Contango ORE, Inc. (“Contango” or the “Company”) (NYSE American:
CTGO) is pleased to announce the results on gold production from
the First Batch of Manh Choh ore processed at the Fort Knox mill
located near Fairbanks, Alaska and operated by Kinross Alaska.
Processing of ore from the First Batch started on July 3rd and
continued through August 2nd.
Results for the First Batch of Manh Choh Ore
Processed1
Fort Knox processed approximately 210,000 tons (190,500 tonnes)
of Manh Choh ore with an average grade of approximately 0.276
ounce/ton (9.46 grams/tonne (“g/t”)), with an average recovery of
95%. Recoveries were slightly better than the 90% estimated in the
Manh Choh Technical Report Summary2 (the “TRS”), which is in part
due to oxidized ores tending to have higher recoveries than sulfide
ores. Attributable to the Peak Gold JV, approximately 55,000 ounces
of gold and 11,000 ounces of silver contained in doré bars were
poured at Fort Knox and sent to a third-party refinery for further
refining.
For Contango’s 30% share of the gold and silver production,
8,900 ounces of gold were delivered into its hedges at an average
price of $2,025/ounce and 5,800 ounces of gold were sold at an
average spot price of approximately $2,440. The blended weighted
average of hedged and spot gold price realized was $2,188 per ounce
of gold sold. In addition, 3,218 ounces of silver were sold at an
average spot price of $27.58. Furthermore, there is still
approximately 6,000 ounces of gold in Recoverable Inventory at Fort
Knox (30% to the account of Contango equal to approximately 1,500
ounces of gold plus a small amount of silver). To date, the
Company’s share of gold and silver sales totaled $32.2 million. The
ounces of gold and silver in Recoverable Inventory will be sold and
reported with Batch #2.
Rick Van Nieuwenhuyse, CEO and President for Contango said: “The
start of Q3 has been a transformative time for Contango - starting
with Manh Choh’s first gold pour on July 8th and continuing with
the first batch of production into early August. In addition, we
closed the acquisition of HighGold and its Johnson Tract property,
which increased the Company’s estimated mineral resources by
threefold. At Manh Choh, the Peak Gold JV completed the first batch
of ore processed through Fort Knox, producing approximately 55,000
ounces of gold and 11,000 ounces of silver. Contango sold its
portion of gold and silver for proceeds of $32.2 million. I would
like to acknowledge and thank Kinross, and in particular both the
Manh Choh and Fort Knox teams, for achieving this important
milestone. Mining and transportation of ore mined at Manh Choh
continues to be delivered to the stockpile at Fort Knox and at this
stage we believe All-In-Sustaining-Costs (“AISC”) remain in line
with the feasibility study (TRS). In late October 2024, the Company
expects to receive the Peak JV financial results for the quarter
ended September 30, 2024, which we will report and discuss in our
earnings for the quarter when we announce in the first half of
November.
Having exceeded Contango’s internal production expectations from
the first batch, we can now look forward to two more batches
planned in the Fall for the remainder of 2024. Our guidance for
Contango’s 30% share of production from Manh Choh is to produce a
total of 30,000 to 40,000 ounces of gold in 2024. Assuming we can
meet these production targets and the price of gold remains at
current levels, the Company expects to be in a strong cash position
by the end of the year after funding working capital and delivering
into our hedges. We then look forward to executing on our ‘Hybrid
Royalty’ model focusing on our Lucky Shot and Johnson Tract
properties, which we believe can both be developed efficiently by
using our DSO (Direct Shipping Ore) approach.”
The Process of Producing Gold at Fort Knox
Manh Choh ore is batch processed at the Fort Knox mill roughly
once a quarter. Each batch will take approximately one month to
complete. Ore stored on the Manh Choh stockpile starts by being
transferred to the run of mine (ROM) feed stockpile located next to
the Fort Knox mill. The first processing step involves the ore
being conveyed to the large gyratory crusher, then on to the SAG
mill (semi-autogenous grinding mill), and from there to a dedicated
ball mill where material is ground to approximately 80% passing 75
microns size particles. From the ball mill, the ground ore material
enters a thickener and then moves to a series of leach tanks where
cyanide leaches the gold out of the finely ground rock material and
then passes onto a series of Carbon in Pulp (CIP) extraction tanks,
where activated charcoal carbon absorbs the gold in the CIP leach
solution. From the CIP tanks the carbon is screened off and
separated, and then sent to the desorption facility where the gold
is stripped off the carbon and put back into solution using caustic
soda. The now highly concentrated gold in solution is sent for
electrolysis where electrical current is used to plate the gold
onto steel wool and then on to the furnace for the final step of
pouring a doré bar containing mostly gold, silver and a few minor
metals such as copper. The doré bars are then sent to a third-party
refinery to produce 4-Nines or 99.99% gold and silver bars, which
are then sold on market.
INVESTOR WEBINAR
Contango will be hosting a webinar on Tuesday, August 20th,
2024, at 1:00 pm Alaska time (5:00pm EST) to provide an update on
Manh Choh. Please use this link to register for the event: Link:
https://events.6ix.com/preview/manh-choh-update. We look forward to
seeing you there!
ABOUT CONTANGO
Contango is a NYSE American listed company that engages in
exploration for gold and associated minerals in Alaska. Contango
holds a 30% interest in the Peak Gold JV, which leases
approximately 675,000 acres of land for exploration and development
on the Manh Choh project, with the remaining 70% owned by KG Mining
(Alaska), Inc., an indirect subsidiary of Kinross, operator of the
Peak Gold JV. The Company also has a lease on the Johnson Tract
project from the underlying owner, CIRI Native Corporation, a lease
on Lucky Shot project from the underlying owner, Alaska Hardrock
Inc. and, through its subsidiary, 100% ownership of approximately
8,600 acres of peripheral State of Alaska mining claims. In
addition, Contango also owns a 100% interest in an additional
approximately 145,000 acres of State of Alaska mining claims
through its wholly owned subsidiary, which gives Contango the
exclusive right to explore and develop minerals on these lands.
Additional information can be found on our web page at
www.contangoore.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements regarding
Contango that are intended to be covered by the safe harbor for
“forward-looking statements” provided by the Private Securities
Litigation Reform Act of 1995, based on Contango’s current
expectations and includes statements regarding future results of
operations, quality and nature of the asset base, the assumptions
upon which estimates are based and other expectations, beliefs,
plans, objectives, assumptions, strategies or statements about
future events or performance (often, but not always, using words
such as “expects”, “projects”, “anticipates”, “plans”, “estimates”,
“potential”, “possible”, “probable”, or “intends”, or stating that
certain actions, events or results “may”, “will”, “should”, or
“could” be taken, occur or be achieved). Forward-looking statements
are based on current expectations, estimates and projections that
involve a number of risks and uncertainties, which could cause
actual results to differ materially from those, reflected in the
statements. These risks include, but are not limited to: the risks
of the exploration and the mining industry (for example,
operational risks in exploring for and developing mineral reserves;
risks and uncertainties involving geology; the speculative nature
of the mining industry; the uncertainty of estimates and
projections relating to future production, costs and expenses; the
volatility of natural resources prices, including prices of gold
and associated minerals; the existence and extent of commercially
exploitable minerals in properties acquired by Contango or the Peak
Gold JV; ability to realize the anticipated benefits of the Peak
Gold JV; potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
interpretation of exploration results and the estimation of mineral
resources; the loss of key employees or consultants; health, safety
and environmental risks and risks related to weather and other
natural disasters); uncertainties as to the availability and cost
of financing; Contango’s inability to retain or maintain its
relative ownership interest in the Peak Gold JV; inability to
realize expected value from acquisitions; inability of our
management team to execute its plans to meet its goals; the extent
of disruptions caused by an outbreak of disease, such as the
COVID-19 pandemic; and the possibility that government policies may
change, political developments may occur or governmental approvals
may be delayed or withheld, including as a result of presidential
and congressional elections in the U.S. or the inability to obtain
mining permits. Additional information on these and other factors
which could affect Contango’s exploration program or financial
results are included in Contango’s other reports on file with the
U.S. Securities and Exchange Commission. Investors are cautioned
that any forward-looking statements are not guarantees of future
performance and actual results or developments may differ
materially from the projections in the forward-looking statements.
Forward-looking statements are based on the estimates and opinions
of management at the time the statements are made. Contango does
not assume any obligation to update forward-looking statements
should circumstances or management’s estimates or opinions
change.
1 Amounts and grade at Fort Knox are
reported in short tons and ounces. All results reported in this
release include a metric equivalent in parenthesis.
2 See press release announcing TRS:
https://www.contangoore.com/press-release/contango-ore-announces-completion-of-s-k-1300-technical-report-summary-for-its-manh-choh-project-in-alaska.
To view a copy of the TRS, see:
https://cdn.prod.website-files.com/5fc5d36fd44fd675102e4420/6470afdaf94d2ac9f93d93e0_SIMS%20Contango%20Manh%20Choh%20Project%20S-K%201300%20TRS%20FINAL%2020230524%20(1)-compressed.pdf.
The information contained in, or otherwise accessible through, the
links are not part of, and are not incorporated by reference into
this investor presentation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240819334833/en/
Contango ORE, Inc. Rick Van Nieuwenhuyse (907) 888-4273
www.contangoore.com
Contango Ore (AMEX:CTGO)
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