Business
Production Commences: Lubu Coking Coal Project
Production Commences: Lubu Coking Coal Project.
About this update from Contango Holdings Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 4469G\n Contango Holdings PLC\n 30 March 2022\n \n \n \n \n Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources\n \n \n \n \n \n 30 March 2022\n \n \n Contango Holdings Plc\n \n \n ('Contango' or the 'Company')\n \n \n \n \n \n Production Commences at the Lubu Coking Coal Project\n \n \n \n \n \n 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 confirm that production commenced at the Lubu site on 29 March 2022.\n \n \n \n \n \n Production is underway on Block 2, which was selected given the high-quality coking coal found at that location and its proximity to surface. Studies have defined an estimated 96Mt of coking coal within Block 2, which forms part of the broader Lubu complex, where an estimated 1.25 billion tonne Indicated and Inferred resource has been identified to NI 43-101 levels.\n \n \n \n \n \n The Company is targeting an initial stabilised mining rate of 5,000 tonnes per month. As previously reported, Contango will stockpile production during Q2 2022 pending the installation of the wash plant in the same period, thereby providing sufficient feedstock to ensure continuity of supply. Work continues to prepare the site for the installation of the crushing unit, wash plant and associated infrastructure. Following the installation of the wash plant the Company expects to sell washed coking coal to regional buyers as well as exporting to South Africa, where the Company has held recent discussions with interested parties.\n \n \n \n \n \n Later in 2022 Contango expects to be able to capture the full value for its product by subsequently manufacturing coke at site for use in the steel and ferro-alloy industries. An initial smaller scale coke battery of 36,000 tonnes per annum has been sourced and a larger coke battery of 150,000 tonnes per annum is expected to be installed towards year end. Whilst sales prices are subject to offtake and future global pricing, the Company is confident that margins in excess of US$300/tonne should be achievable based on ongoing discussions with potential off-takers.\n \n \n \n \n \n Carl Esprey, CEO of Contango, commented:\n \n \n &nb...