Contango ORE Highlights 140 g/t Gold Hit, Targets Lucky Shot Resource Growth

Key Points

• High-grade drilling supports Lucky Shot resource growth: Contango ORE reported a 140 g/t gold intercept from the Coleman drilling program, with results supporting vein continuity and improved geological confidence.
• Resource and feasibility milestones are planned: The company aims to expand Lucky Shot’s current roughly 100,000–110,000-ounce resource toward a 400,000–500,000-ounce target, with an updated estimate expected around April or May and a feasibility study targeted by year-end.
• Underground development is advancing without shareholder dilution: About 450 meters of an 830-meter development program is complete, while underground drilling targets the KM vein. Management expects Manh Choh cash flow to fund the work and is evaluating processing options.

Contango ORE NYSEAMERICAN: CTGO discussed new drilling results and development plans for its Lucky Shot gold project in Alaska, highlighting high-grade intercepts from the completed Coleman surface drilling program and outlining a path toward an updated mineral resource estimate and feasibility study.

Rick Van Nieuwenhuyse, CEO of Contango Silver & Gold, said the summer surface program completed 5,800 meters across 27 holes from five drill pads, falling two holes short of its original objective because early winter conditions created safety concerns. The program focused on infill drilling and extensions of the Coleman vein system along strike and down dip.

The company reported a 140-gram-per-tonne gold intercept in hole LSS-23-018. Van Nieuwenhuyse said the result would need to be considered across a mineable width of roughly two to three meters, but described it as a strong result within a broader suite of assays supporting vein continuity.

Coleman Drilling Supports Resource Work

Dave Larimer, Vice President of Exploration, said the Coleman 4 vein is emerging as an important component of the system, although he cautioned against characterizing it as the project’s “backbone” at this stage. Coleman 4 was intersected from multiple drill pads, helping demonstrate structural continuity through the target area.

Larimer said the Coleman side of the deposit had previously been modeled over an area of roughly 500 meters by 500 meters. The recent drilling was designed in part to replace or improve confidence in historical pre-1960s drilling that could not be independently confirmed for the company’s prior resource model.

The drilling also provided additional information about the broader vein network. Larimer said the 2023 mineral resource model included eight named Coleman veins, though two were later determined to be laterally connected to other structures. The company currently recognizes Coleman veins 1, 2, 3, 4, 7 and 8 in its model and expects to clarify naming conventions during its next resource update.

Results from certain holes also helped define fault boundaries. Larimer said holes LSS-23-007 and LSS-23-008, which did not return significant assay results, intersected the Lucky Shot Fault and gave the company tighter geological control over where the Coleman veins terminate against the fault. The company also identified a modeled West Coleman fault near pad D that appears to bound mineralization in that area.

Targeting Higher-Confidence Resources

Van Nieuwenhuyse said the company’s drilling density in the target area is about 25 meters, supporting its objective of developing measured and indicated resources that can be incorporated into a mine plan. He said Contango is aiming to expand and upgrade Lucky Shot’s existing resource of approximately 100,000 to 110,000 ounces at a grade of about 14.5 grams per tonne.

The company’s stated target is to reach 400,000 to 500,000 ounces of contained gold at grades in the 10-to-12-gram-per-tonne range. Van Nieuwenhuyse said mining dilution and minimum mining widths could reduce the realized grade from the existing resource grade.

Management expects one additional batch of surface-drilling assays in the coming weeks. Van Nieuwenhuyse said the company is targeting an updated mineral resource estimate around April or May, followed by a feasibility study by the end of the year. He added that work on mining methods and related feasibility inputs can begin before the resource estimate is finalized.

Underground Development and Processing Options

Contango has completed about 450 meters of an 830-meter underground development program, according to the discussion. The company is advancing multiple headings intended to establish drill access to the Lucky Shot and KM veins.

Larimer said the completed West Drift Extension provides close-range drill access to the KM vein, while east drift development is intended to support drilling from different sides of the Lucky Shot vein system. The company has started a 1,140-meter, 17-hole underground drilling program targeting the KM vein from five drill stations.

Van Nieuwenhuyse said the company is focusing current work above the water table, which he said would simplify potential underground mine development. He described the KM vein as having a different, flatter orientation than the Lucky Shot vein and said detailed drilling is needed to understand fault offsets and structural relationships.

Management said Lucky Shot could use a direct-shipping-ore model, with potential processing alternatives including the Fort Knox facility, shipment through Seward to a processing facility in Taiwan, or potentially developing a company-owned processing option. Van Nieuwenhuyse said the company is evaluating alternatives and has not made a final processing decision.

Using rough estimates discussed during the event, Van Nieuwenhuyse said management believes material grading 10 grams per tonne could be mined, processed and transported for less than about $400 per tonne before administrative costs. He said higher grades could provide flexibility in selecting processing and transportation arrangements.

Funding and Longer-Term Growth

Van Nieuwenhuyse said cash flow from the Manh Choh operation is funding Lucky Shot work, allowing the company to advance the project without shareholder dilution. He said management’s objective is to develop Lucky Shot as a relatively small but potentially cash-generating operation, rather than pursuing a large-scale production profile.

He said the company sees potential for Lucky Shot to produce roughly 40,000 to 50,000 ounces of gold annually with an estimated additional investment of $40 million to $50 million, though those figures were presented as management’s expectations rather than formal guidance.

The company does not expect to initiate a dividend in the near term, Van Nieuwenhuyse said, as it remains focused on investing in resource growth, reserve conversion and mine development across its portfolio.

About Contango ORE (NYSEAMERICAN:CTGO)

Contango ORE, Inc is an Alaska-focused mineral exploration and development company engaged primarily in the discovery and advancement of gold and other precious-metal assets. The company's activities include geological exploration, resource evaluation, permitting and project development.

Contango's principal asset is its interest in the Peak Gold joint venture in Alaska, which includes the Manh Choh gold project near Tok. Under the joint venture structure, Contango owns a minority interest while Kinross Gold Corporation serves as operator.

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