The company will now move to complete the issue of 100 million shares at $0.08 each once Village Main Reef has received South African Reserve Bank approval, which is expected this month.
The buy-in places Continental in a position to advance its discussions on a strategic partnership and off-take funding agreement for its proposed fourth mine development, the De Wittekrans Coal project.
The funds raised from the private placement will be used to reduce debt, meet working capital requirements and strengthen the company's balance sheet.
The issue price represents a premium to Continental's last traded share price on the ASX and a 30% premium based on its 90-day volume weighted average price.
The placement is part of a broader strategic financing transaction between Continental and Village Main Reef.
On top of the $8 million private placement, Village Main Reef has entered into an agreement to acquire parcels of shares held by shareholders with a market value of less than $500 at a price per share of $0.0521.
The company also plans to acquire further shares in Continental through on market purchases to secure up to a 19.9% interest.
As part of the broader strategic relationship, Village Main Reef can appoint a representative to Continental's Board.
De Wittekrans Coal project
The De Wittekrans Project currently has total gross saleable Proven and Probable reserves of 43.8 million tonnes and gross in situ Measured, Indicated and Inferred Resources of 251.1 million tonnes.
It has the potential to become the company's "flagship" coal asset, generating strong returns, after Continental received positive preliminary results from optimisation work late last year.
The results proposed exports of 2.4 million tonnes per annum of a thermal coal product, ideally suited for the Asian coal market, over an initial 30 year mine life.
Annual forecast thermal coal exports are expected to increase from 800,000 tonnes per annum to 2.4 million tonnes per annum, with total annual sales revenue forecast to increase by over 35% to up to US$145 million.
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