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David Brown, CoAL Chief Executive Officer

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Coal of Africa Limited (CoAL) is pleased to announce that the Company has received notice from Yishun Brightrise Investment Pte Limited (YBI) requesting the conversion of a US$10 million loan to CoAL’s ordinary share capital.

“The Conversion of the Loan to equity holds great value to CoAL. It removes a large potential cash outflow from the Company’s cash flow projections and strengthens the solvency ratio as it allows CoAL to focus its expenditure on the development of its assets instead of repaying debt. This leaves the Company with only one outstanding settlement to Rio Tinto by June 2017. The outstanding balance to Rio Tinto relates to the acquisition of the Greater Soutpansberg Assets in the Limpopo province and forms part of the Company’s long term development strategy. The Conversion of the Loan once again shows the strong support of CoAL’s shareholders to the long term value of its assets and its commitment to their development,” says David Brown, CoAL Chief Executive Officer.

During September 2015 the Company entered into a loan agreement with YBI pursuant to which YBI advanced an amount of US$10 million to the Company.

The loan bore no interest and only became repayable in limited circumstances.

During May 2016 the Company and YBI amended the terms of the Loan to specify the conditions that would trigger the repayment of the Loan. The long stop date for the conditions was agreed as 31 December 2016 and if none of these trigger events occurred prior to the long stop date then the Loan would become convertible to equity. None of the trigger events have been effected and the Company will now convert the Loan to equity at the agreed price of US$0.04081 per share.

The total amount of Conversion Shares will amount to 245,037,980 and the conversion into equity will occur in two tranches. The Company directors have 240,042,603 shares remaining under the general placement authority according the ASX Listing rule 7.1 and will be issued with immediate effect. The second tranche of 4 995 378 shares will be converted into equity once the general placement authority has been replenished by shareholders at the Annual General Meeting (AGM). Post the issue of both tranches of the Conversion

Shares YBI will have a shareholding of 428 269 241 ordinary shares equating to 19.28% shareholding of the Company.

Application has been made for the first tranche of 240,042,603 Conversion Shares to be admitted to trading on the AIM market of the London Stock Exchange (AIM). Admission to trading on AIM is expected to become effective on or around 21 February 2017. The Conversion Shares will rank with the Company’s existing ordinary shares of nil par value. Application for quotation of the Conversion Shares will also be made to the Australian Securities Exchange and the Main Board of the JSE Limited.

Following admission of the first tranche Conversion Shares there will be 2,216,051,527 shares in issue. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the

Company under the FCA’s Disclosure Guidance and Transparency Rules.

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