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The ASX-listed, South African thermal
coal miner currently has two operating
mines in that country providing
approximately 2 million tones per annum
(Mtpa) of run of mine (ROM) production,
however, it is well advanced with plans
that will see it bring up to a further six
SA mines into production within the
next four years, as well as potentially
expanding its operations into Botswana,
Kenya, Tanzania and Mozambique.
At the same time, the Company
continues to fine tune the performance
of its currently producing mines at
Vlakvarkfontein and Ferreira with
combined ROM coal production in the
first quarter of 318,800 tonnes from
the Vlakvarkfontein and Ferreira mines
providing a 24% increase on production
in the previous quarter.
The Company recently demonstrated its
commitment to maintaining that strong
production growth by bringing on line a
new spiral plant at the Delta Processing
Operations for the processing of ROM
coal from the Ferreira Coal Mine and the
proposed new Penumbra coal mining
operation.
The spiral plant is beneficiating coal
mined at Ferreira to export quality as well
as increasing primary yields, which are
forecast to result in up to an additional
3,000 to 5,000 tonnes per month of
saleable export thermal coal product.
Based on current export coal prices, that
has the potential to generate up to an
additional US$250,000 of monthly free
cashflow for Continental.
The Delta Processing Operations
currently process approximately 60,000
tonnes/month of ROM coal from Ferreira.
In early 2012 processing of ROM
coal from the Company?s third mining
operation, Penumbra is forecast to reach
approximately 80,000 tonnes/month of
ROM coal production.
?The commissioning of the spiral
plant demonstrates Continental?s
continued focus on identifying and
implementing ways to improve and
optimise operating performance at our
existing coal mining operations. The new
spiral plant has already had an immediate
impact on overall yields achieved at
the Delta Processing Operations on
production from the Ferreira Mine and
will have a further positive impact
on reducing unit operating costs and
enhancing productivity,? Continentals
CEO, Don Turvey, said during the official
commissioning of the plant in late April.

PENUMBRA PROJECT
DEVELOPMENT
The Company recently reported that
it is set to begin construction of the
Penumbra coal project by the end of
the second quarter of 2011, with first
production expected to commence in
early 2012, ramping up to reach full
production in the third quarter of the
year.
The Penumbra coal project is to
be developed as a conventional
underground bord and pillar mining
operation at a forecast cost of
approximately A$40 million. It is
budgeted to produce 750,000t of ROM
coal production annually over an initial
13 year mine life. ROM coal produced
at Penumbra will be beneficiated
through the existing Delta Processing
Operations, located just 3 km away,
which comprises a 300tph coal
processing plant and 1.2Mtpa railway
siding.

DE WITTEKRANS PROJECT
The next ?cab off the rank? in Continental
Coal?s South African development portfolio
is the De Wittekrans Coal Complex located
near Hendrina, in Mpumalanga Province.
The Company?s Board formally approved the
commencement of the Bankable Feasibility
Study (BFS) for De Wittekrans in December
2010 and is currently advancing the
main components of that study, with the
preliminary results to be released to the
market in July 2011.
The initial development concept for De
Wittekrans is for a conventional opencast
and underground mine, targeting production
of 3.6 to 4.0Mtpa ROM coal over an initial 30
year mine life.
The Company?s South African subsidiary
recently completed an agreement to
increase its interests in the Vaalbank and
Project X Coal Projects, which form part of
the De Wittekrans Complex to 75% and 70%
respectively.
The developments at Penumbra and De
Wittekrans over the next 12 months, and
the continued production increases at
Vlakvarkfontein and Ferreira, is forecast to
take Continental?s ROM production up to 7
Mtpa, just two years after it produced its
first coal at the Vlakvarkfontein mine.
Further proposed developments at
Vlakplaats, Mooifontein, Wesselston II and
Leiden, will ensure that it maintains its climb
up the rankings of South African thermal
coal producers.
But the Company is not stopping there, with
Continental well primed to complete further
consolidation in South Africa as well as
being set to take its successful development
model to other leading coal mining areas in
southern Africa.

BOTSWANA EXPLORATION PROJECTS
In March 2011 the Company appointed
independent South African consulting
geologists Gemecs to consolidate and
interpret newly acquired geological data
on its Kweneng and Serowe thermal coal
projects in Botswana.
Gemecs is expected to hand down the
results of its review by the end of the second
quarter which will provide an updated
assessment of the coal potential within
each of its projects as well as the planned
exploration and drilling programs that are
scheduled to commence in the near future.
The Company is also in the process of
identifying and appointing an in-country
project manager to oversee its significant
Botswana exploration program which will be
drilling into an Exploration Target assessed
by independent geological consultants to
have the potential to contain 6 to 7 billion
tonnes (Bt) of coal, of which 2.7 Bt has been
identified as being at shallow to moderate
depth.
Botswana?s coalfields are considered to be
highly prospective and to contain 212 Bt of
thermal coal, approximately 65% of Africa?s
total resource.

KENYA EXPLORATION AND`
DEVELOPMENT
The Company recently received a
?Notification of Successful Bidder? from the
Kenyan Ministry of Energy following the
Company?s submission of an ?Expression of
Interest? to participate in coal exploration
and development of Kenya?s Mui Coal Basin.
The Mui Coal Basin is located 180km
northeast of Nairobi and has been the
subject of exploration by Kenya?s Ministry of
Energy since 1999.
The Mui Coal Basin is considered by the
Company to be a highly prospective and
strategically located coal basin for the
production of both domestic and export
thermal coal.
The Company is currently waiting to receive
the final tender documents from the Ministry
of Energy ahead of the Company?s planned
submission of its tender by mid-2011.

CORPORATE DEVELOPMENTS
Continental Coal?s ever increasing
production profile is supported by a
strategic off-take and funding agreements
with EDF Trading for its export thermal coal
production.
It has also signed a joint development
agreement with KORES, Korea?s state mining
and exploration company.
Continental has also been extremely
active on the investor market side, having
announced it intends to seek an admission
of its shares to trading on the AIM Market
of the London Stock Exchange (AIM). The
Company has appointed GMP Securities
Europe LLP and Renaissance Capital Limited
as its joint UK brokers and RFC Corporate
Finance Ltd as the Company?s Nominated
Adviser. It is anticipated that the AIM listing
will be completed in the third quarter 2011.
The Company also recently announced that
its American Depository Receipts (ADR) had
commenced trading in the United States on
OTCQX International. Each ADR represents
40 ordinary shares listed on the Australian
Securities Exchange.
?Gaining access to U.S. investors and being
able to share Continental Coal?s story and
value proposition are very important to our
future. We?re confident that the combination
of being quoted on OTCQX paired with the
extensive expertise and support of advisor
and Principal American Liaison Madison
Williams will provide the connection we
are seeking with the U.S. investment
community,? Continental Coal?s Executive
Director, Jason Brewer, said.
?The Board of Continental Coal is very
pleased to have started the Company?s ADR
program trading.?
Continental continues to review a number
of additional consolidation, acquisition and
development opportunities for advanced
and producing thermal and coking coal
assets in southern Africa as it maintains
its medium-term goal of investing in highly
prospective coal resources, with early
cash flow to fund its ongoing financial
requirements and minimum equity dilution.