Business
Placing of £2.5M to bring Lubu into Production
Placing of £2.5M to bring Lubu into Production.
About this update from Contango Holdings Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 8354S\n Contango Holdings PLC\n 18 November 2021\n \n \n \n Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources\n \n 18 November 2021\n Contango Holdings Plc\n ('Contango' or the 'Company')\n \n Placing of £2.5M to bring the Lubu Coking Coal Project (\"Lubu\") into Production\n \n Highlights\n \n · \n \n US$3M will be used to fast track Lubu into production by late Q1 2022\n \n \n \n · \n \n Installation of coke batteries at site in Q4 2021 to capture full value proposition\n \n \n \n · \n \n Funds also applied to further the Garalo-Ntiela Project in Mali \n \n \n \n Contango Holdings Plc is pleased to announce that it has raised £2,500,000 (before expenses) through a Placing of 41,666,666 New Ordinary Shares of GBP0.01 each (\"Placing Shares\") at a price of 6 pence per Placing Share (the \"Placing\"). Investors in the Placing will also receive one warrant per Placing Share to subscribe for one new ordinary share at a cost of 12p per share. The Placing was undertaken by its broker Brandon Hill Capital Limited.\n \n Use of Funds and Work Programme\n \n The Placing will provide the Company with sufficient funds to bring Lubu into production towards the end of Q1 2022, marking the Company's transition into cashflow and profitability from operations.\n \n This development route is now feasible following the recent verification by Bureau Veritas' studies on the Lubu coking coals which confirmed to both the Company and potential customers the product's attractive characteristics. The studies indicated the potential for 96Mt from Block 2 of high-quality coking coal with low ash and sulphur and with high yields and swelling indices. There is currently significant demand both regionally and globally for coking coal with such characteristics.\n \n Also, the Company has recently visited a number of potential customers and off-takers and following such conversations with these groups the directors of the Company have chosen to begin operations with immediate effect and take advantage of strong commodity prices and forecasts.\n \n The Company intends to commence with an initial 300Ktpa production operation with the possibility of increasing production in due course. The local demand is likely to increase as regional coke battery capac...