TIDMCGO
RNS Number : 6087I
Contango Holdings PLC
15 December 2020
Contango Ho ldings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources
15 December 2020
Contango Holdings Plc
('Contango' or the 'Company')
Multi-million-ounce resource potential indicated at Garalo Gold
Project in Mali
Highlights
-- Independent Technical Report (the 'Report') completed on the
Garalo Gold Project ('Garalo' or the 'Project')
-- Potential gold resource of 1,800,000 oz at average grade of
1g/t, representing +460% uplift from previous estimate
-- Additional untested resource potential below historic 150m drilling depth
-- Further resource upside from identified anomalies across 62.5km(2) licence area
-- Expanded production case targeting first gold in Q4 2021
Carl Esprey, Executive Director of Contango Holdings, said:
"Garalo was acquired with the intention of bringing into production
a small but highly profitable gold mine. The publication of this
Report, which included both reinterpretation of historic data as
well as information not previously incorporated in the historic
320,000-ounce figure, has made it clear that Garalo is
significantly larger than first envisaged, with the potential to be
a sizeable, multi-million-ounce standalone mine, rivalling some of
our neighbours in this world class gold producing region.
"The resource quantum now being contemplated at Garalo suggest
the Company should bypass the previously reported initial 10,000oz
per annum development scenario, instead bringing a larger +30,000oz
per annum heap leach operation onstream from the shallow oxides and
providing Contango cashflow from Garalo in late 2021. With an
estimated profitability of circa US$1,000oz at current gold prices,
this would enable not only capital returns to shareholders
potentially as early as 2022, but also fund a comprehensive
exploration campaign focussed on realising the asset's
multi-million ounce potential.
"The Contango in-country team is continuing with detailed core
re-logging and field geological and structural mapping and will
shortly initiate further tighter line-spacing airborne and
radiometric surveys, ahead of fast-tracking a modest confirmatory
drilling programme before progressing with the development. As
previously reported, this expanded development case is expected to
be funded through non-equity finance either via regional banks and
/ or royalty providers.
"This is an exceptionally exciting development for Contango, and
we are committed to identifying the best development route through
which to maximise the value of this asset for all stakeholders,
combining the desire for early cashflow with discovering the full
potential Garalo offers. Following our recent capital raise, the
Company is in a solid financial position to react to this
development at Garalo whilst also advancing development of our Lubu
Coal Project in Zimbabwe, where we expect to commence mine pit
construction in January 2021.
"With coking coal performing strongly over recent weeks and the
interest we are seeing in our coking coal and coke product, I am
confident that Contango has two high quality near term production
assets which will deliver significant returns to shareholders."
Further Information
Contango Holdings Plc, the London listed natural resource
development company, is pleased to announce the receipt of an
Independent Technical Report on the Garalo Gold Project located in
the Sikasso region of southern Mali, 200km south-east of the
capital Bamako and close to the Guinea border. The permit is
surrounded by a number of multi-million ounce gold deposits and the
region is home to some of the world's leading gold miners,
including AngloGold Ashanti, IAMGOLD, Barrick, B2 Gold, Endeavour
Mining and Hummingbird Resources, which has helped to establish
Mali as the third largest gold producer in Africa.
As announced on 19 October, Garalo is an advanced discovery and
has a non-independent resource of 320Koz Au at an average grade of
1.5g/t across three dominant structural trends. Garalo has been
subject to the following work to date:
-- regolith mapping and interpretation;
-- soil geochemistry;
-- airborne magnetic and radiometric surveys;
-- over 900 drill holes, which have returned grades of up to 43g/t.
To date, drilling has focused on the G1A and G3 targets, which
cover a relatively small footprint of the licence and remain open
along strike, indicating further resource upside.
The Report
The Report was conducted by Birima Gold Resources Consulting
('Birima), an international mineral exploration consulting company
with significant experience in West Africa, ranging from grassroots
to mine-site exploration and mineral deposit expansion. Specialisms
include gold exploration and management of all aspects of mineral
exploration programmes from data compilation and project design
through to all levels of implementation and management. Birima's
principal geologists are members of The Australasian Institute of
Mining & Metallurgy (AuSIMM) (Membership Number 316918) and
collaborate with other professional geologists with specific
expertise to produce 43-101 Mineral Resource Estimates (Azimuth
Consulting SARL) and are qualified to write National Instrument
43-101 Technical Reports.
Dr. Serigne Dieng was lead professional geologist on site at the
Garalo Gold Project. Dr. Dieng has over 20 years of experience in
all aspects of mineral exploration from project generation to
deposit definition, with a special interest in West Africa, Canada
and Australia. Dr. Dieng has held senior geologist roles with
various resource companies including IAMGOLD Corporation in Senegal
and Burkina Faso, Wega Mining in Guinea, Waraba Gold Ltd in Mali,
Hydromin Guinea Ltd, Nortec Mineral Corp in Guinea, Sengold Mining
N.L in Senegal, Mingo Affiliates Services Inc in Senegal, Thor
Exploration in Senegal and Alamako Corporation International SARL
in Guinea.
The Report compiled by Birima focussed on one area of the Garalo
project area, which features two main areas of high potential for
economic gold mineralisation in addition to several other clusters
of gold anomalies.
Birima reinterpreted the historic data relating to Zone 1 and
determined that this mineralised zone, which extends to a length of
700m with an average width of 200m, has the potential to host
1,800,000 ounces of gold at an average grade of 1g/t gold. It
should be noted that this was calculated to a depth of 150 metres,
the extent of current drilling, however the mineralisation remains
open at depth offering the potential for further ounces below this
level.
A work programme is ongoing to improve the understanding of the
geological and structural framework of the mineralised zone, and a
drill programme is expected in H1 2021 to further define
mineralised potential of Zone 1 and test other gold anomalies
within the project area. Further details relating to the planned
work programme will be released in due course.
**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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