Gold-Silver Producer Advances Massive 60,000m Drill Program in Alaska, Canada

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Contango Silver and Gold (CTGO:TSX; CTGO:NYSE) announced a significant cash distribution of US$9 million from the Peak Gold joint venture on March 25, according to an April 22 release.

This distribution marks a positive financial influx for Contango as it embarks on an ambitious exploration and development schedule for the year. The Peak Gold JV has already completed the first of its four planned campaigns for 2026, with the next set to start in mid-May.

Looking ahead, Contango detailed its operational roadmap for 2026, aiming to advance its portfolio of advanced exploration-stage projects. The company's exploration program for the year includes several key initiatives: conducting a sustained underground drill program at the Lucky Shot project to support a feasibility study due by the first half of 2027; undertaking crucial infrastructure construction and permitting at the Johnson Tract critical metals project; and completing an updated mineral resource estimate (MRE) at the Kitsault Valley project, followed by an extensive drilling program to lay the groundwork for a preliminary development plan also expected in the first half of 2027.

"The US$9 million cash distribution from the Peak Gold JV underscores the unique strength of our business model — using cash flow from our producing mine operations to fund the aggressive advancement of our 100%-owned assets," Contango Chief Executive Officer Rick Van Nieuwenhuyse said. "We are hitting the ground running in 2026 with the strongest balance sheet and the most aggressive operational schedule in our company's history."

Van Nieuwenhuyse continued, "With nearly 60,000 meters of drilling and important infrastructure work planned in 2026, we are rapidly advancing and derisking our Tier 1 assets toward production. This is a year of execution, and we are fully funded to deliver on the milestones that will define our next chapter as a leading silver and gold developer in Alaska and British Columbia."

2026 Program Is Fully Funded

Financially, the 2026 program is fully funded and designed to foster high-margin growth and systematic project derisking, the release noted. At Lucky Shot, 5,900 meters of underground drilling have been completed as of April 21, with plans to finish an additional 12,100 meters of surface and underground drilling within the year. This drilling is part of a US$21-million investment aimed at underpinning the upcoming feasibility study.

At the Johnson Tract, a US$17-million budget for 2026 will cover significant developments including the construction of a three-mile access road, winterization of the camp for year-round operations, and the mobilization of equipment for portal site preparation, Contango said. This phase also includes critical environmental permitting for the road and barge landing facilities under the FAST-41 program.

In the Kitsault Valley, following the completion of a new MRE expected by the end of Q2, a transformative 40,000-meter surface drilling program is slated to begin in June. This US$25-million campaign is designed to infill known mineral resources and test high-priority exploration targets, setting the stage for a preliminary development plan in the form of a preliminary economic analysis/initial assessment (PEA/IA) for the Kitsault Valley assets later in the year.

Throughout these operations, Contango said it remains dedicated to transparent and proactive community outreach, ensuring that the company’s growth is in harmony with local partnerships.

Contango announced that its common stock started trading on the Toronto Stock Exchange (TSX) under the symbol "CTGO" as of April 13. This development follows the company's existing listing on the New York Stock American Exchange (NYSE American).

Contango is actively engaged in the exploration, development, and production of gold and associated minerals primarily in Alaska and the Golden Triangle in British Columbia. The company holds significant interests and leases across various projects in these regions, including a 30% stake in the Peak Gold JV currently in production, and controls a substantial land area for exploration and development. Other notable projects include the Johnson Tract project, the Lucky Shot project, and extensive mineral rights in Alaska and British Columbia, positioning Contango as a significant player in the North American mining industry.

Last month, Contango and Dolly Varden Silver announced the successful completion of their merger, which was approved by both shareholders and the courts. The merged entity, continuing under the name Contango Silver & Gold Inc., combines Contango’s profitable Manh Choh gold mine and its advanced exploration projects in Alaska with Dolly Varden's high-grade Kitsault Valley silver-gold project in British Columbia. This merger creates a substantial North American mid-tier precious metals producer with a diverse portfolio ranging from advanced exploration to production, large cash reserves, and minimal debt. The leadership team for the merged company includes Van Nieuwenhuyse as CEO, Shawn Khunkhun as President, and Mike Clark as Executive Vice President and Chief Financial Officer, with Clynt Nauman serving as the board chairman.

Analyst Raises Target Price

On March 19, ATB Cormark Capital Markets analyst Richard Gray, CFA reaffirmed his Outperform rating on Contango Ore Inc., which is also CTGO on the NYSE. He also increased his price target for the company from US$46 to US$50 following the shareholder approval of the merger with Dolly Varden. This new target suggests a potential total return of approximately 155% from the share price at time of writing.

The merger received strong support from shareholders of both companies. During a special meeting on March 17, Contango shareholders passed all necessary proposals to finalize the merger. These included the issuance of new Contango shares to Dolly Varden shareholders at a specified exchange ratio, a significant increase in the authorized share count, and the approval of a new 2026 Omnibus Incentive Plan. On the Dolly Varden side, an overwhelming 98.78% of the votes cast supported the arrangement. A court hearing for final approval was scheduled for March 23, with the merger expected to close shortly after.

The terms of the merger stipulate that existing shareholders of both companies will each own about 50% of the new entity on a fully diluted basis, Gray wrote. The combined company starts with approximately US$112 million in cash and US$34 million in debt. Leadership will include executives from both organizations, with Rick Van Nieuwenhuyse from Contango serving as CEO and Shawn Khunkhun from Dolly Varden as President.

The merged entity boasts a robust portfolio including the producing Manh Choh mine in Alaska, in which it holds a 30% interest, and high-grade projects like Lucky Shot and Johnson Tract in Alaska, as well as the Kitsault Valley project in British Columbia. The Kitsault Valley project is particularly notable, having historically produced 20 million ounces (Moz) of silver and currently hosting resources of 64 Moz of silver and 1 Moz of gold.

Gray's updated pro forma net asset value (NAV) for the combined entity is US$50 per share, reflecting contributions from several key assets and recent financial activities. This includes the valuation of the Manh Choh, Johnson Tract, Lucky Shot, and Kitsault Valley projects, along with cash acquired from Dolly Varden and recent equity financing. Despite a decline in per-share NAV from the previous estimate of US$66, Gray has raised his target multiple to 1.00x NAV from 0.70x, citing the addition of silver optionality through Kitsault Valley, an anticipated Canadian stock listing, and a reduced hedge position.

The Catalyst: Precious Metals See Volatility, But With Potential Upside

Rhona O'Connell, Head of Market Analysis at StoneX, recently discussed the current state of the gold and silver markets, noting a decline in long positions for both metals, according to a report by Ernest Hoffman for Kitco News on April 23. Despite this, she said she sees potential upside for gold and silver, although the ongoing conflict in Iran and uncertainties surrounding the leadership transition at the Federal Reserve are likely to deter significant investments in these precious metals in the near term.

O'Connell highlighted that the gold and silver markets have been particularly sensitive to developments in the Strait of Hormuz, a critical chokepoint for global oil shipments. She pointed out the volatility in silver prices, which surged by 5% following a now-retracted announcement that the Strait of Hormuz would remain open during the ceasefire, only to close again shortly thereafter. This closure is believed to be a response to the continued U.S. blockade. With negotiations between the U.S. and Iran still showing considerable distance between the parties, O'Connell expects the markets for these metals to remain cautious and volatile.

She also noted that professional trading houses are currently hesitant to take large positions due to the unstable geopolitical climate, and exchange-traded funds have been reducing their holdings. Meanwhile, speculators are divided, taking positions on both sides of the market.

Adding to the market's nervousness are political developments in the United States. Republican Sen. Thomas Tillis is blocking the appointment of Kevin Warsh as the next Fed Chairman, demanding an end to the Department of Justice’s investigations into cost overruns on Federal Reserve building renovations. President Donald Trump has threatened to remove Jay Powell from office if he remains after May 15, despite legal justifications that may allow Powell to continue. The uncertainty surrounding these events is contributing to market volatility.

A recent Kitco News Weekly Gold Survey indicates that both Wall Street and Main Street have returned to a bullish stance on gold, following four consecutive weeks of gains and growing optimism about a potential long-term resolution to the conflict in Iran, Hoffman noted for Kitco on April 17.

Rich Checkan, president and COO of Asset Strategies International, expressed a positive outlook, noting, "Up," and elaborating that gold and silver prices have recently benefited from the easing tensions in the Middle East, Hoffman said. According to Checkan, the precious metals have shown upward movement in response to ceasefires and have declined during periods of active hostilities. He suggested that as long as the current fragile ceasefires between the U.S. and Iran, and between Israel and Lebanon hold, gold and silver are likely to continue recovering from their recent price corrections.

Ownership and Share Structure¹

About 10% of Contango ORE is held by insiders, about 45% by institutions, and the rest, 45%, is retail.

Top shareholders include Franklin Advisers Inc. with 2.49%, John P. Juneau with 2.32%, The Vanguard Group Inc. with 2.2%, Kenneth R. Peak Marital Trust with 2.19%, and BlackRock Institutional Trust Co. with 2.05%.

Its market cap is US$758 million with 32.1 million shares outstanding. It trades in a 52-week range of US$12.65 and US$34.38.