Lubu Coking Coal Project Update

Contango Holdings Plc / Index: LSE / Epic: CGO / Sector: Natural Resources

 Contango Holdings Plc

('Contango' or the 'Company')

29 January 2021

Lubu Coking Coal Project Update

Contango Holdings Plc, the London listed natural resource development company, is pleased to provide an update on recent and upcoming planned activities at the Lubu Coking Coal Project ('Lubu') in Zimbabwe.

Despite the 30-day national lockdown that has been in place throughout Zimbabwe since 5 January 2021, Contango has been able to continue to advance Lubu, as mining is classified as an 'essential' industry by the Zimbabwean Government.

The site was recently inspected by the Environment Management Agency ("EMA") following the camp site rehabilitation and access upgrades that have now been completed. A meeting with the Binga District Council ('BDC') has now been scheduled in early February 2021 to outline the two pit locations at Lubu ahead of pit development.  This was originally expected to have taken place before the end of January 2021, however given the national lockdown, representatives are now expected within the next two weeks, in line with the proposed start-up timetable.

Contango expects to finalise its discussions with the proposed mining contractor imminently ahead of opening the two pits at Lubu in February 2021.  This will be a significant milestone for Contango and will enable ongoing coking coal offtake discussions to be finalised. In addition, it will allow the requested bulk samples, which will provide first revenues from Lubu to Contango, to be delivered to a number of multi-national companies who are assessing the viability of constructing coke plants at Lubu.  As previously reported, the manufacture of coke at site would provide a significant boost to the value of the product generated at Lubu, which is already considered to be highly valuable.

Carl Esprey, Executive Director of Contango Holdings, said: "Our Lubu Project is advancing well ahead of the unveiling of the first open pit next month.  I must commend the hard work and dedication of our on-site team in Zimbabwe who has persevered through pandemic adversity with relatively modest disruption to the planned development schedule.

"Our offtake negotiations continue to progress well and the opening of the pit in the next few weeks will allow these discussions to be finalised.  Conversion of the existing signed LOIs into formal offtake contracts is expected to generate +US$1M of EBIT per month.  Clearly any additional contracts, either for coking coal or coke, would further boost this figure.

"In recent weeks we have seen a significant uplift in global coking coal prices. Given the size and nature of Lubu, we believe Contango is well positioned to benefit from this demand, whilst elevated pricing should further improve the robust economics at Lubu. I look forward to reporting on our progress in due course.

"Looking now to Mali, work has continued unimpeded at our Garalo Gold Project and we remain extremely enthusiastic about the opportunity that is shaping up before us.  More than 1,000 grab samples have been sent off to the laboratory in January and our in-house and external geologists have been working to improve the understanding of the geological and structural framework of the mineralised zone as highlighted in the Independent Technical Report announced in December 2020.  Initial feedback has been overwhelmingly positive and we look forward to providing a substantial update to shareholders in the coming weeks."

**ENDS**

For further information, please visit www.contango-holdings-plc.co.uk or contact: