Online Reporter
Nqobile Bhebhe Zimpapers Business Hub
Contango Holdings Plc, the London-listed natural resources company advancing the Muchesu Coal Project in Zimbabwe, has confirmed the receipt of US$1 million in royalty payments from Huo Investments (Pvt) Limited.
The payments were made under the terms of a Mineral Royalty Agreement (MRA) with the strategic investor.
The latest disbursement of US$500,000, received since February, brings the total royalty income to date to US$1 million. This forms part of Huo Investments’ minimum annual royalty commitment of US$2 million.
Under the MRA, Huo Investments is obligated to pay a minimum of US$2 million in royalties each year. However, Contango anticipates that total receipts will “be considerably higher” as production and operations at the plus two billion tonne Muchesu coal resource continue to ramp up.
Contango CEO Mr Carl Esprey described the royalty payments as a strong vote of confidence in the project.
“We have now received US$1,000,000 in royalty payments under the MRA. These royalty payments strengthen the Company’s capital position and reaffirm the Investor’s commitment to Muchesu,” said Mr Esprey.
He also highlighted ongoing progress at the site, noting that key infrastructure development is underway.
“Work and capital investment has continued at Muchesu since our last update, including the commencement of installation of coke batteries. An additional RNS will be made addressing operational activities.
“It is however highly encouraging to report continued investment and expenditure at site by the Investor, who remains the Company’s largest shareholder (20.42%),” Mr Esprey added.
Located in the Lubu coalfields of Hwange, Muchesu remains one of Zimbabwe’s most significant coal development initiatives. Contango’s steady progress reflects growing confidence in Zimbabwe’s mining sector.
