CONTINENTAL COAL LTD: ASX Price Query
10 January 2013
Continental Coal Limited's ("Continental" or the "Company") response to a share price and volume query received yesterday from the Australian Securities Exchange is set out below:
1. Is the Company aware of any information concerning it that has not been
announced which, if known, could be an explanation for recent trading in
the securities of the Company?
Please note that as recent trading in the Company's securities could indicate
that information has ceased to be confidential, the Company is unable to rely
on the exception to listing rule 3.1 contained in listing rule 3.1A when
answering this question.
The Company is not aware of any information concerning it, that has not been
announced and which, if known, could be an explanation for recent trading in
the securities of the Company.
2. If the answer to question 1 is yes, can an announcement be made
immediately? If not, why not and when is it expected that an announcement
will be made?
Please note, if the answer to question 1 is yes and an announcement cannot be
made immediately, you need to contact us to discuss this and you needs to
consider a trading halt (see below).
Not applicable. 3. Is there any other explanation that the Company may have for the price change and increase in volume in the securities of the Company? No.
The Company has provided a number of updates to shareholders over the past 2
months that have confirmed that it has achieved several major operational
milestones at its 3 coal mining operations in South Africa, at its proposed 4th
mine development and at its exploration projects in Botswana. These include:
* The Company now operating 3 thermal coal mining operations with a combined
ROM production rate of 2.8Mtpa of thermal coal for sales into both the export and domestic markets * First coal production and first export thermal coal sales completed from the Company's 3rd mine, the Penumbra Coal Mine * Mine development costs at the Penumbra Coal Mine fully funded and on budget * Financial settlement during the December 2012 Quarter of the first Penumbra Coal Mine hedge contracts completed, and demonstrated the benefit of the Company's coal and foreign exchange hedging program that was implemented earlier this year (664,550 tonnes of coal at an average price of ZAR1,057/t (approx. US$123/t) to mitigate its exposure to a fall in US$ coal prices or appreciation of the ZAR:US$ * Confirmation by the Company of forecast sales of approx. 200,000t of a high-quality export thermal coal from the Penumbra Coal Mine in FY 2013 at total costs of approx. US$55/t FOB. With revenue forecast to rise to approx. US$45m in FY2014 on full year export thermal coal sales of 500,000 tonnes generating between US$15m and US$20m of forecast cashflow based on current export coal prices. * Optimization work on the 2011 Feasibility Study on the De Wittekrans Coal Project, the Company's proposed 4th mine development, demonstrated the opportunity to enhance the projects technical and financial fundamentals with proposed exports of 2.4Mtpa of a thermal coal product, over an initial 30 year mine life generating an indicative Equity Project NPV10 in excess of US$110m and an IRR of +20% * Renewal of the Company's three coal Prospecting Licenses in Botswana, the Serowe and Kweneng Coal Projects by the Botswana Department of Mines for a further 2 years.
In addition the Company has also provided a number of updates to shareholders
over the past 2 months that have confirmed that a number of corporate
developments in respect to drawdown on its project debt facilities, divestment
of non-core assets and negotiations over an acquisition and/or direct
investment or joint venture into the Company's South African coal assets have
been advanced. These include: * First drawdown of its secured debt project finance facility with ABSA Capital (a subsidiary of Barclays Capital) completed with the ZAR253m (approx. US$30m) seven year term loan facility and ZAR17.5m (approx. US$2.1m) standby facility to be used to fund the outstanding capital, mine equipment and working capital costs associated with the development and commissioning of the Penumbra Coal Mine. * Settlement of the proposed US$10m sale of the Company's interest in its non-core VanMag Project proceeded with initial payment of approx. US$1m received with a final US$9m payment scheduled to be received in the current quarter. * Proceeds from the sale of VanMag used towards acquisition of the minority shareholders in Mashala Resources with agreement reached to extend the final acquisition of the minority shareholders of Mashala Resources to 28 February 2013 * Further divestment of the Company's other non-core assets advanced with indicative proposals received and under review and with any sales proceeds to be used to reduce debt and meet ongoing working capital requirements * Due diligence and bidding process completed with Indian based coal and power utility companies, major global commodity trading and private equity groups with offers received for the Company's interest in its South African business and for acquisition and/or joint venture of specific operating and development projects. Negotiations in respect to these offers are continuing and an update is planned to be made in the current quarter. 4. Please confirm that the Company is in compliance with the listing rules and, in particular, listing rule 3.1.
The Company confirms that it is in compliance with the ASX listing rules and,
in particular listing rule 3.1.
For and on behalf of the Board.
Don Turvey Chief Executive Officer
For further information please contact:
Jason Brewer Don Turvey Finance Director Chief Executive Officer
T: +61 8 9488 5220 T: +27 11 881 1420
E: firstname.lastname@example.org W: www.conticoal.com
Media (Australia) Media (UK)
David Tasker Mike Bartlett/Lydia Eades/Jos Simson Professional Public Relations Tavistock Communications
T: +61 8 9388 0944 T: +44 20 7920 3150
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. The Company operates three thermal coal mines, the Vlakvarkfontein, Ferreira and Penumbra Coal Mines, producing 2.8Mtpa of thermal coal for the export and domestic markets. The Company commenced development of its first underground mine, the Penumbra Coal Mine, in September 2011 and completed its first coal sales in December 2012. In 2011, a Feasibility Study was also completed on the Company's proposed fourth mine, the De Wittekrans Coal Project, with further optimisation studies completed in 2012. 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 growth. 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 Connie Molusi
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