Contango Hdg Regulatory News (CGO)

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

21 March 2022

Contango Holdings Plc

('Contango' or the 'Company')

Operational Update

Highlights

Lubu Coking Coal Project, Zimbabwe:

• Civil works and infrastructure upgrades ongoing

• Mining operations and first production to begin from end of March

• Discussions with off-takers for both coking coal and coke

• Wash plant to be installed in Q2 2022

Garalo-Ntiela Gold Project, Mali:

• Site visit with strategic investors scheduled in the coming weeks

• Finalising drill programme to prove up targeted resource of 1.8Moz-2Moz gold

Contango Holdings Plc, the London listed natural resource development company developing the Lubu Coking Coal Project in Zimbabwe ('Lubu') and the Garalo-Ntiela Gold Project in Mali ('Garalo-Ntiela'), is pleased to provide an update on recent activities and planned workstreams.

Civil works and infrastructure at Lubu

In recent months the Company has been busy preparing the Lubu coal project site and updating the infrastructure in preparation for mining to commence. As planned and without incident the Company has now commenced resettling a number of people to newly built houses funded by the Company. The project continues to receive strong local community support and will provide employment opportunities.

Mining Operations

The Company expects to mine its first coal by the end of March, with the already ordered wash plant being installed in Q2 2022. Thereafter the Company can deliver coal to its customers and generate revenue. The Company continues to focus on becoming an integrated producer of coke product for the southern African region, supplying coke for steel and ferro-alloy production amongst other things. The Company intends to install a coke battery and scale operations up once it has installed all the associated plant and infrastructure to produce coke.

Rebranding of Local Operation

The Company has now renamed the Lubu project locally to Muchesu Coal. Muchesu is the local village in the broader Lubu region. Contango has recently taken delivery of new plant and machinery with the new branding and images of this will be posted on the Company's social media channels. Whilst Muchesu is the local name, the Company will continue to use the Lubu name in its public statements.

Offtake for Coking Coal

The price of coking coal has increased materially in Q1 2022. To date, the Company has developed the mine without recourse to offtake financing in order to preserve the full sale value of coal. With production imminent, the Company is now in a position to negotiate coking coal offtake contracts at spot prices and leverage the recent increase in the coking coal price. Discussions are underway with several interested parties and the Company will provide an update as appropriate.

In addition, the Company is also in offtake discussions with respect to its expected coke production. There is significant demand within Africa for coke and the Company has also received inquiries from a number of European consumers about the coke product, given the global shortage being experienced and recent macro developments. The Company will continue to study global pricing and demand but expects the export of its coke product outside of Africa to remain a valid and ongoing opportunity.

The Company believes there is a good possibility any contracts entered into for offtake, either for coking coal or coke, will provide some form of funding, be it prepayment against first production or some other form, which can be utilised in the roll out of its development plan for the manufacture of coke.

Garalo-Nitiela Gold Project

CEO Carl Esprey is scheduled to attend site in the coming weeks and will host a number of strategic parties at the site as part of their ongoing due diligence for investing in the project. Notwithstanding the ongoing discussions, the Company is finalising the drill programme to establish a JORC resource across the project in, its efforts to prove up the previously declared targeted resource of 1.8Moz-2Moz gold. The IP survey has now been completed and drill targets are being finalised in conjunction with negotiations with potential strategic investors.

**ENDS**

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