Production at ASX- and Aim-listed Continental Coal’s Penumbra underground coal mine, in Mpumalanga, continues to accelerate, with the company reporting a 93% month-on-month increase in output to 27 311 t in February.

The higher production followed the commissioning of the second continuous underground miner at Penumbra in February, as well as the development of additional coal panels in the bord-and-pillar underground operations.

Underground production of between 35 000 t and 40 000 t was forecast for March, while run-of-mine (RoM) production for the third quarter would likely be between 75 000 t and 80 000 t, with monthly budgeted RoM production of some 63 000 t scheduled to be achieved by June.

Moreover, export thermal coal sales from the Penumbra mine of 9 131 t in February represented a 75% increase on the 5 212 t of export thermal coal sales in January.

Coal from Penumbra continued to be processed through the company’s Delta processing operations, located 3 km away, before being railed through to the Richards Bay Coal Termi- nal from the adjacent Anthra rail siding.

Primary export yields of 47.2% were achieved in February – an increase on the 37.2% primary export yield achieved in January 2013.

Primary export yields of some 67% were forecast once the Penumbra mine had achieved steady-state operating levels by June.

“We remain focused on the completion of the outstanding mine development and construction work and, with over 90% of development activities now completed, the remaining work is largely associated with construction of the main ventilation shaft, where precementation work started in March,” Continental said.

All mine construction activities were scheduled to be completed by April, funded from the drawings under its Absa Capital Debt Facilities.

Penumbra boasted Joint Ore Reserves Com- mittee- (Jorc-) compliant proven and probable reserves of 5.44-million tons and total Jorc-compliant measured, indicated and inferred resources of 68.3-million tons.

The underground mining operation was forecast to produce 750 000 t/y of RoM coal over an initial ten-year mine life at forecast average total free-on-board costs of R490/t or $57/t.

Sales of 500 000 t/y of high-quality export thermal coal specification coal product were forecast.

Ferreira Coal Mine
Meanwhile, mine operations at the Mpuma- langa-based Ferreira coal mine continued to perform strongly in February, following the establishment of the new opencast mining operations in the adjacent and adjoining prospecting rights in the December quarter.

In February, monthly RoM coal production of 63 456 t were achieved, 37% above budget and 12% above January RoM coal production of 56 886 t.

RoM coal production for the March quarter was now forecast to be 170 000 t.

Year-to-date total free-on-road costs continued to remain below budget, averaging R556/t sold.

Vlakvarkfontein Coal Mine
The 143 872 t of RoM production at the Vlak- varkfontein coal mine, in Mpumalanga, for February exceeded budget by 31% and represented a 39% month-on-month increase.

In addition, total thermal coal sales of 140 244 t exceeded budget, with 113 487 t allocated to Eskom and 26 757 t representing nonselect coal sales.

Monthly sales in February were a 25% month-on-month increase on total thermal coal sales of 111 992 t achieved in January.

As a result, Vlakvarkfontein was forecast to exceed budgeted RoM production and thermal coal sales for the financial year.

Year-to-date mining costs at the mine had averaged R80/t RoM – some 20% below budget, while total free-on-truck costs, to date, had averaged R134/t.

The average sales price received for coal from Vlakvarkfontein, to date, was R193/t.