ASX- and JSE-listed MC Mining has entered into binding agreements with Kinetic Development Group (KDG), the company's controlling shareholder, and Eagle Canyon International Group, a minority shareholder of the company, for $9.94-million in promissory note funding.

KDG and Eagle Canyon have agreed to subscribe for one or more unsecured convertible promissory notes to be issued by the company for principal amounts of $6.14-million and $3.8-million, respectively.

The proceeds will be applied principally towards the continued construction and commissioning of MC Mining’s flagship Makhado hard coking coal project, in Limpopo, South Africa.

Funds will be allocated towards the completion of the remaining civil works at the Makhado coal handling and preparation plant; for the continuing development of the opencut mining operations, including ongoing overburden stripping and associated mining contractor costs;  the completion of supporting infrastructure, including the 22 kV power supply main line, substation equipment, water supply pipelines and ancillary works; and the commissioning and joint trial operations required for the Makhado project to transition into stable commercial production.

Funds will also be used to support the company's general working capital requirements and the sustainable management of the company's other South African mining assets, including Uitkomst Colliery and the Vele Colliery.

The company says the promissory note programme will provide the company with timely, committed and flexible funding to support the continued construction and commissioning of the Makhado project and to bridge the period to first commercial production.

The programme will also further demonstrate the strategic alignment and continued financial support of KDG, the company's controlling shareholder and an established profitable coal producer listed on the main board of the Hong Kong Stock Exchange.

The company says the programme also continues the participation of Eagle Canyon as a supportive and significant minority shareholder, providing a meaningful endorsement of the promissory note programme by a noncontrolling shareholder; and it preserves both the company's funding flexibility and sustainability.

MC Mining says further updates on the promissory note programme, including the timing of the general meeting of shareholders and operational milestones at the Makhado project, will be provided to shareholders in due course.