Time running out in MC Mining takeover bid

Junior coal miner MC Mining has accused a consortium of investors of presenting misleading information to shareholders to encourage them to accept an offer that its independent board committee has said undervalued the company.

The consortium pursuing an off-market buyout offer is represented by Goldway Capital Investment and already holds a collective 64% of the shares in MC Mining.

The junior miner has a primary listing in Australia and secondary listings on the JSE and the UK’s Alternative Investment Market.

In February, Goldway Capital offered to buy out the remaining shareholders for A$0.16 a share in cash in a deal that, if passed, would result in MC Mining being delisted from all the stock exchanges, subject to regulatory approvals in all three countries.

MC Mining has consistently urged minority shareholders to reject the proposal, which requires at least 82.2% of the shares in issue to go through. Since the offer opened on February 16, Goldway has received conditional acceptances from 8.29% of shareholders, taking its stake to 71.69%.

On Monday the company issued a statement saying that since its independent board committee advised shareholders not to accept Goldway’s offer, the consortium had tried to dismiss the findings of independent experts, which assessed the share value before the offer to be between A$0.214 and A$0.356.

Goldway Capital had also, said MC Mining, “falsely claimed that the Vele Aluwani Colliery is under care and maintenance”.

Earlier in March, Vulcan Resources announced a nonbinding proposal to make an offmarket cash takeover offer for all the shares in MC Mining. Vulcan’s proposal was at an indicative price of A$0.17-A$0.20 a share, valuing MC Mining at A$69.34m-A$81.58m (compared with the Goldway offer, which valued the company at A$65.3m).

However, a week later, Vulcan Resources said it was walking away from the deal.

MC Mining said on Monday that if Goldway failed to reach a combined relevant interest of 82.19% by April 5 the offer would lapse.

If this happened MC Mining would “recommence the capital and fundraising initiatives that have been stymied since early August 2023 due to the conditions imposed by Goldway in relation to its offer”.

The junior miner relies on the Uitkomst colliery in KwaZuluNatal for cash generation, but its flagship project is the development of the capital-intensive Makhado project, which would be SA’s only producer of hard coking coal.

The Makhado project has been in the pipeline for the past decade, but MC Mining has been battling to secure funding for it.