Business
Term Sheet: Investment & Part Purchase of Muchesu
Term Sheet: Investment & Part Purchase of Muchesu.
About this update from Contango Holdings Plc
[{"type":"text","content":"\n\nContango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources\n17 June 2024\nContango Holdings PLC\n(\"Contango\" or the \"Company\")\n \nTerm Sheet Signed for Investment and Part Purchase of Muchesu\n \n· Agreement entered into with Mr Wencai Huo (the \"Investor\") for the sale of 51% of Muchesu\n· Royalties granted to Contango for life of mine over gross production\n· Minimum of US$2M per annum to be paid to Contango under royalty arrangement\n· Contango expects to retain 24% of Muchesu going forward\n· The Investor to make a cash subscription to take a 20% stake in the Company\n· The Investor to match Contango historic expenditure of approximately US$20M directly into Muchesu, to expand production and operational capacity\n· Offtake updates\n· Board Changes\n \nContango Holdings Plc, a company focused on the development of the +2 billion tonne Muchesu coal project in Zimbabwe (\"Muchesu\" or the \"Mine\"), which is held by the Company's 70% subsidiary Monaf Investments (Pvt) Limited (\"Monaf\"), is pleased to announce it has entered into an agreement (the \"Term Sheet\") with the Investor, a prominent Zimbabwe-based Chinese national with extensive mining and business investments in Zimbabwe and the Southern African region.\n \nThe Term Sheet set out the following key terms:\n \ni) Purchase of a 51% stake in Muchesu by the Investor;\nii) The Investor to enter into a subscription for a 20% holding in the Company;\niii) The Company to be awarded a life of mine royalty; and\niv) The Investor to invest at least US$20M at Muchesu.\n \nThe Term Sheet has been signed by the Investor and the Company following extensive due diligence, several site visits and test work of the coals at Muchesu. The Investor, the Company and Monaf will now look to finalise execute and enter into suite of formal agreements (the \"Definitive Agreements\") to implement the transactions described above.\n \nThe De...