Project Name: Makhado Hard Coking Coal Project

Location: Limpopo, South Africa

Project Owner/s: MC Mining owns a 67.3% interest in the Makhado project through its subsidiary Baobab Mining & Exploration. The Industrial Development Corporation of South Africa owns 6.7%, seven local communities own 20%, and the remaining 6% is held by a black economic-empowerment industrialist.

Project Description: The Makhado project is a fully licensed and shovel-ready steelmaking hard coking coal project. The proven and probable reserves have increased from 69 million tonnes to 106 million tonnes in the updated life-of-mine (LoM) plan, which was released in June 2023. Detailed mine designs have been completed for the East pit deposit, preparing for the start of mining. The production of steelmaking hard coking coal has increased from 13.7 million tonnes to 22.5 million tonnes. The project will utilize surface mining methods to exploit the mineable portions of the East, Central, and West coal deposits. The estimated annual run-of-mine (RoM) production is four million tonnes. The coal handling and processing plant will have a capacity of four million tonnes per year, resulting in planned yearly sales of 64 midvolatile steelmaking and hard coking coal (801,000 tonnes) and yearly sales of 5,500 kcal thermal coal (620,000 tonnes). The total estimated saleable coal products over the 28-year mine life are 41 million tonnes.

Potential Job Creation: The project is expected to create approximately 650 permanent employment positions.

Net Present Value/Internal Rate of Return: The project has an after-tax net present value, at a 6% discount rate, of R6.8 billion and an internal rate of return of 37%, with a payback period of about 3.5 years.

Capital Expenditure: The total estimated capital expenditure for the life of the project is R2.49 billion.

Planned Start/End Date: The time to first production is estimated to be 18 months.

Latest Developments: Significant progress has been made in line with the implementation plan for critical early works activities, including the commencement of the power supply overhead transmission line, the construction of a bridge across the Mutamba river to provide site access, the placement of orders for key long-lead items, and the ongoing selection of mine-operating contractors.

Key Contracts, Suppliers, and Consultants: Minxcon is responsible for the BFS (Bankable Feasibility Study) and potential alternative development scenarios for Makhado, while Erudite is involved in detailed planning for a full process design for the project.