Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources
Contango Holdings Plc ('Contango' or the 'Company')
3 June 2021
Operational & Corporate Update
· Further positive exploration results in
· 8,000m of additional RC drilling in
· Zero Coupon
Contango Holdings Plc, the
Given the focus on early production and cash generation, most of the exploration activities have centred on the Garalo permit, which has demonstrated potential for a 2Moz Resource. However, work on the more recently acquired Ntiela concession, has also continued to yield encouraging results with the intersection of two major structures already. A summary of operations is presented below:
· Detailed regolith mapping on both Garalo and Ntiela sites;
· Interpretation of historic data across both sites, identifying multiple new gold anomalies;
· Over 1,000 samples collected and sent to in-country laboratory;
· Land clearance completed for new operational camp, with buildings expected to arrive later this month
Planned work programme:
· Aeromagnetics and airborne geophysics for the collection of magnetic and radiometric data - expected to commence in July 2021
· 8,000m of RC drilling to further increase the resource and understanding of the orebody
· Core will be sent for oxide / sulphide testing to support final design work for the initial low-cost early production plant
· First production remains targeted for end 2021
The Company is pleased to advise it has received commitments for
Existing major shareholder RAB Capital, has agreed to invest
Carl Esprey, Chief Executive Officer of Contango Holdings, said: "Our exploration and development activities at Garalo and the newly acquired Ntiela permit continue to deliver highly encouraging results which point to the Project having the potential to be a major new mine in the region. Our work in the short-term is focussed on properly assessing the upside potential to the current 2Moz gold resource we are contemplating at Garalo and establishing the optimum route to first production by the end of 2021. As a result, we have made the decision to undertake a short, low-cost drill programme to help with our understanding and optimisation.
"To fund this expanded pre-production work programme, the Company has sourced
"We look forward to providing further updates over the coming weeks as we receive results from the laboratory and begin our aeromagnetic and airborne geophysics programme, as well as additional drilling."
The combined Garalo-Ntiela Project covers an area of 161.5km2 and is in the department of Bougouni within the Sikasso region in southern
An NI 43-101 Independent Technical Report delivered in March 2021 highlighted the potential for the Garalo to have up to 2Moz Resource. The Company believes that there is still room for improvement over and above this threshold as, in addition to G1 and G3 targets (the basis for 2Moz), numerous other clusters of anomalous zones with potential for gold discovery have been identified in both the Garalo and contiguous Ntiela permit area. With this background and given the excellent infrastructure in the vicinity, historical exploration, and the deposit's surface location, the Company aims to establish a processing hub in the region, capable of supporting multiple open pit operations targeting initial production of gold in Q4 2021 in conjunction with an exploration programme including expansion drilling.
Accordingly, as part of the exploration programme, Contango has completed a detailed regolith mapping exercise across both permits to gain a better understanding of the geology/structures of the area, as well as collecting key data like anomalous structural site, gold endowment, hydrothermal alteration, and mineralisation, and deep mantle related fertility indicators. The Company has also undertaken an interpretation exercise relating to historical data which has identified multiple new gold anomalies.
To facilitate the exploration and development campaigns now gaining momentum at Garalo-Ntiela, a camp is being constructed capable of supporting up to 20 employees and contractors, along with a secure storage building for drill core. Ground clearance has now been completed at the selected site and the specialist camp buildings are due to be shipped from
These work programmes will begin with an aeromagnetics and airborne geophysics campaign and this will be followed by 8,000m of RC drilling. The over-arching strategy of this work is to better define the extents and characteristics of the orebody, considering the significant increase in resource quantum that is now contemplated at Garalo. As previously announced, the Company is advancing the development of a 30,000oz per annum heap leach operation from the shallow oxides given the high margins and low capex for its development. Given the increased resource potential highlighted in the NI 43-101 Independent Technical Report released in March 2021, the proposed drilling campaign is designed to complement this strategy and help realise and optimise the asset's full potential, as Contango looks to establish a large standalone gold mine with multiple open pit operations across both permit areas.
For further information, please visit www.contango-holdings-plc.co.uk or contact:
Contango Holdings plc
Chief Executive Officer
Brandon Hill Capital Limited
Financial Adviser & Broker
T: +44 (0)20 3463 5000
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Financial PR & Investor Relations
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