Slide 1: Interim Results for the six months ended 31 December 2019
INTERIM RESULTS for the six months ended 31 December 2019 13 March 2020 Brenda Berlin Chief Executive Officer brenda.berlin@mcmining.co.za Cobus Bronn Head of Operations cobus.bronn@mcmining.co.za PAGE
Slide 2: Disclaimer
DISCLAIMER THESE PRESENTATION MATERIALS (THE “PRESENTATION statements, estimates, forecasts and projections should not be relied The Presentation Materials are being issued on a strictly private and MATERIALS”) ARE FOR INFORMATION PURPOSES ONLY AND upon as indicative of future value or as a guarante
Slide 3: Disclaimer
DISCLAIMER The Presentation Materials are being issued on a strictly private and The right of any entity or individual who is a South African resident, to The compilation of the reserves and resources for the Makhado confidential basis and solely to and directed at, in the case of participate in the
Slide 4: Agenda
AGENDA Overview Brenda Berlin Operational review Cobus Bronn Group Financial review Brenda Berlin Makhado Project update Brenda Berlin MC Mining – Compelling Outlook Brenda Berlin PAGE 4 PAGE
Slide 5: Overview
MCM LIMITED OVERVIEW Brenda Berlin
Slide 6: MC Mining Overview
MC MINING OVERVIEW • Portfolio of South African coal producing and development projects with an experienced management team o Operating Uitkomst Colliery producing coal with metallurgical applications o Fully permitted, shovel-ready flagship Makhado Project will produce high quality hard coking coal
Slide 7: Key features for H1 FY2020
KEY features for H1 FY2020 Seven LTIs ROM production from Uitkomst sold recorded with the Uitkomst underground 161,821t of coal, focus of safety mining operations marginally lower by 1% training continuing increased by 11% to 262,696t Acquired Uitkomst $/t API4 prices 30% $17m loan facility Generaal
Slide 8: Makhado key developments in H1
MAKHADO key developments in H1 • Makhado Phase 1 FEED process (+-10% accuracy) completed in CY2019 • Detailed design substantially completed by DRA confirming capital estimates for Phase 1 • Secured firm proposals on material operating costs: o Mining o Processing 90% of costs certain o Road transpo
Slide 9: Operational Review
OPERATIONAL REVIEW Cobus Bronn PAGE
Slide 10: Uitkomst: Cash Generative, Producing Asset
UITKOMST: CASH GENERATIVE, PRODUCING ASSET • High-grade thermal coal deposit in KwaZulu-Natal for domestic metallurgical and thermal markets • 30% BEE ownership satisfies Mining Charter ownership requirements • Easily accessible, well-established infrastructure • North adit LOM extension – additiona
Slide 11: Uitkomst Safety
UITKOMST SAFETY • Seven LTIs recorded at Uitkomst during the period (H2 FY2019: three LTIs) in six separate incidents • Management changes implemented during the period - new SHE manager appointed in November 2019 • MC Mining’s technical team conducted a plant safety audit – minor risks identified •
Slide 12: Uitkomst Operations
UITKOMST OPERATIONS H1 FY2020 H1 FY2019 tonnes tonnes Production tonnages Uitkomst ROM 262,696 237,715 11% Purchased ROM to blend* - 12,466 (100%) 262,696 250,181 5% Sales tonnages Own ROM 147,234 157,452 (7%) Middlings sales 14,587 - 100% Purchased ROM to blend - 6,035 (100%) 161,821 163,487 (1%)
Slide 13: Uitkomst Finances
UITKOMST FINANCES H1 FY2020 H1 FY2019 $’000 $’000 Sales 11,359 15,201 Cost of sales (11,077) (12,312) Gross profit 282 2,889 EBITDA 1,185 3,121 Cash from operations 1,550 1,295 Cash spent on investing activities (451) (681) Cash spent on financing activities (858) (214) Net cash generated 242 400 Ca
Slide 14: Group Financial Review
GROUP FINANCIAL REVIEW Brenda Berlin PAGE
Slide 15: H1 FY2020 vs. H1 FY2019 Income Statement Variances
H1 FY2020 VS. H1 FY2019 INCOME STATEMENT VARIANCES H1 FY2020 H1 FY2019 Variance $’000 $’000 $’000 Gross profit 282 2,889 (2,607) Other operating income & gains 464 1,346 (882) Net impairments (1,237) (132) (1,105) Administrative expenses (5,415) (4,844) (571) Net finance costs (1,409) (2,243) 834 Ta
Slide 16: Cash Flow Analysis – H1 FY2020
CASH FLOW ANALYSIS – H1 FY2020 ($’000) 12000 10000 8000 3 322 6000 141 89 1 665 542 858 8 811 199 4000 1 182 1 641 2000 3 820 0 Opening cash Net cash utilsed Net interest PPE & PAN & Proceeds on sale Decrease in Biodiversity off- Financing Foreign Cash at period balance by operations Exploration Khe
Slide 17: Makhado Update
MAKHADO UPDATE Brenda Berlin PAGE 17 PAGE
Slide 18: Makhado Investment Case
MAKHADO INVESTMENT CASE Phase 1 Phase 2 Mineable tonnes in situ (MTIS) 344.77Mt Life–of-mine (LOM) 9 years >37 years Anticipated commencement of Q3 CY2020 CY2022 construction Construction period 9 months 12 months Area mined West pit East & central pits ~3.0Mtpa of ROM coal and ~2.0Mtpa of partially
Slide 19: Makhado Project Milestones
MAKHADO PROJECT MILESTONES Process Status Licences, permits and environmental authorisations for Makhado and Vele Completed Access to Makhado Project surface rights Completed Necessary studies to commence with construction of Phase 1 Completed1 Phase 1 thermal coal by-product off-take agreement Comp
Slide 20: Makhado Phase 1 Funding
MAKHADO PHASE 1 FUNDING Funding required ($m) Capex 32 • Binding documents for $17m Working capital (to steady state) 5 debt signed with IDC IDC existing debt 15 • Existing IDC debt will be Total funding required 52 resolved simultaneously New IDC debt (17) through composite funding 35 plan Existing
Slide 21: Moving Forward: MC Mining – Compelling Outlook
MOVING FORWARD MC MINING – COMPELLING OUTLOOK PAGE 21 PAGE
Slide 22: Compelling Outlook
COMPELLING OUTLOOK MC MINING’S OUTLOOK POST PHASE 1 • Two cash generating assets • Three products o Makhado high quality hard coking coal – local & export o Makhado thermal coal by-product – export o Uitkomst metallurgical and thermal coal – local • Sustainable cash flow Upside • Makhado Phase 2 – H
Slide 23: Contacts
Contacts Brenda Berlin Designation Chief Executive Officer Office +27 (0)10 003 8000 Email brenda.berlin@mcmining.co.za Cobus Bronn Designation Head of Operations Office +27 (0)10 003 8000 Email cobus.bronn@mcmining.co.za PAGE 23 PAGE
Slide 24: Annexures
ANNEXURES PAGE 24
Slide 25: Colliery & Project Regulatory Status
COLLIERY & PROJECT REGULATORY STATUS EA granted by the Environmental Access to MR granted by the DMR IWUL granted by the DWS Project Departments surface rights Granted Duration Status Granted Duration Status Granted Duration Status secured 10 years Application to Uitkomst (KwaZulu-Natal) Until 202
Slide 26: MC Mining's Substantial Resources and Reserves
MC MINING’S SUBSTANTIAL RESOURCES AND RESERVES Abridged summary of JORC compliant Resource JORC-compliant Resources JORC-compliant Reserves & Reserve statement at 30 June 2019 (Measured, Indicated and Inferred) 1,2 (Proven & Probable) 3 Gross tonnes Total tonnes Mineable tonnes Reserves Project name