The Alaska Miner Spring 2025 38 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 thriving through this oft-tumultuous 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 exploring and developing high-quality mineral projects that can be advanced quickly to production by shipping ore directly to existing mills, tailings facilities, and other mine infrastructure. This strategy resulted in Contango 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-expected production and record-setting 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 guidance, 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 possible." Out of the gold it received from the Manh Choh production during the second half of 2024, Contango 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 Contango eyes expansion by adding two new mines
RkJQdWJsaXNoZXIy MTcxMjMwNg==