Contango Holdings PLC Lubu Project & Strategy Update (5400X)
September 01 2020 - 2:00AM
UK Regulatory
TIDMCGO
RNS Number : 5400X
Contango Holdings PLC
01 September 2020
Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural
Resources
1 September 2020
Contango Holdings Plc
('Contango' or the 'Company')
Lubu Project & Strategy Update
Contango Holdings Plc, the London listed natural resource
development company, is pleased to announce an update regarding the
Company's Lubu Coalfield Project in Zimbabwe ('Lubu') in addition
to further information regarding Contango's growth strategy.
Commissioning of Lubu Coalfield Project in Zimbabwe on track for
Q4 2020
-- Formal negotiations regarding the previously announced LOIs
for 32,000 tonnes per month coal off-take agreements from Lubu are
progressing well and are expected to be concluded in the current
quarter
-- Progress continues to be made for additional off-take
agreements with interested parties - further announcements are
expected in Q3 2020
-- Commissioning of Lubu and appointment of contract miners in
Q4 2020 remains on schedule and pursuant to finalisation of coal
off-take agreements
Pursuing growth strategy to acquire additional de-risked assets
with clear paths to cash flow
-- Contango has benefited from both its regional expertise in
Zimbabwe and the profile of its UK listing, such that a number of
opportunities have emerged that appear complementary to the
Company's growth strategy
-- The Company's growth strategy remains focussed on targeting
assets with near term cash flow, low capital commitments and short
payback periods
-- In particular Contango has identified a number of gold
opportunities which could be monetised in the near-term through a
toll treatment model in conjunction with exploration/development
upside
-- This would enable a staged development and expansion, along
with potential asset level or off-take funding, which would
minimise any dilution and offer significant value to shareholders,
particularly given the current gold price environment
-- Should the Company elect to proceed with any of these
opportunities a further announcement will be made as
appropriate
Carl Esprey, Executive Director of Contango Holdings, said: "We
have made very pleasing progress with Lubu over the last few months
- progress which is all the more notable due to the exceptional
operating environment that we have found ourselves in due to the
COVID-19 pandemic. I am confident that as southern Africa
increasingly returns to normality over the coming weeks and months,
the LOIs that we have secured thus far will translate into formal
lucrative coal off-take agreements. These are expected to be joined
with other agreements in due course.
"Our progress with Lubu has laid the foundations for what we
believe will be a very profitable cash generative operation. As
such our attention is now turning to our wider complementary growth
strategy, which includes the acquisition of businesses or assets
with clear paths to cash flow and which have already been de-risked
through previous exploration.
"The board is currently evaluating a number of gold
opportunities which are in line with these key investment
principles and which we believe have the potential to provide
material value to our shareholders in the near term. Due to our
status as an emerging natural resources investment vehicle, we are
ideally positioned to apply agile and flexible development models
to our interests allowing us to achieve cash flow in a very modest
timeframe - a unique advantage which distinguishes us from the
larger and more established developers in the region. With this key
differentiator, Contango is well-positioned to capitalise on
opportunities which may not be of sufficient scale or quantum for
larger mining companies, but which could provide a short route to
cash flow for Contango together with exploration/development upside
in the mid-term.
"I look forward to providing further updates to shareholders
with respect to both the commissioning of Lubu and also the growth
of our business via accretive transactions as we establish Contango
as a diversified mining company with multiple commodities and
revenue streams."
**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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