Our opinion on the current state of MCZ
MC Mining, previously known as "Coal of Africa" (MCZ), is a relatively small metallurgical coal-mining company with a single active mine, Uitkomst. In addition to Uitkomst, the company is actively engaged in the development of several projects, including the Makhado project, the Vele colliery, and MbeuYashu. The Makhado project holds a significant position as the company's flagship operation, located in South Africa's Limpopo province. This open-cast mine boasts a potential lifespan of 16 years, with prospects for extension.
A pivotal moment for MC Mining occurred in January 2019 when the company announced the acquisition of surface rights, a strategic move that rendered the Makhado project economically viable. Production at the Makhado project was anticipated to commence by the end of 2020, with expected annual production of 800,000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition significantly altered the company's prospects, leading to a notable surge in its share price, reaching 950 cents in 2018. However, the share price has been on a gradual decline since January 2019, settling around 154 cents.
The acquisition of surface rights for the Makhado project substantially improved MC Mining's risk profile, making it a more attractive investment. To support the project, the Industrial Development Corporation (IDC) provided R245 million in funding, although an additional R530 million remained required. It's important to note that MC Mining holds a 69% ownership stake in Baobab Mining and Exploration, the entity that owns the Makhado project.
In its financial results for the year ending on June 30, 2023, MC Mining reported an after-tax loss of $4.4 million, representing a significant improvement compared to the prior year's loss of $20.8 million. Several factors contributed to this improvement, including a decrease in depreciation and amortization, a 20% increase in share-based payment expenses, and the absence of impairment expenses. Despite these losses, the company experienced a notable increase in revenue, which surged by 91% to $44.8 million. Concurrently, the cost of sales rose by 96% to $41.2 million.
In a report covering the three months ending on September 30, 2023, MC Mining highlighted a 10% increase in run-of-mine coal production from Uitkomst compared to the same quarter in the prior year. Uitkomst successfully sold 100,449 tons of coal during this quarter. Notably, thermal coal prices continued to decline during this period, averaging US$109 per ton in the quarter, compared to US$115 per ton in Q4 FY2023 and US$325 per ton in Q1 FY2023. In contrast, premium steelmaking hard coking coal (HCC) prices remained relatively elevated, averaging US$258 per ton in the quarter, up from US$250 per ton in FY2023 Q1. Furthermore, MC Mining reported available cash and facilities of US$5.1 million, following a net cash balance of US$8.8 million in FY2023 Q4.
In an update covering the three months ending on December 31, 2023, the company disclosed that run-of-mine production at Uitkomst had surged by 31%, with coal sales totaling 102,266 tons, a significant increase from the 56,817 tons sold in the second quarter. The company possessed cash facilities amounting to $3.4 million at the end of the quarter.
From a technical perspective, MC Mining's share price exhibited notable volatility. It experienced a spike between July and September 2022 before subsequently receding to lower levels. This shares characteristic traits with other commodity-related stocks and has an average daily trading volume of approximately R106,000, making it susceptible to market fluctuations and carrying the inherent risks associated with mining exploration and development.
A pivotal moment for MC Mining occurred in January 2019 when the company announced the acquisition of surface rights, a strategic move that rendered the Makhado project economically viable. Production at the Makhado project was anticipated to commence by the end of 2020, with expected annual production of 800,000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition significantly altered the company's prospects, leading to a notable surge in its share price, reaching 950 cents in 2018. However, the share price has been on a gradual decline since January 2019, settling around 154 cents.
The acquisition of surface rights for the Makhado project substantially improved MC Mining's risk profile, making it a more attractive investment. To support the project, the Industrial Development Corporation (IDC) provided R245 million in funding, although an additional R530 million remained required. It's important to note that MC Mining holds a 69% ownership stake in Baobab Mining and Exploration, the entity that owns the Makhado project.
In its financial results for the year ending on June 30, 2023, MC Mining reported an after-tax loss of $4.4 million, representing a significant improvement compared to the prior year's loss of $20.8 million. Several factors contributed to this improvement, including a decrease in depreciation and amortization, a 20% increase in share-based payment expenses, and the absence of impairment expenses. Despite these losses, the company experienced a notable increase in revenue, which surged by 91% to $44.8 million. Concurrently, the cost of sales rose by 96% to $41.2 million.
In a report covering the three months ending on September 30, 2023, MC Mining highlighted a 10% increase in run-of-mine coal production from Uitkomst compared to the same quarter in the prior year. Uitkomst successfully sold 100,449 tons of coal during this quarter. Notably, thermal coal prices continued to decline during this period, averaging US$109 per ton in the quarter, compared to US$115 per ton in Q4 FY2023 and US$325 per ton in Q1 FY2023. In contrast, premium steelmaking hard coking coal (HCC) prices remained relatively elevated, averaging US$258 per ton in the quarter, up from US$250 per ton in FY2023 Q1. Furthermore, MC Mining reported available cash and facilities of US$5.1 million, following a net cash balance of US$8.8 million in FY2023 Q4.
In an update covering the three months ending on December 31, 2023, the company disclosed that run-of-mine production at Uitkomst had surged by 31%, with coal sales totaling 102,266 tons, a significant increase from the 56,817 tons sold in the second quarter. The company possessed cash facilities amounting to $3.4 million at the end of the quarter.
From a technical perspective, MC Mining's share price exhibited notable volatility. It experienced a spike between July and September 2022 before subsequently receding to lower levels. This shares characteristic traits with other commodity-related stocks and has an average daily trading volume of approximately R106,000, making it susceptible to market fluctuations and carrying the inherent risks associated with mining exploration and development.
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إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.