LONDON (Alliance News) - South Africa based Continental Coal Ltd posted broadly flat sales in its fiscal fourth quarter to the end of June, although total run of mine production was down as mining at the Ferreira coal mine ceased in the first half of the year.
Total run of mine production was 539,089 tonnes, down from 560,357 tonnes, as an improved performance at its Penumbra mine offset the absence of Ferreira.
Total sales were broadly flat at 442,782 tonnes. The company's Vlakvarkfontein mine's run of mine production rose in the quarter, meaning it achieved its target of planned production of 1.3 metric tonnes run of mine at a cost of ZAR90.00 per tonne for the full year 2014.
At Penumbra, the company encountered stone rolls that are displacing the coal seam in the current mining area, and that hit its production rate and delivered yield. Continental Coal said that it is working with mining consultants to mitigate the effect of these stone rolls.
It completed an inventory clear up at Ferreira in the previous quarter, and said that rehabilitation work will begin after it finalises its closure plan and appoints contractors.
It is awaiting approval for the integrated water use license application for the De Wittekrans coal project. It selected two sites during the quarter, which are now being evaluated to decide which will be selected for the first phase of mining.
Continental Coal said it was in advanced discussions over two remaining prospective licenses at its Botswana Coal projects.
The company progressed with a rights issue during the quarter to raise AUD35.1 million at a price of AUD0.005 per new share. It said it has received strong interest in participation from institutional and sophisticated investors in Australia, Europe and South Africa. It plans to use the funds to repay unsecured convertible note-holders, loans and royalty holders, repay bridging finance, reduce its borrowings and develop its coal mining projects.
As a result of this rights issue, shares in Continental Coal remain suspended on AIM.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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