LONDON, UK: Contango Holdings Plc, the London listed pure useful resource development firm developing the Lubu Coking Coal Project in Zimbabwe and the Garalo-Ntiela Gold Project in Mali, confirmed that manufacturing commenced on the Lubu site on 29 March 2022.
Production is underway on Block 2, which was chosen given the high-quality coking coal discovered at that location and its proximity to surface. Studies have outlined an estimated 96Mt of coking coal inside Block 2, which forms a half of the broader Lubu complex, the place an estimated 1.25 billion tonne Indicated and Inferred useful resource has been recognized to NI 43-101 levels.
The firm is targeting an preliminary stabilised mining rate of 5,000 tonnes per month. As beforehand reported, Contango will stockpile manufacturing throughout Q2 2022 pending the set up of the wash plant inside the identical period, thereby offering sufficient feedstock to make sure continuity of supply.
Work continues to put together the site for the set up of the crushing unit, wash plant and related infrastructure. Following the set up of the wash plant the Company expects to promote washed coking coal to regional buyers in addition to exporting to South Africa, the place the Company has held recent discussions with interested parties.
Later in 2022 Contango expects to have the ability to seize the full worth for its product by subsequently manufacturing coke at site to be used inside the metal and ferro-alloy industries. An preliminary smaller scale coke battery of 36,000 tonnes per annum has been sourced and a bigger coke battery of 150,000 tonnes per annum is anticipated to be put in towards year end. Whilst gross sales costs are topic to offtake and future global pricing, the Company is assured that margins in extra of US$300/tonne ought to be achievable based on ongoing discussions with potential off-takers.
Carl Esprey, CEO of Contango, commented: “Bringing our first asset into manufacturing is a milestone occasion for Contango. I would like to thank our in-country team for his or her efforts in serving to us accomplish this important achievement. The useful resource at Lubu is significant and we’re now lastly in a place to begin to obtain the financial benefits. Coking coal and coke have suffered from significant under-investment and mine closures in recent years and this, coupled with global infrastructure projects and transition towards inexperienced energy, have led to a significant uptick inside the commodity costs of each coking name and coke. Accordingly, Lubu has come into manufacturing at a time of considerable demand for our merchandise and restricted supply.
“I have spent a lot of the second half of this month in South Africa and Zimbabwe and been able to meet potential off-takers. The demand is clear and with manufacturing start-up risk now drastically reduced I would anticipate being in a place to enter offtake contracts inside the close to term. As beforehand reported, we believe there’s a good possibility any offtake contracts entered into for coking coal or coke would include some type of funding, to be utilised inside the roll out of the Lubu development.”
www.contango-holdings-plc.co.uk