Contango ORE, Inc. (“Contango” or the “Company”) (NYSE American:
CTGO) announced that mining operations have started at its 30%
owned Manh Choh Mine (the “Project” or “Manh Choh”), located near
Tok, Alaska, U.S.A. With all major contracts, bonding and
permitting in place, the Project remains on track and on budget to
bring Contango’s 30% interest in Manh Choh into production in the
second half of 2024. Based on the Feasibility Study Technical
Report Summary (“TRS”), the Manh Choh mine is expected to produce
225,000 gold equivalent ounces (“GEO”) per year over a 4.5 year
mine life1. Contango’s share of production is expected to average
67,500 GEO per year. In addition, the Company has initiated a
surface drilling program at its 100% owned Lucky Shot project.
This press release features multimedia. View
the full release here:
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Figure 1: Photo of the CAT 6030 shovel
loading a 777 CAT (85 ton) haul truck at Manh Choh Mine. (Photo:
Business Wire)
Rick Van Nieuwenhuyse, President, and CEO said: “We are indeed
excited to report that mining operations have commenced at Manh
Choh and that the construction phase has been achieved on budget
and on schedule. The opening at the Manh Choh mine was officially
celebrated with a ground-breaking ceremony on August 29th. In
attendance were the Governor of Alaska, Michael Dunlevy, Tetlin
Tribal Chief, Michael Sam, and Tribal Council members, as well as
representatives from both Kinross and Contango. At this point,
mining operations primarily consist of pre-stripping activities,
with any ore encountered to be stockpiled for later transport by
road haul trucks to the Fort Knox mill for processing. Meanwhile,
mill modification activities continue at the Fort Knox mill with an
emphasis on completing outdoor activities before winter arrives.
The project continues to be on track to achieve commercial
production in H2 2024.”
At the Lucky Shot project, the Company initiated a surface
exploration drill program on the Coleman segment of the Lucky Shot
vein. Figure 2 shows the drill pad that will be used to drill a
series of 12 to 15 drill holes totaling approximately 3,000 meters
(9,800 feet) in a fan pattern to in-fill and extend the Coleman
Segment of the Lucky Shot vein. As previously reported on June 12,
2023, in the Technical Report Summary for the Lucky Shot project2,
the Coleman Segment of the Lucky Shot vein contains an estimated
95,092 ounces of Indicated gold resource averaging 15.6 grams per
metric tonne (“g/t”) (0.455 ounces per short ton (“oz/st”)) and an
additional 23,642 ounces of Inferred gold resource averaging 9.9
g/t (0.289 oz/st). Figure 3 is an image of the planned drill
pattern designed to in-fill and extend the mineralization down
plunge and along strike of know mineralization.
Rick Van Nieuwenhuyse further commented: “We will complete as
much surface drilling as we can safely accomplish from this single
drill pad on top of Box Mountain before winter weather conditions
shut us down. The program is designed to extend known
mineralization on the Coleman Segment of the Lucky Shot vein, and
upgrade resources to a measured category so that we can incorporate
into a proper mine plan. Future drilling of approximately 12,000
meters (39,000 feet) from underground at Lucky Shot is expected to
be undertaken in 2024 to augment resources on the Lucky Shot
Segment of the vein. This program is expected to substantially
expand the current resource on the Lucky Shot Segment with drill
holes having approximately 15 to 20 meters (50 to 65 feet) of
separation on each fan and each fan approximately 25 meters (82
feet) apart. Our objective over the next year is to complete the
above-mentioned surface drill program followed by the underground
drill program at Lucky Shot to identify 400,000 to 500,000 ounces
of gold resource that we can then develop a mine plan around.”
Note 1: “GEO” refers to Gold Equivalent Ounces. See:
https://www.contangoore.com/press-release/contango-ore-announces-completion-of-s-k-1300-technical-report-summary-for-its-manh-choh-project-in-Alaska.
Note 2:
https://assets.website-files.com/5fc5d36fd44fd675102e4420/6487270414e64406df8280bb_Contango%20Lucky%20Shot%20Project%20S-K%201300%20TRS%202023-05-26.pdf
ABOUT THE LUCKY SHOT VEIN
The Lucky Shot vein is hosted within a shear zone in medium to
coarse grained granodiorite intrusive rock. The granodiorite
country rock is normally very competent and stands well
underground. The shear zone ranges from 1 to 5 meters (3 to 15
feet) thick and hosts one or more brecciated and sheared quartz
veins containing sulfides and fine free gold. Individual quartz
veins can be 30 cm (1 foot) to over 3 meters (10 feet) thick with
associated silicified and stockwork mineralized zones. The Lucky
Shot vein is offset along northwest striking and northeast dipping
faults that sub-divide the vein structure into segments referred to
in the TRS as the Lucky Shot Segment and the Coleman Segment. The
Company completed a total of 3,816 meters (12,519 feet) of
underground drilling in 29 HQ drill holes from the Enserch tunnel
(see S-K 1300 Technical Summary Report for Lucky Shot Project:
https://assets.website-files.com/5fc5d36fd44fd675102e4420/6487270414e64406df8280bb_Contango%20Lucky%20Shot%20Project%20S-K%201300%20TRS%202023-05-26.pdf).
The quartz vein and associated silicified shear zone have elevated
very fine grained dark grey sulfides (sulfosalt and telluride
mineral species) and medium to coarse grained pyrite. Detailed
mineralogic studies are underway. Samples have been taken from vein
material as well the immediate footwall and hanging wall of the
vein structure.
Gold was discovered in the Lucky Shot area in 1918, with
subsequent mining from 1922 to 1942. The Willow Creek mining
district historically produced 19 metric tonnes or approximately
610,874 troy ounces of gold from ore ranging between 30 and 60 g/t
making it the third largest historic lode gold producing district
in Alaska (Harlan, et al., 2017). The Lucky Shot mine itself
produced a reported 252,000 ounces of gold from 169,000 tons of
free-milling ore indicating an average head grade of 40 g/t (1.28
oz/st) gold (Stoll, 1997), with additional minor production from
the Coleman and War Baby mines. The Company has not undertaken any
independent work to verify or confirm the previously reported
information (Harlan, et al., 2017 and Stoll, 1997). The historical
information may not be representative of the future results of the
Company’s activities.
ABOUT CORE
Contango is a NYSE American listed company that engages in
exploration for gold and associated minerals in Alaska. Contango
holds a 30% interest in Peak Gold, LLC (the “Peak Gold JV”), which
leases approximately 675,000 acres of land for exploration and
development on the Manh Choh project, with the remaining 70% owned
by an indirect subsidiary of Kinross Gold Corporation (“Kinross”),
operator of the Peak Gold JV. The Company also has a lease on the
Lucky Shot project from the underlying owner, Alaska Hardrock Inc.
and through its subsidiary has 100% ownership of approximately
8,000 acres of peripheral State of Alaska mining claims. Contango
also owns a 100% interest in an additional approximately 137,280
acres of State of Alaska mining claims through its wholly owned
subsidiary, which gives Contango the exclusive right to explore and
develop minerals on these lands. Additional information can be
found on our web page at www.contangoore.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements regarding
Contango that are intended to be covered by the safe harbor for
“forward-looking statements” provided by the Private Securities
Litigation Reform Act of 1995, based on Contango’s current
expectations and includes statements regarding future results of
operations, quality and nature of the asset base, the assumptions
upon which estimates are based and other expectations, beliefs,
plans, objectives, assumptions, strategies or statements about
future events or performance (often, but not always, using words
such as “expects”, “projects”, “anticipates”, “plans”, “estimates”,
“potential”, “possible”, “probable”, or “intends”, or stating that
certain actions, events or results “may”, “will”, “should”, or
“could” be taken, occur or be achieved). Forward-looking statements
are based on current expectations, estimates and projections that
involve a number of risks and uncertainties, which could cause
actual results to differ materially from those, reflected in the
statements. These risks include, but are not limited to: the risks
of the exploration and the mining industry (for example,
operational risks in exploring for, developing mineral reserves;
risks and uncertainties involving geology; the speculative nature
of the mining industry; the uncertainty of estimates and
projections relating to future production, costs and expenses; the
volatility of natural resources prices, including prices of gold
and associated minerals; the existence and extent of commercially
exploitable minerals in properties acquired by Contango or the Peak
Gold JV; ability to realize the anticipated benefits of the Peak
Gold JV; potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
interpretation of exploration results and the estimation of mineral
resources; the loss of key employees or consultants; health, safety
and environmental risks and risks related to weather and other
natural disasters); uncertainties as to the availability and cost
of financing; Contango’s inability to retain or maintain its
relative ownership interest in the Peak Gold JV; inability to
realize expected value from acquisitions; inability of our
management team to execute its plans to meet its goals; the extent
of disruptions caused by an outbreak of disease, such as the
COVID-19 pandemic; and the possibility that government policies may
change, political developments may occur or governmental approvals
may be delayed or withheld, including as a result of presidential
and congressional elections in the U.S. or the inability to obtain
mining permits. Additional information on these and other factors
which could affect Contango’s exploration program or financial
results are included in Contango’s other reports on file with the
U.S. Securities and Exchange Commission. Investors are cautioned
that any forward-looking statements are not guarantees of future
performance and actual results or developments may differ
materially from the projections in the forward-looking statements.
Forward-looking statements are based on the estimates and opinions
of management at the time the statements are made. Contango does
not assume any obligation to update forward-looking statements
should circumstances or management’s estimates or opinions
change.
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Contango ORE, Inc. Rick Van Nieuwenhuyse (713) 877-1311
www.contangoore.com
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