Contango Holdings PLC (LON:CGO) shares have restarted trading in London after it completed the reverse takeover of a 70% interest in the Lubu coal project in Zimbabwe.
The company, which floated as a cash shell back in 2017, last year began advancing funds for ongoing development work and has now acquired the asset for an implied value of £6.4mln, with the remaining 30% stake held by “supportive local partners”.
More than 12,000m of drilling via 100 holes has so far been completed at Lubu, indicating a total resource above 1bn tonnes of coal.
Roy Pitchford, formerly chief executive of Zimbabwe focused Cluff Resources and Vast Resrouces, has been appointed non-executive chairman and Carl Esprey, a former BHP and GLG Partners analyst, has joined as executive director.
Their additions to the board provides “proven natural resources operational expertise and specialist natural resources financing experience”, the company said.
“The acquisition of Lubu has taken longer than expected but I am confident that this transaction and our entry into Zimbabwe will prove worth the wait,” said non-executive director Oliver Stansfield.
Esprey said: “I am delighted to have successfully brought this asset to market and I am confident that the work conducted on Lubu in recent years will translate to material value for shareholders in the near future.
He said the company is looking to deliver first production and revenues from Lubu by the end of the year.
“Our strategy is centred on providing early cashflows from this, our first asset, and then expanding our production schedules.”