The money will be used to fund the Penumbra coal mine development. Penumbra is forecast to achieve a targeted rate of 750,000 metric tons per year (mtpy) run-of-mine coal in the third quarter of 2012. The coal will be washed at the company’s Delta Processing Operations and railed to Richards Bay Coal Terminal for export.

As part of the debt funding with ABSA Capital, CCL has implemented a coal and foreign exchange hedging program to mitigate its exposure to a sustained fall in coal prices ($/mt) or an appreciation of the South African Rand. CCL has hedged approximately 664,550 mt of coal over the life of the term loan facility at an average price of ZAR1,057/mt ($137/mt). The hedging has been achieved at a 23% premium to the current spot price of approximately ZAR860/mt ($112/mt). The average hedged coal price is at a premium to the highest coal price of ZAR983/mt ($128/mt) seen over the past three years.

Murray and Roberts completed the mobilization of all the major decline development equipment to the Penumbra coal mine site on January 16, 2012. Development of the declines will now continue with blasting in the declines.