Contango ORE reports $9 million distribution from JV

FAIRBANKS, Alaska - Contango ORE, Inc. (NYSE American: CTGO), a gold exploration company with a current market capitalization of $124.73 million, announced today that it has received a $9.0 million cash distribution from the Peak Gold Joint Venture (JV). The company's stock, currently trading at $10.2, appears undervalued according to InvestingPro Fair Value analysis. This distribution represents Contango's 30% share of profits from the third campaign of processing Manh Choh ore. The company has collected a total of $40.5 million in cash distributions from the JV since July 2024.

The Peak Gold JV, which is 70% owned by KG Mining (Alaska), Inc., a subsidiary of Kinross Gold (NYSE:KGC) Corporation, and operated by them, has successfully completed three campaigns this year. Contango's share of gold production reached approximately 42,000 ounces, and silver production was about 16,330 ounces. Despite these positive operational results, the stock has declined over 40% in the past six months, with InvestingPro analysis revealing multiple additional insights about the company's performance. These figures surpass the company's initial 2024 production guidance of 30,000 to 35,000 ounces of gold by roughly 30%.

Rick Van Nieuwenhuyse, President and CEO of Contango, stated that for 2025, the company anticipates its share of gold production from the Manh Choh mine to be 60,000 ounces. Analysts tracking the stock maintain price targets ranging from $17.3 to $30, significantly above current trading levels. InvestingPro subscribers can access detailed financial analysis and 12 additional ProTips about CTGO's potential. Additionally, an average of 58,750 ounces of gold per year is expected through 2028, with estimated life of mine all-in sustaining costs at approximately $1,400 per ounce of gold sold. The company plans to release its final financial results for 2024 in March 2025.

Contango's operations include a 30% interest in the Peak Gold JV, which leases around 675,000 acres for exploration and development on the Manh Choh project. Other holdings include leases on the Johnson Tract and Lucky Shot projects, as well as full ownership of mining claims in the State of Alaska.

The press release also contained forward-looking statements regarding the company's expectations for future operations and potential risks and uncertainties that could affect actual results. These risks include operational risks in exploration and development, natural resource price volatility, and the speculative nature of the mining industry.

The information contained in this article is based on a press release statement from Contango ORE, Inc.

In other recent news, Contango ORE, Inc. has updated its financial guidance for the Manh Choh mine, part of the Peak Gold Joint Venture (JV), indicating higher anticipated costs and confirming its 2025 gold production target of approximately 60,000 ounces. The all-in sustaining costs (AISC) for the life-of-mine (LOM) have been revised upward, now projected at approximately $1,400 per ounce of gold equivalent sold. The company is also negotiating with its lenders to restructure some of its credit facility repayments and related hedge contracts to align with the revised production schedule.

Recent developments include Contango ORE receiving significant earnings from its gold mining operations as part of the JV, with total cash distributions amounting to $31.5 million for the year. Furthermore, the company has completed the acquisition of HighGold Mining Inc., expected to add over 1 million ounces of gold equivalent to Contango's resources. Analyst firm Roth/MKM has adjusted Contango ORE's price target to $33.00, maintaining a Buy rating for the stock.

In addition, Contango ORE has made a public offering of its common stock and warrants, managed by Canaccord Genuity and Cormark Securities. The company is progressing with its Manh Choh project, with the first gold production expected by the third quarter of 2024. These are the latest updates in Contango ORE's strategic moves.

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