Nice RNS just out22 Oct 2025 09:17
Variation to Strategic Partnership for Muchesu
Contango Holdings Plc, a company focused on unlocking value from the +2 billion tonne Muchesu coal project in Zimbabwe ("Muchesu"), advises that it has agreed a variation to the previously reported Strategic Partnership with Huo Investments (Pvt) Limited ("Huo Investments" or the "Investor").
Background
As announced on 3 July 2024, Contango entered into binding agreements with the Investor, which together comprised a purchase of a 51% equity interest in Muchesu, a US$2 million Subscription into the Company, a Mineral Royalty Agreement, and a US$20 million Revolving Facility Agreement (together, the "Definitive Agreements").
During 2024 and 2025, the Investor has advanced material funding under the Revolving Facility Agreement for the following:
· Expansion of the mining footprint of Muchesu;
· Installation of a large Dense Media Separation ("DMS") plant;
· Substantial infrastructure works; and
· Installation of coke batteries and associated value-enhancing infrastructure.
Further operational detail and expenditure will be provided shortly in a separate update.
With the Subscription completed in Q1 2025, Huo Investments became the Company's largest shareholder with a holding of 20.42%. Royalty payments commenced in 2025 in accordance with the Mineral Royalty Agreement, with US$1,000,000 paid during H1 2025 and a further US$1,000,000 scheduled for payment this quarter as set out in the Mineral Royalty Agreement.
Variation to the Definitive Agreements
Asset-Level Purchase
Muchesu is held by the Company's subsidiary in Zimbabwe being Monaf Investments (Private) Limited ("Monaf").
The Definitive Agreements originally envisaged that the Investor would purchase a 51% equity interest in Muchesu (via Monaf). This will now be undertaken by Pacific Goal Investments Private Limited ("PGI"), a Zimbabwe-focused investment vehicle equally owned by Mr Wencai Huo (the principal of Huo Investments) and Mr Liu Jun. Definitive documentation has been executed to reflect this change and is currently being registered with the Central Bank in Zimbabwe.
PGI forms part of Pacific Goal Group, a Hong Kong-based industrial group with extensive operations in Zimbabwe. The group is currently developing a major mine-to-energy industrial park in the country, incorporating two power stations, a graphite processing plant, and a nickel smelter. PGI also operates a logistics fleet of more than 200 trucks, as well as holding interests in other mining and power-related developments in Zimbabwe. This extensive operational presence and expertise is expected to prove complimentary to delivering value from the Muchesu project.
The purchase of 6.502% of shares in Monaf as announced on 12 March 2025, is unaffected. These shares are now held through Lilyone Investments, a wholly owned investment company of Mr Wencai Huo.
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