Machinery seen at the Muchesu project
LSE-listed natural resource development company Contango Holdings has received about $116 000 from a large multinational company (MNC) as payment for the previously reported 1 000 t bulk sample of washed coking coal from its Zimbabwe-based Muchesu coal mine.
Over half of the bulk sample has been mined, screened, washed and is ready for collection, with the balance due later in December.
Contango has a 70% interest in the Muchesu project.
The MNC, on December 19, started collection of this coal from mine gate ahead of delivery to its facilities in South Africa for final tests in their own coke batteries.
Given historic test work undertaken by the MNC, as well as Contango's ongoing verification of the coal quality and characteristics of the bulk sample, Contango believes there is a high probability of entering into a long-term offtake with this MNC following the successful completion of their tests in January 2024.
As previously reported, the MNC has expressed a need for a minimum of about 7 000 t a month.
However, current discussions are with respect to a larger long-term contract, which the board is inclined to progress with given the complications around the current offtake partner, TransOre, which has not yet provided further orders or payment for washed coking coal as envisaged under the July 2023 offtake agreement.
In addition, Contango remains in discussions with other potential off take partners of both coking and industrial coal as per the update of October 26, 2023, which would be envisaged as complementary to any contract with the MNC.