Contango Ore (CTGO) Update / Briefing Transcript

Summary of Contango Ore (CTGO) Update / Briefing May 08, 2025 Company Overview - Company: Contango Ore (CTGO) - Project Focus: Johnson Track project located in Lower Cook Inlet, Alaska Key Points and Arguments Project Economics - The Johnson Track project has a Net Present Value (NPV) of $225 million and an Internal Rate of Return (IRR) of 30% [9][20] - The project is expected to produce approximately 60,000 ounces of gold in the current year [7] - The average gold equivalent grade is 7.58 grams per ton, with a resource grade of 9.4 grams per ton [21][55] - Initial capital costs are estimated at $214 million, including $36 million for contingencies [22][24] - The project has a payback period of just over one year [24][32] Mining and Development Strategy - The mining method will primarily utilize long hole stoping, which is cost-effective for the underground mine [33][34] - The project will involve a one-kilometer tunnel for access, which is designed to facilitate efficient ore extraction [16][41] - The mine plan includes a seven-year mine life, with production ramping up in the first year [52][71] - The project is designed to minimize environmental impact, with all development work planned in an unmineralized area to avoid acid rock drainage [19][92] Market Sensitivity and Pricing - The project is sensitive to gold prices, with projections showing an NPV of $400 million at $3,000 gold and $600 million at $4,000 gold [26] - The base case gold price used for projections is $2,200 [38] Capital Allocation and Funding - The company plans to use cash flow from the Montchaux project to fund the development of Johnson Track [44][100] - Future funding may involve a combination of equity and debt, with a focus on maintaining financial flexibility [61][62] Community Engagement and Permitting - Community engagement is prioritized, particularly with the Cook Inlet Regional Corporation (Siri), which owns the land [85][88] - The permitting process is ongoing, with a focus on ensuring compliance with mining operation standards [41][45] Exploration Potential - There is significant upside potential for increasing the size of the ore body, as the deposit is open at depth and along strike [66][70] - The mineralization style is related to a porphyry system, indicating potential for further discoveries [68] Operational Adjustments - The company is considering ore sorting as a method to enhance operational efficiency and reduce costs [58][59] - The project is robust even at lower gold prices, maintaining a positive NPV at $1,800 gold [60] Environmental Considerations - Environmental management is a key focus, with plans to address water quality and contamination risks during the feasibility study [93][94] Additional Important Content - The company is cautious about using streaming financing, preferring traditional debt options due to improved cash flow from operations [95][98] - The average all-in sustaining cost (ASIC) is projected at $860 per gold equivalent ounce, which includes operational and sustaining capital expenditures [48][49] This summary encapsulates the critical insights from the conference call regarding the Johnson Track project and the strategic direction of Contango Ore.