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Report for the quarter ended 30 September 2016 -Progress in identifying cash generating asset Coal of Africa Limited (Incorporated and registered in Australia) Registration number ABN 008 905 388 ISIN AU000000CZA6 JSE/ASX/AIM share code: CZA ("CoAL or the "Company" or the "Group") ANNOUNCEMENT 28 October 2016 REPORT FOR THE QUARTER ENDED 30 September 2016 Progress in identifying cash generating asset Coal of Africa Limited ("CoAL" or "the Company") which operates in South Africa, together with its subsidiaries, hereby provides its update for the quarter ended 30 September 2016. All figures are denominated in United States dollars unless otherwise stated. A copy of this report is available on the Company's website, www.coalofafrica.com. Salient Operational Features - No lost-time injuries ("LTIs") recorded during the quarter (FY2016 Q4: nil). - The Integrated Water Use Licence ("IWUL") for the Makhado Project remains suspended following an appeal to the Department of Water and Sanitation ("DWS") submitted by the Vhembe Mineral Resources Forum. Discussions continue with the Minister of Water and Sanitation. - The Company has made significant progress in the identification of possible cash generating assets. Corporate and Financial Features - Available cash at period end was US$11.9 million and restricted cash of $0.3million. QUARTERLY COMMENTARY Makhado Coking Coal Project ("Makhado Project") - Soutpansberg Coalfield (100% owned - 74% post BBBEE transaction) The Makhado Project recorded no LTIs (FY2016 Q4: nil) during the quarter. Makhado's 26-month construction phase is expected to begin as soon as all regulatory approvals are in place (expected during CY2017). This delayed start up reflects the complex environment in which South African mining companies operate. CoAL remains committed to ensuring that the requisite processes are completed as efficiently as possible. Post construction, a further four month ramp-up phase will result in the production of 5.5 million tonnes per annum ("Mtpa") of saleable product. During FY2016 Q2 the Company was granted a 20-year IWUL for the Makhado project. Following an appeal to the DWS submitted by the Vhembe Mineral Resources Forum and other parties, the IWUL was automatically suspended under Section 148 (2) (b) of the South African National Water Act No 36 of 1998. This appeal had been anticipated, and CoAL is in the process of preparing an urgent representation to the Minister of Water and Sanitation to request that the IWUL remain in full force and effect pending the final conclusion of the appeal by the Water Tribunal. An interim court interdict seeking to halt any mining or construction activity was issued against the Makhado Project during Q2 FY2014. The matter was heard in the North Gauteng High Court on 3 December 2015 with judgment handed down on Tuesday 8 December 2015 on two matters. The first relates to the condition to compel CoAL to conduct a Strategic Regional Impact Assessment and secondly a review of the Environmental Authorisation ("EA"). The condition compelling CoAL to conduct a Strategic Regional Impact Assessment has been set aside. The interim interdict against the EA remains in place pending the review of the authorisation. The Company applied to the Department of Mineral Resources ("DMR") and Limpopo Department of Economic Development, Environment and Tourism ("LEDET") to amend the EA, amending the holder of the authorisation from CoAL to Baobab, the legal operating entity of the Makhado Project, thus ensuring the alignment of the ownership of the full suite of regulatory authorisations for the Project within the appropriate vehicle. The Company also applied for an extension of the validity period of the EA. Both the DMR and LEDET have granted the extension of the validity period of the EA for an additional five years and have granted the transfer of the EA from CoAL to Baobab. CoAL remains committed to the sustainable development of the Makhado Project, whilst recognising its potential to drive significant socio-economic transformation. The Company continues to engage with all stakeholders to ensure the on-going implementation of a co-existent model, seeking co-operation between mining, agriculture and heritage land uses. Mooiplaats Colliery - Ermelo Coalfield (74% owned) The Mooiplaats thermal coal colliery was placed on care and maintenance during Q1 2014, and recorded no LTIs during the period (FY2016 Q4: nil). During the current quarter the Company continued discussions with potential purchasers and is assessing various options regarding a transaction at the colliery. Interested parties are in various stages of the due diligence process. Vele Colliery - Limpopo (Tuli) Coalfield (100% owned) The Vele coking and thermal coal colliery ("Vele Colliery") recorded no LTIs during the quarter (FY2016 Q4: nil). The IWUL for the Vele Colliery has been renewed for a further 20 years and has also been amended in line with the requirements for the Plant Modification Project ("PMP") at the Colliery. During H2 2015, the Company commenced a process to obtain approval relating to a non-perennial stream diversion. This decision is anticipated in H2 2016. Once this regulatory approval in respect of the Colliery has been received, the final decision to proceed with the PMP will be placed before the board. This decision will include an assessment of forecast global coal prices. Greater Soutpansberg Project (MbeuYashu) (74% owned) The MbeuYashu Project recorded no LTIs (FY2016 Q4: nil) during the period. No other significant matters to report. Corporate The Board has been engaged in identifying potential cash generating acquisition targets over the past quarter. The management team is tasked with engaging with these targets with a view to executing a transaction. CoAL's management team is engaged in discussions with current shareholders and potential investors to ensure any possible acquisition can be appropriately funded. Any process of this nature does not confer certainty and the Company will keep the market updated in a timely manner and on an appropriate basis. Markets The coal commodity market has experienced a sensational recovery during CY2016. By the end of September 2016 hard coking coal prices increased by 142% to more than US$210 per tonne as a result of a production shortfall and the recovery of the steel industry. The thermal coal price has also increased by 56% since December 2015. CoAL is optimistic about the opportunities created by the commodity price increase for both its Vele Colliery and the Makhado Project, but it needs to evaluate the sustainability of these prices as part of the investment decisions for these projects. David Brown, CEO commented: "The current company focus is to obtain a cash generating asset for the group. This will allow the Company access to sufficient funds over time to cover company overheads, pre project development costs for the Makhado Project, and all regulatory charges to ensure the continuation of full compliance on all current assets. The increase in thermal and hard coking coal prices over the last quarter leaves the coal industry with a positive outlook and we are committed to the maximise the benefit of this market for our shareholders." Authorised by David Brown Chief Executive Officer For more information contact: David Brown Chief Executive Officer Coal of Africa +27 10 003 8000 De Wet Schutte Chief Financial Officer Coal of Africa +27 10 003 8000 Celeste Riekert Investor Relations Coal of Africa +27 10 003 8000 Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100 Company advisors: Matthew Armitt/Ross Allister Nominated Adviser and Broker Peel Hunt LLP +44 20 7418 8900 Jos Simson/Emily Fenton Financial PR (United Kingdom) Tavistock +44 20 7920 3150 Charmane Russell/Olwen Auret Financial PR (South Africa) Russell & Associates +27 11 880 3924 or +27 82 372 5816 Investec Bank Limited is the nominated JSE Sponsor About CoAL: CoAL is an AIM/ASX/JSE listed coal exploration, development and mining company operating in South Africa. CoAL's key projects include the Vele Colliery (coking and thermal coal), the Greater Soutpansberg Project /MbeuYashu, including CoAL's Makhado Project (coking and thermal coal). AU: Coal of Africa Limited, Suite 8, 7 The Esplanade, Mount Pleasant, Perth WA 6153, Australia, Tel: +61 8 9316 9100, Fax: +61 8 9316 5475 ZA: South Block, Summercon Office Park, Cnr Rockery Lane and Sunset Avenue, Lonehill, 2191, Tel: +27 10 003 8000 Fax: +27 11 388 8333 Email: adminza@coalofafrica.com Bernard R. Pryor - Chairman, David H. Brown - Chief Executive Officer De Wet O.Schutte - Chief Financial Officer Non-executive directors: Peter G. Cordin, Andrew D. Mifflin, Khomotso B. Mosehla , Thabo F. Mosololi, Rudolph H. Torlage, Shangren Ding Tenements held by CoAL and its Controlled Entities Change Project Name Tenement Number Location Interest in quarter Chapudi Albert 686 MS- Limpopo~ 74% Project* Bergwater 712 MS-- 74% Remaining Extent and Portion 2 of Bergwater 697 MS-- 74% Blackstone Edge 705 MS 74% Remaining Extent & Portion 1 of Bluebell 480 MS- 74% 74% Remaining Extent & Portion 1 of Bushy Rise 702 MS-- Castle Koppies 652 MS-- 74% Chapudi 752 MS -- 74% Remaining Extent, Portions 1, 3 & 4 of Coniston 699 MS-- 74% Driehoek 631 MS-- 74% Remaining Extent of Dorps-rivier 696 MS-- 74% Enfield 512 MS (consolidation of Remaining Extent of 74% Enfield 474 MS, Brosdoorn 682 MS & Remaining Extent of Grootvlei 684 MS)-- Remaining Extent and Portion 1 of 74% Grootboomen 476 MS- 74% Grootvlei 684 MS-- 74% Kalkbult 709 MS 74% Remaining Extent, Remaining Extent of Portion 2, 74% Remaining Extent of Portion 3, Portions 1, 4, 5, 6, 7 & 8 of Kliprivier 692 MS- Remaining Extent of Koodoobult 664 MS- 74% Koschade 657 MS (Was Mapani Kop 656 MS)- 74% Malapchani 659 MS- 74% Mapani Ridge 660 MS- 74% Melrose 469 MS- 74% Middelfontein 683 MS- 74% Mountain View 706 MS- 74% M'tamba Vlei 654 MS 74% Remaining Extent & Portion 1 of Pienaar 635 MS- 74% Remaining Extent & Portion 1 of Prince's Hill 704 MS- 74% Qualipan 655 MS- 74% Queensdale 707 MS- 74% Remaining Extent & Portion 1 of Ridge End 662 MS- 74% Remaining Extent & Portion 1 of Rochdale 700 MS- 74% Sandilands 708 MS- 74% Change Project Name Tenement Number Location Interest in quarter Portions 1 & 2 of Sandpan 687 MS-- 74% Sandstone Edge 658 MS- 74% Remaining Extent of Portions 2 & 3 of Sterkstroom 689 74% MS-- Sutherland 693 MS- 74% Remaining Extent & Portion 1 of Varkfontein 671 MS-- 74% Remaining Extent, Portion 2, Remaining Extent of Portion 74% 1 of Vastval 477 MS- Vleifontein 691 MS- 74% Ptn 3, 4, 5 & 6 of Waterpoort 695 MS-- 74% Wildebeesthoek 661 MS- 74% Woodlands 701 MS- 74% Kanowna West M27/41 Coolgardie^ 23.68% and Kalbara M27/47 23.68% M27/59 23.68% M27/72,27/73 23.68% M27/114 23.68% M27/181 21.31% M27/196 23.68% M27/414,27/415 23.68% P27/1826-1829 23.68% P27/1830-1842 23.68% P27/1887 23.68% Abbotshall ML63/409,410 Norseman^ Royalty Royalty Kookynie ML40/061 Leonora^ Royalty Royalty ML40/135,136 Royalty Holfontein Remaining extent, Remaining Extent of portions 1, 5 and Mpumalanga~ 100% 11 and portions 4, 6, 9, 10, 12 and 13 of the farm Holfontein 138 IS Makhado Fripp 645 MS Limpopo~ 100%# Project Lukin 643 MS 100%# Mutamba 668 MS 100%# Salaita 188 MT 100%# Tanga 849 MS 100%# Daru 848 MS 100%# Windhoek 847 MS 100%# Generaal Limpopo~ 74% Beck 568 MS-- Project Bekaf 650 MS- 74% Remaining Extent & Portion 1 of Boas 642 MS- 74% Chase 576 MS- 74% Coen Britz 646 MS- 74% Fanie 578 MS- 74% Portions 1, 2 and Remaining Extent of Generaal 587 MS- 74% Joffre 584 MS- 74% Change Project Name Tenement Number Location Interest in quarter Juliana 647 MS 74% Kleinenberg 636 MS- 74% Remaining Extent of Maseri Pan 520 MS- 74% Remaining Extent and Portion 2 of Mount Stuart 153 MT-- 100% Nakab 184 MT-- 100% Phantom 640 MS-- 74% Riet 182 MT-- 100% Rissik 637 MS- 100% Schuitdrift 179 MT- 100% Septimus 156 MT-- 100% Solitude 111 MT- 74% Stayt 183 MT-- 100% Remaining Extent & Portion 1 of Terblanche 155 MT-- 100% Van Deventer 641 MS- 74% Wildgoose 577 MS- 74% Mopane Limpopo~ 100% Ancaster 501 MS-- Project* Banff 502 MS- 74% Bierman 599 MS- 74% Cavan 508 MS 100% Cohen 591 MS-- 100% Remaining Extent, Portions 1 & 2 of Delft 499 MS- 74% Dreyer 526 MS-- 74% Remaining Extent of Du Toit 563 MS- 74% Faure 562 MS 74% Remaining Extent and Portion 1 of Goosen 530 MS -- 74% Hermanus 533 MS- 74% Jutland 536 MS-- 100% Krige 495 MS- 74% Mons 557 MS- 100% Remaining Extent of Otto 560 MS (Now Honeymoon)- 74% Remaining Extent & Portion 1 of Pretorius 531 MS- 74% Schalk 542 MS- 74% Stubbs 558 MS- 100% Ursa Minor 551 MS-- 74% Van Heerden 519 MS-- 74% Portions 1, 3, 4, 5, 6, 7, 8, 9, Remaining Extent of Portion 74% 10, Portions 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, 29, 30, 35, 36, 37, 38, 39, 40, 41, 44, 45, 46, 48, 49, 50, 51, 52 & 54 of Vera 815 MS Remaining Extent of Verdun 535 MS- 74% Voorburg 503 MS-- 100% Mooiplaats Mpumalanga~ 74% Colliery and Portions 1, 9,14,17,18,19,20 & Remaining Extent of prospects Mooiplaats 290 IT Portion 2, 3 and Remaining Extent of Klipbank 295 IT 74% Portions 1, 2 and Remaining Extent of Adrianople296 IT 74% Portions 2 & 3 of Willemsdal 330 IT 74% Portions 2, 3, 4 & Remaining Extent) of De Emigratie 327 74% IT Change Project Name Tenement Number Location Interest in quarter Remaining Extent and Portions 2, 5, 8,10 & 13 of 74% Buhrmansvallei 297 IT Klipfontein 442 IT 74% Vele Colliery Portions of Overvlakte 125 MS (Remaining Extent, 3, 4, 5, Limpopo~ 100% and prospect 6, 13, 14) Bergen Op Zoom 124 MS 100% Semple 155 MS 100% Voorspoed 836 MS 100% Alyth 837 MS 100% Tshikunda Certain portions of Unsurveyed State Land known as Limpopo~ 60% Mutale Coal bed Limpopo~ 50% Adelaide 91 MT methane Adieu 118 MT 50% Alicedale 138 MT 50% Armstice 120 MT 50% Bergwater 697 MS 50% Bergwater 712 MS 50% Blackstone Edge 705 MS 50% Bushy Rise 702 MS 50% Chapudi 752 MS 50% Charlotte 90 MT 50% Chase 576 MS 50% Cross 117 MT 50% Doppie 95 MT 50% Ettie 33 MT 50% Fanie 578 MS 50% Feskraal 85 MT 50% Folorodwe 79 MT 50% Fripp 645 MS 50% Gray 189 MT 50% Hettey 93 MT 50% Jeannette 77 MT 50% Joffre 584 MS 50% Kalkbult 709 MS 50% Laura 115 MT 50% Lukin 643 MS 50% Magazasand 123 MT 50% Malapchani 659 MS 50% Mountainview 706 MS 50% Mount Stuart 153 MT 50% Nakab 184 MT 50% Naus 178 MT 50% Neltox 92 MT 50% Phantom 640 MS 50% Prince's Hill 704 MS 50% Queensdale 707 MS 50% Riet 182 MT 50% Rochdale 700 MS 50% Rynie 158 MT 50% Salaita 188 MT 50% Change Project Name Tenement Number Location Interest in quarter Schuitdrift 179 MT 50% Septimus 156 MT 50% Stayt 183 MT 50% Suzette 32 MT 50% Tanga 648 MS 50% Telema 190 MT 50% Terblanche 155 MT 50% Trevenna 119 MT 50% The Duel 186 MT 50% Truida 76 MT 50% Van Deventer 641 MS 50% Wendy 86 MT 50% Wildgoose 577 MS 50% Windhoek 649 MS 50% Zisaan 31 MT 50% Ziska 122 MT 50% Portion of Unsurveyed state land 50% * Form part of the Greater Soutpansberg Project - Lapsed - Mining Right Application Lodged -- Valid - Mining Right Application Lodged ~ Tenement located in the Republic of South Africa ^ Tenement located in Western Australia # CoAL's interest will reduce to 74% owned on completion of the Broad Based Economic Empowerment transaction Date: 28/10/2016 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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