Continental Coal Limited (“Continental” or “the Group”) is pleased to provide its operations and financial report for the half-year ended 31 December 2012. “Continental has made significant strides in its strategy of establishing itself as a successful thermal coal mining, production, development and exploration group in South Africa.” Mr Don Turvey, Chief Executive Officer of Continental Coal said commenting on the operating and financial performance for the six months to 31 December 2012. “The Group now operates three thermal coal mines in South Africa: the Ferreira Coal Mine, the Vlakvarkfontein Coal Mine and the Penumbra Coal Mine and has a further nine predevelopment and exploration coal projects, with the De Wittekrans Coal Project planned to be our next new mine development.”

“In arguably one of the most challenging environments for emerging and growth focused mining companies, the Group has continued to report a gross profit as well as having successfully developed and commissioned our third thermal coal mining operation, the Penumbra Coal Mine, within budget and further completed its first exports of a high quality thermal coal product into the Asian markets. We have further increased our access to strategic rail and port export entitlement, secured a material minelife extension to the Ferreira Coal Mine, increased production and sales from the Vlakvarkfontein Coal Mine, completed optimisation studies on our proposed fourth mine development the De Wittekrans Coal Project, delineated a maiden resources of 2.2 billion tonnes in Botswana and further advanced our other exploration activities in South Africa.

Revenue during the period was adversely affected by the fall in the index linked, API4 benchmark coal price, for export thermal coal and by the delays in receiving the necessary approvals to develop the Ferreira Coal Mine into the adjacent and adjoining Prospecting Rights. However, it is pleasing to see that both the Vlakvarkfontein Coal Mine and Ferreira Coal Mine have continued to generate positive cashflow over the period, that the Penumbra Coal Mine has been commissioned successfully, that the Group has established a robust coal price hedging program and has continued to be able to access the debt markets to fund the majority of our growth strategy and that a focus on initiatives to reduce costs and counter the reduced margins from its export focused coal mining operations is already having a noticeable impact on the Group’s financial performance.