tango ORE(CTGO) - 2025 Q2 - Quarterly Results

Financial Highlights and CEO Commentary Contango ORE, Inc. reported increased unrestricted cash and total income from operations for FY2024, with the CEO emphasizing strong gold production and significant debt reduction FY2024 Key Financial Figures Contango ORE, Inc. reported an increase in unrestricted cash for FY2024, alongside total income from operations and a net loss primarily due to a significant non-cash expense from unrealized losses on derivative contracts Unrestricted Cash Balances | Metric | As of Dec 31, 2024 | As of Dec 31, 2023 | | :----------------------- | :----------------- | :----------------- | | Unrestricted Cash | $20.1 million | $15.5 million | FY2024 Financial Performance | Metric | FY2024 Amount | | :--------------------------- | :------------ | | Total Income for Operations | $26.3 million | | Net Loss | $38.0 million | | Non-cash expense (unrealized loss on derivative contracts) | $34.3 million | CEO's Strategic Overview The CEO highlighted that gold production at the Manh Choh mine surpassed 2024 guidance, achieving a strong blended gold price and making significant progress in debt and hedge obligation reduction. The company is well-positioned financially for 2025 and 2026, supporting future project developments - Gold production at Manh Choh mine surpassed 2024 guidance, with 41,325 ounces produced for Contango's 30% share[3] Manh Choh Gold Production Metrics | Metric | Value | | :-------------------------- | :------------ | | Cash Cost per Ounce Sold | $1,209 per ounce | | Average Blended Gold Price | $2,281 per ounce | - The company reduced its credit facility by 36% to $38.3 million and settled 37,861 ounces of gold hedge contracts, reducing the outstanding hedge to 86,739 ounces[3] - 2025 gold production guidance is 60,000 ounces for Contango's account, with approximately 30% of net gold production for FY2025 and FY2026 linked to spot gold prices[3] - The company expects to complete and release the preliminary economic assessment (PEA) for the Johnson Tract project in the next few weeks[3] Detailed Financial Statements This section provides an in-depth analysis of the company's cash flows and operational results, highlighting key drivers of financial performance and losses Statement of Cash Flows Analysis Contango ORE, Inc. saw a significant improvement in net cash provided by operating activities for FY2024, primarily driven by gold production and cash distributions from the Peak Gold JV, despite realized losses on derivative contracts. Investing activities remained focused on the Peak Gold JV, while financing activities included debt drawdowns, repayments, and equity issuance Cash Flow Summary | Cash Flow Activity | FY2024 | 6ME12-2023 | FY2023 | | :----------------- | :---------- | :---------- | :---------- | | Operating | $0.7 million | ($9.4 million) | ($14.7 million) | | Investing | ($32.1 million) | ($34.4 million) | ($21.2 million) | | Financing | $36.0 million | $47.7 million | $24.4 million | - Increase in net cash provided by operating activities was driven by commencement of gold production at Manh Choh and $40.5 million in cash distributions from Peak Gold JV, partially offset by $19.9 million in realized losses on derivative hedge contracts[4] - Financing activities for FY2024 included $30 million drawn from the Facility, offset by $7.9 million in debt repayments, and $15.5 million in equity issuance proceeds[4] Statement of Operations Analysis The company reported a net loss for FY2024, which included a substantial non-cash expense from unrealized losses on derivative contracts. Income from the Peak Gold JV equity investment helped offset interest expenses and derivative contract losses Net Loss and Loss per Share | Metric | FY2024 | 6ME12-2023 | FY2023 | | :------------------------- | :---------- | :---------- | :---------- | | Net Loss | $38.0 million | $40.8 million | $39.7 million | | Loss per Basic/Diluted Share | $3.49 | $4.44 | $5.61 | - FY2024 net loss included a non-cash expense of $34.3 million from an unrealized loss on derivative contracts[5] - Income from Peak Gold JV equity investment totaled $41.7 million, offset by $11.7 million in interest expense and a $54.2 million loss on derivative contracts[5] - The company incurred $4.1 million in exploration expenditures, primarily related to the Johnson Tract drilling program[5] Project Operational Updates This section details the operational performance of the Manh Choh project, including production figures and financial contributions, and updates on the Johnson Tract project's development Manh Choh Project Performance The Manh Choh project commenced gold and silver production in July 2024, exceeding its 2024 gold production guidance for Contango's share. The project achieved favorable cash costs and provided significant cash distributions to the company - The Manh Choh project commenced producing gold and silver with its first gold pour on July 8, 2024[6] Manh Choh Production and Sales (Contango's 30% Share) | Metric (Contango's 30% Share) | 2024 Results | | :----------------------------- | :----------- | | Gold ounces sold | 41,325 ounces | | Silver ounces sold | 16,763 ounces | | Total gold sales | $94.3 million | | Total silver sales | $0.51 million | | Average blended realized gold price | $2,281 per ounce sold | | Cash costs on By-Product Basis, per Ounce | $1,209 per ounce sold | - Contango's share of Manh Choh production was 41,325 ounces of gold, exceeding guidance of 30,000 to 35,000 ounces[9] - The Peak Gold JV paid cash distributions to the Company in the amount of $40.5 million during FY2024[9] - 2025 gold production guidance for Contango's 30% basis is 60,000 ounces[6] Johnson Tract Project Development The Johnson Tract Project advanced significantly with the acquisition of HighGold Mining Inc., completion of a surface drilling campaign, and receipt of a key permit for access road construction, supporting future exploration and development - The Company completed its acquisition of 100% of HighGold Mining Inc. on July 10, 2024, issuing 1,698,887 shares of Contango common stock valued at approximately $33.4 million[9] - A 3,000-meter surface drilling campaign was completed at the Johnson Tract Project, including 18 infill holes and three hydrogeological testing holes[9] - The Company received the 404 permit for construction of a 2.6-mile (4 km) access road between the camp and the proposed portal and laydown site[9] Debt and Hedge Management This section outlines the company's efforts in managing its debt obligations and gold hedge contracts, including repayments, facility amendments, and reductions in outstanding hedge balances Debt Repayments and Facility Status Contango made significant repayments on its credit facility, reducing the outstanding principal balance. The facility was also amended to defer principal repayments and extend its maturity date, improving financial flexibility - Contango repaid $7.9 million on the Facility, reducing the outstanding principal balance by 13% to $52.1 million[9] - On January 31, 2025, an additional $13.8 million was repaid, reducing the outstanding principal balance to $38.3 million[9] - On February 18, 2025, the Facility was amended to defer $10.6 million of principal repayments and delivery of 15,000 hedged gold ounces into the first half of 2027[9] - The maturity date of the Facility was extended from December 31, 2026, to June 30, 2027[10] Hedge Contract Reductions The company actively reduced its gold hedge contract obligations through deliveries and cash settlements, significantly decreasing the outstanding balance - Contango delivered 21,661 ounces of gold into hedge contracts and cash settled a further 16,200 ounces of gold hedges[9] - These actions reduced the hedge contract balance by 30% to 86,739 ounces of gold as of December 31, 2024[9] Additional Corporate Information This section provides details on qualified persons, upcoming investor communications, company overview, forward-looking statements, and contact information Qualified Persons John Sims, CPG, of Sims Resources LLC, a qualified person under S-K 1300, reviewed and approved the technical information regarding proven and probable reserve updates - John Sims, CPG, Sims Resources LLC, a qualified person under S-K 1300, reviewed and approved technical information related to proven and probable reserve updates[11] Conference Call and Webcast Contango ORE, Inc. will host a conference call and webcast on March 17, 2025, to discuss the quarterly results - Contango will host a conference call and webcast on Monday, March 17, 2025, at 4:30pm EST / 1:30pm PST to discuss quarterly results[12] About Contango ORE, Inc. Contango ORE, Inc. is a NYSE American listed company focused on gold and associated minerals exploration in Alaska, holding significant interests in the Manh Choh, Johnson Tract, and Lucky Shot projects, along with other mining claims - Contango is a NYSE American listed company engaged in exploration for gold and associated minerals in Alaska[13] - The company holds a 30% interest in the Peak Gold JV (Manh Choh project), a lease on the Johnson Tract project, a lease on the Lucky Shot project, and 100% ownership of approximately 8,600 acres of peripheral State of Alaska mining claims and 145,000 acres of State of Alaska mining claims[13] Forward-Looking Statements This section provides a standard disclaimer regarding forward-looking statements, outlining the inherent risks and uncertainties in the exploration and mining industry that could cause actual results to differ materially from projections - The press release contains forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[14] - Risks include operational risks in exploration and development, geological uncertainties, volatility of natural resources prices, financing availability, inability to realize expected value from acquisitions, and potential changes in government policies or approvals[15] - Investors are cautioned that forward-looking statements are not guarantees of future performance and actual results may differ materially[15] Contacts Contact information for Contango ORE, Inc. is provided for inquiries - Contact: Rick Van Nieuwenhuyse, Contango ORE, Inc., (907) 888-4273, www.contangoore.com[16](index=16&type=chunk)