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Continental Coal Ltd (COOL)

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Friday 29 August, 2014

Continental Coal Ltd

Underwritten Entitlement Issue Pospectus


28 August 2014

Company Announcements Office
Australian Securities Exchange
Level 6, 20 Bridge Street
SYDNEY NSW 2000

Via E Lodgement

          UNDERWRITTEN ENTITLEMENT ISSUE PROSPECTUS AND APPENDIX 3B

Pease see below the Continental Coal Limited ("CCC" or the "Company")
Entitlement Issue Prospectus for a non-renounceable entitlement issue as
announced on 5 August 2014, to raise approximately A$35.1m by way of the issue
of up to 7,035,234,408 new shares ("Entitlement Issue").

Shareholders will be entitled to acquire 9 new shares ("New Shares") for every
1 existing CCC share held at the record date (being 4 September 2014), at an
offer price of A$0.005 per new share.

The Offer is conditional upon Shareholders approving the Offer at the General
Meeting to be held on 24 September 2014. No Shares will be issued pursuant to
this Prospectus until such Shareholder approval is obtained by the Company.
Please refer to Section 4.2 of the below Prospectus for further details.

Appendix 3B - Issue of Securities

In addition, the Company announces that it has issued 36,000,000 Fully Paid
Ordinary Shares and 36,000,000 Unlisted Options ($0.015; 30 June 2017) in the
capital of the Company in lieu of financing costs relating to the facilitation
fee of the bridging finance facility announced on 13 February 2014.

A full Appendix 3B in relation to the issue of these fully paid ordinary
shares is available from the Company's website at www.conticoal.com. The
Company has applied for the new shares to be admitted on the ASX. An
application for admission to trading on AIM for the new shares will be made
once the suspension to trading of the Company's shares on AIM has been
lifted.

Following the issue of these securities, the Company will have has the
following total number of securities on issue:

7,816,927,120 Ordinary Shares

65,679,134 Listed Options (exercise price $0.50, expiry 30/06/2015)

12,500,000 Unlisted Options (exercise price $0.2216, expiry 15/05/2015)

8,000,000 Unlisted Options (exercise price $0.20, expiry 16/07/2016)

13,950,893 Unlisted Options (exercise price $0.368, expiry 23/08/2016)

6,000,000 Unlisted Options (exercise price $0.057, expiry 06/12/2017)

5,000,000 Unlisted Options (exercise price $0.05382, expiry 18/12/2017)

15,000,000 Unlisted Options (exercise price $0.06, expiry 15/05/2016)

36,000,000 Unlisted options (exercise price $0.015 on or before 30/06/2017)

For and on behalf of the Board

Peter Landau

Executive Director


CONTINENTAL COAL LIMITED
ACN 009 125 651

Entitlement issue PROSPECTUS

For a non-renounceable entitlement issue of 9 Shares for every 1 Share held by
those Shareholders registered at the Record Date at an issue price of $0.005
per Share to raise up to $35,176,172 (based on the number of Shares on issue
as at the date of this Prospectus) (Offer).

The Offer is fully underwritten by Patersons Securities Limited (Underwriter).
Refer to Section 8.5 for details regarding the terms of the Underwriting
Agreement.

The Offer is sub-underwritten by ISSAR Global (ISSAR) and Komodo Capital Pty
Ltd (Komodo). Refer to Section 4.8 for details regarding the sub-underwriting
arrangements and the effect the sub-underwriting has on the control of the
Company.

The Offer is conditional upon Shareholders approving the Offer at the General
Meeting to be held on or around 24 September 2014. No Shares will be issued
pursuant to this Prospectus until such Shareholder approval is obtained by the
Company. Please refer to Section 4.2 of this Prospectus for further details.

IMPORTANT NOTICE

This document is important and should be read in its
entirety. If after reading this Prospectus you have any questions about the
securities being offered under this Prospectus or any other matter, then you
should consult your stockbroker, accountant or other professional adviser.

The Shares offered by this Prospectus should be considered
as speculative.

       This Prospectus may be not released or distributed in the United
               States or any country where it may be unlawful.

TABLE OF CONTENTS

1. CORPORATE DIRECTORY.                                  1

2. Timetable.                                            2

3. IMPORTANT NOTES.                                      3

4. DETAILS OF THE OFFER.                                 6

5. Purpose and Effect of the offer.                     17

6. Rights and Liabilities attaching to shares.          21

7. RISK FACTORS.                                        24

8. additional INFORMATION..                             30

9. Directors' AUTHORISATION..                           41

10. glossary.                                           42


1. CORPORATE DIRECTORY

Directors                             Registered Office
Paul D'Sylva (Executive Chairman)     Ground Floor
Connie Molusi (Non Executive          1 Havelock Street
Director)                             West Perth, WA 6005
Peter Landau (Executive Director)
Lars Schernikau (Non Executive
Director)                             Telephone: + 61 8 9488 5220
                                      Facsimile: +61 8 9324 2400
Company Secretary
Jane Flegg                            Email: [email protected]
                                      Website: www.conticoal.com
Share Registry*                       Solicitors
Computershare Investor Services Pty   Steinepreis Paganin
Ltd                                   Lawyers and Consultants
Level 2, Reserve Bank Building        Level 4, The Read Buildings
45 St Georges Terrace                 16 Milligan Street
Perth WA 6000                         Perth WA 6000
 
Telephone: 1300 787 272
Auditor*                              Underwriter, Corporate Advisor and
BDO Audit (WA) Pty Ltd                Lead Manager
38 Station Street                     Patersons Securities Limited
Subiaco WA 6008                       Level 23, Exchange Plaza
                                      2 The Esplanade
                                      PERTH WA 6000

*These entities are included for information purposes only. They have not been
involved in the preparation of this Prospectus and have not consented to being
named in this Prospectus.

2. Timetable

Announcement of Offer                                  6 August 2014
Notice of General Meeting sent to                     25 August 2014
Shareholders
Lodgement of Prospectus with the ASIC and             28 August 2014
ASX, lodgement of Appendix 3B with ASX and
notice sent to Optionholders
Notice sent to Shareholders                           29 August 2014
Ex date                                             2 September 2014
Record Date for determining Entitlements            4 September 2014
Prospectus sent out to Shareholders &               9 September 2014
Company announces this has been completed
General Meeting held                               24 September 2014
Closing Date*                                      25 September 2014
Shares quoted on a deferred settlement basis       26 September 2014
ASX and Underwriter notified of under              30 September 2014
subscriptions
Issue date/Shares entered into Shareholders'          1 October 2014
security holdings
Anticipated lifting of suspension of                  2 October 2014
Company's Securities and Quotation of Shares
issued under the Offer*

*The Directors may extend the Closing Date by giving at least 3 Business Days
notice to ASX prior to the Closing Date. As such the date the Shares are
expected to commence trading on ASX may vary.

3. IMPORTANT NOTES

This Prospectus is dated 28 August 2014 and was lodged with the ASIC on that
date. The ASIC and its officers take no responsibility for the contents of
this Prospectus or the merits of the investment to which this Prospectus
relates.

No Shares may be issued on the basis of this Prospectus later than 13 months
after the date of this Prospectus.

No person is authorised to give information or to make any representation in
connection with this Prospectus, which is not contained in the Prospectus. Any
information or representation not so contained may not be relied on as having
been authorised by the Company in connection with this Prospectus.

It is important that investors read this Prospectus in its entirety and seek
professional advice where necessary. The Shares the subject of this Prospectus
should be considered highly speculative.

Applications for Shares offered pursuant to this Prospectus can only be
submitted on an original Entitlement and Acceptance Form or Shortfall
Application Form.

This Prospectus is a transaction specific prospectus for an offer of
continuously quoted securities (as defined in the Corporations Act) and has
been prepared in accordance with section 713 of the Corporations Act. It does
not contain the same level of disclosure as an initial public offering
prospectus. In making representations in this Prospectus regard has been had
to the fact that the Company is a disclosing entity for the purposes of the
Corporations Act and certain matters may reasonably be expected to be known to
investors and professional advisers whom potential investors may consult.

This Prospectus does not, and is not intended to, constitute an offer in any
place or jurisdiction in which, or to any person to whom, it would not be
lawful to make such an offer or to issue this Prospectus.

It is not practicable for the Company to comply generally with the securities
laws of overseas jurisdictions having regard to the number of overseas
Shareholders, the number and value of Shares these Shareholders would be
offered and the cost of complying with regulatory requirements in each
relevant jurisdiction. Accordingly, the Offer is only being extended to
Shareholders with a registered address in Australia, New Zealand or the United
Kingdom, unless the Board determines that making the Offer in other
jurisdictions will not breach any relevant securities laws. For further
information, please see section 4.13 of this Prospectus.

3.1 Risk factors

Potential investors should be aware that subscribing for Shares in the Company
involves a number of risks. The key risk factors of which investors should be
aware are set out in Section 7 of this Prospectus. These risks together with
other general risks applicable to all investments in listed securities not
specifically referred to, may affect the value of the Shares in the future.
Accordingly, an investment in the Company should be considered highly
speculative. Investors should consider consulting their professional advisers
before deciding whether to apply for Shares pursuant to this Prospectus.

3.2 Conditional Offer and Notice of Meeting

The Offer is conditional upon Shareholders approving the Offer at the General
Meeting to be held on 24 September 2014.

In the event that Shareholders do not approve the Offer at the General
Meeting, the Offer will not proceed and no Shares will be issued pursuant to
this Prospectus. If this occurs, Applicants will be reimbursed their
Application monies (without interest). A notice of meeting has been announced
on the Company's ASX platform and has been sent to Shareholders in respect of
this Shareholder approval.

The Notice of Meeting also contains resolutions in respect of the Company's
entry into a binding term sheet with UK corporate advisory firm, Empire Equity
Limited (Empire Equity), to arrange $5 million (Investment Amount) of limited
recourse bridge funding to the Company (Term Sheet) as announced to the ASX on
29 January 2014. Empire Equity is an entity controlled by Paul D'Sylva, a
Director. The Term Sheet was executed before Paul D'Sylva was appointed as a
Director of the Company.

The funds raised under the Term Sheet have been applied towards general
operating expenses and payments to creditors of the Company that did not
otherwise agree to standstill agreements, allowing the Company to continue
trading as a going concern while it continued to seek to undertake a broader
recapitalisation and restructure of the Company and its financial
arrangements.

Empire Equity arranged for investors (Investors) to provide the Investment
Amount to the Company. In consideration of the Investment Amount, the
Investors have invested in 7.5 million unsecured convertible promissory notes
(Notes) with a face value of A$1.00 each at a discounted issue price of
A$0.6667 per Note and with a maturity date of 4 months post closing, which was
subsequently extended to 15 October 2014.

The Investors have also undertaken to assist the Company in undertaking the
Offer, including procuring the underwriting of the Offer. The Notes are only
redeemable upon successful completion of the Offer (other than where an event
of default occurs), being full subscription (including underwriter
subscriptions), upon which the Investors will have the option to redeem the
Notes by either conversion into Shares in the Company at the Offer issue price
(being $0.005) or request payment of the $7.5 million face value in cash. The
Investors also procured standstill agreements (ending on 15 October 2014) from
convertible note holders and other major creditors of the Company to allow for
the completion of the Offer or other recapitalization.

The Investors will receive a 6% fee on the Investment Amount as well as being
issued 70,000,000 Options as a fee for providing the Investment Amount of $5
million (Fee Options). Each Fee Option will be exercisable at the Offer issue
price of $0.005 with 3 years to expiry. In the event that Shareholder approval
is not obtained to issue these Fee Options, $500,000 in cash will become
payable to the Investors in lieu of the Fee Options.

Subject to Shareholder approval being obtained at the General Meeting,
100,000,000 Shares will also be issued to the Investors in consideration for
the Investors agreeing to extend the maturity date of the Notes (Investor
Shares). The notice of meeting for the General Meeting contains resolutions
seeking Shareholder approval for the issue of the Investor Shares and the Fee
Options referred to above.

3.3 Forward-looking statements

This Prospectus contains forward-looking statements which are identified by
words such as `may', `could', `believes', `estimates', `targets', `expects',
or `intends' and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating
conditions, and on a number of assumptions regarding future events and actions
that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties, assumptions and other
important factors, many of which are beyond the control of our Company, the
Directors and our management.

We cannot and do not give any assurance that the results, performance or
achievements expressed or implied by the forward-looking statements contained
in this prospectus will actually occur and investors are cautioned not to
place undue reliance on these forward-looking statements.

We have no intention to update or revise forward-looking statements, or to
publish prospective financial information in the future, regardless of whether
new information, future events or any other factors affect the information
contained in this prospectus, except where required by law.

These forward looking statements are subject to various risk factors that
could cause our actual results to differ materially from the results expressed
or anticipated in these statements. These risk factors are set out in Section
7 of this Prospectus.

4. DETAILS OF THE OFFER


4.1 The Offer

The Offer is being made as a non-renounceable entitlement issue of 9 Shares
for every 1 Share held by Shareholders registered at the Record Date at an
issue price of $0.005 per Share. Fractional entitlements will be rounded up to
the nearest whole number.

Based on the capital structure of the Company as at the date of this
Prospectus, a maximum of 7,035,234,408 Shares will be issued pursuant to this
Offer to raise up to $35,176,172.

The Board has decided it needs to raise this amount under the Offer as the
Company is in urgent need of funding to stabilise its financial position and
pay its existing creditors and to meet the Company's short-term working
capital requirements. The Company currently owes $29,285,114 to creditors.
Refer to Section 5.1 for details of the use of funds under the Offer.
Shareholders should note that, if the Offer is not fully subscribed, the
Company may be unable to meet its payment obligations to its creditors and
meet short-term working capital requirements and, as such may not be able to
remain a going concern.

Any failure to pay creditors may have significant implications for
the Company, empowering creditors to take enforcement action including
appointing an administrator and the Company may become insolvent. In the
opinion of the Board, completion of the Offer significantly reduces this risk
for the Company.

The Board is of the view that the Offer will provide the most certain outcome
for the Company in the present circumstances and is preferable because it
allows existing Shareholders the opportunity to participate in the funding of
the Company at the substantial discount the Company must offer to attract
sufficient funding. The Company also considers that the Offer must be on a 9:1
basis to enable sufficient funds to be raised to stabilise the Company's
financial position. A raising on a one for one (1:1) basis or less is
considered insufficient to achieve this objective.

As at the date of this Prospectus the Company has 162,130,027 Options on issue
all of which may be exercised prior to the Record Date in order to participate
in the Offer. Please refer to Section 5.4 of this Prospectus for information
on the exercise price and expiry date of the Options on issue.

All of the Shares offered under this Prospectus will rank equally with the
Shares on issue at the date of this Prospectus. Please refer to Section 6 for
further information regarding the rights and liabilities attaching to the
Shares.

The purpose of the Offer and the intended use of funds raised are set out in
Section 5.1 of this Prospectus.

4.2 Condition of the Offer

The Company has sought and received a conditional waiver from ASX in relation
to Listing Rule 7.11.3 to allow the Company to undertake the Offer.

Listing Rule 7.11.3 provides that the ratio of securities offered by a listed
entity for a pro rata issue must not be greater than one security for each
security held, unless the offer is renounceable and the issue price is not
more than the average market price for the securities in that class,
calculated over the last 5 days on which the sales in securities were recorded
before the day on which the pro rata issue was announced.

As the Offer is non-renounceable and involves a ratio of nine-for-one (9:1)
Shares the Company has made application for, and ASX has granted, a
conditional waiver from Listing Rule 7.11.3. The Company considers that the
Offer must be on a 9:1 basis to enable sufficient funds to be raised to
stabilise the Company's financial position. A raising on a one for one (1:1)
basis or less is considered insufficient to achieve this objective. The Board
considers it necessary that the Company raise additional equity to stabilise
the Company's financial position and pay its existing creditors and to meet
the Company's short-term working capital requirements. Shareholders should
note that, if the Offer is not fully subscribed, the Company's ability to
remain a going concern is likely to be dependent on its ability to pay its
creditors and meet short-term working capital requirements. The Board is of
the view that the Offer will provide the most certain outcome for Shareholders
in the circumstances.

The waiver is conditional upon the Company obtaining Shareholder approval in
relation to the Offer before completion of the Offer. As such, the Offer is
conditional upon Shareholders approving the Offer at the General Meeting which
is currently scheduled for 24 September 2014. A Notice of Meeting has been
announced on the Company's ASX platform and has been sent to Shareholders in
respect of this Shareholder approval.

No Shares will be issued pursuant to this Prospectus until Shareholder
approval is obtained by the Company. If Shareholder approval is not obtained,
the Company will not proceed with the Offer and will repay all Application
monies received, without interest and in accordance with the Corporations Act.

4.3 Minimum subscription

There is no minimum subscription to the Offer as the Offer is fully
underwritten.

4.4 Acceptance

Your acceptance of the Offer must be made on the Entitlement and Acceptance
Form accompanying this Prospectus. You can also apply for additional Shortfall
Shares under the Offer in addition to your Entitlement by completing the
shortfall section contained in the Entitlement and Acceptance Form.

You may participate in the Offer as follows:

(a) if you wish to accept your full Entitlement:

(i) complete the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made
payable in Australian currency, for the amount indicated on the Entitlement
and Acceptance Form; or

(b) if you only wish to accept part of your Entitlement:

(i) fill in the number of Shares you wish to accept in the space provided on the Entitlement and Acceptance Form; and
(ii) attach your cheque, drawn on an Australian bank or bank draft made
payable in Australian currency, for the appropriate application monies (at
$0.005 per Share); or

(c) if you wish to accept your full Entitlement and apply for additional Shortfall Shares under the Shortfall Offer:

(i) complete the Entitlement and Acceptance Form including filling in the
number of Shortfall Shares you wish to apply for in the shortfall section on
the Entitlement and Acceptance Form; and

(ii) attach your cheque, drawn on an Australian bank made payable in
Australian currency, for the appropriate Application monies (at $0.005 per
Share); or

(d) if you do not wish to accept all or part of your Entitlement, you are not obliged to do anything.

4.5 Payment by cheque/bank draft

All cheques must be drawn on an Australian bank or bank draft made payable in
Australian currency to "Continental Coal Limited - Entitlement Issue Account"
and crossed "Not Negotiable".

Your completed Entitlement and Acceptance Form and cheque must reach the
Company no later than 5.00pm (WST) on the Closing Date.

4.6 Payment by Electronic Funds Transfer

For payment by electronic funds transfer, please follow the instructions set
out below and on the Entitlement and Acceptance Form.

Application money can be paid to the Company by electronic funds transfer
(EFT) to the following account:

Bank:            Westpac

Account Name:    Continental Coal - Entitlement Issue Account

BSB:             036-308

Account Number:  202383

Swift:           WPACAU2S

Reference:       Your Personalised Entitlement Number and Surname or Company Name

Applicants should ensure they include as a reference the personalised
entitlement number set out in their Entitlement and Acceptance Form if paying
by EFT.

Please note that should you choose to pay by EFT:

(a) you should send your Entitlement and Acceptance Form to the Company along
with a copy of the bank transfer for your payment of the Application money;

(b) you are taken to have made the declarations on that Entitlement and
Acceptance Form even if it is not submitted to the Company; and

(c) if you do not pay for your Entitlement in full, you are deemed to have
taken up your Entitlement in respect of such whole number of Shares which is
covered in full by your application monies.

It is your responsibility to ensure that your EFT payment is received by the
Company by no later than 5.00pm (WST) on the Closing Date. You should be aware
that your financial institution may implement earlier cut-off times with
regards to electronic payment and you should therefore take this into
consideration when making payment. Any application monies received for more
than your final allocation of Shares (only where the amount is $1.00 or
greater) will be refunded. No interest will be paid on any application monies
received or refunded.

The Offer is non-renounceable. Accordingly, a Shareholder may not sell or
transfer all or part of their Entitlement.

4.7 Underwriting

The Offer is fully underwritten by the Underwriter. Please refer to Section
8.5 of this Prospectus for further details of the terms and conditions of the
underwriting.

The Offer is sub-underwritten as follows:

(a) ISSAR Global - the first 5,000,000,000 Shortfall Shares (to the value of $25 million); and

(b) Komodo Capital Pty Ltd - the remaining 2,035,234,408 Shortfall Shares (to the value of $10,176,172).

Please refer to Section 4.8 for the control effect of the underwriting and sub-underwriting arrangements.

4.8 Effect of the underwriting and sub-underwriting on control of the Company

(a) Underwriting

The Underwriter is not presently a shareholder of the Company. The extent to
which Shares are issued pursuant to the underwriting will increase the
Underwriter's voting power in the Company. The Company chose Patersons
Securities Limited to underwrite the Offer as it is a leading national
underwriter and offered competitive underwriting terms in comparison with the
other market competitors the Company liaised with.

The Underwriter is not a related party of the Company for the purpose of the
Corporations Act. The Underwriter's present relevant interest (which is nil)
and changes under several scenarios are set out in the table below and are
based on the assumption that the Underwriter takes up the full shortfall of
the Offer.

Event                       Shares held by   Voting power of
                             Underwriter       Underwriter

Date of Prospectus               nil               nil
Completion of Entitlement
Issue
- Fully subscribed               nil               nil
- 75% subscribed            1,758,808,602         22.5%
- 50% subscribed            3,517,617,204          45%
- 25% subscribed            5,276,425,806         67.5%
- 0% subscribed             7,035,234,408          90%

The number of Shares held by the Underwriter and its voting power in the table
above show the potential effect of the underwriting of the Offer. If the
Underwriter increases its voting power in the Company beyond 50%, it will then
have the unilateral ability, by voting the Shares in which it has voting
power, to defeat or pass resolutions at Shareholder meetings which may be
passed by ordinary resolution. Examples of such ordinary resolutions include
resolutions to remove or appoint directors and approve the issues of
securities. The effect of the Underwriter having such voting power is that it
would be able to control the composition of the Board.

However, it is unlikely that no Shareholders will take up Entitlements under
the Offer. It is also the intention of the Underwriter to place 100% of the
Shortfall Shares to sub-underwriters as described below. The underwriting
obligation and therefore voting power of the Underwriter will reduce by a
corresponding amount for the amount of Entitlements under the Offer taken up
by the other Shareholders and for the amount of Shortfall Shares placed to the
sub-underwriters. Further, the Underwriter would only receive Shortfall Shares
under the Underwriting Agreement after all applications for Shares by existing
Shareholders under the Shortfall Offer have been satisfied. Refer to Section
4.10 for further details.

(b) ISSAR Sub-Underwriting

The Offer is priority sub-underwritten by ISSAR Global (or its nominee)
(ISSAR) to a maximum amount of $25,000,000. This means that ISSAR (or its
nominee) will receive the first 5,000,000,000 Shares of Shortfall which are
not taken up by existing Shareholders under the Shortfall Offer. ISSAR will
not receive a fee in consideration for its sub-underwriting commitment.

ISSAR seeks to develop a portfolio of investment interests in a variety of
sectors, including the mining sector. ISSAR has considerable resources at its
disposal to undertake investments of this nature and is an investment holding
company with wholly owned subsidiaries providing a diverse range of services.

ISSAR is not presently a Shareholder of the Company. The extent to which
Shares are issued to ISSAR pursuant to the sub-underwriting will increase
ISSAR's voting power in the Company.

ISSAR is not a related party of the Company for the purpose of the
Corporations Act. ISSAR's present relevant interest (which is nil) and changes
under several scenarios are set out in the table below and are based on the
assumption that ISSAR takes up the maximum amount of Shortfall it can under
its sub-underwriting arrangements.

Event              Shares held by ISSAR Voting power of ISSAR

Date of Prospectus         Nil                   Nil
Completion of
Entitlement Issue
- Fully subscribed         Nil                   Nil
- 75% subscribed      1,758,808,602            22.50%
- 50% subscribed      3,517,617,204            45.00%
- 25% subscribed      5,000,000,000            63.96%
- 0% subscribed       5,000,000,000            63.96%

The number of Shares held by ISSAR and its voting power in the table above
show the potential effect of the sub-underwriting of the Offer. If ISSAR
increases its voting power in the Company beyond 50%, it will then have the
unilateral ability, by voting the Shares in which it has voting power, to
defeat or pass resolutions at Shareholder meetings which may be passed by
ordinary resolution. Examples of such ordinary resolutions include resolutions
to remove or appoint directors and approve the issues of securities. The
effect of ISSAR having such voting power is that it would be able to control
the composition of the Board.

However, it is unlikely that no Shareholders will take up Entitlements under
the Offer. The sub-underwriting obligation and therefore voting power of ISSAR
(or its nominee) will reduce by a corresponding amount for the amount of
Entitlements under the Offer taken up by the other Shareholders.

Further, ISSAR (or its nominee) will only receive Shares under the
sub-underwriting arrangements after all applications for Shortfall Shares by
existing Shareholders of the Company under the Shortfall Offer have been
satisfied. However, while Shortfall Shares will be issued to current
Shareholders in priority to the issue of Shares to ISSAR (or its nominee),
third party investors will not receive Shortfall Shares under the Shortfall
Offer in priority to ISSAR (or its nominee).

(c) Komodo Sub-Underwriting

The remaining 2,035,234,408 Shares (to a value of $10,176,172) which make up
the Offer are sub-underwritten by Komodo Capital Pty Ltd, a company controlled
by Mr Peter Landau, an Executive Director of the Company, (or its nominee)
(Komodo).

Komodo is an internationally focused corporate advisory and venture capital
firm based in West Perth, Western Australia with offices in London. Komodo
focuses on achieving successful outcomes for clients ranging from private
start-up ventures to mid-cap listed entities, with a focus on the resource
sector. Komodo holds an Australian Financial Services License - No. 344 234.

Komodo is not presently a Shareholder of the Company. The extent to which
Shares are issued pursuant to the sub-underwriting will increase Komodo's (or
its nominee's) voting power in the Company.

Komodo is a related party of the Company for the purpose of the Corporations
Act by virtue of the fact it is controlled by Peter Landau, a Director.
Notwithstanding this relationship between the Company and Komodo, the Board
considered prior Shareholder approval for the issue of shares to Komodo under
the sub-underwriting arrangements was not required on the basis that it fell
under the underwriting exception in Exception 2 of ASX Listing Rule 10.12 and
also on the basis that the terms of the sub-underwriting were considered to be
`arm's length' (i.e. on the same terms as the ISSAR sub-underwriting).

Komodo's present relevant interest (which is nil) and changes under several
scenarios are set out in the table below and are based on the assumption that
Komodo (or its nominee) takes up the maximum amount of Shortfall it can under
its sub-underwriting arrangements.

Event               Shares held by   Voting power of
                        Komodo           Komodo

Date of Prospectus       Nil               Nil
Completion of
Entitlement Issue
- Fully subscribed       Nil               Nil
- 75% subscribed         Nil               Nil
- 50% subscribed         Nil               Nil
- 25% subscribed     276,425,806          3.54%
- 0% subscribed     2,035,234,408        26.04%

The number of Shares held by Komodo (or its nominee) and its voting power in
the table above show the potential effect of the sub-underwriting of the
Offer.

However, it is unlikely that no Shareholders will take up Entitlements under
the Offer. The sub-underwriting obligation and therefore voting power of
Komodo (or its nominee) will reduce by a corresponding amount for the amount
of Entitlements under the Offer taken up by the other Shareholders.

Further, Komodo (or its nominee) will only receive Shares under the
sub-underwriting arrangements after all applications for Shortfall Shares by
existing Shareholders of the Company under the Shortfall Offer and the issue
of Shortfall Shares to ISSAR (or its nominee) under its sub-underwriting
arrangements have been satisfied.

In addition, Komodo intends procuring that non-related third parties
(including existing convertible noteholders, creditors and royalty holders of
the Company) take up Shortfall Shares in satisfaction of moneys owing to such
parties by the Company. Refer to Section 5.1 for further details.

(d) Rationale for underwriting and sub-underwriting arrangements

The Company considered all reasonably available options to it to mitigate the
potential control effects of the underwriting and the sub-underwriting (for
example considering whether a number of separate underwriters or
sub-underwriters could be appointed in respect of the Offer or whether the
Offer could be renounceable). However, the underwriting and sub-underwriting
arrangements summarised above and the Offer as structured were, in the Board's
opinion, the most practical and suitable arrangements for the Company to
enter.

The Board also considered alternative methods of raising funds including
private placements (which would have a greater dilutionary effect on existing
Shareholders) and debt funding (which, given the Company's existing debt
position, was not available on commercially acceptable terms). However, the
Board decided that the Offer was the preferred form of capital raising as it
provides the most certain outcome for the Company in the present circumstances
and is preferable because it allows existing Shareholders the opportunity to
participate in the funding of the Company at the substantial discount
represented by the issue price which the Company has offered to attract
sufficient funding. The Board also set the issue price of the Offer at an
attractive discount to the market price of the Company's Shares to encourage
Shareholders to take up their Entitlement and thereby reduce Shortfall under
the Offer and the likelihood of control becoming concentrated with the
Underwriter/ISSAR/Komodo.

The Board is also of the opinion that the control effect of the
underwriting/sub-underwriting does not exceed what is reasonably necessary for
the capital raising the subject of the Offer given the Company's financial
position and its urgent need for funds. The size of the Offer is, in the
opinion of the Board, consistent with and does not exceed the Company's
funding requirement - refer to Section 5.1 for details of the use of funds
raised under the Offer.

(e) Dilution

In addition, Shareholders should note that if they do not participate in the
Offer, their holdings are likely to be diluted by approximately 88.89% (as
compared to their holdings and number of Shares on issue as at the date of the
Prospectus). Examples of how the dilution may impact Shareholders is set out
in the table below:

              Holding as              Entitlements  Holdings if
               at Record  % at Record   under the    Offer not    % post
   Holder        date        Date         Offer      taken Up      Offer

Shareholder 1 20,000,000     2.56%     180,000,000  20,000,000     0.26%
Shareholder 2 10,000,000     1.28%     90,000,000   10,000,000     0.13%
Shareholder 3  5,000,000     0.64%     45,000,000    5,000,000     0.06%
Shareholder 4  1,000,000     0.13%      9,000,000    1,000,000    0.013%
Shareholder 5   500,000      0.06%      4,500,000     500,000     0.006%
    Total     781,692,712             7,035,234,408

Notes:

1. The dilutionary effect shown in the table is the maximum percentage on the
assumption that those Entitlements not accepted are placed under the Shortfall
Offer or underwriting/sub-underwriting arrangements. In the event all
Entitlements are not accepted and some or all of the resulting Shortfall was
not subsequently placed, the dilution effect for each Shareholder not
accepting their Entitlement would be a lesser percentage.

4.9 Lead Manager/Corporate Advisor

The Underwriter has also been appointed as Lead Manager and Corporate Advisor
to the Offer. The terms of the appointment are summarised in Section 8.5 of
this Prospectus.

4.10 Shortfall Offer

Any Entitlement not taken up pursuant to the Offer will form the Shortfall
Offer.

The Shortfall Offer is a separate offer made pursuant to this Prospectus and
will remain open to Shareholders and new investors to the Company for up to
three months following the Closing Date. The issue price for each Share to be
issued under the Shortfall Offer shall be $0.005 being the price at which
Shares have been offered under the Offer. The Underwriter and/or
sub-underwriter(s) will only receive Shares under the Underwriting Agreement
or sub-underwriting arrangements after all applications for Shares by existing
Shareholders under the Shortfall Offer have been satisfied.

The Directors reserve the right to issue Shortfall Shares at their absolute
discretion, provided that any Shortfall Shares applied for by existing
Shareholders will be issued to those Shareholders in priority to issues to the
Underwriter or any sub-underwriter.

Existing Shareholders can apply for Shortfall Shares by following the
instructions set out in Section 4.4(c) above. New investors in the Company can
apply for Shortfall Shares by completing the Shortfall Application Form and
attaching their cheque, drawn on an Australian bank made payable in Australian
currency, for the appropriate Application monies (at $0.005 per Share).

The Company may also permit the satisfaction of Application moneys for
Shortfall Shares under the Shortfall Offer by offsetting moneys owed by the
Company to creditors of the Company in consideration for the issue of such
Shortfall Shares to such creditors.

4.11 ASX listing

Application for Official Quotation of the Shares offered pursuant to this
Prospectus will be made in accordance with the timetable set out at the
commencement of this Prospectus. If ASX does not grant Official Quotation of
the Shares offered pursuant to this Prospectus before the expiration of 3
months after the date of issue of the Prospectus, (or such period as varied by
the ASIC), the Company will not issue any Shares and will repay all
application monies for the Shares within the time prescribed under the
Corporations Act, without interest.

The fact that ASX may grant Official Quotation to the Shares is not to be
taken in any way as an indication of the merits of the Company or the Shares
now offered for subscription.

4.12 Issue of Shares

Subject to Shareholder approval for the Offer being obtained at the General
Meeting, Shares issued pursuant to the Offer will be issued in accordance with
the ASX Listing Rules and timetable set out at the commencement of this
Prospectus.

Shares issued pursuant to the Shortfall Offer will be issued on a progressive
basis. Where the number of Shares issued is less than the number applied for,
or where no issue is made surplus application monies will be refunded without
any interest to the Applicant as soon as practicable after the closing date of
the Shortfall Offer.

Pending the issue of the Shares or payment of refunds pursuant to this
Prospectus, all application monies will be held by the Company in trust for
the Applicants in a separate bank account as required by the Corporations Act.
The Company, however, will be entitled to retain all interest that accrues on
the bank account and each Applicant waives the right to claim interest.

Holding statements for Shares issued under the Offer will be mailed in
accordance with the ASX Listing Rules and timetable set out at the
commencement of this Prospectus and for Shortfall Shares issued under the
Shortfall Offer as soon as practicable after their issue.

4.13 Overseas shareholders

This Offer does not, and is not intended to, constitute an offer in any place
or jurisdiction in which, or to any person to whom, it would not be lawful to
make such an offer or to issue this Prospectus.

It is not practicable for the Company to comply generally with the securities
laws of overseas jurisdictions having regard to the number of overseas
Shareholders, the number and value of Shares these Shareholders would be
offered and the cost of complying with regulatory requirements in each
relevant jurisdiction. Accordingly, the Offer is only being extended to
Shareholders with a registered address in Australia, New Zealand or the United
Kingdom.

New Zealand

The Shares are not being offered or sold to the public in New Zealand other
than to existing shareholders of the Company with registered addresses in New
Zealand to whom the offer of Shares is being made in reliance on the
Securities Act (Overseas Companies) Exemption Notice 2013 (New Zealand).

This Prospectus contains an offer to Eligible Shareholders of continuously
quoted securities and has been prepared in accordance with section 713 of the
Australian Corporations Act. This Prospectus has not been registered, filed
with or approved by any New Zealand regulatory authority under the Securities
Act 1978 (New Zealand). This Prospectus is not an investment statement or
prospectus under New Zealand law and is not required to, and may not, contain
all the information that an investment statement or prospectus under New
Zealand law is required to contain.

United Kingdom

Neither the information in this Prospectus nor any other document relating to
the Offer has been delivered for approval to the Financial Services Authority
in the United Kingdom and no prospectus (within the meaning of section 85 of
the Financial Services and Markets Act 2000, as amended ("FSMA")) has been
published or is intended to be published in respect of the Shares. This
document is issued on a confidential basis to fewer than 150 persons (other
than "qualified investors" (within the meaning of section 86(7) of FSMA)) in
the United Kingdom, and the Shares may not be offered or sold in the United
Kingdom by means of this document, any accompanying letter or any other
document, except in circumstances which do not require the publication of a
prospectus pursuant to section 86(1) FSMA. This Prospectus should not be
distributed, published or reproduced, in whole or in part, nor may its
contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the
meaning of section 21 FSMA) received in connection with the issue or sale of
the Shares has only been communicated or caused to be communicated and will
only be communicated or caused to be communicated in the United Kingdom in
circumstances in which section 21(1) FSMA does not apply to the Company.

Nominees and Custodians

Nominees, custodians and other registered Shareholders resident in Australia
or New Zealand holding Shares on behalf of persons who are resident overseas
may not take up an Entitlement under the Offer without the consent of the
Company. Return of a duly completed Entitlement and Acceptance Form will be
taken by the Company to constitute the Shareholder's compliance with this
requirement.

4.14 Enquiries

Any questions concerning the Offer should be directed to Jane Flegg, Company
Secretary, on +61 9488 5220.

5. Purpose and Effect of the offer

5.1 Purpose of the Offer

The purpose of the Offer is to raise up to $35,176,172.

The funds raised from the Offer are planned to be used in accordance with the
table set out below:

Item Proceeds of the Offer                Full            %
                                      Subscription
                                           ($)

 1.  Repayment of existing Company     18,560,738      52.77%
     debt to convertible
     noteholders, lenders and
     royalty holders pursuant to a
     Standstill and Forbearance
     Deed1
 2.  Payment of bridging loan to        7,500,000      21.32%
     financiers of the Company2
 3.  Payments to other existing          724,376        2.06%
     creditors of the Company
 4.  Repayment of debt to EDF           2,500,000       7.11%
     Trading pursuant to Finance
     Agreement
 5.  Expenses of the Offer3             3,517,617      10.00%
 6.  Working capital                    2,373,441       6.75%
     Total                             35,176,172      100.00%

Notes:

1. It is intended that these repayments will be satisfied through the issue of
   671,087,460 Shortfall Shares (to the value of $3,355,437) and a cash payment
   of $15,205,300 to the creditors, convertible noteholders and royalty holders
   of the Company. Refer to Sections 4.8(c) and 4.10 for further details.

2. It is intended that these repayments will be satisfied through the issue of
   800,000,000 Shortfall Shares (to the value of $4,000,000) and a cash payment
   of $3,500,000 to the financiers of the Company. Refer to Sections 4.8(c) and
   4.10 for further details.

In the event that there is insufficient Shortfall to satisfy the equity
portion of the Company's repayment obligations (as set out in the notes to the
table above), those obligations will be settled by way of a cash payment out
of the Offer proceeds.

3. Refer to Section 8.8 of this Prospectus for further details relating to the
   estimated expenses of the Offer.

On completion of the Offer, the Board believes the Company will have
sufficient working capital to achieve these objectives.

The above table is a statement of current intentions as of the date of this
Prospectus. As with any budget, intervening events (including exploration
success) or failure and new circumstances have the potential to affect the
manner in which the funds are ultimately applied. The Board reserves the right
to alter the way funds are applied on this basis.

5.2 Effect of the Offer

The principal effect of the Offer, assuming all Entitlements are accepted and
no Options are exercised prior to the Record Date, will be to:

(a) increase the cash reserves by $31,658,555 (after deducting the estimated
expenses of the Offer) immediately after completion of the Offer; and

(b) increase the number of Shares on issue from 781,692,712 as at the date of this Prospectus to 7,816,927,120 Shares.

5.3 Pro-forma balance sheet

The unaudited balance sheet as at 30 June 2014 and the unaudited pro-forma
balance sheet as at 30 June 2014 shown below have been prepared on the basis
of the accounting policies normally adopted by the Company and reflect the
changes to its financial position.

The pro-forma balance sheet has been prepared assuming all Entitlements are
accepted, no Options are exercised prior to the Record Date and including
expenses of the Offer.

The pro-forma balance sheet has been prepared to provide investors with
information on the assets and liabilities of the Company and pro-forma assets
and liabilities of the Company as noted below. The historical and pro-forma
financial information is presented in an abbreviated form, insofar as it does
not include all of the disclosures required by Australian Accounting Standards
applicable to annual financial statements.

                                   Consolidated               Consolidated
                                    Unauditied   Rights Issue   Proforma
                                  as at 30 June
                                       2014
                                      $'000         $'000        $'000

ASSETS
CURRENT ASSETS
Cash and cash equivalents                  2,989        5,891        8,880
Trade and other receivables                4,681                     4,681
Inventories                                1,167                     1,167
TOTAL CURRENT ASSETS                       8,837                    14,728
 
NON-CURRENT ASSETS
Trade and other receivables                2,473                     2,473
Other assets                               2,472                     2,472
Derivative financial instruments           7,050                     7,050
Exploration expenditure                   47,417                    47,417
Development expenditure                   65,105                    65,105
Property, plant and equipment             12,628                    12,628
Deferred tax assets                        4,081                     4,081
TOTAL NON-CURRENT ASSETS                 141,226                   141,226
TOTAL ASSETS                             150,063                   155,954
 
CURRENT LIABILITIES
Trade and other payables                   7,451                     7,451
Income tax payable                           451                       451
Provisions                                 4,601                     4,601
Borrowings                                91,600       29,285       62,315
Derivative financial instruments              80                        80
Other financial liabilities                4,419                     4,419
Provision for rehabilitation               3,173                     3,173
TOTAL CURRENT LIABILITIES                111,775                    82,490
 
NON-CURRENT LIABILITIES
Borrowings                                   167                       167
Other financial liabilities                6,633                     6,633
Deferred tax liability                    19,511                    19,511
Provision for rehabilitation               8,787                     8,787
TOTAL NON-CURRENT LIABILITIES             35,098                    35,098
TOTAL LIABILITIES                        146,873                   117,588
NET ASSETS                                 3,190                    38,366
 
EQUITY
Issued capital                           246,533       35,176      281,709
Reserves                                 (1,906)                   (1,906)
Accumulated losses                     (234,239)                 (234,239)
Capital and reserves                      10,388                    45,564
attributable to owners of
Continental Coal Ltd
Amounts attributable to                  (7,198)                   (7,198)
non-controlling interests
TOTAL EQUITY                               3,190                    38,366
 
Notes:-
 
5.4 Effect on capital structure

The effect of the Offer on the capital structure of the Company, assuming all
Entitlements are accepted and no Options are exercised prior to the Record
Date, is set out below.

Shares

                                                              Number

Shares currently on issue                                781,692,712
Shares offered pursuant to the Offer                   7,035,234,408
Investor Shares to be issued to the Investors (subject   100,000,000
to Shareholder approval being obtained)
Total Shares on issue after completion of the Offer    7,916,927,120
Options

                                                                   Number
Options currently on issue:
(Quoted exercisable at $0.50 on or before 30/06/2015)          65,679,134
(Unquoted exercisable at $0.2216 on or before 15/05/2015)      12,500,000
(Unquoted exercisable at $0.20 on or before 16/07/2016)         8,000,000
(Unquoted exercisable at $0.368 on or before 23/08/2016)       13,950,893
(Unquoted exercisable at $0.057 on or before 06/12/2017)        6,000,000
(Unquoted exercisable at $0.05382 on or before 18/12/2017)      5,000,000
(Unquoted exercisable at $0.06 on or before 15/05/2016)        15,000,000
(Unquoted exercisable at $0.015 on or before 30 June 2017)     36,000,000
Options to be issued to Investors                              70,000,000
New Options offered pursuant to the Offer                             Nil
Total Options on issue after completion of the Offer          232,130,027

The capital structure on a fully diluted basis as at the date of this
Prospectus would be 943,822,739 Shares and on completion of the Offer
(assuming all Entitlements are accepted) would be 8,149,057,147 Shares.

No Shares or Options on issue are subject to escrow restrictions, either
voluntary or ASX imposed.

5.5 Details of substantial holders

Based on publicly available information as at 28 August 2014, those persons
which (together with their associates) have a relevant interest in 5% or more
of the Shares on issue are set out below:

Shareholder                             Shares       %

Vaxomode (Pty) Ltd                    111,752,818  16.34
Computershare Clearing Pty Ltd        77,324,548   11.30

In the event all Entitlements are accepted there will be no change to the
substantial holders on completion of the Offer. In the more likely event that
a significant amount of Entitlements are not accepted, the Underwriter and/or
sub-underwriter(s) may become substantial holders on completion of the Offer.
Refer to Section 4.8 for further details of the control effect the
underwriting/sub-underwriting may have on the Company.

6. Rights and Liabilities attaching to shares

The following is a summary of the more significant rights and liabilities
attaching to Shares being offered pursuant to this Prospectus. This summary is
not exhaustive and does not constitute a definitive statement of the rights
and liabilities of Shareholders. To obtain such a statement, persons should
seek independent legal advice.

Full details of the rights and liabilities attaching to Shares are set out in
the Constitution, a copy of which is available for inspection at the Company's
registered office during normal business hours.

6.1 General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or
representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with section 249D of the
Corporations Act and the Constitution of the Company.

6.2 Voting rights

Subject to any rights or restrictions for the time being attached to any class
or classes of shares, at general meetings of shareholders or classes of
shareholders:

(a) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(b) on a show of hands, every person present who is a Shareholder or a proxy,
attorney or representative of a Shareholder has one vote; and

(c) on a poll, every person present who is a Shareholder or a proxy, attorney
or representative of a Shareholder shall, in respect of each fully paid Share
held by him, or in respect of which he is appointed a proxy, attorney or
representative, have one vote for each Share held, but in respect of partly
paid shares shall have such number of votes as bears the same proportion to
the total of such Shares registered in the Shareholder's name as the amount
paid (not credited) bears to the total amounts paid and payable (excluding
amounts credited).

6.3 Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the
holders of any shares created or raised under any special arrangement as to
dividend, the Directors may from time to time declare a dividend to be paid to
the Shareholders entitled to the dividend which shall be payable on all Shares
according to the proportion that the amount paid (not credited) is of the
total amounts paid and payable (excluding amounts credited) in respect of such
Shares.

The Directors may from time to time pay to the Shareholders any interim
dividends as they may determine. No dividend shall carry interest as against
the Company. The Directors may set aside out of the profits of the Company any
amounts that they may determine as reserves, to be applied at the discretion
of the Directors, for any purpose for which the profits of the Company may be
properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by
resolution of the Directors, implement a dividend reinvestment plan on such
terms and conditions as the Directors think fit and which provides for any
dividend which the Directors may declare from time to time payable on Shares
which are participating Shares in the dividend reinvestment plan, less any
amount which the Company shall either pursuant to the Constitution or any law
be entitled or obliged to retain, be applied by the Company to the payment of
the subscription price of Shares.

6.4 Winding-up

If the Company is wound up, the liquidator may, with the authority of a
special resolution, divide among the Shareholders in kind the whole or any
part of the property of the Company, and may for that purpose set such value
as he considers fair upon any property to be so divided, and may determine how
the division is to be carried out as between the Shareholders or different
classes of Shareholders.

The liquidator may, with the authority of a special resolution, vest the whole
or any part of any such property in trustees upon such trusts for the benefit
of the contributories as the liquidator thinks fit, but so that no Shareholder
is compelled to accept any shares or other securities in respect of which
there is any liability.

6.5 Shareholder liability

As the Shares issued will be fully paid shares, they will not be subject to
any calls for money by the Directors and will therefore not become liable for
forfeiture.

6.6 Transfer of shares

Generally, shares in the Company are freely transferable, subject to formal
requirements, the registration of the transfer not resulting in a
contravention of or failure to observe the provisions of a law of Australia
and the transfer not being in breach of the Corporations Act and the ASX
Listing Rules.

6.7 Future increase in capital

The issue of any new Shares is under the control of the Directors of the
Company. Subject to restrictions on the issue or grant of Securities contained
in the ASX Listing Rules, the Constitution and the Corporations Act (and
without affecting any special right previously conferred on the holder of an
existing share or class of shares), the Directors may issue Shares as they
shall, in their absolute discretion, determine.

6.8 Variation of rights

Under section 246B of the Corporations Act, the Company may, with the sanction
of a special resolution passed at a meeting of Shareholders vary or abrogate
the rights attaching to shares.

If at any time the share capital is divided into different classes of shares,
the rights attached to any class (unless otherwise provided by the terms of
issue of the shares of that class), whether or not the Company is being wound
up, may be varied or abrogated with the consent in writing of the holders of
three quarters of the issued shares of that class, or if authorised by a
special resolution passed at a separate meeting of the holders of the shares
of that class.

6.9 Alteration of constitution

In accordance with the Corporations Act, the Constitution can only be amended
by a special resolution passed by at least three quarters of Shareholders
present and voting at the general meeting. In addition, at least 28 days
written notice specifying the intention to propose the resolution as a special
resolution must be given.

7. RISK FACTORS

7.1 Introduction

The Shares offered under this Prospectus are considered highly speculative. An
investment in the Company is not risk free and the Directors strongly
recommend potential investors to consider the risk factors described below,
together with information contained elsewhere in this Prospectus and to
consult their professional advisers before deciding whether to apply for
Shares pursuant to this Prospectus.

There are specific risks which relate directly to the Company's business. In
addition, there are other general risks, many of which are largely beyond the
control of the Company and the Directors. The risks identified in this
section, or other risk factors, may have a material impact on the financial
performance of the Company and the market price of the Shares.

The following is not intended to be an exhaustive list of the risk factors to
which the Company is exposed.

7.2 Company specific

(a) `Going concern' risk

While completing the audit review of the Company's half-year financial report
for the half-year ended 31 December 2013, the Company's auditor noted that:

"the ability of the consolidated entity to continue as a going concern is
dependent upon the success of the renegotiations with financiers and future
successful raising of necessary funding through equity. These conditions
indicate the existence of a material uncertainty that may cast significant
doubt about the consolidated entity's ability to continue as a going concern
and therefore, the consolidated entity may be unable to realise its assets and
discharge its liabilities in the normal course of business."

Further, the Company is currently in urgent need of funding to stabilise its
financial position and pay its existing creditors and to meet the Company's
short-term working capital requirements. Refer to Sections 4.1 and 5.3 of this
Prospectus for further details of the current financial position of the
Company.

Shareholders should note that, if the Offer is not fully subscribed, the
Company may be unable to meet its payment obligations to its creditors and
meet short-term working capital requirements and, as such may not be able to
remain a going concern.

Any failure to pay creditors may have significant implications for the
Company, empowering creditors to take enforcement action including appointing
an administrator and the Company may become insolvent. In the opinion of the
Board, completion of the Offer significantly reduces this risk for the
Company.

The ability of the Company to continue its normal business activities and
continue as a going concern is dependent on the ongoing support of a number of
the Company's creditors and the Company raising additional working capital as
and when required. It is highly likely that further funding will be required
to meet the medium to long term working capital costs of the Company. Please
refer to section 7.2(b) below for further details.

(b) Additional requirements for capital

The Company's capital requirements depend on numerous factors. Depending on
the Company's ability to generate income from its operations, the Company will
require further financing. Any additional equity financing will dilute
shareholdings, and debt financing, if available, may involve restrictions on
financing and operating activities. If the Company is unable to obtain
additional financing as needed, it may be required to reduce the scope of its
operations and scale back its exploration programmes as the case may be. There
is however no guarantee that the Company will be able to secure any additional
funding or be able to secure funding on terms favourable to the Company.

(c) ABSA and EDF Trading Debt Facilities

The Company's 74% owned South African subsidiary Continental Coal Limited has
debt facilities with ABSA and EDF Trading as set out in the Company's accounts
(and in the pro forma balance sheet in Section 5.3 of this Prospectus).
Negotiations are continuing in relation to the restructuring of these
respective debt facilities. Whilst completion of the Offer is expected to
assist in these negotiations, there are no guarantees that the debts will not
be called in for repayment (due to a default event occurring) whilst the
restructuring negotiations are ongoing.

(d) International operations

The Company's current assets are all located in South Africa. Any potential
future South African operations of the Company's are subject to a number of
risks, including:

(i) potential difficulties in enforcing agreements and collecting receivables
through foreign local systems;

(ii) potential difficulties in protecting rights and interest in assets;

(iii) increases in costs for transportation and shipping; and

(iv) restrictive governmental actions, such as imposition of trade quotas,
tariffs and other taxes.

Any of these factors could materially and adversely affect the Company's
business, results of operations and financial condition.

South Africa experiences economic, social and political volatility. As a
result, the Company's future operations may be impacted by currency
fluctuations, political reforms, changes in South African government policies
and procedures, civil unrest, social and religious conflict and deteriorating
economic conditions. The likelihood of any of these changes, and their
possible effects, if any, cannot be determined by the Company with any clarity
at the present time, but they may include disruption, increased costs and, in
some cases, total inability to establish or to continue to operate mining
exploration or development activities.

(e) Title

The acquisition and retention of title to mineral rights in South Africa is a
detailed and time-consuming process. Title to, and the area of, mineral
resource claims may be disputed or challenged. Although the Company believes
it has taken and is taking reasonable measures to secure title to its
projects, there is no guarantee that title to its projects will be granted,
that prospecting rights will be converted into mining rights or that title
will not be challenged or impaired.

Any successful challenges to the title of the Company's projects could stop,
materially delay or restrict the Company from proceeding with exploration
activities, any development, or future mining operations.

Certain of the Company's mining rights and prospecting rights may from time to
time have technical defects, errors or breaches, have not been registered with
the applicable authority or may have consents or approvals outstanding. These
include, for instance, outstanding consents (Section 11 Consents) in terms of
section 11 of the Mineral and Petroleum Resources Development Act, 2002
(MPRDA) and/or outstanding registration of Section 11 Consents at the Mining
and Petroleum Titles Registration Office established in terms of the Mining
Titles Registration Act 1967, and/or discrepancies in related documentation.

7.3 Industry specific

(a) Exploration

The mineral tenements of the Company are at various stages of exploration, and
potential investors should understand that mineral exploration and development
are high-risk undertakings.

There can be no assurance that exploration of these tenements, or any other
tenements that may be acquired in the future, will result in the discovery of
an economic ore deposit. Even if an apparently viable deposit is identified,
there is no guarantee that it can be economically exploited.

The exploration costs of the Company are based on certain assumptions with
respect to the method and timing of exploration. By their nature, these
estimates and assumptions are subject to significant uncertainties and,
accordingly, the actual costs may materially differ from these estimates and
assumptions. Accordingly, no assurance can be given that these cost estimates
and the underlying assumptions will be realised in practice, which may
materially and adversely affect the Company's viability.

(b) Operating

The operations of the Company may be affected by various factors, including
failure to locate or identify mineral deposits, failure to achieve predicted
grades in exploration and mining, operational and technical difficulties
encountered in mining, difficulties in commissioning and operating plant and
equipment, mechanical failure or plant breakdown, unanticipated metallurgical
problems which may affect extraction costs, adverse weather conditions,
industrial and environmental accidents, industrial disputes and unexpected
shortages or increases in the costs of consumables, spare parts, plant and
equipment.

No assurances can be given that the Company will achieve commercial viability
through the successful exploration or mining of its tenement interests. Until
the Company is able to realise value from its projects, it is likely to incur
ongoing operating losses.

(c) Resource estimates

Resource estimates are expressions of judgement based on knowledge, experience
and industry practice. Estimates which were valid when originally calculated
may alter significantly when new information or techniques become available.
In addition, by their very nature, resource estimates are imprecise and depend
to some extent on interpretations, which may prove to be inaccurate. As
further information becomes available through additional fieldwork and
analysis, the estimates are likely to change. This may result in alterations
to development and mining plans which may, in turn, either benefit or
adversely affect the Company's operations.

(d) Commodity price volatility and exchange rates

If the Company achieves success leading to mineral production, a significant
proportion of the Company's revenues and cash flows are likely to be derived
from the sale of coal. In this event, it is likely that the financial
performance of the Company will be sensitive to coal prices. Coal prices are
affected by numerous factors and events that are beyond the control of the
Company. These factors and events include general economic activity, demand
for the commodity, and forward selling and costs of production by other coal
producers.

Commodity prices are also affected by macroeconomic factors such as
expectations regarding inflation, interest rates, currency exchange rates
(particularly the strength of the US dollar) as well as general global
economic conditions and political trends.

If coal prices should fall below or remain below the Company's costs of
production for any sustained period due to these or other factors and events,
the Company's exploration and production could be delayed or even abandoned. A
delay in exploration or production or the abandonment of one or more of the
Company's projects may require the Company to revise downwards its coal
resources and will have a material adverse effect on the Company's financial
position.

It is difficult to predict accurately future demand and price movements and
how such movements may adversely impact the Company's profitability, financial
position and performance, prospects, future development and any future
production.

Furthermore, international prices of various commodities are denominated in
United States dollars, whereas the income and expenditure of the Company are
and will be taken into account in Australian currency, exposing the Company to
the fluctuations and volatility of the rate of exchange between the United
States dollar and the Australian dollar as determined in international
markets.

(e) Environment

The operations and proposed activities of the Company are subject to laws and
regulation concerning the environment applicable in the jurisdiction of those
activities. As with most exploration projects and mining operations, the
Company's activities are expected to have an impact on the environment,
particularly if advanced exploration or mine development proceeds. It is the
Company's intention to conduct its activities to the highest standard of
environmental obligation, including compliance with all environmental laws.

(f) Litigation

All industries, including the mining industry, are subject to legal claims in
the ordinary course of their corporate and operational activities. Such claims
are both with and without merit. Defence and settlement costs can be
substantial, even with respect to claims that have no merit. Due to the
inherent uncertainty of the litigation and dispute resolution process, there
can be no assurance that the resolution of any particular legal proceeding or
dispute will not have an adverse effect on the Company's future cash flow,
results of operations or financial condition.

7.4 General risks

(a) Economic

General economic conditions, movements in interest and inflation rates and
currency exchange rates may have an adverse effect on the Company's
exploration, development and production activities, as well as on its ability
to fund those activities.

(b) Market conditions

Share market conditions may affect the value of the Company's quoted
securities regardless of the Company's operating performance. Share market
conditions are affected by many factors such as:

- general economic outlook;

- introduction of tax reform or other new legislation;

- interest rates and inflation rates;

- changes in investor sentiment toward particular market sectors;

- the demand for, and supply of, capital; and

- terrorism or other hostilities.

The market price of securities can fall as well as rise and may be subject to
varied and unpredictable influences on the market for equities in general and
resource exploration stocks in particular. Neither the Company nor the
Directors warrant the future performance of the Company or any return on an
investment in the Company.

(c) Dividends

Any future determination as to the payment of dividends by the Company will be
at the discretion of the Directors and will depend on the financial condition
of the Company, future capital requirements and general business and other
factors considered relevant by the Directors. No assurance in relation to the
payment of dividends or franking credits attaching to dividends can be given
by the Company.

(d) Taxation

The acquisition and disposal of Shares and Options will have tax consequences,
which will differ depending on the individual financial affairs of each
investor. All potential investors in the Company are urged to obtain
independent financial advice about the consequences of acquiring Shares and/or
Options from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of
their respective advisors accept no liability and responsibility with respect
to the taxation consequences of subscribing for New Listed Options under this
Prospectus.

(e) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic
management of the Company depends substantially on its senior management and
its key personnel. There can be no assurance given that there will be no
detrimental impact on the Company if one or more of these employees cease
their employment.

7.5 Speculative investment

The above list of risk factors ought not to be taken as exhaustive of the
risks faced by the Company or by investors in the Company. The above factors,
and others not specifically referred to above, may in the future materially
affect the financial performance of the Company and the value of the Shares
offered under this Prospectus.

Therefore, the Shares to be issued pursuant to this Prospectus carry no
guarantee with respect to the payment of dividends, returns of capital or the
market value of those Shares.

Potential investors should consider that the investment in the Company is
speculative and should consult their professional advisers before deciding
whether to apply for Shares pursuant to this Prospectus.

8. additional INFORMATION

8.1 Litigation

As at the date of this Prospectus, the Company is not involved in any legal
proceedings and the Directors are not aware of any legal proceedings pending
or threatened against the Company.

8.2 Continuous disclosure obligations

The Company is a "disclosing entity" (as defined in section 111AC of the
Corporations Act) for the purposes of section 713 of the Corporations Act and,
as such, is subject to regular reporting and disclosure obligations.
Specifically, like all listed companies, the Company is required to
continuously disclose any information it has to the market which a reasonable
person would expect to have a material effect on the price or the value of the
Company's securities.

This Prospectus is a "transaction specific prospectus". In general terms a
"transaction specific prospectus" is only required to contain information in
relation to the effect of the issue of securities on a company and the rights
attaching to the securities. It is not necessary to include general
information in relation to all of the assets and liabilities, financial
position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly
available information in relation to the Company which has been notified to
ASX and does not include all of the information that would be included in a
prospectus for an initial public offering of securities in an entity that is
not already listed on a stock exchange. Investors should therefore have regard
to the other publicly available information in relation to the Company before
making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable,
the Company believes that it has complied with the general and specific
requirements of ASX as applicable from time to time throughout the 3 months
before the issue of this Prospectus which required the Company to notify ASX
of information about specified events or matters as they arise for the purpose
of ASX making that information available to the stock market conducted by ASX.

Information that is already in the public domain has not been reported in this
Prospectus other than that which is considered necessary to make this
Prospectus complete.

The Company, as a disclosing entity under the Corporations Act states that:

(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company (not
being documents referred to in section 1274(2)(a) of the Corporations Act) may
be obtained from, or inspected at, the offices of the ASIC; and

(c) it will provide a copy of each of the following documents, free of charge,
to any person on request between the date of issue of this Prospectus and the
Closing Date:

(i) the annual financial report most recently lodged by the Company with the ASIC;
(ii) any half-year financial report lodged by the Company with the ASIC after
the lodgement of the annual financial report referred to in (i) and before the
lodgement of this Prospectus with the ASIC; and

(iii) any continuous disclosure documents given by the Company to ASX in
accordance with the ASX Listing Rules as referred to in section 674(1) of the
Corporations Act after the lodgement of the annual financial report referred
to in (i) and before the lodgement of this Prospectus with the ASIC.

Copies of all documents lodged with the ASIC in relation to the Company can be
inspected at the registered office of the Company during normal office hours.

Details of documents lodged by the Company with ASX since the date of
lodgement of the Company's latest annual financial report and before the
lodgement of this Prospectus with the ASIC are set out in the table below.

Date         Description of Announcement

26/08/2014   Notice of General Meeting
06/08/2014   Financing Update Underwritten Rights Issue to raise
             A$35.1m
01/08/2014   Quarterly Operations Report
03/07/2014   Withdrawal of S708 Notice
30/06/2014   S708 Notice and Appendix 3B
01/05/2014   Quarterly Report
03/03/2014   Interim Financial Report
20/02/2014   Initial and Final Directors Interest Notices
13/02/2014   Closing of Bridge Finance
03/02/2014   Quarterly Activities Report
29/01/2014   Continental Coal Executes Binding Term Sheet
20/01/2014   Suspension Update
16/01/2014   Appointment of Independent Financial Advisor
13/01/2014   Continuation of Voluntary Suspension
08/01/2014   Suspension from Official Quotation
06/01/2014   Trading Halt
13/12/2013   Appendix 3B & Cleansing Statement
03/12/2013   Section 708A Notice
28/11/2013   Appendix 3B and Appendix 3Y
22/11/2013   Appendix 3Z
21/11/2013   Annual General Meeting Results
21/11/2013   AGM Presentation
18/11/2013   Operations and Corporate Update
08/11/2013   Director Shares to be Sold and Approval Sought for
             Re-Issue
05/11/2013   Continental Coal Appoints Special Board Committee
01/11/2013   Quarterly Activities Report
23/10/2013   Notice of Annual General Meeting/Proxy Form
18/10/2013   Appendix 3B and Cleansing Statement
17/10/2013   Company Presentation - MRQ Investor Evening
10/10/2013   Prospectus
07/10/2013   Initial Director's Interest Notice
04/10/2013   Appointment of Independent Non-Executive Director
01/10/2013   Operations Update and Investor Conference Call
01/10/2013   Competent Persons Report

ASX maintains files containing publicly available information for all listed
companies. The Company's file is available for inspection at ASX during normal
office hours.

The announcements are also available through the Company's
website http://www.conticoal.com.

8.3 Market price of shares
The Company is a disclosing entity for the purposes of the
Corporations Act and its Shares are enhanced disclosure securities quoted on
ASX.

The highest, lowest and last market sale prices of the
Shares on ASX during the three months immediately preceding the date of
lodgement of this Prospectus with the ASIC and the last date of those sales
were:
Highest           $0.02               12 June 2014
Lowest            $0.02               12 June 2014
Last              $0.02             27 August 2014
 
8.4 Underwriting Agreement

By an agreement between the Underwriter and the Company (Underwriting
Agreement), the Underwriter agreed to conditionally underwrite the Offer for
7,035,234,408 Shares (Underwritten Securities).

Pursuant to the Underwriting Agreement, the Company has agreed to pay the
Underwriter a lead manager fee of 1% of the total amount raised under the
Offer plus a corporate advisory fee of $300,000 plus an underwriting fee of 5%
of the value of the Underwritten Securities.

The Agreement is conditional upon:

(a) the Underwriter completing a due diligence review of the Company to its satisfaction;
(b) the Underwriter being satisfied with the form of this Prospectus and
giving its consent to be named in this Prospectus;

(c) a legal sign-off letter being provided by the Company's solicitors in
respect of the Offer, to the satisfaction of the Underwriter, and addressed to
be for the benefit of the Underwriter;

(d) the Underwriter obtaining sufficient sub-underwriting commitments for the entire Offer; and
(e) the Underwriter not being bound to underwrite the Offer unless and until
the Company lodges the Prospectus with ASIC.

The obligation of the Underwriter to underwrite the Offer is subject to
certain events of termination. The Underwriter may terminate its obligations
under the Underwriting Agreement if, among other events:

(a) Prospectus: any of the following occurs in relation to the Prospectus:
(i) it is not lodged with ASIC by 28 August 2014 (or such later date agreed in
writing by the Underwriter) or is withdrawn by the Company;

(ii) there is an omission, it contains a statement which is misleading or
deceptive or likely to mislead or deceive, or a statement has become
misleading or deceptive or likely to mislead or deceive, or the Prospectus is
or becomes misleading or deceptive or likely to mislead or deceive;

(iii) ASIC gives notice of its intention to hold a hearing under section
739(2) or any other provision of the Corporations Act in relation to this
Prospectus or makes an interim or final stop order under section 739(3) or any
other provision of the Corporations Act in relation to this Prospectus or
makes an application under section 1324B or any other provision of the
Corporations Act in relation to this Prospectus and the application is not
dismissed or withdrawn before the shortfall notice deadline date; or

(iv) any person other than the Underwriter who consented to being named in the 
Prospectus withdraws that consent;
(b) Supplementary Prospectus: the Underwriter reasonably forms the view that a
supplementary or replacement document (as appropriate) must be lodged with
ASIC under section 719 of the Corporations Act and the Company does not lodge
a supplementary or replacement document (as the case may be) in the form and
content and within the time reasonably required by the Underwriter or the
Company lodges a supplementary or replacement prospectus without the prior
written agreement of the Underwriter;

(c) ASX listing: ASX does not give approval for the Underwritten Securities to
be listed for official quotation, or if approval is granted, the approval is
subsequently withdrawn, qualified or withheld;

(d) Index changes: the ASX All Ordinaries Index (ASX Code: XAO) or the S&P /
ASX 200 (ASX Code: XJO) or the S&P / ASX 300 Metals and Mining (ASX Code: XMM)
Indices as published by the ASX falls 10% or more from its respective level as
at the close of business on the Business Day prior to the date of the
Underwriting Agreement ;

(e) share price: the Shares of the Company finish trading on the ASX on any
trading days with a closing price that is less than the issue price of Shares
under the Offer;

(f) indictable offence: a director or senior manager of the Company or any
related corporation is charged with an indictable offence;

(g) return of capital or financial assistance: the Company or a related
corporation passes or takes any steps to pass a resolution under section 254N,
257A or 260B of the Corporations Act, without the prior written consent of the
Underwriter;

(h) change in Act or policy: there is introduced, or there is a public
announcement of a proposal to introduce, into the Parliament of Australia or
any of its States or Territories any Act or prospective Act or budget or the
Reserve Bank of Australia or any Commonwealth or State authority adopts or
announces a proposal to adopt any new, or any major change in, existing,
monetary, taxation, exchange or fiscal policy;

(i) failure to comply: the Company or any related corporation contravenes any of the following:

(i) a provision of its constitution;

(ii) the Corporations Act;

(iii) the ASX Listing Rules; or

(iv) any other applicable legislation or any policy or requirement of ASIC or ASX;
(j) alteration of capital structure or constitution: except as described in
this Prospectus, the Company or any related corporation alters it capital
structure or alters its Constitution without the prior written consent of the
Underwriter;

(k) hostilities: there is an outbreak of hostilities or a material escalation
of hostilities (whether or not war has been declared) after the date of the
Underwriting Agreement involving one or more of Australia, New Zealand,
Indonesia, Japan, Russia, South Africa, the United Kingdom, the United States
of America, or the Peoples Republic of China, Israel or any member of the
European Union, or a terrorist act is perpetrated on any of those countries or
any diplomatic, military, commercial or political establishment of any of
those countries anywhere in the world;

(l) extended Force Majeure: a force majeure (as defined in the Underwriting
Agreement), which affects the Company's business or an obligation under the
Underwriting Agreement, lasting in excess of 7 days occurs;

(m) default: the Company is in default or breach of any of the terms and
conditions of the Underwriting Agreement or breaches any warranty or covenant
given or made by it under the Underwriting Agreement;

(n) incorrect or untrue representation: any representation, warranty or
undertaking given by the Company in the Underwriting Agreement or any
information released by the Company is or becomes untrue or incorrect;

(o) adverse change: any adverse change occurs which materially impacts or is
likely to impact the assets, liabilities, trading results, profits, forecasts,
losses, prospects, business or operational or financial position of the
Company or a related corporation (including but not limited to if any
projection or forecast in this Prospectus becomes incapable of being met or
unlikely to be met in the projected time);

(p) investigation: any person is appointed under any legislation in respect of
companies to investigate the affairs of the Company or a related corporation;

(q) due diligence: there is a material omission from the results of the due
diligence investigation performed in respect of the Offer or the results of
the investigation or the verification material are false or misleading;

(r) Prescribed occurrence: a prescribed occurrence (as defined in the Underwriting Agreement) occurs;

(s) Suspension of debt payments: the Company suspends payment of its debts generally;
(t) Event of insolvency: an event of insolvency (as defined in the
Underwriting Agreement) occurs in respect of a related corporation; or

(u) Litigation: litigation, arbitration, administrative or industrial
proceedings are after the date of the Underwriting Agreement commenced or
threatened against any related corporation, other than any claims foreshadowed
in this Prospectus;

(v) Takeovers Panel: the Takeovers Panel makes a declaration that
circumstances in relation to the affairs of the Company are unacceptable
circumstances under Pt 6.10 of the Corporations Act, or an application for
such a declaration is made to the Takeovers Panel;

(w) Authorisation: any authorisation which is material to anything referred to
in this Prospectus is repealed, revoked or terminated or expires, or is
modified or amended in a manner unacceptable to the Underwriter; (x) Judgment
against a related corporation: a judgment in an amount exceeding $25,000 is
obtained against the Company or a related corporation and is not set aside or
satisfied within 7 days. The Underwriting Agreement also contains a number of
indemnities, representations and warranties from the Company to the
Underwriter that are considered standard for an agreement of this type.

8.5 Interests of Directors

Other than as set out in this Prospectus, no Director or proposed Director
holds, or has held within the 2 years preceding lodgement of this Prospectus
with the ASIC, any interest in:

(a) the formation or promotion of the Company;

(b) any property acquired or proposed to be acquired by the Company in connection with:

(i) its formation or promotion; or

(ii) the Offer; or

(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been
given or agreed to be given to a Director or proposed Director:

(a) as an inducement to become, or to qualify as, a Director; or

(b) for services provided in connection with:

(i) the formation or promotion of the Company; or

(ii) the Offer.

Security holdings

The relevant interest of each of the Directors in the securities of the
Company as at the date of this Prospectus, together with their respective
Entitlement, is set out in the table below.

Director        Shares    Options   Entitlement    $

Andrew Molusi    Nil        Nil         Nil       Nil
Peter Landau2    Nil        Nil         Nil       Nil
Lars             Nil        Nil         Nil       Nil
Schernikau1
Paul D'Sylva     Nil        Nil         Nil       Nil

1 Lars Schernikau is associated with, but does not control, entities that have
subscribed for $2,000,000 of the Investment Amount of $5,000,000 described in
Section 3.2 of this Prospectus.

2 Komodo, a company controlled by Peter Landau, has agreed to sub-underwrite a
portion of the Offer. Please refer to Section 4.8(c) for details of this
sub-underwriting including the maximum number of Shares that could be issued
to Komodo and the control effect the sub-underwriting may have on the Company.

Remuneration

The remuneration of an executive Director is decided by the Board, without the
affected executive Director participating in that decision-making process. The
total maximum remuneration of non-executive Directors is initially set by the
Constitution and subsequent variation is by ordinary resolution of
Shareholders in general meeting in accordance with the Constitution, the
Corporations Act and the ASX Listing Rules, as applicable. The determination
of non-executive Directors' remuneration within that maximum will be made by
the Board having regard to the inputs and value to the Company of the
respective contributions by each non-executive Director. The current amount
has been set at an amount not to exceed $500,000 per annum.

A Director may be paid fees or other amounts (ie non-cash performance
incentives such as Options, subject to any necessary Shareholder approval) as
the other Directors determine where a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a
Director. In addition, Directors are also entitled to be paid reasonable
travelling, hotel and other expenses incurred by them respectively in or about
the performance of their duties as Directors.

The following table shows the total (and proposed) annual remuneration paid to
both executive and non-executive directors.

Director                    2013            2014

Andrew Molusi              $86,958        $50,000
Peter Landau1                nil          $150,000
Lars Schernikau              nil          $100,000
Paul D'Sylva                 nil          $50,000

1 Okap Ventures Pty Ltd, a company controlled by Mr Landau, provides the
Company with strategic and corporate advisory, capital raising, company
secretarial, financial management, investor and public relations and
associated services in fully serviced offices in both Perth and London. Okap
Ventures Pty Ltd is paid a monthly fee of $70,000 by the Company for these
services.

8.6 Interests of experts and advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) person named in this Prospectus as performing a function in a
professional, advisory or other capacity in connection with the preparation or
distribution of this Prospectus;

(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to the issue or a financial
services licensee named in this Prospectus as a financial services licensee
involved in the issue,

holds, or has held within the 2 years preceding lodgement of this Prospectus
with the ASIC, any interest in:

(a) the formation or promotion of the Company;

(b) any property acquired or proposed to be acquired by the Company in connection with:

(i) its formation or promotion; or

(ii) the Offer; or

(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been
given or agreed to be given to any of these persons for services provided in
connection with:

(a) the formation or promotion of the Company; or

(b) the Offer.

Patersons Securities Limited will be paid an underwriting fee of approximately
$1,758,809 together with a $351,762 lead management fee and a corporate
advisory fee of $300,000 in respect of this Offer. During the 24 months
preceding lodgement of this Prospectus with the ASIC, Patersons Securities
Limited has not been paid any fees by the Company.

Steinepreis Paganin has acted as the solicitors to the Company in relation to
the Offer. The Company estimates it will pay Steinepreis Paganin $40,000
(excluding GST and disbursements) for these services. During the 24 months
preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has
been paid fees totalling $169,989 (excluding GST and disbursements) for legal
services provided to the Company.

8.7 Consents

Each of the parties referred to in this Section:

(a) does not make, or purport to make, any statement in this Prospectus other
than those referred to in this Section; and

(b) to the maximum extent permitted by law, expressly disclaim and take no
responsibility for any part of this Prospectus other than a reference to its
name and a statement included in this Prospectus with the consent of that
party as specified in this Section.

Patersons Securities Limited has given its written consent to being named as
underwriter, lead manager and corporate advisor to the Offer in this
Prospectus, in the form and context in which it is named. Patersons Securities
Limited has not withdrawn its consent prior to the lodgement of this
Prospectus with the ASIC. Patersons Securities Limited (including its related
entities) is not presently a Shareholder of the Company and currently has no
relevant interest in any of the Company's securities;

ISSAR Global has given its written consent to being named as a sub-underwriter
to the Offer in this Prospectus, in the form and context in which it is named.
ISSAR Global has not withdrawn its consent prior to the lodgement of this
Prospectus with the ASIC;

Komodo has given its written consent to being named as a sub-underwriter to
the Offer in this Prospectus, in the form and context in which it is named.
Komodo has not withdrawn its consent prior to the lodgement of this Prospectus
with the ASIC; and

Steinepreis Paganin has given its written consent to being named as the
solicitors to the Company in this Prospectus. Steinepreis Paganin has not
withdrawn its consent prior to the lodgement of this Prospectus with the ASIC.

8.8 Expenses of the offer

In the event that all Entitlements are accepted, the total expenses of the
Offer are estimated to be approximately $3,517,617 (excluding GST) and are
expected to be applied towards the items set out in the table below:

                                     $
ASIC fees                        2,290
ASX fees                         9,052
Underwriting fees            2,110,570
Manager to the offer fees      500,000
Legal fees                     100,000
Printing and distribution       30,000
Miscellaneous                  765,705
Total                        3,517,617
8.9 Electronic prospectus

If you have received this Prospectus as an electronic Prospectus, please
ensure that you have received the entire Prospectus accompanied by the
Application Forms. If you have not, please phone the Company on +61 9488 5220
and the Company will send you, for free, either a hard copy or a further
electronic copy of the Prospectus, or both. Alternatively, you may obtain a
copy of this Prospectus from the Company's website at
http://www.conticoal.com/.

The Company reserves the right not to accept an Application Form from a person
if it has reason to believe that when that person was given access to the
electronic Application Form, it was not provided together with the electronic
Prospectus and any relevant supplementary or replacement prospectus or any of
those documents were incomplete or altered.

8.10 Financial forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170
and believe that they do not have a reasonable basis to forecast future
earnings on the basis that the operations of the Company are inherently
uncertain. Accordingly, any forecast or projection information would contain
such a broad range of potential outcomes and possibilities that it is not
possible to prepare a reliable best estimate forecast or projection.

8.11 Clearing House Electronic Sub-Register System (CHESS) and Issuer Sponsorship

The Company will not be issuing share certificates. The Company is a
participant in CHESS, for those investors who have, or wish to have, a
sponsoring stockbroker. Investors who do not wish to participate through CHESS
will be issuer sponsored by the Company. Because the sub-registers are
electronic, ownership of securities can be transferred without having to rely
upon paper documentation.

Electronic registers mean that the Company will not be issuing certificates to
investors. Instead, investors will be provided with a statement (similar to a
bank account statement) that sets out the number of Shares issued to them
under this Prospectus. The notice will also advise holders of their Holder
Identification Number or Security Holder Reference Number and explain, for
future reference, the sale and purchase procedures under CHESS and issuer
sponsorship.

Further monthly statements will be provided to holders if there have been any
changes in their security holding in the Company during the preceding month.

8.12 Privacy Act

If you complete an application for Shares, you will be providing personal
information to the Company (directly or by the Company's share registry). The
Company collects, holds and will use that information to assess your
application, service your needs as a holder of equity securities in the
Company, facilitate distribution payments and corporate communications to you
as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons
inspecting the register, bidders for your securities in the context of
takeovers, regulatory bodies, including the Australian Taxation Office,
authorised securities brokers, print service providers, mail houses and the
Company's share registry.

You can access, correct and update the personal information that we hold about
you. Please contact the Company or its share registry if you wish to do so at
the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is
governed by legislation including the Privacy Act 1988 (Cth) (as amended), the
Corporations Act and certain rules such as the ASX Settlement Operating Rules.
You should note that if you do not provide the information required on the
application for Shares, the Company may not be able to accept or process your
application.

9. Directors' AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by
a resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has
consented to the lodgement of this Prospectus with the ASIC.

_______________________________
Paul D'Sylva

Executive Chairman
For and on behalf of
Continental Coal Limited



10. glossary

$ means the lawful currency of the Commonwealth of Australia.

Applicant means a Shareholder who applies for Shares pursuant to the Offer or
a Shareholder or other party who applies for Shortfall Shares pursuant to the
Shortfall Offer.

Application Form means an Entitlement and Acceptance Form or Shortfall
Application Form as the context requires.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it
as the context requires.

ASX Listing Rules means the listing rules of the ASX.

ASX Settlement Operating Rules means the settlement rules of the securities
clearing house which operates CHESS.

Board means the board of Directors unless the context indicates otherwise.

Business Day means Monday to Friday inclusive, except New Year's Day, Good
Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX
declares is not a business day.

Closing Date means the date specified in the timetable set out at the
commencement of this Prospectus (unless extended).

Company means Continental Coal Limited (ACN 009 125 651).

Constitution means the constitution of the Company as at the date of this
Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company as at the date of this
Prospectus.

Entitlement means the entitlement of a Shareholder who is eligible to
participate in the Offer.

Entitlement and Acceptance Form means the entitlement and acceptance form
either attached to or accompanying this Prospectus.

General Meeting means the general meeting of Shareholders of the Company to be
held on or around 24 September 2014.

Offer means the non-renounceable entitlement issue the subject of this
Prospectus.

Official Quotation means official quotation on ASX.

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Prospectus means this prospectus.

Record Date means the date specified in the timetable set out at the
commencement of this Prospectus.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Shortfall means the Shares not applied for under the Offer (if any).

Shortfall Application Form means the shortfall application form either
attached to or accompanying this Prospectus.

Shortfall Offer means the offer of the Shortfall on the terms and conditions
set out in Section 4.10 of this Prospectus.

Shortfall Shares means those Shares issued pursuant to the Shortfall.

Underwriter means Patersons Securities Limited (ACN 008 896 311).

WST means Western Standard Time as observed in Perth, Western Australia.

28 August 2014

The Manager
Company Announcements
Australian Securities Exchange Limited
Level 6, 20 Bridge Street
Sydney NSW 2000

By e-lodgement

ASX Waiver from Listing Rules 7.11.3 and 7.15 - Rights Issue

Continental Coal Limited (ASX: CCC AIM: COOL) ("Continental" or "the
Company"), the South African thermal coal mining company is pleased to
announce that ASX Limited has granted the Company the following waivers in
connection with the Company's rights issue announced on 6 August 2014 ("Rights
Issue").

ASX Listing Rule 7.11.3 provides that the ratio of securities offered by a
listed entity under a non-renounceable pro-rata issue must not be greater than
one security for each security held. The Company has been granted a waiver of
Listing Rule 7.11.3 to permit the Company to undertake the Rights Issue on the
basis of 9 new shares for every one share held, subject to the following
conditions:

(c) Shareholders of the Company approve the Rights Issue;
(d) The notice of meeting seeking shareholder approval for the Rights Issue
contains a voting exclusion statement that excludes the votes of any
substantial shareholders, any proposed underwriter or sub-underwriter of the
Rights Issue, and any brokers or managers of the Rights Issue; and

(e) The Company releases details of the waiver at the time that full details
of the Rights Issue are announced to shareholders on the ASX Market
Announcements Platform.

ASX Listing Rule 7.15 provides that if a company is undertaking a pro-rata
entitlement issue that is subject to shareholder approval, the record date to
determine entitlements under the offer needs to be at least 7 business days
after the date of the meeting. The Company has been granted a waiver of
Listing Rule 7.15 to permit the Company to undertake the Rights Issue with a
record date which is prior to the date of the shareholders' meeting to approve
the Rights Issue, subject to the following conditions:

(a) The Company's securities are not reinstated to official quotation at any
time prior to the shareholders' meeting to approve the Rights Issue; and

(b) The Company releases details of the waiver at the time that full details
of the Rights Issue are announced to shareholders on the ASX Market
Announcements Platform.

For and on behalf of the Board

Peter Landau

Executive Director

For further information please contact:

Investors / Shareholders                    Media
Peter Landau                                David Tasker
Continental Coal Limited                    Professional Public Relations
T: +618 9488 5220                           T: +618 9388 0944
E: [email protected]                      E: [email protected]

Nominated Advisor                           Brokers (UK)
Oliver Morse/Trinity McIntyre               Jonathan Williams
RFC Ambrian Limited                         RFC Ambrian Ltd
T: +61 8 9480 2500                          T : +44 203 440 6817

About Continental Coal Limited

Continental Coal Limited (ASX:CCC/AIM: COOL) is a South African
thermal coal producer with a portfolio of projects located in South Africa's
major coal fields including two operating mines, the Vlakvarkfontein and
Penumbra Coal Mines, producing approx. 2Mtpa of thermal coal for the export
and domestic markets. A Feasibility Study was also completed on a proposed
third mine, the De Wittekrans Coal Project with a mining right granted in
September 2013.

Forward Looking Statement

Certain statements made during or in connection with this
communication, including, without limitation, those concerning the economic
outlook for the coal mining industry, expectations regarding coal prices,
production, cash costs and other operating results, growth prospects and the
outlook of Continental's operations including the likely commencement of
commercial operations at De Wittekrans, its liquidity and the capital
resources and expenditure, contain or comprise certain forward-looking
statements regarding the Company's development and exploration operations,
economic performance and financial condition.

Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. Accordingly, results could
differ materially from those set out in the forward-looking statements as a
result of, among other factors, changes in economic and market conditions,
success of business and operating initiatives, changes in the regulatory
environment and other government actions, fluctuations in coal prices and
exchange rates and business and operational risk management. For a discussion
of such factors, refer to the Company's most recent annual report and half
year report. The Company undertakes no obligation to update publicly or
release any revisions to these forward-looking statements to reflect events or
circumstances after today's date or to reflect the occurrence of unanticipated
events.

a d v e r t i s e m e n t