Continental Coal Limited has announced that through its South Africansubsidiary Mashala Resources (Pty) Limited, it has entered into agreements thatwill allow the Company to extend the operating mine life at the Ferreira CoalMine and its production of high quality thermal coal through the acquisitionand development of the adjacent and adjoining Prospecting Right
Under the termsof a recently executed Sale and Purchase agreement with Misty Sea Trading (Pty)Limited, Mashala has acquired the right to develop the Prospecting Rightcomprising Portion 25 of the farm Witbank 262 IT. This Prospecting Right islocated immediately adjacent to and adjoining the current open cast mining activitiesbeing conducted by the company at the Ferreira Coal Mine and on Portion 19 ofthe farm Witbank 262 IT. The Prospecting Right has been acquired by the Companyfor a market related monthly royalty payment on each tonne of run-of-mine coalmined from the C-lower, C-upper and B-lower coal seams.
Continental hasalready commenced mine planning work on the Prospecting Right to incorporatethe adjacent block into the Ferreira Coal Mine’s existing mine plan. A 15 holeexploration and resource confirmation drill program has been finalised anddrilling has commenced. The company is proposing to commence development of theProspecting Right once relevant approvals have been obtained.
Thecompany lodged a Section 102 Application with the Department of Minerals andResources in September 2011 to allow it to conduct mining activities on theProspecting Right.
Miningactivities at the Ferreira Coal Mine will extend from the current open castoperations across and into the Prospecting Right. Mining on the ProspectingRight of between 350 000 to 400 000 ROM tonnes is forecast to be completed inapproximately 8 months. Continental has also confirmed that it is in furthernegotiations with additional parties to acquire further prospecting rights thatare both contiguous to - and in close proximity to - the Ferreira Coal Mine onsimilar terms and will advise the market once these negotiations have beenfinalised.
Adapted from a press release by David Bizley
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