LONDON (ShareCast) - (ShareCast News) - Contango Holdings has signed a memorandum of understanding as it entered exclusive talks with regards to its potential acquisition of Zimbabwean mining assets.
As the London-listed company was unable to provide full disclosure about the details of the acquisition, apart from that it would constitute a reverse takeover under London listing rules, a suspension of trading in its shares has been requested.

Contango anticipated that the enlarged entity would be admitted to trading on the LSE's main market around the end of the first quarter of 2018.

The MoU outlined a transaction of 5p per share, a 33% premium to Contango's mid-market share price at the time of suspension.

Contango floated on the London main market only last month with the express purpose of acquiring a controlling interest in a business in the natural resources sector, raising gross proceeds of £1m at a price of 3p before expenses to fund its first acquisition.

Brian McMaster, chairman of Contango said on Friday, "We are delighted to have entered into our first MoU within two months of listing in London. In that time, we have reviewed numerous projects and believe the proposed acquisition meets our stated objective of identifying a low capex and opex [capital and operational expenditure] project with near term production."

"Zimbabwe is an area which the board is familiar with and believe successful completion of the targeted transaction should position Contango well for subsequent expansion in country, particularly in light of the increasingly favourable political climate," he added.

As well as Australian financier McMaster, Contango's board includes two non-executives of Brandon Hill Capital, the company's financial adviser and broker, plus Philip Richards, the founder of once-notorious hedge fund manager RAB Capital.

As Friday morning, the company's shares were suspended at 3.5p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE