• Mon. Apr 15th, 2024

More offtakers for Lubu Coal as Contango signs MOU

ByEconomic Times

Dec 7, 2022

By ETimes

Contango Holdings, the London listed miner announced that it has entered into a non-binding Memorandum of Understanding (MOU) with a leading Multi-National Company (MNC) with respect to its Lubu Coal Project.
 
The Lubu Coal Project, is known as Muchesu Coal Project locally in Zimbabwe.
 
The MOU outlines a framework for collaboration across not only coking coal, but also in the manufacture of coke and follows several site visits and a preliminary analysis of a 50kg sample of Muchesu washed coking-coal.
 
Contango Chief Executive, Carl Esprey said, “The signing of this MOU is hugely material for Contango. The MNC is active in Zimbabwe and is a world leader in its field. I believe their interest in the Muchesu Coal Project is testament to its highly attractive characteristics, both in terms of scale and coal quality.”
 
The intention is to undertake a stage-gated due diligence exercise which will look at all aspects that would underpin either a coking-coal offtake agreement, or the possibility of establishing a coking plant adjacent to the Muchesu Mine.
 
“The due diligence process is underway, and one of the first steps has been to deliver a 1t coking-coal sample to the MNC for further testing. The ongoing discussions are focussed on the viability of a long-term offtake and the potential of a joint venture partnership in establishing coke batteries and developing an underground mine,” Esprey added.
 
Based on current timelines, the Company would aim to conclude the first phase (concept /pre-feasibility) of the due diligence exercise in First Quarter 2023 after which a decision will be made if, and how best, to proceed to the subsequent phases.
 
Esprey said, “Given that Muchesu has a 2 billion tonne plus resource there is plenty of scope for multiple offtakes across our whole suite of coal products – the MOU does not focus on thermal coal for instance.”
 
The chief executive said he looks forward to updating the market on further progress – Harare

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