South African thermal coal producer Continental Coal is planning to hand over one of its prospecting licences to the Ministry of Minerals, Energy and Water Resources in Botswana to reduce costs.
The company said an assessment of low exploration prospectivity and the lack of farm-out or divestment opportunities have resulted in the relinquishment of prospecting licence 339.
Continental Coal is reviewing opportunities to further minimise future spend and still extract value from its remaining prospecting licences in Botswana.
Meanwhile, production at the company's recently opened Penumbra underground mine, in South Africa, reached 51,000t during October 2013.
The company said that the availability of continuous miners during November 2013 had a negative impact on the month-to-date production.
A conventional drill-and-blast section has been set up and production from this section is anticipated to ramp up in the next few months.
The Vlakvarkfontein mine, which is also located in South Africa, is continuing to cross expected production targets, delivering 127,400t run-of-mine coal during October 2013.
Continental Coal chief executive officer Don Turvey said the company is making good progress to refinance the convertible debentures that have created a significant overhang in our share price over the past few months.
"We are delighted with the continued progress being made at Penumbra as well as the continued good production results from our Vlakvarkfontein coal mine," Turvey added.
Continental Coal currently has three operating mines, Penumbra, Vlakvarkfontein and Ferreira, producing 2.2Mtpa of thermal coal for the export and domestic markets.
In 2013/14, Continental is planning to start development of its fourth thermal coal mine, De Wittekrans which will add 3.6 million tonnes per annum once in full production.
Image: Penumbra Coal mine main ventilation shaft. Photo: Courtesy of Continental Coal.