Shares of Contango Holdings PLC (LON: CGO) soared 32.2% after confirming that it was in talks with two large stainless steel giants amid rumours that it was about to sign a potential offtake deal with Afrochine.
The company issued a statement clarifying that it was in negotiations with two global steelmakers but had signed confidentiality agreements prohibiting further details about the discussions.
Contango issue a statement saying: “Non-Disclosure Agreements limit Contango's ability to directly comment on individual discussions, but the company can confirm it is in discussions with two of the largest stainless-steel producers in the world, as well as several other interested parties, and expects to be in a position to provide a full update in the near term.”
Afrochine is the wholly-owned Zimbabwean subsidiary of Tsingshan Group, which is one of the stainless-steel producers worldwide.
The last major announcement from Contango was regarding the completion of an airborne geophysical survey at its Garalo-Ntiela gold project in Southern Mali.
The mining and exploration company has yet to release the geophysical survey results, which could further gain if they beat current estimates.
Contango had promised to release the data earlier this month, which is yet to happen. The company was exploring extensions of the G1 and G3 deposits, estimated to contain up to 1.8 million ounces of gold.
Investors who missed the latest rally could be best served waiting for a pullback before opening new positions.
*This is not investment advice.
Contango share price.
Contango shares surged 32.24% to trade at 7.67p, rising from Tuesday’s closing price of 5.80p.