Minergy Limited, the owner of Masama Coal Mine, anticipates a net loss before tax ranging between P25 million and P45 million for the interim period ending on December 31, 2022.
In a statement addressed to its shareholders, Minergy disclosed that the projected loss represents an increase of 51 percent to 71 percent compared to the previous interim period. This surge in losses is primarily attributed to the absence of production during the second quarter of the interim period, with sales solely reliant on existing product inventory.
The primary cause of these disruptions was the suspension of operations by its former mining contractor, Jarcon Opencast Mining, due to trade payable arrears in March 2023. Although this suspension occurred in the final quarter of the 2022/23 financial year, Minergy emphasises that its repercussions persisted into the interim period, significantly affecting sales performance.
“This, together with depressed coal prices (both offshore and inland) and an increase in inland inventories attributable to logistical challenges in South Africa, conspired to a very challenging trading environment,” reads the company cautionary announcement.
In August of last year, Minergy secured a substantial funding injection of P90 million from its principal financier, Minerals Development Company Botswana (MDCB). Concurrently, Morne du Plessis stepped down from the position of CEO, leading to the appointment of Matthews Bagopi, hailing from MDCB, as the Acting CEO of Minergy. This funding marked the initial phase of a strategic turnaround plan designed to revitalise the business and steer it towards improved fortunes.
In December, Minergy secured additional funding from MDCB totalling P299 million. This substantial investment brought closure to its association with the previous contractor, enabling the smooth transition for the new contractor to initiate operations and resume production. In February, Meropa Resources, the newly appointed mining contractor, commenced mining activities at Masama Coal Mine, gearing up for full-scale production. Minergy anticipates sales to ramp up accordingly, with expectations set for full-scale production and sales to be achieved by the end of June 2024
