Coal miner MC Mining reports that its subsidiary Baobab Mining & Exploration’s deferred payment of R35-million – needed to complete the acquisition of the Lukin and Salaita properties – has been extended from January 10 to February 28.
On January 14, 2019, Baobab entered into the R70-million acquisition of the Lukin and Salaita properties, paying over R35-million at the time – the properties holding the key surface rights for the Makhado hard coking and thermal coal project.
The balance of the purchase price of R35-million (plus interest) was payable by Baobab within three years of the transfer of the properties, or on the earlier of certain events occurring.
Accordingly, the deferred payment became due on January 10, with MC Mining currently resolving the funding required to make the outstanding payment, while the vendor has agreed to extend the payment due date.
In the interim, MC Mining agreed to pay an instalment of R6-million by January 12, which is to be deducted from the deferred payment.
Nonetheless, interest shall accrue on the unpaid deferred payment at the effective yearly rate of 15.2%.
MC Mining, in a statement, says it is working with Baobab and its advisers to complete the funding requirement for development of the Makhado project.
IDC LOAN
Meanwhile, MC Mining also reports that the payment of a R160-million loan plus accrued interest provided by the Industrial Development Corporation of South Africa (IDC), has been extended to January 31.
The IDC also agreed to extend the terminal drawdown date of the additional R245-million IDC term loan for the development of Phase 1 of Makhado, to January 31, subject to the IDC re-affirming its financial due diligence.
MC Mining notes that, because of the delay in finalising the Makhado project funding, it has requested a further extension, to May 31, for both the repayment date of the existing R160-million plus interest and the terminal drawdown date of the additional R245-million term loan.
MC Mining says the IDC is yet to respond to these requests.