Online Reporter
Nqobile Bhebhe
Zimpapers Business Hub
Muchesu Mine, a coal mining operation in Binga, has announced a variation to its Definitive Agreements, paving the way for Pacific Goal Investments Private Limited, a Zimbabwe-focused investment vehicle, to assume a controlling 51 percent equity stake in the project.
A definitive agreement is the final, legally binding contract that details the terms and conditions of a business transaction, such as a merger or acquisition.
The variation to the agreement, according to the company, strengthens its partnership structure and aligns the project with an investor that has a significant operational footprint in Zimbabwe’s industrial and energy sectors.
“The Definitive Agreements originally envisaged that the Investor would purchase a 51 percent equity interest in Muchesu (via Monaf),” the company said.
“This will now be undertaken by Pacific Goal Investments Private Limited, a Zimbabwe-focused investment vehicle equally owned by Mr Wencai Huo (the principal of Huo Investments) and Mr Liu Jun. Definitive documentation has been executed to reflect this change and is currently being registered with the Central Bank in Zimbabwe.”
PGI is part of the Pacific Goal Group, a Hong Kong-based industrial conglomerate with substantial investments and operations in Zimbabwe.
The group is spearheading the development of a major mine-to-energy industrial park in the country, comprising two power stations, a graphite processing plant, and a nickel smelter.
“PGI also operates a logistics fleet of more than 200 trucks, as well as holding interests in other mining and power-related developments in Zimbabwe,” the company said. “This extensive operational presence and expertise are expected to prove complementary to delivering value from the Muchesu project.”
The revised ownership of Monaf, the vehicle through which Muchesu Mine is owned, means PGI now holds a 51 percent stake in the mine, Contango 24 percent, Lilyone Investments 6,5 percent and Local minority shareholders own 18,5 percent.
The purchase of 6,5 percent of shares in Monaf, as announced on March 12, 2025, remains unaffected.
These shares are now held through Lilyone Investments, a wholly owned investment company of Mr Wencai Huo.
Under the variation, PGI will now become the lender under the US$20 million Revolving Facility Agreement, assuming responsibility for all funds previously advanced by Huo Investments.
“As previously disclosed, advances under the facility rank pari passu with the loans provided by Contango to Monaf (approximately US$20 million, the CGO Debt). Any repayments by Monaf to PGI under the facility will require an equal payment to Contango until the CGO Debt is repaid in full,” the firm said.
The structure ensures financial parity between investors while sustaining capital inflows for the project’s ongoing expansion.
There is no change to the terms of the Mineral Royalty Agreement, which remains in force for the life of the mine.
Royalties are payable by Monaf to Contango at US$2 per tonne for thermal coal, US$4 per tonne for industrial coal, and US$8 per tonne for coking coal, the company said.
A minimum annual royalty of US$2 million, uncapped, remains applicable. PGI has confirmed that the next minimum royalty payment of US$1 million will be made during the current quarter.
The updated Definitive Agreements now stipulate that royalty payments to Contango will take priority, followed by costs relating to the CGO Debt and the revolving facility on an equal basis.
Contango chief executive officer Mr Daniel Dos Santos said the revisions enhance the long-term sustainability of Muchesu Mine by introducing a strong and strategically aligned investor.
“These variations strengthen the partnership structure at Muchesu and introduce PGI, part of Pacific Goal Group, as a committed strategic investor with an established operational footprint in Zimbabwe,” said Mr Dos Santos.
“Their industrial investments, including power, logistics and processing infrastructure, are highly complementary to the long-term development of Muchesu.
“At the same time, Huo Investments remains supportive through its shareholding and previous contributions to advancing the site. We look forward to providing a further operational update shortly, as activity on the ground continues to build momentum.”
On July 3, 2024, Contango entered into binding agreements with the original investor, comprising a 51 percent equity acquisition in Muchesu, a US$2 million Subscription, a Mineral Royalty Agreement, and a US$20 million Revolving Facility Agreement.
During 2024 and 2025, the investor advanced significant funding under the facility to expand Muchesu’s mining footprint, install a large Dense Media Separation plant, undertake extensive infrastructure works, and install coke batteries and associated value-enhancing equipment.
With the Subscription completed in the first quarter of 2025, Huo Investments became Contango’s largest shareholder with a 20.42 percent holding.
Royalty payments commenced in 2025, in accordance with the Mineral Royalty Agreement, with US$1 million paid during the first half of the year and another US$1 million scheduled for this quarter.
With construction and expansion works ongoing, Muchesu is seen as a key component in the country’s strategy to unlock value from its vast coal resources and drive downstream beneficiation in the energy and metallurgical sectors.
Peter Tanyanyiwa