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 DIRECTORYDirectors and Officers Country of IncorporationPaul D'SYLVA Australia(Interim Executive Chairman) Registered OfficePeter LANDAU Ground Floor(Interim Executive Director) 1 Havelock StreetLars SCHERNIKAU WEST PERTH WA 6005(Non-Executive Director) Telephone: +61 8 9488 5220Connie MOLUSI Facsimile: +61 8 9324 2400(Non-Executive Director) Principal Place of BusinessCompany Secretary 9th Floor Fredman TowersJane FLEGG 13 Fredman DriveShare Registry SANDTON SOUTH AFRICA 2196Computershare Ltd Telephone: +27 11 881 1420Level 2, Reserve Bank Building Facsimile: +27 11 881 142345 St Georges Terrace Home ExchangePERTH WA 6000 Australian Securities ExchangeTelephone: +61 8 9323 2000 Level 40, Central ParkFacsimile: +61 8 9323 2033 152-158 St George's TerraceAuditors Perth WA 6000BDO Audit (WA) Pty Ltd Telephone: +61 8 9224 000038 Station Street Facsimile: +61 8 9381 1322SUBIACO WA 6008 ASX Code: CCCTelephone: +61 8 6382 4600 AIM Code: COOLFacsimile: + 61 8 6382 4601 Email: admin@conticoal.com Website: www.conticoal.comResults for announcement to the market 2013 2014 Variance $'000 $'000 %Revenue from ordinary up from 62,230 to 68,715 (10%)activitiesLoss from continuing down from (34,573) to (24,818) (28%)operationsaftertax attributable tomembersNet loss attributable to down from (35,720) to (24,818) (28%)membersDividendsDividends/distributions Amount per security Franked amount per securityFinal dividend - -Interim dividend - -The directors recommend that no dividend be paid for the year ended 30 June2014 nor have any amounts been paid or declared by way of dividend since theend of the previous financial year.AuditThis report is based on financial statements which are in the process ofbeing audited.Other significant information needed by an investor to make an informedassessment of the Group's Financial Performance and Financial PositionSee attached preliminary final report.Commentary on results for the periodA commentary on the results for the period is contained within the financialstatements that accompany this announcement.This information should be read in conjunction with Continental Coal's attachedpreliminary final report.Forward Looking StatementThis document includes certain statements that may be deemed "forward-lookingstatements" and information. All statements in this document, other thanstatements of historical facts, that address future production, reservepotential, exploration drilling, exploitation activities and events ordevelopments that the Company expects to take place in the future areforward-looking statements and information. Although the Company believes theexpectations expressed in such forward-looking statements and information arebased on reasonable assumptions, such statements are not guarantees of futureperformance and actual results or developments may differ materially from thosein the forward-looking statements and information. Factors that could causeactual results to differ materially from those in forward-looking statementsinclude market prices, exploitation and exploration successes, drilling anddevelopment results, production rates and operating costs, continuedavailability of capital and financing and general economic, market or businessconditions. Investors are cautioned that any such statements are not guaranteesof future performance and actual results or developments may differ materiallyfrom those stated.Review of OperationsPrincipal ActivitiesThe principal activity of the Group during the year ended 30 June 2014 was theacquisition, exploration, development and operation of thermal coal mines andproperties in South Africa. There were no significant changes in the nature ofthe activities of the Group during the financial year.OverviewDuring the year ended 30 June 2014 the Group continued its program ofestablishing itself as a successful thermal coal mining, production,exploration and development Group in Southern Africa focusing on the ramp up ofits flagship Penumbra Coal Mine and advancing the De Wittekrans coal projectwith the granting of its mining right in September 2013.Reserve and Resource StatementThe 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 68,468,591Vlakplaats 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 137,524,216 121,791,500Vlakplaats 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 428,758,233 375,249,541Notes: 1. JORC compliant.These coal resources and coal reserves (excluding Kweneng) have been defined inaccordance with the 2007 South African Code for Reporting of Mineral Resourcesand Mineral Reserves Code (SAMREC Code). The SAMREC Code requires the use ofthe South African National Standard : South African Guide to the SystematicEvaluation of Coal Resources and Coal Reserves (SANS10320:2004) whenclassifying and reporting coal resources and reserves. SANS10320:2004 uses theprinciple of relative distances from boreholes with quality data for theclassification of coal resources. This standard was utilised by the Company'sconsultants in calculating the project resources.The above coal resource and coal reserve estimates are also in compliance withand to the extent required by the 2012 Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves published by the JointOre Reserves Committee of The Australasian Institute of Mining, Metallurgy,Australian Institute of Geoscientists and Minerals Council of Australia (JORCCode). Similarly to the SAMREC Code, the JORC Code uses the principle ofrelative distances from boreholes with quality data for the classification ofcoal resources. The SAMREC Code distances are narrower than those required bythe JORC Code, and hence, by reporting to SAMREC, the requirements of the JORCCode have also been metCoal Mine and Processing OperationsHealth and SafetyThe Group maintains a strong health and safety culture across all of its coalmining and processing operations and continues to improve its health and safetyinitiatives and policies across all of its operations. During the financialyear, eleven Dressing Station Case ("DSC") accidents were reported at theCompany's mining and processing operations - ten DSC accidents were reported atthe Penumbra Underground Mine and one at the Vlakvarkfontein Open Cast Mine andone Medical Treatment Incident (MTI) was reported at the Penumbra UndergroundMine. All the accidents were relatively minor with no material impacts andtheir causes have been addressed.Operational Performance Year ended 30 June Year ended 30 June 2014 2013Run of Mine (ROM)ProductionVlakvarkfontein 1,382,487 1,526,469Ferreira 247,129 559,107Penumbra 498,176 143,299Total ROM Production 2,127,792 2,228,875Feed to PlantFerreira 269,670 627,329Penumbra 491,424 143,299Total Plant Feed 761,094 770,628Export YieldsFerreira 72% 70.4%Penumbra 57.2% 36.8%Domestic Sales 1,401,080 1,315,701Export Sales 523,906 453,582Total Coal Sales 1,924,986 1,769,283Total ROM coal production for the year ended 30 June 2014 of 2,127,792t wasachieved with a full 12 months production at the Vlakvarkfontein Coal Mine, 6months production at the Ferreira Coal Mine until end of life and ramp upproduction from the Penumbra Coal Mine.Feed to the Delta Processing Operations for the year ended 30 June 2014 was761,094t. The feed from the Penumbra Coal Mine has steadily increased duringthe 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 thepast 12 months with the average yield of 57.2% recorded for the ended 30 June2014.Domestic sales from the Vlakvarfontein Coal Mine have increased on a year-endbasis comparable to year ended 30 June 2013. 1. Vlakvarkfontein Coal MineVlakvarkfontein Coal Mine produced 1,382,487t ROM for the year ended 30 June2014, achieving its target production at a cost of ZAR 90.00/t (US$8.50/t) theyear 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 toEskom and 251,861t non-select. 2. Ferreira Coal MineFerreira Coal Mine produced 247,129t ROM for the year ended June 2014, beforeits end of life in December 2013, with export yields averaging 72%.Inventory clean-up at the Ferreira Coal Mine was completed in the first Quarterof 2014. The rehabilitation work will commence upon finalisation of the closureplan and appointing contractors. 3. Penumbra Coal MineThe Penumbra Coal Mine delivered 498,176t ROM for the year ended 30 June 2014comparable 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 aredisplacing the coal seam in the current mining area and this is impacting onthe production rate and the delivered yield due to added contamination.Management, in conjunction with mining consultants, have been reviewing theplanned production lay-out in order to mitigate the impact of the stone rollson the production rate of the continuous miners. As procedures are implementedthe ROM and yield are increasing with the month of June 2014 producing 58,013twhich is on track to the targeted 70,000t per month. Additional explorationdrilling is currently being carried out to ascertain the extent of the stonerolls with the view to revising the production plan.Export yields at the Penumbra Coal Mine averaged 57.2% for the year ended 30June 2014. The yield is expected to improve to the planned 62% with theincrease in production and the mitigation of the additional contaminationcaused 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 forecastincrease in production.The Company received ZAR 10.1 million revenue for the year ended 30 June 2014from the ABSA forward hedging contract at the Penumbra Coal Mine. 2. DEVELOPMENT PROJECT 3. 1. De Wittekrans Coal ProjectThe De Wittekrans Development Project (De Wittekrans) is a potentialunderground export and domestic thermal coal mining project at apre-development stage. Optimisation work on previous feasibility studies hasidentified the opportunity to develop De Wittekrans into a major miningoperation with the potential to produce ~3.6Mtpa of ROM over the LOM.A mining right was granted in September 2013 and the Integrated Water UseLicense (IWUL) application was submitted, the Company awaits approval.With mining right successfully executed in May 2014, the Company now has 12months to commence mining operations, however should the IWUL not be receivedwithin this 12 month period the mining right can be delayed.During the last quarter of the year ended 30 June 2014 two sites were selectedfor mining and these are now being evaluated as to which site will be selectedfor the first phase of mining. 3. EXPLORATION PROJECTS 4. 1. Botswana Coal ProjectsThe Company is in advanced discussions in respect of the two remainingProspecting licenses (PL 340/2008 and PL 341/2008). PL341 has been transferredand the transfer documents for PL340 have been submitted to the BotswanaMinistry of Minerals, Energy. 2. VlakplaatsVlakplaats is a 50:13:36 joint venture between the Company, Big Match Trading34 (Pty) Ltd and Korea Resources Corporation. Therefore the Company only has aneffective interest of 37% in the project. A Prospecting Right has been grantedfor this project.Vlakplaats is considered a non-core asset and the Company will retain theProspecting Right in good standing while it evaluates divestment opportunities. 3. Other non-core assetsProject X, Vaalbank, Leiden.Knapdaar, Wolvenfontein, Wesselton II,Mooifonteinhave all been considered as non-core assets which the Company will keep in goodstanding order while it evaluates divestment opportunities 4. CORPORATE 5. 1. Bridge Finance and RecapitalisationIn February 2014 the Group executed a binding term sheet with UK corporateadvisory firm Empire Equity Limited ("Empire Equity") to provide $5 millionbridge funding and undertake a broader recapitalisation and restructure of theGroup and its financial arrangements.The Group received the $5 million bridge funding from Empire Equity and madekey payments to current creditors and negotiated a 3 month standstill period torecapitalize the Group. The standstill period was subsequently extended to 15October 2014.Empire Equity and/or its nominees (the "Investors") have invested in 7.5million unsecured convertible promissory notes ("Notes") with a face value ofA$1.00 at a discounted issue price of A$0.6667 per Note and with a maturitydate of 4 months redeemable upon successful completion of the Groupsrecapitalization. The Investors will receive a 6% fee on the Investment Amountas well as 70 million options, subject to shareholder approval, for providingthe $5 million.A condition to providing the funding was the restructure of the Board whichoccurred on 13 February 2014.The Investors also undertook to assist the Group in undertaking a rights issuewith the proceeds to be used to settle amounts owed by the Group to variousexisting convertible note holders , loans and royalty holders, repay bridgingfinance, reduce the Group's other borrowings, provide funds towards thedevelopment of the Company's advanced coal mining projects and provide workingcapital.Subsequent to year ended 30 June 2014 the Group announced a fully underwrittennon-renounceable rights issue prospectus to raise approximately A$35.1m by wayof the issue of up to 7,035,234,408 new shares at an offer price of $0.005 pernew share. 2. Proposed listing on the Johannesburg Stock ExchangeThe proposed listing has been postponed until such time as the recapitalisationof the Company has been completed. 3. ASX and Aim share trading suspensionAs at the date of this report Continental's securities on both the ASX and AIMmarkets continue to be suspended. In line with the timetable disclosed in thefully underwritten non-renounceable rights issue prospectus the Groupanticipates lifting of the suspension of Continentals securities on ASX and AIMat completion of the Rights Issue on or about 2 October 2014.Competent Persons StatementThe information in this report that relates to Coal Resources onVlakvarkfontein, Vlakplaats and Wolvenfontein is based on resource estimatescompleted by Dr. Philip John Hancox. Dr. Hancox is a member in good standing ofthe South African Council for Natural Scientific Professions (SACNASP No.400224/04) as well as a Member and Fellow of the Geological Society of SouthAfrica. He is also a member of the Fossil Fuel Foundation, the GeostatisticalAssociation of South Africa, the Society of Economic Geologists, and a CoreMember of the Prospectors and Developer Association of Canada. Dr. Hancox hasmore than 12 years' experience in the South African Coal and Mineralsindustries and holds a Ph.D from the University of the Witwatersrand (SouthAfrica).The information in this report that relates to Coal Resources on Penumbra, DeWittekrans, Knapdaar, Leiden and Wesselton II is based on coal resourceestimates 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 forNatural Scientific Professions (SACNASP No. 400060/98) as well as a Member andFellow 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 andVaalbank is based on coal resource estimates completed by Mr. Coenraad vanNiekerk, a full time employee of Gemecs (Pty) Ltd. Mr. van Niekerk is a memberin good standing of the South African Council for Natural ScientificProfessions (SACNASP No. 400066/98) as well as a Member and Fellow of theGeological Society of South Africa. He has more than 38 years' experience inthe South African Coal and Minerals industries.The information in this report that relates to Coal Resources on Mooifontein isbased on coal resource estimates completed by Mr. Dawie van Wyk, a full timeemployee of Geocoal services (Pty) Ltd. Mr. van Wyk is a member in goodstanding of the South African Council for Natural Scientific Professions(SACNASP No. 401964/83) as well as a Member and Fellow of the GeologicalSociety of South Africa. He has more than 30 years' experience in the SouthAfrican Coal and Minerals industries.The Coal Reserves on Vlakvarkfontein, and is based on reserve estimatescompleted by Eugène de Villiers. Mr. de Villiers is a graduated mining engineer(B.Eng) Mining from the University of Pretoria and is professionally registeredwith the Engineering Council of South Africa (Pr.eng no - 20080066). He is alsoa member of the South African Institute of Mining and Metallurgy (SAIMMMembership no. 700348) and the South African Coal Managers Association (SACMAMembership no. 1742). Mr. de Villiers has been working in the coal industrysince 1993 and has a vast amount of production and mine management as well asproject related experience. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2014 Note Consolidated 2014 2013 $'000 $'000Operating sales revenue 2 68,715 62,230Operating expenses (58,714) (55,181)Depreciation & amortisation (7,022) (4,190)Cost of sales 3 (65,736) (59,371)Gross profit 2,979 2,859Other income 2 1,962 4,130Administration 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 1,101Loss after income tax from continuing (33,320) (48,341)operationsLoss 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 continuingoperationsattributable to the ordinary equityholders 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 theNotes to the Financial Statements. CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014 Note Consolidated 2014 2013 $'000 $'000Loss for the year (33,320) (49,488)Other Comprehensive Income/(Loss)Items that may be reclassified to profitor lossExchange differences on translation of (1,932) (6,052)foreign operationsChanges in the fair value of cashflow - 3,087hedges, net of taxOther comprehensive loss for the year, - (2,965)net of taxTotal comprehensive loss for the year (35,252) (52,453)Total comprehensive income/(loss) isattributable 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 periodattributable toowners of Continental Coal Limited arisesfrom:Continuing operations (25,926) (37,030)Discontinued operations - (1,147) (25,926) (38,177)The above Consolidated Statement of Other Comprehensive Income should be readin conjunction with the Notes to the Financial Statements. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014 Note Consolidated 2014 2013 $'000 $'000ASSETSCURRENT ASSETSCash and cash equivalents 5 2,989 4,496Trade and other receivables 6 4,681 7,744Inventories 7 1,167 4,862 17,102Non-current assets classified as held for -saleTOTAL CURRENT ASSETS 8,837 17,102NON-CURRENT ASSETSTrade and other receivables 6 2,473 2,981Other assets 2,472 1,658Derivative financial instruments 7,050 2,400Exploration expenditure 10 47,417 54,363Development expenditure 11 65,105 76,344Property, plant and equipment 12 12,628 11,933Deferred tax assets 13 4,081 3,022TOTAL NON-CURRENT ASSETS 141,226 152,701TOTAL ASSETS 150,063 169,803CURRENT LIABILITIESTrade and other payables 14 7,451 12,459Deferred revenue 15 - 5,859Income tax payable 451 1,115Provisions 4,601 296Borrowings 16 68,902 18,531Derivative financial instruments 80 228Other financial liabilities 17 4,419 3,633Provision for rehabilitation 19 3,173 3,759TOTAL CURRENT LIABILITIES 89,077 45,880NON-CURRENT LIABILITIESDeferred revenue 15 - 5,467Borrowings 16 22,865 52,141Other financial liabilities 17 6,633 6,984Deferred tax liability 18 19,511 23,009Provision for rehabilitation 19 8,787 9,594TOTAL NON-CURRENT LIABILITIES 57,796 97,195TOTAL LIABILITIES 146,873 143,075NET ASSETS 3,190 26,728EQUITYIssued capital 20 246,533 236,032Reserves (1,905) (2,838)Accumulated losses (234,239) (198,987)Capital and reserves attributable to 10,389 34,207owners ofContinental Coal LimitedAmounts attributable to non-controlling (7,198) (7,479)interestsTOTAL EQUITY 3,190 26,728The above Consolidated Statement of Financial Position should be read inconjunction 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 $'000Balance at 1 220,015 (164,739) (19,190) (9,944) (508) - 30,798 - 56,433 8,089 64,522July 2012Loss for the - (35,720) - - - - - - (35,720) (13,768) (49,488)yearExchange - - (4,741) - - - - - (4,741) (1,311) (6,052)differences ontranslation offoreignoperationsCashflow - - - - 2,284 - - - 2,284 803 3,087hedges, net oftaxTotal - (35,720) (4,741) - 2,284 - - - (38,177) (14,276) (52,453)comprehensiveloss for theyearTransactionswith owners intheir capacityas owners:Shares issued 16,117 - - - - - - - 16,117 - 16,117during the yearTransaction (100) - - - - - - - (100) - (100)costsOptions issued - - - - - - 701 - 701 - 701Transfers - 1,472 - (1,472) - - - - - - -Transactions - - - (766) - - - - (766) (1,026) (1,792)withnon-controllinginterestsDividends paid - - - - - - - - - (266) (266)Balance at 30 236,032 (198,987) (23,931) (12,182) 1,776 - 31,499 - 34,207 (7,479) 26,728June 2013Loss for the - (35,252) - - - - - - (24,818) (8,502) (33,320)yearExchange - - (3,716) - - - - - (3,716) (824) (4,540)differences ontranslation offoreignoperationsCashflow - - - - 4,650 - - - 4,650 - 4,650hedges, net oftaxTotal - (35,252)) (3,716) - 4,650 - - - (25,926) (9,326) (35,252)comprehensiveloss for theyearTransactionswith owners intheir capacityas owners:Shares issued 10,501 - - - - - - - 10,501 - 10,501during the yearTransaction - - - - - - - - - - -costsOptions issued - - - - - - - - - - -Transfers - - - - - - - - - - -Transactions - - - - - - - - - 2,128 2,128withnon-controllinginterestsDividends paid - - - - - - - - - - -Balance at 30 246,533 (234,239) (27,647) (12,182) 6,426 - 34,499 - 10,389 (7,198) 3,190June 2014The above Consolidated Statement of Changes in Equity should be read inconjunction with the notes to the Financial Statements. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014 Consolidated 2014 2013 $'000 $'000CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 64,836 58,505Payments to suppliers and employees (60,864) (70,488)Interest received 676 249Other income 121 2,196Proceeds on settlement of commodity hedges 1,018 336Income tax paid (1,126) (1,080)Net cash (used in)/provided by operating 2,127 (10,282)activitiesCASH FLOWS FROM INVESTING ACTIVITIESPayment for additional ownership interest in - (8,839)subsidiaryExploration 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 - 1,092equipmentPayments in relation to SIOC transaction - (331)Proceeds from sale of Vanmag - 8,696Payments for purchase of other assets (6) (642)Net cash (used in) investing activities (7,558) (27,752)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares, net of - 8,597transaction costsInterest and borrowing costs (117) (1,227)Proceeds from borrowings 5,908 26,890Repayment 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 27,994Net (decrease)/increase in cash held (1,507) (10,040)Effect of the exchange rate changes on the (1,042)balance of cash held inforeign currencies at the beginning of thefinancial yearCash at beginning of financial year 4,496 14,595Cash at end of financial year 2,989 3,513The above Consolidated Statement of Cash Flows should be read in conjunctionwith the Notes to the Financial Statements.Note 1: Basis of the Preparation of the Preliminary Final ReportThe preliminary final report has been prepared in accordance with the ASXListing rule 4.3A and the disclosure requirements of ASX Appendix 4E.This report has been prepared in accordance with Australian AccountingStandards, Urgent Issues Group Interpretations, other authoritativepronouncements of the Australian Accounting Standards Board and theCorporations Act 2001.As such this preliminary final report does not include all the notes of thetype included in an annual financial report and accordingly, should be read inconjunction with the annual report for the year ended 30 June 2013, and withany public announcements made by Continental Coal Limited during the reportingperiod in accordance with the disclosure requirements of the Corporations Act2001.The accounting policies have been consistently applied, unless otherwisestated.The preliminary report has been prepared on the going concern basis, whichcontemplates continuity of normal business activities and the realisation ofassets and the settlement of liabilities in the ordinary course of businessNote 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 4,130Note 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 JuneNote 5: Cash and Cash Equivalents Consolidated 2014 2013 $'000 $'000Cash at bank and in hand 2,989 4,496 2,989 4,496Reconciliation of cashCash at the end of the financial year as shown in theConsolidated Statement ofCash Flows is reconciled to items in the ConsolidatedStatement of Financial Positionas follows:Cash and cash equivalents 2,989 4,496Bank overdrafts - (983) 2,989 3,513Note 6: Trade and Other Receivables Consolidated 2014 2013 $'000 $'000CURRENTTrade receivables (a) 2,547 4,588Other receivables (b) 1,304 1,012Prepayments 830 151Restricted cash (c) - 1,993Total current receivables 4,681 7,744NON-CURRENTOther receivables (d) 2,473 2,981Total non-current receivables 2,473 2,9812014 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 $'000CURRENTCoal stockpiles 1,167 4,862Total coal stockpiles 1,167 4,862Note 8: Other AssetsNON-CURRENTMining rehabilitation fund 2,472 1,658 2,472 1,658As approved by the Department of Mineral Resources in South Africa, the Groupmakes monthly contributions to a Liberty investment product to fund futureenvironmental rehabilitation work at the Group's Vlakvarkfontein and PenumbraMines.The Liberty investment products consist primarily of money market accounts.These investments are not available for general purposes of the Group and areclassified as restricted funds. All income earned on these funds is re-investedNote 9: Controlled EntitiesControlled Entities Consolidated Country of Percentage Owned (%)* Incorporation 30 June 30 June 2014 2013Subsidiaries of Continental CoalLimited ("CCC"):Continental Coal Ltd ("CCL SA") South Africa 74 74Subsidiaries of Continental Coal LtdTsimpilo Trading 45 (Pty) Limited South Africa 100 100Ayoba Taboo Trading 137 (Pty) Ltd South Africa 100 100Idada Trading 310 (Pty) Ltd South Africa 70 70Kebragen (Pty) Ltd South Africa 75 75City Square Trading 437 (Pty) Ltd South Africa 100 100Ntshovelo 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 100Subsidiaries of Mashala Resources(Pty) LtdNamib Drilling (Pty) Ltd South Africa 100 100Wessleton Opencast (Pty) Ltd South Africa 100 100BW Mining (Pty) Ltd South Africa 100 100Copper Sunset Trading 148 (Pty) Ltd South Africa 100 100Mandla Coal Resources (Pty) Ltd South Africa 100 100Penumbra Coal Mining (Pty) Ltd South Africa 100 100Mashala Hendrina Coal Pty Ltd (Pty) South Africa 100 100Ltd)Weldon Investments (Pty) Ltd Botswana 100 100* Percentage of voting power is in proportion toownershipNtshovelo - 60% economic interest even though 50% equity interest.Ultimatum Challenge Trading - 63% economic interest even though 50% equityinterest.Note 10: Exploration Expenditure Consolidated 2014 2013 $'000 $'000NON-CURRENTExploration expenditure capitalised- Exploration and evaluation phases - direct 40,893 45,957- Exploration and evaluation phases - indirect 6,524 8,406Total exploration expenditure 47,417 54,363Mineral rights held by South African subsidiaryProject name Prospecting Current holder of Holder of right once Date or mining mining or transaction is Granted right prospecting right completed referenceVlakvarkfontein MP 300 MR Ntshovelo Mining Ntshovelo Mining 2 February Resources (Pty) Ltd Resources (Pty) Ltd 2010Vaalbank MP 1689 PR Misty Sea Trading Kebragen (Pty) Ltd 16 April 262 (Pty) Ltd 2008Project X MP 1640 PR Misty Sea Trading Idada Trading 310 16 April 262 (Pty) Ltd (Pty) Ltd 2008Vlakplaats MP 1520 PR Ultimatum Challenge Ultimatum Challenge 15 July Trading (Pty) Ltd Trading (Pty) Ltd 2008Wolvenfontein Ultimatum Challenge Ultimatum Challenge 15 July Trading (Pty) Ltd Trading (Pty) Ltd 2008Ferreira MP 345 MR Mashala Resources Mashala Resources 19 May 2010 (Pty) Ltd (Pty) LtdKnapdaar MP 1494 PR Mashala Resources Mashala Resources 5 February (Pty) Ltd (Pty) Ltd 2008Leiden MP 401 PR Mashala Resources Mashala Resources 17 October (Pty) Ltd (Pty) Ltd 2006Mooifontein MP 713 PR Mashala Resources Mashala Resources 17 OctoberPtn 13 & 16 (Pty) Ltd (Pty) Ltd 2009Wesselton II MP 231 MR Mashala Resources Mashala Resources 19 February (Pty) Ltd (Pty) Ltd 2009Penumbra MP 247 MR Penumbra Coal Mining Penumbra Coal Mining 19 May 2010 (Pty) Ltd (Pty) LtdDe Wittekrans MP 97 PR Mashala Hendrina Mashala Hendrina 26 April Coal (Pty) Ltd Coal (Pty) Ltd 2006 MP 365 MRBotswana Weldon Investments Weldon Investments 1 April (Pty) Ltd (Pty) Ltd 2009Note 11: Development Expenditure Consolidated 2014 2013 $'000 $'000NON-CURRENT- Development expenditure at cost 85,932 89,903- Accumulated depreciation (20,827) (13,559)Total development expenditure 65,105 76,344The Development expenditure relates mainly to the mining infrastructure assetsand 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 thesuccessful development and commercial exploration or sale of the respectivemining permits.Note 12: Property, Plant & Equipment Consolidated 2014 2013 $'000 $'000PLANT AND EQUIPMENTPlant and equipment at cost 15,162 14,251Accumulated depreciation (2,534) (2,318)Net book amount 12,628 11,933Note 13: Deferred Tax AssetsDeferred tax assetTax losses available for set off against 4,081 2,045future taxable incomeOther - 977 4,081 3,022Note 14: Trade and Other PayablesCURRENTUnsecured liabilitiesTrade payables 6,477 8,997Sundry payables and accrued expenses 974 2,670Accrued interest - 792 7,451 12,459Note 15: Deferred RevenueIn previous financial years the Group received USD $20m sales proceeds inadvance of the delivery of coal in accordance with the coal prepayment facilitywith EDF Trading. The prepayment facility was secured over all assets of theGroup's South African mining interests apart from Penumbra.During the year ended 30 June 2014 the EDF coal prepayment facility wasrestructured into a financial loan repayable through 24 monthly instalmentscommencing in July 2014. EDF has retained its security over the Group's SouthAfrican mining interests.During the year ended 30 June 2014, approximately $2,5m (2013: $5m) of thedeferred revenue balance was earned and recognised on the delivery of coal toEDF Trading prior to the restructure. Consolidated 2014 2013 $'000 $'000Deferred revenue - current - 5,859Deferred revenue - non-current - 5,467Total deferred revenue - 11,326Note 16: Borrowings Consolidated 2014 2013 $'000 $'000CURRENTBank overdraft - secured - 983Convertible Note - unsecured (a) 1,114 932Convertible Note - unsecured (b) 106 100Convertible Note - unsecured (c) 5,309 4,510Convertible Note - unsecured (d) 11,190 9,589Convertible Note - unsecured (e) 3,800 2,000Other loans - unsecured (f) 847 160Related party working capital facility (g) - 257Bank debt - secured (h) 26,000 -EDF loan (i) 15,536 -Bridge funding (k) 5,000 - 68,902 18,531NON-CURRENTBank debt - secured (h) - 25,034Related party loans - unsecured (j) 22,698 26,856Other 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 March2014. The directors are working with ABSA to rectify the default as part of therecapitalisation 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 arrangementsOn 10 February 2014 the Company negotiated a 90 day standstill period,subsequently extended to 15 October 2014, with these parties and certain tradeand other creditors of the Company. The Company must meet the specifiedrecapitalisation milestones to ensure the standstill arrangements are in placeduring the standstill term.Note 17: Other Financial LiabilitiesDuring a previous financial year, the Group recorded a royalty liability inrelation to a USD $1 per tonne royalty payable on all coal produced by theGroup's South African mining operations, capped at 15,000,000 tonnes.The royalty is payable based on coal produced attributable to the parentcompany, therefore the royalty is only payable on 74% of total coal producedbased on the parent company's shareholding in Continental Coal Ltd SouthAfrica.The royalty arises from a financing arrangement entered into in a priorfinancial 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 isincluded within financing expenses in the Consolidated Income Statement. Consolidated 2014 2013 $'000 $'000CurrentRoyalty liability 4,419 3,633 4,419 3,633Non-currentRoyalty liability 6,633 6,984 6,633 6,984Note 18: Deferred Tax Liability Consolidated 2014 2013 $'000 $'000Non-currentDeferred tax arising on business 19,511 23,009combinations 19,511 23,009The deferred tax liability arises in relation to the difference between thecarrying amount of exploration and development expenditure for accountingpurposes and the cost base of the assets for tax purpose in accordance with therequirements of Australian Accounting Standard AASB 112 Income Taxes.The Group does not have a tax payable in relation to the deferred tax liabilityat 30 June 2014 or 30 June 2013 and as anticipated the deferred tax liabilityhas reduced as the development expenditure is amortised.Note 19: Provision for RehabilitationThe Group's provision for rehabilitation relates to environmental liability forVlakvarkfontein, Ferreira, and Penumbra. South African mining companies arerequired by law to undertake rehabilitation work as part of their ongoingoperations. The expected timing of the cash outflows in respect of theprovision is on the closure of the mining operations. Management has assessedthat no environmental liability exists for the other projects as onlyexploration activities have been performed and rehabilitation has taken placeas damages were incurred Consolidated 2014 2013 $'000 $'000CurrentMining rehabilitation fund 3,173 3,759 3,173 3,759Non-currentMining rehabilitation fund 8,787 9,594 8,787 9,594Note 20: Issued capital Consolidated 2014 2013 $'000 $'000781,692,712 (2013: 684,104,446) fully paid 246,533 236,032ordinary shares 246,533 236,032 a. Movement 2014 No. $'000Balance at 1 July 2013 684,104,446 236,03216/10/13 - Convertible note interest settled in 5,000,000 155shares28/11/13 - To director in accordance with 1,000,000 20employment contract06/12/13 - Convertible note interest and extension 15,588,266 326fee30/06/14 - Collateral shares in relation to 76,000,000 1,520bridging loanBalance at 30 June 2013 781,692,712 246,533 b. Movement 2013 No. $'000Balance at 1 July 2012 430,742,398 220,01502/07/12 - Conversion of debt to equity 6,038,647 39809/07/12 - Conversion of debt to equity 9,113,001 96303/09/12 - Conversion of debt to equity 10,000,000 30920/09/12 - Conversion of debt to equity 8,370,540 33505/10/12 - Conversion of debt to equity 7,259,390 36018/10/12 - To convertible note holder as upfront 1,537,796 60coupon payment in relation tonew convertible note provided to the Group02/11/12 - Conversion of debt to equity 6,830,602 33502/11/12 - To convertible note holder as upfront 409,837 20coupon payment in relation tonew convertible note provided to the Group22/11/12 - Conversion of debt to equity 9,213,762 33522/11/12 - To convertible note holder as upfront 552,826 20coupon payment in relation tonew convertible note provided to the Group30/11/12 - To consultants as consideration for 1,000,000 45corporate advisory servicesprovided to the Group06/12/12 - To consultants as consideration for 273,771 22corporate advisory servicesprovided to the Group06/12/12 - To lender as consideration for new 2,000,000 88borrowings facility provided tothe Group06/12/12 - To the investor as consideration for 6,741,573 297finance facility provided to theGroup07/12/12 - Conversion of debt to equity 8,581,237 33507/12/12 - To consultants as consideration for 514,875 20capital raising servicesprovided to the Group07/12/12 - To consultants as consideration for 1,000,000 43corporate advisory servicesprovided to the Group18/12/12 - To convertible note holder as upfront 939,346 35coupon payment in relation tonew convertible note provided to the Group10/01/13 - To convertible note holder as 939,346 35consideration for convertible notefacility provided to the Group10/01/13 - Conversion of debt to equity 8,575,006 55724/01/13 - Placement 7,500,000 440Note 20: Issued capital (cont'd) b. Movement 2013 No. $'00022/02/13 - Conversion of debt to equity 10,000,000 57001/03/13 - Conversion of debt to equity 5,000,000 25006/03/13 - Placement 10,000,000 48615/03/13 - Royalty settlement 5,603,666 28821/03/13 - Conversion of debt to equity 5,681,818 25025/03/13 - To consultants as consideration for 2,000,000 130corporate advisory servicesprovided to the Group09/04/13 - Placement 5,000,000 23315/04/13 - Royalty settlement 6,199,228 26529/04/13 - Conversion of outstanding directors' 5,485,781 548fees to equity01/05/13 - To director in accordance with 1,000,000 45employment contract08/05/13 - Placement 100,000,000 8,000Share issue costs including valuation of - (100)derivativesBalance at 30 June 2013 684,104,446 236,032 c. Ordinary sharesOrdinary shares entitle the holder to participate in dividends and the proceedson winding up of the Group in proportion to the number of and amounts paid onthe shares held.On a show of hands every holder of ordinary shares present at a meeting of theGroup, in person or by proxy, is entitled to one vote, and upon a poll eachshare is entitled to one vote. d. OptionsInformation relating to share options outstanding at the end of the financialyear 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 5,000,000 126,130,0271 Listed OptionsNote 21: Segment Reporting a. Description of segmentsManagement has determined that the operating segments are based on the reportsreviewed 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 andgeographical perspective and has identified three reportable segments. b. Segment information provided to the Board of DirectorsThe segment information provided to the Board of Directors for the reportablesegments is as follows:2014 Coal SA Coal Corporate Consolidated Botswana Costs $'000 $'000 $'000 $'000Total segment revenue and 70,204 - 473 70,677other incomeSegment gross profit 2,979 - - 2,979Adjusted EBITDA 3,822 - (3,812) 9,904Depreciation 7,371 - - 7,372Impairment 2,208 - - 2,208Total segment assets at 30 145,484 1,147 3,432 150,063June 2014Total segment liabilities 105,581 - 41,292 146,873at 30 June 20142013 Coal SA Coal Corporate Consolidated Botswana Costs $'000 $'000 $'000 $'000Total segment revenue and 65,010 - 1,350 66,360other incomeSegment gross profit 2,859 - - 2,859Adjusted EBITDA 2,320 - (5,844) (3,524)Depreciation 4,406 - - 4,406Impairment 28,126 - - 28,126Total segment assets at 30 163,828 1,200 4,775 169,803June 2013Total segment liabilities 106,448 - 36,627 143,075at 30 June 2013Accounting PoliciesSegment revenues and expenses are those directly attributable to the segmentsand include any joint revenue and expenses where a reasonable basis ofallocation exists. Segment assets include all assets used by a segment andconsist principally of cash, receivables, plant and equipment and explorationand development expenditure. While most such assets can be directly attributedto individual segments, the carrying amount of certain assets used jointly bytwo or more segments is allocated to the segments on a reasonable basis.Segment liabilities consist principally of payables, employee benefits, accruedexpenses, provisions and borrowings. Segment assets and liabilities do notinclude deferred income taxes.Intersegment TransfersSegment revenues, expenses and results include transfers between segments. Theprices charged on intersegment transactions are the same as those charged forsimilar 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 thefollowing 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 LANDAUExecutive DirectorDate: 31 August 2014