Contango ORE Maps Path to 200,000 Gold Ounces as Manh Choh Funds Growth

Key Points

• Contango ORE targets major production growth, aiming to increase attributable output from about 60,000 ounces of gold to 200,000 ounces of gold and 5 million ounces of silver within five years, led by Johnson Tract and Kitsault.
• Manh Choh generated more than $100 million for Contango and is expected to fund development, although production may dip to 40,000–45,000 ounces this year before rising to 75,000–80,000 ounces next year. The company expects nearly $200 million in free cash flow next year and plans to repay roughly $45 million of debt by June 2027.
• Lucky Shot, Johnson Tract and Kitsault represent the company’s pipeline: Lucky Shot could produce about 50,000 gold ounces annually, Johnson Tract is targeting production around 2030, and Kitsault’s updated resource estimate is expected next year as Contango evaluates processing-facility options.

Contango ORE NYSEAMERICAN: CTGO outlined a five-year plan to increase its attributable production from approximately 60,000 ounces of gold to 200,000 ounces of gold and 5 million ounces of silver, with growth expected to come primarily from its Johnson Tract and Kitsault projects.

The company said it intends to fund project advancement through cash flow from the Manh Choh mine in Alaska, while Lucky Shot is expected to serve as an intermediate production asset. Management said it plans to maintain its current share count of about 33 million shares while advancing projects toward production decisions.

Contango said it has approximately 8 million ounces of gold and 83 million ounces of silver in resources. The company trades in New York and Toronto, is domiciled in the United States, and reports its figures in U.S. dollars.

Manh Choh Cash Flow and Production Outlook

Manh Choh is a joint venture with Kinross Gold, which owns 70% and operates the mine. Contango said the operation uses a direct-shipping-ore model, in which ore is mined, loaded onto trucks and transported about 240 miles to Kinross’ Fort Knox mill for processing.

According to the presentation, the arrangement allowed Manh Choh to be permitted and moved into production in about three years. The mine began producing gold in July 2024 and generated 60,000 ounces of gold attributable to Contango in 2025, in line with the company’s target. Contango said its all-in sustaining costs were slightly above $1,600 per ounce and that it received more than $100 million from the joint venture.

Production is expected to decline to 40,000 to 45,000 ounces this year as the mine transitions from the north pit to the south pit and undertakes pre-stripping work. Contango expects attributable production to increase to 75,000 to 80,000 ounces next year. The company said it may guide costs near $1,700 per ounce, citing diesel and transportation cost pressures.

Management said the company has eliminated its gold hedges and expects to repay roughly $45 million of debt by June of next year. At current gold prices, the company said it expects Manh Choh could generate close to $200 million in free cash flow next year.

Lucky Shot Targets High-Grade Gold Production

Contango identified Lucky Shot as its next prospective producing asset. The historically operating underground mine produced about 250,000 ounces of gold between 1928 and 1942, according to the company.

The company is conducting more than 20,000 meters of drilling, which began last December and is expected to continue through February. Contango’s objective is to define a resource of 400,000 to 500,000 ounces of gold at roughly 14 grams per ton and develop a five-year mine plan containing 250,000 ounces. That plan would support annual production of approximately 50,000 ounces.

Contango also reported a new discovery called the KM Vein, which is oriented at right angles to the historic Lucky Shot vein system. The company said Lucky Shot is fully permitted for its planned approach of sending ore to Fort Knox for processing.

Johnson Tract and Kitsault Development Plans

At Johnson Tract, Contango described a polymetallic deposit averaging 40 meters in width and 9.5 grams per ton, with gold and silver accounting for about 70% of the metal content and copper, lead and zinc comprising the remainder.

The company has permitted an underground portal and is pursuing permits for a road and barge landing through the federal FAST-41 process. It expects those permits by May 2028. Contango completed three miles of road, two bridges and winterization work at the camp this year. It plans to begin tunnel construction next year, complete drilling and a feasibility study in 2028, and target production in 2030. The company cited estimated capital costs of about $250 million and said it has spent approximately $20 million so far.

For Kitsault, its silver-focused district, Contango recently reported an indicated resource of 89 million silver-equivalent ounces. The company said the resource averages about 350 grams per ton silver equivalent and is based partly on approximately 175,000 meters of historical drilling conducted before its merger with Dolly Varden Silver Corporation.

Contango completed 53,000 meters of drilling at Kitsault this year and expects an updated mineral resource estimate around March of next year, followed by an initial assessment. Management said recent drilling may help connect previously separate deposits, potentially reducing the number of underground access tunnels needed for development.

In response to an analyst question, management said its only anticipated external financing would relate to securing a processing facility for the Kitsault area. The company is considering either acquiring and modifying an idle mill or building a new facility at a permitted former molybdenum mine site.

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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