Business
Acquisition of Lubu Coalfield Project, Zimbabwe
Acquisition of Lubu Coalfield Project, Zimbabwe.
About this update from Contango Holdings Plc
[{"type":"text","content":"\n \nRNS Number : 5052V Contango Holdings PLC 09 April 2019 \n\nContango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources\n9 April 2019\nContango Holdings Plc\n(\"Contango\" or the \"Company\")\nAcquisition of the Lubu Coalfield Project, Zimbabwe\n \nFurther to the announcement of the signing of a Memorandum of Understanding relating to the possible acquisition of Consolidated Growth Holdings Limited's (\"CGH\") interest in the Lubu Coalfield project in Zimbabwe (the \"Lubu Coalfield\"), the board of the Company are pleased to announce that on 8 April 2019 the Company entered into a Share Purchase Agreement to acquire the Lubu Coalfield from CGH (the \"Acquisition\"). The Company will satisfy the acquisition consideration of £6,450,000 by issuing 128,849,961 ordinary shares to CGH at a price of £0.05 each (the \"Consideration Shares\"). This transaction constitutes a reverse takeover under the Listing Rules and the Company will issue a prospectus containing further details of the Acquisition in due course (the \"Prospectus\"). \n \nThe Lubu Coalfield\nThe Lubu Coalfield is a potential thermal and coking coal project. Following completion of the Acquisition, the Company initially intends to commence trial mining and carry out bulk samples to determine the viability of full-scale production.\n \nThe Lubu Coalfield is permitted for trial mining. Existing cash resources and new funds to be raised by way of a placing by the Company of new ordinary shares (the \"Placing Shares\") (the \"Placing\") will be applied to site preparation and refurbishment to facilitate modest production levels and early cashflow. The Company intends to sell the coal product generated in this phase to regional power companies in Zimbabwe and other industrial users.\n \nDetails of the Share Purchase Agreement\nAs noted above, the Company has entered into a conditional share purchase agreement (\"SPA\") on 8 April 2019 with (1) Someden Investments (Private) Limited (\"Someden\") (2) Monaf Investments (Private) Limited (\"Monaf\") (both Someden and Monaf being subsidiaries of CGH) and (3) CGH to implement the sale and purchase of 70% of the issued share capital of Monaf (\"Sale Shares\"), the novation of certain debts owing to CGH by Monaf (\"CGH-Monaf Loans\") and the transfer of ce...