Online Reporter
Nqobile Bhebhe, [email protected]
CONTANGO Holdings, which is engaged in coking coal production in Binga District, Matabeleland North, has secured a further US$300 000 royalty payment, bringing the total received to date to US$500 000.
This development further strengthens the company’s capital position.
The remaining US$500 000, part of the previously reported US$1 million, is expected to be paid later this month in accordance with the terms of the Mineral Royalty Agreement (MRA) signed with Huo Investments (Pvt) Limited, Contango’s strategic partner.
The royalties are linked to coking coal production at Muchesu, with an US$8 per tonne royalty on processed output. Under the MRA, Contango is guaranteed a minimum royalty payment of US$2 million annually, with additional payments tied to coal production levels.
In a recent update, Contango Holdings stated that the company is engaged in a series of agreements with Huo Investments, including the MRA, a US$20 million Revolving Facility Agreement, and the change of ownership of Monaf Investments (Private) Limited. The company aims to finalise the Definitive Agreements within the current quarter.
Contango has already completed a US$2 million subscription with Huo Investments, making the investor the largest shareholder in the company with a 20,42 percent stake.
Chief Executive Officer, Mr Carl Esprey, expressed enthusiasm about concluding the remaining documentation for the Definitive Agreements.
“This additional royalty payment from the investor under the proposed MRA further strengthens the company’s capital position and continues the highly collaborative relationship,” he said.
“Following the end of the Chinese New Year celebrations and the return of key personnel to Zimbabwe, we look forward to finalising the remaining outstanding documentation for the Definitive Agreements and bringing the broader transaction to a successful conclusion.”
The partnership with Huo Investments, formalised through a series of agreements, including the MRA and a US$20 million Revolving Facility Agreement, positions Contango for long-term growth.
Upon the completion of the US$2 million subscription, Huo Investments will become the largest shareholder, aligning its interests with those of Contango’s existing shareholders.
Matabeleland North has extensive mining activities that have been crucial to both provincial and national development.
The province serves as a hub for coal-to-energy value chain investments, which are expected to unlock up to US$1 billion under the coal and hydrocarbon sector.
