The latest Investing Matters Podcast episode with Inclusive Asset Management's Alexandra McGuigan has just been released. Listen here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksContango Hdg Regulatory News (CGO)

Share Price Information for Contango Hdg (CGO)

London Stock Exchange
Share Price is delayed by 15 minutes
Get Live Data
Share Price: 0.95
Bid: 0.90
Ask: 1.00
Change: -0.05 (-5.00%)
Spread: 0.10 (11.111%)
Open: 1.025
High: 1.10
Low: 0.95
Prev. Close: 1.00
CGO Live PriceLast checked at -

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

Interim Results

24 Feb 2023 07:00

RNS Number : 8894Q
Contango Holdings PLC
24 February 2023
 

Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources

 

24 February 2023

Contango Holdings Plc

('Contango' or the 'Company')

 

Unaudited Interim Results for the six months to 30 November 2022

 

Contango Holdings Plc, the London listed natural resource development company, announces its results for the six-month period ended 30 November 2022.

 

Highlights

· £7.5 million raised ("Fundraise") in October 2022 at 6p to support the Lubu Coal Project ("Lubu") to first coking coal production from Q1 2023.

· £1.0 million Convertible Loan converted at 6p on 5 July 2022 for 16,666,667 ordinary shares

· First offtake signed with AtoZ Investments (Pty) Ltd to purchase 10,000 tonnes per month of washed coking coal produced at Lubu.

· Coking coal and coke tests undertaken through installed 1 tonne per hour test plant confirmed the excellent quality of coal from Lubu further strengthening Contango's position to complete additional offtake agreements.

· Expansion of production strategy to include both thermal coal and coke development scenarios to provide additional near-term high value revenues streams.

· Contango's operating subsidiary declared the winner of the 2022 Excellence in Community, Empowerment & Social Impact Award recognising its work at Lubu.

 

Post period

· MOU signed with a leading Multi-National Company for collaboration across coking coal and manufacture of coke at Lubu.

· Award of Environmental Impact Assessment certificate for Lubu recognising the highest environmental standards imposed by Contango at the mine.

· Delivery of the Lubu wash plant in early February and assembly ahead of commissioning in March 2023 - capacity to produce 20,000 tonnes per month.

· Delivery of surface miner (Wirtgen 2200SM) which has a cutting width of 2200mm, ideal for selective mining, and can mine up to 500 tonnes per hour of hard rock and up to 1,000 tonnes per hour of coking coal.

· Laboratory delivered to site in February representing the last of the significant capital items ahead of first production and sales at the end of Q1 2023.

 

Carl Esprey, Chief Executive Officer of Contango Holdings, said:

 

"We expect Contango to transition into cash flow towards the end of the current quarter with first sales of coking coal. Lubu's advancement over recent months has been facilitated by the successful £7.5 million fundraising during the period, which has enabled investment in building mining and processing operations. These development initiatives are now reaching their conclusion, with the wash plant now at site and being assembled ahead of commissioning. Once calibrated and operating efficiently the wash plant is expected to be able to produce 20,000 tonnes of washed coking coal per month which will satisfy its first offtake partner, AtoZ Investments (Pty) Ltd, and also provide sufficient supply to secure further offtakes for our coking coal.

 

"I would like to thank our long-standing shareholders for their support, and welcome the new entrants to our register, as I reiterate my excitement and enthusiasm for what is in store for Contango over the coming weeks and months and we transition into a fully-fledged and cash generative production company."

 

For further information, please visit www.contango-holdings-plc.co.uk or contact:

 

Contango Holdings plc

Chief Executive Officer

Carl Esprey

E: contango@stbridespartners.co.uk

 

Tavira Financial Limited

Financial Adviser & Broker

Jonathan Evans

T: +44 (0)20 7100 5100

 

St Brides Partners Ltd

Financial PR & Investor Relations

Susie Geliher

T: +44 (0)20 7236 1177

 

 

Chairman's Statement

 

Activity at the Lubu Coal Mine in Zimbabwe ("Lubu") is intensifying as the technical team and our various consultants direct the final elements of our mining and processing operations to deliver first coking coal production and sales by the end of the current quarter. Activity levels on site are now significant marking the culmination of substantial operational, commercial, and corporate undertakings orchestrated by the team over the past two and half years since Contango acquired the project.

 

As shareholders will be aware, we are now in our final phase of pre-production at Lubu as we approach commissioning of the wash plant and we anticipate first sales to our first offtake partner, AtoZ Investments (Pty) Ltd ("AtoZ"), by the end of the current quarter. During this development phase, the Contango team has also advanced other commercial negotiations and post period end, Contango signed a Memorandum of Understanding with a leading Multi-National Company ("MNC"), which has the potential to support both a further expansion of the Company's coking coal production capabilities and also its future higher-margin coke production strategy. Final due diligence is underway, and we will report on these findings in due course. Given the MOU's broader focus than just coking coal offtake and subsequent potential to unlock significant value, the Company has not elected to enter into any additional offtake arrangements at this time, despite clear demand and interest from several groups keen to acquire Lubu washed coking coal.

 

Alongside these technical and commercial deliverables, I was delighted to learn that our vision for sustainable development was also recognised with our operating company in Zimbabwe, Monaf Investments, being declared the winner of the 2022 Excellence in Community, Empowerment & Social Impact Award. Specifically, Monaf Investments was selected as the winner of this prestigious award by Corporate Social Responsibility Network Zimbabwe (CSRNZ), together with the Minister of Provincial Affairs and Devolution for Matabeleland North Province, recognising our efforts in supporting issues of sustainability in the Province of Matabeleland North, and developing and promoting the Zimbabwean Government's Vision 2030 and Sustainable Development Goals. We look forward to a long and harmonious partnership with the local communities and authorities in Zimbabwe as we commit to upholding the sustainable and responsible production philosophies that we have developed since commencing work at Lubu.

 

Looking now to our Garalo-Ntiela Gold Project in Mali, our focus remains on the strategic realisation of its full value. The team in Mali continue to undertake low-cost exploration activities however the work to date has pointed to the project's strong potential to host a resource of 1.8Moz-2Moz gold, and the board has determined that comprehensive drill campaigns are merited to fully delineate the wider resource potential of this asset. Our primary focus is now on Lubu, particularly given the significant cashflows expected from this asset in the near-term, and so discussions regarding strategic investment to fund future exploration and development work at Garalo-Ntiela is being prioritised. There remains healthy interest from various parties and the Contango board are carefully considering numerous opportunities to ensure the Company benefits appropriately from future development upside.

 

Financial Review

 

In October 2022, the Company announced an oversubscribed placing of 125,000,000 new ordinary shares at 6 pence per share to raise gross proceeds of £7,500,000 from existing and new shareholders. The funds have, and will continue to be, used to finalise mine development, complete the installation of the wash plant, acquire further mining equipment, and expand operations at the Lubu Project. The proceeds have also enabled the Company to finalise the agreed relocation of additional households from the mine site, thereby providing a larger footprint for the mine and operations to meet heightened demand.

 

As a pre-production Company, Contango did not generate revenue however was able to source loans from supportive investors during the period to enable the continued development of Lubu ahead of the Fundraise, which enabled all Loans to be repaid. Additional one-off Administration costs and other costs including commissions, professional fees and general transaction costs relating to the publication of a prospectus in November 2022, as required by the Prospectus Rules governed by the FCA, were also incurred.

 

The Company spent £2,090,604 on the exploration and fixed assets during the period under review which relate to the development of the site and operations at Lubu.

 

The Company is now fully funded to reach first cash flow from the sale of coking coal from Lubu at the end of this quarter.

 

Revenue

The Company generated no revenue during the period under review but anticipates making first coking coal sales by the end of Q1 2023.

 

Expenditure

The Company has applied its cash resources to the development of Lubu and Garalo-Ntiela.

 

Liquidity, cash and cash equivalents

As of 30 November 2022, the Company held £3,314,359 (2021: £2,419,266). The Company is fully funded to deliver first coking coal sales by the end of Q1 2023.

 

Outlook

 

The coming weeks and months are clearly going to be a defining period for Contango; one in which we establish ourselves as a production company and begin to expand our horizons in order to fully realise the potential of our +1 billion tonnes coal resource at Lubu. With the tailwinds of increasing coal demand and prices supporting our various production strategies at Lubu, I believe we are entering the coal market at an ideal time and will benefit from the continuing demand and pricing dynamics many commentators are predicting.

 

I would like to take this opportunity to extend my thanks to our shareholders, both new and old, and also my fellow board members and our operational team for their tireless efforts to ensure our shared ambitions are realised.

 

Roy Pitchford

23 February 2023

 

CEO REPORT

 

Contango's primary objective during the period was to advance the Lubu Coal Project in Zimbabwe through to commercial operations and sales, in tandem with advancing strategic discussions to support the development of the Garalo-Ntiela Project Area in Mali towards production.

 

Lubu Coal Project ('Lubu') - known as the Muchesu Coal Mine in Zimbabwe

 

Contango has a 70% interest in Lubu, with the remaining 30% held by local partners.

 

Since acquisition in 2020, the Contango team have implemented a rapid development plan with the objective of delivering first coking coal in as short a timeframe as practicable.

 

The primary focus during the period under review was on the preparation of the site for commercial mining and coking coal production, and also advancing commercial discussions regarding coking coal offtake. Commercial discussions were also undertaken regarding potential thermal coal and coke production, and strategies for these additional products are now being advanced in tandem with its coking coal activities.

 

Our focus now is on quickly getting to an initial production rate of 10,000 tonnes per month of washed coal, as covered by our existing offtake with specialist coal trading company AtoZ Investments (Pty) Ltd ("AtoZ") out of South Africa, whilst in tandem also identifying the optimal production and processing route to maximise recoveries and minimise production costs. The Company expects to then move to the headline production capacity of the wash plant as either additional offtakes are signed or we successfully conclude the existing MOU with a leading Multi-National Company. Given the expected profitability of operations at Lubu, should demand for the Company's suite of coal products continue as envisaged then the purchase of additional wash plants and capital items to meet this demand are expected to be funded via cashflow or non-equity finance. The coal mined to date has either been washed using the installed 1 tonne per hour test plant located on site or stockpiled in anticipation of the larger wash plant being commissioned by the end of the current quarter.

 

Coal washed using the current test plant, which was supplied and supervised by OneVision, the company that is currently installing the larger 100 tonne per hour throughput wash plant, was used by Contango's technical team for test work. This processing has confirmed that, after passing through the wash plant, the coking coal product is of excellent quality and has been an important mechanism in the Company's offtake discussions. An additional test was undertaken on 15kg of washed coking coal from both the NUTTS and PEAS sections. These were processed through a mini-coking test plant as a first determinant of how the coking coal would react when processed into coke. These coke results returned better than expected results and when shared with potential coke offtake partners, we received very positive feedback on this data and the characteristics of Lubu coking coal and coke products.

 

Post period end, in December, Contango signed a Memorandum of Understanding with a leading Multi-National Company ("MNC"), which outlined a framework for collaboration across not only coking coal, but also in the manufacture of coke. 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 mine. The Company expects to be able to provide an update on these negotiations in the coming weeks.

 

Garalo-Ntiela Project Area ('Garalo-Ntiela')

 

The Garalo-Ntiela Gold Project covers an area of 161.5km2 in southern Mali, and combines the Garalo Licence Area, acquired by Contango in October 2020, with the neighbouring Ntiela Licence Area, which was acquired in March 2021. Work programmes conducted by Contango on the Garalo-Ntiela Gold Project have returned consistently positive results and the project area has demonstrated its potential for a 1.8Moz-2Moz gold resource.

 

With this large potential resource now identified, and significant exploration upside possible with further drilling, the board of Contango has determined that the optimum route for development would be through a large processing hub, capable of supporting multiple open pit operations.

 

In order to realise the full potential of this asset whilst also protecting investors from the dilution at the PLC level, the board is advancing discussions with a number of potential investors in relation to Garalo-Ntiela. The board believes Garalo-Ntiela represents an exceptional asset with large scale commercial value, and this remains at the forefront of all ongoing discussions. The Company will provide further updates on these negotiations at the proper time, as appropriate.

 

Carl Esprey

23 February 2023

 

 

 

Condensed Consolidated Statements of Comprehensive Income

For the six months ended 30 November 2022

 

 

 

Unaudited Six Months ended

30 November 2022

 

Unaudited Six Months ended

30 November 2021

Audited Year to

31 May 2022

 

Notes

£

£

£

 

 

 

 

 

Administrative fees and other expenses

3

(1,786,947)

(636,398)

(2,944,656)

Operating loss

 

(1,786,947)

(636,398)

(2,944,656)

 

 

 

Finance revenue

-

-

-

Finance expense

-

-

-

Loss before tax

 

(1,786,947)

(636,398)

(2,944,656)

 

 

 

Income tax

-

-

-

 

 

Loss for the period

 

(1,786,947)

(636,398)

(2,944,656)

 

 

 

 

 

 

 

Loss attributable to owners of the parent company

(1,632,379)

(591,350)

(2,805,563)

 

Loss attributable to non-controlling interests

(154,568)

(45,048)

(139,093)

 

 

(1,786,947)

(636,398)

(2,944,656)

 

 

 

 

 

 

Basic and diluted loss per Ordinary Share

4

(0.55)

(0.27)

(1.00)

 

 

 

 

 

 

Other comprehensive income

319,624

(40,735)

127,977

 

Total comprehensive loss for the period

(1,467,323)

(677,133)

(2,816,679)

 

 

 

 

 

 

Total comprehensive loss attributable to owners of Contango Holdings PLC

 

(1,403,389)

(618,569)

(2,700,477)

 

Total comprehensive loss attributable to non-controlling interests

 

(63,934)

(58,564)

(116,202)

 

Total comprehensive loss for the period

 

(1,467,323)

(677,133)

(2,816,679)

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Financial Position

For the six months ended 30 November 2022

 

Notes

 

Unaudited as at

30 November 2022

Unaudited as at

30 November 2021

Audited as at

31 May 2022

 

£

£

£

Non-current assets

Intangible assets

5

13,416,214

10,515,941

11,936,206

Investments

46,474

62,260

46,474

Property, plant and equipment

1,095,911

256,641

737,727

Total non-current assets

14,558,599

10,834,842

12,720,407

 

Current assets

Other receivables

6

576,713

587,348

52,211

Cash and cash equivalents

3,314,359

2,419,266

610,546

Total current assets

 

3,891,072

3,006,614

662,757

 

 

 

 

 

Total assets

 

18,449,671

13,841,456

13,383,164

Current liabilities

Trade and other payables

7

(310,148)

(1,155,632)

(503,732)

Convertible debt and Investor loans

(1,331,750)

Total current liabilities

 

(310,148)

(1,155,632)

(1,835,482)

Net assets/(liabilities)

 

18,139,523

12,685,824

11,547,682

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

Share capital

8

4,580,246

2,687,760

2,949,679

Share premium

8

18,130,551

11,176,636

11,047,218

 

Shares to be issued

400,000

400,000

400,000

Warrant reserve

2,059,584

90,474

1,013,815

Option reserve

-

1,700,505

1,700,505

Foreign exchange reserve

300,683

(6,174)

71,693

Retained earnings

(8,590,889)

(4,744,297)

(6,958,510)

Total equity attributable to owners of ownersowners of Contango Holdings owners of Contango Holdings owners of the parent company

 

 

16,880,175

11,304,904

10,224,400

Non-controlling interests

 

 

1,259,348

1,380,920

1,323,282

Total equity

 

 

18,139,523

12,685,824

11,547,682

 

 

 

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 November 2022

 

 

Share capital

Share premium

Shares to be issued

Warrant

reserve

Option reserve

Translation reserve

Retained earnings

Total Equity of Owners

Non-controlling interests

Total

 

£

£

£

£

£

£

£

£

£

£

Balance at 31 May 2021

2,279,338

8,294,643

400,000

160,074

1,700,505

(33,393)

(4,152,947)

8,648,220

1,439,484

10,087,704

Loss for the year

-

-

-

-

-

-

(2,805,563)

(2,805,563)

(139,093)

(2,944,656)

Other comprehensive income

Translation differences

-

-

-

-

-

105,086

-

105,086

22,891

127,977

Total comprehensive income for the year

-

-

-

-

-

105,086

(2,805,563)

(2,700,477)

(116,202)

(2,816,679)

 

 

 

 

 

 

 

 

 

 

Transactions with owners

Share issues - cash received net

419,091

2,100,909

-

-

-

-

-

2,520,000

-

2,520,000

Share issues - warrants exercised

251,250

651,666

-

(69,599)

-

-

-

833,317

-

833,317

Warrants issued

-

-

-

923,340

-

-

-

923,340

-

923,340

Total transactions with owners

670,341

2,752,575

-

853,741

-

-

-

4,276,657

-

4,276,657

Balance at 31 May 2022

2,949,679

11,047,218

400,000

1,013,815

1,700,505

71,693

(6,958,510)

10,224,400

1,323,282

11,547,682

Loss for the period

-

-

-

-

-

-

(1,632,379)

(1,632,379)

(154,568)

(1,786,947)

Other comprehensive income

Translation differences

-

-

-

-

-

228,990

-

228,990

90,634

319,624

Total comprehensive income for the period

-

-

-

-

-

228,990

(1,632,379)

(1,403,389)

(63,934)

(1,467,323)

 

 

 

 

 

 

 

 

 

 

Transactions with owners

Share issues - cash received net

1,630,567

7,083,333

-

-

-

-

-

8,713,900

-

8,713,900

Share issues - warrants exercised

-

-

-

-

-

-

-

-

-

-

Shares to be issued

-

-

-

-

-

-

-

-

-

-

Warrants issued

-

-

-

1,045,769

-

-

-

1,045,769

-

1,045,769

Options exercised

-

-

-

-

(1,700,505)

-

-

(1,700,505)

-

(1,700,505)

Minority interest share of intangible asset acquisitions

-

-

-

-

-

-

-

-

-

-

Total transactions with owners

1,630,567

7,083,333

-

1,045,769

(1,700,505)

-

-

8,059,164

-

8,059,164

Balance at 30 Nov 2022

4,580,246

18,130,551

400,000

2,059,584

-

300,683

(8,590,889)

16,880,175

1,259,348

18,139,523

 

 

 

 

Condensed Consolidated Statements of Cash Flows

For the six months ended 30 November 2022

 

Notes

Unaudited Six Months

ended

30 November 2022

Unaudited Six Months

ended

30 November 2021

Audited Year

ended

31 May 2022

 

 

£

£

£

Operating activities

 

 

 

 

Loss after tax

(1,786,947)

(636,398)

(2,944,656)

Adjustment for:

Depreciation

104,825

11,200

77,922

Share based transactions

(108,480)

(69,600)

853,741

Revaluation of intangible asset

-

-

-

Impairment of listed investment

15,786

Changes in working capital

(Increase)/decrease in trade and other receivables

(524,503)

(451,650)

83,488

Increase in trade and other payables

(193,584)

873,968

222,068

(Decrease) in Net cash from operating activities

(2,508,689)

(272,480)

(1,691,651)

Investing activities

Purchase of exploration licences

-

-

-

Spending on exploration licences

(1,551,836)

(372,143)

(1,775,809)

Purchase of fixed assets

(538,768)

(221,846)

(786,995)

Purchase of investment

-

-

-

(Decrease) in Net cash from investing activities

(2,090,604)

(593,989)

(2,562,804)

 

 

 

Financing activities

Ordinary Shares issued (net of issue costs)

5

4,717,196

3,290,415

3,422,916

Proceeds from convertible debt

-

-

831,750

Conversion of convertible debt

1,331,750

-

-

Proceeds from investor loans

1,349,493

-

500,000

Net cash flows from financing activities

7,398,439

3,290,415

4,754,666

 

 

 

Increase/(decrease) in cash and short-term deposits

2,799,146

1,134,983

500,211

 

 

 

 

Cash and short-term deposits as at the start of period

610,546

22,143

22,143

Effect of foreign exchange changes

(95,333)

(26,823)

88,192

Cash at the end of the period

3,314,359

2,419,266

610,546

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

For the six months ended 30 November 2022

 

1 General information

 

The Company was incorporated in England under the Laws of England and Wales with registered number 10186111 on 18 May 2016. All of the Company's Ordinary Shares were admitted to the London Stock Exchange's Main Market and commenced trading on 1 November 2017. The company was re-registered as a public company under Companies Act 2006 on 1 June 2017, by the name Contango Holdings plc.

 

The Company is listed on the Standard Market of London Stock Exchange plc.

 

The unaudited interim consolidated financial statements for the six months ended 30 November 2022 were approved for issue by the board on 23 February 2023.

 

The figures for the six months ended 30 November 2022 and 30 November 2021 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 May 2022 are extracts from the annual report and do not constitute statutory accounts.

 

2 Basis of Preparation and Risk Factors

The Company Financial Information has been prepared in accordance with and comply with IFRS as adopted by the European Union, International Financial Reporting Interpretations Committee interpretations and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified for financial assets carried at fair value.

 

 

The financial information of the company is presented in British Pound Sterling ("£").

 

The accounting policies and methods of calculation adopted are consistent with those of the financial statements for the year ended 31 May 2022.

 

The business and operations of the Company are subject to a number of risk factors which may be sub-divided into the following categories:

 

Exploration and development risks, including but not limited to:

 

Mineral exploration is speculative and uncertain

Verification of historical washability analysis

Independent verification of internal resource estimation at Garalo-Ntiela

Mining is inherently dangerous and subject to conditions or events beyond the Company's control, which could have a material adverse effect on the Company's business

The volume and quality of coal recovered may not conform to current expectations

The extend and grade of gold mineralisation at Garalo-Ntiela may not conform to current expectations

 

· Permitting and title risks, including but not limited to:

 

Licence and permits

The Company will be subject to a variety of risks associated with current and any potential future joint ventures, which could result in a material adverse effect on its future growth, results of operations and financial position

 

· Political risks, including but not limited to:

 

Political stability

Enforcement of foreign judgements

Potential legal proceedings or disputes may have a material adverse effect on the Company's financial performance, cash flow and results of operations

 

· Financial risks, including but not limited to:

 

Foreign exchange effects

Valuation of intangible assets

The Company may not be able to obtain additional external financing on commercially acceptable terms, or at all, to fund the development of its projects

The Company will be subject to taxation in several different jurisdictions, and adverse changes to the taxation laws of such jurisdictions could have a material adverse effect on its profitability

The Company's insurance may not cover all potential losses, liabilities and damage related to its business and certain risks are uninsured and uninsurable

 

· Commodity prices, including but not limited to:

 

The price of coal may affect the economic viability of ultimate production at Lubu

The revenues and financial performance are dependent on the price of coal

The price of gold may affect the economic viability of ultimate production at Garalo-Ntiela

 

· Operational risks, including but not limited to:

 

Availability of local facilities

Adverse seasonal weather

The Company's operational performance will depend on key management and qualified operating personnel which the Company may not be able to attract and retain in the future

The Company's directors may have interests that conflict with its interests

Risk relating to Controlling Shareholders

 

The Company's comments and mitigating actions against the above risk categories are as follows:

 

Exploration and development risks

 

There can be no assurance that the Company's development activities will be successful however significant exploratory work has been conducted to date at Lubu and Garalo-Ntiela which supports the Board's confidence that a profitable mining operation can be developed.

 

Additionally, the phased development route which will be employed at Lubu seeks to mitigate risks along the development life cycle of the project.

 

Permitting and title risks

The Company complies with existing laws and regulations and ensures that regulatory reporting and compliance in respect of each permit is achieved. Applications for the award of a permit may be unsuccessful. Applications for the renewal or extension of any permit may not result in the renewal or extension taking effect prior to the expiry of the previous permit. There can be no assurance as to the nature of the terms of any award, renewal or extension of any permit.

 

The Company regularly monitors the good standing of its permits.

 

Political risks

The Company maintains an active focus on all regulatory developments applicable to the Company, in particular in relation to the local mining codes.

 

In recent years the political and security situations in Zimbabwe and Mali have been particularly volatile.

 

Financial risks

The board regularly reviews expenditures on projects. This includes updating working capital models, reviewing actual costs against budgeted costs, and assessing potential impacts on future funding requirements and performance targets.

 

Commodity prices

As projects move towards commercial mining the Company will increasingly review changes in commodity prices so as to ensure projects remain both technically and economically viable.

 

Operational risks

Continual and careful planning, both long-term and short-term, at all stages of activity is vital so as to ensure that work programmes and costings remain both realistic and achievable.

 

COVID-19 outbreak

In addition to the foregoing comments and mitigating actions against the above risk categories the Company has implemented various protocols in relation to the current COVID-19 outbreak. Contango places the health and safety of its employees and contractors as its highest priority. Accordingly, a business continuity programme has been put in place to protect employees whilst ensuring the safe operation of the Company.

 

Having spoken with, amongst others, local government, staff and contractors, strict protocols have been implemented to reduce the risk of transmission of COVID-19 at all the Company's operations.

 

The situation in respect of COVID-19 is an evolving one and the Board will continue to review its potential impact on its staff and the business.

 

3 Loss before taxation

Loss before income tax is stated

after charging:

 

Unaudited Six Months Ended 30 November 2022

 

Unaudited Six Months Ended 30 November 2021

Audited Year Ended 31 May 2022

£

£

£

 

 

 

 

 

Directors' remuneration

43,500

50,400

95,900

Ongoing listing costs

117,585

151,177

302,419

Finance costs

513,000

-

Share-based finance costs

457,356

-

160,000

Salaries

421,697

217,184

536,842

Consultancy fees

500

-

182,829

Legal and accountancy fees

33,775

4,869

19,317

Travel

301,549

174,673

364,444

Office costs

147,620

66,742

170,817

Share performance options

(1,486,605)

-

-

Net warrant issue costs

1,045,769

(69,600)

853,741

Impairment of listed investment

-

-

15,786

Depreciation

104,825

11,200

77,922

Other

86,376

29,753

-

Group audit fee

 

Fee payable to the Company's auditor in respect of all other non-audit services

-

 

 

-

-

 

 

-

35,000

Fees paid to auditors for non-audit work services

-

-

-

4 Loss per Ordinary Share

The calculation of the basic and diluted loss per Ordinary Share is based on the following data:

 

Unaudited Six Months to

30 November

2022

Unaudited Six Months to

30 November

2021

Audited Year

to

31 May

2022

 

£

£

£

Earnings

Loss from continuing operations for the period attributable to the equity holders of the Company

(1,632,379)

(591,350)

(2,805,563)

Number of Ordinary Shares

Weighted average number of Ordinary Shares for the purpose of basic and diluted earnings per Ordinary Share (number)

296,565,032

222,711,321

280,455,370

Basic and diluted loss per Ordinary Share (pence)

(0.55)

(0.27)

(1.00)

 

There are no potentially dilutive Ordinary Shares in issue.

 

 

 

5. Intangible Asset

Unaudited As at

30 November

2022

Unaudited As at

30 November

2021

Audited As at

31 May

2022

£

£

£

 

At start of period

11,936,206

10,118,098

10,118,098

Additions - during year

1,392,836

397,843

1,775,809

Foreign exchange movements

87,172

-

42,299

Amortisation

-

-

-

Total

13,416,214

10,515,941

11,936,206

Mining rights Zimbabwe

11,314,113

8,495,807

9,849,069

Mining rights Mali (Garalo)

1,272,650

1,273,617

1,260,686

Mining rights Mali (Ntiela)

829,451

746,517

826,451

13,416,214

10,515,941

11,936,206

 

The intangible asset represents the mining rights and technical information acquired when the Group acquired its 70% shareholding in Monaf Investments (Pty) Ltd on 18 June 2020; its 75% share in the Garalo gold licence in Mali bought for $1 million on 22 October 2020; and its 100% share in the Ntiela gold licence (adjacent to Garalo) in Mali. The Ntiela licence was acquired for approximately £750,000 - being €400,000 (£346,517) in cash and 4,000,000 ordinary shares at £0.10 to be issued during 2023.

 

The Ntiela gold licence is still under the name of Samagold Resources SARL (a subsidiary of the vendor - African Mineral Exploration Resources Mali SARL) whilst the formal transfer is processed by the Mali Ministry of Mining. The cash element paid (£346,517) together with the £400,000 of shares to be issued are currently held on the parent company balance sheet until the transfer is completed.

 

 

6. Other receivables

Unaudited As at

30 November

2022

Unaudited As at

30 November

2021

Audited As at

31 May

2022

£

£

£

 

Prepayments

17,970

16,332

17,895

Other debtors

558,743

571,016

34,316

576,713

587,348

52,211

 

 

 

 

 

 

7. Trade and other payables

Unaudited As at

30 November

2022

Unaudited As at

30 November

2021

Audited As at

31 May

2022

£

£

£

 

Trade payables

245,481

221,919

175,316

Accruals and other payables

64,667

101,963

328,416

Convertible debt

-

831,750

831,750

Investor loans

-

-

500,000

310,148

1,155,632

1,835,482

 

The convertible loan note was announced on 3rd June 2021 and had a fixed conversion price of 6 pence per share, with a mandatory conversion to take place on 4 January 2022. Due to a lack of headroom to issue new shares in January all note holders unanimously agreed to extend the life of the instruments by a further six months with no additional charges or penalties. The instruments were duly converted and the new shares admitted for trading on 12 July 2022. The term of the attaching one warrant for every two ordinary shares, with an exercise price of 8p, remained unchanged.

 

8 Share capital

Number of Ordinary Shares issued and fully paid

Share Capital

Share Premium

Total Share Capital

£

£

£

As at 01 June 2022

309,667,356

2,949,679

11,047,218

13,996,897

Loan conversion

16,666,667

166,667

833,333

1,000,000

Placement November 2022

125,000,000

1,250,000

6,250,000

7,500,000

Performance shares

21,390,000

213,900

-

213,900

As at 30 November 2022

472,724,023

4,580,246

18,130,551

22,710,797

 

The Ordinary Shares issued by the Parent Company have par value of 1p each and each Ordinary Share carries one vote on a poll vote. The Authorised share capital of the Parent Company is £5,000,000 ordinary shares at £0.01 per share resulting in 500,000,000 ordinary shares.

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR FZGZZFFNGFZM
Date   Source Headline
9th Apr 20247:00 amRNSDirector/PDMR Shareholding
8th Apr 20247:00 amRNSPlacing & Operational Update
28th Feb 20244:13 pmRNSInterim Results for the six months to 30 Nov 2023
20th Dec 20237:10 amRNSMuchesu Project Update
8th Dec 202312:19 pmRNSStatement re Share Price Movement
29th Nov 202310:30 amRNSResult of AGM
3rd Nov 20231:00 pmRNSNotice of AGM
26th Oct 20237:00 amRNSStatement re Share Price Movement
30th Aug 20237:00 amRNSAward of Export Permit & First Sales from Muchesu
8th Aug 20237:00 amRNSWeighbridge Installation at Muchesu Coal Project
2nd Aug 20237:00 amRNSMuchesu Mine Opening Ceremony
20th Jul 20237:00 amRNSMuchesu Project Presentation
19th Jul 202312:48 pmRNSMuchesu Opening Ceremony
10th Jul 20237:00 amRNSNew Offtake Arrangement and Operational Update
22nd Jun 20231:00 pmRNSResponse re Speculation
22nd Jun 20237:00 amRNSFormal Opening Ceremony for Lubu Coal Mine
24th May 20237:00 amRNSWashed Coal Production Commences at Lubu
9th May 202312:35 pmRNSLubu Project Operational Update
28th Mar 20237:00 amRNSLubu Project Operational Update
1st Mar 20237:08 amRNSCompletion of Pilot Coke Plant at Lubu Project
27th Feb 20237:00 amRNSBoard Appointment
24th Feb 20237:00 amRNSInterim Results
6th Feb 20237:00 amRNSLubu Site Preparation and Assembly of Wash Plant
30th Jan 202311:26 amRNSResult of Annual General Meeting
4th Jan 202310:30 amRNSNotice of Annual General Meeting
14th Dec 20227:35 amRNSAward of EIA Certificate
5th Dec 20227:00 amRNSMOU Signed with a Leading Multi-National Company
30th Nov 20227:00 amRNSAudited Final Results for the Year to 31 May 2022
17th Nov 20224:40 pmRNSSecond Price Monitoring Extn
17th Nov 20224:35 pmRNSPrice Monitoring Extension
17th Nov 20222:06 pmRNSSecond Price Monitoring Extn
17th Nov 20222:00 pmRNSPrice Monitoring Extension
16th Nov 20227:00 amRNSHolding(s) in Company
15th Nov 20224:17 pmRNSHolding(s) in Company
15th Nov 202212:51 pmRNSHolding(s) in Company
8th Nov 20227:00 amRNSNew Corporate Presentation
1st Nov 20224:40 pmRNSPublication of Prospectus
31st Oct 20227:00 amRNSOversubscribed Placing of £7,500,000
29th Sep 20227:00 amRNSCommunity, Empowerment & Social Impact Award
28th Sep 20227:00 amRNSIssue of Final Results
16th Sep 202211:05 amRNSSecond Price Monitoring Extn
16th Sep 202211:00 amRNSPrice Monitoring Extension
16th Sep 20227:00 amRNSThermal Coal Strategy
6th Sep 20227:00 amRNSPositive Results: Lubu Coking Coal & Coke Tests
29th Jul 20223:00 pmRNSChange of Registered Office
8th Jul 20224:09 pmRNSHolding(s) in Company
8th Jul 20221:00 pmRNSCGH “in specie” Distribution
5th Jul 20222:26 pmRNSConversion of Convertible Loan
21st Jun 20224:41 pmRNSSecond Price Monitoring Extn
21st Jun 20224:36 pmRNSPrice Monitoring Extension

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.