Slide 1: Results 2020 for the year ended 30 June 2020
Results 2020 for the year ended 30 June 2020 Brenda Berlin Acting Chief Executive Officer 30 September 2020
Slide 2: Disclaimer
Disclaimer THESE PRESENTATION MATERIALS (THE “PRESENTATION MATERIALS”) Company or its affiliates, subsidiaries, directors, officers, agents, advisers or The Presentation Materials are being issued on a strictly private and confidential ARE FOR INFORMATION PURPOSES ONLY AND DO NOT CONSTITUTE AN emplo
Slide 3: Disclaimer
Disclaimer The Presentation Materials are being issued on a strictly private and confidential The Presentation Materials are confidential and should not be copied, distributed • the Uitkomst Colliery was evaluated by Minxcon Consulting and an basis and solely to and directed at, in the case of recip
Slide 4: Contents
Contents 1 Introduction & Strategy 2 FY2020 Overview 3 Uitkomst Colliery Review 4 Financial Review 5 Makhado Progress 6 Compelling Outlook 7 Annexures 3
Slide 5: Introduction and Strategy
INTRODUCTION AND STRATEGY
Slide 6: MC Mining overview
MC Mining overview Positioned to be South Africa’s pre-eminent hard coking coal producer Growing demand forecast as global per-capita steel consumption increases Portfolio of South African coal producing and development projects GREATER SOUTPANSBURG UITKOMST COLLIERY MAKHADO PROJECT PROJECT Operatio
Slide 7: Project pipeline
Project pipeline OUR VISION to responsibly produce 1.4-1.5Mt of saleable product in CY2022 CURRENT SHORT-TERM MEDIUM-TERM LONG-TERM Makhado Makhado Uitkomst Vele and GSP Phase 1 Phase 2 Production asset Surface rights secured Phasing of Makhado facilitates Vele to restart in ~CY2029 to supply HCC an
Slide 8: Location of operations and projects
Location of operations and projects 7
Slide 9: FY2020 Overview
FY2020 OVERVIEW
Slide 10: FY2020 COVID-19 effects
FY2020 COVID-19 effects • Safety, health, wellbeing of employees, contractors, stakeholders our primary concern • 23 March 2020 – COVID-19 lockdown in South Africa • Uitkomst placed on care and maintenance from 27 March 2020 • necessary precautions to prevent virus spread, reduce threat • All MC Min
Slide 11: FY2020 corporate and strategic achievements
FY2020 corporate and strategic achievements Strategy Status Result Advancement of • All required regulatory approvals in place Makhado Project • Detailed design substantially completed by DRA, confirming capital estimates for Phase 1 • Firm proposals secured on material mining and processing operati
Slide 12: FY2020 key features
FY2020 key features Key area Result Safety • No fatalities and nine LTIs at Uitkomst in FY2020 • 431,354t of ROM coal mined Production • Uitkomst placed on care and maintenance in March 2020 due to COVID-19 • Production returned to normal June-end 2020 • Sales from Uitkomst ROM of 228,206t Sales • 2
Slide 13: Uitkomst Colliery Review
UITKOMST COLLIERY REVIEW
Slide 14: Uitkomst: safety
Uitkomst: safety • Nine LTIs during FY2020 (FY2019: four LTIs) • Renewed focus on retraining to entrench safety culture • Re-training programme completed with a key focus on safety • Hazard identification re-emphasised • ‘In house’ safety strategy in conjunction with the workforce • Management chang
Slide 15: Uitkomst: production
Uitkomst: production H1 FY2020 H2 FY2020 FY2020 FY2019 Mt Mt Mt Mt % Production tonnages Uitkomst ROM 262,696 168,658 431,354 472,647 (9) Purchased ROM to blend - - - 12,466 (100) 262,696 168,658 431,354 485,113 (11) • H1 FY2020 ROM production 11% ahead of comparative H1 FY2019: • initiatives implem
Slide 16: Uitkomst: sales
Uitkomst: sales FY2020 FY2019 Mt Mt % Sales tonnages Own ROM 228,206 295,051 (23) Purchased ROM to blend or wash - 6,035 (100) Coarse discard sales 25,987 8,315 213 254,193 309,401 (18) Financial metrics Average API4 prices/tonne ($) 67.73 86.51 (22) Revenue/tonne ($) 65.15 81.39 (20) Production cos
Slide 17: Uitkomst: sales continued
Uitkomst: sales continued • ROM sales reduced due to decline in ROM coal mined owing to lockdown • High-ash, coarse discard coal sales higher in FY2020 as plant modifications were completed in H2 FY2019, resulting in sales of less than six months in FY2019 • Materially lower coal pricing environment
Slide 18: Financial Review
FINANCIAL REVIEW
Slide 19: Cash flow analysis – FY2020 (#039;000)
Cash flow analysis – FY2020 ($’000) FY2020 FY2019 $’000 $’000 Group loss for the year before tax (12,850) (33,522) Add back non-cash items 7,800 28,245 (continuing and discontinued operations): Depreciation and amortisation 2,608 2,318 Unrealised foreign exchange (gain)/loss 399 (244) Share based pa
Slide 20: Cash flow analysis – FY2020 (#039;000) cont.
Cash flow analysis – FY2020 ($’000) cont. 10 000 8 811 5 050 8 000 6 000 4 000 271 1 840 1 719 1 354 - 2 000 1 004 113 896 - 236 - 464 0 Opening cash Net cash Khethekile PPE, PAN Africa Sale of assets Repayment of Net interest, tax Foreign Financial Cash at year balance utilised in acquisition explo
Slide 21: Makhado Progress
MAKHADO PROGRESS
Slide 22: Makhado Project: phased approach
Makhado Project: phased approach Phased development reduces execution risk Road and rail and siding infrastructure tested and previously used Makhado Phase 1 Makhado Phase 2 • Construction expected to start in Q1 CY2021 • Construction can start from circa CY2023, coal • West pit mined, crushed, scre
Slide 23: Makhado Project: phased approach continued
Makhado Project: phased approach continued • Compelling returns • Scarce commodity • Continued growth Makhado Phase 1 Makhado Phase 2 ROM production 3.0Mtpa 4.0Mtpa LOM 9 years >37 years Hard coking coal production 0.54Mtpa 0.7 – 0.8Mtpa Thermal coal by-product production1 0.57Mtpa 0.9 – 1.0Mtpa Con
Slide 24: 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 Completed Phase 1 thermal coal by-product off-take agreement Comp
Slide 25: Makhado Phase 1: funding update
Makhado Phase 1: funding update Funding required* ($m) PHASE 1 IS SHOVEL READY Capex 32 • Binding conditional documents for Working capital (to steady 5 $17m debt signed with IDC state) IDC bridge 3 • Existing IDC debt will be resolved Total funding required 40 simultaneously through composite Secur
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Slide 27: Compelling outlook post Phase 1
Compelling outlook post Phase 1 ONLY SA PRODUCER OF • Sustainable cash flow – two cash generating assets HARD COKING COAL • HCC differentiator – local and export supply • Three products: • Makhado high quality hard coking coal – local & export • Makhado thermal coal by-product – export • Uitkomst me
Slide 28: Contacts
Contacts Brenda Berlin Acting Chief Executive Officer +27 10 003 8000 brenda.berlin@mcmining.co.za
Slide 29: Annexures
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Slide 30: Vele: brownfields project
Vele: brownfields project • Fully permitted project, currently on care and maintenance • Existing Vele processing plant to be modified to process Makhado Phase 1 ROM coal • Phase 1 saleable coal to be trucked to Musina siding for sale FOR • Musina siding previously used when Vele was in production •
Slide 31: Greater Soutpansberg Project
Greater Soutpansberg Project MASSIVE PIPELINE, LONG-TERM POTENTIAL • Chapudi, Generaal and Mopane Projects – early stage coking and thermal coal exploration projects in Soutpansberg Coalfield • Over 1.6Bt mineable tonnes in situ • Consolidation of tenements and ore bodies needed to improve mine plan