tango ORE(CTGO) - 2024 Q4 - Annual Report

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Contango ORE, Inc. Item 1. Financial Statements This section presents Contango ORE, Inc.'s unaudited condensed consolidated financial statements and notes for Q2 2024 and FY2023 Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position at specific points in time, detailing assets, liabilities, and equity | Metric | June 30, 2024 | December 31, 2023 | | :------------------------------------- | :-------------- | :---------------- | | ASSETS | | | | Cash | $24,118,918 | $15,504,819 | | Total current assets | $25,632,014 | $16,850,301 | | Investment in Peak Gold, LLC | $54,468,519 | $28,064,405 | | Total long-term assets | $68,003,558 | $41,741,327 | | TOTAL ASSETS | $93,635,572 | $58,591,628 | | LIABILITIES | | | | Total current liabilities | $50,536,292 | $13,071,610 | | Total non-current liabilities | $80,978,752 | $60,064,563 | | TOTAL LIABILITIES | $131,515,044 | $73,136,173 | | STOCKHOLDERS' EQUITY/(DEFICIT) | | | | Total Stockholders' Equity/(Deficit) | $(37,879,472) | $(14,544,545) | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) | $93,635,572 | $58,591,628 | - Total assets increased by approximately $35 million from December 31, 2023, to June 30, 2024, primarily driven by a significant increase in the investment in Peak Gold, LLC and cash[5] - Total liabilities increased substantially from $73.1 million to $131.5 million, mainly due to a rise in derivative contract liabilities and current debt[6] - Stockholders' deficit worsened from $(14.5) million to $(37.9) million, reflecting the net loss incurred during the period[8] Condensed Consolidated Statements of Operations This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net loss | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total expenses | $(2,386,488) | $(3,690,937) | $(5,099,380) | $(6,087,316) | | Interest expense | $(2,920,550) | $(615,979) | $(4,951,364) | $(1,063,489) | | Loss from equity investment in Peak Gold, LLC | $(695,633) | $(6,720,000) | $(835,886) | $(11,810,000) | | Unrealized loss on derivative contracts | $(12,553,491) | $0 | $(28,178,821) | $0 | | NET LOSS | $(18,545,753) | $(10,415,512) | $(39,042,992) | $(18,340,999) | | Basic and diluted loss per share | $(1.90) | $(1.38) | $(4.03) | $(2.46) | - Net loss significantly increased for both the three and six months ended June 30, 2024, primarily due to substantial unrealized losses on derivative contracts and higher interest expenses[8] - Loss from equity investment in Peak Gold, LLC decreased significantly, from $(6.7) million to $(0.7) million for the three-month period and from $(11.8) million to $(0.8) million for the six-month period, indicating improved performance or reduced recognition of losses from the JV[8] Condensed Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,855,143) | $(4,132,854) | | Net cash used by investing activities | $(27,247,167) | $(11,810,719) | | Net cash provided by financing activities | $42,718,270 | $18,824,613 | | NET INCREASE IN CASH | $8,615,960 | $2,881,040 | | Cash and restricted cash, end of period | $24,353,351 | $11,877,194 | - Net cash used in operating activities increased by approximately $2.7 million, primarily due to higher net loss and changes in working capital[9] - Cash invested in Peak Gold, LLC more than doubled to $27.2 million in the first six months of 2024, reflecting increased capital calls for the Manh Choh Project[10] - Net cash provided by financing activities significantly increased to $42.7 million, driven by $30 million in debt proceeds and $14.2 million from common stock issuance[11] Condensed Consolidated Statement of Stockholders' Equity (Deficit) This section presents changes in the company's equity over time, including common stock, additional paid-in capital, and accumulated deficit | Metric | June 30, 2024 | December 31, 2023 | | :------------------------------------ | :-------------- | :---------------- | | Common Shares Outstanding | 10,365,914 | 9,454,233 | | Common Stock Amount | $103,658 | $94,542 | | Additional Paid-In Capital | $140,150,016 | $124,451,067 | | Accumulated Deficit | $(178,084,838) | $(139,041,846) | | Total Stockholders' Equity/(Deficit) | $(37,879,472) | $(14,544,545) | - The total stockholders' deficit increased from $(14.5) million at December 31, 2023, to $(37.9) million at June 30, 2024, primarily due to the net loss incurred during the period[13] - Additional paid-in capital increased by approximately $15.7 million, reflecting common stock issuances and warrant issuances during the six months ended June 30, 2024[13] - Common shares outstanding increased from 9,454,233 to 10,365,914, driven by common stock issuances and stock issued for convertible note interest payments[13] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements 1. Organization and Business This section describes Contango ORE, Inc.'s corporate structure and primary business activities in gold exploration and development - Contango ORE, Inc. (CORE) is engaged in gold and associated mineral exploration and development in Alaska through three main avenues: a 30% interest in Peak Gold, LLC (Manh Choh Project), its wholly-owned subsidiary Contango Lucky Shot Alaska, LLC (Lucky Shot Property), and its wholly-owned subsidiary Contango Minerals Alaska, LLC (Minerals Property)[15] - The Manh Choh Project has commenced ore mining and stockpiling at the Fort Knox facility, with processing expected to accelerate development and reduce capital costs due to existing infrastructure[16][17] - The Company's share of the Peak Gold JV's 2023 and 2024 approved budgets for cash calls totals approximately $74.5 million, with an additional unbudgeted $4.1 million funded in July 2024[18][19] 2. Basis of Presentation This section outlines the accounting principles and conventions used in preparing the unaudited condensed consolidated financial statements - The