REG - Contango HoldingsPLC - Update on Transaction with Strategic Investor

Contango HoldingsAnnouncement

18/07/2024 07:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240718:nRSR9111Wa&default-theme=true

RNS Number : 9111W  Contango Holdings PLC  18 July 2024

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

18 July 2024

 

Contango Holdings PLC

("Contango" or the "Company")

 

Update on Transaction with Strategic Investor

 

Contango Holdings Plc, a company focused on the development of the +2 billion
tonne Muchesu coal project in Zimbabwe ("Muchesu"), is pleased to provide an
update with respect to the binding transaction agreements (the "Definitive
Agreements") entered into with Huo Investments (Pvt) Limited (the "Investor"),
the investment vehicle of Mr Wencai Huo, a Zimbabwe-based Chinese national
with extensive mining and business investments in Zimbabwe and Southern
Africa.

 

Subscription Agreement with Contango

As reported on 3 July 2024, the Investor has entered into a subscription
agreement with the Company to subscribe for 142,000,000 new ordinary shares
("Subscription Shares") at a price of £0.0111 pence per share ("Subscription
Price"). As a result, the Company will receive £1,576,200 (US$2,000,000) of
new funding ("Subscription"). The Subscription is subject to the issuance and
approval of a Short Form Prospectus ("SFP"). The Company is pleased to advise
it has now submitted a SFP to the FCA for its review and approval.

 

Further, in keeping with the collaborative relationship between the Investor
and the Company, the Company is pleased to report it has now received a
payment of US$1,000,000, as an advance against the Subscription.

 

Commencement of Project Investment under the Revolving Facility Agreement (the
"RFA")

Also as reported on 3 July 2024, the Investor has entered into an RFA, whereby
it will provide unsecured debt finance of up to US$20,000,000 into the
operating subsidiary Monaf Investments (Private) Limited ("Monaf"), for the
purpose of funding the development and expansion of operations at Muchesu.

 

The Company is pleased to report that under this agreement, the Investor has
already commenced delivery of some capital equipment and operational items.
The first convoy carrying parts for a new wash plant has arrived at site with
the remaining convoys expected to arrive during July. A team of engineers are
already on site to oversee operations and the installation of the new wash
plant. Upon completion, the wash plant is expected to have a washing capacity
of 3,000 tonnes per day, significantly greater than the Company's existing
washing capabilities, which will continue to remain operational.

 

Orders have now been placed for a further five heavy-duty excavators, four of
which are to be delivered from South Africa. Also, another front-end loader
and accessories have been ordered. All these items are due at Muchesu before
the end of July 2024.

 

Carl Esprey, Chief Executive Officer of Contango, commented:

 

"I am delighted to provide this update. It is testament to the Investor's
faith in Muchesu that funds have already been advanced into both Contango and
at the asset-level whilst we address the remaining conditions precedent for
the formal closing of the Definitive Agreements. The Company has now submitted
the prospectus pending FCA approval to approve the issue of the Subscription
Shares.

 

"We are now seeing significant activity at Muchesu. A new wash plant is being
delivered and constructed to materially increase production capacity, whilst
other earth moving and processing equipment are expected to arrive on site in
the forthcoming weeks. We are also integrating members of the existing
operational team with the team assembled by the Investor. We believe the
resultant outcome will leave Muchesu on a much firmer footing and poised for
significant growth.

 

"Finally, planning is also underway to expand the size of the existing open
pit as well as engineering designs for underground mining.  These steps
should lead to a significant increase in mining output, which the Company
stands to benefit from through both its royalty arrangements and residual
24.75% interest in Muchesu. I look forward to keeping shareholders appraised
of both operational developments and the formal closing of the Definitive
Agreements."

Images showing additional wash plant and equipment:

 

 

**ENDS**

 

 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 / 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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDQVLBFZDLXBBK