feedback fron j brewer re languishing sp

I forwarded email to Jason Brewer regarding falling share price, my concern was the Coal spot price.

In Quick Summary

Hedge Price protection in Place for Penumbra which is getting closer to completion. Average price ZAR1057T which is way above current $87 spot prices
Ferreira coal miine extended and increased pricing achieved, for Export coal.
Eskom local Sth African buying all the Domestic CCC can produce from Vlakvarfontein Mine.

Cash cost for Export approx $70 Ton

All coal sold in high demand market.



My Email
Attention: Jon Brewer or Don Turvey

Long suffering CCC investors need urgent update today, share price all time lows.

Falling coal price, are mines viable? YES
What is the Cash Cost for production for each mine, what Coal prices is CCC receiving.....Coal spot prices have fallen to $87 spot price (Cash cost approx $70 for Export)
So many announcements CCC has undertaken, deals with all sorts of parties, Loan Tranches, Convertale notes, acquisition here and there, Expansions....

We are a group of CCC investors and lots of others in forum's that are owed clear details today..

Prompt Reply received today

REPLY Paraphrased

Reply from Jason Brewer below

Happy to address some of your concerns here, however updates to the market are made when material transactions are completed or on operations, development and exploration progress. Obviously we are keen to get news out there to demonstrate that the underlying business continues to perform and that positive progress is being made in a number of other areas.

The share price is at all time lows and is completely unacceptable and your concerns are shared by myself and the Board and we continue to look into ways to address it. What we can control is our operational activities and in particular our progress with the Penumbra Mine development and that is where we can make most progress as we look to build a long term and sustainable business.


Whilst the share price has fallen in recent times, the two mines have continued to operate and sell coal into the domestic and export markets. Mine life for one of the operations has been materially extended over the past quarter and increased pricing has been achieved at the other following execution of an offtake with Eskom. The Penumbra Mine development continues and day by day we get closer to the first coal from that new underground operation, which has good coal price protection through the hedge program at an average price of ZAR1057/t.


Many of your questions can be answered by looking at the Independent Competent Persons Report on our website which was completed by SRK and gives a very detailed breakdown on the various operations and its operating and capital costs etc. Cashflow forecasts were also prepared by them. Our quarterly production reports and various operations updates also gives mine by mine financial data, allowing you to see the quarterly and year to date operating and financial performance on each operation. We go down into this detail to allow shareholders to see how each operation performs on a stand alone basis.


The company has completed deals with many financial and strategic institutions and those completed by debt have been largely non-dilutionary and by institutions that have completed an independent legal, technical and financial due diligence of our business. Such deals demonstrate long term support for the company's business activities in South Africa and should give shareholders comfort that our business model, management practices and corporate governance has been independently verified and supported. EDF who take our export coal under a long term offtake made their first direct investment into South Africa in Continental through their coal prepayment. ABSA/Barclays have put forward various debt facilities of which we will be drawing only on the US$35m project finance tranche to complete the Penumbra Mine development, and please note that debt financiers loan covenants typically require 2 to 3 times discounted cashflow coverage over this principal amount, so valuing the Penumbra Coal Mine asset alone well in excess of our current market capitalization. Other key financings and financiers include $10m of the $20m convertible notes done last year with Susquehanna, a major US fund, and whilst we didn't make too big a deal out of this at the time, take a look at Universal Coals recent announcement and you will see how strategic an investor they are. Actual details on debt outstanding etc was included in the Half Yearly Report and will also be included in the next quarterly report along with cash balances etc.


As I mentioned updates will be made, but rest assured the mines continue to operate and sell their coal into high demand export and domestic markets and largely independent of the daily share price fluctuations. Management are looking to successfully build a long term, profitable and sustainable business that will provide its shareholders with both income and capital growth - the former we are well down the track with given the improved operating and financial performance over the past year and growth ahead of us, and the latter whilst challenging in the current capital markets needs to be addressed to meet the shorter term investment frames of many of the company's shareholder base.


Once again many thanks for your email. I will be returning to Perth at the end of the week and more than happy to take a call and discuss further.


With kind regards

Jason