mbulelo smpofu
Nqobile Bhebhe, [email protected]
CONTANGO Holdings Plc is seeking to raise £1,7 million to boost working capital for its Binga coal plant while completing the subscription for 166 million new ordinary shares.
On Monday, the mining firm released a prospectus for the issuance of 191 million new ordinary shares related to the subscription and fee shares.
The firm recently announced that it had entered into a term sheet with a new investor, Huo Investments (Pvt) Limited for the disposal of 51 percent of its Muchesu Coal business to invest a further US$20 million.
The agreement also has a royalty agreement with Monaf that pays the company on coals produced for the life of the mine and a subscription of 142 000 000 ordinary shares at the issue price of £0,0111 for US$2 million.
Recently, the company announced that it had received its first royalty payment of $200 000, a major confidence boost from new shareholders.
The company anticipates receiving an additional $800 000 this month.
Once these payments are received, the total royalty receipts will amount to $1 million, in accordance with the Mineral Royalty Agreement with its new investor, Huo Investments (Pvt) Limited.
In an update, the mining entity said following the issue of the Prospectus, it may now complete the subscription for 166 666 665 new ordinary shares raising gross proceeds of £1 850 000.
“Huo Investments (Pvt) Limited will hold 142 000 000 shares in the company resulting in a holding of approximately 19 percent, being the largest shareholder of the Company.
“Net proceeds of £1 775 000 will be dedicated to the working capital of the company. The company is targeting to complete to close the transaction in Q1 2025 pending the finalisation of the Definitive Agreements,” it said.
It added that it will make an application for the 191 255 217 New Ordinary Shares to be admitted to trading on the Equity Shares category of the Official List and the Main Market of the London Stock Exchange on 24 January 2025.
In 2024, the London-listed natural resource development firm entered into an agreement to sell 51 percent of its shareholding in the Muchesu Colliery Project to a Zimbabwe-based Chinese national, Mr Wencai Huo.
Coal remains the dominant energy mineral for Zimbabwe and the country boasts of vast reserves of the mineral, particularly, in the northwest and southern parts of the country.
Matabeleland North has vast mining activities that have been critical to the growth of the province and the country’s development.
The province is the hub of coal-to-energy value chain investments, which will unlock up to US$1 billion under the coal and hydro-carbon sector.
The Muchesu project is poised to play a pivotal role in harnessing this resource for economic growth.
