Mc Mining Regulatory News (MCM)

ANNOUNCEMENT 27 July 2015

REPORT FOR THE QUARTER ENDED 30 JUNE 2015

Makhado Mining Right transforms CoAL

Coal of Africa Limited ("CoAL" or "the Company") which operates in South Africa, together with its subsidiaries, hereby provides its update for the quarter ended 30 June 2015. All figures are denominated in United States dollars unless otherwise stated. A copy of this report is available on the Company's website, www.coalofafrica.com.

Salient Operational Features

· No lost-time injuries ("LTIs") recorded during the quarter (FY2015 Q3: nil).

· The Department of Mineral Resources ("DMR") granted the Company a New Order Mining Right ("NOMR") for the Makhado hard coking and thermal coal project ("Makhado Project") as well as Section 11 approval transferring the project from CoAL to its subsidiary Baobab Mining & Exploration (Pty) Ltd ("Baobab").

Corporate and Financial Features

· Agreement reached for the liability owing to Rio Tinto with the balance to be paid in monthly instalments of at least $100,000 plus interest and the obligation settled by June 2017. During the quarter the Company paid the interest accrued from May 2014 of $1.2 million (FY2015 Q3: nil) and $2.7 million (FY2015 Q3: $1.0 million) in capital and the balance remaining at the end of the period was $19.8 million.

· Continued engagements with the Department of Water Affairs to progress the application for the Makhado Project Integrated Water Use Licence ("IWUL"), expected to be granted in Q3 CY2015.

· During the quarter the Company issued 144 million shares at GBP0.55 each raising $13.8 million completing the $65 million (before charges and foreign currency movements) three stage shareholder approved equity raise process.

· Renegotiation of the Opgoedenhoop NOMR sale with the R17.4 million ($1.4 million) (including interest and VAT) owing to CoAL payable in monthly instalments of at least R0.25 million ($0.02 million) with the balance due by the end of H1 CY2016.

· Appointment of De Wet Schutte as Chief Financial Officer and Executive Director during the quarter.

· Available cash at period end was $17.8 million and restricted cash of $1.3 million.

Commenting today, Mr David Brown, Chief Executive Officer said: "The granting of a mining right for CoAL's flagship Makhado Project is an important milestone, given that the project has the potential to stimulate domestic industrialisation once it reaches full capacity. The Company can now move towards developing the colliery which has the capability to produce hard coking and thermal coal, thereby capitalising on its proximity to underutilised rail infrastructure.

With these significant developments we are getting closer to extracting value from this project. We continue to engage constructively with the Department of Water and Sanitation and anticipate that we will be granted an IWUL in due course. The process of identifying potential strategic partners to provide funding and technical expertise is on track. We expect to finalise this process and the necessary off-take agreements with prospective customers by the end of H1 CY2016."

QUARTERLY COMMENTARY

Makhado Coking Coal Project - Soutpansberg Coalfield (100% owned - 74% post BBBEE transaction)

The Makhado Project recorded no LTIs (FY2015 Q3: no LTIs) during the quarter.

During the quarter the DMR granted the Company a NOMR in terms of the Mineral and Petroleum Resources Development Act (Act 28 of 2002) as well as Section 11 approval to transfer the right from CoAL to Baobab, the company that will develop the colliery. Makhado's 26 month construction phase is expected to begin in H2 CY2016 with a further four month ramp-up phase resulting in the production of 5.5 Mtpa of saleable product. Consultations with potential customers to secure off-take agreements for Makhado's hard coking and thermal coal products and with potential project funders continued during the quarter.

An interim court interdict seeking to halt any mining or construction activity was issued against the Makhado Project during Q2 FY2015. As one of the respondents the Company is preparing to have the interim interdict set aside. CoAL does not anticipate that the process will affect the Makhado Project construction timetable.

Mooiplaats Colliery - Ermelo Coalfield (74% owned)

The Mooiplaats thermal coal colliery ("Mooiplaats Colliery") was placed on care and maintenance during the September 2013 quarter and recorded no LTIs during the period (FY2015 Q3: no LTIs).

During Q1 FY2015 the Company signed a Share Purchase Agreement ("SPA") with Blackspear Capital Proprietary Limited ("Blackspear") for the disposal of the Mooiplaats Colliery for R250 million ($20.3 million). Blackpear was unable to agree terms with a financial and operational partner to fund its acquisition resulting in the SPA lapsing. The Company is continuing discussions with other potential purchasers including Blackspear.

Vele Colliery - Limpopo (Tuli) Coalfield (100% owned)

The Vele coking and thermal coal colliery ("Vele Colliery") recorded no LTIs during the quarter (FY2015 Q3: no LTIs).

The Company previously submitted applications to amend and renew Vele's IWUL and expects these to be granted during H2 CY2015. CoAL does not anticipate any delays as a result of the appeal lodged against the colliery's amended and updated EA. The current Vele Colliery IWUL is valid until March 2016 and the Company has delayed the commencement of the plant modification construction pending the approval of the amended IWUL and approved Water Use Licence for the planned stream diversions, as well as an assessment of global coal prices.

Greater Soutpansberg Project (MbeuYashu) (74% owned)

The MbeuYashu Project recorded no LTIs (FY2015 Q3: no LTIs) during the period.

Authorised by

David Brown

Chief Executive Officer

27 July 2015

For more information contact:

Company advisors:

Investec Bank Limited is the nominated JSE Sponsor

About CoAL:

CoAL is an AIM/ASX/JSE listed coal exploration, development and mining company operating in South Africa. CoAL's key projects include the Vele Colliery (coking and thermal coal), the Greater Soutpansberg Project /MbeuYashu, including CoAL's Makhado Project (coking and thermal coal).

Tenements held by CoAL and its Controlled Entities

* Form part of the Greater Soutpansberg Project

- Lapsed - Mining Right Application Lodged

-- Valid - Mining Right Application Lodged

~ Tenement located in the Republic of South Africa

^ Tenement located in Western Australia

# CoAL's interest will reduce to 74% owned on completion of the Broad Based Economic Empowerment transaction