Continental Coal completes takeover of Mashala Resources

VlarkfarkF1 Continental Coal Limited, the South African thermal coal production, development and exploration company, says its principal and 74% owned subsidiary in South Africa (Continental Coal Limited (“CCL”)) has satisfied all necessary regulatory requirements and completed the acquisition of the outstanding minority interests in Mashala Resources.

Following the acquisition and the transfer of the outstanding shares in Mashala Resources to CCL, the company’s principal subsidiary in South Africa CCL now holds, amongst other things, 100% interests in the operating Ferreira and Penumbra Coal Mines. These mines each produce a high quality thermal coal product that is exported through the Richards Bay Coal Terminal and sold under existing off-take agreements into predominantly the Asian markets.

The Penumbra Coal Mine, which only commenced underground production in November 2012, is set to achieve an annual export coal sales rate of 500,000t in June 2013, with exports at these levels to continue over an initial 10 year mine life, generating between US$15m and US$20m of forecast cash flow based on current export coal prices.

CCL also now holds a 100% interest in the De Wittekrans Coal Project, which is proposed to be developed as the company’s fourth thermal coal mining operation in 2013, and where the company is advancing off-take agreements, financing and strategic partnership discussions ahead of its initial open pit development.

The company says the optimisation work completed in the December 2012 Quarter on the Feasibility Study, identified the opportunity to develop the De Wittekrans Coal Project to be a major mining operation producing 3.6Mtpa of ROM coal over a 33 year mine life with annual sales of up to 2.4Mtpa of a thermal coal product, ideally suited for the Asian export market and South African domestic market and forecast annual sales revenue of up to US$145m.

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