Contango Holdings PLC Operational Update (3637F)
21 March 2022 - 6:00PM
UK Regulatory
TIDMCGO
RNS Number : 3637F
Contango Holdings PLC
21 March 2022
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
21 March 2022
Contango Holdings Plc
('Contango' or the 'Company')
Operational Update
Highlights
Lubu Coking Coal Project, Zimbabwe:
-- Civil works and infrastructure upgrades ongoing
-- Mining operations and first production to begin from end of March
-- Discussions with off-takers for both coking coal and coke
-- Wash plant to be installed in Q2 2022
Garalo-Ntiela Gold Project, Mali:
-- Site visit with strategic investors scheduled in the coming weeks
-- Finalising drill programme to prove up targeted resource of 1.8Moz-2Moz gold
Contango Holdings Plc, the London listed natural resource
development company developing the Lubu Coking Coal Project in
Zimbabwe ('Lubu') and the Garalo-Ntiela Gold Project in Mali
('Garalo-Ntiela'), is pleased to provide an update on recent
activities and planned workstreams.
Civil works and infrastructure at Lubu
In recent months the Company has been busy preparing the Lubu
coal project site and updating the infrastructure in preparation
for mining to commence. As planned and without incident the Company
has now commenced resettling a number of people to newly built
houses funded by the Company. The project continues to receive
strong local community support and will provide employment
opportunities.
Mining Operations
The Company expects to mine its first coal by the end of March,
with the already ordered wash plant being installed in Q2 2022.
Thereafter the Company can deliver coal to its customers and
generate revenue. The Company continues to focus on becoming an
integrated producer of coke product for the southern African
region, supplying coke for steel and ferro-alloy production amongst
other things. The Company intends to install a coke battery and
scale operations up once it has installed all the associated plant
and infrastructure to produce coke.
Rebranding of Local Operation
The Company has now renamed the Lubu project locally to Muchesu
Coal. Muchesu is the local village in the broader Lubu region.
Contango has recently taken delivery of new plant and machinery
with the new branding and images of this will be posted on the
Company's social media channels. Whilst Muchesu is the local name,
the Company will continue to use the Lubu name in its public
statements.
Offtake for Coking Coal
The price of coking coal has increased materially in Q1 2022. To
date, the Company has developed the mine without recourse to
offtake financing in order to preserve the full sale value of coal.
With production imminent, the Company is now in a position to
negotiate coking coal offtake contracts at spot prices and leverage
the recent increase in the coking coal price. Discussions are
underway with several interested parties and the Company will
provide an update as appropriate.
In addition, the Company is also in offtake discussions with
respect to its expected coke production. There is significant
demand within Africa for coke and the Company has also received
inquiries from a number of European consumers about the coke
product, given the global shortage being experienced and recent
macro developments. The Company will continue to study global
pricing and demand but expects the export of its coke product
outside of Africa to remain a valid and ongoing opportunity.
The Company believes there is a good possibility any contracts
entered into for offtake, either for coking coal or coke, will
provide some form of funding, be it prepayment against first
production or some other form, which can be utilised in the roll
out of its development plan for the manufacture of coke.
Garalo-Nitiela Gold Project
CEO Carl Esprey is scheduled to attend site in the coming weeks
and will host a number of strategic parties at the site as part of
their ongoing due diligence for investing in the project.
Notwithstanding the ongoing discussions, the Company is finalising
the drill programme to establish a JORC resource across the project
in, its efforts to prove up the previously declared targeted
resource of 1.8Moz-2Moz gold. The IP survey has now been completed
and drill targets are being finalised in conjunction with
negotiations with potential strategic investors.
**ENDS**
For further information, please visit
www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc E: contango@stbridespartners.co.uk
Chief Executive Officer
Carl Esprey
Tavira Securities Limited T: +44 (0)20 7100 5100
Financial Adviser & Broker
Jonathan Evans
St Brides Partners Ltd T: +44 (0)20 7236 1177
Financial PR & Investor Relations
Susie Geliher / Charlotte Page
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDPPURUWUPPGBU
(END) Dow Jones Newswires
March 21, 2022 03:00 ET (07:00 GMT)
Contango (LSE:CGO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Contango (LSE:CGO)
Historical Stock Chart
From Jul 2023 to Jul 2024