It also confirmed an agreement with Mpumalanga-based company Forzando Coal to pursue a joint exploration program at the nearby Vaalbank coal project.

Prospecting rights for an area adjoining open pit mining at Ferreira are expected to be developed into an extension of the established mine’s activities.

The company lodged an application with the Department of Minerals and Resources to allow it to conduct open cast mining activities and it will commence mine development once approval is obtained.

Mining of an additional 250,000-300,000 tonnes of run of mine coal over a six to eight-month period is forecast from the prospecting rights acquisition.

Ferreira’s budgeted coal production for 2012 was previously targeted as 600,000t ROM.

“The recently completed acquisitions of prospecting rights contiguous to our Ferreira coal mine will materially extend the mine life and its production of a high quality export thermal coal,” Continental Coal chief executive Don Turvey said.

“The acquisitions further demonstrate the strategic importance of the Delta processing operations, the Anthra rail siding and ability to export coal through the Richards Bay coal terminal.”

Further expansion of Continental activity in Mpumalanga was advanced, with the joint exploration agreement with Forzando slated to be a 12-month program of drilling and geological modelling of coal resources at the Vaalbank project.

Forzando operates four underground and open cast mines immediately northwest and contiguous to Vaalbank and is looking to acquire additional coal deposits and expand its current reserve base in the immediate vicinity of these operations.