On 14 January 2019, Coal exploration, development and mining company, MC Mining Limited’s (ASX: MCM) subsidiary Baobab Mining & Exploration (Pty) Ltd announced that it has completed the acquisition of the Lukin and Salaita properties, key surface rights required for its Makhado hard coking and thermal coal project.
As per MC Mining’s Chief Executive Officer Mr. David Brown, this transaction will facilitate the commencement of final geotechnical drilling and related services studies required for the sitting of mine’s infrastructure.
The acquisition of properties was first announced on 15 November 2018 in which the company had announced that the properties will be purchased for R70mn (US$4.8mn) to be settled in two equal tranches of R35mn (US$2.4mn) with the Properties pledged as security until the purchase price is settled.
Further, the acquisition was conditional upon the seller notifying and addressing any concerns regarding the transaction raised by the Limpopo province regional land claims commissioner. As per today’s announcement the commissioner has not objected to the transaction during the legislated 30-day notification.
Further, the company has made the payment for the first tranche to the seller and the second tranche is going to accrue interest at the South African prime interest rate less 3.0 percent. The current South African prime interest rate is 10.25 percent.
The second tranche is payable within three years, on the earlier of the third anniversary of the transfer of properties or the first anniversary of production of coal underlying the properties or the completion of potential land claims and expropriation process. As per the announcement, Baobab will receive market-related compensation which will be followed by negotiation with the Minister of land affairs and the successful claimants, who are shareholders in Baobab, for long-term access to the properties
At the time of the initial announcement, Mr. Dawid Brown had told that this transaction is a significant step for MC Mining and with the acquisition of the Lukin and Salaita properties, the Company can for geotechnical and related studies for the mine’s infrastructure.
On 14 January 2019, the company also announced that it has updated its policy relating to trading in its securities by key management personnel during prohibited periods (Dealing Code), incorporating European Market Abuse Regulation (Regulation (EU) No. 596/2014) governing AIM-listed companies.
The purpose of the Dealing Code is to make sure that the directors of the Company and certain employees of the Company and its subsidiaries are not engaging in conduct which may constitute market abuse or insider dealing (trading) and comply with their obligations in relation to notification of dealings.
Meanwhile, in the past six months, the share price of the company increased by 168.66 percent as on 11 January 2019. MCM’s shares traded flat today at $0.900 with a market capitalization of circa $126.79 million as on 14 January 2019 (AEST 3:20 PM). The company has a 52-week high and low of $0.900 and $0.300 respectively.