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Continental Coal announces 2013 production

World Coal,

Continental Coal’s Vlakvarkfontein coal mine is set to achieve its 3rd consecutive record year of thermal coal production, domestic coal sales and earnings, according to a company press release.

Vlarkvarkfontein performance and outlook

The mine is a conventional opencast contract mining operation located about 90 km east of Johannesburg. Since June 2010, the mine has produced in excess of 3.5 million t of ROM coal production and over 3.1 million t of thermal coal sales into the South African domestic market.

With about 11 million t of JORC compliant proven reserves, the mine has a remaining mine life in excess of 7 years.

In 2013 financial year, the mine is set to achieve a number of operational and financial records for the third consecutive year;

  • Year to date (for the 11 months ending 31 May 2013), the mine produced 1.4 million t ROM, 16% above budget. Total ROM production for the year is expected to be 1.55 million t, 23% and 70% above ROM production of 1.24 million t and 0.89 million t achieved in 2012 and 2011 respectively.
  • Thermal coal sales of 1.21 million t have been achieved year to date, with total sales of 1.33 million t forecast for 2013. Coal sales are forecast to be 5% and 100% above thermal coal sales of 1.27 million t and 0.60 million t achieved in 2012 and 2011 respectively.
  • The mine reported Rand 224 million of sales revenue for the 11 months ending 31 May 2013. With total mine production and administration costs of Rand 150 million, the operation has recorded a gross operating profit of Rand 74 million and a margin of 33%.
  • The mine is now forecast to achieve record sales revenue of about Rand 244 million and a record gross operating profit of about Rand 80 million, 50% higher than the previous years.

Vlarkvarkfontein a “success story”

“The Vlakvarkfontein coal mine has been a real success story for Continental. It was our first coal mine into operation, a true greenfield project development and first coal production was achieved within 12 months of its acquisition. The operation has fully repaid all its capital development costs and is forecast to continue to generate free cashflow and dividends to its shareholders over the next 7 years.” Continental’s CEO, Don Turvey, said.

For the 2014 financial year, the mine is forecast to produce 1.32 million t ROM coal and achieve thermal coal sales of 1.1 million t, generating Rand 242 million of total sales revenue.

Adapted from press release by Jonathan Rowland.

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