REG - Goldway Capital Inv MC Mining Limited - Goldway - Fourth supplementary bidder's statement

MC MiningAnnouncement

28/03/2024 07:15

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RNS Number : 6689I  Goldway Capital Investment Limited  28 March 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK
LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI
2019/310). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION
IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

 Goldway Capital Investment Limited

 (Incorporated in Hong Kong)

 CR No. 3294426

 Off-market takeover offer for all of the ordinary shares in:

 MC Mining Limited

 Previously Coal of Africa Limited

 (Incorporated and registered in Australia)

 Registration number ABN 008 905 388

 ISIN AU000000MCM9

 JSE share code: MCZASX/AIM code: MCM

28 March 2024

 

Goldway Capital Investment Limited - Fourth Supplementary Bidder's Statement

Goldway Capital Investment Limited (company registration number 3294426)
(Goldway) refers to its bidder's statement dated 2 February 2024, first
supplementary bidder's statement dated 15 February 2024, second supplementary
bidder's statement dated 14 March 2024 and third supplementary bidder's
statement dated 21 March 2024 in relation to its off-market takeover offer for
all of the ordinary shares in MC Mining Limited ACN 008 905 388 (ASX: MCM)
(MCM).

In accordance with section 647(3)(a)(ii) of the Corporations Act 2001 (Cth), a
copy of Goldway's fourth supplementary bidder's statement dated 28 March 2024
(Fourth Supplementary Bidder's Statement) is enclosed.

A copy of the Fourth Supplementary Bidder's Statement has today been lodged
with the Australian Securities and Investments Commission and served on MCM.

 

 

 

---

 

 

Fourth Supplementary Bidder's Statement

 

ACCEPT

 

 

Offer by

 

Goldway Capital Investment Limited

 

CR No. 3294426

 

to acquire all of your ordinary shares in

 

MC Mining Limited ACN 008 905 388

 

for

 

A$0.16 cash per MCM Share

 

   TO ACCEPT THE OFFER YOU MUST

   Complete and sign the Acceptance Form accompanying the Original Bidder's
   Statement and return it to the address set out on the form before the Offer
   closes.

 

 

 

 

 

 

 

 

This is an important document and requires your immediate attention.

 

If you are in any doubt about how to deal with this document, you should
contact your legal, financial, tax or other professional advisor immediately.

 

Fourth Supplementary Bidder's Statement

 

1.         Introduction

 

This document is the fourth supplementary bidder's statement (Fourth
Supplementary Bidder's Statement) to the bidder's statement dated and lodged
with ASIC on 2 February 2024 (Original Bidder's Statement) and to the first
supplementary bidder's statement dated and lodged with ASIC on 15 February
2024 (First Supplementary Bidder's Statement), second supplementary bidder's
statement dated and lodged with ASIC on 14 March 2024 (Second Supplementary
Bidder's Statement) and third supplementary bidder's statement dated and
lodged with ASIC on 21 March 2024 (Third Supplementary Bidder's Statement),
issued by Goldway Capital Investment Limited (company registration number
3294426) (Goldway) in relation to its off-market takeover bid for all of the
ordinary shares in MC Mining Limited ACN 008 905 388 (MCM).

 

This Fourth Supplementary Bidder's Statement is given pursuant to Division 4
of Part 6.5 of the Corporations Act 2001 (Cth) (Corporations Act) in
compliance with the requirements of section 643 of the Corporations Act.

 

This Fourth Supplementary Bidder's Statement supplements and should be read
together with the Original Bidder's Statement, the First Supplementary
Bidder's Statement, the Second Supplementary Bidder's Statement and Third
Supplementary Bidder's Statement. Unless the context otherwise requires, terms
defined in this Fourth Supplementary Bidder's Statement have the same meaning
as in the Original Bidder's Statement.

 

This Fourth Supplementary Bidder's Statement is dated 28 March 2024 and was
lodged with ASIC and given to ASX on that date. Neither ASIC, nor the ASX, nor
any of their respective officers takes any responsibility for the content of
this Fourth Supplementary Bidder's Statement.

 

This is an important document and requires your immediate attention.

 

If you are in any doubt about how to deal with this document, you should
contact

your legal, financial, tax or other professional advisor immediately.

 

 

2.         Observations on the IBC Response

Goldway has reviewed MCM's independent board committee's response to Goldway's
Third Supplementary Bidder's Statement dated 25 March 2024 (IBC Response)which
included the IBC's observations on the valuation methodology adopted in the
independent expert's report (IER) issued by BDO Corporate Finance (WA) Pty Ltd
ACN 124 031 045 (BDO or Independent Expert) and the independent specialist's
report (SRK Report) issued by SRK Consulting (Australasia) Pty Ltd ACN 074 271
720 (SRK).

Goldway expresses its overall disappointment that the MCM Independent Board
Committee (IBC) has decided not to recommend that MCM Shareholders accept
Goldway's Offer. Goldway believes that the Offer represents an attractive,
certain exit price, which MCM Shareholders should consider against several key
points that call into question the view adopted by the IBC Response, as well
as that of the Independent Expert and SRK, on the value of MCM.

Responses to the IBC's claims that Goldway has been misleading shareholders

To assist MCM Shareholders in deciding whether to accept the Offer, Goldway
wishes to outline the further points set out below. The IBC has made
statements that Goldway has been misleading in the Third Supplementary
Bidder's Statement and the IBC "will continue to ensure that Shareholders are
provided with factual information".

Goldway therefore confirms the following facts:

2.1.       Vele Aluwani Colliery (Vele) is on care and maintenance

The definition of care and maintenance is a "temporary closure where  a  mine
is said to be in a state of care and maintenance when it has stopped
production for various technical, environmental, financial or labour related
reasons but the holder has not declared their intent to finally close the
mine". 1 

Vele production ceased in January 2024, with no stated plans or cost estimates
to recommence production. Vele is by definition on care and maintenance.

2.2.       The Independent Expert has adopted a Market Value approach to valuation which "does not consider any potential future operating cashflow generated from MCM's assets"2

The facts of MCM's financial records are:

a)       Since 2010, MCM has raised approximately US$500m to advance its
assets, plus additional proceeds from asset sales. 2 

b)       MCM last reported US$936.5m in accumulated losses. 3 

c)       MCM's annual financial records are as follows: 4 

i.    1H 2024: US$6.0m loss

ii.    2023: US$4.4m loss

iii.   2022: US$20.8m loss

iv.   2021: US$11.8m loss

v.   2020: US$12.2m loss

vi.   2019: US$33.7m loss

vii.  2018: US$103.7m loss

viii. 2017: US$17.4m loss

ix.   2016: US$22.5m loss

x.   2015: US$6.7m loss

xi.   2014: US$84.1m loss

xii.  2013: US$148.1m loss

xiii. 2012: US$138.9m loss

xiv. 2011: US$219.0m loss

xv.  2010: US$101.4m loss

2.3.       The Independent Expert has a ZAR584m (A$46m) preferred valuation of Vele

The facts of the Vele operation are:

a)       February 2010: MCM acquired 100% interest in Vele.

b)       April 2012: MCM announced first coal shipment.

c)       October 2013: Vele was placed on care and maintenance to
"reduce the current cash losses incurred". The intention was to raise the
required funds to ramp-up operations by 2015.6

d)       August 2014: MCM announced a private placement to raise
US$64.9m with US$25m allocated to implement modifications to the Vele plant.

e)       2014 - 2022: Vele remained on care and maintenance.

f)       December 2022: MCM announced it had outsourced Vele with first
coal sales expected in Q1 CY2023 with the ramp-up to full production during Q2
CY2023.

g)       December 2023: MCM's quarterly report stated that "due to the
operating challenges at Vele, combined with elevated logistics costs and the
depressed API4 coal price, it intends downscaling operations while it
progresses a production optimisation strategy".

h)       January 2024: Vele is again on care and maintenance.

2.4.       The IBC states "Shareholders who sell their Shares will forego the opportunity to participate in the exploration and production potential of MCM's development assets"

Goldway would like to highlight the following facts:

a)       MCM's Global Resource was 8.83Bn tonnes in 2014. Ten years
later the Global Resource has declined to 8.65Bn tonnes.

b)       The 'shovel ready' Makhado project definitive feasibility
status (DFS) was announced in June 2013. The project is still at DFS level 10
years later.

c)       Vele has been re-commissioned twice by MCM and failed to remain
operating for a period longer than 18 months on both occasions.

d)       The Greater Soutpansberg Projects (GSP) Resource has not
changed over the past 10 years.

e)       MCM produced 3.1Mt of saleable coal over the financial year
ended 2012. By 2023, MCM's production has declined by 2.8Mtpa to only 0.34Mt.

f)       Since 2010 MCM has raised approximately US$500m in debt and
equity to advance its assets and to its own admission, MCM remains a "resource
development company".

3.         Consents and approval of the Fourth Supplementary Bidder's Statement

This Fourth Supplementary Bidder's Statement includes statements which are
made in or based on statements made in, documents lodged with ASIC or given to
ASX. Under the terms of ASIC Corporations (Takeover Bids) Instrument 2023/683,
the parties making those statements are not required to consent to, and have
not consented to, inclusion of those statements in this Fourth Supplementary
Bidder's Statement. If you would like to receive a copy of any of those
documents, or the relevant parts of the documents containing the statements
(free of charge), during the Offer Period, please call the relevant Goldway
Offer Information Line. Goldway will provide these within 2 Business Days of
the request.

A copy of this document was lodged with ASIC on 28 March 2024.  This Fourth
Supplementary Bidder's Statement prevails to the extent of any inconsistency
with the Original Bidder's Statement, the First Supplementary Bidder's
Statement, the Second Supplementary Bidder's Statement or Third Supplementary
Bidder's Statement.  Neither ASIC nor any of its officers takes any
responsibility for the contents of this Fourth Supplementary Bidder's
Statement.

            Authorisation

This Fourth Supplementary Bidder's Statement has been approved by a resolution
passed by the sole director of Goldway.

 

 

Signed for on behalf of

Goldway Capital Investment Limited

 

 

Mr Jun Liu

Sole Director

 

Date: 28 March 2024

 

 1  The South African Legislative Frame Work for Mine Closure, E. Swart,
Department of Minerals and Energy. See link:
https://www.saimm.co.za/Conferences/MineClosure/001-Swart.pdf.

2 Page 3, MCM announcement Independent Board Committee's Response to Goldway's
Third Supplementary Bidder's Statement.

 2  https://www.mcmining.co.za/investors-and-media/annual-reports.

 3  As above.

 4  As above.

6
https://www.mcmining.co.za/all-categories?task=download.send&id=1122:vele-colliery-update-10-15-2013&catid=61
(https://www.mcmining.co.za/all-categories?task=download.send&id=1122:vele-colliery-update-10-15-2013&catid=61)
.

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