Department of Mines approves renewal of Continental Coal prospecting licences in Botswana

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Continental Coal Limited says the Botswana Department of Mines has approved the renewal of the company’s three coal Prospecting Licenses in Botswana for a further 2 years.

Commenting on the renewal of its licenses, Continental Coal Chief Executive Officer Don Turvey says: “The renewal of the prospecting licenses that make up our Serowe and Kweneng Coal Projects in Botswana is another positive step forward for the Company.”

“With the JORC Compliant Resource that we have already delineated and the larger Exploration Target that has been determined by our geological consultants, our Botswana projects have the potential to be significant assets for the company and we can now move forward with our next phase of exploration planning. There have been a number of positive developments in Botswana’s emerging coal sector recently, so the renewal of our licenses comes is timely, and we look forward to making a significant contribution to what is a rapidly growing and exciting sector” Turvey adds.

Continental, through its Botswana subsidiary, Weldon Investment (Pty) Ltd, holds three coal prospecting licenses that cover an area of approx. 475km² in Botswana. The Prospecting Licenses, PL339/2008 and PL340/2008 are together known as the Serowe Coal Project, whilst PL341/2008 is known as the Kweneng Coal Project.

The company’s licenses are considered very well located strategically, with the Serowe Coal Project located immediately north of Botswana’s only major producing thermal coal mine, the Morupule Coal Mine, whilst the Kweneng Project is 25kms west of CIC Energy’s Mmamabula Coal Project that was recently acquired by Jindal Steel and Power Ltd of India for US$116m.

In August 2012 following completion of its Phase 1 drilling program, the Company announced a maiden JORC Compliant Inferred Resource of 2.2 Billion Tonnes on the Kweneng Coal Project and a further Exploration Target in excess of 9 Billion Tonnes1 across both the Kweneng and Serowe Coal Projects (refer ASX Announcement dated 8 August 2012).

The Phase 1 drilling program that was completed in early 2012 and subsequent geological modelling by the Company’s geological consultants further confirmed that there are shallow coal seam areas at the Serowe Coal Project that are suitable for open cast mine development, whilst coal washability tests also confirmed the potential for low grade thermal coal exports from the Kweneng Coal Project.

The renewal of the Prospecting Licenses for a further 2 years allows the Company to finalise its proposed Phase 2 exploration drilling program across both the Kweneng and Serowe Coal Projects with the principle aims being to increase existing resources, increase the level of confidence in the extent, continuity and quality of the known resources as well as to convert a significant portion of the Exploration Target into JORC compliant resources on the Serowe and Kweneng Coal Projects.

The renewal of the Prospecting Licenses will also allow the Company to advance its discussions with several strategic parties that have already expressed an interest in participating in the Company’s exploration activities across the Serowe and Kweneng Coal Projects.

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