Shares of the junior South African coal miner have been suspended from quotation as the board seeks restructuring or recapitalisation arrangements to settle convertible notes that mature from November 2013 to February 2014.

It said active discussions were also underway with other creditors, royalty holders and various investor groups.

“If no acceptable restructure and/or refinancing arrangements can be agreed in the near term, the Board considers that the appointment of a voluntary administrator to the Company in Australia may be necessary, as it will have insufficient funds to meet the repayment obligations on the Convertible Notes and other creditors,” Continental said.

Continental blamed lower than expected production at its new Penumbra underground operations for its financial position.

“Whilst the production will be augmented by the implementation of an additional conventional drill and blast production section, the ramp up of production from this is expected to take several months placing additional pressure on the company’s working capital requirement.”

The company was previously known as Continental Capital before it started acquiring second tier South African coal assets in 2009.

Continental shares entered a trading halt on Monday and last closed at 2c each.