Contango, the natural-resources company, saw a surge in its share prices following the announcement that it has received an offer for its assets. The potential sale is at the subsidiary level, and the company is also engaged in advanced talks for additional offtake agreements.
At 0702 GMT, Contango shares were trading at 5.10 pence, indicating a significant increase of 21% or 0.90 pence.
Early Stages of Negotiation
Contango clarified that the non-binding proposal is still in its early stages, with various commercial aspects under discussion. While the company is currently in talks with advisors, they emphasized that there is no guarantee of a formal offer at this point.
In August, Contango announced that it had obtained export approvals to supply TransOre International with 20,000 metric tons of washed coal on a monthly basis as part of their offtake deal. Additionally, Contango has entered into an agreement with a leading steel producer for a formal industrial trial in November, supplying 1,000 tons of washed coking coal. The steel producer has expressed interest in an offtake agreement, starting with an initial 80,000 tons per year, with the potential for expansion. Notably, Contango will receive $100,000 in revenue in advance.
Contango is actively engaged in advanced discussions with other parties for additional offtake agreements regarding both coking coal and industrial coal.