HomeCoalContango signs Letter of Intent for Lubo coal project

Contango signs Letter of Intent for Lubo coal project

Contango Holdings has signed a Letter of Intent with CoalZim Marketing relating to an offtake agreement for coal products produced at the Company’s Lubu Coalfield Project in Zimbabwe.

Carl Esprey, Executive Director of Contango Holdings, says:

“The delivery of another LOI, within 10 days of securing our first agreement with South Mining, further highlights the strong demand dynamics for our coal products within Zimbabwe.

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“Furthermore, the anticipated pricing of this agreement, being between $100 and $120 per metric tonne of coal delivered to Harare against the forecast extraction and washing and transport cost of circa $30 per metric tonne, provides further support for the potential value of this contract.

“As previously reported, I am confident that commercial negotiations can be finalised with CoalZim and South Mining, as well as the additional coal offtake partners we are currently in discussions with, and this process is likely to move quickly once the COVID-19 related travel restrictions ease further in Zimbawe.

“These formalised agreements will allow us to move forward with development at Lubu and, employing contract miners, we expect to be in a position to deliver first production and revenues within six months.

“Clearly this is set to be a highly active period in our transition to a cash generative mining company, and I look forward to providing further updates in due course.”

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