HARARE - COAL of Africa (CoAL), the Australian junior coal producer, will be renamed MC Mining Limited if shareholders pass a special resolution adopting the new name at the annual general meeting (AGM) to be held on November 24.
CoAL strengthened 6% to trade at 48cents a share on the JSE on Friday after announcing plans to rebrand and market CoAL to the wider investment community. It also said it wanted to consolidate its issued share capital through the conversion of every 20 shares into one share.
CoAL chief executive David Brown said on Friday that the name change was necessary to reflect the company’s potential growth, particularly of its metallurgical coal prospects, as he announced production results for the September quarter.
Transformed
CoAL sold its Mooiplaats thermal coal colliery and acquired the Uitkomst metallurgical and thermal coal colliery for R275million from Pan African Resources in a bid to restructure its balance sheet.
“The Uitkomst acquisition transformed CoAL into a coal producer and we are now well positioned to take advantage of higher global coal prices. CoAL is currently assessing Uitkomst’s coal marketing options to maximise returns given the upward trend in export coal prices,” Brown said on Friday.
The Uitkomst Colliery had the required environmental and social permits in place and a remaining 17 years of life of the mine.
The colliery generated 125108 tons of coal in the September quarter, resulting in sales of 80677 tons, while slurry processed at the wash plant yielded sales of 36489 tons. Coal purchased from nearby collieries and sold directly after blending added sales of 48266 tons.
Brown also said CoAL had proposed that shareholders vote to approve a 20-for-one share conversion at the AGM.
“The company has a disproportionately large number of shares in issue due to historical equity-based capital raisings and this is a disincentive for institutional investors to invest in CoAL as their mandates inhibit them from investing in stocks where unit prices are too low,” he said.
Approvals
The Makhado Lite Project had the requisite regulatory approvals and it was working to secure access to two key properties that would allow it to complete the confirmatory geotechnical work required before construction commences to ensure the project footprint was appropriately positioned. This would be resolved in either late in the first half of 2018 or early in the second half of the 2018 financial year with construction in the first half of 2019.
“The accelerated build-plan positions Makhado to be able to take advantage of higher hard coking and thermal coal prices, delivering positive returns for shareholders in the near-term,” Brown said.
The Vele Colliery remained on care and maintenance throughout the quarter.
-BUSINESS REPORT
CoAL shares gained 8.89percent on the JSE on Friday to close at 49cents.