REG - Contango HoldingsPLC - Washed Coal Production Commences at Lubu

Contango HoldingsAnnouncement

24/05/2023 07:00

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RNS Number : 4249A  Contango Holdings PLC  24 May 2023

Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources

24 May 2023

Contango Holdings PLC

('Contango' or the 'Company')

 

Washed Coal Production Commences at Lubu

 

Contango Holdings Plc, the London listed natural resource development company,
is pleased to advise that the production of washed coking coal commenced on
Tuesday 23 May 2023 at its flagship Lubu Coking Coal Project in Zimbabwe. This
followed dry and wet runs of the wash plant over the preceding days and the
integration of the screen with the broader processing facilities.

 

Stockpiles of coking coal have already been established by the Wirtgen Surface
Miner, which, as previously reported, can mine at a rate of up to 1,000 tonnes
per hour of coking coal.  The Surface Miner continues to extract coking coal
and is increasing the wash plant stockpiles further.

 

The Company will continue to undertake studies on washed coal production to
ensure optimisation. Samples will also be sent to several parties who have
indicated they would look to enter into long-term offtake contracts. This
includes the Company's potential Strategic Partner under a Memorandum of
Understanding and complements Contango's existing offtake for 10,000t a month
of washed coal. All coking coal produced, including coal dispatched as
samples, will be sold at factory gate, with the current MMCZ price still set
at US$120 per tonne. The Company expects to announce the first sales of washed
coking coal in June 2023.

 

Photos and videos of the Wirtgen Surface Miner in operation and the
commissioned wash plant will be uploaded to the Company's website
(www.contango-holdings-plc.co.uk (http://www.contango-holdings-plc.co.uk) )
and its official Twitter account (@ContangoPLC) later today.

 

Carl Esprey, CEO of Contango, commented: "This is a landmark moment for
Contango. It is no small feat to bring a mine into production and something
most junior mining companies never achieve. I appreciate this process has
taken longer than expected, but we are now producing a high-quality coking
coal product and very soon will be a revenue generating company. We have
achieved this during turbulent markets and without significant dilution at the
plc level, which is testament to the team assembled in country and the
attractiveness of the Lubu Project.

 

"The focus for the Company is now how to best expand operations at Lubu,
leveraging off our producer status. We have advised previously we intend on
manufacturing coke at Lubu, which is expected to increase our margins from
US$80/tonne to over US$300/tonne at current pricing. We have continued to
pursue this avenue in discussions with potential strategic partners.

"The sheer scale of Lubu opens up significant potential across a variety of
revenue streams and we intend to focus on unlocking the potential of Lubu from
this very solid foundation."

 

 Contango Holdings plc                   E: contango@stbridespartners.co.uk

 Chief Executive Officer

 Carl Esprey

 Tavira Financial 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

 

 

 

 

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