tango ORE(US:CTGO)2025-03-19 02:15Financial Data and Key Metrics Changes - The company produced more gold than initially planned, with a total production of just shy of 42,000 ounces in 2024, exceeding guidance by over 25% [8][16] - Cash costs for 2024 came in slightly over guidance at $1,209 per ounce, with expectations for 2025 cash costs to be between $1,200 and $1,600 per ounce [35][36] - The company started 2024 with $60 million in debt, paid down just under $8 million, and finished the year with approximately $52 million in debt, projecting to end 2025 with about $15 million remaining [26][27] Business Line Data and Key Metrics Changes - The Manh Choh project began production in July 2023, with a ramp-up period that allowed for more ore to be delivered than anticipated, leading to higher production levels [13][15] - The company plans to produce approximately 60,000 ounces of gold in 2025, with three more batches planned for the year [9] Market Data and Key Metrics Changes - The hedge delivery schedule mirrors the principal repayment schedule, with expectations to finish the year with around 43,000 ounces of hedges remaining [24] - The average hedge price per ounce is $2,025 for 2025 and 2026, with a slight decrease for 2027 due to underwater hedges [74] Company Strategy and Development Direction - The company is focused on a direct shipping ore model, which minimizes environmental impact and capital costs associated with building a mill and tailings facility [50][52] - The company aims to be debt-free and hedge-free by the end of 2026, with a focus on delivering hedges and paying down debt [19][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial health, stating that they are not facing bankruptcy and are making money [88][92] - The company believes there is significant upside potential in junior stocks, and they are optimistic about future performance as gold prices increase [91][92] Other Important Information - The company is working on a Preliminary Economic Assessment (PEA) for the Johnson Tract project, expected to be released in April, which will evaluate the project as a DSO model [59][60] - Exploration efforts are ongoing to identify potential drill sites around the Manh Choh property, with a focus on closer to the mine site [82][84] Q&A Session Summary Question: What factors led to Manh Choh exceeding production guidance? - Management indicated that more ore was delivered to the stockpile than anticipated, allowing for higher-grade ore to be processed [15][16] Question: What is the cash flow projection for 2025 and beyond? - Positive cash flow is expected, with plans to use excess cash to pay down debt and deliver hedges [19] Question: How much debt did Contango have at the start and end of 2024? - The company started with $60 million in debt and finished with approximately $52 million, projecting to end the year with about $15 million remaining [25][26] Question: What percentage of the mine life is unhedged? - Currently, about 65% of the mine life is unhedged, with plans to deliver into hedges mostly by the end of 2026 [30] Question: What is the timeline for eliminating the remaining credit facility balance? - The credit facility balance is scheduled to be paid down to $15 million by the end of this year, with the remaining amount to be paid off between 2026 and mid-2027 [40] Question: What drove the decision to defer some debt payments into 2027? - The decision was based on revised mine plans and the delivery schedule of hedges, aiming to better align repayments with production [42] Question: What are the economic advantages of direct shipping ore? - Direct shipping ore reduces environmental impact and capital costs, avoiding the lengthy permitting process associated with building a mill [50][52] Question: What metrics should investors watch for in the upcoming PEA for Johnson Tract? - Investors should look for standard metrics such as NPV and rate of return, as well as the project's capital cost savings from not building a mill [60] Question: How does management view the market value gap for the company? - Management believes the company is undervalued and that there is potential for the market to recognize this as gold prices increase [91][92]