CONTINENTAL COAL LTD: First Production from Penumbra Coal Mine

26 November 2012 
The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000 
By e-lodgement 

                   FIRST PRODUCTION FROM PENUMBRA COAL MINE                    

Key points:

  * First coal production achieved from the Penumbra Coal Mine
      * Decline development advanced to a full face of the C-Upper and  C-Lower
    Coal Seams
      * First saleable export thermal coal to be produced this month following 
    processing of the ROM coal through the Company's nearby Delta Processing
      * ROM production of 5,000 to 10,000 tonnes now forecast for the December
    Quarter with targeted production rate of 63,000 tonnes per month, by 30
    June 2013
      * Continental now operates 3 coal mines, with a combined ROM production rate
    of 2.8Mtpaof thermal coal for both the export and domestic markets
      * Financial settlement of first Penumbra Coal Mine coal hedge contracts in
    October and November already resulted in hedging gain of ZAR2.1m

Continental Coal Limited (ASX:CCC) ("Continental" or "Company") the South
African thermal coal production, development and exploration company, is
pleased to announce that it has begun producing thermal coal from its Penumbra
Coal Mine in South Africa. The commencement of underground coal mining
activities at the Penumbra Coal Mine, the Company's third operating thermal
coal mine, is a major milestone for the Company. 
"To be able to announce that we have achieved first coal production from the
Penumbra Coal Mine is a really significant moment for the Company. It is the
result of a huge effort from our operations team and a number of contractors
that have been working together on this project for the past 14
months," Continental's Chief Executive Officer, Don Turvey said. 
"Penumbra will soon be making its first export thermal coal sales and
generating its first cashflow. It is set to be a long-life and low-cost
operation which should generate significant and sustainable returns for
shareholders." Mr. Turvey added. 
First thermal coal production from the Penumbra Coal Mine mine was achieved
from underground development activities, by the decline contractors Murray &
Roberts, as the twin declines were advanced into a full face of the C-Upper and
C-Lower Coal Seams. The declines first developed into the C-Upper Coal Seam in
mid November 2012 and subsequent advances of the declines has now fully exposed
the C-Upper and C-Lower Coal Seams. ROM coal has been stockpiled at the
Penumbra Coal Mine and is being hauled to the Company's Delta Processing
Operations for processing through the existing wash plant. 
ROM coal production from development activities in the declines will continue
over the next 5 days as the first of two 14HM15 Joy Continuous Miners is
commissioned ahead of commencing full scale underground mining activities later
this month and into December. 
ROM production of 5,000 to 10,000 tonnes for the December Quarter 2012 are
forecast, ramping up to the targeted ROM production rate of 63,000tonnes per
month by 30 June 2013. 
The Penumbra Coal Mine has JORC Compliant Reserves of 5.4Mt and total JORC
Compliant Resources of 68.3MT. It is forecast to produce 750,000 tonnes per
annum of ROM coal over an initial 10 year mine life at forecast average total
FOB costs of ZAR490/t (May 2011 terms), approx. USD$57/t. The ROM production
will be beneficiated through the existing and adjacent Delta Processing
Operations, which comprises a 1.8Mtpa coal processing plant and the 1.2Mtpa
Anthra Rail Siding. Sales of 500,000 tonnes per annum of a high quality export
thermal coal RB1 specification coal product are now forecast to commence this
First export thermal coal sales from the Penumbra Coal Mine are expected in
December 2012. 
In FY 2013, sales of approx. 200,000t of a high-quality export thermal coal are
forecast from the Penumbra Coal Mine at total free-on-board (FOB) costs of
ZAR471/t (approximately US$55/t) and forecast to generate approx. US$17m in
revenue this financial year and forecast to rise to approx. US$45m in FY2014
with between US$15m and US$20m of forecast free cashflow based on current
export coal prices. 
The coal from the Penumbra Coal Mine will be transported by rail to the
Richards Bay Coal Terminal and sold under existing off-take agreements into the
spot market and under existing coal hedging contracts. Financial settlement of
the first Penumbra Coal Mine hedge contracts in October and November 2012 have
already resulted in a hedging gain of ZAR2.1m (approx. A$0.25m) for the
Construction and development activities at the Penumbra Coal Mine are scheduled
to continue through to June 2013, with additional underground shaft bottom
development and the construction of the upcast ventilation shaft representing
two of the key activities. Capital costs for the approx. ZAR325m (approx.
A$39m) mine development have been predominantly funded from the Company's cash.
The oustanding capital costs are fully funded from drawings under a secured
project finance tranche of funding from ABSA Capital. 
For and on behalf of the Board, 
Don Turvey
Chief Executive Officer 
For further information please contact: 
Investors/ shareholders                                            
Jason Brewer                           Don Turvey                  
Executive Director                     Chief Executive Officer                   
T: +61 8 9488 5220                     T: +27 11 881 1420                       
Media (Australia)                        Media (UK)                             
David Tasker                             Mike Bartlett/ Jessica Fontaine/ Jos 
Professional Public Relations            Tavistock Communications                
T: +61 8 9388 0944                       T: +44 20 7920 3150                     


Nominated Advisor                                                               
Stuart Laing                                                                   
RFC Ambrian Limited                                                              
T: +61 8 9480 2500                                                             
Joint Brokers                            Joint Brokers                          
Mark Wellesley-Wood / Chris Sim          Andrew Young                          
Investec Bank plc                        GMP Securities Europe LLP               
T: +44 20 7597 4000                      T: +44 20 7647 2800                     


About Continental Coal Limited

Continental Coal Limited (ASX:CCC/AIM: COOL/US-OTCQX:CGFAY) is a South African
thermal coal producer with a portfolio of projects located in South Africa's
major coal fields including three operating mines, the Vlakvarkfontein,
Ferreira and Penumbra Coal Mines, producing 2.8Mtpa of thermal coal for the
export and domestic markets. The Company's first underground mine, the Penumbra
Coal Mine, commenced development in September 2011 and produced first coal in
November 2012. In 2011, a Feasibility Study was also completed on a proposed
fourth mine, the De Wittekrans Coal Project. The Company has further concluded
strategic off-take and funding agreements with EDF Trading for its export
thermal coal production, signed a joint development agreement with KORES, Korea
Resources Corporation and secured debt funding from ABSA Capital to fund its

Competent Person Statement

The information in this report that relates to the Coal Resources and Reserves
has been prepared in accordance with the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves as published by the
Joint Ore Reserves Committee (JORC Code). The Australasian Joint Ore Reserves
Committee (JORC) and the JORC Code requires that Competent Persons must belong
to the Australasian Institute of Mining and Metallurgy (AusIMM), or the
Australian Institute of Geoscientists (AIG), or a Recognized Overseas
Professional Organisation (ROPO). ROPOs are professional organisations that the
ASX, acting on advice from JORC and its parent organisations, accepts as bodies
to which Competent Persons may belong to for the purpose of preparing
documentation on Exploration Results and Mineral Resources, on which reports to
the ASX are based. The South African Council for Natural Scientific Professions
(SACNASP) as well as the Geological Society of South Africa are considered as

The information in this report that relates to Coal Resources and Reserves on
Penumbra is based on coal resource estimates completed by Mr. Nico Denner, a
full time employee of Gemecs (Pty) Ltd. Mr. Denner is a member in good standing
of the South African Council for Natural Scientific Professions (SACNASP No.
400060/98) as well as a Member and Fellow of the Geological Society of South
Africa. He has more than 15 years' experience in the South African Coal and
Minerals industries. Mr. Denner has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined by
the 2004 Edition of the `Australasian Code of Reporting of Exploration Results,
Mineral Resources and the Ore reserves. Within the constraints mentioned above,
all work undertaken by Mr. Denner and related to the resource estimate was
carried out following industry best practice standards using the South African
Code for Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code,
2007) in conjunction with the South African guide to the systematic evaluation
of coal resources and coal reserves (SANS 10320:2004) as a basis. As such the
resource statements contained in this report may be considered compliant with
the JORC Code. Mr. Denner consents to the inclusion in the ASX release of the
matters based on his information in the form and context in which it appears.

Forward Looking Statement

Certain statements made during or in connection with this communication,
including, without limitation, those concerning the economic outlook for the
coal mining industry, expectations regarding coal prices, production, cash
costs and other operating results, growth prospects and the outlook of
Continental's operations including the likely commencement of commercial
operations of the Penumbra and De Wittekrans, its liquidity and the capital
resources and expenditure, contain or comprise certain forward-looking
statements regarding Company's development and exploration operations, economic
performance and financial condition.

Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Accordingly, results could differ
materially from those set out in the forward-looking statements as a result of,
among other factors, changes in economic and market conditions, success of
business and operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in coal prices and exchange rates and
business and operational risk management. For a discussion of such factors,
refer to the Company's most recent annual report and half year report. The
Company undertakes no obligation to update publicly or release any revisions to
these forward-looking statements to reflect events or circumstances after
today's date or to reflect the occurrence of unanticipated events.              
                           South Africa Australia                              

  T +27 11 881 1420 F +27 11 881 1423 W T +61 8 9488 5220 F +61 8 9324 2400 W   
9th Floor Fredman Towers, 13 Fredman Ground Floor, 1 Havelock Street, West   

                    Drive, Sandton 2196 Perth, WA 6005                         
            PO Box 787646, Sandton 2146 PO Box 684, West Perth WA 6872         

 Independent Non-Executive Chairman Mike Kilbride Chief Executive Officer Don  
                    Turvey Executive Director Jason Brewer                     

Non-Executive Directors: Johan Bloemsma Peter Landau James Leahy Andy Macaulay  
                             Connie Molusi                                  
-0- Nov/26/2012 07:00 GMT
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