Member Info for Nicks1981

Bumping along - didn’t align increase their holding

88e paid an expensive price given the value here.

88e paid £7m for 219bopd net (73%)

Ntog could be producing that amount very soon

So much upside here. Very little downside

And that applies no value to potential Tunisian deal

https://www.thetimes.co.uk/article/974c34ce-9199-11ec-8038-2fedb801d1cc?shareToken=36a455a2233a6f28cb49aa64948eb105

Thanks Jungmana

I have been in CGO for over 18 months.

My slides are an accurate summery of the facts (up to now).

Estimates are based on $300pt margin for coke as suggested by Carl

The numbers for met coal alone are staggering

Instead of denying it, they all increased their notice periods for “succession planning” or better severance

I see this as irrelevant. A bloke has moved to a new co and his clients agree to move with him. Pretty standard to be honest

Endeavour bought Kalana 1.8m oz for $120m

Carl wasn’t naive thinking both projects could be in production by now…coal was ready in March 21 and gold would have been ready q4/21

What happened was Coal was postponed to test coal for Chinese (unexpected) and gold was supposed to be 300k oz open pit but ended up being 2moz

Thanks buddy

Read the RNS…300,000pa initial production - prob south mining that was ready to go Jan 2021

The projection was $70 profit per tonne earning $12mpa EBITDA in Jan 2021 - probably double that now

150,000tpa is for coke battery which won’t start until 2023

Gold production will happen soon too

Building a Coke plant doesn’t suggest a lack of interest it says we want to maximise our profitability

“ 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. 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”

For anyone wondering about production - take a look at the Jan RNS. We were ready to go into production c.March. Awaiting approval expected in Feb

[“The site was recently inspected by the Environment Management Agency ("EMA") following the camp site rehabilitation and access upgrades that have now been completed. A meeting with the Binga District Council ('BDC') has now been scheduled in early February 2021 to outline the two pit locations at Lubu ahead of pit development…in line with the proposed start-up timetable…Contango expects to FINALISE ITS DISCUSSIONS WITH THE PROPOSED MINING CONTRACTOR IMMINENTLY AHEAD OF OPENING THE TWO PITS AT LUBU IN FEB 21…This will enable ongoing coking coal offtake discussions to be finalised…As previously reported, the manufacture of coke at site would provide a significant boost to the value of the product generated at Lubu, which is already considered to be highly valuable.



Carl Esprey, Executive Director of Contango Holdings, said: "Our Lubu Project is advancing well ahead of the unveiling of the first open pit next month…Our offtake negotiations continue to progress well and the opening of the pit in the next few weeks will allow these discussions to be finalised. Conversion of the existing signed LOIs into formal offtake contracts is expected to generate +US$1M of EBIT per month”]

Then on 26th March they had to cease progress to deal with Afrochine

Thus I expect the mine to be ready for production very quickly. Probably just waiting for the council to sign it off

That m sale price was what they based their $12m pa EBITDA off of back in q4 202 before prices rocketed

The eventual price will no doubt be at a discount to current price but with a floor (hopefully $100)

Hence $12mpa EBITDA

I don’t think mining costs are anywhere near $100pt

“ Contango is targeting an initial 1Mtpa of coal product sales, focussing on the production and sale of semi-soft coking coal for export to southern African countries. Although the project has a total resource in excess of 1 billion tonnes of coal, we are focussing initially on a small area of the B2 Block of Lubu, where the deposit starts at surface and goes down to a maximum depth of 47m. Site preparation has begun, and we are planning to use contract mining to fast track production whilst minimising capex. The Board expects that combined contract mining and processing costs will total US$15 per tonne, versus the sales price (minus potential transport costs of a further circa US$15 per tonne) of between $70 and $105 per tonne, highlighting the significant margin achievable using this model”

Only needs a bit of profit taking and flipped in to Cgo and we will be £0.50 in a short space of time

Fundamentally, minimum $24mpa EBITDA wo one or two Chinese deals so should easily be pushing £1 next yr q2

I think they only commissioned it in the last few weeks.

They need lots of coal as they have multiple collieries to build

Also CGO have an off take arrangement with southern mining which was going in to production in May but got postponed - Carl said that he will start production next few months

a couple of typos

CGO 30,000oz per annual (not PW)

CGO could have anywhere between 2m oz & 5m oz (not 5min)

A side note - the co mentioned that they had potential two of the worlds biggest steel manufacturers interested. One being Afrochine (Tsingshan).

On the border of Zimbabwe, MC Mining have a met coal resource but their main asset is struggling to get in to production due to finance issues. That specific asset has an off take agreement with Arcellor mitral who need 350,000tpa

https://www.caesarsreport.com/blog/mc-mining-signs-offtake-agreement-with-arcelormittal/

They still haven’t solved the finance issues

https://m.miningweekly.com/article/idc-reaffirms-support-for-mc-mining-2021-10-29/rep_id:3861

While I’m adding 1 + 2 and coming out with 8 (lol) there remains a shortage in South Africa and some new explorers are struggling. So it makes sense to complete independent mineral / metal testing in South Africa where they do also have a coal shortage