JOHANNESBURG (miningweekly.com) – ASX- and Aim-listed Continental Coal on Thursday said its 74%-owned South African subsidiary had completed the acquisition of the outstanding minority interests in coal mining junior Mashala Resources.
The acquisition afforded Continental Coal South Africa with, besides others, 100% interests in the Ferreira and Penumbra coal mines, in Mpumalanga, which produce a high-quality thermal coal product that is exported through the Richards Bay Coal Terminal and sold under existing offtake agreements, mainly into the Asian markets.
Underground production at Penumbra started in November last year and the mine was set to achieve yearly export coal sales of 500 000 t in June this year. Exports at these levels were anticipated to continue over an initial ten-year mine life, generating between $15-million and $20-million of forecast cashflow, based on current export coal prices.
Continental Coal South Africa also now held a 100% interest in the De Wittekrans coal project, in Mpumalanga, which was proposed to be developed as the company's fourth thermal coal mining operation in 2013. Continental Coal South Africa was advancing offtake agreements, financing and strategic partnership discussions ahead of the project’s initial openpit development.
Optimisation work completed on the feasibility study in the December quarter last year, identified the opportunity to develop De Wittekrans into a major mining operation that produced 3.6-million tons a year (Mtpa) of run-of-mine coal over a 33-year mine life, with yearly sales of up to 2.4 Mtpa of a thermal coal product.
The coal miner stated that this product would be ideally suited for the Asian export market and South African domestic market, with yearly sales revenue forecast to reach up to $145-million.