Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources
30 March 2022
Contango Holdings Plc
('Contango' or the 'Company')
Production Commences at the Lubu Coking Coal Project
Contango Holdings Plc, the
Production is underway on Block 2, which was selected given the high-quality coking coal found at that location and its proximity to surface. Studies have defined an estimated 96Mt of coking coal within Block 2, which forms part of the broader Lubu complex, where an estimated 1.25 billion tonne Indicated and Inferred resource has been identified to NI 43-101 levels.
The Company is targeting an initial stabilised mining rate of 5,000 tonnes per month. As previously reported, Contango will stockpile production during Q2 2022 pending the installation of the wash plant in the same period, thereby providing sufficient feedstock to ensure continuity of supply. Work continues to prepare the site for the installation of the crushing unit, wash plant and associated infrastructure. Following the installation of the wash plant the Company expects to sell washed coking coal to regional buyers as well as exporting to
Later in 2022 Contango expects to be able to capture the full value for its product by subsequently manufacturing coke at site for use in the steel and ferro-alloy industries. An initial smaller scale coke battery of 36,000 tonnes per annum has been sourced and a larger coke battery of 150,000 tonnes per annum is expected to be installed towards year end. Whilst sales prices are subject to offtake and future global pricing, the Company is confident that margins in excess of
Carl Esprey, CEO of Contango, commented:
"Bringing our first asset into production is a milestone event for Contango. I would like to thank our in-country team for their efforts in helping us accomplish this important achievement. The resource at Lubu is significant and we are now finally in a position to start to receive the economic benefits. Coking coal and coke have suffered from significant under-investment and mine closures in recent years and this, coupled with global infrastructure projects and transition towards green energy, have led to a significant uptick in the commodity prices of both coking call and coke. Accordingly, Lubu has come into production at a time of substantial demand for our products and limited supply.
"I have spent much of the second half of this month in
**ENDS**
For further information, please visit www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc Chief Executive Officer Carl Esprey |
E: contango@stbridespartners.co.uk |
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Tavira Securities Limited Financial Adviser & Broker Jonathan Evans |
T: +44 (0)20 7100 5100 |
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St Brides Partners Ltd Financial PR & Investor Relations Susie Geliher / Charlotte Page |
T: +44 (0)20 7236 1177 |