Registered number: 10186111
Contango Holdings Plc
Annual Report and Financial Statements
For the year ended 31 May 2025
Parent Company Information
Directors
Oliver Stansfield
Carl Esprey
Gordon Thompson
Yan Huo (appointed 1 April 2025)
Danial Dos Santos (appointed 17 June 2025)
Company Secretary
Graham May
Registered Office
Company Registered No. 10186111 (England and Wales)
Auditors
Moore Kingston Smith LLP
6
th
Floor
9 Appold Street
London
EC2A 2AP
Broker
Tavira Financial Limited
88 Wood Street
London
EC2V 7DA
Registrars
Avenir Registrars
5 St John’s Lane
London
EC1M 4BH
Contango Holdings PLC
Table of Contents
For the year ended 31 May 2025
Chairman’s Report
..................................................................................................................................
1
Strategic Report
......................................................................................................................................
3
Directors’ Report
...................................................................................................................................
10
Directors’ Remuneration Report
...........................................................................................................
17
Independent auditor’s report to the members………………………………………………………………..22
Consolidated Statement of Comprehensive Income
............................................................................
30
Consolidated Statement of Financial Position
......................................................................................
31
Company Statement of Financial Position
............................................................................................
32
Consolidated Statement of Changes in Equity
.....................................................................................
33
Company Statement of Changes in Equity
...........................................................................................
34
Consolidated Statement of Cash Flows
................................................................................................
35
Company Statement of Cash Flows
.....................................................................................................
36
Notes to the Financial Statements
........................................................................................................
37
Contango Holdings Plc
Chairman’s report
For the year ended 31 May 2025
1
The period under review has seen Contango Holdings Plc (‘Contango’) pass operational control of
Monaf Investments (Pvt) Limited (‘Monaf’) to Huo Investments Pvt Limited (‘Huo Investments’), following
the signing of the Definitive Agreements on 3 July 2024.
Contango will continue to hold a 24% interest in Monaf and will continue to support Huo Investments in
advancing the Muchesu Mine (‘Muchesu’) into a sustainable mining operation, focused on producing
high-quality coking coal for industrial use across southern Africa.
Remembering that our initial strategy for Muchesu was to progress offtake negotiations with the
objective of securing a contract to underpin development and generate free cash flow for reinvestment.
While those discussions were ongoing, the Board was presented with an alternative, which has unlocked
the project’s potential through a partial sale of our stake in the project to Huo Investments.
In June 2024, following due diligence, an agreement was reached with Huo Investments for their
acquisition of a 51% stake in Monaf, which in turn translated into an associated subscription of
approximately 20% in Contango Holdings Plc.
This agreement provided Contango with:
•
A life-of-mine royalty, including a guaranteed minimum of $2 million per annum;
•
A committed investment of at least $20 million by Huo Investments into Muchesu, equivalent to
Contango’s historic investment; and
•
The refund of Contango’s historic $20 million investment through future revenue streams.
Following the signing of the Definitive Agreements in July 2024, Huo Investments became the
Company’s largest shareholder through its participation in the January 2025 placing. They have since
followed through with their capital commitment to Muchesu’s development, including the delivery and
commissioning of a Dense Media Separation (DMS) plant with a daily yield capacity of 3,000 tonnes of
washed coal, as well as the expansion of the open pit and the construction of coke batteries (ovens).
Funding
During the year, Contango received $700,000 of the first $1,000,000 due under the Mineral Royalty
Agreement, with the remaining $300,000 received in June 2025. The second $1,000,000 is expected by
the end of Q4 2025.
When the DMS plant is fully commissioned and operates at design capacity, royalty payments will
exceed the minimum $2 million per annum as per the terms of the 2024 Definitive Agreement.
In January 2025, the Company raised gross proceeds of £1.85 million through a placing of 191,255,217
new ordinary shares at 1.11p, of which £272,933 was applied to reduce creditor balances.
Revenue and Expenditure
The Group recorded revenue of £nil (2024: £64,218 coal sales) from its investment in Monaf, following
the partial disposal completed in July 2024. A royalty amount of £567,551 ($700,000) was received from
Huo Investments during the year against the deferred consideration receivable asset created on the
sale of 51% of Contango’s original shareholding in Monaf on 3 July 2024. Cash resources were applied
primarily to creditor repayments and strengthening the balance sheet.
Contango Holdings Plc
Chairman’s report
For the year ended 31 May 2025
2
Liquidity
As at 31 May 2025, the Group held cash and cash equivalents of £3,216 (2024: £1,166).
Outlook
Looking to 2026, Contango is transitioning from an operating company to a royalty-based business
model. The Board will continue to support Huo Investments as it completes the development programme
at Muchesu, with first commercial production targeted for early 2026.
Further updates will be provided in due course on operational progress, including the commissioning of
new coke ovens, alongside confirmation of the receipt of the second Mineral Royalty payment.
On behalf of the Board, I would like to thank shareholders for their continued support and patience as
we progress through this important phase in Contango’s development.
Gordon Thompson
Chairman
29 September 2025
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
3
Contango's primary focus during the period was to complete the transfer of control of Monaf to Huo
Investments following the signing of the Definitive Agreements on 3 July 2024.
Muchesu Project ('Muchesu')
The Company currently holds its interest in Muchesu through the Company's 24% investment in Monaf.
The Company sold 51% of its shareholding in Monaf to Huo Investments in return for a life of mine
royalty (including a guaranteed royalty of no less than $2 million per annum) – whereupon it relinquished
full operational control of Monaf.
Muchesu is a sizeable coal asset with a resource in excess of 1.3 billion tonnes identified under NI 43-
101 standard.
Mining activities are currently focused on Block B2, where extensive work has also been
undertaken to define the specific properties of the coal.
The coal seams within Block B2 are from surface
down to a maximum depth of 47m, thus ensuring operating costs are kept competitive.
Block 2 contains
an estimated 96MT of coking coal.
A DMS plant with production capacity of 3,000 tonnes of washed
coal per day has been installed and is now fully operational. The DMS plant has been calibrated to
process coking coal from Muchesu, which is readily available following the pit expansion in Q3 and Q4
2024. The Muchesu Resource was reported on 22 April 2020 by Sumsare Consulting CC prior to the
relisting of the Company in June 2020. The Company Mineral Resource was prepared as per the
guidelines set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects as
published by the Canadian Institute of Mining. It has not been updated since the relisting and remains
as reported below.
Mineral Resource Statement for the Company
Source: Company
Source: Company
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
4
Key performance indicators (KPIs)
The Group, together with Huo Investments, continues to focus on the expansion and commercialisation
of the Muchesu Project and the ongoing assessment of its environmental impact.
The Group monitors its performance through four KPIs:
•
To reduce loss per ordinary share on total operations.
•
To reduce recurring UK head office costs.
•
To increase Group net assets.
•
To increase deferred consideration received.
The Group’s performance in 2025 against these KPIs it set out in the table below, together with prior
year performance data.
Funding
During the year the Company was funded through cash raised via share placings and royalty receipts
from Monaf.
Revenue
The Group received revenue of £nil (2024: £64,218 coal sale revenue) from its investment in Monaf,
following the partial disposal completed in July 2024. However, an amount of £567,551 was received
from Huo Investments against the deferred consideration receivable asset created on the sale of 51%
of Contango’s original shareholding in Monaf on 3 July 2024. In the prior year the revenue was derived
from two bulk sample orders for coking coal. This was included in the results of Monaf which is classified
as a discontinued activity in the prior year.
Expenditure
The Group has low ongoing overheads and, during the year under review, devoted the majority of its
cash to paying off creditors and strengthening its balance sheet.
Liquidity, cash and cash equivalents
At 31 May 2025, the Group held cash and cash equivalents of £3,216 (at 31 May 2024 the Group held
£1,166).
Unit
2025
2024
2025
vs
2024
Gain/loss per ordinary share (total
operations)
Pence
0.94
(0.78)
221%
Recurring UK head office costs
£
554,647
1,515,661
(63%)
Net assets
£
17,776,970
10,612,516
68%
Deferred consideration received
£
567,551
-
100%
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
5
Health and safety
During the year, the Company had no reported health and safety incidents that lead to time lost, staff
requiring medical treatment or hospitalisation and no fatalities (2024: nil).
Employees
During the period, with the exception of the Directors, the Group has 6 employees. Of the 6 employees,
one is female, one is from an ethnic minority background and two of the board members of subsidiary
Group companies are from ethnic minority backgrounds. Other people work on a consultancy basis at
present to keep overheads at a minimum. The board of Directors is currently comprised of four males
and one female. One of the board members is from an ethnic minority background. Contango is
committed to promoting and enhancing diversity across all levels of the organisation.
The Group is committed to promoting policies which ensure that high calibre employees are attracted,
retained and motivated, to ensure the ongoing success for the business. Employees and those who
seek to work within the Group are treated equally regardless of gender, marital status, disability, race,
ethnicity or any other basis. Contango provides equal opportunities for career development and
promotion as well as providing employees with appropriate training opportunities. For more information
about the Group’s employees see directors’ remuneration report on pages 17 – 21.
The report does not contain any specific information about social, community and human rights issues
since the Group is still in a pre-recurring revenue stage and collating that information would be onerous
at present.
Environmental
The Muchesu Project underwent a full environmental risk assessment and suitable recommendations
were made and were adopted during Contango’s stewardship which ended on 3 July 2024.
Environmental and safety legislation may change in a manner that may require stricter or additional
standards than those now in effect, a heightened degree of responsibility for companies and their
directors and employees and more stringent enforcement of existing laws and regulations.
Climate Change Disclosures
As a responsible corporate entity operating in the natural resources sector, the Company is committed
to the recognition and disclosure of the potential impacts of climate change on the Company’s business
activities.
Whilst the Company supports the initiatives and recommendations of the Task Force on Climate-related
Financial Disclosures (“TCFD”) it does not consider these applicable to Contango since its transition to
a royalty company with no active mineral extraction projects.
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
6
Financial risk management objectives and policies
The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies. It meets periodically to review the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets. The overall objective of the Board is to set policies
that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and
flexibility.
The Group’s principal financial instruments comprise cash; deferred consideration assets (being the
discounted cashflows expected to be received as consideration for the sale of 51% of its former
shareholding in Monaf); its loan to Monaf;
a
nd trade and other payables. It is, and has been throughout
the year under review, the Group’s policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are liquidity risk, price risk, foreign
exchange risk and to a lesser extend credit risk. The Board reviews and agrees policies for managing
each of these risks and they are summarised below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group’s
exploration, development and production activities. Management prepares and monitors forecasts of
the Company’s cash flows and cash balances monthly and ensures that the Group maintains sufficient
liquid funds to meet its expected future liabilities. The Group may raise funds in discrete tranches to
provide sufficient cash resources to manage the activities through to profitability.
Price risk
Although part of the future royalty stream is based on production per tonne, the Group is still exposed
to fluctuating prices of commodities, including coal and coke, if falls in prices mean the new operators
of the Muchesu Mine decide to reduce production.
Foreign exchange risk
The Group operates in a number of overseas jurisdictions and carries out transactions in a number of
currencies including British pound sterling (currency symbol: GBP or GBP£) and United States dollar
(currency symbol: USD or $).
The Group does not have a policy of using hedging instruments but will
continue to keep this under review. The Group operates foreign currency bank accounts to help mitigate
the foreign currency risk.
Credit risk
The Group minimises its credit risk through the Group policy not to provide loans of any sort to third
parties, and loans provided to subsidiaries (together with the loan to Monaf) are monitored regularly for
signs of impairment. Indicators of impairment include factors such as a loss of exploration licences,
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
7
increased political risk within a foreign jurisdiction or anticipated inability of a subsidiary to repay the
loan. This process led the Board to conclude that the loan to Contango Gold Mali should be fully impaired
in 2023 and the loan to Contango Holdings Services be fully impaired in the prior year.
The credit risk on liquid funds is low as the counterparts are banks with high credit ratings assigned by
international credit rating bodies. The majority of the Group’s cash holdings during the year were held
at Westpac Bank in Australia which has an A+ credit rating. The carrying value of both financial assets
and liabilities approximates to fair value.
Political risks, including but not limited to:
•
Political stability
•
Enforcement of foreign judgements
•
Potential legal proceedings or disputes may have a material adverse effect on the Group’s
financial performance, cash flow and results of operations
Financial risks, including but not limited to:
•
Foreign exchange effects
•
Valuation of investments
•
Valuation of deferred consideration receivable
•
The Group may not be able to close the previously referenced Definitive Agreements
entered with Huo Investments
•
The Group is reliant on royalty receipts from a single source (Monaf)
•
The Group will be subject to taxation in several different jurisdictions, and adverse changes
to the taxation laws of such jurisdictions could have a material adverse effect on its
profitability
•
The Group’s insurance may not cover all potential losses, liabilities and damage related to
its business and certain risks are uninsured and uninsurable
Commodity prices, including but not limited to:
•
The price of coal and coke may affect production volumes at Muchesu which will have a
direct follow through effect on royalty receipts
The Group’s comments and mitigating actions against the above risk categories are as follows:
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
8
Political risks
The Group maintains an active focus on all regulatory developments applicable to the Group, in
particular in relation to disclosure requirements for listed companies.
In recent years the political and security situations in Zimbabwe and Mali have been particularly volatile.
Financial risks
The Board will regularly review management updates provided by Monaf to monitor progress towards
full scale commercial production. This includes updating working capital models, reviewing actual costs
against budgeted costs, and assessing potential impacts on future funding requirements and
performance targets.
Commodity prices
As commercial mining ramps up at Muchesu, the Group will increasingly review changes in commodity
prices and discuss with Huo Investments how these will affect their near term coal production targets.
Streamlined Energy and Carbon Reporting (“SECR”)
Greenhouse gas emissions, energy consumption and energy efficiency disclosures have not been
provided because the Group has consumed less than 40,000kWh of energy during the period in the UK.
Directors’ Section 172 Statement
The Directors believe they have acted in the way most likely to promote the success of the Company
for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
•
Consider the likely consequences of any decision in the long term;
•
Act fairly between the members of the Company;
•
Maintain a reputation for high standards of business conduct;
•
Consider the interests of the Company’s employees;
•
Foster the Company’s relationships with suppliers, customers and others; and
•
Consider the impact of the Company’s operations on the community and the environment.
The Chairman’s Report describes the Company’s activities, strategy and future prospects.
The Board
considers the Company’s major stakeholders to include employees, suppliers, partners and
shareholders.
When making decisions, consideration is given to the interest of each stakeholder group
individually and collectively.
Certain decisions require more weight attached to some stakeholders than
others and while generally seeing the long-term interest of the shareholders as of primary importance,
Contango Holdings Plc
Strategic report
For the year ended 31 May 2025
9
the directors consider those interests are best served by having regard to the interests of the other key
stakeholder groups and, in fact, to all the section 172 considerations.
The Board considers the Company’s employees essential to the success of the Company and it is
committed to attracting and retaining highly skilled and dedicated employees and contractors. The Board
ensures that the Company endeavours to maintain good relationships with its suppliers through
contracting on standard business terms and paying promptly, within reasonable commercial terms.
The Board recognises its responsibility for setting and maintaining a high standard of behaviour and
business conduct.
The Company is committed to acting with integrity and no special treatment is given
to any group of shareholders and all material information is disseminated through appropriate channels
and available to all through the Company’s corporate presentations, news releases and website.
Carl Esprey
Director on behalf of the Board
29 September 2025
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
10
The Directors present their report and the audited financial statements for the year ended 31 May 2025.
Principal Activity
Results
Contango Holdings Plc recorded a profit for the year of £6,650,976 (2024: loss of £4,423,695).
Dividends
No dividend has been paid during the year nor do the Directors recommend the payment of a final
dividend (2024: £nil).
Directors
The Directors who served at any time during the year and to the date of this report were:
Gordon Thompson
Acting Chairman
Oliver Stansfield
Non-Executive Director
Carl Esprey
Chief Executive Officer
Roy Pitchford
Chairman (resigned 1 April 2025)
Yan Huo
Non-Executive Director (appointed 1 April 2025)
Daniel Dos Santos
Executive Director (appointed 17 June 2025)
Details of the Directors’ holding of Ordinary Shares, Warrants and Options are set out in the Directors’
Remuneration Report.
Further details of the interests of the Directors in the Warrants and Options of the Parent Company are
set out in Note 19 of the financial statements.
Share Capital
Wales with the registered number 10186111. Details of the Parent Company’s issued share capital,
together with details of the movements during the year, are shown in Note 18. The Parent Company
has one class of Ordinary Share and all shares have equal voting rights and rank pari passu for the
distribution of dividends and repayment of capital.
Substantial Shareholdings
As at 25 August 2025, the Parent Company had been informed of the following substantial interests
over 3% in the issued share capital of the Parent Company.
Holdings
Percentage
Huo Investments Limited
154,750,000
20.42%
Pershing Nominees Ltd
122,393,206
16.15%
Interactive Brokers LLC
93,474,937
12.33%
Hargreaves Lansdown (Nominees) Limited
51,647,405
6.81%
Luna Nominees Ltd
51,125,093
6.74%
Interactive Investor Services Nominees Ltd
25,275,255
3.33%
HSDL Nominees Limited
24,114,627
3.18%
Lynchwood Nominees Limited
24,074,292
3.17%
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
11
The Directors’ beneficial interests in the Ordinary share capital are disclosed on page 19.
The only employees in the Parent Company are the Directors, who are all considered to be key management
personnel.
Gordon Thompson
Gordon has over 30 years of experience in building, developing and managing mines across the globe,
with an extensive track record in Africa. He is a qualified mining engineer and holds membership of
the Engineering Council of South Africa ECSA.
Over the last 20 years Gordon has held a number of senior executive roles for listed mining companies.
He was Chief Operating Officer from 2017-2019 of copper producing, DRC-focused and ASX-
listed Tiger Resources Limited; Chief Executive Officer for private-equity supported and West
Africa gold-focused Taurus Gold Limited from 2010-2016; and Chief Operating Officer for Central
African Mining & Exploration plc from 2008-2010, helping manage the company's 12,345 employees,
prior to its sale to ENRC for £584M.
Oliver Stansfield
Since 2004 Oliver has primarily focused on equity sales and corporate broking, developing relationships
with a broad range of investors including Funds, Family Offices and High-Net-Worth individuals. During
his career, he has helped raise in excess of £1bn for junior resource companies in a variety of
jurisdictions and across a multitude of commodities. Oliver joined Tavira Financial Limited in January
2022 to help establish a new natural resources corporate broking division. Prior to joining Tavira, Oliver
was the CEO of resource specialist Brandon Hill Capital, where he also acted as Head of Sales.
Oliver is one of the founders of Contango Holdings plc. He is also a Director of private companies Green
Tech Investments PLC and Dionysus Capital PLC.
Carl Esprey
Carl, who qualified as a Chartered Accountant and Chartered Financial Analyst, has built a career in the
natural resource investment and development sector. After beginning his career at Deloitte in
Johannesburg in 2001, Carl joined BHP Billiton in 2004 as an analyst focused on mergers and
acquisitions. After four years at BHP Billiton, Carl used his expertise in the resources industry to move
into equity investment and joined GLG Partners in London in 2008, where he focused on natural
resources investments. In 2014 Carl joined the board of Atlas Development & Support Services Limited
and guided the company through its dual listing on the Growth Enterprise Market Segment of the Nairobi
Securities Exchange, whilst also managing operations across Kenya, Ethiopia and Tanzania. Most
recently, Carl has separately founded Elatio Tech Limited, a Southern-African revenue generating
gaming business and Waraba Gold Limited, a West-African gold exploration company.
Yan Huo
Yan is a Chinese national who resides in Zimbabwe and is a director and 50% shareholder of Huo
Investments (Pvt) Limited, which is the largest shareholder of the Company, with a holding of 20.42%.
Yan is the daughter of Wencai Huo, who owns the balance of 50% of Huo Investments (Pvt) Limited.
Yan is a director of a number of local businesses and has extensive experience within the mineral
exploration space in Zimbabwe.
Corporate Governance Statement
The Board is committed to maintaining appropriate standards of corporate governance. The statement
below, together with the report on Directors’ remuneration on pages 17 to 21, explains how the Group
has observed the principles set out in The UK Corporate Governance Code (“the Code”) as relevant to
the Group and contains the information required by section 7 of the UK Listing Authority’s Disclosure
Rules and Transparency Rules.
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
12
The Group is a small entity with modest resources. The Group has a clear mandate to optimise the
allocation of limited resources to invest in its assets and support its future plans. As such the Group
strives to maintain a balance between conservation of limited resources and maintaining robust
corporate government practices. As the Group evolves, the Board is committed to enhancing the
Group’s corporate governance policies and practices deemed appropriate to the size and maturity of
the organisation.
Board of Directors
The Board currently consists of two executive Directors, a non-executive chairman and two non-
executive Directors. Four of the directors are male and from white European backgrounds. One director
is female and from an Asian background. It met regularly throughout the year to discuss key issues and
to monitor the overall performance of the Group. With a Board comprising of just one executive and four
non-executive Directors, all matters and committees, such as Remuneration, Audit and Nominations are
considered by the Board as a whole. The Directors will actively seek to expand Board membership to
provide additional levels of corporate governance procedures at the relevant opportunity. The Board
had only met one of the following targets on board diversity as at 31 May 2025:
•
At least 40% of the individuals on its board of directors are women;
•
At least one of the following senior positions on its board of directors is held by a woman: (A) the
chair; (B) the chief executive; (C) the senior independent director; or (D) the chief financial officer;
and
•
At least one individual on the board of directors is from a minority ethnic background.
The reason for not meeting all of the targets is the Group is still in the early stages of growing its business
and does not have the resources to expand the Board at present. Once the business is on a path of
stable, profitable growth it will endeavour to expand the Board and meet the above targets. This is also
the reason why the Board does not have a director appointed from the workforce; a formal workforce
advisory panel; or a designated non-executive Director.
Audit Committee
The Board seeks to present a balanced and understandable assessment of the Group’s position and
prospects in all interim, final and price-sensitive reports and information required to be presented by
statute.
The Directors consider the size of the Group and the close involvement of executive Directors in the
day-to-day operations makes the maintenance of an internal audit function unnecessary. The Directors
will continue to monitor this situation.
External auditor
During the year the Board met with the auditor to discuss the audit process and the matters the auditor
identified during the audit. The Board will continue to meet with the auditor at least twice a year to
consider the results, internal procedures and controls and matters raised by the auditor. The Board
considers auditor independence and objectivity and the effectiveness of the audit process. It also
considers the nature and extent of the non-audit services supplied by the auditor reviewing the ratio of
audit to non-audit fees and ensures that an appropriate relationship is maintained between the Group
and its external auditor.
The Group has a policy of controlling the provision of non-audit services by the external auditor in order
that their objectivity and independence are safeguarded and approved the non-audit services provided
by the external auditors. As part of the decision to recommend the appointment of the external auditor,
the Board takes into account the tenure of the auditor in addition to the results of its review of the
effectiveness of the external auditor and considers whether there should be a full tender process. There
are no contractual obligations restricting the Board’s choice of external auditor. The current auditors,
Moore Kingston Smith LLP, were appointed in August 2024.
Remuneration Committee
There is no separate Remuneration Committee at present, instead all remuneration matters are
considered by the Board as a whole. It meets when required to consider all aspects of directors’ and
staff remuneration, share options and service contracts.
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
13
Nominations Committee
A Nominations Committee has not yet been established. This is due to the small size of the Company.
Internal financial control
Due to the small size of the Company
there is at present no internal audit function within the business.
However, financial controls have been established so as to provide safeguards against unauthorised
use or misappropriation of the assets, to maintain adequate accounting records and to provide reliable
financial information for internal use. Key financial controls include:
•
The maintenance of adequate records;
•
A schedule of matters reserved for the approval of the Board; and
•
Close involvement of the Directors in the day-to-day operational matters of the Group.
The Board conducts reviews annually to assess the continued effectiveness of the company’s risk
management and internal control systems; and the process used to prepare consolidated accounts. The
Board’s most recent review found that the risk management and internal control systems in place were
still operating effectively and appropriate for an organization of this size.
Attendance at meetings
Four board meetings took place during the year. The attendance of those Directors in place at the year
end at Board and Audit Committee meetings was as follows:
Board
Audit
Number held
4
1
Number attended:
Carl Esprey
4
1
Oliver Stansfield
4
1
Gordon Thompson
3
1
Yan Huo *
-
-
* Appointed 1 April 2025
Shareholder communications
The Group uses its corporate website (www.contango-holdings-plc.co.uk) to ensure that the latest
announcements, press releases and published financial information are available to all shareholders
and other interested parties.
The AGM is used to communicate with both institutional shareholders and private investors and all
shareholders are encouraged to participate. Separate resolutions are proposed on each issue so that
they can give proper consideration and there is a resolution to approve the Annual Report and financial
statements.
The Group counts all proxy votes and will indicate the level of proxies lodged on each resolution after it
has been dealt with by a show of hands.
Statement of Directors’ Responsibilities in respect of the Annual Report and the financial
statements
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have prepared the group and company financial statements in accordance with UK-
adopted International Accounting Standards.
In preparing these financial statements, the Directors are
required to:
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
14
•
select accounting policies and then apply them consistently;
•
make judgements and accounting estimates that are reasonable and prudent;
•
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
•
state whether applicable UK-adopted International Accounting Standards have been followed,
subject to any material departures disclosed and explained in the financial statements;
•
provide additional disclosures when compliance with the specific requirements in UK-adopted
International Accounting Standards are insufficient to enable users to understand the impact of
particular transactions, other events and conditions on the Company’s and Group’s financial position
and financial performance; and
•
make an assessment of the Company’s and Group’s ability to continue as a going concern, prepare
the financial statements on the going concern basis unless it is inappropriate to presume that the
Company and Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company and Group’s transactions and disclose with reasonable accuracy at any time the
financial position of the Company and Group and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a
Strategic Report, Report of the Directors, Annual Report on Remuneration, Directors’ Remuneration
Policy and Corporate Governance Statement that comply with that law and those regulations. The
Directors are responsible for the maintenance and integrity of the corporate and financial information
and statements included on the Company’s website, www.contango-holdings-plc.co.uk. Legislation in
the United Kingdom governing the preparation and dissemination of the financial statements may differ
from legislation in other jurisdictions. The directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
The Directors confirm that to the best of their knowledge:
•
The Group financial statements, prepared in accordance with UK-adopted International
Accounting Standards, give a true and fair view of the assets, liabilities, financial position and
loss of the Group;
•
This Annual Report includes the fair review of the development and performance of the business
and the position of the Group together with a description of the principal risks and uncertainties
that it faces; and
•
The Annual Report and financial statements, taken as a whole, are fair, balanced and
understandable and provide information necessary for shareholders to assess the Group’s
performance, business and strategy.
Greenhouse Gas Disclosures
The Group has as yet no substantive greenhouse gas emissions to report from the operations of the
Group and does not have responsibility for any other emission producing sources under the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.
Disclosure and Transparency Rules
Details of the Parent Company’s share capital and warrants are given in Notes 18 and 19 respectively.
The Directors undertook not to sell any of their holdings for a year after admission to the, as then,
standard listing without the consent of the Group and the Group’s broker. There are now no restrictions
on transfer or limitations on the holding of the ordinary shares. None of the shares carry any special
rights with regard to the control of the Parent Company. There are no known arrangements under which
the financial rights are held by a person other than the holder and no known agreements or restrictions
on share transfers and voting rights.
As far as the Group is aware there are no person with significant direct or indirect holdings other than
the Directors and other significant shareholders as shown on page 10 and page 19.
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
15
The provisions covering the appointment and replacement of directors are contained in the Parent
Company’s articles, any changes to which require shareholder approval. There are no significant
agreements to which the Group is party that take effect, alter or terminate upon a change of control
following a takeover bid and no agreements for compensation for loss of office or employment that
become effective as a result of such a bid.
Auditor Information
The Directors who held office at the date of approval of the Directors’ Report confirm that, so far as they
are each aware, there is no relevant audit information of which the Group’s Auditor is unaware; and
each Director has taken all the steps that he ought to have taken as a Director to make himself aware
of any relevant audit information and to establish that the Group’s Auditor is aware of that information.
Auditor
Moore Kingston Smith LLP was appointed as Auditor of the Group in August 2024 and resolutions for
their re-appointment and for the Directors to determine its remuneration will be proposed at the
forthcoming AGM.
Financial Instruments
The Group has exposure to liquidity risk. Note 2 presents information about the Group’s exposure to
these risks, along with the Group’s objectives, processes and policies for managing the risks.
Events after the reporting period
Note 20 of the financial statements provides further detail on deferred consideration received since the
end of the financial year.
Directors’ Indemnity Provisions
The Group has implemented Directors and Officers Liability Indemnity insurance.
Powers of directors
The directors are responsible for the management of the business and may exercise all powers of the
Company subject to UK legislation and the Company’s Articles of Association, which includes powers
to issue the Company’s shares given by special resolution. The authority to issue shares granted at the
2024 Annual General Meeting was used in the January 2025 placement.
Going concern
After making enquiries, the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. The Group entered into binding
agreements with Huo Investments (Pvt) Limited to sell 51% of its shareholding in its subsidiary Monaf.
Huo Investments have agreed to invest up to $20 million in the Muchesu Mine to increase production
capacity and upgrade infrastructure and will pay Contango a royalty based on production. The royalty
will be a minimum of $2 million per annum. Huo Investments also acquired a 20% shareholding in
Contango for $2 million as part of the January 2025 placement. The $2 million was used by Contango
to pay creditors and provide working capital to the Group.
The Directors consider that the $2m minimum royalty will be sufficient funds to cover ongoing running
costs until the Muchesu Mine is making regular cash sales and the Company is receiving regular royalty
payments based on production. However, the Company still has outstanding investor loans of
£4,666,998 as at 31 May 2025, all of which are now overdue for repayment and repayable on demand.
In the event that multiple investors demanded their loans be repaid at the same time the Company would
not have sufficient funds to accommodate this. Whilst noting that this is a possibility, the Company
maintains regular contact with the lenders (all of whom are supportive shareholders) and considers that
investors demanding immediate repayment of their loans is unlikely. However, given this possibility the
directors acknowledge the disclaimer of opinion in respect of going concern. Further details are given in
Note 2 (c) to the financial statements. However, the Directors continue to adopt the going concern basis
in preparing the financial statements.
Contango Holdings Plc
Directors’ Report
For the year ended 31 May 2025
16
Donations
The Group made no political donations during the year.
Carl Esprey
Director on behalf of the Board
29 September 2025
Contango Holdings Plc
Directors’ Remuneration Report
For the year ended 31 May 2025
17
Remuneration Policies
The remuneration policy of the Group, which has been in effect from 18 June 2020, is designed to
attract, retain and motivate Directors and senior management of a high calibre with a view to
encouraging commitment to the development of the Group and for long term enhancement of a
shareholder value. The Board believes that shared ownership by Executive Directors strengthens the
link between their personal interests and those of shareholders although there is no formal shareholding
policy in place. There are no other UK-based employees (and never have been) so the directors’
remuneration policy is based on comparisons with salary levels for directors in equivalent companies.
The current Directors’ remuneration comprises a basic fee.
Service contracts
Each of the Directors entered into Service Agreements on 19 May 2020 with the Parent Company and
continue to be employed until terminated by the Group giving three months’ prior notice or the Director
giving three months’ prior notice to save in cases of a material breach of contract when the Executive
Directors can be dismissed without notice.
In the event of termination or loss of office the Director is entitled only to payment of his basic salary in
respect of his notice period. In the event of termination or loss of office in the case of a material breach
of contract the Director is not entitled to any further payment.
The outgoing Chief Executive Officer Carl Esprey was paid at a rate of £60,000 per annum. The
incoming Chief Executive Officer (Daniel Dos Santos), appointed after the year end on 17 June 2025,
will receive a salary of £36,000 per annum. The Chairman is paid at a rate of £24,000 per annum.
Executive Directors are allowed to accept external appointments with the consent of the Board, provided
that these do not lead to conflicts of interest. Executive Directors are allowed to retain fees paid.
Non-Executive Directors are paid at a rate of £18,000 per annum and are required to seek re-election
at the annual general meeting.
The contracts are available for inspection at the Company’s registered office.
Executive remuneration is assessed on an annual basis against director pay in equivalent companies
to ensure that it remains competitive.
Approval by members
The remuneration policy above will be put before the members for approval at the next Annual General
Meeting.
Implementation Report
Particulars of Directors’ Remuneration (the table below is audited)
Particulars of directors’ remuneration, including directors’ warrants which, under the Companies Act
2006 are required to be audited, are given in Notes 5 and 21 and further referenced in the Directors’
Report.
Remuneration paid to the Directors’ during the year ended 31 May 2025:
Executive Director
Salary and
fees (£)
Total
2025
(£)
Carl Esprey
60,000
60,000
Roy Pitchford
20,000
20,000
Gordon Thompson
18,000
18,000
Oliver Stansfield
18,000
18,000
Yan Huo
3,000
3,000
119,000
119,000
Contango Holdings Plc
Directors’ Remuneration Report
For the year ended 31 May 2025
18
Remuneration paid to the Directors’ during the year ended 31 May 2024:
Executive Director
Salary and
fees (£)
Total
2024
(£)
Carl Esprey
60,000
60,000
Roy Pitchford
24,000
24,000
Gordon Thompson
18,000
18,000
Oliver Stansfield
18,000
18,000
120,000
120,000
The columns relating to taxable benefit, contribution to pension schemes and annual bonus have not
been used in the tables above because the amounts for both years in these categories in the Group are
£nil.
There was no variable remuneration in either year and total fixed remuneration is as per the totals above.
There were no performance measures associated with any aspect of Directors’ remuneration during the
year.
Payments to past Directors
There are no payments to past Directors.
Payments for loss of office
There were no payments for loss of office during the year.
Bonus and incentive plans
There were no bonus payments made to Directors during the year.
Unpaid Salaries
Due to cashflow constraints all Directors have had their cash salary payments frozen since December
2024. The amount owing in unpaid salaries at the year-end was £36,371. This will be paid when funds
are available.
Unpaid Salaries
2025
2024
(£)
(£)
Carl Esprey
16,371
50,000
Roy Pitchford
8,000
18,000
Gordon Thompson
9,000
13,500
Oliver Stansfield
-
8,240
Yan Huo
3,000
-
36,371
89,740
Contango Holdings Plc
Directors’ Remuneration Report
For the year ended 31 May 2025
19
All of the £89,740 owed as at 31 May 2024 was settled in cash in the year. During the year £37,733 was
settled through the issue of shares in the January 2025 placement and £44,896 was paid in cash.
Directors’ interests in shares
The Group has no Director shareholder requirements.
The beneficial interest of the Directors in the Ordinary share capital of the Parent Company was as
follows:
31 May 2025
% of issued
share capital
31 May 2024
% of issued
share capital
Number
2025
Number
2024
Carl Esprey
8,594,437
1.13%
8,594,437
1.52%
Roy Pitchford
1,890,900
0.25%
990,000
0.17%
Oliver Stansfield
13,196,666
1.74%
12,500,000
2.21%
Gordon Thomson
900,900
0.12%
-
-
Yan Huo
77,375,000*
10.21%
-
-
101,957,903
13.45%
22,084,437
3.90%
*
Yan Huo owns 50% of Huo Investments Limited which owns 154,750,000 shares in the Company.
The Directors held the following warrants at the end of the year:
Director
Number of
warrants
Number of
warrants
Exercise Price
Earliest
date of
exercise
Latest date of
exercise
2025
2024
Carl Esprey
347,219
347,219
Nov 22 Placing
9p
7 Nov 2022
6 Nov 2025
Oliver Stansfield
-
1,458,333
Nov 21 Placing
Broker
Warrants: 6p
3 Mar 2022
2 Mar 2025
Oliver Stansfield
971,736
971,736
Nov 22 Placing
Broker
Warrants: 6p
7 Nov 2022
6 Nov 2025
Oliver Stansfield
1,645,000
1,645,000
Apr 24 Placing
Broker
Warrants: 1p
11 Apr 2024
10 Apr 2027
Remuneration Committee
There is no separate Remuneration Committee at present, instead all remuneration matters are
considered by the Board as a whole. It meets when required to consider all aspects of directors’
remuneration, share options and service contracts.
Shareholder voting at the Annual General Meeting
The Board presented its Directors’ Remuneration Report and the Directors’ Remuneration Policy to its
members at the last Annual General Meeting (AGM) held on 29 November 2024 where it was duly
approved by shareholders.
Contango Holdings Plc
Directors’ Remuneration Report
For the year ended 31 May 2025
20
2025 CEO Single Figure of Remuneration
The single figure of remuneration for Carl Esprey is £60,000 – which represents his base salary. In the
prior year the single figure remuneration was his £60,000 base salary.
The table above illustrates the total return of Contango shareholders over the years since relisting of
-78% as opposed to the +41% return for the FTSE 350 as a whole.
£0
£50,000
£100,000
£150,000
£200,000
£250,000
£300,000
£350,000
£400,000
2020-21
2021-22
2022-23
2023-24
2024-25
10 Year CEO Single Figure Outcomes (since relisting in 2020)
Base Salary
Share Performance Options
-100%
-50%
0%
50%
100%
150%
May-20
Aug-20
Nov-20
Feb-21
May-21
Aug-21
Nov-21
Feb-22
May-22
Aug-22
Nov-22
Feb-23
May-23
Aug-23
Nov-23
Feb-24
May-24
Aug-24
Nov-24
Feb-25
May-25
Total Shareholder Return
FTSE 350
CGO
Contango Holdings Plc
Directors’ Remuneration Report
For the year ended 31 May 2025
21
Statement
From incorporation the outset the Board has set out and implemented a policy designed to attract, retain
and motivate executive Directors of the right calibre and ability. There have been no major changes
during the period either in that policy or its implementation, including levels of remuneration and terms
of service for the Directors.
ON BEHALF OF THE BOARD
Carl Esprey
Chief Executive Officer
29 September 2025
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
22
Disclaimer of opinion
We were engaged to audit the financial statements of Contango Holdings Plc (‘the Company’) and its
subsidiaries (‘the Group’) for the year ended 31 May 2025 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the
Consolidated and Company Statements of Changes in Equity, the Consolidated and Company
Statements of Cash Flows, and notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law
and UK adopted International Accounting Standards.
We do not express an opinion on the financial statements of the Group or the Company. Because of the
significance of the matters described in the basis for disclaimer of opinion section of our report, we have
not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on
the financial statements.
Basis for disclaimer of opinion
As disclosed in note 2c to the financial statements, the financial statements of the Group and Company
are prepared on the assumption that the Group and Company will continue as a going concern.
On 3 July 2024, the Company entered into an agreement with Huo Investments (Pvt) Limited (Huo
Investments) to sell 51% of its shareholding in its subsidiary Monaf Investments (Pvt) Limited (Monaf).
Huo Investments have agreed to invest up to $20 million in the Muchesu Mine, for which Monaf holds
the mining licence, in order to increase production capacity and upgrade infrastructure, and have agreed
to pay the Company a royalty based on production. The contract includes payment of a royalty which
will be a minimum of $2 million per annum. In addition, Huo Investments have acquired a 20%
shareholding in the Company for $2 million. The $2 million has been used by the Company to pay
creditors and provide working capital to the Company and Group.
As at 31 May 2025, the Group and Company has investor loans amounting to £4,666,998 which are
now overdue for payment as disclosed in Note 16 to the financial statements.
Given that there are inherent uncertainties associated with the development of mining assets, the Group
and Company are not guaranteed to secure additional cash apart from the minimum royalty of $2 million
per annum referred to above. Therefore, the Group and Company may be unable to realise its assets
and discharge its liabilities, including the investor loans referred to above, in the normal course of
business for a period of at least twelve months from the date of approval of the financial statements.
The ability of the Group and Company to have sufficient funds available to continue to operate by
receiving royalty payments based on production and by the investor loans not being called for repayment
are the key assumptions supporting the Directors’ conclusions that it is appropriate to prepare the
financial statements of the Group and Company on a going concern basis. Whilst we understand Huo
Investments has continued to make material investments to enable the start of production and
consequently to allow the Group and Company to continue to operate as a going concern, production
has not yet started, and an offtake agreement has not been signed as at the date of approval of the
financial statements. In addition, whilst the Directors do not have any reason to believe that the investors
will call for repayment of the loans, there can be no certainty in this respect.
As a result, we were unable to obtain sufficient appropriate audit evidence to conclude that the Company
will be able to repay the investor loans. Consequently, we were unable to obtain sufficient appropriate
audit evidence to enable us to conclude on the Group’s and Company’s ability to continue as a going
concern for a period of at least twelve months from the date of approval of the audit report and therefore
whether the use of the going concern basis of preparation of the financial statements is appropriate.
The financial statements do not reflect any adjustments that would be required should the Group and
Company be unable to continue as a going concern.
In addition to the above matter, as disclosed in notes 3(e) and 11, the cost of the retained interest of
Monaf has been calculated as the fair value of the retained interest at the date of transfer of shares as
there is no active market for Monaf shares and mining operations have not commenced.
Additionally, as disclosed in notes 3(f) and 13, the royalty stream referred to above represents deferred
consideration for the disposal of the majority of the Group and Company’s investment in Monaf. The
value of the deferred consideration receivable arising from this royalty stream has been calculated
based on the minimum royalty amount as agreed between the company and Monaf of $2 million per
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
23
annum. This does not include any production-based royalties which the Group and Company may
receive, due to uncertainties around the commencement of commercial production and finalisation of
offtake agreements.
Consequently, we were unable to obtain sufficient appropriate audit evidence regarding the fair values
of the Monaf investment and the related deferred consideration receivable as set out in notes 11 and
13 respectively which further contributed to us being unable to form an opinion on the financial
statements.
Our approach to the audit
Our group audit was scoped by obtaining an understanding of the group and its environment, including
the group’s system of internal control, and assessing the risks of material misstatement in the financial
statements. We also addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the directors that may have represented a risk of
material misstatement. Our group audit focused on the financial information of components which, in
our view, either individually or in combination, represented the most significant areas of financial
reporting risk or were quantitatively material to the Group's results.
For those components that presented a higher risk of material misstatement or contributed significantly
to the overall group’s results or financial position, either a full scope or a specified audit approach was
determined based on their relative materiality to the group and our assessment of the audit risk. For
components requiring a full scope approach, we evaluated controls by performing walkthroughs over
the financial reporting systems identified as part of our risk assessment, reviewed the accounts
production process and addressed critical accounting matters. We then undertook substantive testing
on significant transactions and material account baIances.
In order to address the audit risks identified during our planning procedures, we performed a full scope
audit of the financial statements of the group and the parent company. We performed analytical
procedures over the remaining components, which were individually immaterial but collectively covered
residual group risk.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year and include the most significant assessed risks
of material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the audit engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
24
Key audit matter
How our scope addressed the matter -
Going concern (Group and Company)
The Group has made a profit for the year of
£6,478,748
(2024:
Loss
of
£4,423,695).
However, this was primarily due to the disposal
of the majority of the group’s interests in Monaf
Investments (Pvt) Limited during the year. The
Group had net cash outflows of £133,690
(2024: £104,144 outflow) with a cash balance of
£3,216 (2024: £1,166) at the year end.
The Group has outstanding investor loans of
£4,666,998 (2024: £4,184,740) which are
overdue as at 31 May 2025.
The
Directors
have
prepared
cash
flow
forecasts that show that, in the absence of any
further debt or equity funding, the outstanding
investor loans cannot be fully repaid if
demanded.
Given the outstanding investor loans and the
uncertainty in respect of if and when future
royalty income will be received in excess of the
$2 million minimum, the ability of the Group and
Company to continue in business as a going
concern was considered to be significant risk
and a key audit matter
.
Our audit work and conclusion in respect of
going concern has been detailed in the basis
for disclaimer of opinion section of our audit
report.
Valuation of investments and deferred
consideration receivable
Determination of the fair value of the retained
investment in Monaf amounting to £474,827
(2024:Nil)
and
deferred
consideration
receivable amounting £6,463,572 (2024: Nil) as
at 31 May 2025 is subject to a high degree of
judgement and based on
management’s
assessment of the likelihood of the level of
production, the profitability and the cash
generated from future royalty payments from
Our audit work and conclusion in respect of
these matters has been detailed in the basis
for disclaimer of opinion section of our audit
report.
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
25
operations at the Muchesu mine, which is reliant
upon a number of significant assumptions.
Consequently this was considered to be a key
audit matter.
Valuation of related party loans
The carrying value of related party loans due
from Monaf as at 31 May 2025 of £15,882,572
(2024: £15,866,081), set out in notes 2(b) and
13, has not been subject to any provision for
impairment at the reporting date. The company
has agreed the terms of repayment with Monaf
and
considers
the
amount
to
be
fully
recoverable.
Given the significance of the amount involved
and judgments applied, recoverability of related
party loans was considered a key audit matter.
The scope of our work included, but was not
restricted to:
•
We critically assessed the current loan
facility agreements and the relevant
clauses
of
the
sale
and
purchase
agreement (SPA) in respect of the
disposal of the 51% shareholding In
Monaf;
•
We critically assessed management’s
consideration
and
application
of
impairment triggers in relation to the
outstanding loan balance as at the
reporting date;
•
We critically assessed how settlement of
the loan can be achieved and the
likelihood of settlement;
•
We critically assessed the calculation of
expected credit losses in respect of these
related party loans; and
•
We evaluated the accounting policy and
detailed disclosures to check whether
information provided in the financial
statements is compliant with the group
accounting policies and relevant IFRS
accounting and disclosure requirements.
Key observations
Based on the work performed, we concluded
that the value of related party loans at the
reporting date is not materially misstated.
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
26
Assessment of whether Contango Holdings
Plc has significant influence over Monaf
Investments (Pvt) Limited
We considered that there was a risk that the
group’s accounting treatment of the remaining
investment in Monaf Investments (Pvt) Limited
was incorrect. Whether the retained investment
should be treated as an investment in an
associate or not was considered a key audit
matter as this would significantly impact the
treatment of the investment in the consolidated
financial statements.
The scope of our work included, but was not
restricted to:
•
We critically assessed management’s
assessment
of
whether
significant
influence is exercised;
•
We
reviewed
the
post-disposal
shareholding structure and governance
arrangements (e.g. board seats, voting
rights, decision-making powers) to assess
whether Contango Holdings Plc retains
significant influence in Monaf Investments
(Pty) Limited under IAS 28 or not;
•
We reviewed the SPA and any ongoing
agreements with Monaf Investments (Pvt)
Limited to identify rights that may indicate
significant influence, such as veto rights or
material transactions; and
•
We assessed the adequacy of the
disclosures in the financial statements.
Key Observations
Based on the work performed, we concluded
that
management's
assessment
that
Contango
Holdings
does
not
exercise
significant influence over Monaf Investments
is appropriate and accordingly, the remaining
investment in Monaf Investments is correctly
treated as an 'Investment in equity shares'
and not as 'Investment in an Associate'.
Our application of materiality
The scope and focus of our audit engagement was influenced by our assessment and application of
materiality. We define materiality as the magnitude of misstatement that could reasonably be expected
to influence the readers and the economic decisions of the users of the financial statements. We use
materiality to determine the scope of our audit engagement and the nature, timing and extent of our
audit procedures and to evaluate the effect of misstatements, both individually and on the financial
statements as a whole.
Due to the nature of the Group, we considered total assets to be the main focus for the readers of the
financial statements, and accordingly this consideration influenced our judgement of materiality. Based
on our professional judgement, we determined materiality for the Group to be £347,000 based on a
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
27
percentage of assets (1%). Based on our professional judgement, we determined materiality for the
Company to be £312,300 based on a percentage of total assets (1%).
On the basis of our risk assessment, together with our assessment of the overall control environment,
our judgement was that performance materiality (i.e. our tolerance for misstatement in an individual
account or balance) for the Group and Company was 50% of materiality, which is £173,500 and
£156,150 respectively.
We agreed to report to the Audit Committee all audit differences in respect of the Group and Company
in excess of £17,350 and £15,615 respectively and, as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds. We also reported to the Audit Committee on
disclosure matters that we identified when assessing the overall presentation of the financial statements.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared
in accordance with the Companies Act 2006.
Because of the significance of the matter described in the basis for disclaimer of opinion section of our
report, we have been unable to form an opinion whether, based on the work undertaken in the course
of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
•
the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
Notwithstanding our disclaimer of opinion on the financial statements, in the light of the knowledge and
understanding of the Group and the Company and their environment obtained in the course of the audit,
performed subject to the pervasive limitation described above, we have not identified material
misstatements in the Strategic Report or the Directors’ Report.
Arising from the limitation of our work referred to above:
•
we have not received all the information and explanations we require for our audit; and
•
we were unable to determine whether adequate accounting records have been kept.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires
us to report to you if, in our opinion:
•
returns adequate for our audit have not been received from branches not visited by us; or
•
the Company financial statements and the part of the directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
a corporate governance statement has not been prepared by the Company.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
28
Auditor’s Responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit of the Group’s and Company’s financial statements in
accordance with International Standards on Auditing (UK) and to issue an auditor’s report.
However, because of the matter described in the basis for disclaimer of opinion section of our report,
we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
on these financial statements.
We are independent of the Group and Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material
misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence
regarding the assessed risks of material misstatement due to fraud, through designing and implementing
appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or
suspected fraud identified during the audit. However, the primary responsibility for the prevention and
detection of fraud rests with both management and those charged with governance of the Company.
Our approach was as follows:
•
We obtained an understanding of the legal and regulatory requirements applicable to the Company
and considered that the most significant are the Companies Act 2006, UK adopted International
Accounting Standards, the Listing Rules, the Disclosure Guidance and Transparency Rules, and
UK taxation legislation.
•
We obtained an understanding of how the Company complies with these requirements by
discussions with management and those charged with governance.
•
We assessed the risk of material misstatement of the financial statements, including the risk of
material misstatement due to fraud and how it might occur, by holding discussions with management
and those charged with governance.
•
We inquired of management and those charged with governance as to any known instances of non-
compliance or suspected non-compliance with laws and regulations.
•
Based on this understanding, we designed specific appropriate audit procedures to identify
instances of non-compliance with laws and regulations. This included making enquiries of
management and those charged with governance and obtaining additional corroborative evidence
as required.
•
We evaluated managements’ incentives to fraudulently manipulate the financial statements and
determined that the principal risks related to management bias in accounting estimates and
judgemental areas of the financial statements. We challenged the assumptions and judgements
made by management in respect of the significant areas of estimation, as described in the key audit
matters section.
There are inherent limitations in the audit procedures described above. We are less likely to become
aware of instances of non-compliance with laws and regulations that are not closely related to events
and transactions reflected in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through
collusion.
Contango Holdings PLC
Independent Auditor’s Report To The Members Of Contango Holdings Plc
For the year ended 31 May 2025
29
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the Company’s Annual
General Meeting (AGM) in August 2024 as auditor of the Company to hold office until the conclusion of
the next AGM of the Company. Our total uninterrupted period of engagement is two years, covering the
periods ended 31 May 2024 and 31 May 2025.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or
Company and we remain independent of the Group and the Company in conducting our audit
engagement.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw
to the attention of the Company’s members those matters which we are required to include in an
auditor’s report addressed to them. To the fullest extent permitted by law, we do not accept or assume
responsibility to any party other than the Company and Company’s members as a body, for our work,
for this report, or for the opinions we have formed.
Matthew Banton (Senior Statutory Auditor)
For and on behalf of Moore Kingston Smith LLP, Statutory Auditor
6
th
Floor
9 Appold Street
London
EC2A 2AP
Contango Holdings PLC
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2025
30
Year ended
31 May 2025
Year ended
31 May 2024
Notes
£
£
Income
Cost of sales
Gross profit
Administrative fees and other expenses
(554,647 )
(1,515,661 )
Profit on disposal of subsidiary
6
Impairment of loan to related party
13
(1,053,412 )
Impairment of Mali exploration licences
(23,157 )
Operating expenses
(1,538,818 )
Finance expense
(795,530 )
(957,416 )
Total expenses
(2,496,234 )
Profit/(loss) before tax
(2,496,234 )
Income tax
9
Profit/(loss) for the year from continuing operations
(2,496,234 )
Loss for the year from discontinued operations
10
(48,602 )
(1,927,461 )
Profit/(loss) for the period
(4,423,695 )
Other comprehensive income
(172,228 )
(30,140 )
Total comprehensive profit/(loss) for the period
(4,453,835 )
Total comprehensive profit/(loss) attributable to
owners of Contango Holdings PLC
(3,819,326 )
Total comprehensive loss attributable to non-
controlling interests
23
(16,207 )
(634,509 )
Total comprehensive profit/(loss) for the period
(4,453,835 )
Total comprehensive profit/(loss) for the year from
continuing operations
(2,516,634 )
Total comprehensive profit/(loss) for the year from
discontinued operations
(12,731 )
(1,937,201 )
Total other comprehensive profit/(loss) for the
period
(4,453,835 )
Basic and diluted profit/(loss) per share from
total operations (pence)
8
(0.78
Basic and diluted profit/(loss) per share from
continuing operations
8
(0.50
Basic and diluted profit/(loss) per share from
discontinued operations
8
(0.01
(0.28
The notes to the financial statements form an integral part of these financial statements.
Contango Holdings PLC
Consolidated Statement of Financial Position
As at 31 May 2025
31
Notes
31 May 2025
31 May 2024
Non-current assets
£
£
Investments
11
Other receivables
13
Property plant and equipment
12
Total non-current assets
Current assets
Other receivables
13
Cash and cash equivalents
15
Total current assets
Assets held for sale
17
Total assets
Current liabilities
Trade and other payables
16
(727,644 )
(1,081,195 )
Investor loans
16
(4,666,998 )
(4,184,740 )
Total current liabilities
(5,394,642 )
(5,265,935 )
Liabilities relating to assets classified as
held for sale
17
(1,004,354 )
Total liabilities
(5,394,642 )
(6,270,289 )
Net assets
Equity
Share capital
18
Share premium
18
Warrant reserve
18
Translation reserve
18
Retained earnings
(8,228,654 )
(15,980,533 )
Total equity
attributable to owners of
Contango Holdings
Non-controlling interests
23
(46,863 )
Total Equity
The notes to the financial statements form an integral part of these financial statements
.
………………………………
Carl Esprey (Director)
Registered number: 10186111
32
Contango Holdings PLC
As at 31 May 2025
Notes | 31 May 2025 | 31 May 2024 | |
Non-current assets | £ | £ | |
Investments | 11 | 474,827 | 1,420,888 |
Other receivables | 13 | 20,764,724 | 15,866,081 |
Total non-current assets | 21,239,551 | 17,286,969 | |
Current assets | |||
Other receivables | 13 | 1,915,195 | 155,345 |
Cash and cash equivalents | 15 | 17 | 1 |
Total current assets | 1,915,212 | 155,346 | |
Total assets | 23,154,763 | 17,442,315 | |
Current liabilities | |||
Trade and other payables | 16 | (498,438) | (858,201) |
Investor loans | 16 | (4,666,998) | (4,184,740) |
Total current liabilities | (5,165,436) | (5,042,941) | |
Net assets | 17,989,327 | 12,399,374 | |
Equity | |||
Share capital | 18 | 7,579,793 | 5,667,240 |
Share premium | 18 | 17,423,560 | 17,285,180 |
Warrant reserve | 18 | 1,026,466 | 2,107,277 |
Retained earnings | (8,040,492) | (12,660,323) | |
Total Equity | 17,989,327 | 12,399,374 |
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not
presented its own Statement of Comprehensive Income in these financial statements. The profit of the Parent Company for the
year was £3,539,020 (2024: £2,525,272 loss).
The notes to the financial statements form an integral part of these financial statements
This report was approved by the board and authorised for issue on 29 September 2025 and signed on its behalf by:
………………………………
Carl Esprey
Director
Registered number: 10186111
Contango Holdings PLC
Consolidated Statement of Changes in Equity
For the year ended 31 May 2025
33
Share Capital
Share
Premium
Warrant
reserve
Translation
Reserve
Retained
Earnings
Total Equity of
Owners
Non-controlling
Interests
Total
£
£
£
£
£
£
£
£
Balance as at 31 May 2023
(12,181,474 )
Loss for the year
(3,799,059 )
(3,799,059 )
(624,636 )
(4,423,695 )
Other comprehensive income
Translation differences
(20,267 )
(20,267 )
(9,873 )
(30,140 )
Total comprehensive income for the year
(20,267 )
(3,799,059 )
(3,819,326 )
(634,509 )
(4,453,835 )
Transactions with owners
Shares issued
Share issue costs
(47,000 )
(47,000 )
(47,000 )
Warrants issued
Total transactions with owners
(47,000 )
Balance at 31 May 2024
(15,980,533 )
Profit for the year
(20,092 )
Other comprehensive income
Translation reserve realised on disposal of
Monaf
(176,113 )
(176,113 )
(176,113 )
Translation differences
Total comprehensive income for the year
(176,113 )
(16,207 )
Transactions with owners
Shares issued
Share issue costs
(72,000 )
(72,000 )
(72,000 )
Warrants expired
(1,080,811 )
NCI elimination on disposal of Monaf
(1,365,227 )
(1,365,227 )
Total transactions with owners
(1,080,811 )
(1,365,227 )
Balance at 31 May 2025
(8,228,654 )
(46,863 )
34
Contango Holdings PLC
For the year ended 31 May 2025
Share | Share | Warrant | Retained | Total Equity of | |
Capital | Premium | reserve | Earnings | Owners | |
£ | £ | £ | £ | £ | |
Balance as at 31 May 2023 | 4,727,240 | 17,332,180 | 2,101,664 | (10,135,051) | 14,026,033 |
Loss for the year | - | - | - | (2,525,272) | (2,525,272) |
Other comprehensive income | |||||
Translation differences | - | - | - | - | - |
Total comprehensive income for the | |||||
year | - | - | - | (2,525,272) | (2,525,272) |
Transactions with owners | |||||
Shares issued | 940,000 | - | - | - | 940,000 |
Share issue costs | - | (47,000) | - | - | (47,000) |
Warrants issued | - | - | 5,613 | - | 5,613 |
Total transactions with owners | 940,000 | (47,000) | 5,613 | - | 898,613 |
Balance at 31 May 2024 | 5,667,240 | 17,285,180 | 2,107,277 | (12,660,323) | 12,399,374 |
Profit for the year | - | - | - | 3,539,020 | 3,539,020 |
Other comprehensive income | |||||
Translation differences | - | - | - | - | - |
Total comprehensive income for the | |||||
year | - | - | - | 3,539,020 | 3,539,020 |
Transactions with owners | |||||
Shares issued | 1,912,553 | 210,380 | - | - | 2,122,933 |
Share issue costs | - | (72,000) | - | - | (72,000) |
Warrants expired | - | - | (1,080,811) | 1,080,811 | - |
Total transactions with owners | 1,912,553 | 138,380 | (1,080,811) | 1,080,811 | 2,050,933 |
Balance at 31 May 2025 | 7,579,793 | 17,423,560 | 1,026,466 | (8,040,492) | 17,989,327 |
Contango Holdings PLC
Consolidated Statement of Cash Flows
For the year ended 31 May 2025
35
Notes
Year ended
31 May 2025
Year ended
31 May 2024
Operating activities
£
£
Profit/(loss) after tax
(2,496,234 )
Adjustments for:
Depreciation and amortisation
Royalties received against deferred consideration
Share based payment transactions
Loan facility fees
Impairment of listed investment
Impairment of exploration licences
Gain on disposal of subsidiary
(9,103,167 )
Foreign exchange reserves eliminated on disposal
of subsidiary
(172,623 )
Impairment of loan
Changes in working capital
(Increase)/decrease in trade and other receivables
(327,542 )
Decrease in trade and other payables
(1,084,972 )
(205,186 )
Cash used in continuing operating activities
(1,838,088 )
(1,615,830 )
Cash used in discontinued operating activities
(48,602 )
(425,790 )
Decrease in cash from operating activities
(1,886,690 )
(2,041,620 )
Investing activities
Net cash used investing in discontinued operating
activity
(1,163,524 )
Net cash outflow from investing activities
(1,163,524 )
Financing activities
Ordinary shares issued
18
Share issue costs
(72,000 )
(47,000 )
(Repayment of)/proceeds from investor loans
(25,000 )
Net cash generated from financing activities
Decrease in cash and cash equivalents
(133,690 )
(104,144 )
Cash and cash equivalents at the start of the period
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the
period
The non-cash transaction in the year was the settlement of £272,933 of trade and other payables through shares
issued during the January 2025 placement.
36
Contango Holdings PLC
For the year ended 31 May 2025
Year | Year | ||
ended | ended | ||
Notes | 31 May 2025 | 31 May 2024 | |
£ | £ | ||
Operating activities | |||
Profit/(loss) after tax | 3,539,020 | (2,525,272) | |
Adjustments for: | |||
Share based payment transactions | - | 5,613 | |
Royalties received against deferred consideration | 567,551 | - | |
Impairment of listed investment | 3,994 | 34,260 | |
Impairment of loan to subsidiary | - | 257,020 | |
Impairment of exploration licence | - | 23,157 | |
Gain on disposal of subsidiary | (6,089,056) | - | |
Loan facility fees | 507,258 | 924,558 | |
Changes in working capital | |||
(Increase)/Decrease in trade and other receivables | (163,309) | 194 | |
(Decrease)/Increase in trade and other payables * | (86,830) | 600,965 | |
Decrease in cash from operating activities | (1,721,372) | (679,505) | |
Investing activities | |||
Loans to subsidiaries | (31,612) | (2,402,696) | |
Net cash outflow from investing activities | (31,612) | (2,402,696) | |
Financing activities | |||
Ordinary shares issued | 18 | 1,850,000 | 940,000 |
Share issue costs | (72,000) | (47,000) | |
Proceeds from investor loans | (25,000) | 2,208,000 | |
Net cash inflow from financing activities | 1,753,000 | 3,101,000 | |
Increase in cash and cash equivalents | 16 | 18,799 | |
Cash and cash equivalents at the start of the period | 1 | 4,382 | |
Effect of foreign exchange rate changes | - | (23,180) | |
Cash and cash equivalents at the end of the | |||
period | 17 | 1 |
The non-cash transaction in the year was the settlement of £272,933 of trade and other payables through shares
issued during the January 2025 placement.
The notes to the financial statements form an integral part of these financial statements
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
37
General information
The Parent Company was incorporated in England and Wales under the Laws of England and
The acquisition of the Lubu coalfield project (now known as the Muchesu Mine) by the Parent
Company took place on the 18 June 2020 and the Parent Company’s shares were readmitted
for trading on the London Stock Exchange. The Parent Company acquired 75% of the shares
of Monaf Investments (Pvt) Limited (“Monaf”), which owns the Muchesu Mine.
On 3 July 2024 the Company announced that it had entered into binding agreements with Huo
Investments to sell 51% of its shareholding in its subsidiary Monaf. Huo Investments took over
control of Monaf on 3 July 2024 and it was deconsolidated from the Group financial statements
at that date. Huo Investments have agreed to invest up to $20 million in the Muchesu Mine to
increase production capacity and upgrade infrastructure and will pay Contango a royalty based
on production. The royalty will be a minimum of $2 million per annum for the life of the mine
paid monthly in arrears. The royalty per tonne produced will be as follows: $2 for thermal coal;
$4 for industrial coal; and $8 for coking coal. Huo Investments also acquired a 20% shareholding
Summary of Significant Accounting Policies
The Board has reviewed the accounting policies set out below and considers them to be the
most appropriate to the Group’s business activities.
Basis of Preparation
Act 2006, and UK adopted International Accounting Standards. The financial statements have
been prepared under the historical cost convention as modified for certain financial assets
accounting policies for the first period beginning on or after the effective date of the
the nearest £.
The consolidated financial statements comprise the financial statements of the Parent
Company; Contango Gold Mali (“CGM”) following the acquisition of 75% of the share capital on
14 October 2020; Contango Holdings Services Pty Limited which was incorporated on 12
November 2021 with the Parent Company as the sole shareholder and Monaf Investments (Pvt)
Limited until its deconsolidation on 3 July 2024.
Group obtains control. Control is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through
its power over an investee, including:
• the contractual arrangement with the other vote holders of the investee;
• rights arising from other contractual arrangements; and
• the Group’s voting rights and potential voting rights.
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
38
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the Consolidated Financial
Statements from the date the Group gains control until the date the Group ceases to control the
All intra-group balances, transactions, income and expenses and profits and losses resulting
During the year the Group made a profit from total operations of £6,650,976 (2024: £4,423,695
loss). However, this was primarily due to the accounting effects of the deconsolidation of Monaf
and the Group had a net cash outflow of £133,690 (2024: £104,144 outflow) with a cash
balance of £3,216 (2024: £1,166) at the year end.
On 3 July 2024 the Group entered into binding agreements with Huo Investments (Pvt) Limited
to sell 51% of its shareholding in its subsidiary Monaf. Huo Investments have agreed to invest
up to $20 million in the Muchesu Mine to increase production capacity and upgrade
infrastructure and will pay Contango a royalty based on production. The royalty will be a
minimum of $2 million per annum. Huo Investments also acquired a 20% shareholding in
Contango for $2 million during the January 2025 placement. The $2 million was used by
Contango to pay creditors and provide working capital to the Group.
Huo Investments has invested a considerable amount of money upgrading the mine
infrastructure but due to the depressed global coal price have decided not to start commercial
production yet. The Directors believe that the $2m minimum royalty payment will be sufficient
funds to cover ongoing running costs until the Muchesu mine is making regular cash sales and
the Company is receiving regular royalty payments based on production. However, the
Company still has outstanding investor loans of £4,666,998 as at 31 May 2025, all of which
are now overdue for repayment and repayable on demand. In the event that multiple investors
demanded their loans be repaid at the same time the Company would not have sufficient funds
to accommodate this. Whilst noting that this is a possibility, the Company maintains regular
contact with the lenders (all of whom are supportive shareholders) and considers that investors
demanding immediate repayment of their loans is unlikely.
However due to the inherent uncertainties associated with the development of mining assets
neither the financial success of the Muchesu Mine, nor the raising of any further finance, can
be guaranteed. Whilst the Directors are confident that the Muchesu Mine will soon be
consistently revenue generating as ongoing offtake negotiations are finalised, this is not
guaranteed. The audit report includes a disclaimer of opinion in respect of going concern.
However, the Directors have, at the time of approving the financial statements, a reasonable
expectation that the Group will have adequate resources to continue in operational existence
for the foreseeable future, which is defined as twelve months from the signing of this report.
For this reason, the Directors continue to adopt the going concern basis in preparing the
d)
Standards and interpretations issued but not yet applied
Below is a list of new and revised IFRSs that are not yet mandatorily effective (but allow early
application) for the year ended 31 May 2025 and have not been early adopted by the Group.
These standards are not expected to have a material impact on the Group in the future reporting
periods and on foreseeable future transactions.
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
39
Effective periods |
|
IFRS accounting standards |
beginning on or after |
Amendments to IAS 21 The Effects of Changes in Foreign |
|
Exchange Rates: Lack of Exchangeability |
1 January 2025 |
Amendments to IFRS 9, Financial Instruments and IFRS 7, |
|
Financial Instruments: Disclosures, Classification and |
|
Measurement of Financial Instruments |
1 January 2026 |
IFRS 18 Presentation and Disclosures in Financial Statements |
1 January 2027 |
IFRS 19 Subsidiaries without Public Accountability: Disclosures |
1 January 2027 |
There were no new or amended standards adopted in the year that were relevant to the Group.
Taxation
In future years when tax will be payable it will be based on the taxable profit for the period.
Taxable profit differs from net profit as reported in the income statement because it excludes
items of income or expense that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Group’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the reporting
date.
reporting date between the tax basis of assets and liabilities and their carrying amounts for
financial reporting purposes. Deferred tax liabilities are recognised in full for all temporary
differences. Deferred tax assets are recognised for all deductible temporary differences
carried forward of unused tax credits and unused tax losses to the extent that it is probable
that taxable profits will be available against which the deductible temporary differences and
carry-forward of unused tax credits and unused losses can be utilised. The carrying amount
of deferred tax assets is assessed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that is probable that future taxable profits will
Property, plant and equipment
All items of property, plant and equipment are stated at historical cost less depreciation and
impairment. Historical cost includes expenditure that is directly attributable to the acquisition.
Subsequent costs are included in the asset’s carrying value when it is considered probable
that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. Depreciation is charged to the profit or loss on a straight-
line basis as follows:
Motor vehicles 20% - 33.3% |
|
Office furniture and equipment 33.3% |
|
Plant and equipment – 20% |
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
reporting date. Gains and losses on disposals are determined by comparing proceeds with
carrying amount and are included in profit or loss.
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
40
Whenever events or changes in circumstance indicate that the carrying amount of an asset
may not be recoverable an asset is reviewed for impairment. An asset’s carrying value is
written down to its estimated recoverable amount (being the higher of the fair value less costs
Financial Instruments
The Group applies IFRS 9 which sets out requirements for recognising and measuring
financial assets and financial liabilities. A financial instrument is any contract that gives rise
to a financial asset of one entity and a financial liability or equity instrument of another.
cost, fair value through other comprehensive income (FVTOCI) or fair value through profit or
As at the reporting date the Group holds cash; its remaining 24% investment in Monaf
Investments (Pvt) Limited; deferred consideration receivable being the discounted cashflows
expected to be received as consideration for the sale of 51% of its former shareholding in
Monaf; and its loan to Monaf. The 24% investment in Monaf Investments (Pvt) Limited and
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Group are classified according to
the substance of the contractual arrangements entered into and the definitions of a financial
liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds
Trade and other payables are initially measured at fair value, net of transaction costs, and
are subsequently measured at amortised cost, where applicable, using the effective interest
The Group derecognises financial liabilities when, and only when, the Group’s obligations
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
41
Cash and cash equivalents comprises cash held in bank accounts and in petty cash floats
Warrants classified as equity are recorded at fair value as of the date of issuance in the
Consolidated and Company Statements of Financial Position and no further adjustments to their
valuation are made. Management estimates the fair value of these liabilities using the Black
Scholes option pricing model and assumptions that are based on the individual characteristics
of the warrants or instruments on the valuation date, as well as assumptions for future financing,
Financial Risk Management Objectives and Policies
The Group’s significant financial instruments include bank balances, trade payables and
accruals. Details of these financial instruments are disclosed in respective notes. The risks
associated with these financial instruments, and the policies on how to mitigate these risks are
set out in Note 14. The management manages and monitors these exposures to ensure
appropriate measures are implemented on a timely and effective manner.
Transactions in foreign currencies are translated to the functional currency (British Pound
Sterling) at the exchange rates ruling at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date. Exchange differences arising on the
retranslation of balances at the year-end are recognised in other comprehensive income whilst
k) Listed investments
therein recognised in profit or loss. However, where an investment is traded infrequently and a
true market value is difficult to measure the Group has decided that it is prudent to measure the
Convertible debt and investor loans
Convertible loan notes where conversion into equity is mandatory but the price is based upon
Earnings per share
The Group presents basic earnings per share (EPS) data for its Ordinary Shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the
Assets held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying
amount is to be recovered principally through a sale transaction and a sale is considered highly
probable. They are stated at the lower of carrying amount and fair value less costs to sell and
are presented separately in the income statement as discontinued operations, and the
associated assets and liabilities of the disposal group are presented as separate line items in
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
42
the Consolidated Statement of Financial Position as Group disposal assets and Group disposal
Segmental reporting
Segment information is presented on the basis of management’s perspective and relates to the
parts of the Group that are defined as operating segments. Segment information is analysed on
Key accounting judgements and sources of estimation uncertainty
The preparation of financial statements in conformity with UK-adopted International Accounting
Standards requires management to make estimates and assumptions that affect the reported
amounts of income, expenditure, assets and liabilities. Estimates and judgements are
continually evaluated, including expectations of future events to ensure these estimates to be
reasonable.
The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these estimates.
Key accounting judgements
a) Going concern
The use of the going concern basis of preparation is assessed to be a significant judgement
which is detailed in accounting policy note 2c.
b)
Recoverability of Loans to Subsidiaries and Related Parties
Following the Group’s adoption of IFRS 9 the directors have assessed the likelihood that the
loans advanced by the Parent Company to its operating subsidiary in Mali and investment in
Zimbabwe will not be repaid. Repayment is dependent upon successful monetisation of the
Group’s exploration assets in those countries.
The loan to Contango Gold Mali was fully impaired as at 31 May 2025 and 31 May 2024. The
directors do not consider there to be any change to the status of this impairment because both
exploration licences in Mali have now expired and there are no plans to apply for renewal.
Following the sale of 51% of the Group’s stake in Monaf and the investment in plant upgrades
by Huo Investments, the Directors consider that there is no significant change in their ECL
assessment that the Monaf loan as at 3 July 2024 will be fully repaid. Repayment of the loans
(as stipulated in one of the Definitive Agreements) will start 18 months after commencement of
commercial operations. However, £1,053,412 previously transferred by the Group to Monaf to
pay historic creditors was not part of the Definitive Agreements and will not be repaid. This has
been fully impaired during the year.
c)
Valuation of Warrants
The Group use Black Scholes valuation models to value warrants issued during the year. These
require judgement to be used by management as to the variables used to populate the model.
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
43
d)
Disposal group (asset held for sale)
51% of the Group’s 75% holding in Monaf is in the process of being sold to Huo Investments
(Private) Limited in return for a royalty based on production worth a minimum of $2 million a
year. Once commercial production starts the Group expects royalty receipts based on
production to be in excess of the $2 million minimum per year it is receiving currently. A binding
agreement was announced on 3 July 2024 (at which point control passed to Huo Investments)
and all local approvals for the share transfer to Huo Investments are expected to be obtained
by the end of the calendar year. Consequently Monaf Investments was categorised as a
disposal group (asset held for sale) in the prior year consolidated financial statements and was
fully deconsolidated as at 3 July 2024 during the current year.
The passing of control to Huo Investments on 3 July 2024 meant that the Group was no longer
responsible for any operational costs incurred in running Monaf and developing the Muchesu
Mine from that date. However, at the same time the Group no longer has operational control of
Monaf meaning that all commercial decisions regarding the operation of the Muchesu Mine are
now made by Huo Investments. As such the directors have assessed that the Group does not
have significant influence over Monaf from 3 July 2024.
e)
Fair value of retained interest in Monaf
The fair value of the 24% retained interest in Monaf has been calculated as approximately one
third of the prior year book value of the 75% shareholding in Monaf.
f)
Fair value of deferred consideration receivable
The fair value of the deferred consideration receivable has been calculated based on the
discounted $2 million per year minimum royalty since the Muchesu Mine has not yet started
commercial production. The minimum royalty stream has been discounted using a weighted
average cost of capital (WACC) of 12.5% between 2024 and the end of the current mining
Segment Reporting
The directors consider that the Group’s continuing activities comprise two business and
geographic segments, head office in the UK and the now discontinued mine development in
Africa.
Head office (UK) |
Discontinued |
Total |
|
Mine |
|||
development |
|||
(Africa) |
|||
£ |
£ |
£ |
|
Year ended 31 May 2025 |
|||
Administrative expenses |
(1,350,177) |
(48,602) |
(1,398,779) |
Impairment of loan |
(1,053,412) |
- |
(1,053,412) |
Gain on disposal of |
|||
subsidiary |
9,103,167 |
- |
9,103,167 |
Profit/(loss) for the year |
|||
from operations |
6,699,578 |
(48,602) |
6,650,976 |
Year ended 31 May 2024 |
|||
Administrative expenses |
(2,490,621) |
(1,904,304) |
(4,394,925) |
Impairment of intangible |
|||
assets |
- |
(23,157) |
(23,157) |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
44
Warrant issue costs |
(5,613) |
- |
(5,613) |
Loss for the year from |
|||
operations |
(2,496,234) |
(1,927,461) |
(4,423,695) |
The segment assets and liabilities at 31 May and the capital expenditure for the year then ended
are as follows:
Discontinued |
||||
mine |
||||
Head office |
Dormant |
development |
||
(UK) |
(Mali) |
(Zimbabwe) |
Group |
|
£ |
£ |
£ |
£ |
|
2025 |
||||
Non-current assets |
21,237,574 |
21,860 |
- |
21,259,434 |
Liabilities |
(5,175,571) |
(219,071) |
- |
(5,394,642) |
Capital Expenditure - |
- |
- |
- |
- |
PPE |
||||
Capital Expenditure – |
- |
- |
- |
- |
intangible assets |
||||
2024 |
||||
Non-current assets |
5,811 |
43,670 |
- |
49,481 |
Liabilities |
(5,046,483) |
(219,452) |
(1,004,354) |
(6,270,289) |
Capital Expenditure - |
- |
- |
(186,008) |
(186,008) |
PPE |
||||
Capital Expenditure – |
- |
- |
(977,516) |
(977,516) |
intangible assets |
Non-current assets comprise exploration and development assets, property plant and
Staff numbers and costs
The average number of persons employed (including directors) during the financial year,
analysed by category, was as follows:
31 May 2025 |
31 May 2024 |
|||
Group |
Company |
Group |
Company |
|
Directors |
4 |
4 |
4 |
4 |
Senior management |
5 |
- |
7 |
- |
Staff |
1 |
- |
22 |
- |
10 |
4 |
33 |
4 |
|
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
45
The aggregate personnel costs were
as follows:
31 May 2025 | 31 May 2024 | |||
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Directors’ fees | 119,000 | 119,000 | 120,000 | 120,000 |
Staff salaries | 276,295 | 223,032 | 574,803 | - |
Total personnel costs | 395,295 | 342,032 | 694,803 | 120,000 |
Profit/(loss) before tax
Profit/(loss) before income tax is stated after | ||
charging: | Year | Year |
ended | ended | |
31 May 2025 | 31 May 2024 | |
£ | £ | |
Warrant charge | - | (5,613) |
Foreign exchange differences | 4,284 | (327) |
Depreciation | (18,423) | (45,487) |
Profit on disposal of subsidiary | 9,103,167 | - |
Impairment of loan to related party | (1,053,412) | - |
Auditor’s remuneration
The analysis of auditor’s remuneration is as | ||
follows: | Year | Year |
ended | ended | |
31 May 2025 | 31 May 2024 | |
£ | £ | |
Fees payable to the Company’s auditor and | ||
their associates for the audit of the | ||
Company’s annual accounts | 75,000 | 75,000 |
Fees payable to the component auditor for | ||
the audit of the Company’s subsidiary | - | 5,504 |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
46
Earnings
/(l
oss) per Ordinary Share
The calculation of the basic and diluted earnings/(loss) per Ordinary Share is based on the
following data:
Year |
Year |
|
ended |
ended |
|
31 May |
31 May |
|
2025 |
2024 |
|
Earnings |
||
Profit/(loss) from operations for the period |
||
attributable to the equity holders of the Parent |
||
Entity |
6,671,068 |
(3,799,059) |
Profit/(loss) from continuing operations for the |
||
period attributable to the equity holders of the |
||
Parent Entity |
6,705,089 |
(2,449,836) |
Loss from discontinued operations for the period |
||
attributable to the equity holders of the Parent |
||
Entity |
(34,021) |
(1,349,223) |
Number of Ordinary Shares |
||
Weighted average number of Ordinary Shares |
||
for the purpose of basic and diluted earnings per |
||
Ordinary Share (number) |
706,212,402 |
485,858,270 |
Basic and diluted earnings/(loss) per Ordinary |
||
Share (pence) |
0.94 |
(0.78) |
Basic and diluted earnings/(loss) per Ordinary |
||
Share (pence) on continuing activities |
0.95 |
(0.50) |
Basic and diluted loss per Ordinary Share |
||
(pence) on discontinued activities |
(0.01) |
(0.28) |
Due to the loss in the prior year the warrants in issue at 31 May 2024 are anti-dilutive.
Income tax
The taxation charge for the year can be reconciled to the profit/(loss) per the Statement of
Comprehensive Income as follows:
Year ended |
Year ended |
|
31 May 2025 |
31 May 2024 |
|
£ |
£ |
|
Profit/(loss) before tax |
6,699,578 |
(2,496,234) |
Tax at UK corporation tax rate of 25% (2024: |
1,674,895 |
(624,059) |
25%) |
||
Less: |
||
Tax effect of expenses that are not |
264,351 |
98,322 |
deductible for tax purposes |
||
Gain on disposal of subsidiary |
(2,275,792) |
- |
Tax effect of UK losses not recognised |
336,546 |
525,737 |
Income tax recognised in profit or loss |
- |
- |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
47
against future profits. The Directors have not recognised a deferred tax asset on the losses to
Discontinued activities
The single line item discontinued operations in 2024 represents the Group’s share in the loss of
Monaf Investments (Pvt) Limited.
Year ended |
Year ended |
|
31 May 2025 |
31 May 2024 |
|
£ |
£ |
|
Revenue |
- |
64,218 |
Cost of sales |
- |
(408,548) |
Gross loss |
- |
(344,330) |
Administrative fees and other expenses |
(48,602) |
(1,583,131) |
Operating loss |
(48,602) |
(1,583,131) |
Finance expense |
- |
- |
Loss before tax |
(48,602) |
(1,927,461) |
Income tax |
- |
- |
Loss for the year from discontinued |
||
operations |
(48,602) |
(1,927,461) |
There were cash outflows of £48,602 from discontinued operations relating to Monaf
Investments in the consolidated statement of cash flows (2024: £1,589,314). Control of Monaf
passed to Huo Investments upon the signing of the Definitive Agreements on 3 July 2024 and
Investments
31 May 2025 |
31 May 2024 |
|||
Group |
Company |
Group |
Company |
|
£ |
£ |
£ |
£ |
|
Monaf Investments |
||||
(Pvt) Limited |
471,033 |
471,033 |
- |
1,413,100 |
Contango Gold Mali |
||||
Sarl |
- |
1,922 |
- |
1,922 |
Contango Holdings |
||||
Services Pty Limited |
- |
55 |
- |
55 |
Waraba Gold Limited |
1,817 |
1,817 |
5,811 |
5,811 |
472,850 |
474,827 |
5,811 |
1,420,888 |
|
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
48
Country of | |||
Incorporation | |||
and principal | |||
Proportion | place of | ||
Subsidiary | Held | business | Nature of Business |
Contango Gold Mali | 75% | Mali | Dormant |
Contango Holdings Services Pty Ltd | 100% | Australia | Treasury services |
The investment in Waraba Gold Ltd (a company listed on the Toronto Stock Exchange) consists
of 675,000 ordinary shares and 378,000 warrants. These were purchased for a combined
amount of CAD106,300 or CAD0.1575 per share. As at 31 May 2025 the shares were trading
at CAD0.005 per share. Consequently the value of the investment was impaired to reflect the
fall in the market value of Waraba Gold. The warrants expired in 2022. Carl Esprey is chief
executive officer of Waraba Gold Ltd.
Control of Monaf passed to Huo Investments upon the signing of the Definitive Agreements on
3 July 2024 and Monaf was deconsolidated from the Contango group at this date. Contango
sold 51% of its shareholding in Monaf to Huo Investments in return for a royalty based on
production – retaining an investment of 24% of Monaf within the Group. Please see Note 17.
The valuation of the royalty stream due from Monaf (prior to the start of commercial production)
has been calculated at £6,463,572 based on the minimum payment of $2 million per annum up
to the end of the current mining licence in 2043. The royalty stream has been discounted at a
WACC rate of 12.5% between 2024 and the end of the current mining licence in 2043. The
directors have completed sensitivity analysis on the valuation of the deferred consideration
receivable. A decrease in the WACC used to 7.5% and increase to 17.5% would result in the
carrying value of deferred consideration receivable being £10,738,895 and £5,586,858
respectively. The tax rate used is the UK corporation tax rate of 25%. UK corporation tax will be
payable in the year royalty receipts are received. The net asset value of Monaf held within the
Group (including the $20 million owed to Contango by Monaf) as at 3 July 2024 was £1,648,884.
Excluding the loan the net asset value was £14,233,688. The fair value of the 24% retained
interest in Monaf has been calculated as approximately one third of the prior year book value of
Property Plant and Equipment
Motor | Plant and | Office | Total | |
Vehicles | Equipment | Equipment | ||
£ | £ | £ | £ | |
Cost | ||||
At 1 June 2024 | 83,250 | 88,078 | 2,735 | 174,063 |
Additions | - | - | - | - |
Disposals | - | - | - | - |
Exchange | ||||
differences | (2,887) | (497) | (3) | (3,387) |
At 31 May 2025 | 80,363 | 87,581 | 2,732 | 170,676 |
Accumulated | ||||
Depreciation | ||||
At 1 June 2024 | 83,250 | 44,715 | 2,428 | 130,393 |
Charge for | ||||
period | (2,887) | 21,206 | 104 | 18,423 |
At 31 May 2025 | 80,363 | 65,921 | 2,532 | 148,816 |
Net Book Value | ||||
At 31 May 2025 | - | 21,660 | 200 | 21,860 |
At 31 May 2024 | - | 43,363 | 307 | 43,670 |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
49
Other receivables
2025 | 2025 | 2024 | 2024 | |
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Non-current | ||||
Subsidiary loans | - | - | - | 15,866,081 |
Deferred consideration | ||||
receivable | 4,882,152 | 4,882,152 | - | - |
Loan to related party | 15,882,572 | 15,882,572 | - | - |
20,764,724 | 20,764,724 | - | 15,866,081 | |
Current | ||||
Prepayments | 45,599 | 40,456 | 28,545 | 23,351 |
Deferred consideration | ||||
receivable | 1,581,420 | 1,581,420 | - | - |
Other receivables | 281,943 | 293,319 | 135,840 | 131,994 |
1,908,962 | 1,915,195 | 164,385 | 155,345 |
The circa $20m loaned by Contango to Monaf prior to control passing to Huo Investments on 3
July 2024 is addressed as part of the Definitive Agreements signed on that date. Under the
terms of the agreement the loan will be repaid over 40 equal quarterly payments of circa
$575,000 commencing 18 months after the start of commercial production. Interest will accrue
at a rate of SOFR plus 5% starting 18 months after the start of commercial production. The loan
is repayable by Monaf within 40 business days of receiving written notice from Contango
Holdings.
The valuation of the deferred consideration receivable (royalty stream) due from Monaf (prior to
the start of commercial production) has been calculated based on the minimum payment of $2
million per annum. The royalty stream has been discounted at a WACC rate of 12.5% between
2024 and the end of the current mining licence in 2043. Please see Note 11 for sensitivity
analysis completed on the WACC rate. The tax rate used is the UK corporation tax rate of 25%.
The deferred consideration receivable has been split between current assets (that due over the
Categories of financial instruments
2025 | 2025 | 2024 | 2024 | |
Group | Company | Group | Company | |
£ | £ | £ | £ | |
Financial assets at | ||||
amortised cost | ||||
Cash and cash equivalents | 3,216 | 17 | 1,166 | 1 |
Loan to Monaf Investments | 15,882,572 | 15,882,572 | - | 15,866,081 |
Loan to Contango Holdings | ||||
Services Pty Limited | - | 15,121 | - | - |
Financial assets at FVTPL | ||||
Deferred consideration | ||||
receivable (non-current) | 4,882,152 | 4,882,152 | - | - |
Deferred consideration | ||||
receivable (current) | 1,581,420 | 1,581,420 | - | - |
Investments | 472,850 | 474,827 | 5,811 | 1,420,888 |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
50
Financial liabilities at |
||||
amortised cost |
||||
Trade and other payables |
727,644 |
498,438 |
1,081,195 |
858,201 |
Investor loans |
4,666,998 |
4,666,998 |
4,184,740 |
4,184,740 |
objectives and policies. It meets periodically to review the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it sets. The overall objective of the
Board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group’s competitiveness and flexibility.
The Group’s principal financial instruments comprise cash and trade and other payables. It is,
and has been throughout the year under review, the Group’s policy that no trading in financial
instruments shall be undertaken. The main risks arising from the Group’s financial instruments
are liquidity risk, price risk, foreign exchange risk and to a lesser extend credit risk. The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the
Group’s exploration, development and production activities. Management prepares and
monitors forecasts of the Company’s cash flows and cash balances monthly and ensures that
the Group maintains sufficient liquid funds to meet its expected future liabilities. The Group may
raise funds in discrete tranches to provide sufficient cash resources to manage the activities
through to profitability.
The key element of the maturity analysis is the investor loans of £4,666,998 which are overdue
for repayment and are repayable on demand; together with trade payables and accruals with a
Price risk
Although the future royalty stream is based on production per tonne the Group is still exposed
to fluctuating prices of commodities, including coal and coke, if falls in prices mean the new
operators of the Muchesu Mine decide to reduce production.
The Group operates in a number of overseas jurisdictions and carries out transactions in a
number of currencies including British pound sterling (currency symbol: GBP or GBP£) and
United States dollar (currency symbol: USD or $).
The Group does not have a policy of using
hedging instruments but will continue to keep this under review. The Group operates foreign
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
51
The Group minimises its credit risk through its policy of not providing loans of any sort to third
parties, and loans provided to subsidiaries are monitored regularly for signs of impairment.
Indicators of impairment include factors such as a loss of exploration licences, increased
political risk within a foreign jurisdiction or anticipated inability of a subsidiary to repay the loan.
This process lead the Board to conclude that the loan to Contango Gold Mali should be fully
impaired in 2023 and the loan to Contango Holdings Services be fully impaired in the prior year.
Amounts transferred of £1,053,412 to the related party Monaf during the year to pay historic
creditors were also fully impaired during the year. These historic creditors remained the liability
of Contango post the signing of the Definitive Agreements and thus have been included in the
decrease in trade and other payables line in the Consolidated Statement of Cash Flows on page
36.
The credit risk on liquid funds is low as the counterparts are banks with high credit ratings
assigned by international credit rating bodies. The majority of the Group’s cash holdings during
the year were held at Westpac Bank in Australia which has an A+ credit rating. The carrying
Cash and Cash Equivalents
2025 |
2025 |
2024 |
2024 |
|
Group |
Company |
Group |
Company |
|
£ |
£ |
£ |
£ |
|
Cash at Bank |
3,216 |
17 |
1,166 |
1 |
Trade and other payables
2025 |
2025 |
2024 |
2024 |
|
Group |
Company |
Group |
Company |
|
£ |
£ |
£ |
£ |
|
Trade payables |
466,437 |
249,199 |
536,127 |
318,526 |
Accruals and other payables |
261,207 |
249,239 |
545,068 |
539,675 |
727,644 |
498,438 |
1,081,195 |
858,201 |
|
Investor loans |
4,666,998 |
4,666,998 |
4,184,740 |
4,184,740 |
5,394,642 |
5,165,436 |
5,265,935 |
5,042,941 |
The prior year investor loans included a facility fee of 25% of the principal amount. Since
conversion of the loan notes was mandatory but the price was based upon the prevailing
market price at the time of conversion they were treated as debt. Investor loans made in prior
years totalled £3,044,111. Combined with facility fees of 25% they amounted to £4,184,740
owed to investors.
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
52
During the current financial year no new loans have been made by investors. However,
£25,000 of short term loans were repaid in cash in July 2024. A further £507,258 of facility
fees have been accrued during the year leaving a balance of £4,666,998 owed to investors.
Assets held for sale
Year ended |
Year ended |
|
31 May 2025 |
31 May 2024 |
|
£ |
£ |
|
Assets of disposal group classified as |
||
held for sale |
||
Property, plant and equipment (Note 12) |
- |
2,287,421 |
Intangible assets |
- |
14,259,569 |
Cash at bank |
- |
24,690 |
Other current assets |
- |
96,093 |
Total |
- |
16,667,773 |
Liabilities of disposal group classified as |
||
held for sale |
||
Other current liabilities |
- |
(1,004,354) |
Net assets of disposal group classified as |
||
held for sale |
- |
15,663,419 |
On 3 July 2024 the Company announced that it had entered into binding agreements with Huo
Investments (Pvt) Limited to sell 51% of its shareholding in its subsidiary Monaf Investments
(Pvt) Limited. Huo Investments have agreed to invest up to $20 million in the Muchesu Mine
to increase production capacity and upgrade infrastructure and will pay Contango a royalty
based on production. The royalty will be a minimum of $2 million per annum and Huo
Investments will be responsible for all running costs going forwards. Contango will retain a 24%
holding in Monaf Investments but all operational decisions concerning the Muchesu Mine are
now made by Huo Investments.
Control of Monaf passed to Huo Investments upon the signing of the Definitive Agreements on
Share capital
Number of |
||||
Ordinary |
||||
Shares |
||||
issued and |
Share |
Share |
Total Share |
|
fully paid |
Capital |
Premium |
Capital |
|
£ |
£ |
£ |
||
As at 1 June 2024 |
566,724,023 |
5,667,240 |
17,285,180 |
22,952,420 |
Shares issued |
191,255,217 |
1,912,553 |
210,380 |
2,122,933 |
Less share issue costs |
- |
- |
(72,000) |
(72,000) |
As at 31 May 2025 |
757,979,240 |
7,579,793 |
17,423,560 |
25,003,353 |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
53
The Ordinary Shares issued by the Parent Company have par value of 1p each and each Ordinary
Share carries 1 vote on a poll vote. The authorised share capital of the Parent Company is £8,667,240
ordinary shares at £0.01 per share being 866,724,023 ordinary shares.
On 24 January 2025 Contango issued 191,255,217 new ordinary shares in a placing at a price of 1.11p
per share. This raised £2,122,933 (before costs). £1,850,000 of this placement was for cash proceeds,
whilst £272,933 was payment of fees with equity. 24,666,665 shares issued during the placement in
January 2025 have been allotted but not yet paid.
Share Capital – Represents the nominal value of ordinary shares issued.
Share Premium – Represents the amount in excess of nominal value received from the issue of ordinary
shares less share issue costs.
Warrant reserve – Represents the fair value of the issuance of warrants, net of issue costs. This will be
transferred to share capital and the share premium account upon the exercise of the warrants.
Retained Earnings – Represents the entity’s accumulated losses.
Foreign currency translation reserve – Represents the gains/losses arising on translating the assets and
Warrants
At the beginning of the year ended 31 May 2025 the Group had the following warrants
outstanding:
Number |
Exercise |
Vesting Date |
Expiry Date |
Fair Value of |
Price |
Individual |
|||
Warrant |
||||
62,500,000 |
£0.09 |
07 Nov 2022 |
06 Nov 2025 |
£0.014* |
2,776,389 |
£0.06 |
07 Nov 2022 |
06 Nov 2025 |
£0.022** |
4,700,000 |
£0.01 |
11 Apr 2024 |
10 Apr 2027 |
£0.0012*** |
69,976,389 |
Granted |
||||
during the |
||||
year |
||||
2,441,667 |
£0.06 |
24 Jan 2025 |
23 Jul 2026 |
£0.00**** |
72,418,056 |
The total number of warrants at 31 May 2024 was 122,059,722 of which 52,083,333 lapsed in
the year ended 31 May 2025.
The fair value of warrants were calculated using the Black Scholes valuation model. The inputs
used were as follows:
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
54
•
The Contango Holdings Plc share price on the day the warrants were issued;
•
The exercise price of the warrants;
•
Price volatility based on the standard deviation of the last 20 days of daily closing prices;
•
A zero % dividend rate; and
•
A risk free rate using the three year UK bond yield on the day the warrants were issued.
*
Share price on issue: £0.059 / volatility applied: 52% / risk free rate: 3.17%
**
Share price on issue: £0.059 / volatility applied: 52% / risk free rate: 3.17%
***
Share price on issue: £0.01 / volatility applied: 1% / risk free rate: 4.2%
****
Events after the reporting date
On 12 June 2025 the Company announced that it had received the final instalment of the first
Related Party Transactions
Several of the directors hold shares and warrants as disclosed on page 19 in the Directors‘
Remuneration Report. Oliver Stansfield works as a consultant for Tavira Securities Limited and
is a director of the Company. Tavira Securities acts as the broker to the Group and are paid an
annual retainer of £30,000 (2024: £30,000) per annum. As at 31 May 2025 £27,000 (2024:
£99,000) was owed to Tavira.
During the year cashflow constraints meant that £36,371 of the directors’ salaries for the year
remain unpaid at 31 May 2025. Please see the table on page 18 for an analysis by director.
Investor loans provided by two directors, Oliver Stansfield and Carl Esprey, of £5,000 each were
repaid in the year.
Yan Huo and Danny Dos Santos are both directors of Monaf Investments (Pvt) Ltd. Monaf
Investments paid Contango deferred consideration of £567,551 (2024: £nil) during the year. On
3 July 2024 51% of Contango’s shareholding in Monaf was sold to Huo Investments Limited (a
company of which Yan Huo is a director and which owns 20.42% of Contango) in return for a
deferred consideration royalty stream based on production with a minimum annual amount
receivable of $2 million. The deferred consideration owed to Contango by Monaf has been
valued at £6,463,572 (2024: £nil) based on the $2million per annum minimum royalty payment
using the discounted cashflow method over the period 2024 until the end of the current mining
licence in 2043. See Note 13. It is disclosed under deferred consideration receivable in the
statement of financial position and is split between current and non-current assets. The net
asset value of Monaf held within the Group (including the $20 million owed to Contango by
Monaf) as at 3 July 2024 was (£1,648,884). Excluding the loan the net asset value was
£14,233,688. Tax will be paid on royalty receipts at the UK corporation tax rate of 25% in the
year that they are received.
As at 31 May 2025 £15,882,572 (2024: £15,866,081) was owed by Monaf to Contango (see
Note 13). The Monaf loan accrues interest at a rate of zero % until the Muchesu Mine enters
the production phase - whereupon interest will be charged at SOFR plus 5% per annum. The
loan is repayable by Monaf within 40 business days of receiving written notice from Contango
Holdings. During the year the Company advanced Monaf £16,491 (2024: £2,378,223) to fund
development of the Muchesu Mine. Control of Monaf passed to Huo Investments upon the
signing of the Definitive Agreements on 3 July 2024 and Monaf was deconsolidated from the
Contango group at this date. Contango retains an investment in Monaf of 24% which is treated
as an investment (see Note 11). Amounts transferred of £1,053,412 to Monaf during the year to
pay historic creditors were also fully impaired during the year. These historic creditors remained
the liability of Contango post the signing of the Definitive Agreements.
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
55
As at 31 May 2025 £4,399 (2024: £4,399) was owed by Waraba Gold (a company of which Carl
Esprey is a director) for expenses paid on its behalf by the Group.
During the year £29,741 was paid to Perfect Selection Lda (a company of which Carl Esprey is
a director) for office rent and associated costs. As at 31 May 2025 £nil (2024: £26,371) was
owed to Perfect Selection. The Lisbon office ceased to be rented by the group in July 2024.
The Company advanced Contango Gold Mali £nil (2024: £nil) to cover operating costs. The
Net Debt
Reconciliation
The table below sets out an analysis of net funds and the movements in net funds for the
Group for each of the periods presented:
2025 |
2025 |
2024 |
2024 |
|
Group |
Company |
Group |
Company |
|
£ |
£ |
£ |
£ |
|
Cash and cash equivalents |
3,216 |
17 |
1,166 |
1 |
Net funds |
3,216 |
17 |
1,166 |
1 |
Investor loans |
4,666,998 |
4,666,998 |
4,184,740 |
4,184,740 |
Net debt |
4,666,998 |
4,666,998 |
4,184,740 |
4,184,740 |
Group |
Company |
|
Cash and cash |
£ |
£ |
equivalents |
||
At 1 June 2023 |
75,692 |
4,382 |
Cash flows |
(104,144) |
18,799 |
Currency translation |
29,618 |
(23,180) |
At 31 May 2024 |
1,166 |
1 |
Cash flows |
(133,690) |
16 |
Currency translation |
135,740 |
- |
At 31 May 2025 |
3,216 |
17 |
Investor loans |
||
At 1 June 2023 |
1,052,206 |
1,052,206 |
Cash flows |
2,220,500 |
2,220,500 |
Facility fees |
949,534 |
949,534 |
Converted to equity |
(37,500) |
(37,500) |
At 31 May 2024 |
4,184,740 |
4,184,740 |
Cash flows |
(25,000) |
(25,000) |
Facility fees |
507,258 |
507,258 |
At 31 May 2025 |
4,666,998 |
4,666,998 |
Net debt at: |
||
31 May 2025 |
(4,663,782) |
(4,666,981) |
31 May 2024 |
(4,183,574) |
(4,184,739) |
Contango Holdings Plc
Notes to the Financial Statements
For the year ended 31 May 2025
56
Non Controlling Interests
Monaf | Contango Gold Mali | Group | ||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
£ | £ | £ | £ | £ | £ | |
Summarised | ||||||
Balance Sheet | ||||||
Current assets | - | 120,783 | 9,760 | 10,111 | 9,760 | 130,894 |
Current liabilities | - | (1,004,354) | (219,071) | (219,452) | (219,071) | (1,223,806) |
Current net | ||||||
liabilities | - | (883,571) | (209,311) | (209,341) | (209,311) | (1,092,912) |
Non-current assets | - | 7,936,622 | 21,860 | 43,670 | 21,860 | 7,980,292 |
Non-current liabilities | - | (15,866,081) | - | - | - | (15,866,081) |
Non-current net | ||||||
(liabilities)/assets | - | (7,929,459) | 21,860 | 43,670 | 21,860 | (7,885,789) |
Net liabilities | - | (8,813,030) | (187,451) | (165,671) | (187,451) | (8,978,701) |
Accumulated NCI | - | 1,375,989 | (46,863) | (41,418) | (46,863) | 1,334,571 |
Summarised | ||||||
Statement of | ||||||
Comprehensive | ||||||
Income | ||||||
Revenue | - | 64,218 | - | - | - | 64,218 |
Loss for the period | (48,602) | (1,927,461) | (22,053) | (185,600) | (70,655) | (2,113,061) |
Other | ||||||
comprehensive | ||||||
income | 35,871 | (9,740) | (27,503) | (27,801) | 8,368 | (37,541) |
Total | ||||||
comprehensive | ||||||
income | (12,731) | (1,937,201) | (49,556) | (213,401) | (62,287) | (2,150,602) |
Loss allocated to | ||||||
NCI | (3,819) | (625,131) | (12,389) | (38,832) | (16,208) | (663,963) |
Summarised cash | ||||||
flows | ||||||
Cash Flows from | ||||||
Operating Activities | - | (2,395,936) | (23,356) | (23,384) | (23,356) | (2,419,320) |
Cash Flows from | ||||||
Investing Activities | - | - | - | - | - | - |
Cash Flows from | ||||||
Financing Activities | - | 2,378,223 | 23,157 | 23,157 | 23,157 | 2,401,380 |
Net decrease in | ||||||
Cash | - | (17,713) | (199) | (227) | (199) | (17,940) |