First production from the underground mining operation is forecast to commence in the June quarter of 2012 with full production targeted to be achieved in the September quarter of 2012.
Development activities at Continental's third thermal coal mine are proceeding on schedule with the box-cut at the mine already excavated to a depth of 5.5 metres. The first blast in the box-cut was successfully completed on 15 October 2011.
Excavation of the pollution control dam is now 80% complete and the installation of the dam lining is scheduled to commence later this month. The ZAR 96 million decline development tender will be finalised in October 2011 and mobilisation to site is scheduled in early November 2011.
The construction of the terraces for the site buildings, the contractors lay down area, as well as the access roads and visual berms is now 65% complete. In addition, the underground mining equipment tenders for the Penumbra Coal Mine have been adjudicated by Continental and TWP Projects and meetings have been held with the preferred supplier for the ZAR 116 million equipping of the two production sections with the continuous miners and shuttle cars or battery haulers.
The Penumbra Coal Mine is on track to produce 500,000 tonnes per annum of a high quality export thermal coal product. Production of 750,000 tonnes of ROM coal from the Penumbra Coal Mine will be beneficiated through the existing Delta Processing Operations which comprises a 300tph coal processing plant and the 1.2Mtpa Anthra Rail Siding.
The export thermal coal product will be railed through to the Richards Bay Coal terminal under existing rail contracts and sold to EDF Trading and other export off-take agreements.