🕐21.09.10 - 09:54 Uhr
CONTINENTAL POISED TO BECOME MID-TIER SOUTH AFRICAN COAL PRODUCER AS KEY MASHALA AGREEMENTS EXECUTED
Continental Coal Limited (CCC)
ASX Announcement
21 September 2010
VLAKVARKFONTEIN PRODUCTION UPDATE
EXCEEDS TARGETED PRODUCTION OF 100,000 TONNES FOR JULY
Key Points:
- Production of 101,899 tonnes for July exceeds 100,000 tonnes monthly
target
- Target achieved within two months from first coal production blast on May
27
- Further off-take contracts signed for sales of domestic thermal coal
- Crushing and screening contractor mobilised to site and now fully
operational
- Appointment of highly experienced site representative
South African focused coal mining company Continental Coal Limited (ASX:
CCC) ("Continental" or "the Company") is pleased to provide this update on
mining activities at its Vlakvarkfontein coal mine in South Africa, where
in only the second full month of operations it has already exceeded its
targeted monthly production of 100,000 tonnes of thermal coal.
The achievement of the targeted production at Vlakvarkfontein comes
approximately two months after production commenced at the Companys first
mine.
"To have reached our production target so soon after our first coal
production blast on May 27th is testament to the planning and operational
expertise of our mining contractor, Trollope Mining Services, our key
consultants and our management" said Continental Coal CEO, Mr Don Turvey.
"With mining activities now focussed on both the No.4 and No.2 coal seams
we are confident that sustained monthly coal production levels of 100,000
tonnes can be achieved in the December 2010 quarter and beyond.
This gives
Continental Coal a strong operating and financial platform from which we
can advance our other development plans," Mr Turvey added.
Appointment of Crushing and Screening Contractor
In August, the Company appointed W-Carriers Contracting ("WCC") under a 3
year contract to conduct crushing, screening and stockpiling of 100,000
tonnes per month of the run-of-mine coal to produce a -50mm coal product
that will be sold free on truck and at mine gate.
With these facilities now
established on site and able to produce a crushed and screened product, the
Company is now well placed to sell to a broader domestic market and attract
better gross margins compared with producing a raw run of mine coal
product.
In addition WCC will also be responsible for the loading of the coal trucks
that are taking delivery of the coal under recently executed coal off-take
agreements.
At the end of August all site works were completed by WCC and crushing and
screening activities are currently achieving their targeted hourly rates.
Conclusion of Domestic Off-take Agreements
The Company is also pleased to advise that since first coal production
commenced in May 2010 it has successfully concluded three separate off-take
contracts for the sale of its production of a domestic quality thermal coal
from Vlakvarkfontein.
These contracts are generally short term contracts and extend for periods
of no more than six month.
Contracts are for sale on a free-on-truck basis
at the mine gate for a crushed and screened product.
The contracts are with
domestic end users and nearby mining operations.
Furthermore with mining activities at Vlakvarkfontein now taking place on
both the 4 seam and 2 seam, the Company anticipates that longer term
contracts will likely be entered into in the coming months, as detailed
results of the 2 seam coal qualities are received and a final blended 4 and
2 seam coal product is determined and the associated pricing is finalised.
"With these preliminary off-take contracts already established, the
Company is well positioned to ensure 100% of our forecast production at
Vlakvarkfontein is sold into the domestic market at attractive coal prices
which provide free cashflow to support our other mine development
activities," Mr Turvey said.
Key Site Appointment and Completion of Construction for Key Project
Infrastructure
In August the Company appointed experienced mining engineer and mine
manager, Mr Hilton Papenfus as its representative at Vlakvarkfontein.
Mr.
Hilton Papenfus has over 15 years experience and was most recently General
Manager at the nearby Kendal Coal Mine, operated by TSX listed Homeland
Energy.
The Company is pleased to advise that in recent months, it has also
completed a wide range of construction activities on key infrastructure
items that will further underpin its longer-term mining operations at
Vlakvarkfontein.
In the month of August, the Company completed the upgrade of the rail level
crossing close to the Arbor rail siding located north of the
Vlakvarkfontein open pit as well as other associated infrastructure to
support the transport of coal from our site.
Completion of these works has
enabled the Company to increase coal haulage from the open pit and manage
the increased number of coal trucks taking delivery of coal sales at mine
gate.
To download a full copy of the ASX announcement please click on this link:
http://esp.gewru.com/download/files/12414/1245261/21092010%20Production%20exceeeds%20100_000%20tonnes%20for%20July.pdf
For further information:
Peter Landau, Non Executive Director,
Continental Coal Limited
Ph: 08 9488 5220
David Tasker,
Professional Public Relations,
Ph: 08 9388 0944 / 0433 112 936
Em:
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