Booklet: Financial report for the half year ended 31 December 2024

MC MINING LIMITED

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

CORPORATE DIRECTORY (CONTINUED)

2

MC MINING LIMITED

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

3

MC MINING LIMITED

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

The directors of MC Mining Limited (MC Mining or the Company) submit herewith the financial report of MC Mining and its subsidiaries (the Group) for the half-year ended 31 December 2024. All amounts are expressed in US dollars ($) unless stated otherwise.

In order to comply with the provision of the Corporations Act 2001, the directors report as follows:

Directors

The names of the directors of the Company during or since the end of the half-year are:

• Executive director (Interim, Managing Director and Chief Executive Officer (CEO))

Review of Operations

Principal activity and nature of operations

The principal activity of the Company and its subsidiaries is the mining, exploration and development of steelmaking coking and thermal coal properties in South Africa.

The Company's principal assets and projects include:

• Uitkomst Colliery, an operating metallurgical and thermal coal mine (Uitkomst);
• Makhado Project, a steelmaking hard coking and thermal coal project in development phase (the Makhado Project or Makhado);
• Vele Aluwani Colliery, a semi-soft coking and thermal colliery (Vele) previously on care and maintenance but outsourced and recommissioned in December 2022; and
• Three exploration stage coking and thermal coal projects, namely Chapudi, Generaal, and Mopane, in the Soutpansberg Coalfield (collectively the GSP).

Uitkomst Colliery - Utrecht, KwaZulu-Natal (84% owned)

Uitkomst regrettably had 1 fatality during the half year (H1 FY2024: zero fatalities) and two LTI's (H1 FY2024: Nil LTIs) during the reporting period. Uitkomst comprises the existing underground coal mine with a planned life of mine (LOM) extension directly to the north of current operations and the colliery has approximately 15 years remaining LOM. The LOM extension requires the development of adit 2k (horizontal shaft) and the development is subject to receipt of the regulatory approvals, available funds and prevailing market conditions.

Uitkomst sells a 0 to 40mm (duff) product into the metallurgical domestic market for use as pulverised coal. Uitkomst supplies sized coal (peas) products to local energy generation facilities and also sells smaller volumes of a high-ash, coarse discard coal (middlings) product.

Uitkomst's run of mine (ROM) coal production for the six months decreased by 30.88% to 185,558 tonnes (t) (H1 FY2024: 268,464 t) as a result of geological challenges. The colliery had inventory of 4,911t (FY2024: 14,422t) at site at the end of the period. Uitkomst sold 121,793t (FY2024 H1: 202,715t) of coal during the six months consisting of 108,776t of high-grade peas and duff (H1 FY2024: 202,340t). The colliery also sold 13,017t of lower grade middlings coal (H1 FY2024: 375t).

International thermal coal prices remained under pressure during the period. Uitkomst Colliery generated revenue of $8.4 million (H1 FY2024: $16.3 million), yielding a gross loss of $4.8 million (H1 FY2024: Gross profit $1.5 million) and operating cash outflow of $4.7 million (H1 FY2024: $5.1 million) with a negative net working capital of $2.8 million (FY2024: $1.4 million) at the end of December 2024.

4

MC MINING LIMITED

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

Makhado Coking Coal Project - Soutpansberg Coalfield, Limpopo (67.3% owned)

No LTIs were recorded at Makhado during the period (H1 FY2024: nil LTIs).

MC Mining's flagship Makhado Project is situated in the Soutpansberg Coalfield and all regulatory approvals are in place and the required surface rights over the mining and coal handling and processing plant (CHPP) areas have been secured. MC Mining is heavily invested in the Makhado Project as the complex regulatory environment in South Africa demanded significant capital and time investment to achieve its current 'shovel ready' status.

The development of the Makhado Project is expected to deliver positive returns for shareholders and position MC Mining as South Africa's pre-eminent steelmaking hard coking coal (HCC) producer. The planned CHPP annual ROM feed capacity is 4.0 million tonnes per annum (Mtpa) with a forecast HCC yield of 22.6% and a 17.6% yield of a 5,500k/cal thermal coal by-product. The Makhado steelmaking HCC will have an ash content of less than 10% and is expected to advantage South African steel producers as the coal could displace HCC currently imported. Development of Makhado is also expected to have a positive impact on employment and will create 650 direct jobs.

The Makhado Project has the potential to produce in excess of 800,000t per annum of steelmaking HCC and over 600,000t of a 5,500kcal thermal coal byproduct. The Company continued with the detailed design of the Makhado CHPP and related infrastructure, during the period in preparation of procurement.

During the half year period Makhado Project has met the reporting requirements and is technical feasibility and the commercial viability in terms of extracting a mineral resource are demonstrable. Accordingly, the capital expenditure has been reclassified from 'exploration and evaluation' assets to 'development' assets.

Project development at Makhado has commenced with the initial focus being on:

• Ensuring all the required environmental and regulatory licenses are in place;
• Engagement with the local community and other key stakeholders;
• Finalising the Mine plan based targeted 2 million tons p/a and the updated geotechnical data;
• Finalising the design and appointment of contractor to construct the Coal Handling & Processing Plant ('CHPP'); and
• Construction of general infrastructure required (Power supply, road infrastructure, platform for the CHPP).

The development of Makhado represents a significant milestone for MC Mining.

Vele Aluwani Colliery - Tuli Coalfield, Limpopo (100% owned)

The Vele Aluwani Colliery recorded no LTIs during the period (H1 FY2024: nil LTIs).

The Vele Colliery contains over 291 million tonnes (in situ) of semi-soft coking and thermal coal Reserves.

The colliery was recommissioned in December 2022 after having been on care and maintenance since late CY2013. The outsourcing of operations at the colliery was identified as the optimal strategy considering the significant capital and technical investment required to restart and optimise production at the colliery. The Contract Mining Agreement was concluded with Hlalethembeni Outsource Services Proprietary Limited (HOS). This secured the necessary investment from a third party to de- water the opencast pit, modify and recommission the CHPP and remove a significant portion of the ongoing costs associated with the colliery. HOS is responsible for all mining and processing costs while the Company remains responsible for the colliery's regulatory compliance, rehabilitation guarantees, relationships with authorities and communities as well as the supply of electricity and water.

The recommencement of operations at Vele created approximately 245 permanent job positions and also alleviated potential 'use it or lose it' risk associated with unutilised mining assets in South Africa. The colliery did not produce saleable thermal coal during the reporting period (H1 FY2024: 119,799t).

5

MC MINING LIMITED

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

Vele Aluwani Colliery - Tuli Coalfield, Limpopo (100% owned) (continued)

HOS notified the Company during December 2023 that due to production challenges, combined with elevated logistics costs and the depressed API4 coal price, it would exercise the hardship clause in the Contract Mining Agreement. This resulted in HOS downscaling operations, which was completed during January 2024, and the commencement of a production optimisation strategy. This strategy (Operation Shandukani) will potentially include, amongst others, changes to the mining methodology, as well as further modifications to the CHPP as well as securing access to rail transport at competitive prices. The evaluation of these measures is expected to take place in H2 FY2025 with the intention to improve profitability at the colliery.

The colliery's CHPP does not have the requisite fines circuits that would allow for the simultaneous production of steelmaking semi-soft coking coal (SSCC) and thermal coal. A further significant opportunity at Vele is the addition of a fines circuit to the CHPP to produce SSCC, a higher value product.

Greater Soutpansberg Projects - Soutpansberg Coalfield, Limpopo (74% owned)

The GSP reported no LTIs during the period (H1 FY2024: nil LTIs).

The three GSP is the Group's long-term greenfield development area and contains over 7.0 billion gross tonnes in situ of inferred HCC, SSCC and thermal coal resources. The exploration and development of the GSP is the catalyst for MC Mining's long-term growth and positions the Company to be a potential long-term significant domestic and export steelmaking coal supplier.

The mining rights for the Mopane, Generaal and Chapudi project areas were legally executed during FY2024. Following this, the studies required for the environmental and water use licences are expected to commence following the construction of the Makhado Project.

Corporate

IDC loan

The Industrial Development Corporation of South Africa Limited (IDC) is a 6.7% shareholder in MC Mining's subsidiary, Baobab Mining & Exploration (Pty) Ltd (Baobab), the owner of the Makhado Project. The bank continues to provide support for the development of Makhado. MC Mining previously utilised the existing IDC loan facility to explore and develop the project and during the period, the IDC extended the date for repayment of the ZAR160 million loan ($8.5 million) plus interest thereon, to 30 June 2025.

Kinetic Group investment

On the 23rd of January the Shareholders passed the following resolutions to:

• Ratify the prior issue by the Company of 62,102,002 new Shares to Kinetic Crest Limited, a wholly owned subsidiary of Kinetic Development Group Limited.
• Approve the acquisition by Kinetic Development Group Limited (and its Associates) of such number of Second Closing Shares that will result in Kinetic Development Group Limited (and its Associates) holding 51% of the Company's issued and outstanding Shares and having a Relevant Interest in a total of 51% of all of the Company's issued and outstanding Shares on the Second Closing.
• Approve the acquisition by the Company of a Relevant Interest in the Second Closing Shares on the Second Closing as a consequence of the Company's entry into the Proposed Escrow Deed, on the terms and subject to the conditions set out in the Explanatory Statement.

6

MC MINING LIMITED

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

Financial review

The loss after tax attributable to the owners of the parent for the six months under review was $8,317,000 or 1.83 cents per share compared to a loss after tax of $5,800,961 or 1.45 cents per share for the prior corresponding period.

The loss after tax for the period under review of $8,385,000 (FY2024 H1: $5,981,426). The increase in the loss for the six months compared to FY2024 H1 is attributable to:

• $5,866,392 reduction in the Uitkomst Colliery's gross profit due to 1.79% lower international coal prices and lower production as a result of geological challenges;

The salient features of the Statement of Comprehensive Income are:

• revenue of $8,384,007 (FY2024 H1: $25,221,399) and cost of sales of $12,543,018 (FY2024 H1: $24,145,894), resulting in a
  gross loss of $4,159,011 (FY2024 H1: gross profit of $1,076,311);
  o revenue was adversely impacted by the decline in coal prices compared to FY2024 H1,
  o Uitkomst's sales volumes were 39.92% lower at 121,793t (FY2024 H1: 202,715t) of coal during the six months, generating revenue of $8,384,007 (FY2024 H1: $16,266,871). The 1.79% decline in average coal prices and the lower production resulted in the colliery's revenue declining by 48.46%. The decrease in production resulted in Uitkomst's cost of sales decreasing by 10,55% to $13,168,866 (FY2024 H1: $14,722,227);
• employee costs of $2,165,354 (FY2024 H1: $4,017,674) with no non-cash employee expenses for the reporting period
  (FY2024 H1: $227,055) and cash employee expenses of $2,165,354 (FY2024 H1: $3,790,619);
• other administrative expenses of $4,392,000 (FY2024 H1: $9,697,000) due to decreased water use license costs and holding fees charged by the IDC;
• depreciation of $172,100 (FY2024 H1: $95,132) included in administrative expenses;
• net foreign exchange loss of $744,751 (FY2024 H1: loss of $107,487) arising from the translation of borrowings and cash due to movement in the ZAR:USD and ZAR:AUD exchange rates during the period; and
• income tax expense of $237,280 (FY2024 H1: $170,383).

As at 31 December 2024, the Company had cash and cash equivalents of $3,924,764 compared to cash and cash equivalents of $233,841 at 30 June 2024.

Authorised and issued share capital

MC Mining had 476,115,351 fully paid ordinary shares in issue as at 31 December 2024. The holders of ordinary shares are entitled to one vote per share and are entitled to receive dividends when declared.

Dividends

No dividends were declared by or paid by MC Mining during the six months.

Basis of preparation and going concern

Attention is drawn to the disclosure in the interim financial statements on the going concern assumption (refer note 2), noting that there is a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, that the entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

The directors are satisfied however, at the date of signing the interim financial report, that there are reasonable to strong grounds to believe that the Group will be able to continue to meet its debts as and when they fall due and that it is appropriate for the financial statements to be prepared on a going concern basis. The directors have based this on a number of assumptions which are set out in detail in note 2 to the interim financial report. In order to meet its working capital requirements, the Group has made significant progress in the first half of FY2025 to remove this material uncertainty through the following initiatives:

• Completed the new equity raise for cash via the Kinetic Development Group Limited subscription;
• Successively extended the loan repayments due to the Industrial Development Corporation of South Africa Limited; and
• Progressed the build, own, operate, transfer (BOOT) funding arrangement.

7

MC MINING LIMITED

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

Basis of preparation and going concern (continued)

Subsequent to 31 December 2024 the following material events were concluded that in Managements view should remove the requirements for the going-concern uncertainty:

• Shareholders approved the acquisition by Kinetic Development Group Limited (and its Associates) of 51% of the Company's issued and outstanding Shares; and
• The Industrial Development Corporation of South Africa Limited extended the date for repayment of the R160 million loan plus interest thereon, to 30 June 2025, on condition that the Company make a payment of ZAR10,000,000 to the IDC which has been made.

Events after the reporting period

On the 23rd of January, the Shareholders passed the following resolutions to:

• Ratify the prior issue by the Company of 62,102,002 new Shares to Kinetic Crest Limited, a wholly owned subsidiary of Kinetic Development Group Limited.
• Approve the acquisition by Kinetic Development Group Limited (and its Associates) of such number of Second Closing Shares that will result in Kinetic Development Group Limited (and its Associates) holding 51% of the Company's issued and outstanding Shares and having a Relevant Interest in a total of 51% of all of the Company's issued and outstanding Shares on the Second Closing.
• Approve the acquisition by the Company of a Relevant Interest in the Second Closing Shares on the Second Closing as a consequence of the Company's entry into the Proposed Escrow Deed, on the terms and subject to the conditions set out in the Explanatory Statement.

Kinetic Development Group Limited has made payments amounting to $20,000,000 up to the date of the release of the 31 December 2024 interim financial report, for the purchase of the MC Mining shares as part of the share subscription agreement.

The Industrial Development Corporation of South Africa Limited extended the date for repayment of the R160 million ($8.472 million) loan plus interest thereon, to 30 June 2025, on condition that the Company make a payment of ZAR10,000,000 ($0.5 million) to the IDC. The repayment was made.

Other than the above, no matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.

Rounding off of amounts

The Company is of the kind referred to in ASIC Legislative Instrument 2016/191, and in accordance with that Instrument amounts in the directors' report and the half-year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

8

MC MINING LIMITED

DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2024

Auditor's Independence Declaration

The auditor's independence declaration is included on page 25 of the half-year report.

Signed in accordance with a resolution of directors, pursuant to s.306(3) of the Corporations Act 2001.

Dated at Johannesburg, South Africa, this 14th day of March 2025.

9