Continental Coal update on operations and new coal project acquisition

Tuesday, 22 Nov 2011

African focused coal mining investment and production company Continental Coal Limited provide an update on operating and financial performance at its thermal coal mining and processing operations in South Africa and background on the strategic acquisition of the Wolvenfontein Coal Project.

Ferreira Coal Mine and Delta Processing Operations
During the month of October 2011, ROM coal production of 69,228 tonnes at the Ferreira Mine was achieved, 13% above the average monthly ROM production in the previous quarter. The Delta Processing Operations washed a total of 81,642 tonnes for the month.

Railings to the Richards Bay Coal Terminal from the Company’s Anthra Rail Siding for the month totaled 64,191 tonnes of high quality export thermal coal. This represents a 47% increase on the average monthly tonnes railed to RBCT during the previous 2011 quarter.

Vlakvarkfontein Coal Mine
During the month of October 2011, the Vlakvarkfontein Coal Mine achieved ROM coal production of 102,796 tonnes a 9% increase on the average monthly tonnes of ROM production in the September 2011.

Thermal coal sales from the Vlakvarkfontein Coal Mine to the South African domestic market of 117,122 tonnes of thermal coal were made during the month. This was approx. 9% below the record average monthly sales of 128,148 tonnes of domestic sales achieved in the previous quarter.

Wolvenfontein Coal Project
The Company’s South African subsidiary Continental Coal Limited has executed a Sale Agreement with South African based Universal Pulse Trading (Pty) Limited and completed the acquisition of a 100% interest in the Wolvenfontein Coal Project for total consideration of ZAR 10.4 million payable in equity.

The Wolvenfontein Coal Project is located approx. 80km east of Johannesburg and 4km south of the town of Delmas in the Nkangala District Municipality, Mpumalanga Province. The Company’s Vlakplaats Coal Project, which has total JORC compliant resources of 187.7 million tonne is located less than 5km to the east.

Key points:
1. Run of mine thermal coal production of 172,024 tonnes achieved at the Ferreira and Vlakvarkfontein Coal Mines for the month of October 2011 in line with annual target of 2 million tonne per annum
2. Ferreira Mine and Delta Processing Operations achieve record monthly run-of mine coal production and record high quality export thermal coal sales for the month of October
3. Ferreira and Vlakvarkfontein Coal Mines generate unaudited aggregate EBITDA of ZAR 10.1 million for the month of October and ZAR 38.9 million for the first 4 months of the financial year
4. Acquisition of the Wolvenfontein Coal Project, which has a JORC compliant resource of 36.7 million tonne and is strategically located to the east of the Company’s Vlakplaats Coal Project

Continental Coal on track with development of third South African coal mine

Sat, 22 Oct 2011

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.

(sourced proactiveinvestors)

Continental ships first steam coal cargo from RBCT to India

Monday, 24 Jan 2011

Australia listed producer Continental Coal has completed the first shipment of thermal coal from South Africa's Richards Bay Coal Terminal under its offtake agreement with France's EdF Trading.
Around 33,000 tonnes of thermal coal was loaded from the company's 57,500 tonnes stockpile at RBCT with the vessel now heading towards the Indian port of Mundra.
Final coal pricing for the shipment will be revised upwards based on the prevailing higher export price. When coal is loaded onto railcars at Continental's Anthra rail siding, it will be based upon the average coal price for the month of loading.
In November and December last year, the provisional gross coal price received by Continental for coal railed to RBCT was around USD 105 per tonne.
Continental will benefit because the average coal price for January is USD 127 per tonne and is forecast at over USD 120 per tonne for the remainder of the month.
Mr Don Turvey CEO of Continental Coal said “It is extremely pleasing that the company is so well placed to take advantage of the current high thermal coal prices, as we look to increase thermal coal exports with the development of the Penumbra mine.”
Under the offtake agreement, EdF will secure thermal coal production from Continental's Ferreira, Penumbra and De Wittekrans mines for an initial period of 20 years at a market API4 benchmark price FOB RBCT.
Continental expects first output from its Penumbra underground coal mine in South Africa in the fourth quarter of this year. Penumbra is forecast to produce 500,000 tonnes per year of export coal and 120,000 tonnes per year of a secondary domestic quality thermal coal product.
(Sourced from Argus Media)