Investment summary: New coal on the block Within a year,...

Investment summary: New coal on the block

Within a year, Continental Coal has transformed itself from a junior explorer to a mid-tier producer of thermal coal in South Africa. The company�s first mine, Vlakvarkfontein, commenced production in May this year, while the recent acquisition of Mashala Resources adds a second producing mine, Ferreira. The strengthening of Continental Coal�s management team with six senior executives from Mashala gives us confidence that it can execute on the planned production schedule. Since the half year, Continental Coal has secured funding of almost A$100m, which will be used to settle the recent acquisitions and go towards the development of the company�s third coal mine, Penumbra. Provided Continental Coal achieves its production plans, we value the business at A$0.14/fully diluted share.

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