Continental Coal Limited the South African thermal coal production, development and exploration company, is pleased to announce that run-of-mine coal production at the Ferreira Coal Mine has exceeded budgeted levels in the December 2012 quarter, the first full quarter of operations in the recently acquired adjacent Prospecting Rights.Run of mine coal production at the Ferreira Coal Mine for the December 2012 quarter totaled 152,280 tonnes. Quarter on quarter an increase of approx. 40% was achieved, from the 109,935 tonnes of ROM coal produced in the September 2012 quarter. Monthly ROM production has now increased for the past 5 consecutive months in FY 2013.

On 27 September 2012, the Company announced that approval had been received from the Department of Mineral Resources to extend the Ferreira Coal Mine opencast mining operations into adjacent and adjoining Prospecting Rights, that it had acquired in April and May 2012. Mining operations in the September 2012 quarter had previously been challenged with operations having reached the mining boundry and a resultant reduction in production.

During the December 2012 quarter, the Company and its mining contractors successfully completed the initial pre-stripping for the new opencast mining operations and moved approx 1.3 million BCM of material. Opencast mining operations have advanced throughout the quarter, with ROM coal production increasing from approx. 38,700 tonnes in October 2012 to approx. 57,550 tonnes in December 2012. The run-of-mine coal production in December 2012, the highest monthly production to date in FY2013, was achieved despite the seasonal holidays.

Mining costs per tonne and total production costs per sales tonne have reduced over the December 2012 Quarter as the mine has moved towards steady state operations, with mining costs per tonne and total production costs per sales tonne reduced by over 30%. FY2013 year to date mining costs per tonne and total production costs per sales tonne at the Ferreira Coal Mine remain below budgeted levels. The ROM coal production for the December 2012 quarter has exceeded the ramp up production profile advised in the September 2012 Quarterly Report, where 125,000 tonnes and 150,000 tonnes of ROM coal production were forecast for the December 2012 and March 2013 quarters respectively. The Ferreira Coal Mine remains on track to achieve ROM coal production of approx. 600,000 tonnes and sales of approx. 420,000 tonnes of a high quality thermal coal forecast for FY 2013.

“Since the Company’s Ferreira Coal Mine started export sales in November 2010, we have exported over 1.1Mt of a high quality thermal coal through the Richards Bay Coal Terminal. Our increasing production levels at the Ferreira Coal Mine and commencement of production at our newly developed Penumbra Coal Mine has been timely with record coal railings and investment by South Africa’s rail operator Transnet into the dedicated Richards Bay Coal Line and coal exports at the Richards Bay Coal Terminal at its highest levels since 2006” Continental’s CEO Don Turvey said. In FY2013, the Company is forecasting total export thermal coal sales of 0.6Mt from the Ferreira and Penumbra Coal Mines and domestic thermal coal sales of 1.3Mt from the Vlakvarkfontein Coal Mine. Detailed production and operation data will be included in the Company’s Quarterly Operations Report to be released on or before 31 January 2013.