23 January 2013
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000
FERREIRA COAL MINE EXCEEDS BUDGETED PRODUCTION LEVELS
Continental Coal Limited (ASX:CCC, AIM:COOL) ("Continental" or "Company") the
South African thermal coal production, development and exploration company, is
pleased to announce that run-of-mine ("ROM") coal production at the Ferreira
Coal Mine has exceeded budgeted levels in the December 2012 quarter, the first
full quarter of operations in the recently acquired adjacent Prospecting
Run of mine coal production at the Ferreira Coal Mine for the December 2012
quarter totaled 152,280 tonnes. Quarter on quarter an increase of approx. 40%
was achieved, from the 109,935 tonnes of ROM coal produced in the September
2012 quarter. Monthly ROM production has now increased for the past 5
consecutive months in FY 2013.
On 27 September 2012, the Company announced that approval had been received
from the Department of Mineral Resources to extend the Ferreira Coal Mine
opencast mining operations into adjacent and adjoining Prospecting Rights, that
it had acquired in April and May 2012. Mining operations in the September 2012
quarter had previously been challenged with operations having reached the
mining boundry and a resultant reduction in production.
During the December 2012 quarter, the Company and its mining contractors
successfully completed the initial pre-stripping for the new opencast mining
operations and moved approx 1.3 million BCM of material.
Opencast mining operations have advanced throughout the quarter, with ROM coal
production increasing from approx. 38,700 tonnes in October 2012 to approx.
57,550 tonnes in December 2012. The run-of-mine coal production in December
2012, the highest monthly production to date in FY2013, was achieved despite
the seasonal holidays.
Mining costs per tonne and total production costs per sales tonne have reduced
over the December 2012 Quarter as the mine has moved towards steady state
operations, with mining costs per tonne and total production costs per sales
tonne reduced by over 30%. FY2013 year to date mining costs per tonne and total
production costs per sales tonne at the Ferreira Coal Mine remain below
The ROM coal production for the December 2012 quarter has exceeded the ramp up
production profile advised in the September 2012 Quarterly Report, where
125,000 tonnes and 150,000 tonnes of ROM coal production were forecast for the
December 2012 and March 2013 quarters respectively.
The Ferreira Coal Mine remains on track to achieve ROM coal production of
approx. 600,000 tonnes and sales of approx. 420,000 tonnes of a high quality
thermal coal forecast for FY 2013.
"Since the Company's Ferreira Coal Mine started export sales in November 2010,
we have exported over 1.1Mt of a high quality thermal coal through the Richards
Bay Coal Terminal. Our increasing production levels at the Ferreira Coal Mine
and commencement of production at our newly developed Penumbra Coal Mine has
been timely with record coal railings and investment by South Africa's rail
operator Transnet into the dedicated Richards Bay Coal Line and coal exports at
the Richards Bay Coal Terminal at its highest levels since 2006" Continental's
CEO Don Turvey said.
In FY2013, the Company is forecasting total export thermal coal sales of 0.6Mt
from the Ferreira and Penumbra Coal Mines and domestic thermal coal sales of
1.3Mt from the Vlakvarkfontein Coal Mine.
Detailed production and operation data will be included in the Company's
Quarterly Operations Report to be released on or before 31 January 2013.
For and on behalf of the Board
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
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
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, are set to produce at an annualised rate of
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 and 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
-0- Jan/23/2013 07:00 GMT
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