Junior coal miner Continental Coal will buy a further 35.9 per cent stake in South African miner Mashala Resources to take full ownership.

The Mashala assets include the Ferreira export thermal coal mine, Delta processing operations and Penumbra and De Wittekrans export thermal coal projects.

The takeover would simplify Continental's operations in South Africa, as well as increase cash flows from Ferreira Coal Mine, at a time when export thermal coal prices were high.

In order to complete the acquisition, Continental had agreed to sell up to $US20 million ($A18.7 million) of its own shares to US-based investment group Socius CG II, making Socius the largest shareholder.

Continental had sold an initial $US10 million of shares to Socius so far, the company said in a statement.

The takeover of Mashala follows the announcement on June 29 of an offer by ABSA Capital to provide $65 million in debt funding and an agreement with a black economic empowerment group to buy into Continental to repay an existing $20 million debt.