S African Continental's coal output, sales above average in...

S African Continental's coal output, sales above average in April

London (Platts)--16May2012/714 am EDT/1114 GMT

South Africa's Continental Coal achieved above budget run-of-mine coal production of 112,281 mt at its Vlakvarkfontein coal mine during April, up 6% from the monthly average in January-March, the third quarter of its July-June fiscal year, the company said in an operations update Wednesday.

The thermal coal production, development and exploration company said April domestic sales from the mine at 93,180 mt were also slightly higher than the fiscal Q3 monthly average of 92,761 mt.

It reported a fiscal year-to-date ROM coal production from Vlakvarkfontein of 1 million mt.

Continental said its Ferreira Coal mine produced 55,263 mt of ROM coal during April, 25% above budget and a 4% increase on the fiscal Q3 monthly average of 53,829 mt.

The Delta Processing Operations produced 37,830 mt of high quality export thermal coal, achieving an average yield of 62.3%, with high quality export thermal coal sales at 40,864 mt during the month.

In addition, during April, an agreement was concluded for Mashala Resources to develop the prospecting right immediately adjacent to and adjoining the current open cast mining at Ferreira.

Continental said in the update that mine planning work has already begun on the prospecting right and it expects ROM coal production of 350,000-400,000 mt "will extend the mine life further and return earnings to levels achieved in previous quarters." The miner also continued negotiations during April with additional parties to acquire further resources close to the Ferreira mine.

It reported fiscal year-to-date ROM coal production at Ferreira of 574,419 mt, with export sales at the mine and the Delta processing Operations of 496,065 mt.

Continental also provided an update on its third thermal coal mining operation, Penumbra, where it forecasts production of 500,000 mt/year of primary export thermal coal to be transported through the Richards Bay Coal Terminal under existing rail contracts and sold to EDF Trading and other export off-take agreements.

The miner said that development activities at Penumbra are ongoing, with primary focus during April on the advance of the twin declines, following the completion of the civil engineering.

It said that the declines advanced 58 meters during the month to a combined total length of 135 meters. It added that the conveyor road has progressed 79 meters and the traveling road 56 meters.

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