Contango ORE reports gold production from Manh Choh ore

FAIRBANKS, Alaska - Contango ORE, Inc. (NYSE American: CTGO), part of the Peak Gold Joint Venture (JV), recently completed processing its first batch of ore from the Manh Choh project at the Fort Knox mill, operated by Kinross Alaska. The processing began on July 3 and concluded on August 2.

The Fort Knox mill processed approximately 210,000 tons of Manh Choh ore with an average gold grade of 0.276 ounce per ton and achieved an average recovery rate of 95%, slightly higher than the 90% estimated in the Manh Choh Technical Report Summary. The JV resulted in the production of about 55,000 ounces of gold and 11,000 ounces of silver, which were refined into doré bars and sent to a third-party refinery.

Contango's 30% share of the gold and silver production led to sales totaling $32.2 million, with 8,900 ounces of gold delivered into hedges at an average price of $2,025 per ounce and 5,800 ounces sold at an average spot price of approximately $2,440 per ounce. The company also sold 3,218 ounces of silver at an average spot price of $27.58. Additionally, approximately 6,000 ounces of gold remain in Recoverable Inventory at Fort Knox, equating to about 1,500 ounces attributable to Contango, which will be sold with the second batch of production.

Rick Van Nieuwenhuyse, CEO and President of Contango, highlighted the transformative period for the company with the first gold pour on July 8 and the completion of the first batch of production. He acknowledged the efforts of Kinross and the teams at Manh Choh and Fort Knox for achieving this milestone. Van Nieuwenhuyse also mentioned the recent acquisition of HighGold and its Johnson Tract property, which tripled the company's estimated mineral resources.

Contango has set a production target for its 30% share from Manh Choh to be between 30,000 to 40,000 ounces of gold for 2024. With two more batches planned for the remainder of the year, the company expects to maintain a strong cash position by year-end.

The process at Fort Knox involves a series of steps, including crushing, grinding, thickening, leaching, and Carbon in Pulp (CIP) extraction, ultimately resulting in doré bars that are refined to produce gold and silver bars sold on the market.

This news article is based on a press release statement from Contango ORE, Inc.

In other recent news, Contango Ore has been making notable strides in its operations. The company has initiated gold production at the Peak Gold joint venture's Manh Chow project in Alaska, a collaboration with Kinross Gold (NYSE:KGC) Corporation. Furthermore, Contango Ore has finalized the acquisition of HighGold Mining Inc., adding the promising Johnson Tract (JT) project to its portfolio. The acquisition is expected to triple Contango's resources by adding over 1 million ounces of gold equivalent.

Recent developments also include a public offering of its common stock and warrants, managed by Canaccord Genuity and Cormark Securities. The proceeds are intended for general corporate purposes, including funding continued exploration activities on the Lucky Shot Project and the HighGold Johnson Tract. However, Roth/MKM has lowered Contango Ore's price target to $33.00, down from $38.00, while maintaining a Buy rating for the stock.

Finally, the company is progressing with its Manh Choh project, expecting the first gold production by the third quarter of 2024. This project, 30% owned by Contango, is currently operated by a Kinross Gold Corporation subsidiary. These are the recent developments in Contango Ore's strategic moves.

InvestingPro Insights

Contango ORE, Inc. (NYSE American: CTGO) is navigating through a transformative period with its recent operational successes. The company's strategic initiatives are reflected in its real-time financial and market metrics, which provide a window into its performance and potential challenges.

InvestingPro data shows a market capitalization of approximately $245.09 million, indicating the size and scale of Contango within the mining sector. Despite the company's progress in production, the P/E ratio stands at -1.9, with an adjusted P/E ratio for the last twelve months as of Q2 2024 at -2.4, suggesting that investors are cautious about the company's profitability prospects. The negative return on assets of -174.92% over the same period further underscores this sentiment.

Contango's share price has experienced volatility, with a 1-month price total return of -11.49%, although there has been a rebound with a 6-month price total return of 21.35%. This could be reflective of market reactions to both operational updates and broader economic factors.

Two InvestingPro Tips highlight critical financial concerns for Contango: the company's short-term obligations exceed its liquid assets, and analysts do not anticipate the company will be profitable this year. These insights are particularly relevant for investors considering the company's financial health and future profitability. For those looking for a deeper dive into the company's financials, InvestingPro offers additional tips on its platform.

While Contango does not pay a dividend, which could be a deterrent for income-focused investors, the company's focus on expanding its mineral resources and production capabilities may appeal to those with a longer-term investment horizon. The recent acquisition of HighGold and its Johnson Tract property has significantly increased Contango's resource estimates, which could be a positive driver for future growth.

For further analysis and additional InvestingPro Tips, interested parties can visit InvestingPro's dedicated page for Contango ORE, Inc. at https://www.investing.com/pro/CTGO, where a suite of tips and data is available to support investment decisions.

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