Modern Mining February 2021

COKING COAL

Key takeaways  In a major development critical to the start of production at Lubu Coalfield Project, Contango Holdings expects to finalise its discus- sions with the proposed mining contractor imminently ahead of opening two pits at Lubu in February 2021  This will be a significant milestone for Contango and will enable ongoing coking coal offtake discussions to be finalised  In addition, it will allow the requested bulk samples, which will pro- vide first revenues from Lubu to Contango, to be delivered to a number of multi-national companies assessing the viability of con- structing coke plants at Lubu  Contango Holdings late last year announced the signing of two LOIs with two major companies – South Mining and CoalZim Marketing “This is one of the biggest coal deposits in southern Africa. It has been drilled and studied to Canadian standards (NI43-101) and is the only coal deposit in Zimbabwe that has had so much money spent on it,” concludes Esprey.  Lubu is a derisked development with total historical spend in excess of US$20-million and over 100 holes and 12 000 m of drilling completed. starting at surface up to a depth of 47 m, B2 Block offers a quick and cost- effective route to production, allowing the company to produce 1-million tonnes a year over the next 10 years. Esprey reiterates that the company’s immediate focus is on early cash flows from Lubu to underpin its financial position and support a dividend policy. Lubu is a derisked development with total historical spend in excess of US$20-million and over 100 holes and 12 000 m of drilling completed and total resource in excess of 2-billion tonnes. The money has been spent on various studies, drilling and demarcation of the resources, as well as geological reports. The project covers 19 236 ha of the highly prospective Karroo Mid Zambezi coal basin in established Hwange mining district in north-western Zimbabwe. The over US$20-miliion historic spend by the previous and current owners has gone towards the 100 holes for 12 000 m of drilling; down-hole geophysics on all holes; test work on the washability charac- teristics of the coal; NI43-101 resource study (702 Mt Indicated and 510 Mt Inferred); completion of pre-feasibility study; and test work confirming ther- mal and metallurgical coal.

February 2021  MODERN MINING  19