Mine operator Trollope Mining Services made the first coal production blast at 1pm on top of the No. 4 seam in the pit.

The initial raw coal will be transported to local wash plants in the Witbank coalfield.

Continental expects the resulting analysis to cement a domestic offtake agreement.

“Discussions with a number of parties are already well advanced and the contract is expected to be completed within the coming weeks,” the company said.

Continental chief executive Don Turvey said the start-up of production marked a milestone in the development of the company into a mid-tier producer.

“The Vlakvarkfontein project was acquired less than 12 months ago, with our mining contractors Trollope mobilising onsite only in February 2010,” he said.

“To have brought Vlakvarkfontein into production in the previously announced timeframe is a credit to our partners, the executives of the company, the contractors and the various consultants that have assisted with the development of this project.”

Continental is targeting a rate of 1.2 million tonnes per annum of raw coal production from the mine in the next three months.

The company is also advancing development of its Vaalbank, Project X and Vlakplaats mines for 300,000 tonnes a month of production next year.

Continental shares are up 5% to A4.2c.