Continental Coal (CCC) 25.5cTHERE'S a symbolic element in the...

Continental Coal (CCC) 25.5c

THERE'S a symbolic element in the South African thermal coal producer's maiden profit, given that its real potential lies in a wider suite of undeveloped projects.

Still, we'll take a $1.9m profit (for calendar 2011) over the previous $30.8m loss any day.

The number reflects Continental's stronger output from its two operating mines, Ferreira and Vlakvarkfontein, which produce both domestic and export product.

Backed by Barclays Bank's ABSA Capital to the tune of $US65m, development has started on a third mine, Penumbra. A fourth, De Wittekrans, is in bankable feasibility stage.

Conti's total output of just less than one million tonnes won't get Rio's or Xstrata's brass quaking in their Blundstones, but if the current-year target of 7mt is achieved that makes for handy revenues -- and margins -- at current prices.

We rated Conti a spec buy at 40c last July and maintain the call.

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