Carl Esprey, Executive Director at Contango Holdings is interviewed by @Donaldleggatt @LondonSouthEast. Contango have just been readmitted to the London Stock Exchange Main Market.
Contango Holdings was a shell company set up 2 and a half years ago to look for a near term production asset "which could be developed and turned into cashflow in short order". Contango felt that the Lubu Coalfield in Northern Zimbabwe looked ideal. "We didn't want to take on the risk of an Exploration Licence, so we tasked the vendor [Consolidated Growth Holdings] to turn it into a Mining Licence which they duly did, so we have recently closed on the transaction to purchase of the Mining Licence for Lubu in Northern Zimbabwe.
This will allow us to start construction of the mine soon and move quickly towards first cash flow" explained Carl. The one billion tonnes+ Lubu coal field is one of the biggest discoveries in Southern Africa according to Carl, and although it contains both coking coal and thermal coal, the priority is to develop coking coal first. Coking coal is used to make coke, an essential ingredient for steelmaking and has an international market. "We were in discussions about offtake agreements when Covid struck and will resume those in a month or two's time when South Africa opens up again." Contango was already a listed shell company.
"The first block of shareholders are the people who set up the Contango company. The second big block is the vendor of the asset [Consolidated] who will end up owning 65% of the company post dilution, and the last block is people who have put in money in the latest raise, we have raised £1.4M, those are institutions, high net worths and some retail investors".