The company has entered into a new limited recourse debt and commodity linked facility to fund the potential acquisition.
The addition of the high quality hard coking coal mining operation will complement Continental’s existing thermal coal mining, development and exploration projects in South Africa as well as diversify its production base geographically, the company said.
The deal involves acquisition of five mining concessions covering over 1,500ha including an existing 24-year old underground mine and adjacent exploration ground.
Continental also stated it will assist the joint venture in funding and developing existing operational mine to increase production.
Current underground production and access is through a series of declines to mine two seams with a total economic thickness of 1.7m.
Continental noted that sales of hard coking coal are made at mine gate with margins of about 75%, and direct sales for the export market are planned in 2013.
