HARARE – Contango Holdings Plc has announced a strategic financial boost for its Muchesu coal project in Zimbabwe, securing £1.58 million through a new share subscription agreement and an advance of us$1 million from investor Huo Investments.
Huo Investments is the investment vehicle of Wencai Huo, a Zimbabwe-based Chinese national with extensive mining and business investments in Zimbabwe and Southern Africa.
The investor has entered into a subscription agreement with Contango Holdings to subscribe for 142,000,000 new ordinary shares at a price of £0.0111 pence per share.
As a result, the company will receive £1,576,200 (US$2,000,000) of new funding.
Additionally, the company is bolstering its operations with the imminent arrival of new heavy-duty excavators, a wash plant with enhanced capacity, and other capital equipment.
Hou Investments has entered an RFA, whereby it will provide unsecured debt finance of up to US$20,000,000 into the operating subsidiary Monaf Investments, for the purpose of funding the development and expansion of operations at Muchesu.
“Contango is pleased to report that under this agreement, the investor has already commenced delivery of some capital equipment and operational items. The first convoy carrying parts for a new wash plant has arrived at site with the remaining convoys expected to arrive during July,” said the company.
A team of engineers are already on site to oversee operations and the installation of the new wash plant. Upon completion, the wash plant is expected to have a washing capacity of 3,000 tpd, significantly greater than the company’s existing washing capabilities, which will continue to remain operational.
Orders have now been placed for a further five heavy-duty excavators, four of which are to be delivered from South Africa. Also, another front-end loader and accessories have been ordered. All these items are due at Muchesu before the end of July 2024.
CEO Carl Esprey expressed confidence in the significant operational enhancements and future growth prospects of the project.
