Coal miner MC Mining reported a post-tax loss of $14.6 million for the financial year ending in June, a 232% increase compared to the $4.4 million loss in the previous year.
Non-cash charges, which increased by 59% to $5.9 million, were one of the contributors to the loss. These charges included a net impairment expense of $900,000.
In addition, depreciation and amortization decreased by 5% to $1.9 million, while share-based payment expenses fell by 22% to $700,000.
Revenue during the period was also reported to have decreased by 18% to $36.7 million, and the cost of sales decreased by 11% to $36.5 million, resulting in a decline in gross profit to zero, compared to $3.6 million in the previous year.
Furthermore, a $900,000 impairment was recorded during the current year related to the Vele semisoft coking and thermal coal project in Limpopo.
Administrative expenses increased by 73% to $15.4 million during the reporting period, from $8.9 million in the previous period.
MC Mining reported an increase in employee expenses of 53% to $6.6 million due to additional staff required for the Makhado coking coal project.
Professional fees also rose 160% to $1.3 million, while overhead costs increased by 79% to $7 million due to activities at the Vele project.
Although finance costs decreased by 12% to $1.5 million, unrestricted cash balances stood at only $200,000 at the end of the year. Net asset value decreased by 14% to $75.4 million, and per-share losses surged, with headline losses increasing by 127% and basic and diluted losses up by 143%.
No dividend was declared for the period.
OPERATIONS
MC Mining reported that the Uitkomst Colliery in KwaZulu-Natal produced 498,350 tonnes of run-of-mine coal over 12 months, a 12% increase compared to the previous year.
Uitkomst successfully sold 350,677 tonnes of coal, generating sales revenue of $27.7 million. Net revenue per tonne dropped to $79 due to sales in the domestic market, while API4 coal prices rose in the first half of the 2023 financial year.
Additionally, higher sales volumes helped reduce production costs per saleable tonne by 48%. MC Mining continued efforts to fund the Makhado project and expects funding to be completed in the second half of this calendar year.
The Vele Aluwani Colliery produced 119,799 tonnes of saleable thermal coal and faced production challenges that led to reduced operations by contractors.
MC Mining also began a production optimization review expected to enhance profitability in the 2025 financial year.
The company plans to explore three coal projects in Soutpansberg, which are expected to support the company’s long-term growth with over seven billion tonnes of inferred coal resources.
Source: https://www.miningweekly.com/article/mc-mining-reports-widened-losses-2024-09-30
