Contango Holdings PLC Lubu Coking Coal Project Update (2866N)
January 29 2021 - 1:00AM
UK Regulatory
TIDMCGO
RNS Number : 2866N
Contango Holdings PLC
29 January 2021
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
Contango Holdings Plc
('Contango' or the 'Company')
29 January 2021
Lubu Coking Coal Project Update
Contango Holdings Plc, the London listed natural resource
development company, is pleased to provide an update on recent and
upcoming planned activities at the Lubu Coking Coal Project
('Lubu') in Zimbabwe.
Despite the 30-day national lockdown that has been in place
throughout Zimbabwe since 5 January 2021, Contango has been able to
continue to advance Lubu, as mining is classified as an 'essential'
industry by the Zimbabwean Government.
The site was recently inspected by the Environment Management
Agency ("EMA") following the camp site rehabilitation and access
upgrades that have now been completed. A meeting with the Binga
District Council ('BDC') has now been scheduled in early February
2021 to outline the two pit locations at Lubu ahead of pit
development. This was originally expected to have taken place
before the end of January 2021, however given the national
lockdown, representatives are now expected within the next two
weeks, in line with the proposed start-up timetable.
Contango expects to finalise its discussions with the proposed
mining contractor imminently ahead of opening the two pits at Lubu
in February 2021. This will be a significant milestone for Contango
and will enable ongoing coking coal offtake discussions to be
finalised. In addition, it will allow the requested bulk samples,
which will provide first revenues from Lubu to Contango, to be
delivered to a number of multi-national companies who are assessing
the viability of constructing coke plants at Lubu. As previously
reported, the manufacture of coke at site would provide a
significant boost to the value of the product generated at Lubu,
which is already considered to be highly valuable.
Carl Esprey, Executive Director of Contango Holdings, said: "Our
Lubu Project is advancing well ahead of the unveiling of the first
open pit next month. I must commend the hard work and dedication of
our on-site team in Zimbabwe who has persevered through pandemic
adversity with relatively modest disruption to the planned
development schedule.
"Our offtake negotiations continue to progress well and the
opening of the pit in the next few weeks will allow these
discussions to be finalised. Conversion of the existing signed LOIs
into formal offtake contracts is expected to generate +US$1M of
EBIT per month. Clearly any additional contracts, either for coking
coal or coke, would further boost this figure.
"In recent weeks we have seen a significant uplift in global
coking coal prices. Given the size and nature of Lubu, we believe
Contango is well positioned to benefit from this demand, whilst
elevated pricing should further improve the robust economics at
Lubu. I look forward to reporting on our progress in due
course.
"Looking now to Mali, work has continued unimpeded at our Garalo
Gold Project and we remain extremely enthusiastic about the
opportunity that is shaping up before us. More than 1,000 grab
samples have been sent off to the laboratory in January and our
in-house and external geologists have been working to improve the
understanding of the geological and structural framework of the
mineralised zone as highlighted in the Independent Technical Report
announced in December 2020. Initial feedback has been
overwhelmingly positive and we look forward to providing a
substantial update to shareholders in the coming weeks."
**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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