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CONTINENTAL COAL LTD - Appendix 4E and Preliminary Final Report

LSE, ENVI, CGFAY


                              ABN 13 009 125 651

                                  Appendix 4E

                           Preliminary Final Report

                        For the year ended 30 June 2014

                      Results for announcement to market

                    in accordance with ASX Listing Rule 4.3A

                              CORPORATE DIRECTORY

Directors and Officers                Country of Incorporation

Paul D'SYLVA                          Australia

(Interim Executive Chairman)          Registered Office

Peter LANDAU                          Ground Floor

(Interim Executive Director)          1 Havelock Street

Lars SCHERNIKAU                       WEST PERTH WA 6005

(Non-Executive Director)              Telephone: +61 8 9488 5220

Connie MOLUSI                         Facsimile: +61 8 9324 2400

(Non-Executive Director)              Principal Place of Business

Company Secretary                     9th Floor Fredman Towers

Jane FLEGG                            13 Fredman Drive

Share Registry                        SANDTON SOUTH AFRICA 2196

Computershare Ltd                     Telephone: +27 11 881 1420

Level 2, Reserve Bank Building        Facsimile: +27 11 881 1423

45 St Georges Terrace                 Home Exchange

PERTH WA 6000                         Australian Securities Exchange

Telephone: +61 8 9323 2000            Level 40, Central Park

Facsimile: +61 8 9323 2033            152-158 St George's Terrace

Auditors                              Perth  WA  6000

BDO Audit (WA) Pty Ltd                Telephone: +61 8 9224 0000

38 Station Street                     Facsimile: +61 8 9381 1322

SUBIACO WA 6008                       ASX Code: CCC

Telephone: +61 8 6382 4600            AIM Code: COOL

Facsimile: + 61 8 6382 4601           Email: admin@conticoal.com

                                      Website: www.conticoal.com




Results for announcement to the market

                                       2013              2014   Variance
                                      $'000             $'000       %

Revenue from ordinary      up from     62,230    to      68,715     (10%)
activities

Loss from continuing      down from  (34,573)    to    (24,818)     (28%)
operationsafter
tax attributable to
members

Net loss attributable to  down from  (35,720)    to    (24,818)     (28%)
members

Dividends

Dividends/distributions   Amount per security      Franked amount per
                                                        security

Final dividend                                -                        -

Interim dividend                              -                        -

The directors recommend that no dividend be paid for the year ended 30 June
2014 nor have any amounts been paid or declared by way of dividend since the
end of the previous financial year.

Audit

This report is based on financial statements which are in the process of
being audited.

Other significant information needed by an investor to make an informed
assessment of the Group's Financial Performance and Financial Position

See attached preliminary final report.

Commentary on results for the period

A commentary on the results for the period is contained within the financial
statements that accompany this announcement.

This information should be read in conjunction with Continental Coal's attached
preliminary final report.

Forward Looking Statement

This document includes certain statements that may be deemed "forward-looking
statements" and information. All statements in this document, 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.

Review of Operations

Principal Activities

The principal activity of the Group during the year ended 30 June 2014 was the
acquisition, exploration, development and operation of thermal coal mines and
properties in South Africa. There were no significant changes in the nature of
the activities of the Group during the financial year.

Overview

During the year ended 30 June 2014 the Group continued its program of
establishing itself as a successful thermal coal mining, production,
exploration and development Group in Southern Africa focusing on the ramp up of
its flagship Penumbra Coal Mine and advancing the De Wittekrans coal project
with the granting of its mining right in September 2013.

Reserve and Resource Statement

The Group's Coal Resource and Reserve Statements are as follows:

Group Resources Statement - July 2014

    PROJECT       RESOURCE   PROJECT GROSS TOTAL PROJECT      CONTINENTAL'S
                  CATEGORY      TONNES        TONNES           ATTRIBUTABLE
                                IN SITU       IN SITU            INTEREST
                              (GTIS) (t)    (TTIS) (t)

Vlakvarkfontein   Measured       8,703,480     6,803,316           44%

Penumbra                         8,421,911     7,134,875           74%

De Wittekrans                   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       Indicated      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                   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   137,524,216   121,791,500

Vlakplaats        Inferred      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                        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   213,267,907   184,989,450

       GRAND TOTAL RESOURCES   428,758,233   375,249,541

Notes:

 1. JORC compliant.

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

Coal Mine and Processing Operations

Health and Safety

The Group maintains a strong health and safety culture across all of its coal
mining and processing operations and continues to improve its health and safety
initiatives and policies across all of its operations. During the financial
year, eleven Dressing Station Case ("DSC") accidents were reported at the
Company's mining and processing operations - ten DSC accidents were reported at
the Penumbra Underground Mine and one at the Vlakvarkfontein Open Cast Mine and
one Medical Treatment Incident (MTI) was reported at the Penumbra Underground
Mine. All the accidents were relatively minor with no material impacts and
their causes have been addressed.

Operational Performance

                                         Year ended 30 June     Year ended 30 June
                                                2014                    2013

Run of Mine (ROM)Production

Vlakvarkfontein                              1,382,487                1,526,469

Ferreira                                       247,129                  559,107

Penumbra                                       498,176                  143,299

Total ROM Production                         2,127,792                2,228,875

Feed to Plant

Ferreira                                       269,670                  627,329

Penumbra                                       491,424                  143,299

Total Plant Feed                               761,094                  770,628

Export Yields

Ferreira                                           72%                    70.4%

Penumbra                                         57.2%                    36.8%

Domestic Sales                               1,401,080                1,315,701

Export Sales                                   523,906                  453,582

Total Coal Sales                             1,924,986                1,769,283

Total ROM coal production for the year ended 30 June 2014 of 2,127,792t was
achieved with a full 12 months production at the Vlakvarkfontein Coal Mine, 6
months production at the Ferreira Coal Mine until end of life and ramp up
production from the Penumbra Coal Mine.

Feed to the Delta Processing Operations for the year ended 30 June 2014 was
761,094t. The feed from the Penumbra Coal Mine has steadily increased during
the year and is line with the ramp up of the Penumbra Coal Mine.

Export yields at the Penumbra Coal Mine have shown a steady increase during the
past 12 months with the average yield of 57.2% recorded for the ended 30 June
2014.

Domestic sales from the Vlakvarfontein Coal Mine have increased on a year-end
basis comparable to year ended 30 June 2013.

 1. Vlakvarkfontein Coal Mine

Vlakvarkfontein Coal Mine produced 1,382,487t ROM for the year ended 30 June
2014, achieving its target production at a cost of ZAR 90.00/t (US$8.50/t) the
year ended 30 June 2014.

An average strip ratio of 2.22:1 was achieved for the year ended 30 June 2014.

Total thermal coal sales for the year ended 30 June 2014 were 1,149,216t to
Eskom and 251,861t non-select.

 2. Ferreira Coal Mine

Ferreira Coal Mine produced 247,129t ROM for the year ended June 2014, before
its end of life in December 2013, with export yields averaging 72%.

Inventory clean-up at the Ferreira Coal Mine was completed in the first Quarter
of 2014. The rehabilitation work will commence upon finalisation of the closure
plan and appointing contractors.

 3. Penumbra Coal Mine

The Penumbra Coal Mine delivered 498,176t ROM for the year ended 30 June 2014
comparable to the revised forecast of 500,000t at a FOB cost of ZAR 841.13
(US$79.40) per sales tonne.

During the initial ramp up stage the Company encountered stone rolls that are
displacing the coal seam in the current mining area and this is impacting on
the production rate and the delivered yield due to added contamination.
Management, in conjunction with mining consultants, have been reviewing the
planned production lay-out in order to mitigate the impact of the stone rolls
on the production rate of the continuous miners. As procedures are implemented
the ROM and yield are increasing with the month of June 2014 producing 58,013t
which is on track to the targeted 70,000t per month. Additional exploration
drilling is currently being carried out to ascertain the extent of the stone
rolls with the view to revising the production plan.

Export yields at the Penumbra Coal Mine averaged 57.2% for the year ended 30
June 2014. The yield is expected to improve to the planned 62% with the
increase in production and the mitigation of the additional contamination
caused by the stone rolls.

For the year ended 30 June 2014 ROM mining costs averaged ZAR 165.95/t
(US$15.50/t) and FOB export sales tonnes costs averaged ZAR 748.24/t (US$70.35/
t). Total FOB costs will reduce in the coming months given the forecast
increase in production.

The Company received ZAR 10.1 million revenue for the year ended 30 June 2014
from the ABSA forward hedging contract at the Penumbra Coal Mine.

 2. DEVELOPMENT PROJECT

 3.
     1. De Wittekrans Coal Project

The De Wittekrans Development Project (De Wittekrans) is a potential
underground export and domestic thermal coal mining project at a
pre-development stage. Optimisation work on previous feasibility studies has
identified the opportunity to develop De Wittekrans into a major mining
operation with the potential to produce ~3.6Mtpa of ROM over the LOM.

A mining right was granted in September 2013 and the Integrated Water Use
License (IWUL) application was submitted, the Company awaits approval.

With mining right successfully executed in May 2014, the Company now has 12
months to commence mining operations, however should the IWUL not be received
within this 12 month period the mining right can be delayed.

During the last quarter of the year ended 30 June 2014 two sites were selected
for mining and these are now being evaluated as to which site will be selected
for the first phase of mining.

 3. EXPLORATION PROJECTS

 4.
     1. Botswana Coal Projects

The Company is in advanced discussions in respect of the two remaining
Prospecting licenses (PL 340/2008 and PL 341/2008). PL341 has been transferred
and the transfer documents for PL340 have been submitted to the Botswana
Ministry of Minerals, Energy.

 2. Vlakplaats

Vlakplaats is a 50:13:36 joint venture between the Company, Big Match Trading
34 (Pty) Ltd and Korea Resources Corporation. Therefore the Company only has an
effective interest of 37% in the project. A Prospecting Right has been granted
for this project.

Vlakplaats is considered a non-core asset and the Company will retain the
Prospecting Right in good standing while it evaluates divestment opportunities.

 3. Other non-core assets

Project X, Vaalbank, Leiden.Knapdaar, Wolvenfontein, Wesselton II,Mooifontein
have all been considered as non-core assets which the Company will keep in good
standing order while it evaluates divestment opportunities

 4. CORPORATE

 5.
     1. Bridge Finance and Recapitalisation

In February 2014 the Group executed a binding term sheet with UK corporate
advisory firm Empire Equity Limited ("Empire Equity") to provide $5 million
bridge funding and undertake a broader recapitalisation and restructure of the
Group and its financial arrangements.

The Group received the $5 million bridge funding from Empire Equity and made
key payments to current creditors and negotiated a 3 month standstill period to
recapitalize the Group. The standstill period was subsequently extended to 15
October 2014.

Empire Equity and/or its nominees (the "Investors") have invested in 7.5
million unsecured convertible promissory notes ("Notes") with a face value of
A$1.00 at a discounted issue price of A$0.6667 per Note and with a maturity
date of 4 months redeemable upon successful completion of the Groups
recapitalization. The Investors will receive a 6% fee on the Investment Amount
as well as 70 million options, subject to shareholder approval, for providing
the $5 million.

A condition to providing the funding was the restructure of the Board which
occurred on 13 February 2014.

The Investors also undertook to assist the Group in undertaking a rights issue
with the proceeds to be used to settle amounts owed by the Group to various
existing convertible note holders , loans and royalty holders, repay bridging
finance, reduce the Group's other borrowings, provide funds towards the
development of the Company's advanced coal mining projects and provide working
capital.

Subsequent to year ended 30 June 2014 the Group announced a fully underwritten
non-renounceable rights issue prospectus to raise approximately A$35.1m by way
of the issue of up to 7,035,234,408 new shares at an offer price of $0.005 per
new share.

 2. Proposed listing on the Johannesburg Stock Exchange

The proposed listing has been postponed until such time as the recapitalisation
of the Company has been completed.

 3. ASX and Aim share trading suspension

As at the date of this report Continental's securities on both the ASX and AIM
markets continue to be suspended. In line with the timetable disclosed in the
fully underwritten non-renounceable rights issue prospectus the Group
anticipates lifting of the suspension of Continentals securities on ASX and AIM
at completion of the Rights Issue on or about 2 October 2014.

Competent Persons Statement

The information in this report that relates to Coal Resources on
Vlakvarkfontein, Vlakplaats and Wolvenfontein 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 and holds a Ph.D from the University of the Witwatersrand (South
Africa).

The information in this report that relates to Coal Resources on Penumbra, De
Wittekrans, Knapdaar, 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.

The information in this report that relates to Coal Resources on Project X and
Vaalbank is based on coal resource estimates completed by Mr. Coenraad van
Niekerk, a full time employee of Gemecs (Pty) Ltd. Mr. van Niekerk is a member
in good standing of the South African Council for Natural Scientific
Professions (SACNASP No. 400066/98) as well as a Member and Fellow of the
Geological Society of South Africa. He has more than 38 years' experience in
the South African Coal and Minerals industries.

The information in this report that relates to Coal Resources on Mooifontein is
based on coal resource estimates completed by Mr. Dawie van Wyk, a full time
employee of Geocoal services (Pty) Ltd. Mr. van Wyk is a member in good
standing of the South African Council for Natural Scientific Professions
(SACNASP No. 401964/83) as well as a Member and Fellow of the Geological
Society of South Africa. He has more than 30 years' experience in the South
African Coal and Minerals industries.

The Coal Reserves on Vlakvarkfontein, and is based on reserve estimates
completed by Eugène de Villiers. Mr. de Villiers is a graduated mining engineer
(B.Eng) Mining from the University of Pretoria and is professionally registered
with the Engineering Council of South Africa (Pr.eng no - 20080066). He is also
a member of the South African Institute of Mining and Metallurgy (SAIMM
Membership no. 700348) and the South African Coal Managers Association (SACMA
Membership no. 1742). Mr. de Villiers has been working in the coal industry
since 1993 and has a vast amount of production and mine management as well as
project related experience.

                         CONSOLIDATED INCOME STATEMENT

                        FOR THE YEAR ENDED 30 JUNE 2014

                                            Note                Consolidated

                                                             2014          2013
                                                            $'000         $'000

Operating sales revenue                      2             68,715        62,230

Operating expenses                                       (58,714)      (55,181)

Depreciation & amortisation                               (7,022)       (4,190)

Cost of sales                                3           (65,736)      (59,371)

Gross profit                                                2,979         2,859

Other income                                 2              1,962         4,130

Administration expenses                      3            (7,629)      (11,533)

Finance expenses                             3           (27,215)      (13,888)

Impairment expenses                          3            (2,208)      (28,126)

Marketing expenses                                          (225)         (266)

Other expenses                               3            (1,339)       (2,618)

Loss before income tax                                   (33,676)      (49,442)

Income tax benefit                                            356         1,101

Loss after income tax from continuing                    (33,320)      (48,341)
operations

Loss from discontinued operation                                -       (1,147)

Loss for the year                                        (33,320)      (49,488)

Net profit/(loss) is attributable to:

Owners of Continental Coal Limited                       (24,818)      (35,720)

Non-controlling interests                                 (8,502)      (13,768)

                                                         (33,320)      (49,488)

Loss per share for loss from continuing
operations
attributable to the ordinary equity
holders of the Company:

Basic loss per share                         4            (0.004)        (6.56)
(cents per share)

Diluted loss per share                       4            (0.004)        (6.56)
(cents per share)


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
                                                           $'000         $'000

Loss for the year                                        (33,320)      (49,488)

Other Comprehensive Income/(Loss)

Items that may be reclassified to profit
or loss

Exchange differences on translation of                    (1,932)       (6,052)
foreign operations

Changes in the fair value of cashflow                           -         3,087
hedges, net of tax

Other comprehensive loss for the year,                          -       (2,965)
net of tax

Total comprehensive loss for the year                    (35,252)      (52,453)

Total comprehensive income/(loss) is
attributable to:

Owners of Continental Coal Limited                       (25,926)      (38,177)

Non-controlling interests                                 (9,326)      (14,276)

                                                         (35,252)      (52,453)

Total comprehensive loss for the period
attributable to
owners of Continental Coal Limited arises
from:

Continuing operations                                    (25,926)      (37,030)

Discontinued operations                                         -       (1,147)

                                                         (25,926)      (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
                                                             $'000         $'000

ASSETS

CURRENT ASSETS

Cash and cash equivalents                     5              2,989        4,496

Trade and other receivables                   6              4,681        7,744

Inventories                                   7              1,167        4,862

                                                                         17,102

Non-current assets classified as held for                                     -
sale

TOTAL CURRENT ASSETS                                         8,837       17,102

NON-CURRENT ASSETS

Trade and other receivables                   6              2,473        2,981

Other assets                                                 2,472        1,658

Derivative financial instruments                             7,050        2,400

Exploration expenditure                       10            47,417       54,363

Development expenditure                       11            65,105       76,344

Property, plant and equipment                 12            12,628       11,933

Deferred tax assets                           13             4,081        3,022

TOTAL NON-CURRENT ASSETS                                   141,226      152,701

TOTAL ASSETS                                               150,063      169,803

CURRENT LIABILITIES

Trade and other payables                      14             7,451       12,459

Deferred revenue                              15                 -        5,859

Income tax payable                                             451        1,115

Provisions                                                   4,601          296

Borrowings                                    16            68,902       18,531

Derivative financial instruments                                80          228

Other financial liabilities                   17             4,419        3,633

Provision for rehabilitation                  19             3,173        3,759

TOTAL CURRENT LIABILITIES                                   89,077       45,880

NON-CURRENT LIABILITIES

Deferred revenue                              15                 -        5,467

Borrowings                                    16            22,865       52,141

Other financial liabilities                   17             6,633        6,984

Deferred tax liability                        18            19,511       23,009

Provision for rehabilitation                  19             8,787        9,594

TOTAL NON-CURRENT LIABILITIES                               57,796       97,195

TOTAL LIABILITIES                                          146,873      143,075

NET ASSETS                                                   3,190       26,728

EQUITY

Issued capital                                20           246,533      236,032

Reserves                                                   (1,905)      (2,838)

Accumulated losses                                       (234,239)    (198,987)

Capital and reserves attributable to                        10,389       34,207
owners of
Continental Coal Limited

Amounts attributable to non-controlling                    (7,198)      (7,479)
interests

TOTAL EQUITY                                                 3,190       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

                 $'000      $'000       $'000     $'000    $'000   $'000   $'000   $'000   $'000      $'000     $'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               -           -           -        -   2,284       -       -       -    2,284         803    3,087
hedges, 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           -    (35,252)           -        -       -       -       -       - (24,818)     (8,502) (33,320)
year

Exchange               -           -     (3,716)        -       -       -       -       -  (3,716)       (824)  (4,540)
differences on
translation of
foreign
operations

Cashflow               -           -           -        -   4,650       -       -       -    4,650           -    4,650
hedges, net of
tax

Total                  -   (35,252))     (3,716)        -   4,650       -       -       - (25,926)     (9,326) (35,252)
comprehensive
loss for the
year

Transactions
with owners in
their capacity
as owners:

Shares issued     10,501           -           -        -       -       -       -       -   10,501           -   10,501
during the year

Transaction            -           -           -        -       -       -       -       -        -           -        -
costs

Options issued         -           -           -        -       -       -       -       -        -           -        -

Transfers              -           -           -        -       -       -       -       -        -           -        -

Transactions           -           -           -        -       -       -       -       -        -       2,128    2,128
with
non-controlling
interests

Dividends paid         -           -           -        -       -       -       -       -        -           -        -

Balance at 30    246,533   (234,239)    (27,647) (12,182)   6,426       -  34,499       -   10,389     (7,198)    3,190
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

                                                               Consolidated

                                                             2014          2013
                                                            $'000         $'000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers                                    64,836        58,505

Payments to suppliers and employees                      (60,864)      (70,488)

Interest received                                             676           249

Other income                                                  121         2,196

Proceeds on settlement of commodity hedges                  1,018           336

Income tax paid                                           (1,126)       (1,080)

Net cash (used in)/provided by operating                    2,127      (10,282)
activities

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for additional ownership interest in                    -       (8,839)
subsidiary

Exploration expenditure                                     (326)         (660)

Development costs                                         (5,190)      (20,393)

Purchase of property, plant and equipment                 (2,036)       (6,675)

Proceeds on disposal of property, plant and                     -         1,092
equipment

Payments in relation to SIOC transaction                        -         (331)

Proceeds from sale of Vanmag                                    -         8,696

Payments for purchase of other assets                         (6)         (642)

Net cash (used in) investing activities                   (7,558)      (27,752)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares, net of                           -         8,597
transaction costs

Interest and borrowing costs                                (117)       (1,227)

Proceeds from borrowings                                    5,908        26,890

Repayment of borrowings                                   (1,886)       (3,537)

Payment to fund Penumbra standby facility                       -       (1,930)

Payment of finance related royalty                              -         (533)

Dividends paid                                                  -         (266)

Net cash provided by financing activities                   3,924        27,994

Net (decrease)/increase in cash held                      (1,507)      (10,040)

Effect of the exchange rate changes on the                              (1,042)
balance of cash held in
foreign currencies at the beginning of the
financial year

Cash at beginning of financial year                         4,496        14,595

Cash at end of financial year                               2,989         3,513

The above Consolidated Statement of Cash Flows should be read in conjunction
with the Notes to the Financial Statements.

Note 1: Basis of the Preparation of the Preliminary Final Report

The preliminary final report has been prepared in accordance with the ASX
Listing rule 4.3A and the disclosure requirements of ASX Appendix 4E.

This report has been prepared in accordance with Australian Accounting
Standards, Urgent Issues Group Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001.

As such this preliminary final report does not include all the notes of the
type included in an annual financial report and accordingly, should be read in
conjunction with the annual report for the year ended 30 June 2013, and with
any public announcements made by Continental Coal Limited during the reporting
period in accordance with the disclosure requirements of the Corporations Act
2001.

The accounting policies have been consistently applied, unless otherwise
stated.

The preliminary report has been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of
assets and the settlement of liabilities in the ordinary course of business

Note 2: Revenue and other income

                                                               Consolidated

                                                             2014         2013
                                                            $'000        $'000

    Revenue from continuing operations

      * Export coal sales                                  38,735       35,508

      * Eskom coal sales                                   26,673       25,941

      * Other coal sales                                    3,307          781

    Total revenue from continuing operations               68,715       62,230

    Other income

      * Foreign exchange gain                                  64          200

      * Recovery of costs                                      27        2,196

      * Interest received                                     676          502

      * Net gain on fair values of derivative                 147          777
        financial instruments (note 13e)

      * Realised gains on commodity hedges                  1,018          336

      * Gain on debt settlement                                 -          119

      * Miscellaneous income                                   30            -

    Total other income                                      1,962        4,130


Note 3: Expenses

(a)  Loss before income tax includes the following
     specific expenses:

     Cost of sales

       * Mining                                            26,836        35,221

       * Export costs                                       8,541         6,405

       * Processing                                         4,773         5,265

       * Materials handling                                 4,395         3,813

       * Indirect costs                                     3,727         3,324

       * Administration costs                               3,024         2,641

       * Stock on hand movement                             3,571             -

       * Mining royalties                                     873         1,153

       * Depreciation & amortisation                        7,022         4,190

       * Bought in coal                                     2,974             -

     Total cost of sales                                   65,736        59,371

     Finance costs

     - Interest and borrowing costs                         8,436         4,546

     - Share based payments                                   100             -

     - Royalty expense                                        745         3,639

     - Convertible note interest accretion                    870         2,047

     - EDF interest                                        13,451           623

     - Other borrowing costs                                3,613         3,033

     Total finance costs                                   27,215        13,888

     Impairment

     - Impairment of exploration expenditure (ii)           2,208        26,661

     - Impairment of property, plant, and equipment             -         1,465
     (iii)

     Total impairment                                       2,208        28,126

     Administration & Other Expenses

     - Employee related costs                               2,994         3,769

     - Key management personnel                               688         1,543

     - Pre feasibility costs in relation to other             214            62
     projects

     - Consultants                                            942         2,083

     - Share based payments                                   100           429

     - Loss on debt settlement                                  -           626

     - Legal fees                                             671           582

     - Occupancy                                              183           276

     - Foreign exchange loss                                1,932         1,122

     - Depreciation & amortisation                            349           216

 i. The impairment charge of $2,208,000 recognised in the year ended 30 June
    2014 relates to the carrying values of Vaalbank. The impairment charge of
    $26,661,000 recognised in the year ended 30 June 2013 relates to the
    carrying values of Project X, Vlakplaats, and Wesselton 2.

Note 4: Loss per Share (EPS)

                                                               Consolidated

                                                              2014         2013

                                                             $'000        $'000

(a)  Basic loss per share

     From continuing operations attributable to             (0.004)      (6.56)
     owners of
     Continental Coal Limited

     From discontinued operation attributable to                  -      (0.22)
     owners of
     Continental Coal Limited

                                                            (0.004)      (6.78)

(b)  Reconciliation of loss used in calculating loss
     per share

     Loss for the year from continuing operations          (24,818)    (34,573)
     attributable to owners of
     Continental Coal Limited

     From discontinued operation attributable to                  -     (1,147)
     owners of
     Continental Coal Limited

     Loss used to calculate basic EPS                      (24,818)    (35,720)

     Loss used in the calculation of dilutive EPS          (24,818)    (35,720)

                                                                No.         No.

(c)  Weighted average number of shares used as the
     denominator

     Weighted average number of ordinary shares         697,009,056 526,964,473
     outstanding during the year
     used in calculating basic EPS

     Weighted average number of ordinary shares         697,009,056 526,964,473
     outstanding during the year
     used in calculating dilutive EPS

(d)  Diluted earnings per share

     The Group's potential ordinary shares were not
     considered dilutive, and as
     a result, diluted EPS is the same as basic EPS.

(e)  Potential ordinary shares that could dilute EPS
     in the future

     Weighted average number of ordinary shares         697,009,056 526,964,473
     (basic)

     Effect of share options on issue                   126,130,027 162,130,027

     Effect of conversion of debt to equity shares       36,000,000           -
     issued post year end

     Weighted average number of ordinary shares         859,139,083 689,094,500
     (diluted) at 30 June

Note 5: Cash and Cash Equivalents

                                                               Consolidated

                                                              2014         2013
                                                             $'000        $'000

Cash at bank and in hand                                     2,989        4,496

                                                             2,989        4,496

Reconciliation of cash

Cash at the end of the financial year as shown in the
Consolidated Statement of
Cash Flows is reconciled to items in the Consolidated
Statement of Financial Position
as follows:

Cash and cash equivalents                                    2,989        4,496

Bank overdrafts                                                  -        (983)

                                                             2,989        3,513

Note 6: Trade and Other Receivables

                                                                Consolidated

                                                             2014          2013
                                                            $'000         $'000

CURRENT

Trade receivables (a)                                       2,547         4,588

Other receivables (b)                                       1,304         1,012

Prepayments                                                   830           151

Restricted cash (c)                                             -         1,993

Total current receivables                                   4,681         7,744

NON-CURRENT

Other receivables (d)                                       2,473         2,981

Total non-current receivables                               2,473         2,981

2014

 a. The Group's trade receivables are generally settled within 30 days. No
    interest is charged on outstanding balances.

 b. The majority of other receivables relates to VAT recoverable by the South
    African subsidiary and deposits.

2013

 c. The majority of the restricted cash balance relates to the Penumbra equity
    standby facility of ZAR 17,500,000 ($1,930,000) funded by the Group.

 d. As part of the transaction to secure SIOC as the Group's Black Economic
    Empowerment (BEE) partner during the 2012 year, the Group transferred ZAR
    75,000,000 (approximately $9,180,000) of its intercompany loan balance to
    the new BEE partner. The effect of this transfer was to increase the
    Group's external receivables and borrowings by the same amount. The
    receivable balance at year end is inclusive of principal and accrued
    interest at 3% per annum. It is denominated in South African Rand, and its
    fair value has been determined using a 16.5% discount rate and a repayment
    date of 30 June 2022 (2012: 16.6% discount rate and repayment date of 30
    June 2017). An increase in the discount of $838,000 (2012: unwinding of
    discount of $162,000) has been recognised within transactions with
    non-controlling interests within equity and not in the Consolidated Income
    Statement.

Note 7: Inventories

                                                             Consolidated

                                                          2014          2013
                                                         $'000         $'000

CURRENT

Coal stockpiles                                          1,167         4,862

Total coal stockpiles                                    1,167         4,862

Note 8: Other Assets

NON-CURRENT

Mining rehabilitation fund                               2,472         1,658

                                                         2,472         1,658

As approved by the Department of Mineral Resources in South Africa, the Group
makes monthly contributions to a Liberty investment product to fund future
environmental rehabilitation work at the Group's Vlakvarkfontein and Penumbra
Mines.

The Liberty investment products consist primarily of money market accounts.
These investments are not available for general purposes of the Group and are
classified as restricted funds. All income earned on these funds is re-invested

Note 9: Controlled Entities

Controlled Entities Consolidated       Country of        Percentage Owned (%)*
                                       Incorporation

                                                             30 June    30 June
                                                                2014       2013

Subsidiaries of Continental Coal
Limited ("CCC"):

Continental Coal Ltd ("CCL SA")        South Africa                74        74

Subsidiaries of Continental Coal Ltd

Tsimpilo Trading 45 (Pty) Limited      South Africa               100       100

Ayoba Taboo Trading 137 (Pty) Ltd      South Africa               100       100

Idada Trading 310 (Pty) Ltd            South Africa                70        70

Kebragen (Pty) Ltd                     South Africa                75        75

City Square Trading 437 (Pty) Ltd      South Africa               100       100

Ntshovelo Mining Resources (Pty) Ltd   South Africa                50        50
(i)

Ultimatum Challenge Trading (Pty) Ltd  South Africa                50        50
(ii)

Mashala Resources (Pty) Ltd            South Africa               100       100

Subsidiaries of Mashala Resources
(Pty) Ltd

Namib Drilling (Pty) Ltd               South Africa               100       100

Wessleton Opencast (Pty) Ltd           South Africa               100       100

BW Mining (Pty) Ltd                    South Africa               100       100

Copper Sunset Trading 148 (Pty) Ltd    South Africa               100       100

Mandla Coal Resources (Pty) Ltd        South Africa               100       100

Penumbra Coal Mining (Pty) Ltd         South Africa               100       100

Mashala Hendrina Coal Pty Ltd (Pty)    South Africa               100       100
Ltd)

Weldon Investments (Pty) Ltd           Botswana                   100       100

* Percentage of voting power is in proportion to
ownership

Ntshovelo - 60% economic interest even though 50% equity interest.

Ultimatum Challenge Trading - 63% economic interest even though 50% equity
interest.

Note 10: Exploration Expenditure

                                                          Consolidated

                                                       2014          2013
                                                       $'000         $'000

NON-CURRENT

Exploration expenditure capitalised

- Exploration and evaluation phases - direct              40,893        45,957

- Exploration and evaluation phases - indirect             6,524         8,406

Total exploration expenditure                             47,417        54,363

Mineral rights held by South African subsidiary

Project name    Prospecting Current holder of    Holder of right once Date
                or mining   mining or            transaction is       Granted
                right       prospecting right    completed
                reference

Vlakvarkfontein MP 300 MR   Ntshovelo Mining     Ntshovelo Mining     2 February
                            Resources (Pty) Ltd  Resources (Pty) Ltd  2010

Vaalbank        MP 1689 PR  Misty Sea Trading    Kebragen (Pty) Ltd   16 April
                            262 (Pty) Ltd                             2008

Project X       MP 1640 PR  Misty Sea Trading    Idada Trading 310    16 April
                            262 (Pty) Ltd        (Pty) Ltd            2008

Vlakplaats      MP 1520 PR  Ultimatum Challenge  Ultimatum Challenge  15 July
                            Trading (Pty) Ltd    Trading (Pty) Ltd    2008

Wolvenfontein               Ultimatum Challenge  Ultimatum Challenge  15 July
                            Trading (Pty) Ltd    Trading (Pty) Ltd    2008

Ferreira        MP 345 MR   Mashala Resources    Mashala Resources    19 May 2010
                            (Pty) Ltd            (Pty) Ltd

Knapdaar        MP 1494 PR  Mashala Resources    Mashala Resources    5 February
                            (Pty) Ltd            (Pty) Ltd            2008

Leiden          MP 401 PR   Mashala Resources    Mashala Resources    17 October
                            (Pty) Ltd            (Pty) Ltd            2006

Mooifontein     MP 713 PR   Mashala Resources    Mashala Resources    17 October
Ptn 13 & 16                 (Pty) Ltd            (Pty) Ltd            2009

Wesselton II    MP 231 MR   Mashala Resources    Mashala Resources    19 February
                            (Pty) Ltd            (Pty) Ltd            2009

Penumbra        MP 247 MR   Penumbra Coal Mining Penumbra Coal Mining 19 May 2010
                            (Pty) Ltd            (Pty) Ltd

De Wittekrans   MP 97 PR    Mashala Hendrina     Mashala Hendrina     26 April
                            Coal (Pty) Ltd       Coal (Pty) Ltd       2006
                MP 365 MR

Botswana                    Weldon Investments   Weldon Investments   1 April
                            (Pty) Ltd            (Pty) Ltd            2009

Note 11: Development Expenditure

                                                              Consolidated

                                                           2014            2013
                                                          $'000           $'000

NON-CURRENT

- Development expenditure at cost                         85,932         89,903

- Accumulated depreciation                              (20,827)       (13,559)

Total development expenditure                             65,105         76,344


The Development expenditure relates mainly to the mining infrastructure assets
and the environmental assets for closure costs in relation to the Penumbra,
Vlakvarkfontein, and Ferreira mines.

Recoverability of the carrying amount of development assets is dependent on the
successful development and commercial exploration or sale of the respective
mining permits.

Note 12: Property, Plant & Equipment

                                                         Consolidated

                                                      2014           2013
                                                     $'000          $'000

PLANT AND EQUIPMENT

Plant and equipment at cost                         15,162         14,251

Accumulated depreciation                           (2,534)        (2,318)

Net book amount                                     12,628         11,933

Note 13: Deferred Tax Assets

Deferred tax asset

Tax losses available for set off against             4,081          2,045
future taxable income

Other                                                    -            977

                                                     4,081          3,022

Note 14: Trade and Other Payables

CURRENT

Unsecured liabilities

Trade payables                                       6,477           8,997

Sundry payables and accrued expenses                   974           2,670

Accrued interest                                         -             792

                                                     7,451          12,459

Note 15: Deferred Revenue

In previous financial years the Group received USD $20m sales proceeds in
advance of the delivery of coal in accordance with the coal prepayment facility
with EDF Trading. The prepayment facility was secured over all assets of the
Group's South African mining interests apart from Penumbra.

During the year ended 30 June 2014 the EDF coal prepayment facility was
restructured into a financial loan repayable through 24 monthly instalments
commencing in July 2014. EDF has retained its security over the Group's South
African mining interests.

During the year ended 30 June 2014, approximately $2,5m (2013: $5m) of the
deferred revenue balance was earned and recognised on the delivery of coal to
EDF Trading prior to the restructure.

                                                           Consolidated

                                                         2014         2013
                                                        $'000        $'000

Deferred revenue - current                                  -        5,859

Deferred revenue - non-current                              -        5,467

Total deferred revenue                                      -       11,326

Note 16: Borrowings

                                                              Consolidated

                                                            2014           2013
                                                           $'000          $'000

CURRENT

Bank overdraft - secured                                       -            983

Convertible Note - unsecured (a)                           1,114            932

Convertible Note - unsecured (b)                             106            100

Convertible Note - unsecured (c)                           5,309          4,510

Convertible Note - unsecured (d)                          11,190          9,589

Convertible Note - unsecured (e)                           3,800          2,000

Other loans - unsecured (f)                                  847            160

Related party working capital facility (g)                     -            257

Bank debt - secured (h)                                   26,000              -

EDF loan (i)                                              15,536              -

Bridge funding (k)                                         5,000              -

                                                          68,902         18,531

NON-CURRENT

Bank debt - secured (h)                                        -         25,034

Related party loans - unsecured (j)                       22,698         26,856

Other facilities                                             167            251

                                                          22,865         52,141

 a. The parent entity issued $1,000,000 of convertible notes on 5 November
    2010. The notes are convertible at the option of the holder based upon the
    share price at the time of conversion. At inception, the conversion rate
    was $0.80. On 5 November 2011 the conversion rate was reset to the higher
    of $0.60 or the 15 day VWAP prior to the first anniversary date. On 5
    November 2012 the conversion rate was reset to the higher of $0.55 or the
    15 day VWAP prior to the first anniversary date. On 5 November 2013 the
    conversion rate was reset to the higher of $0.55 or the 15 day VWAP prior
    to first anniversary date. Interest is payable bi-annually at a rate of 10%
    per annum either in cash or in shares at a 5% discount to the 30 day VWAP
    at the option of the holder. All stated conversion rates have been adjusted
    for the 10:1 equity consolidation that occurred on 26 August 2011. The
    convertible notes matured on 5 November 2013. Refer to details of
    standstill arrangements below.

 b. The parent entity issued $100,000 of convertible notes on 26 November 2010.
    The notes are convertible at the option of the holder based upon the share
    price at the time of conversion. Interest is payable bi-annually at a rate
    of 10% per annum. The convertible notes matured on 26 November 2013. Refer
    to details of standstill arrangements below.

 c. The parent entity issued $4,900,000 of convertible notes on 26 November
    2010. At inception, the conversion rate was $0.80. On 26 November 2011 the
    conversion rate was reset to the higher of $0.60 or the 15 day VWAP prior
    to the first anniversary date. On 26 November 2012 the conversion rate was
    reset to the higher of $0.55 or the 15 day VWAP prior to the first
    anniversary date. On 26 November 2013 the conversion rate was reset to the
    higher of $0.55 or the 15 day VWAP prior to first anniversary date.
    Interest is payable bi-annually at a rate of 10% per annum either in cash
    or in shares at a 5% discount to the 30 day VWAP at the option of the
    holder. The notes are convertible at the option of the holder based upon
    the share price at the time of conversion. Interest is payable annually at
    a rate of 10% per annum either in cash or in shares at a 5% discount to the
    30 day VWAP at the option of the holder. All stated conversion rates have
    been adjusted for the 10:1 equity consolidation that occurred on 26 August
    2011. The convertible notes matured on 26 November 2013. Refer to details
    of standstill arrangements below.

Note 16: Borrowings (cont'd)

 d. The parent entity issued $10,000,000 of convertible notes on 25 February
    2011. The notes are convertible at a fixed rate of $0.80 at the option of
    the holder. Interest is payable annually at a rate of 10% per annum either
    in cash or in shares at a 5% discount to the 30 day VWAP at the option of
    the holder. The maturity date of the convertible note is 25 February 2014.
    Refer to details of standstill arrangements below.

 e. The parent entity issued $3,800,000 of convertible notes in March 2013. The
    notes are convertible at the option of the holder based upon the share
    price at the time of conversion. The conversion rate is the lesser of 80%
    of the VWAP over the 10 days prior to conversion or 125% of the VWAP over
    the 10 days prior to note execution date. The convertible notes matured in
    September 2013 and are secured over all assets of the Australian parent
    company Continental Coal Ltd. Refer to details of standstill arrangements
    below.

 f. Loans are interest bearing at 10% per annum and were due to be repaid on or
    before 30 June 2013. Refer to details of standstill arrangements below.

 g. The working capital facility has been provided by Stonebridge Trading 36
    Pty Ltd, a Group with a non-controlling interest in the Group. The facility
    is interest free with no set term of repayment.

 h. The Group's initial drawdown of the ABSA Capital project finance facility
    occurred 12 December 2012, providing the Group with funding to meet
    outstanding capital development costs and underground mine equipment costs
    in relation to Penumbra. During the year ended 30 June 2014 the facility of
    the ZAR 253,000,000 was fully drawn down. The facility is denominated in
    South African Rand and is repayable in escalating amounts during the second
    month of each quarter commencing August 2014 and concluding November 2019.
    The percentage of the facility to be repaid each calendar year is as
    follows: 2014 - 2%; 2015 - 11.28%; 2016 - 15.64%; 2017 - 21.32%; 2018 -
    24.88%; and 2019 - 24.88%. The facility is secured over all assets of
    Penumbra Coal Mining (Pty) Ltd ("Penumbra"), including project bank
    accounts, trade and other debtors, property and equipment, contractual
    rights to licences/permits, and Witbank farms. The facility is guaranteed
    by Continental Coal Ltd ("CCC"), the Group's South African subsidiary
    Continental Coal Ltd ("CCL"), and Mashala Resources (Pty) Ltd.
    Additionally, Mashala has provided its shareholding in Penumbra and its
    inter-company loan receivable from Penumbra as security for the facility.
    Half of the drawdown bears interest at JIBAR at drawdown date; the
    remaining half is fixed with interest rate swaps.

The Group received notice from ABSA that a default event had occurred in March
2014. The directors are working with ABSA to rectify the default as part of the
recapitalisation process.

 i. During the year ended 30 June 2014, the EDF coal prepayment facility was
    restructured into a financial loan repayable through 24 monthly instalments
    commencing in July 2014. The loan bears interest at 10% per annum and
    interest will be capitalised until June 2014. Executing binding legal
    agreements for this restructure are dependent on the recapitalisation of
    the Group and EDF being provided a second ranking security over the
    Penumbra underground coal mine and its assets. EDF has retained its
    security over the Group's South African mining interests (apart from
    Penumbra).

 j. Related party borrowings of $22,698,000 relate to ZAR 140,000,000 received
    from SIOC-cdt, the Group's South African BEE partner during the 2012
    financial year, and ZAR 75,000,000 transferred from the Group's inter-Group
    loan to SIOC-cdt during the 2012. The loan is repayable (pro-rata with the
    inter-company loan payable to the parent entity) as and when the Group has
    the necessary cash available having regard to the foreseeable cash flow
    requirements of the Group with reference to its budgeted expenditure
    requirements. In effect, the SIOC financing (26%) can not be paid until pro
    rata distributions are also repaid to the parent entity (74%).

Note 16: Borrowings (cont'd)

 k. On 14 February 2014, the Group executed a binding term sheet with UK
    corporate advisory firm Empire Equity Limited ("Empire Equity") to provide
    $5 million bridge funding and undertake a broader recapitalisation and
    restructure of the Group and its financial arrangements. The Group received
    the $5 million bridge funding from Empire Equity and made key payments to
    current creditors. Empire Equity and/or its nominees (the "Investors") have
    invested in 7.5 million unsecured convertible promissory notes ("Notes")
    with a face value of A$1.00 at a discounted issue price of A$0.6667 per
    Note and with a maturity date of 4 months redeemable upon successful
    completion of the Groups recapitalization. The Investors will receive a 6%
    fee on the Investment Amount as well as 70 million options, subject to
    shareholder approval, for providing the $5 million. Refer to details of
    standstill arrangements below.

Standstill arrangements

On 10 February 2014 the Company negotiated a 90 day standstill period,
subsequently extended to 15 October 2014, with these parties and certain trade
and other creditors of the Company. The Company must meet the specified
recapitalisation milestones to ensure the standstill arrangements are in place
during the standstill term.

Note 17: Other Financial Liabilities

During a previous financial year, the Group recorded a royalty liability in
relation to a USD $1 per tonne royalty payable on all coal produced by the
Group's South African mining operations, capped at 15,000,000 tonnes.

The royalty is payable based on coal produced attributable to the parent
company, therefore the royalty is only payable on 74% of total coal produced
based on the parent company's shareholding in Continental Coal Ltd South
Africa.

The royalty arises from a financing arrangement entered into in a prior
financial year. Accordingly, the expense in relation to the royalty of
$4,419,458 (2013: $3,639,000) is considered to be a financing cost and is
included within financing expenses in the Consolidated Income Statement.

                                                          Consolidated

                                                       2014           2013
                                                      $'000          $'000

Current

Royalty liability                                     4,419          3,633

                                                      4,419          3,633

Non-current

Royalty liability                                     6,633          6,984

                                                      6,633          6,984

Note 18: Deferred Tax Liability

                                                          Consolidated

                                                       2014           2013
                                                      $'000
                                                                     $'000

Non-current

Deferred tax arising on business                     19,511         23,009
combinations

                                                     19,511         23,009


The deferred tax liability arises in relation to the difference between the
carrying amount of exploration and development expenditure for accounting
purposes and the cost base of the assets for tax purpose in accordance with the
requirements of Australian Accounting Standard AASB 112 Income Taxes.

The Group does not have a tax payable in relation to the deferred tax liability
at 30 June 2014 or 30 June 2013 and as anticipated the deferred tax liability
has reduced as the development expenditure is amortised.

Note 19: Provision for Rehabilitation

The Group's provision for rehabilitation relates to environmental liability for
Vlakvarkfontein, Ferreira, and Penumbra. South African mining companies are
required by law to undertake rehabilitation work as part of their ongoing
operations. The expected timing of the cash outflows in respect of the
provision is on the closure of the mining operations. Management has assessed
that no environmental liability exists for the other projects as only
exploration activities have been performed and rehabilitation has taken place
as damages were incurred

                                                              Consolidated

                                                            2014           2013
                                                           $'000          $'000

Current

Mining rehabilitation fund                                 3,173          3,759

                                                           3,173          3,759

Non-current

Mining rehabilitation fund                                 8,787          9,594

                                                           8,787          9,594

Note 20: Issued capital

                                                           Consolidated

                                                        2014          2013
                                                       $'000          $'000

781,692,712 (2013: 684,104,446) fully paid                246,533       236,032
ordinary shares

                                                          246,533       236,032

 a. Movement 2014                                       No.           $'000

Balance at 1 July 2013                                684,104,446       236,032

16/10/13 - Convertible note interest settled in         5,000,000           155
shares

28/11/13 - To director in accordance with               1,000,000            20
employment contract

06/12/13 - Convertible note interest and extension     15,588,266           326
fee

30/06/14 - Collateral shares in relation to            76,000,000         1,520
bridging loan

Balance at 30 June 2013                               781,692,712       246,533

 b. Movement 2013                                       No.           $'000

Balance at 1 July 2012                                430,742,398       220,015

02/07/12 - Conversion of debt to equity                 6,038,647           398

09/07/12 - Conversion of debt to equity                 9,113,001           963

03/09/12 - Conversion of debt to equity                10,000,000           309

20/09/12 - Conversion of debt to equity                 8,370,540           335

05/10/12 - Conversion of debt to equity                 7,259,390           360

18/10/12 - To convertible note holder as upfront        1,537,796            60
coupon payment in relation to
new convertible note provided to the Group

02/11/12 - Conversion of debt to equity                 6,830,602           335

02/11/12 - To convertible note holder as upfront          409,837            20
coupon payment in relation to
new convertible note provided to the Group

22/11/12 - Conversion of debt to equity                 9,213,762           335

22/11/12 - To convertible note holder as upfront          552,826            20
coupon payment in relation to
new convertible note provided to the Group

30/11/12 - To consultants as consideration for          1,000,000            45
corporate advisory services
provided to the Group

06/12/12 - To consultants as consideration for            273,771            22
corporate advisory services
provided to the Group

06/12/12 - To lender as consideration for new           2,000,000            88
borrowings facility provided to
the Group

06/12/12 - To the investor as consideration for         6,741,573           297
finance facility provided to the
Group

07/12/12 - Conversion of debt to equity                 8,581,237           335

07/12/12 - To consultants as consideration for            514,875            20
capital raising services
provided to the Group

07/12/12 - To consultants as consideration for          1,000,000            43
corporate advisory services
provided to the Group

18/12/12 - To convertible note holder as upfront          939,346            35
coupon payment in relation to
new convertible note provided to the Group

10/01/13 - To convertible note holder as                  939,346            35
consideration for convertible note
facility provided to the Group

10/01/13 - Conversion of debt to equity                 8,575,006           557

24/01/13 - Placement                                    7,500,000           440

Note 20: Issued capital (cont'd)

 b. Movement 2013                                       No.           $'000

22/02/13 - Conversion of debt to equity                10,000,000           570

01/03/13 - Conversion of debt to equity                 5,000,000           250

06/03/13 - Placement                                   10,000,000           486

15/03/13 - Royalty settlement                           5,603,666           288

21/03/13 - Conversion of debt to equity                 5,681,818           250

25/03/13 - To consultants as consideration for          2,000,000           130
corporate advisory services
provided to the Group

09/04/13 - Placement                                    5,000,000           233

15/04/13 - Royalty settlement                           6,199,228           265

29/04/13 - Conversion of outstanding directors'         5,485,781           548
fees to equity

01/05/13 - To director in accordance with               1,000,000            45
employment contract

08/05/13 - Placement                                  100,000,000         8,000

Share issue costs including valuation of                        -         (100)
derivatives

Balance at 30 June 2013                               684,104,446       236,032

 c. Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds
on winding up of the Group in proportion to the number of and amounts paid on
the shares held.

On a show of hands every holder of ordinary shares present at a meeting of the
Group, in person or by proxy, is entitled to one vote, and upon a poll each
share is entitled to one vote.

 d. Options

Information relating to share options outstanding at the end of the financial
year is as follows:

  Grant Date     Date of Expiry    Exercise Price   Number of Options

  24/06/2013       30/06/2015                 $0.50        65,679,1341

  16/05/2012       15/05/2015               $0.2216         12,500,000

  15/03/2013       15/05/2016                 $0.06         15,000,000

  16/05/2012       16/07/2016                 $0.20          8,000,000

  18/11/2011       23/08/2016                $0.368         13,950,893

  06/12/2012       06/12/2017                $0.057          6,000,000

  18/12/2012       18/12/2017              $0.05382          5,000,000

                                                           126,130,027

1 Listed Options

Note 21: Segment Reporting

 a. Description of segments

Management has determined that the operating segments are based on the reports
reviewed by the Board of Directors that are used to make strategic decisions.
The Board of Directors are as disclosed in the Directors' Report.

The Board of Directors considers the business from both a commodity type and
geographical perspective and has identified three reportable segments.

 b. Segment information provided to the Board of Directors

The segment information provided to the Board of Directors for the reportable
segments is as follows:

2014                         Coal SA        Coal       Corporate   Consolidated
                                          Botswana       Costs

                              $'000        $'000         $'000        $'000

Total segment revenue and        70,204            -           473       70,677
other income

Segment gross profit              2,979            -             -        2,979

Adjusted EBITDA                   3,822            -       (3,812)        9,904

Depreciation                      7,371            -             -        7,372

Impairment                        2,208            -             -        2,208

Total segment assets at 30      145,484        1,147         3,432      150,063
June 2014

Total segment liabilities       105,581            -        41,292      146,873
at 30 June 2014


2013                         Coal SA        Coal       Corporate   Consolidated
                                          Botswana       Costs

                              $'000        $'000         $'000        $'000

Total segment revenue and        65,010            -         1,350       66,360
other income

Segment gross profit              2,859            -             -        2,859

Adjusted EBITDA                   2,320            -       (5,844)      (3,524)

Depreciation                      4,406            -             -        4,406

Impairment                       28,126            -             -       28,126

Total segment assets at 30      163,828        1,200         4,775      169,803
June 2013

Total segment liabilities       106,448            -        36,627      143,075
at 30 June 2013


Accounting Policies

Segment revenues and expenses are those directly attributable to the segments
and include any joint revenue and expenses where a reasonable basis of
allocation exists. Segment assets include all assets used by a segment and
consist principally of cash, receivables, plant and equipment and exploration
and development expenditure. While most such assets can be directly attributed
to individual segments, the carrying amount of certain assets used jointly by
two or more segments is allocated to the segments on a reasonable basis.
Segment liabilities consist principally of payables, employee benefits, accrued
expenses, provisions and borrowings. Segment assets and liabilities do not
include deferred income taxes.

Intersegment Transfers

Segment revenues, expenses and results include transfers between segments. The
prices charged on intersegment transactions are the same as those charged for
similar goods to parties outside of the economic entity at an arms' length.
These transfers are eliminated on consolidation.

Compliance Statement:

1. This report is based on the financial statements to which one of the
following applies:

         The financial statements have         The financial statements have
         been audited.                         been supplied to review.

         The financial statements are          The financial statements have
     X   in the process of being               not yet been audited or
         audited or subject to review.         reviewed.

2. The entity has a formally constituted audit committee.

____________________________

PETER LANDAU

Executive Director
Date: 31 August 2014

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