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MC Mining Ltd said on Friday it was exploring ways to raise funds as the coal miner reported an increase in production in the third quarter, taking advantage of high prices.
The Western Australia-based developer and producer of thermal and coking coal with projects in South Africa said run-of-mine coal production at Uitkomst Colliery rose by 7% to 124,144 tonnes for the third quarter ended March 31, up from 115,944 tonnes in the same quarter last year.
The company recorded 71,361 tonnes of coal sales during the quarter, up 15% from 62,301 tonnes.
Revenue leapt by 53% to $110 per tonne from $72 a tonne due to the much higher API4 coal prices recorded during the quarter.
Global coal prices have soared to record levels as a result of Russia's invasion of Ukraine. Russia is a significant producer of coal.
However, MC Mining said elevated international coal prices are not being accepted in the South African domestic coal market, indicating it is assessing alternative coal marketing strategies, including the potential production of higher quality coal for the international pulverised coal injection market.
Average API4 prices for the three months to March 31 were $238 per tonne, multiplied from $91 a tonne in the third quarter last year.
After the end of the third quarter, the Makhado Project's bankable feasibility study was completed, confirming the project's robust economic fundamentals. This study is a key input in the due diligence process for potential funders of this coking coal project.
As at March 31, the company had cash balance of $3.0 million, with available overdraft facilities fully utilised.
To meet its working capital requirements, the group said it was exploring and progressing several alternative strategies to raise additional funding including.
These include the issue of new shares and further debt.
Shares in MC Mining were up 3.0% at 8.50 in London, while its counter rose by 2.7% to R 1.90 in Johannesburg.
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