28 February 2014 REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2013Continental Coal Limited ("Continental" or "the Group") is pleased to provideits operations and financial report for the half-year ended 31 December 2013.Post 31 December 2013, of major significance to Continental and itsshareholders is the recapitalisation of the Company with an initial $5 millionbridge funding being received and larger recapitalisation plans well advanced,as previously announced.Continental has made key payments to current creditors and negotiated a 3 monthstandstill period to recapitalize the Group and restructure its financialarrangements.Importantly the Group will focus on, and ensure, stability at an operationallevel with the Group's current mining operations whilst saving significantcosts at the corporate level. As part of the restructure process, Continentalwill look to strengthen its BEE credentials in South Africa and generateadditional synergies with key strategic partners including Eskom, Transnet andRBCT to ensure a significant growth profile moving forward.The reconstituted Board of Directors have complete faith in the assets andoperational management of the Company, and are optimistic that a range ofstrategic and financing opportunities will be advanced so as to stabilise theGroup's balance sheet and focus on significant growth following completion of aproposed rights issue.The reconstituted Board of Directors has received interest from a number ofglobally recognised energy investors/traders to participate in the Companygoing forward, and terms are currently being negotiated.As at the date of this report Continental's securities on both the ASX and AIMmarkets continue to be suspended. The reconstituted Board of Directors willconsider a decision on seeking to lift the suspension of the shares pending theprovision of further clarification of its financial position to the market.Please find attached extracts from the Company's Half Year Report as follows: * Consolidated Statement of Profit or Loss and Other Comprehensive Income; * Consolidated Statement of Financial Position; and * Consolidated Statement of Cash Flows.A copy of the full Half Year Report is available on the Company's website.For and behalf of the BoardDr Paul D'SylvaInterim Executive Chairman Results for Announcement to MarketSUMMARY RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2013The following is a summary of the financial results for the period ended 31December 2013 (previous corresponding period 31 December 2012). Unlessotherwise stated all figures are provided in AUD. Increase/ Six months ended Six months ended (Decrease) 31 December 2013 31 December 2012 % $'000 $'000Revenue and other income 28% 39,900 31,210from ordinary activitiesProfit/(Loss) before 225% (3,688) (1,134)Interest and Tax (EBIT)from ordinary activitiesIncome tax benefit/ (130%) 194 (638)(expense)Profit /(Loss) for the 146% (15,788) (6,412)period attributable tomembers (NPAT)Brief Explanation of above figuresRefer to the Review of Operations on page 4 of the attached Half Yearly Reportfor the period ended 31 December 2013.DividendsThere were no dividends declared or paid during the period and the directors donot recommend that any dividend be paid.Earnings ResultThe net loss of Continental Coal Limited for the half-year ended 31 December2013 after providing for income tax was $16,698,000 (31 December 2012: loss of$7,291,000). 31 December 2013 31 December 2012 Cents CentsEarnings Per Share (EPS)Basic loss per share (cents per share) (2.29) (1.37)Weighted average number of ordinary shares 688,466,982 467,682,357used in the calculation of basic earningsper shareThe amount used as the numerator in calculating basic EPS is the same as thenet profit/(loss) reported in the Consolidated Statement of Profit or Loss andOther Comprehensive Income. 31 December 31 December 2013 2012 Cents CentsNet Tangible Asset (NTA) BackingPer ShareNet tangible asset backing per (12.74) (17.76)share (cents per share)Peter LandauInterim Executive DirectorDated this 28th day of February 2014DIRECTOR'S REPORTYour directors present their report on the consolidated entity (referred tohereafter as the "Group") consisting of Continental Coal Limited and theentities it controlled at the end of, or during, the half-year ended 31December 2013.DIRECTORSThe names of the Directors who held office during or since the end of the halfyear:Dr Paul D'Sylva Interim Executive Chairman (appointed 13 February 2014)Mr Peter Landau Interim Executive Director (appointed 13 February 2014)Mr Connie Molousi Non-executive DirectorDr Lars Schernikau Non-executive Director (appointed 13 February 2014)Mr Mike Kilbride Independent Non-executive Chairman (resigned 13 February 2014)Mr Don Turvey Chief Executive Officer and Executive Director (resigned 13 February 2014)Mr Johan Bloemsma Non-executive Director (resigned 13 February 2014)Mr Bernard Swanepoel Non-executive Director (resigned 13 February 2014)Mr Ron Chamberlain Non-executive Director (appointed 14 October 2013, resigned 13 February 2014)Mr Jason Brewer Non-executive Director (resigned 15 November 2013)Mr James Leahy Non-executive Director (resigned 31 July 2013)REVIEW OF OPERATIONSPrincipal ActivitiesThe principal activity of the Group during the period was the acquisition,exploration, development and operation of thermal coal mines and properties inSouthern Africa. There were no significant changes in the nature of theactivities of the Group during this period.OverviewIn the 6 months to 31 December 2013 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.Coal Mine and Processing OperationsHealth and SafetyDuring the period, seven Dressing Station Case ("DSC") accidents were reportedat the Company's mining and processing operations - six DSC accidents werereported at the Penumbra Underground Mine and one at the Vlakvarkfontein Mine.One reportable methane related incident and two reportable dam overflowingrelated incidents also occurred at the Penumbra Underground Mine and processingfacility during the period due to excessive rain. The incidents had no materialimpacts on operations and their causes have been addressed.Operational performance Operational performance (tonnes) 6 months ended 6 months ended 31 December 2013 31 December 2012Run of Mine (ROM) productionVlakvarkfontein 728,983 735,748Ferreira 247,129 258,037Penumbra 223,327 2,694Total ROM production 1,199,439 996,479Feed to plantFerreira 269,670 323,253Penumbra 216,401 2,694Total feed to plant 486,071 325,947Export yieldsFerreira 72.0% 68.0%Penumbra 55.4% 26.2%Export coal buy-in 20,953 -Domestic sales 712,624 647,659Export sales 320,696 209,750Total sales 1,033,320 857,409Total ROM coal production increased by 20% for the 6 months ended 31 December2013 compared to the previous reporting period.Feed to the Delta Processing Operations increased by 49% increase for the 6months ended 31 December 2013 compared to the previous reporting period.Total sales increased by 21% increased for the 6 months ended 31 December 2013compared to the previous reporting period.Export yields at Penumbra have shown a steady increase during the past 6 monthswith the average yield of 55.4% recorded for the 6 months ended 31 December2013.Vlakvarkfontein Coal MineVlakvarkfontein Coal Mine produced 728,983t ROM for the half year, which wasvery similar to the production achieved for the 6 months ended 31 December2012.Total thermal coal sales for the 6 months ended 31 December 2013 from theVlakvarkfontein Coal Mine were 712,624 and comprised 579,432t to Eskom and133,192t of non-select coal.Vlakvarkfontein remains on target to achieve its planned production of 1.3 MtROM at a cost of ZAR152/t (US$13.82) for FY2014.Ferreira Coal MineROM coal production at the Ferreira Coal Mine for the 6 months ended 31December 2013, which was its last producing period, totalled 247,129t.Export yields for Ferreira averaged 72.0% for the 6 months ended 31 December2013.Mining at Ferreira has now been terminated with only inventory clean-up to becompleted. The Group is finalising the closure plan with all stakeholders andwill commence the final rehabilitation of the mine site on approval of theclosure plan by all stakeholders.Penumbra Coal MineThe commissioning of the permanent ventilation shaft in August 2013 was thelast remaining infrastructure item required to reach the design capacity of67,000 tonnes per month. With adequate ventilation in place since earlySeptember 2013, both continuous miner sections were fully operational and ableto be deployed in the planned mining outlay of 9 road production sections.Production rates increased to an average of 37,221t ROM per month during thehalf year. A drill-and-blast section was added to the two continuous minersections during the half year which will add additional flexibility to achieveand maintain the planned production rate. Each continuous miner sectioncurrently has two shuttle cars each with the third shuttle cars expected inFebruary 2014.ROM coal production at the Penumbra Coal Mine for the 6 months ended 31December 2013 was 223,327t. Production build-up at Penumbra is now forecast toachieve its design capacity of 67,000t ROM per month by April 2014.Export yields at Penumbra have shown a steady increase during the reportingperiod with the average yield of 55.4% recorded for the six months ended 31December 2013. The yield is expected to improve to the planned 62% with theincrease in production.Penumbra is forecasting the delivery of 359 621t ROM during the 2014 financialyear at a FOB cost of R580 (US$53) per sales tonne.Development ProjectDe Wittekrans Coal ProjectThe Mining Right for De Wittekrans was granted in September 2013 and theCompany expects the Integrated Water Use License (IWUL) to be granted in Q22014.Exploration ProjectsBotswana Coal ProjectsNegotiations on the previously announced earn-in agreement on ProspectingLicences 339/2008 and 341/2008 were terminated during the half year. The Groupis in early stage discussions with 2 unrelated parties to reach a commercialagreement on 2 of the Prospecting licences that have been awarded to the Group.The third license is in the process of being relinquished.CorporateBridge finance and recapitalisationSubsequent to half year end the Group executed a binding term sheet with UKcorporate advisory firm Empire Equity Limited ("Empire Equity") to provide $5million bridge funding and undertake a broader recapitalisation and restructureof the Group 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.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.The Investors have also undertaken to assist the Group in undertaking a rightsissue currently proposed to raise up to A$28 million with terms to bedetermined by the Group and the underwriter engaged. The proceeds will be usedto settle amounts owed by the Group to various existing convertible noteholders and other major creditors.A condition to providing the funding was the resignation or termination of theCEO Mr Don Turvey, CFO Mr Lou van Vuuren and Non-Executive Directors Mr MikeKilbride and Mr Johan Bloemsma. This occurred on 13 February 2014. Mr RonChamberlain and Mr Bernard Swanepoel also tendered their resignations asNon-Executive Directors to the Board. Village Main Reef Ltd will nominate a newrepresentative to the Board pursuant to the terms of their 2013 subscriptionagreement.Following the new appointments, the Board of the Company comprises:Dr Paul D'Sylva (Interim Executive Chairman)Mr Peter Landau (Interim Executive Director)Mr Connie Molusi (Non-Executive Director)Dr Lars Schernikau (Non-Executive Director)Creditors' representative (Non-Executive Director) - to be appointedVillage Main Reef representative (Non-Executive Director) - to be appointedThe management structure of the Company moving forward is still beingconsidered by the reconstituted Board, but will initially be overseen by MrLandau and Dr D'Sylva in temporary executive roles as well as current COO MrJohan Heystek at an operational level.In addition Ms Jane Flegg was appointed as Company Secretary following theresignations of Mr Dennis Wilkins and Mr John Ribbons as Joint CompanySecretary.Proposed listing on the Johannesburg Stock ExchangeThe proposed listing has been postponed until such time as the recapitalisationof the Company has been completed.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. The reconstituted Board of Directors willconsider a decision on seeking to lift the suspension of the shares pending theprovision of further clarification of its financial position to the market.ROUNDINGThe Group is of a kind referred to in Class Order 98/100, issued by theAustralian Securities and Investments Commission, relating to the `roundingoff' of amounts in the directors' report and financial report. Amounts in thedirectors' report and financial report have been rounded off to the nearestthousand dollars in accordance with that Class Order.EVENTS SUBSEQUENT TO REPORTING DATEOther than as set out above, there were no matters or circumstances have arisensince the end of the reporting date and the date of this report whichsignificantly affects or may significantly affect the results of the operationsof the Group.AUDITORS INDEPENDENCE DECLARATIONThe lead auditor's independence declaration under section 307C of theCorporations Act 2001 for the half-year ended 31 December 2013 can be found onthe following page.This report is made in accordance with a resolution of the Board of Directors.Peter LandauInterim Executive DirectorDated this 28th day of February 2014 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 201331 December 2013 Note Consolidated 31 December 31 December 2013 2012 $'000 $'000Operating sales revenue 2 38,597 29,737Operating expenses (32,458) (25,349)Depreciation & amortisation (3,531) (1,704)Cost of sales 3 (35,989) (27,053)Gross profit 2,608 2,684Other income 2 1,303 1,473Administration expenses 3 (4,050) (4,461)Finance expenses 3 (13,656) (5,772)Impairment expenses 3 (2,265) -Marketing expenses (97) (144)Other expenses 3 (735) (433)Loss before income tax (16,892) (6,653)Income tax benefit/(expense) 194 (638)Loss for the half year from (16,698) (7,291)continuing operationsOther Comprehensive Income/(Loss)Items that may be reclassified toprofit or lossExchange differences on translation 85 (3,373)of foreign operationsChanges in the fair values of (580) 1,266cashflow hedges, net of taxOther comprehensive loss for the (495) (2,107)half year, net of taxTotal comprehensive loss for the (17,193) (9,398)half yearNet loss is attributable to:Owners of Continental Coal Limited (15,788) (6,412)Non-controlling interests (910) (879) (16,698) (7,291)Total comprehensive loss isattributable to:Owners of Continental Coal Limited (16,430) (7,577)Non-controlling interests (763) (1,821) (17,193) (9,398)Loss per share for loss fromcontinuing operations attributableto the ordinary equity holders ofthe Group:Basic loss per share (2.29) (1.37)(cents per share)Diluted loss per share (2.29) (1.37)(cents per share) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the notes to the Financial Statements. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 Note Consolidated 31 December 2013 30 June 2013 $'000 $'000ASSETSCURRENT ASSETSCash and cash equivalents 4 3,948 4,496Trade and other receivables 6,239 7,744Inventories 3,190 4,862TOTAL CURRENT ASSETS 13,377 17,102NON-CURRENT ASSETSTrade and other receivables 2,931 2,981Other assets 2,217 1,658Derivative financial instruments 1,820 2,400Exploration expenditure 5 50,751 54,363Development expenditure 6 72,579 76,344Property, plant and equipment 7 12,511 11,933Deferred tax assets 3,328 3,022TOTAL NON-CURRENT ASSETS 146,137 152,701TOTAL ASSETS 159,514 169,803CURRENT LIABILITIESTrade and other payables 8 11,016 12,459Deferred revenue 9 - 5,859Income tax payable 796 1,115Provisions 4,273 296Borrowings 10 87,876 18,531Derivative financial instruments 80 228Other financial liabilities 4,419 3,633Provision for rehabilitation 3,416 3,759TOTAL CURRENT LIABILITIES 111,876 45,880NON-CURRENT LIABILITIESDeferred revenue 9 - 5,467Borrowings 10 212 52,141Other financial liabilities 6,633 6,984Deferred tax liability 21,699 23,009Provision for rehabilitation 9,318 9,594TOTAL NON-CURRENT LIABILITIES 37,862 97,195TOTAL LIABILITIES 149,738 143,075NET ASSETS 9,776 26,728EQUITYIssued capital 11 236,533 236,032Reserves (3,480) (2,838)Accumulated losses (214,775) (198,987)Capital and reserves attributable to 18,278 34,207owners of Continental Coal LtdAmounts attributable to non-controlling (8,502) (7,479)interestsTOTAL EQUITY 9,776 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 HALF YEAR ENDED 31 DECEMBER 2013 Share Accumulated Foreign Other Hedging Share Total Non- Total Capital losses Currency Reserve Reserve Based Controlling Ordinary Translation Payment Interest Reserve Reserve $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Balance at 1 July 2012 220,015 (164,739) (19,189) (9,944) (508) 30,798 56,433 8,089 64,522Loss for the half year - (6,412) - - - - (6,412) (879) (7,291)Exchange differences on - - (2,102) - - - (2,102) (1,271) (3,373)translation of foreignoperationsCashflow hedges, net of - - - - 937 - 937 329 1,266taxTotal comprehensive - (6,412) (2,102) - 937 - (7,577) (1,821) (9,398)income/(loss) for thehalf yearTransactions with ownersin their capacity asowners:Shares issued during the 3,654 - - - - - 3,654 - 3,654half yearTransaction cost 241 - - - - - 241 - 241recoveriesOptions issued as share - - - - - 219 219 - 219based paymentsTransactions with - - - 333 - - 333 - 333non-controllinginterestsBalance at 31 December 223,910 (171,151) (21,291) (9,611) 429 31,017 53,303 6,268 59,5712012Balance at 1 July 236,032 (198,987) (23,931) (12,182) 1,776 31,499 34,207 (7,479) 26,7282013Loss for the half - (15,788) - - - - (15,788) (910) (16,698)yearExchange differences - - (195) - - - (195) 280 85on translation offoreign operationsCashflow hedges, net - - - - (447) - (447) (133) (580)of taxTotal comprehensive - (15,788) (195) - (447) - (16,430) (763) (17,193)income/(loss) forthe half yearTransactions withowners in theircapacity as owners:Shares issued during 501 - - - - - 501 - 501the half yearDividends paid - - - - - - - (260) (260)Balance at 31 236,533 (214,775) (24,126) (12,182) 1,329 31,499 18,278 (8,502) 9,776December 2013The 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 HALF YEAR ENDED 31 DECEMBER 2013 Note Consolidated 31 December 31 December 2013 2012 $'000 $'000CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 40,832 30,020Interest received 249 202Other income 31 -Proceeds from commodity hedge 561 346Payments to suppliers and employees (36,667) (32,791)Income tax paid (1,126) -Net cash provided by/(used in) operating 3,880 (2,223)activitiesCASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of investment in Vanmag - 879Proceeds from sale of property, plant and 420 -equipmentExploration expenditure 5 (244) (587)Development costs 6 (1,783) (15,605)Purchase of property, plant and equipment (1,593) (7,402)Payments in relation to SIOC transaction - (125)Net cash (used in) investing activities (3,200) (22,840)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares, net of - (11)transaction costsInterest and borrowing costs (1,145) (3,751)Proceeds from borrowings 908 17,735Repayment of borrowings (491) (1,231)Royalty payments (325) (414)Net cash (used in)/provided by financing (1,053) 12,328activitiesNet (decrease) in cash held (373) (12,735)Effect of the exchange rate changes on the (74) (631)balance of cash held in foreign currenciesat the beginning of the half yearCash at beginning of half year 3,513 14,595Cash at half year end 4 3,066 1,229The above Consolidated Statement of Cash Flows should be read in conjunctionwith the Notes to the Financial Statements.For further information please contact:Media (Australia)David TaskerProfessional Public RelationsT: +61 8 9388 0944Nominated AdvisorStuart LaingRFC Ambrian LimitedT: +61 8 9480 2500BrokersJonathan WilliamsRFC Ambrian LtdT : +44 203 440 6817About Continental Coal LimitedContinental Coal Limited (ASX:CCC/AIM: COOL) is a South African thermal coalproducer with a portfolio of projects located in South Africa's major coalfields including two operating mines, the Vlakvarkfontein and Penumbra CoalMines, producing approx. 2Mtpa of thermal coal for the export and domesticmarkets. A Feasibility Study was also completed on a proposed third mine, theDe Wittekrans Coal Project with a mining right granted in September 2013.Competent Persons StatementThe information in this release 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 release 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 release 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 release that relates to Coal Resources on Mooifonteinis based 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.Forward Looking StatementThis communication includes certain statements that may be deemed"forward-looking statements" and information. All statements in thiscommunication, other than statements of historical facts, that address futureproduction, reserve potential, exploration drilling, exploitation activitiesand events or developments that the Company expects to take place in the futureare forward-looking statements and information. Although the Company believesthe expectations expressed in such forward-looking statements and informationare based on reasonable assumptions, such statements are not guarantees offuture performance and actual results or developments may differ materiallyfrom those in the forward-looking statements and information. Factors thatcould cause actual results to differ materially from those in forward-lookingstatements 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 orbusiness conditions. Investors are cautioned that any such statements are notguarantees of future performance and actual results or developments may differmaterially from those stated.