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Continental Coal: South Africa’s Village Main Reef gains approval for cornerstone investment

Published: 02:08 06 May 2013 BST

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Continental Coal (ASX: CCC, AIM: COOL) has reported that Village Main Reef has received South Africa Reserve Bank approval for its proposed strategic financing deal with Continental.

The South Africa Reserve Bank approval was the only outstanding condition for Village Main Reef to take up to a 19.9% cornerstone interest in Continental Coal.

The buy-in places Continental in a position to advance its discussions on a strategic partnership and offtake funding agreement for its proposed fourth mine development, the De Wittekrans Coal Project.

Continental and Village Main Reef previously entered into binding financing agreements, under which Village Main Reef would subscribe for 100 million shares in Continental at A$0.08 per share, raising a total of A$8 million.

Village Main Reef also agreed to establish and fund a mechanism for the sale of parcels of shares held by shareholders with a market value of less than $500, as well as acquire further Continental shares on market at up to A$0.10 per share, increasing its shareholding to 19.9%.

With the final approval now received, completion and financial settlement of the placement is expected next week.


De Wittekrans Coal Project


Continental is continuing to progress its application for a New Order Mining Right and Integrated Water Use Licence for the De Wittekrans Coal Project.

In parallel with the permitting and approval processes underway, the company also continued its discussions and negotiations regarding a potential long-term offtake agreement, strategic partnership and stand-alone funding agreement for the De Wittekrans Coal Project.

Discussions with several parties are ongoing and are focused on the finalisation of a funding arrangement.

This will allow the company to bring the planned initial seven year open cast mine into development and provide funding for the subsequent forecast 30 year, 3.6 million tonne per annum underground mine development and secure a long-term strategic offtake partner for the operations.


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