Contango Holdings PLC Offtake Discussions -- Lubu Coking Coal Project (6224T)
26 March 2021 - 6:00PM
UK Regulatory
TIDMCGO
RNS Number : 6224T
Contango Holdings PLC
26 March 2021
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
26 March 2021
Contango Holdings Plc
('Contango' or the 'Company')
Offtake Discussions - Lubu Coking Coal Project
Contango, the London listed natural resource development
company, is pleased to advise that it is currently in discussions
regarding a potential long-term offtake for coking coal produced at
Contango's Lubu Coking Coal Project with the Zimbabwean subsidiary
of a major Chinese industrial company and one the world's largest
stainless steel producers (the 'Potential Offtake Partner'). The
Potential Offtake Partner has a sizeable footprint in Zimbabwe and
is planning to construct a US$1bn carbon steel plant in the
country, with capacity of 2 million tonnes of steel per annum. In
addition, the Potential Offtake Partner is currently in the process
of constructing a number of coke batteries in the Hwange region of
Zimbabwe with the aim of being ready for production by the end of
April 2021.
Given the Lubu Coking Coal Project's proximity to Hwange, the
Company and the Potential Offtake Partner have entered into
discussions with the view to Contango supplying the coking coal for
the coke batteries on a long-term offtake.
Given the positive progress made thus far and the potential
significance of an agreement with the Potential Offtake Partner,
the Company has elected to cease mining operations at Lubu until
these discussions have progressed, which is expected to be in April
2021, thereby ensuring any potential development is optimised and
the Company's resources are deployed appropriately.
Both parties are looking to advance discussions further and
additional meetings and a site visit have been scheduled for
mid-April 2021. The Company intends to open a trial pit and a bulk
sample will be sent to the Potential Offtake Partner so that it can
conduct a burn test.
Carl Esprey, Chief Executive Officer of Contango Holdings, said:
"The Potential Offtake Partner, together with its global
conglomerate parent company, are investing heavily in Zimbabwe as
they look to establish an industrial steel and coke hub in-country,
capitalising on the significant demand for construction materials
both in the region and overseas. We believe that the Potential
Offtake Partner will be a key architect in the expansion of
Zimbabwe's industrial growth and we are delighted to be in
discussions with this prominent and progressive business in
relation to our Lubu Coking Coal Project.
"As shareholders will be aware, coking coal is a critical
component of steel manufacturing and the synergies between Contango
and the Potential Offtake Partner are evident. We look forward to
advancing these discussions next month and will update the market
accordingly."
**ENDS**
For further information, please visit
www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc E: info@contango-holdings-plc.co.uk
Chief Executive Officer
Carl Esprey
Brandon Hill Capital Limited T: +44 (0)20 3463 5000
Financial Adviser & Broker
Jonathan Evans
St Brides Partners Ltd T: +44 (0)20 7236 1177
Financial PR & Investor Relations
Susie Geliher / Cosima Akerman
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END
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