Contango eyes expansion by adding two new mines
silver, 5.21% (400.8 million pounds) zinc, 0.59% (43.1 million lb) copper, and 0.67% (51.5 million lb) lead. When you add up the value of all the metals, this comes to 9.4 g/t (1 million oz) gold-equivalent. This high-grade polymetallic gold deposit is located alongside Alaska's Cook Inlet, which offers the ben - efit of low-cost ocean shipping to transport direct shipping ore to a third-party mill for processing. A preliminary economic assess- ment offering an initial look at the envisioned JT Deposit mining operation is expected in the coming weeks. In the meantime, the precious metals produced at Manh Choh are flowing cash into the company's treasury. "This strong financial foundation supports critical permitting efforts at the Johnson Tract project and ongoing discussions regarding mill- ing facilities for Johnson Tract and Lucky Shot ores using our direct ship ore approach," Van Nieuwen- huyse said. — Shane Lasley, North of 60 Mining News
system that extends for at least 1.5 miles across the property. Since acquiring Lucky Shot in 2021, Contango has worked to define a resource capable of supporting a high-grade direct shipping ore gold mine. This includes rehabilitating and extending the historical Enserch tunnel, which served as a platform for a 29-hole drill program the company carried out at the project in 2022. The next step for this small but high-grade project is to carry out close-spaced underground drilling focused on expanding the high- grade Luck Shot Vein to around 400,000 oz of gold in preparation for developing a mine that is expected to produce around 40,000 oz of gold per year. At the same time, Contango is rapidly advancing the Johnson Tract project on CIRI-owned Alaska Native lands about 100 miles southwest of Anchorage toward permitting. According to the most recent calculation, the JT Deposit at John- son Tract hosts 3.49 million metric tons of indicated resource averaging 5.33 grams per metric ton (598,000 ounces) gold, 6 g/t (673,000 oz)
repaid 36% of its loan and settled 30% of its hedge contracts, re - ducing the remaining balances to $38.3 million and 86,739 oz of gold, respectively. In the meantime, the first 2025 batch of Manh Choh ore is being processed through the Kinross Alas- ka mill at Fort Knox. It is estimated that 50,000 to 60,000 oz of gold will be produced during this batch, which will deliver between 15,000 to 18,000 oz to Contango. Overall, four similar-sized batch- es of Manh Choh ore are slated for processing this year, which equates to at least 60,000 oz of gold for Alaska's newest mining company. Contango plans to use the cash generated from Manh Choh pro- duction to develop similar direct shipping ore (DSO) mines at Johnson Tract and Lucky Shot – high-grade gold projects in Southcentral Alaska. Located in the historic Willow Creek Mining District about 100 road miles north of Anchorage, Lucky Shot encompasses three pre-World War II era underground mines – Coleman, Lucky Shot, and War Baby – that produced roughly 252,000 oz of gold from a high-grade vein
mine infrastructure. This strategy resulted in Con- tango forging a partnership with Kinross Gold Corp. to develop a mine at its Manh Choh project and process the high-grade ore at Kinross' Fort Knox mine north of Fairbanks, Alaska. The Peak Gold joint venture between Contango (30%) and Kinross (70%) produced more than 41,000 oz of gold from Manh Choh ore from the first pour on July 8 through the end of 2024. As a result of higher-than-ex- pected production and record-set- ting gold prices over the first six months of commercial operations at Manh Choh, Contango Ore paid down debt, eliminated a large chunk of gold hedges, and entered 2025 with $20.1 million in unrestricted cash. "Gold production at the Manh Choh mine surpassed 2024 guid- ance, with 41,325 ounces of gold produced for Contango's 30% share of production at a cash cost of $1,209 per ounce of gold sold," said Contango Ore President and CEO Rick Van Nieuwenhuyse. "Since commencement of Manh Choh production, our focus has been and continues to be paying down the debt and hedge obligations under our credit facility as quickly as pos- sible." Out of the gold it received from the Manh Choh production during the second half of 2024, Contan- go delivered 21,661 oz into hedge contracts, which provided minimum gold price guarantees from the company's first mine, and another 19,664 oz was sold at spot prices. As a result, Contango realized an average price of $2,281/oz for its share of Manh Choh gold produced during the second half of 2024. The company received an extra $509,238 boost from 16,763 oz of silver received from the first six months of Manh Choh production. With its share of Manh Choh's 2024 production, Contango has
transition due to its unique hybrid royalty strategy and a bull market that has seen gold prices rally $600 from an already healthy $2,400 per oz when it poured its first bullion eight months ago to current $3,000/ oz levels. Under its hybrid royalty business model, Contango is focused on ex- ploring and developing high-qual- ity mineral projects that can be advanced quickly to production by shipping ore directly to existing mills, tailings facilities, and other
Boosted by output, company continues gold mining success Mineral exploration companies transitioning to gold producers have historically lived or died by the state of gold markets and the company's treasury by the time the first mine comes online. Contango Ore Inc. is thriv- ing through this oft-tumultuous
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The Alaska Miner
Spring 2025
www.AlaskaMiners.org
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