South African-focused mining firm Continental Coal Ltd (ASX: CCC) announced on Thursday that it has struck a deal that would allow the junior miner to purchase Mashala Resources, paving the way for the company to achieve mid-tier producer status.

The company revealed that as covered by the takeover's terms of share sale, Continental Coal is poised to gain up to 64.1 percent in Mashala Resources for a total of $US35 million or $A37.31 million, adding that the agreement would be submitted to government regulator approvals.

Continental Coal said that it would be acquiring Mashala Resources' remaining shares within the next 12 months either by using cash holdings or share offerings, following the company's entry into the Johannesburg Stock Exchange in South Africa, where the resource firm is concentrating its mining activities.

Company chief executive Don Turvey said that Continental's new acquisition would bring over immediate export coal output for the mining firm as he noted that last year alone, Mashala Resources yielded and estimated 500,000 tonnes of thermal coal for export.

Mr Turvey added that this production capacity would be further boosted by an additional project expected to be online very soon.

He stressed that the buyout agreement "has presented a unique opportunity to rapidly build an even stronger company for our shareholders and employees."