1 October 2014
Continental Coal Limited
("Continental Coal" or "the Company")
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2014
Please find attached extracts from the Company's Annual Report for the year
ended 30 June 2014, being the:
- Statement of Income;
- Statement of Other Comprehensive Income;
- Statement of Financial Position;
- Statement of Changes in Equity;
- Statement of Cashflow; and
- Reserve and Resource Statement.
A copy of the full Annual Report is available on the Company's website at
www.conticoal.com and also at the Australian Securities Exchange website,
ww.asx.com.au.
Yours faithfully
Peter Landau
Executive Director
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2014
Note Consolidated
2014 2013
A$'000 A$'000
Operating sales revenue 2 68,706 62,230
Operating expenses (59,537) (55,181)
Depreciation & amortisation (6,862) (4,190)
Cost of sales 3 (66,399) (59,371)
Gross profit 2,307 2,859
Other income 2 4,180 4,130
Administration expenses 3 (11,595) (11,533)
Finance expenses 3 (26,939) (13,888)
Impairment expenses 3 (2,208) (28,126)
Marketing expenses (225) (266)
Other expenses 3 (1,384) (2,618)
Loss before income tax (35,864) (49,442)
Income tax benefit 4 1,338 1,101
Loss after income tax from continuing
operations (34,526) (48,341)
Loss from discontinued operation 10 - (1,147)
Loss for the year (34,526) (49,488)
Net profit/(loss) is attributable to:
Owners of Continental Coal Limited (30,295) (35,720)
Non-controlling interests (4,231) (13,768)
(34,526) (49,488)
Loss per share for loss from continuing
operations attributable to the ordinary
equity holders of the Company:
Basic loss per share
(cents per share) 6 (4.30) (6.56)
Diluted loss per share
(cents per share) 6 (4.30) (6.56)
The above Consolidated Income Statement should be read in conjunction with the
Notes to the Financial Statements.
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Note Consolidated
2014 2013
A$'000 A$'000
Loss for the year (34,526) (49,488)
Other Comprehensive Income/(Loss)
Items that may be reclassified to profit
or loss
Exchange differences on translation of
foreign operations (3,140) (6,052)
Changes in the fair value of cashflow
hedges, net of tax 2,679 3,087
Other comprehensive loss for the year,
net of tax (461) (2,965)
Total comprehensive loss for the year (34,987) (52,453)
Total comprehensive income/(loss) is
attributable to:
Owners of Continental Coal Limited (32,695) (38,177)
Non-controlling interests (2,292) (14,276)
(34,987) (52,453)
Total comprehensive loss for the period
attributable to owners of Continental
Coal Limited arises from:
Continuing operations (32,695) (37,030)
Discontinued operations - (1,147)
(32,695) (38,177)
The above Consolidated Statement of Other Comprehensive Income should be read
in conjunction with the Notes to the Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Note Consolidated
2014 2013
A$'000 A$'000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 7 3,619 4,496
Trade and other receivables 8 4,527 7,744
Inventories 9 1,166 4,862
9,312 17,102
Non-current assets classified as held 10
for sale - -
TOTAL CURRENT ASSETS 9,312 17,102
NON-CURRENT ASSETS
Trade and other receivables 8 3,936 2,981
Other assets 11 2,411 1,658
Derivative financial instruments 12 7,047 2,400
Exploration expenditure 15 47,306 54,139
Development expenditure 16 63,988 75,040
Property, plant and equipment 17 13,792 13,462
Deferred tax assets 18 2,107 3,022
TOTAL NON-CURRENT ASSETS 140,587 152,701
TOTAL ASSETS 149,899 169,803
CURRENT LIABILITIES
Trade and other payables 19 10,713 12,459
Deferred revenue 20 53 5,859
Income tax payable 4 501 1,115
Provisions 24a 7,610 296
Borrowings 21 69,531 18,531
Derivative financial instruments 12 80 228
Other financial liabilities 22 4,594 3,633
Provision for rehabilitation 24b 3,480 3,759
TOTAL CURRENT LIABILITIES 96,562 45,880
NON-CURRENT LIABILITIES
Deferred revenue 20 - 5,467
Provisions 24a 3,688 -
Borrowings 21 22,792 52,141
Other financial liabilities 22 6,094 6,984
Deferred tax liability 23 19,503 23,009
Provision for rehabilitation 24b 8,364 9,594
TOTAL NON-CURRENT LIABILITIES 60,441 97,195
TOTAL LIABILITIES 157,003 143,075
NET ASSETS (7,104) 26,728
EQUITY
Issued capital 25 236,733 236,032
Reserves 26 (3,776) (2,838)
Accumulated losses (229,282) (198,987)
Capital and reserves attributable to
owners of Continental Coal Limited 3,675 34,207
Amounts attributable to non-controlling
interests (10,779) (7,479)
TOTAL EQUITY (7,104) 26,728
The above Consolidated Statement of Financial Position should be read in
conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Share Accumulated Foreign Other Hedging Option Share Shares Total Non- Total
Capital losses Currency Reserve Reserve Reserve Based and Controlling
Ordinary Translation Payment Options Interest
Reserve Reserve to
be
Issued
A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 220,015 (164,739) (19,190) (9,944) (508) - 30,798 - 56,433 8,089 64,522
July 2012
Loss for the - (35,720) - - - - - - (35,720) (13,768) (49,488)
year
Exchange - - (4,741) - - - - - (4,741) (1,311) (6,052)
differences on
translation of
foreign
operations
Cashflow hedges, - - - - 2,284 - - - 2,284 803 3,087
net of tax
Total - (35,720) (4,741) - 2,284 - - - (38,177) (14,276) (52,453)
comprehensive
loss for the
year
Transactions
with owners in
their capacity
as owners:
Shares issued 16,117 - - - - - - - 16,117 - 16,117
during the year
Transaction (100) - - - - - - - (100) - (100)
costs
Options issued - - - - - - 701 - 701 - 701
Transfers - 1,472 - (1,472) - - - - - - -
Transactions - - - (766) - - - - (766) (1,026) (1,792)
with
non-controlling
interests
Dividends paid - - - - - - - - - (266) (266)
Balance at 30 236,032 (198,987) (23,931) (12,182) 1,776 - 31,499 - 34,207 (7,479) 26,728
June 2013
Loss for the - (30,295) - - - - - - (30,295) (4,231) (34,526)
year
Exchange - - (4,285) - - - - - (4,285) 1,145 (3,140)
differences on
translation of
foreign
operations
Cashflow hedges, - - - - 1,885 - - - 1,885 794 2,679
net of tax
Total - (30,295) (4,285) - 1,885 - - - (32,695) (2,292) (34,987)
comprehensive
loss for the
year
Transactions
with owners in
their capacity
as owners:
Shares issued 701 - - - - - - - 701 - 701
during the year
Transaction - - - - - - - - - - -
costs
Options issued - - - - - - - - - - -
Transfers - - - - - - - - - - -
Transactions - - - 1,462 - - - - 1,462 - 1,462
with
non-controlling
interests
Dividends paid - - - - - - - - - (1,008) (1,008)
Balance at 30 236,733 (229,282) (28,216) (10,720) 3,661 - 31,499 - 3,675 (10,779) (7,104)
June 2014
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
Note Consolidated
2014 2013
A$'000 A$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 72,942 58,505
Payments to suppliers and employees (70,782) (70,488)
Interest received 358 249
Other income 196 2,196
Proceeds on settlement of commodity hedges 12a 1,026 336
Income tax paid (1,978) (1,080)
Net cash (used in)/provided by operating 30
activities 1,762 (10,282)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for additional ownership interest in 13
subsidiary - (8,839)
Exploration expenditure 15 (474) (660)
Development costs 16 (3,346) (20,393)
Purchase of property, plant and equipment 17 (2,810) (6,675)
Proceeds on disposal of property, plant and
equipment 96 1,092
Payments in relation to SIOC transaction - (331)
Proceeds from sale of Vanmag 10 - 8,696
Proceeds from release of restricted cash 1,937 -
Payments for purchase of other assets (957) (642)
Net cash (used in) investing activities (5,554) (27,752)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares, net of
transaction costs - 8,597
Interest and borrowing costs (380) (1,227)
Payment of finance leases (63) -
Proceeds from borrowings 6,028 26,890
Repayment of borrowings (975) (3,537)
Payment to fund Penumbra standby facility - (1,930)
Payment of finance related royalty (56) (533)
Dividends paid to non-controlling interest (1,008) (266)
Net cash provided by financing activities 3,546 27,994
Net (decrease)/increase in cash held (246) (10,040)
Effect of the exchange rate changes on the
balance of cash held in foreign currencies
at the beginning of the financial year (336) (1,042)
Cash at beginning of financial year 3,513 14,595
Cash at end of financial year 7 2,931 3,513
The above Consolidated Statement of Cash Flows should be read in conjunction
with the Notes to the Financial Statements.
Reserve and Resource Statement
The Group's Coal Resource and Reserve Statements are as follows:-
(i) Group Resources Statement as at 31 July 2014:-
PROJECT RESOURCE PROJECT GROSS TOTAL PROJECT CONTINENTAL'S
CATEGORY TONNES IN SITU TONNES IN SITU ATTRIBUTABLE
(GTIS) (t) (TTIS) (t) INTEREST
Vlakvarkfontein 8,703,480 6,803,316 44%
Penumbra 8,421,911 7,134,875 74%
De Wittekrans Measured 52,330,387 47,097,100 74%
Wesselton II 4,201,199 3,570,800 74%
Leiden 4,309,133 3,862,500 74%
Total Measured 77,966,110 68,468,591
Vlakplaats 38,176,346 34,258,000 37%
Project X 2,969,951 2,672,000 56%
Penumbra 6,725,373 6,052,000 74%
De Wittekrans Indicated 73,733,941 66,358,000 74%
Vaalbank 8,809,511 7,928,000 52%
Wesselton II 5,112,340 4,344,000 74%
Leiden 1,996,754 179, 500 74%
Total Indicated 137,524,217 121,791,500
Vlakplaats 16,276,680 12,190,000 37%
Wolvenfontein 36,725,119 31,200,000 74%
Project X 11,687,034 10,517,000 56%
De Wittekrans 66,618,671 59,940,000 74%
Knapdaar Inferred 42,064,528 35,750,000 74%
Vaalbank 13,937,555 12,540,000 52%
Wesselton II 8,648,522 7,330,000 74%
Mooifontein 3,092,970 2,620,000 74%
Leiden 12,057,828 10,851,400 74%
Kweneng (1) 2,159,000 2,051,050 100%
Total Inferred 213,267,906 184,989,450
GRAND TOTAL RESOURCES 428,758,233 375,249,541
Notes:
(1) JORC compliant.
(ii) Group Reserves Statement as at 31 July 2014:-
PROJECT RESERVE MINEABLE ROM TONNAGE PRIMARY SECONDARY CONTINENTAL'S
CATEGORY TONNES IN (t) MARKETABLE MARKETABLE ATTRIBUTABLE
SITU RESERVE (t) RESERVE (t) INTEREST
(MTIS) (t)
Vlakvarkfontein Proven 6,770,000 6,310,000 6,310,000 - 44%
Penumbra 7,252,000 3,354,000 1,625,000 943,000 74%
De Wittekrans* 47,097,100 - - - 74%
Total Proved 61,119,100 9,664,000 7,935,000 943,000
Penumbra Probable 5,399,400 4,828,000 2,637,000 939,000 74%
De Wittekrans* 66,358,000 70,865,000 19,052,000 19,395,000 74%
Total Probable 71,757,400 75,693,000 21,689,000 20,334,000
GRAND TOTAL RESERVES 132,876,500 85,357,000 29,624,000 21,277,000
Notes:
* The primary and secondary marketable coal reserves are subject to change in line with
results from the coal revenue optimisation exercise that is currently being undertaken.
These coal resources and coal reserves (excluding Kweneng) have been defined
in accordance with the 2007 South African Code for Reporting of Mineral
Resources and Mineral Reserves Code (SAMREC Code). The SAMREC Code requires
the use of the South African National Standard : South African Guide to the
Systematic Evaluation of Coal Resources and Coal Reserves (SANS10320:2004)
when classifying and reporting coal resources and reserves. SANS10320:2004
uses the principle of relative distances from boreholes with quality data for
the classification of coal resources. This standard was utilised by the
Company's consultants in calculating the project resources.
The above coal resource and coal reserve estimates are also in
compliance with and to the extent required by the 2012 Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves published
by the Joint Ore Reserves Committee of The Australasian Institute of Mining,
Metallurgy, Australian Institute of Geoscientists and Minerals Council of
Australia (JORC Code). Similarly to the SAMREC Code, the JORC Code uses the
principle of relative distances from boreholes with quality data for the
classification of coal resources. The SAMREC Code distances are narrower than
those required by the JORC Code, and hence, by reporting to SAMREC, the
requirements of the JORC Code have also been met.
Yours faithfully
Peter Landau
Executive Director
For further information please contact:
Peter Landau Media (Australia)
Continental Coal Limited David Tasker
T:+ 61 8 9488 5220 Professional Public Relations
T: +61 8 9388 0944
Nominated Advisor Brokers
Oliver Morse/Trinity McIntyre Jonathan Williams
RFC Ambrian Limited RFC Ambrian Ltd
T: +61 8 9480 2500 T: +44 203 440 6817
About Continental Coal Limited
Continental Coal Limited (ASX:CCC/AIM: COOL) is a South African
thermal coal producer with a portfolio of projects located in South Africa's
major coal fields including two operating mines, the Vlakvarkfontein and
Penumbra Coal Mines, producing approx. 2Mtpa of thermal coal for the export
and domestic markets. A Feasibility Study was also completed on a proposed
third mine, the De Wittekrans Coal Project with a mining right granted in
September 2013.
Competent Persons Statement
The information in this report that relates to the Coal Resources
and Reserves has been prepared in accordance with the Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves as
published by the Joint Ore Reserves Committee (JORC Code). The Australasian
Joint Ore Reserves Committee (JORC) and the JORC Code requires that Competent
Persons must belong to the Australasian Institute of Mining and Metallurgy
(AusIMM), or the Australian Institute of Geoscientists (AIG), or a Recognized
Overseas Professional Organisation (ROPO). ROPOs are professional
organisations that the ASX, acting on advice from JORC and its parent
organisations, accepts as bodies to which Competent Persons may belong to for
the purpose of preparing documentation on Exploration Results and Mineral
Resources, on which reports to the ASX are based. The South African Council
for Natural Scientific Professions (SACNASP) as well as the Geological Society
of South Africa are considered as ROPOs by JORC.
The information in this report that relates to Coal Resources on
Vlakvarkfontein and Vlakplaats is based on resource estimates completed by Dr.
Philip John Hancox. Dr. Hancox is a member in good standing of the South
African Council for Natural Scientific Professions (SACNASP No. 400224/04) as
well as a Member and Fellow of the Geological Society of South Africa. He is
also a member of the Fossil Fuel Foundation, the Geostatistical Association of
South Africa, the Society of Economic Geologists, and a Core Member of the
Prospectors and Developer Association of Canada. Dr. Hancox has more than 12
years' experience in the South African Coal and Minerals industries, holds a
Ph.D from the University of the Witwatersrand (South Africa), and has authored
a number of published and unpublished academic articles on the Karoo Basin and
its contained coal, as well as over 50 peer reviewed scientific papers on
various aspects of sedimentary geology and palaeontology. Dr. Hancox has
sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined by the 2004 Edition of
the Australasian Code of Reporting of Exploration Results, Mineral Resources
and the Ore reserves. Within the constraints mentioned above, all work
undertaken by Dr. Hancox and related to the resource estimate was carried out
following industry best practice standards using the South African Code for
Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code, 2007) in
conjunction with the South African guide to the systematic evaluation of coal
resources and coal reserves (SANS 10320:2004) as a basis. As such the resource
statements contained in this report may be considered compliant with the JORC
Code. Dr. Hancox consents to the inclusion in the ASX release of the matters
based on his information in the form and context in which it appears.
The information in this report that relates to Coal Resources and
Reserves on Penumbra, Ferreira, De Wittekrans, Knapdaar, Project X, Vaalbank,
Leiden and Wesselton II is based on coal resource estimates completed by Mr.
Nico Denner, a full time employee of Gemecs (Pty) Ltd. Mr. Denner is a member
in good standing of the South African Council for Natural Scientific
Professions (SACNASP No. 400060/98) as well as a Member and Fellow of the
Geological Society of South Africa. He has more than 15 years' experience in
the South African Coal and Minerals industries. Mr. Denner has sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined by the 2004 Edition of the
Australasian Code of Reporting of Exploration Results, Mineral Resources and
the Ore reserves. Within the constraints mentioned above, all work undertaken
by Mr. Denner and related to the resource estimate was carried out following
industry best practice standards using the South African Code for Reporting of
Mineral Resources and Mineral Reserves (the SAMREC Code, 2007) in conjunction
with the South African guide to the systematic evaluation of coal resources
and coal reserves (SANS 10320:2004) as a basis. As such the resource
statements contained in this report may be considered compliant with the JORC
Code. Mr. Denner consents to the inclusion in the ASX release of the matters
based on his information in the form and context in which it appears.
Forward Looking Statement
This communication includes certain statements that may be deemed
"forward-looking statements" and information. All statements in this
communication, other than statements of historical facts, that address future
production, reserve potential, exploration drilling, exploitation activities
and events or developments that the Company expects to take place in the
future are forward-looking statements and information. Although the Company
believes the expectations expressed in such forward-looking statements and
information are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may differ
materially from those in the forward-looking statements and information.
Factors that could cause actual results to differ materially from those in
forward-looking statements include market prices, exploitation and exploration
successes, drilling and development results, production rates and operating
costs, continued availability of capital and financing and general economic,
market or business conditions. Investors are cautioned that any such
statements are not guarantees of future performance and actual results or
developments may differ materially from those stated.