tango ORE(CTGO) - 2025 Q3 - Quarterly Results

Company Announcement & Q1-2025 Highlights Q1-2025 Financial and Operational Overview The company achieved significant operating income growth in Q1-2025, shifting from a loss to a profit, driven by substantial gold sales at low all-in sustaining costs Q1-2025 Financial and Operational Overview | Metric | Q1-2025 | Q1-2024 | | :----------------------- | :--------------- | :--------------- | | Operating Income | $19.3 M | ($2.9 M) | | Net Loss | ($22.3 M) | ($20.5 M) | | Non-cash Loss on Derivative Contracts | $40.5 M | $15.6 M | | Gold Sold | 17,382 oz | - | | Cash Costs (By-Product Basis) | $1,334/oz | - | | All-in Sustaining Costs (AISC) | $1,374/oz | - | | Unrestricted Cash Position (as of Mar 31) | $35.0 M | - | | Unrestricted Cash Position (as of Dec 31) | - | $20.1 M | CEO's Strategic Commentary The CEO highlights a successful Q1-2025 with Manh Choh's gold production exceeding guidance, progress on hedge contracts, and a positive technical report for the Johnson Tract project - Manh Choh project's gold production exceeded quarterly guidance, with 17,382 ounces sold at an AISC of $1,374/oz, well below the 2025 target of $1,625/oz[3] - Nearly 12,000 ounces of gold were delivered against hedge contracts via a Carry Trade, effectively reducing the hedge balance to 74,800 ounces[3] - Manh Choh mining operations are proceeding as planned, with continuous improvements in ore transportation and processing at Fort Knox[4] - The 2025 gold production guidance for Peak Gold JV's 30% share remains at 60,000 ounces, with a life-of-mine average annual production of 58,750 ounces through 2029 at an estimated AISC of $1,400/oz[4] - Received $24 M in cash distributions in Q1-2025, with an additional $9 M received on April 24[4] - The Johnson Tract project's technical report summary was completed, showing robust economics with a net present value exceeding $400M at current gold prices[7] Detailed Financial Performance Statement of Operations Analysis The company reported a net loss in Q1-2025, primarily driven by unrealized losses on derivative contracts, partially offset by income from its Peak Gold equity investment Statement of Operations | Metric | Q1-2025 | Q1-2024 | | :----------------------- | :--------------- | :--------------- | | Net Loss | ($22.3 M) | ($20.5 M) | | Basic and Diluted Loss Per Share | ($1.86) | - | | Income from Equity Investment in Peak Gold, LLC | $22.3 M | - | | Unrealized Loss on Derivative Contracts | ($40.5 M) | ($15.6 M) | | Interest and Finance Expense | ($2.7 M) | - | Statement of Cash Flows Analysis Operating cash flow improved significantly in Q1-2025 due to gold production and distributions from the Peak Gold JV, while financing activities reflected credit facility repayments Statement of Cash Flows | Cash Flow Type | Q1-2025 | Q1-2024 | | :------------------- | :--------------- | :--------------- | | Net Cash from Operating Activities | $28.6 M (Provided) | ($4.4 M) (Used) | | Net Cash from Investing Activities | $0 (Used) | ($15.5 M) (Used) | | Net Cash from Financing Activities | ($13.7 M) (Used) | $12.0 M (Inflow) | - The increase in operating cash flow was primarily driven by gold production from the Manh Choh project, a $24.0 M cash distribution from the Peak Gold JV, and a $7.8 M increase in accounts payable[8] - Cash outflow from financing activities was mainly for a $13.8 M principal repayment on the credit facility[8] Project and Operational Updates Manh Choh Project The Manh Choh project demonstrated strong Q1-2025 performance with significant sales, substantial cash distributions, well-controlled costs, and successful litigation resolution Production and Sales Metrics Production and Sales (Contango's 30% Share) | Metric | Quantity | | :----------------------- | :----- | | Gold Sold | 17,382 oz | | Silver Sold | 12,770 oz | | Recoverable Gold in Inventory | 3,810 oz | | Gross Gold Sales | $51,226,768 | | Gross Silver Sales | $412,864 | | Average Realized Spot Gold Price | $2,947/oz | | Average Realized Blended Carry Trade Gold Price | $2,314/oz | | 2025 Gold Production Guidance | 60,000 oz | - On a 100% basis, the Peak Gold JV processed 323,000 tons of ore in Q1-2025 at an average grade of 0.215 oz/ton, recovering approximately 65,000 ounces of gold, with Contango's 30% share being 19,500 ounces[11] Financial Distributions and Costs Financials and Costs | Metric | Amount | | :----------------------- | :----------- | | Peak Gold JV Cash Distribution (Q1-2025) | $24,000,000 | | Peak Gold JV Additional Cash Distribution (Post-Quarter) | $9,000,000 | | Cash Costs (By-Product Basis) | $1,334/oz | | All-in Sustaining Costs (AISC) | $1,374/oz | Legal Resolution - Litigation against the Alaska Department of Transportation (DOT) concerning the Manh Choh project's ore haulage program was dismissed by the "Community Safety Coalition" (CSC) on May 6, 2025[5][6][11] Johnson Tract Project Development The Johnson Tract project's completed technical report summary outlines strong economic potential as an underground mining operation utilizing a direct-shipping ore model - On May 6, 2025, the company announced the completion of a Technical Report Summary (TRS) for the Johnson Tract project, summarizing the results of an Initial Assessment (IA)[7][14] - The IA indicates potential for a 7-year mine life underground operation using the same direct-shipping ore (DSO) method as the Manh Choh mine[7][14] Initial Assessment Highlights | IA Highlight | Value | | :----------------------- | :---------------- | | Pre-Tax Net Present Value (NPV5%) | $359.0 Million | | Pre-Tax Internal Rate of Return (IRR) | 37.4% | | After-Tax Net Present Value (NPV5%) | $224.5 Million | | After-Tax Internal Rate of Return (IRR) | 30.2% | | Life of Mine (LOM) | 7 Years | | LOM Average Annual Production | 102,258 GEO (7.58 g/t AuEq oz) | | Initial Capital Costs | $213.6 Million (incl $36 M contingency) | | Sustaining Capital Costs | $61.3 Million (incl $12.3 M contingency) | | AISC | $860/GEO Sold | | Undiscounted Payback Period | 1.3 Years | - The company will continue to focus on permitting for the underground access, road transport corridor, and port easements[7][14] Capital Structure and Investments The company actively managed its debt and hedge contracts through credit agreement amendments and a Carry Trade strategy, while its investment in Onyx Gold Corp saw significant appreciation Debt Management and Credit Facility - On February 18, 2025, the company amended its credit facility, deferring a $10.6 M principal repayment and the delivery of 15,000 ounces of hedged gold to the first half of 2027, and extending the maturity date to June 30, 2027[14] - In Q1-2025, the company repaid $13.8 M of its credit facility, reducing the outstanding principal balance by 26.5% to $38.3 M[14] - Post-quarter, on April 4, 2025, an additional $8.2 M was repaid, further reducing the outstanding principal balance by 21% to $30.1 M[14] Hedge Contract Management - During Q1-2025, the company sold 11,939 ounces of gold through a "Carry Trade" strategy, simultaneously locking in a forward price to settle hedge contracts due April 30, 2025[14] - The Carry Trade generated a $2.2 M derivative asset, which offsets the derivative liability on the financial statements[14] - The Carry Trade was settled on April 30, 2025, with Contango paying $11.0 M in exchange for a reduction of 11,939 ounces of gold under the hedge agreement[15] - As of April 30, 2025, the remaining balance on the hedge agreement was 74,800 ounces[15] Strategic Investments (Onyx Gold Corp.) - The company holds 5 million shares of Onyx Gold Corp, valued at Cdn$1.35 M as of March 31, 2025[15] - As of the release date, the value of the Onyx shares had increased to approximately Cdn$5.0 M[15] - On April 10, 2025, Onyx announced drill results from its Munro-Croesus project and an option agreement to acquire a 100% interest in a key inlier property adjacent to the project[15] Additional Information About Contango ORE, Inc. Contango ORE, Inc is a NYSE American-listed company focused on gold and mineral exploration in Alaska, holding interests in the Manh Choh, Johnson Tract, and Lucky Shot projects - Contango holds a 30% interest in the Peak Gold JV, which leases approximately 675,000 acres for exploration and development of the Manh Choh project[17] - The company also holds lease rights to the Johnson Tract and Lucky Shot projects, as well as approximately 8,600 acres of peripheral State of Alaska mining claims and 145,000 acres of State of Alaska mining claims[17] Conference Call & Webcast Contango will host a conference call and webcast on May 15, 2025, to discuss its quarterly results - The conference call and webcast will be held on May 15, 2025, at 1:00 PM Eastern Time / 10:00 AM Pacific Time[16] Forward-Looking Statements & Risks This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected - Forward-looking statements are based on current expectations, estimates, and projections and involve risks inherent to the exploration and mining industry, including operational risks, geological uncertainties, and commodity price volatility[18] - Other risks include uncertainty of financing availability, ability to maintain ownership interest in the Peak Gold JV, failure to realize anticipated value from acquisitions, and changes in government policy or delays in approvals[19] Contacts Contact information for Contango ORE, Inc is provided - Contact: Rick Van Nieuwenhuyse, Phone: (907) 888-4273, Website: www.contangoore.com[20](index=20&type=chunk)