Page 10 - AfrElec Week 44 2022
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AfrElec COAL AfrElec
Contango Holdings raises
$8.6bn to build Zimbabwe
coal mine, processing plant
ZIMBABWE AIM-LISTED Contango Holdings (Contango) tonne, is expected to provide an estimated mar-
has announced that a placing of 125,000 new gin of $80/tonne. The wash plant being installed
shares, to raise £7.5mn ($8.6mn) to fund the at the project has the capacity to wash 20,000
building of a coal mine in western Zimbabwe, tonnes/month of coal, double the existing con-
has been oversubscribed. tracted coal production under offtake of 10,000
Contango is now fully funded to first reve- tonnes/month.
nue from the sale of coking coal from the Lubu As a result, Contango expects in the current
mine under an existing offtake agreement and quarter to enter additional offtake arrange-
is targeting additional offtakes for coking coal, ments for washed coking coal to utilise this spare
thermal coal and coke product. capacity.
The placing shares represent 26.4% of the Carl Esprey, the chief executive officer of
enlarged share capital of Contango. Contango said most of the site preparatory work
“The funds will be used to finalise mine has been completed, adding that it remains
development, complete the installation of the focused on delivering first sales by December
wash plant, acquire further mining equipment 2022.
and expand operations at the Lubu project,” said “I am delighted to report the strong demand
a company release. for this capital raise, particularly in the context
“The placing will also enable the company of difficult equity capital market conditions for
to finalise the agreed relocation of additional junior mining companies and we welcome the
households from the mine site, thereby provid- support of a number of new shareholders to the
ing a larger footprint for the mine and operations register,” he said.
to meet heightened demand. Finally, the placing “I believe it is a testament to the attractiveness
will enable the company to settle all outstand- of the Contango investment proposition that
ing borrowings incurred by the company with significant funds were available to ensure Con-
respect to its capital expenditure on developing tango is now fully capitalised to deliver on both
the mine since Q2 2022.” the current offtake and our expansion plans.”
The current offtake agreement for the sale of
10,000 tonnes/month of washed coal, at $120/
P10 www. NEWSBASE .com Week 44 02•November•2022
