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

24 May 2023

Contango Holdings PLC

('Contango' or the 'Company')

Washed Coal Production Commences at Lubu

Contango Holdings Plc, the London listed natural resource development company, is pleased to advise that the production of washed coking coal commenced on Tuesday 23 May 2023 at its flagship Lubu Coking Coal Project in Zimbabwe. This followed dry and wet runs of the wash plant over the preceding days and the integration of the screen with the broader processing facilities.

Stockpiles of coking coal have already been established by the Wirtgen Surface Miner, which, as previously reported, can mine at a rate of up to 1,000 tonnes per hour of coking coal.  The Surface Miner continues to extract coking coal and is increasing the wash plant stockpiles further.

The Company will continue to undertake studies on washed coal production to ensure optimisation. Samples will also be sent to several parties who have indicated they would look to enter into long-term offtake contracts. This includes the Company's potential Strategic Partner under a Memorandum of Understanding and complements Contango's existing offtake for 10,000t a month of washed coal. All coking coal produced, including coal dispatched as samples, will be sold at factory gate, with the current MMCZ price still set at US$120 per tonne. The Company expects to announce the first sales of washed coking coal in June 2023.

Photos and videos of the Wirtgen Surface Miner in operation and the commissioned wash plant will be uploaded to the Company's website (www.contango-holdings-plc.co.uk) and its official Twitter account (@ContangoPLC) later today.

Carl Esprey, CEO of Contango, commented: "This is a landmark moment for Contango. It is no small feat to bring a mine into production and something most junior mining companies never achieve. I appreciate this process has taken longer than expected, but we are now producing a high-quality coking coal product and very soon will be a revenue generating company. We have achieved this during turbulent markets and without significant dilution at the plc level, which is testament to the team assembled in country and the attractiveness of the Lubu Project.

"The focus for the Company is now how to best expand operations at Lubu, leveraging off our producer status. We have advised previously we intend on manufacturing coke at Lubu, which is expected to increase our margins from US$80/tonne to over US$300/tonne at current pricing. We have continued to pursue this avenue in discussions with potential strategic partners.

"The sheer scale of Lubu opens up significant potential across a variety of revenue streams and we intend to focus on unlocking the potential of Lubu from this very solid foundation."