(Alliance News) - Contango Holdings PLC on Wednesday provided an update into operations at its Muchesu project.
The Muchesu mine in Zimbabwe, in which Contango holds a 70% interest, is the natural resource development company's primary focus and value driver.
On Wednesday, the company was paid USD116,000 from an unnamed multinational company for a 1,000-tonne bulk sample of washed coking coal from the mine.
Contango said that over half of this sample has been mined, screened and washed and awaits collection, with the balance due later this month.
On Tuesday, the customer commenced collection of the coal ahead of delivery to its facilities in South Africa. The company believes there to be a "high probability" of entering a long-term offtake agreement with the customer, after testing of the bulk sample and historic test work by the MNC is completed in January 2024.
The customer has previously expressed a minimum need of 6,700 tonnes per month of washed coal from the Muchesu mine. However, Contango has said that discussions are underway for a larger long-term contract.
The board is inclined to progress with these talks given "complications" with its current offtake partner, TransOre International FZE. Contango said that TransOre has not yet provided further orders or payment for coal as envisaged by the pair's July offtake agreement.
Shares in Contango were down 5.3% at 2.70 pence each in London on Wednesday afternoon.
By Hugh Cameron, Alliance News reporter
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