Contango Share Discussion Threads

[jailbird] 04/1/2023 15:16

So at $450/tonne , The Company expects that thermal coal could generate margins of over US$100 per tonne. So. that strategy likely to be dead especially as a fall to $300 coal prices will wipe out any margins Back to coking coal and coke battery strategy as early part of the year .Another cash call this year ?

[jailbird] 04/1/2023 15:10

UBSThermal coal will similarly "stay elevated for longer" due to supply issues, said the analysts, but a decline from the record levels exceeding US$400 per tonne are likely, with prices forecasted to fall to US$300 per tonne by the end of the year.

[burtond1] 30/12/2022 06:04

Yet another bleak year for the junior miners...Here @TMSreach we look at 12 Mining Companies that should be worth following over the next 12 months.Companies covered include:#CGH #CGO #EEE #FRG #HE1 #JAN #LND #LEX #PALM #POW #SRES #VASThttps://total-market-solutions.com/2022/12/12-mining-companies-to-follow-in-2023/

[andymunchkin] 20/12/2022 16:07

up Or dOOn beWare of the ramPing cnTs like hAmida Hamida thisGang is uTTerly shameLess

[andymunchkin] 20/12/2022 14:53

hamidahamida16 Feb '22 - 08:46 - 602 of 2463
0 3 0
It would be a massive mistake not to buy big
when Almighty gives a no brainer gift like CGO
You got to grab them with both hands when they come
Big opportunities in life have to be SEIZED
-----
whereIs tisRamPing cnT now iTakeIt heDumpD it &MmoVed on...

[sharekitchen1974] 14/12/2022 21:11

For sure they will be spending that 7.5m on related party transactions. All the equipment will be bought by offshore companies they secretly own, then sold to the company at super inflated prices and nobody will bat an eyelid, goodbye 7.5m for 2m of equipment, biggest AIM mining scam going

[festario] 14/12/2022 21:03

APFindlay, I do wish you well with this, but I had to get out of it, (from my free CGO shares) because it never broke out of the same repetitive trading range. The most compelling evidence for me is the £15m market cap.If this company was en route to being a major mining and exporting operation, then those in the know would have forced it higher. I'm seeing the exact same pattern here as I saw at Paragon Diamonds before it collapsed as a scam.

[goforgold1] 14/12/2022 20:44

Once a con man always a con man . All they have done is lie and raise money

[goforgold1] 14/12/2022 20:38

Ha ha i wonder who they used to buy the award lol ?

[mayroad2] 14/12/2022 16:06

No, he said it pursue it if profitable - thermal coal pricing is far more volatile. Its still an option

[jailbird] 14/12/2022 15:49

SS,

Lol...you are getting it

[jailbird] 14/12/2022 15:32

Mayroad,

So after RNS for placing , in an interview he said he will not pursue it because of pricing fears

Ok I missed that!!!!


unbelievable

[jailbird] 14/12/2022 15:29

Reason for placing

Use of Proceeds

The funds will be used to finalise mine development, complete the installation of the wash plant, acquire further mining equipment and expand operations at the Lubu Project. The Placing will also enable the Company to finalise the agreed relocation of additional households from the mine site, thereby providing a larger footprint for the mine and operations to meet heightened demand. Finally, the Placing will enable the Company to settle all outstanding borrowings incurred by the Company with respect to its capital expenditure on developing the mine since Q2 2022.

The capital raise also provides the Company with financial flexibility to pursue its growth plans with regard to coke product and thermal coal.

Coking Coal

Contango is now fully funded to achieve positive cash flows from the sale of coking coal in the near term under its current offtake arrangement and to fund future growth.

The current offtake agreement for the sale of 10,000 tonnes per month of washed coal, at the prevailing MMCZ market price of US$120 per tonne, is expected to provide an estimated margin of circa US$80 per tonne. The wash plant being installed this quarter at the Lubu Project has the capacity to wash 20,000 tonnes per month of coal (double the existing contracted coal production under offtake of 10,000 tonnes per month). Therefore, in the current quarter, the Company expects to enter additional offtake arrangements for washed coking coal to utilise this spare capacity.

Any further offtake agreements for coking coal above the 20,000 tonne per month capacity of the wash plant would require the installation of further similar wash plants on site which cost US$1.5-2m each. The Company can fund any future capex from internally generated cash flow from the sales anticipated to begin shortly.

The Directors want to capitalise on the strong coal pricing and demand environment and given the material coal resource of 2.6 billion tonnes at Lubu, with a significant weighting of coking coal, there is clearly scalability in both production capacity and sales.

Coking Product

As previously reported the Company intends to produce coke by installing coke batteries that process coking coal into coke for the industrial and ferro alloy industries. The capex related to the installation of the coke batteries is circa US$5m. The Company has received heightened interest from a number of potential partners and off takers with respect to the manufacture of coke at Lubu.

The Company is looking to actively accelerate this plan, especially given current market prices and ongoing discussions have outlined the margins on the manufacture of coke are as much as four times those achieved on coking coal production at Lubu.

For the avoidance of doubt, the Company does not intend to raise any additional equity to fund the capex on the installation of coke batteries. This capital will be sourced from a combination of pre-payment of coke product via offtake, project level debt and the Company's own cash resources.

Thermal Coal

The Company recently announced a potential thermal coal strategy given the favourable thermal coal pricing and demand dynamics, which has seen thermal coal prices rise more than threefold to all-time highs of circa US$450 per tonne this year,.

The Company has received a number of requests for the regular delivery of thermal coal from a variety of international markets and is currently looking to finalise logistics to enable an export solution. The Company expects that thermal coal could generate margins of over US$100 per tonne. This could be further improved in the event the Company is successful in its current efforts to secure a rail transport solution rather than trucking to port.

[purchaseatthetop] 14/12/2022 15:24

So does that mean CGO will also not pursue Met coal when the market price drops next year? Got to mine something!

[mayroad2] 14/12/2022 15:16

Check out last week's interview - thermal coal won't be pursued at current lower prices - focusing on met coal only for now which is a completely different product/pricing structure

[jailbird] 14/12/2022 14:52

I was referring to placing RNSThe Company recently announced a potential thermal coal strategy given the favourable thermal coal pricing and demand dynamics,

[apfindley] 14/12/2022 14:25

You need to read tns's more and understand the Company's plans.We are concentrating on coking coal (met coal) which will be used in iron and steelmaking. There is huge demand for this in S.A.You are talking of thermal coal which is used in powerstations. They're different products.The deals so far are for washed and coking coal, not for steamed coal ..take note in the latest mou rns...."Given that Muchesu has a +2bn tonne resource there is plenty of scope for multiple offtakes across our whole suite of coal products - the MOU does not focus on thermal coal for instance.'

[apfindley] 14/12/2022 14:17

New account. FILTERED.idiots.

[jailbird] 14/12/2022 11:23

Only thing i will say, ppl better hope that coal prices stay elevated next year.



By the end of 2022, Fitch expects the price of coking coal to reach $370/t. In 2023 and 2024, it will be $200/t and $140/t, respectively.

At the same time, Fitch has lowered its forecast for the price of thermal coal from Australia due to warm weather in Europe, a key consumption region. For 2022, the forecast was reduced from $360/t – to $350/t, for 2023 – from $240/t to $220/t. Analysts expect overall demand for marine thermal coal to remain stable, with supplies from Australia normalizing in 2023.

Analysts at the agency slightly raised their forecast for Chinese thermal coal prices in 2022-2023. It reflected higher prices since the start of 2022, greater dependence on the country’s coal-fired power generation in the near term, supply constraints due to Covid-related measures.