Contango strengthens partnership structure at Muchesu coal mine

(Sharecast News) - Coal miner Contango has announced a series of changes to its partnership structure at the Muchesu coal project in Zimbabwe, introducing Pacific Goal Group as a new strategic investor. Huo Investments, which owns a 20.42% stake in Contango, originally agreed to buy a 51% equity interest in Muchesu in July, committing to a $20m revolving facility agreement to provide material funding for the expansion of the mine and installatino of key infrastructure and equipment.

However, Contango announced on Wednesday that Pacific Goal Investments will now undertake those requirements, and become the lender of the $20m.

PGI is part of Pacific Goal Group, a Hong Kong-based, Zimbabwe-focused investment vehicle partly owned by Wencai Huo - the principal of Huo Investments - which already has extensive operations in the country, with a major mine-to-energy industrial park, a logistics fleet of more than 200 trucks and interests in other mining and power-related developments.

"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. Their industrial investments, including power, logistics and processing infrastructure, are highly complementary to the long-term development of Muchesu," said Contango's chief executive Daniel Dos Santos.

"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."

The stock was up 14.1% at 0.8p by 1137 BST.