[10-Q] Contango ORE, Inc. Quarterly Earnings Report
Contango ORE, Inc. (CTGO) reported third‑quarter results reflecting strong contributions from its Peak Gold JV alongside hedge‑related losses. For the quarter ended September 30, 2025, the company recorded a net loss of $5.39 million (basic and diluted loss per share $0.44). Income from its 30% interest in Peak Gold JV was $29.53 million, while a loss on derivative contracts of $30.34 million and interest and finance expense of $1.72 million weighed on results.
Liquidity strengthened: cash rose to $106.98 million and operating cash flow for the nine months reached $60.20 million, driven by $87.0 million in JV cash distributions tied to Manh Choh production. Shareholders’ equity improved to $47.81 million from $1.27 million at year‑end. Debt, net, stood at $42.10 million (including $23.10 million outstanding on the secured facility and a $20.0 million unsecured convertible debenture); the company repaid $29.0 million year‑to‑date and an additional $8.5 million on October 2, 2025.
Hedge obligations remain significant: 62,900 oz of gold were outstanding at a weighted average price of approximately $2,003/oz as of September 30, 2025, contributing to current and non‑current derivative liabilities of $72.38 million and $42.30 million, respectively. An underwritten offering on September 25, 2025 raised $50.0 million in gross proceeds. Certain litigation related to Manh Choh permitting was dismissed, and the Johnson Tract permit remains in effect.
- None.
- None.
Insights
JV cash distributions boosted liquidity, but hedge losses remain sizable.
CTGO is leveraging Manh Choh production via its 30% Peak Gold JV interest, posting
However, gold price hedges generated a Q3 loss on derivatives of
Debt, net, was
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” or “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer ☐ |
Accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The total number of shares of common stock, par value $0.01 per share, outstanding as of November 13, 2025 was
Table of Contents
CONTANGO ORE, INC.
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
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Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 |
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Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 |
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Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2025 and 2024 |
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Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine months Ended September 30, 2025 and 2024 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
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Item 4. |
Controls and Procedures |
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PART II – OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 4. |
Mine Safety Disclosures |
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Item 5. |
Other Information |
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Item 6. |
Exhibits |
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All references in this Form 10-Q to the “Company”, “CORE”, “we”, “us” or “our” are to Contango ORE, Inc.
2
Table of Contents
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Item 1 - Financial Statements
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September 30, 2025 |
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December 31, 2024 |
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ASSETS |
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CURRENT ASSETS: |
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Cash |
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Restricted cash |
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Prepaid expenses and other |
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Income taxes receivable |
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Total current assets |
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LONG-TERM ASSETS: |
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Investment in Peak Gold, LLC |
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Property & equipment, net |
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Marketable securities |
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Total long-term assets |
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TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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Accrued liabilities |
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Royalty reimbursement advance |
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Derivative contract liability |
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Debt, current portion |
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Total current liabilities |
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NON-CURRENT LIABILITIES: |
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Royalty reimbursement advance |
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Asset retirement obligations |
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Contingent consideration liability |
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Derivative contract liability |
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Debt non-current portion, net |
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Deferred tax liability |
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Total non-current liabilities |
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TOTAL LIABILITIES |
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COMMITMENTS AND CONTINGENCIES (NOTE 11) |
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STOCKHOLDERS’ EQUITY: |
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Preferred Stock, |
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Common Stock, $ |
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Additional paid-in capital |
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Treasury stock at cost ( |
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Accumulated deficit |
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TOTAL STOCKHOLDERS’ EQUITY |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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EXPENSES: |
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Claim rental expense |
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$ |
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Exploration expense |
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Depreciation expense |
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Accretion expense |
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General and administrative expense |
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Total expenses |
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Income from equity investment in Peak Gold, LLC |
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Total income from operations |
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OTHER INCOME/(EXPENSE): |
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Interest and other income |
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Interest and finance expense |
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Loss on derivative contracts |
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( |
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Gain on metal sales |
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Unrealized gain/(loss) on marketable securities |
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Total other income/(expense) |
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Loss before income taxes |
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Income tax benefit/(expense) |
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NET LOSS |
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$ |
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$ |
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$ |
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$ |
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LOSS PER SHARE |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine Months Ended September 30, |
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2025 |
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2024 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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$ |
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$ |
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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Stock-based compensation |
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Depreciation expense |
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Accretion expense |
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Non-cash portion for lease expense |
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Equity earnings from investment in Peak Gold, LLC |
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Cash distribution from Peak Gold, LLC |
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Unrealized loss from derivative contracts |
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Unrealized (gain)/loss from marketable securities |
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Interest expense paid in stock |
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Amortization of debt discount and debt issuance fees |
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Drawdown of silver royalty |
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Deferred tax expense |
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Changes in operating assets and liabilities: |
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Decrease in prepaid expenses and other |
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Increase in accounts payable and accrued liabilities |
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Increase in income taxes payable |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Cash invested in Peak Gold, LLC |
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Cash consideration paid for Avidian Alaska Acquisition |
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Acquisition of property and equipment |
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Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Cash proceeds from debt |
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Principal repayments on debt |
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Cash proceeds from common stock and warrant issuance, net |
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Shares repurchased for tax withholdings on share-based awards |
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Debt issuance costs |
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Net cash provided by financing activities |
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NET CHANGE IN CASH AND RESTRICTED CASH |
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CASH AND RESTRICTED CASH, BEGINNING OF PERIOD |
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CASH AND RESTRICTED CASH, END OF PERIOD |
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$ |
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$ |
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Supplemental disclosure of cash flow information |
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Cash paid for: |
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Interest expense |
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$ |
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$ |
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Non-cash investing and financing activities |
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Commitment fee derecognized and added to debt discount |
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— |
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Shares issued for acquisitions |
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Consideration payable for Avidian acquisition |
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Accrued transaction costs for HighGold acquisition |
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Total non-cash investing and financing activities |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Table of Contents
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)
(Unaudited)
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Treasury |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Stock |
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Deficit |
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Equity/(Deficit) |
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Balance at June 30, 2025 |
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$ |
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$ |
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Stock-based compensation |
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— |
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Common stock issuance |
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Cost of common stock issuance |
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— |
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Common stock issuance for acquisitions |
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— |
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— |
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Shares issued for convertible debt interest payment |
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Net loss for the period |
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— |
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Balance at September 30, 2025 |
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$ |
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$ |
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$ |
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Treasury |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Stock |
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Deficit |
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Equity/(Deficit) |
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Balance at June 30, 2024 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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Stock-based compensation |
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— |
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Restricted shares grants |
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— |
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Common stock issuance |
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Cost of common stock issuance |
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— |
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— |
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) |
||
Common stock issuance for acquisitions |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of warrants |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares issued for convertible debt interest payment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss for the period |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Balance at September 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
|
Total |
|
||||||
|
|
Common Stock |
|
|
Paid-In |
|
|
Treasury |
|
|
Accumulated |
|
|
Stockholders’ |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Stock |
|
|
Deficit |
|
|
Equity/(Deficit) |
|
||||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restricted shares grants |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Common stock issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of common stock issuance |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Common stock issuance for acquisitions |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Shares repurchased for tax withholdings on share-based awards |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Shares issued for convertible debt interest payment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss for the period |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Balance at September 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
|
Total |
|
||||||
|
|
Common Stock |
|
|
Paid-In |
|
|
Treasury |
|
|
Accumulated |
|
|
Stockholders’ |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Stock |
|
|
Deficit |
|
|
Equity/(Deficit) |
|
||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restricted shares grants |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Common stock issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of common stock issuance |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Common stock issuance for acquisitions |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of warrants |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares issued for convertible debt interest payment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss for the period |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Balance at September 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
CONTANGO ORE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Business
CORE Alaska , a wholly-owned subsidiary of Contango ORE, Inc. (“CORE” or the “Company”) has a
The Company conducts its business through the below primary means:
The Johnson Tract Project, Lucky Shot Property, Contango Minerals Properties and Avidian Properties are collectively referred to in these Notes to Unaudited Condensed Consolidated Financial Statements as the “Contango Properties”.
The Company’s Manh Choh Project is in the production stage, while all other projects are in the exploration stage.
2. Basis of Presentation and Reclassification of the Presentation of Income from Equity Investment
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), including instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by US GAAP for complete annual consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated financial statements have been included. All such adjustments are of a normal recurring nature. The consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes included in the Company’s Form 10-K for the year ended December 31, 2024. The results of operations for the three months and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.
The Company has reclassified the presentation of the “Income from equity investment in Peak Gold, LLC” in its Statement of Operations for the three and nine months ended September 30, 2024. The “Income from equity investment in Peak Gold, LLC” was previously presented in “Other Income/(Expense)” and is now presented within income/(loss) from operations on the Statement of Operations. The change in presentation will have no impact on Net Loss for all impacted periods.
7
Table of Contents
3. Liquidity
The Company’s cash needs going forward will primarily relate to exploration of the Contango Properties, repayment of debt and related interest, and general and administrative expenses of the Company. As of September 30, 2025, the Company has working capital balance of $
4. Summary of Significant Accounting Policies
Please see the Company’s Form 10-K for the fiscal year ended December 31, 2024 for a summary of the Company's significant accounting policies, as there have been no changes to the Company's significant accounting polices since the time of that filing, with exception of the following:
Recently issued accounting pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvements to Income Tax Disclosures, requiring entities to disclose more detailed information about income tax expense (benefit), significant components of income tax expense (benefit), separate disclosure of income tax expense (benefit) for domestic and foreign jurisdictions and by major jurisdictions. The Company adopted ASU 2023-09 as of January 1, 2025, and the corresponding impacts will be reflected in the annual disclosures connected to income taxes.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Recently issued accounting pronouncements not yet effective
In November 2024, the FASB issued Accounting Standards Update 2024-03 (“ASU 2024-03”), Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring disclosure of specified information about certain costs and expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026. The Company has not early adopted this standard.
5. Investment in the Peak Gold JV
As of September 30, 2025 the Company has contributed approximately $
8
Table of Contents
The following table is a roll-forward of the Company’s investment in the Peak Gold JV as of September 30, 2025:
|
|
Investment |
|
|
|
|
in Peak Gold, LLC |
|
|
Investment balance at December 31, 2023 |
|
$ |
|
|
Investment in Peak Gold, LLC |
|
|
|
|
Loss from equity investment in Peak Gold, LLC |
|
|
( |
) |
Investment balance at March 31, 2024 |
|
$ |
|
|
Investment in Peak Gold, LLC |
|
|
|
|
Loss from equity investment in Peak Gold, LLC |
|
|
( |
) |
Investment balance at June 30, 2024 |
|
$ |
|
|
Investment in Peak Gold, LLC |
|
|
|
|
Distributions received from Peak Gold, LLC |
|
|
( |
) |
Income from equity investment in Peak Gold, LLC |
|
|
|
|
Investment balance at September 30, 2024 |
|
$ |
|
|
Distributions received from Peak Gold, LLC |
|
|
( |
) |
Income from equity investment in Peak Gold, LLC |
|
|
|
|
Investment balance at December 31, 2024 |
|
$ |
|
|
Distributions received from Peak Gold, LLC |
|
|
( |
) |
Income from equity investment in Peak Gold, LLC |
|
|
|
|
Investment balance at March 31, 2025 |
|
$ |
|
|
Distributions received from Peak Gold, LLC |
|
|
( |
) |
Income from equity investment in Peak Gold, LLC |
|
|
|
|
Investment balance at June 30, 2025 |
|
$ |
|
|
Distributions received from Peak Gold, LLC |
|
|
( |
) |
Income from equity investment in Peak Gold, LLC |
|
|
|
|
Investment balance at September 30, 2025 |
|
$ |
|
|
|
|
|
|
|
The following table presents the condensed unaudited results of operations for the Peak Gold JV for the three and nine month periods ended September 30, 2025 and 2024 in accordance with US GAAP:
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||||
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cost of sales |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Peak Gold JV income does not include any provisions related to income taxes as the Peak Gold JV is treated as a partnership for income tax purposes. As of September 30, 2025 and September 30, 2024, the Company's cumulative investment in the Peak Gold JV exceeded its cumulative losses, which allowed the Company to recognize its investment of $
6. Prepaid Expenses and other assets
The Company has prepaid expenses and other assets of $
9
Table of Contents
7. Net Loss Per Share
A reconciliation of the components of basic and diluted net loss per share of common stock is presented below:
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
|
|
|
Weighted |
|
|
Loss |
|
|
|
|
|
Weighted |
|
|
Loss |
|
||||||
|
|
Net Loss |
|
|
Shares |
|
|
Per Share |
|
|
Net Loss |
|
|
Shares |
|
|
Per Share |
|
||||||
Basic Net Loss per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Net Loss per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss attributable to common stock |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
|
|
|
Weighted |
|
|
Loss |
|
|
|
|
|
Weighted |
|
|
Loss |
|
||||||
|
|
Net Loss |
|
|
Shares |
|
|
Per Share |
|
|
Net Loss |
|
|
Shares |
|
|
Per Share |
|
||||||
Basic Net Loss per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss attributable to common stock |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Net Loss per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss attributable to common stock |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
$ |
( |
) |
||
The Company uses the two-class method to compute basic earnings per share. Under this method earnings are allocated to common shares and participating securities according to their participation rights in dividends declared and undistributed earnings and divide the income available to each class by the weighted average number of common shares for the period in each class. Unvested restricted stock grants made to our non-employee directors and certain employees are considered participating securities because the shares have the right to receive non-forfeitable dividends. Because the participating shares have no obligation to share in net losses, we do not allocate losses to our common shares in this calculation.
10
Table of Contents
Diluted earnings per share reflect the potential dilutive effect of securities that could share in our earnings. Restricted stock awarded to non-employee directors and certain employees that have not yet vested are considered when computing diluted earnings per share. The Company uses the treasury stock method to determine the dilutive effect of unvested restricted stock. Shares of unvested restricted stock under a stock-based compensation arrangement are considered options for purposes of computing diluted earnings per share and are considered outstanding shares as of the grant date for purposes of computing diluted earnings per share even though their exercise may be contingent upon vesting. Those stock-based awards are included in the diluted earnings per share computation even if the non-employee director and employee may be required to forfeit the stock at some future date, or no shares may ever be issued to the non-employee director and/or employee. Unvested restricted stocks are not included in outstanding common shares in computing basic earnings per share.
Warrants to purchase
8. Stockholders’ Equity (Deficit)
ATM Program
The Company may, from time to time, offer and sell shares of its common stock in an aggregate amount of up to $
Underwritten Offering - 2024
On June 10, 2024, the Company entered into an underwriting agreement (the "June 2024 Underwriting Agreement") with Canaccord Genuity LLC and Cormark Securities Inc. (collectively, the "June 2024 Underwriters"), relating to the underwritten public offering (the “June 2024 Offering”) of
Underwritten Offering - 2025
On September 25, 2025, the Company sold
11
Table of Contents
The issued pre-funded warrants were classified as a component of permanent equity in the Company’s Condensed Consolidated Balance Sheets as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares, and permit the holders to receive a fixed number of shares of common stock upon exercise. All of the shares underlying the pre-funded warrants have been included in the weighted-average number of shares of common stock used to calculate net income/loss per share, basic and diluted, attributable to common stockholders as the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date of the pre-funded warrants. As of September 30, 2025, none of the pre-funded warrants had been exercised.
9. Property & Equipment
The table below sets forth the book value by type of fixed asset owned by the Company (excludes Peak Gold LLC assets) as well as the estimated useful life:
Asset Type |
|
Estimated |
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||
Mineral properties |
|
N/A - Units of Production |
|
$ |
|
|
$ |
|
||
Land |
|
Not Depreciated |
|
|
|
|
|
|
||
Buildings and improvements |
|
|
|
|
|
|
|
|||
Machinery and equipment |
|
|
|
|
|
|
|
|||
Vehicles |
|
|
|
|
|
|
|
|||
Computer and office equipment |
|
|
|
|
|
|
|
|||
Furniture & fixtures |
|
|
|
|
|
|
|
|||
Right of use asset |
|
|
|
|
|
|
|
|||
Less: Accumulated depreciation and |
|
|
|
|
( |
) |
|
|
( |
) |
Less: Accumulated impairment |
|
|
|
|
( |
) |
|
|
( |
) |
Property & Equipment, net |
|
|
|
$ |
|
|
$ |
|
||
10. Stock-Based Compensation
As of September 30, 2025, there were
The remaining shares of restricted stock outstanding will vest between January 2026 and March 2027.
Restricted Stock. Under the Equity Plans, the Compensation Committee of the Company's board of directors (the “Compensation Committee”) shall determine to what extent, and under what conditions, the participant shall have the right to vote shares of Stock Awards and to receive any dividends or other distributions paid on such shares during the restriction period. The terms and applicable voting and dividend rights are outlined in the individual restricted stock agreements. All restricted stock grants are expensed over the applicable vesting period based on the fair value at the date the stock is granted. The grant date fair value may differ from the fair value on the date the individual’s restricted stock actually vests. The total grant date fair value of the restricted stock granted during the nine months ended September 30, 2025 and September 30, 2024 was $
As of September 30, 2025, the total compensation cost related to nonvested restricted share awards not yet recognized was $
12
Table of Contents
Below table indicates the unvested restricted stock balance as of September 30, 2025 and December 31, 2024:
|
|
Number of restricted shares unvested |
|
|
Balance - January 1, 2025 |
|
|
|
|
Restricted shares granted |
|
|
|
|
Restricted shares vested |
|
|
( |
) |
Balance - September 30, 2025 |
|
|
|
|
|
|
|
|
|
Balance - January 1, 2024 |
|
|
|
|
Restricted shares granted |
|
|
|
|
Restricted shares vested |
|
|
( |
) |
Balance - December 31, 2024 |
|
|
|
|
Stock Options. The Company applies the fair value method to account for stock option expense. Under this method, cash flows from the exercise of stock options resulting from tax benefits in excess of recognized cumulative compensation cost (excess tax benefits) are classified as financing cash flows. See Note 4 - Summary of Significant Accounting Policies from Company's Form 10-K for the year ended December 31, 2024. There were
11. Commitments and Contingencies
Tetlin Lease. The Tetlin Lease had an initial
Additionally, should the Peak Gold JV derive revenues from the properties covered under the Tetlin Lease, the Peak Gold JV is required to pay the Tetlin Tribal Council a production net smelter return royalty ranging from
Gold Exploration. The Company’s Triple Z, Eagle/Hona, Shamrock, Willow, Golden Zone, Amanita, Amanita NE and Lucky Shot claims are all located on State of Alaska lands. The annual claim rentals on these projects vary based on the age of the claims, and are due and payable in full by November 30 of each year. Annual claims rentals for the 2024-2025 assessment year totaled $
Lucky Shot Property. With regard to the Lucky Shot Property, the Company will be obligated to pay CRH Funding II PTE. LTD, a Singapore private limited corporation (“CRH”), additional consideration if production on the Lucky Shot Property meets two separate milestone payment thresholds. If the first threshold of (1) an aggregate “mineral resource” equal to
13
Table of Contents
Royal Gold Royalties. Royal Gold Inc. ("Royal Gold"), the former
CIRI Lease Agreement. J T Mining Inc. entered into a lease agreement effective May 17, 2019 with CIRI and shall pay the sum of $
CIRI Exploration Agreement. J T Mining Inc. entered into an exploration agreement effective July 1, 2023 with CIRI and on each anniversary of the effective date thereafter during the
Mining Lease and Option to Purchase Agreement Amanita Project.
Employment Agreements. Mike Clark serves as the Company’s Chief Financial Officer and Secretary and is responsible for performing the functions of the Company’s principal financial officer. Pursuant to his employment agreement (the "CFO Employment Agreement"), Mr. Clark receives a base salary of $
Rick Van Nieuwenhuyse serves as the Company’s President & Chief Executive Officer and director. Pursuant to his employment agreement (the “CEO Employment Agreement”). Mr. Van Nieuwenhuyse receives a base salary of $
Committee for Safe Communities Complaint. On October 20, 2023, the Committee for Safe Communities ("CSC"), an Alaskan non-profit corporation inclusive of certain vacation home owners along the Manh Choh ore haul route, formed for the purpose of opposing the Manh Choh project, filed suit in the Superior Court in Fairbanks, Alaska against the State of Alaska Department of Transportation and Public Facilities ("DOT"). The Complaint sought injunctive relief against the DOT with respect to its oversight of the Peak Gold JV's ore haul plan. On May 9, 2025, and at CSC’s request, the Court entered an Order of Dismissal Without Prejudice as to CSC’s one remaining claim, vacated the trial date and closed the case.
14
Table of Contents
Village of Dot Lake Complaint. On July 1, 2024, the Village of Dot Lake, a federally recognized Indian Tribe, located approximately 50 miles from the Manh Choh mine on the ore haul route along the Alaska Highway ("Dot Lake"), filed a Complaint in the U.S. District Court for the District of Alaska against U.S. Army Corps of Engineers (the "Corps") and Lt. General Scott A. Spellmon, in his official capacity as Chief of Engineers and Commanding General of the Corps. The Complaint seeks declaratory and injunctive relief based on the Corps' alleged failure to consult with Dot Lake and to undertake an adequate environmental review with respect to the Corps' issuance in September 2022 of a wetlands disturbance permit in connection with the overall permitting of the Manh Choh mine as to approximately five acres of wetlands located on Tetlin Village land. The Peak Gold JV was not named as a defendant in the Complaint and, on August 20, 2024, moved to intervene in the action, which Dot Lake opposed. On October 10, 2024, the Court granted intervention to the Peak Gold JV. On October 18, 2024, the Peak Gold JV joined the partial motion to dismiss that the Corps filed on August 23, 2024. On March 19, 2025, the Court entered an Order on Motion to Partially Dismiss, which Order dismissed three of the four claims asserted in the Complaint. On April 1, 2025, Dot Lake filed an Amended Complaint which sought to reassert one of the claims that was dismissed without prejudice. On May 2, 2025, the Peak Gold JV filed a Motion to Dismiss this reasserted claim, which motion was granted on July 31, 2025. On September 29, 2025, the Court entered an Order dismissing the action with prejudice based on the Stipulated Dismissal of Action filed by the parties and the Court closed the case.
Cook Inletkeeper, Chickaloon Village Traditional Counsel, Center for Biological Diversity. On September 10, 2024, the Corps issued to Johnson Tract Mining Inc, (a wholly owned subsidiary of the Company) a permit under Section 404 of the Clean Water Act to construct an access road and improve an existing air strip on the south parcel of the Johnson Tract project. On May 20, 2025, Cook Inletkeeper, Chickaloon Village Traditional Council, Center for Biological Diversity, and an individual plaintiff filed suit in the United States District Court for the District of Alaska against the Corps and related officials, challenging the Corps’ issuance of the Section 404 permit. Plaintiffs seek to vacate the section 404 permit issued and halt mineral exploration on the lands. The complaint alleges that the Corps Environmental Assessment for the Section 404 permit failed to adequately analyze the potential for acid rock drainage and contaminants leaching into the Johnson River and Cook Inlet and the harmful effects of the project on beluga whales at the Cook Inlet. In July 2025, the Company filed a motion to intervene as a defendant in the lawsuit to protect its legal rights under the Section 404 permit, its significant investment in the Johnson Tract, and its mineral exploration lease with CIRI. The Alaska District Court has not issued any rulings or relief and the permit in question is still active and in good standing.
12. Income Taxes
The Company recognized a full valuation allowance on its deferred tax asset as of September 30, 2025 and December 31, 2024 and has recognized a tax benefit of $
13. Debt
The table below shows the components of Debt, net as of September 30, 2025 and December 31, 2024:
|
|
September 30, |
|
|
December 31, |
|
||
Secured Debt Facility |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized debt discount |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Debt, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Unsecured, Subordinated Convertible Debenture |
|
|
|
|
|
|
||
Principal amount |
|
$ |
|
|
$ |
|
||
Unamortized debt discount |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Debt, net |
|
$ |
|
|
$ |
|
||
Total Debt, net |
|
$ |
|
|
$ |
|
||
Less current portion |
|
$ |
|
|
$ |
|
||
Debt non-current portion, net |
|
$ |
|
|
$ |
|
||
15
Table of Contents
Secured Credit Facility
On May 17, 2023, the Company entered into a credit and guarantee agreement (the “Credit Agreement”), by and among CORE Alaska as the borrower, each of the Company, LSA, and Contango Minerals, as guarantors, each of the lenders party thereto from time to time, ING Capital LLC ("ING") as administrative agent for the lenders, and Macquarie Bank Limited ("Macquarie"), as collateral agent for the secured parties. The Credit Agreement provides for a senior secured loan facility (the “Facility”) of up to $
The Credit Agreement is secured by all the assets and properties of the Company and its subsidiaries, including the Company’s
During the first quarter of 2025, the Company sold all gold, purchased from Peak Gold, LLC for $
As of October 31, 2025, the hedge agreement balance is
As of September 30, 2025, the Company had
The carrying value of the Facility approximates its fair value as it accrues interest based on market interest rates. The Company recognized interest expense totaling $
As of September 30, 2025, the Company was in compliance with all of the required debt covenants.
The Company is scheduled to repay $
16
Table of Contents
In connection with entering into the Credit Agreement, the Company entered into a mandate lender arrangement fee letter (the “MLA Fee Letter”) with ING and Macquarie (collectively, the “Mandated Parties”) and a production linked arrangement fee letter (the “PLA Fee Letter”) with ING. Pursuant to the MLA Fee Letter, the Company paid the Mandated Parties on the date of the initial disbursement at the initial closing an upfront fee, calculated based on the principal amount of the Facility. Additionally, the Company paid the Mandated Parties an initial disbursement upfront fee, calculated based on the initial disbursement of $
Unsecured Convertible Debenture
On April 26, 2022, the Company closed on a $
The Company agreed to an interest rate of
The Debenture currently bears interest at
In connection with the issuance of the Debenture, the Company agreed to pay an establishment fee of
The fair value of the Debenture (Level 2) as of September 30, 2025 and December 31, 2024 was approximately $
17
Table of Contents
14. Derivatives and Hedging Activities
On August 2, 2023, CORE Alaska, a subsidiary of the Company, pursuant to an ISDA Master Agreement entered into with ING Capital Markets LLC (the “ING ISDA Master Agreement”) and an ISDA Master Agreement entered into with Macquarie Bank Limited (the “Macquarie ISDA Master Agreement”), in accordance with its obligations under the Credit Agreement, entered into a series of hedging agreements with ING Capital LLC and Macquarie Bank Limited for the sale of an aggregate of
As of September 30, 2025, the Company had the following outstanding derivatives that were not designated as hedges in qualifying hedging relationships:
Period |
|
Commodity |
|
Volume |
|
|
Weighted |
|
||
2025 |
|
Gold |
|
|
|
|
$ |
|
||
2026 |
|
Gold |
|
|
|
|
$ |
|
||
2027 |
|
Gold |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
$ |
|
||
As of September 30, 2025, the outstanding hedge volume of
Fair Values of Derivative Instruments on the Balance Sheet
The table below presents the fair value of the Company’s derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024.
|
|
|
|
As of September 30, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||||||||||
Derivatives not designated as hedging instruments |
|
Balance Sheet |
|
Gross |
|
|
Gross |
|
|
Net |
|
|
Gross |
|
|
Gross |
|
|
Net |
|
||||||
Commodity Contracts |
|
Derivative contract asset - current |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Commodity Contracts |
|
Derivative contract liability - current |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Commodity Contracts |
|
Derivative contract asset - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Commodity Contracts |
|
Derivative contract liability - noncurrent |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
As of September 30, 2025, the Company has not posted any collateral related to these agreements.
Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement
The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2025 and 2024.
18
Table of Contents
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20 |
|
Location of Gain or (Loss) Recognized in Other Income (Expense) |
|
Amount of Loss |
|
|
Amount of Loss |
|
||||||||||
|
|
|
|
Three months ended |
|
|
Three months ended |
|
|
Nine months ended |
|
|
Nine months ended |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity Contracts |
|
Unrealized loss on derivative contracts |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Commodity Contracts |
|
Realized loss on derivative contracts |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Credit-risk-related Contingent Features
Cross Default. The Company has agreements with each of its derivative counterparties that contain a provision that if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.
Material adverse change. Certain of the Company's agreements with its derivative counterparties contain provisions where if a specified event or condition occurs that materially changes the Company's creditworthiness in an adverse manner, the Company may be required to fully collateralize its obligations under the derivative instrument.
Incorporation of loan covenants. The Company has an agreement with a derivative counterparty that incorporates the loan covenant provisions of the Company's indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.
Metal Sales
The Company purchases its
The sales are accounted for under FASB Accounting Standards Codification ("ASC") 610 Other Income and not ASC 606 Revenue from Contracts with Customers since the sales are incidental to the Company's primary contractual obligation and do not constitute the Company's ongoing or central operations.
Beginning with February 25, 2025, to satisfy physical delivery obligations under the existing hedge agreements, the Company entered into agreements with the counterparties to repurchase hedged quantities of gold at a contracted fixed price at each hedge delivery date.
15. Fair Value Measurement
The FASB ASC Topic 820, defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. FASB ASC Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets.
The three levels are defined as follows:
Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Other inputs that are observable directly or indirectly, such as quoted prices in markets that are not active or inputs, which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
19
Table of Contents
Level 3 – Unobservable inputs for which there are little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instrument’s complexity. The Company reflects transfers between the three levels at the beginning of the reporting period in which the availability of observable inputs no longer justifies classification in the original level. There were no transfers between fair value hierarchy levels for the period ended September 30, 2025.
Fair Value on a Recurring Basis
The Company performs fair value measurements on a recurring basis for the following:
Derivative Financial Instruments - Derivative financial instruments are carried at fair value and measured on a recurring basis. The Company's potential derivative financial instruments include features embedded within its convertible debenture with QRC (see Note 13). These measurements were not material to the Consolidated Financial Statements.
Commodity Hedges - As discussed in Note 14, the Company has entered into hedge agreements with delivery obligations of gold ounces. The Company utilizes derivative instruments in order to manage exposure to risks associated with fluctuating commodity prices. The derivative hedges are marked-to-market with changes in estimated value driven by forward commodity prices.
Marketable Securities - The Company owns an investment in a publicly traded company, Onyx Gold Corp. ("Onyx"). Changes in the fair value of this investment are recorded through income using quoted prices obtained from securities exchanges.
Contingent Consideration - As discussed in Note 11, the Company will be obligated to pay CRH additional consideration if production on the Lucky Shot Property meets two separate milestone payment thresholds. The fair value of the share-based portion of the contingent consideration is measured on a recurring basis, and is driven by the probability of reaching the milestone payment thresholds. The cash portion of the contingent consideration related to that asset acquisition will be recorded when the contingency is resolved.
The following table summarizes the fair value of the Company’s financial assets and liabilities, by level within the fair-value hierarchy:
As of September 30, 2025 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Financial Assets |
|
|
|
|
|
|
|
|
|
|||
Marketable securities - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial Liabilities |
|
|
|
|
|
|
|
|
|
|||
Derivative Liability - current |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Derivative Liability - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Contingent consideration liability - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Financial Assets |
|
|
|
|
|
|
|
|
|
|||
Marketable securities - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial Liabilities |
|
|
|
|
|
|
|
|
|
|||
Derivative Liability - current |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Derivative Liability - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Contingent consideration liability - noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Fair Value on a Nonrecurring Basis
The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its non-financial assets and liabilities, including mineral properties, business combinations, and asset retirement obligations. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments if events or changes in certain circumstances indicate that adjustments may be necessary.
20
Table of Contents
16. Acquisitions
HighGold Acquisition
On
On July 10, 2024, the Company completed the HighGold Acquisition and, as contemplated by the Arrangement Agreement, each HighGold share of common stock was exchanged for
Avidian Alaska Acquisition
On
On
17. General and Administrative Expenses
The following table presents the Company's general and administrative expenses for the three and nine months ended September 30, 2025 and 2024.
|
|
Three Months |
|
|
Three Months |
|
|
Nine Months |
|
|
Nine Months |
|
||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
General and administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketing and investor relations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Office and administrative costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Regulatory fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Travel |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Director fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
21
Table of Contents
18. Segments
The reportable segments are those operations whose operating results are regularly reviewed by the chief operating decision maker ("CODM") to make decisions about resources to be allocated and assess performance. The Company's CODM is the President and Chief Executive Officer and is responsible for the management of the Company. The Company has identified
22
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Three Months Ended September 30, 2025 |
|
Exploration |
|
|
Peak Gold JV |
|
|
Corporate and other reconciling items |
|
|
Consolidated |
|
||||
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Claim rental expense |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Exploration expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Johnson Tract |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Lucky Shot |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
General exploration expenses |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total exploration expense |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Depreciation expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
General and administrative expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total expenses |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from equity investment in Peak Gold, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total income/(loss) from operations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER INCOME/(EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Loss on derivative contracts |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Gain on metal sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on marketable securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Total other income/(expense) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
INCOME/(LOSS) BEFORE INCOME TAXES |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2025 |
|
Exploration |
|
|
Peak Gold JV |
|
|
Corporate and other reconciling items |
|
|
Consolidated |
|
||||
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Claim rental expense |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Exploration expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Johnson Tract |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Lucky Shot |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
General exploration expenses |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total exploration expense |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Depreciation expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
General and administrative expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total expenses |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from equity investment in Peak Gold, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total income/(loss) from operations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER INCOME/(EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Loss on derivative contracts |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Gain on metal sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain on marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total other income/(expense) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
LOSS BEFORE INCOME TAXES |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net Assets/(Deficit) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
23
Table of Contents
Three Months Ended September 30, 2024 |
|
Exploration |
|
|
Peak Gold JV |
|
|
Corporate and other reconciling items |
|
|
Consolidated |
|
||||
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Claim rental expense |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Exploration expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Johnson Tract |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Lucky Shot |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
General exploration expenses |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total exploration expense |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Depreciation expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Accretion expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
General and administrative expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total expenses |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from equity investment in Peak Gold, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total income/(loss) from operations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER INCOME/(EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Loss on derivative contracts |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Gain on metal sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on marketable securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Total other income/(expense) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
INCOME/(LOSS) BEFORE INCOME TAXES |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2024 |
|
Exploration |
|
|
Peak Gold JV |
|
|
Corporate and other reconciling items |
|
|
Consolidated |
|
||||
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Claim rental expense |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Exploration expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Johnson Tract |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Lucky Shot |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
General exploration expenses |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total exploration expense |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Depreciation expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Accretion expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
General and administrative expense |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Total expenses |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from equity investment in Peak Gold, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total income/(loss) from operations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER INCOME/(EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Loss on derivative contracts |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Gain on metal sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain/(loss) on marketable securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Total other income/(expense) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
LOSS BEFORE INCOME TAXES |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net Assets/(Deficit) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
24
Table of Contents
19. Related Party Transactions
The Company has identified its relationship with Peak Gold JV as a related party. During the nine months ended September 30, 2025 and the year ended December 31, 2024, the Company has made contributions to the Peak Gold JV and received distributions from it. See note 5 - Investment in the Peak Gold JV. Additionally, the Company purchased gold from Peak Gold JV. See note 13 - Debt. As of September 30, 2025, the Company owes Peak Gold JV $
The Company holds an investment in marketable securities, consisting of approximately
25
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes and other information included in our Form 10-K for the year ended December 31, 2024, previously filed with the SEC.
Cautionary Statement about Forward-Looking Statements
Some of the statements made in this report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words and phrases “should be”, “will be”, “believe”, “expect”, “anticipate”, “estimate”, “forecast”, “goal” and similar expressions identify forward-looking statements and express our expectations about future events. Any statement that is not historical fact is a forward -looking statement. These include such matters as:
Although the Company believes the expectations reflected in such forward-looking statements are reasonable, such expectations may not occur. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, that may cause our actual results, performance or achievements to be materially different from future results expressed or implied by the forward-looking statements. In addition to the risk factors described in Part II, Item 1A. Risk Factors, of this Form 10-Q and Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024, these factors include among others:
26
Table of Contents
You should not unduly rely on these forward-looking statements in this report, as they speak only as of the date of this report. Except as required by law, the Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this report or to reflect the occurrence of unanticipated events. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
2025 Highlights and Recent Developments
Manh Choh Project
In July 2024, the Peak Gold JV commenced processing ore at the Fort Knox facility and on July 8, 2024, the Manh Choh Project achieved a significant milestone and poured its first gold bar, on schedule. In 2024, the Company received $40.5 million in cash distributions from the Peak Gold JV relating to production at Manh Choh, followed by $87.0 million received during the nine months ended September 30, 2025.
During the first quarter of 2025, the Peak Gold JV (on a 100% basis) processed 323,000 tons of ore with an average grade of 0.215 ounces (“oz”) per ton and containing approximately 69,500 oz of gold. Gold recovery averaged 93.5%, resulting in approximately 65,000 oz of recovered gold, of which Contango’s 30% share amounted to 19,500 oz of gold. During the first quarter of 2025, 17,382 oz of gold were delivered to Contango and sold during the period.
During the second quarter of 2025, the Peak Gold JV (on a 100% basis) processed 255,000 tons of ore with an average grade of 0.222 oz per ton and containing approximately 56,000 oz of gold. Gold recovery averaged 93%, resulting in approximately 52,000 oz of recovered gold, of which Contango’s 30% share amounted to 15,700 oz of gold. During the second quarter of 2025, 17,764 oz of gold were delivered to Contango and sold during the period. As of June 30, 2025, 241 oz of gold remained in the Company.
During the third quarter of 2025, the Peak Gold JV (on a 100% basis) processed 287,000 tons of ore with an average grade of 0.214 oz per ton and containing approximately 61,400 oz of gold. Gold recovery averaged 92.5%, resulting in approximately 56,800 oz of recovered gold, of which Contango’s 30% share amounts to approximately 17,000 oz of gold. During the third quarter of 2025, 16,428 oz of gold were delivered to Contango and the Company sold 16,669 oz of during the period, which included 241 oz that was remaining at the end of the second quarter of 2025.
27
Table of Contents
Johnson Tract Project
During the third quarter of 2025, the Company continued with ongoing work to permit the underground exploration drift along with baseline environmental and engineering work to support permitting a road and barge landing facility within the Transportation and Port Easements granted to Cook Inlet Regional Inc. (CIRI) the underlying land owner. Field crews started work in July 2025 and finalized the field program in mid-October.
On May 6, 2025, the Company announced that it had completed a Technical Report Summary ("TRS") on the Johnson Tract Project. The TRS summarizes the results of an Initial Assessment (“IA”) of the potential viability for a seven-year life of mine (“LOM”), underground mining operation, utilizing the same direct ship ore (“DSO”) approach as the Manh Choh mine. The TRS was filed on May 12, 2025.
IA HIGHLIGHTS:
Lucky Shot Property
Subsequent to quarter end, the Company mobilized a drill rig at the Lucky Shot mine site to commence the first phase of a 15,000-meter underground in-fill drilling program. We expect assay results to start being reported in the first quarter of 2026. This work, along with detailed engineering, hydrology and geotechnical work will form the basis for a feasibility level mine and transportation plan for Lucky Shot, which are targeting to produce 30,000 to 40,000 ounces of gold per year using our Direct Shipping Ore (DSO) approach. We expect to complete the feasibility study in 12 to 18 months and make a production decision in 2027.
Committee for Safe Communities Complaint
On October 20, 2023, the Committee for Safe Communities ("CSC"), an Alaskan non-profit corporation inclusive of certain vacation home owners along the Manh Choh ore haul route, formed for the purpose of opposing the Manh Choh project, filed suit in the Superior Court in Fairbanks, Alaska against the State of Alaska Department of Transportation and Public Facilities ("DOT"). The Complaint sought injunctive relief against the DOT with respect to its oversight of the Peak Gold JV's ore haul plan. On May 9, 2025, and at CSC’s request, the Court entered an Order of Dismissal Without Prejudice as to CSC’s one remaining claim, vacated the trial date and closed the case.
Dot Lake Complaint
On July 1, 2024, the Village of Dot Lake, a federally recognized Indian Tribe, located approximately 50 miles from the Manh Choh mine on the ore haul route along the Alaska Highway ("Dot Lake"), filed a Complaint in the U.S. District Court for the District of Alaska against U.S. Army Corps of Engineers (the "Corps") and Lt. General Scott A. Spellmon, in his official capacity as Chief of Engineers and Commanding General of the Corps. The Complaint seeks declaratory and injunctive relief based on the Corps' alleged failure to consult with Dot Lake and to undertake an adequate environmental review with respect to the Corps' issuance in September 2022 of a wetlands disturbance permit in connection with the overall permitting of the Manh Choh mine as to approximately five acres of wetlands located on Tetlin Village land. The Peak Gold JV was not named as a defendant in the Complaint and, on August 20, 2024, moved to intervene in the action, which Dot Lake opposed. On October 10, 2024, the Court granted intervention to the Peak Gold JV. On October 18, 2024, the Peak Gold JV joined the partial motion to dismiss that the Corps filed on August 23, 2024. On March 19, 2025, the Court entered an Order on Motion to Partially Dismiss, which Order dismissed three of the four claims asserted in the Complaint. On April 1, 2025, Dot Lake filed an Amended Complaint which sought to reassert one of the claims that was dismissed without prejudice. On May 2, 2025, the Peak Gold JV filed a Motion to Dismiss this reasserted claim, which motion was granted on July 31, 2025. On September 29, 2025, the Court entered an Order dismissing the action with prejudice based on the Stipulated Dismissal of Action filed by the parties and the Court closed the case.
Cook Inletkeeper, Chickaloon Village Traditional Counsel, Center for Biological Diversity.
On September 10, 2024, the Corps issued to Johnson Tract Mining Inc, (a wholly owned subsidiary of the Company) a permit under Section 404 of the Clean Water Act to construct an access road and improve an existing air strip on the south parcel of the Johnson Tract project. On May 20, 2025, Cook Inletkeeper, Chickaloon Village Traditional Council, Center for Biological Diversity, and an individual plaintiff filed suit in the United States District Court for the District of Alaska against the Corps and related officials,
28
Table of Contents
challenging the Corps’ issuance of the Section 404 permit. Plaintiffs seek to vacate the section 404 permit issued and halt mineral exploration on the lands. The complaint alleges that the Corps Environmental Assessment for the Section 404 permit failed to adequately analyze the potential for acid rock drainage and contaminants leaching into the Johnson River and Cook Inlet and the harmful effects of the project on beluga whales at the Cook Inlet. In July 2025, the Company filed a motion to intervene as a defendant in the lawsuit to protect its legal rights under the Section 404 permit, its significant investment in the Johnson Tract, and its mineral exploration lease with CIRI. The Alaska District Court has not issued any rulings or relief and the permit in question is still active and in good standing. Management expects to be prevail in this litigation.
Index Inclusion
On September 15, 2025, the Company announced that it has been added to the Global Junior Gold Miners Index ("GDXJ"), effective at market close on September 19, 2025, pursuant to the GDXJ's semi-annual review and quarterly rebalance.
Strategy and Asset Management
Partnering with strategic industry participants to expand future exploration work. As of October 1, 2020, in conjunction with the Kinross Transactions and the signing of the A&R JV LLCA, KG Mining became the manager of the Peak Gold JV (the “Manager”). KG Mining may resign as Manager and can be removed as Manager for a material breach of the A&R JV LLCA, a material failure to perform its obligations as the Manager, a failure to conduct the Peak Gold JV operations in accordance with industry standards and applicable laws, and other limited circumstances. Except as expressly delegated to the Manager, the A&R JV LLCA provides that the JV Management Committee has exclusive authority to determine all management matters related to the Company. The JV Management Committee currently consists of one appointee designated by the Company and two appointees designated by KG Mining. The Representatives designated by each member of the Peak Gold JV vote as a group, and in accordance with their respective membership interests in the Peak Gold JV. Except in the case of certain actions that require approval by unanimous vote of the Representatives, the affirmative vote of a majority of the membership interests in the Peak Gold JV constitutes the action of the JV Management Committee.
Structuring Incentives to Drive Behavior. The Company believes that equity ownership aligns the interests of the Company’s executives and directors with those of its stockholders. The Company has implemented an equity compensation program for its executive officers and directors (and other persons) that provides an incentive for such officers to achieve the Company’s long-term business objectives. The Company’s equity compensation program includes two forms of long-term incentives: restricted stock and stock options. As of September 30, 2025, the Company’s directors and executives beneficially own approximately 12.3% of the Company’s common stock.
Acquiring exploration properties. The Company anticipates from time to time acquiring additional properties in Alaska for exploration, subject to the availability of funds. The acquisitions may include leases or similar rights from Alaska Native corporations and/or staking Federal or State of Alaska mining claims. Acquiring additional properties will likely result in additional expense to the Company for minimum royalties, minimum rents and annual exploratory work requirements. The Company is open to strategic partnerships or alliances with other companies as a means to enhance its ability to fund new and existing exploration and development opportunities.
Results of Operations
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Claim Rentals Expense. Claim rental expense primarily consists of State of Alaska rental payments and costs incurred to record annual labor documents. For the three months ended September 30, 2025 and 2024, claim rental expense were $0.1 million and $0.2 million, respectively.
Exploration Expense. Exploration expense for the three months ended September 30, 2025 was $2.0 million compared to $3.0 million for the three months ended September 30, 2024. Current period exploration expense primarily relates to the permitting process for the underground exploration drift and baseline environmental work at the Johnson Tract Project. The prior period exploration expense related to a 3,000 meter surface drill program at the Johnson Tract Project.
General and Administrative Expense. General and administrative expense for the three months ended September 30, 2025 and 2024 was $2.5 million and $2.6 million, respectively. The Company’s general and administrative expense primarily relates to professional fees, regulatory fees, payroll and stock-based compensation expense. The increase is mainly driven by expenditures carried for marketing and investor relations, increased legal costs and professional fees.
Income from Equity Investment in the Peak Gold JV. The income from the Company’s equity investment in the Peak Gold JV for the three months ended September 30, 2025 was $29.5 million compared to income of $28.5 million for the same period in 2024. The Manh Choh Project commenced production in July 2024, which generated income thereafter.
Interest Expense. For the three months ended September 30, 2025, interest expense was $1.7 million and primarily related to the Queen's Road Capital Investment, Ltd. Debenture (the "Debenture") and interest expense related to the Company’s cumulative $23.1
29
Table of Contents
million net draw-down on the Facility. Prior year interest expense of $3.7 million included interest expense related to the Debenture and interest expense related to the Company's cumulative $58.0 million net draw-down on the Facility (see Note 13 - Debt).
Metal Sales. For the three months ended September 30, 2025 and 2024, the gain on metal sales was $2.2 million and $0.9 million, respectively, and related to excess ounces that were purchased from the Peak Gold JV that were not delivered into the hedges and sold to the derivative counterparties and hedged volumes sold at spot with obligation to repurchase at fixed price before delivering into hedges. The ounces sold during the three months ended September 30, 2025 were 16,669 with an average spot price of $3,647 compared to 12,850 ounces with an average spot price of $2,521 for the three-month period ended September 30, 2024.
Loss on Derivative Contracts. Loss on derivative contracts for the three months ended September 30, 2025 was comprised of unrealized and realized loss of $14.4 million and $15.9 million, respectively, compared to $22.9 million and $5.9 million, respectively, for the three months ended September 30, 2024. The variance is generated from the valuation of the derivative contracts which was affected by the increase of the spot price and the corresponding impact in the forward curves used to value them and the deliveries completed towards them. The Company delivered 11,900 gold ounces into the derivative contracts for the three-month period ended September 30, 2025. The Company delivered 14,826 gold ounces into the derivative contracts for the three-month period ended September 30, 2024 (see Note 14 - Derivative and Hedging Activities).
Unrealized loss on marketable securities. For the three months ended September 30, 2025, the unrealized loss on marketable securities was $1.0 million and related to valuation of the Company's investment in Onyx, compared to $0.2 million for the three months ended September 30, 2024.
Nine months Ended September 30, 2025 Compared to Nine months Ended September 30, 2024
Claim Rentals Expense. Claim rental expense primarily consists of State of Alaska rental payments and costs incurred to record annual labor documents. For the nine months ended September 30, 2025 and 2024, claim rental expense were $0.3 million and $0.4 million, respectively.
Exploration Expense. Exploration expense for the nine months ended September 30, 2025 was $3.5 million compared to $3.0 million for the nine months ended September 30, 2024. Current period exploration expense primarily relates to the permitting process for the underground exploration drift and baseline environmental work at the Johnson Tract Project. The prior period exploration expense related to a 3,000-meter surface drill program at the Johnson Tract Project.
General and Administrative Expense. General and administrative expense for the nine months ended September 30, 2025 and 2024 was $8.1 million and $7.3 million, respectively. The Company’s general and administrative expense primarily relates to professional fees, regulatory fees, payroll and stock-based compensation expense. The increase is mainly driven by expenditures carried for marketing and investor relations, increased legal costs and professional fees and the Facility restructure.
Income from Equity Investment in the Peak Gold JV. The income from the Company’s equity investment in the Peak Gold JV for the nine months ended September 30, 2025 was $79.2 million compared to income of $27.7 million for the nine months ended September 30, 2024. The Manh Choh Project commenced production in July 2024, which generated income for the second half of 2024 and the three quarters of 2025.
Interest Expense. For the nine months ended September 30, 2025, interest expense was $6.5 million and primarily related to the Debenture and interest expense related to the Company’s cumulative $23.1 million net draw-down on the Facility. Prior year interest expense of $8.6 million included interest expense related to the Debenture and interest expense related to the Company's cumulative $58.0 million net draw-down on the Facility (see Note 13 - Debt).
Metal Sales. For the nine months ended September 30, 2025 and 2024, the gain on metal sales was $4.3 million and $0.9 million, respectively, and related to excess ounces that were purchased from the Peak Gold JV that were not delivered into the hedges and sold to the derivative counterparties and hedged volumes sold at spot with obligation to repurchase at fixed price before delivering into hedges. The ounces sold during the nine months ended September 30, 2025 were 51,574 with an average spot price of $3,300, compared to 12,850 ounces with an average spot price of $2,521 for the nine-month period ended September 30, 2024.
Loss on Derivative Contracts. Loss on derivative contracts for the nine months ended September 30, 2025 was comprised of unrealized and realized loss of $57.0 million and $26.7 million, respectively, compared to $51.1 million and $6.0 million, respectively, for the nine months ended September 30, 2024. The variance is generated from the valuation of the derivative contracts which was affected by the increase of the spot price and the corresponding impact in the forward curves used to value them and the deliveries completed towards them. The Company delivered 23,839 gold ounces into the derivative contracts for the nine-month period ended September 30, 2025. The Company delivered 14,826 gold ounces into the derivative contracts for the three-month period ended September 30, 2024 (see Note 14 - Derivative and Hedging Activities).
Unrealized gain/(loss) on marketable securities. For the nine months ended September 30, 2025, the unrealized gain on marketable securities was $5.7 million and related to valuation of the Company's investment in Onyx, compared to a $0.2 million loss for the nine months ended September 30, 2024.
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Table of Contents
Cash Cost on a By-Product Basis and All-In Sustaining Costs on a By-Product Basis (non-GAAP)
The table below presents reconciliations between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost on a By-product Basis and (ii) AISC on a By-product Basis for the Peak Gold JV operations (Manh Choh) for the three and nine months ended September 30, 2025.
Cash Cost on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.
Cash Cost on a By-product Basis includes all direct and indirect operating cash costs related directly to the physical activities of producing gold, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. The value of silver sold is deducted from the total production cost of sales as it is considered residual production, i.e. a by‐product.
AISC on a By-product Basis includes reclamation, sustaining capital, exploration and joint venture partner operator management costs.
Cash Cost on a By-product Basis, per Ounce sold is an important operating statistic that we utilize to measure a mine's operating performance. We use AISC on a By-product Basis, per Ounce sold as a measure of a mine's net cash flow after costs for reclamation and sustaining capital. This is similar to the Cash Cost on a By-product Basis, per Ounce sold measure we report, but also includes reclamation and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain gold production. Cash Cost on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold also allow us to benchmark the performance of the Peak Gold JV versus those of our competitors. These statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.
Cash Costs on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold are calculated by adjusting production cost of sales, as reported on the interim condensed consolidated statements of operations, as follows:
|
|
Three Months |
|
|
Nine Months |
|
||
|
|
2025 |
|
|
2025 |
|
||
Cash Cost on a By-Product Basis: |
|
|
|
|
|
|
||
Total cost of sales |
|
$ |
92,875,525 |
|
|
$ |
285,277,975 |
|
Less: silver revenue |
|
|
(2,244,251 |
) |
|
|
(5,329,563 |
) |
Depreciation, depletion and amortization |
|
|
(13,858,844 |
) |
|
|
(42,047,076 |
) |
Total |
|
$ |
76,772,429 |
|
|
$ |
237,901,336 |
|
Sustaining capital |
|
|
|
|
|
|
||
Sustaining capital - PPE |
|
$ |
6,638,883 |
|
|
$ |
11,279,017 |
|
Exploration costs |
|
|
2,261,510 |
|
|
|
4,458,793 |
|
Reclamation and other costs |
|
|
521,478 |
|
|
|
1,557,648 |
|
JV Partner operator management fee |
|
|
1,279,565 |
|
|
|
3,552,846 |
|
AISC on a By-Product basis |
|
$ |
87,473,865 |
|
|
$ |
258,749,640 |
|
|
|
|
|
|
|
|
||
Divided by ounces sold |
|
|
54,760 |
|
|
|
171,916 |
|
Cash Cost on a By-product Basis, per Ounce |
|
$ |
1,402 |
|
|
$ |
1,384 |
|
AISC on a By-product Basis, per Ounce |
|
$ |
1,597 |
|
|
$ |
1,505 |
|
|
|
|
|
|
|
|
||
Liquidity and Capital Resources
As of September 30, 2025, the Company had approximately $107.0 million of cash.
The Company’s primary cash requirements have been for general and administrative expenses, capital calls from the Peak Gold JV for the Manh Choh Property, repayment of principal and interest related to debt and exploration expenditures on the Johnson Tract Project and Lucky Shot Property. The Company’s sources of cash have been from common stock offerings, the issuance of the Debenture, distributions from the equity investment and the proceeds from the Facility (see Note 5 - Investment in the Peak Gold JV, Note 8 - Stockholders' Equity (Deficit) and Note 13 - Debt, for a discussion of the recent activity).
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Table of Contents
The Manh Choh Project began production early in the third quarter of 2024 and on July 8, 2024, the Peak Gold JV poured its first gold bar. The Manh Choh Project remains on schedule and ore mining continues along with stockpiling of ore at the Fort Knox facility. Production from the Manh Choh Project has allowed the Peak Gold JV to operate from the cash flows generated from its operations and there are no future anticipated cash calls.
The Company’s cash needs going forward will primarily relate to exploration of the Contango Properties, repayment of debt and related interest and general and administrative expenses of the Company. In the third and fourth quarters of 2024, the Company received cash distributions from the Peak Gold JV relating to production at Manh Choh of $19.5 million and $21.0 million, respectively. In the first, second and third quarters of 2025, the Company received cash distributions totaling $24.0 million, $30.0 million, and $33.0 million, respectively. Although there can be no guarantee that the Peak Gold JV will continue to make distributions to the Company, the Company believes that distributions are probable and that it will maintain sufficient liquidity to meet its working capital requirements, including repayment obligations of approximately $3.0 million on the Facility and delivery into its hedge contracts, for the next twelve months from the date of this report. The Company made a repayment of $8.5 million on the Facility on October 2, 2025.
On September 25, 2025, the Company sold shares of common stock and pre-funded warrants and received gross proceeds of $50.0 million. The Company intends to use the net proceeds of approximately $47.5 million to advance its fully permitted Lucky Shot Project to a mine production decision over the next two years by completing underground and surface-based drilling and underground development work. Proceeds will also be used to advance its Johnson Tract Project, subject to receipt of appropriate permits, by mobilizing all equipment necessary to complete road construction to the planned portal, winterizing the project’s camp for year-round operations, starting construction of an exploration tunnel in order conduct advanced exploration drilling, and completing a feasibility-level mine plan. Any remaining proceeds will also be used for general corporate purposes, including working capital.
Further financing by the Company may include issuances of equity, instruments convertible into equity (such as warrants) or various forms of debt. The Company has issued common stock and other instruments convertible into equity in the past and cannot predict the size or price of any future issuances of common stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of the Company’s securities.
Off-Balance Sheet Arrangements
None.
Critical Accounting Estimates
The discussion and analysis of the Company’s financial condition and results of operations is based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. There were no material changes in the Company’s critical accounting estimates from those that were previously reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Available Information
General information about the Company can be found on the Company’s website at www.contangoore.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through our website as soon as reasonably practicable after the Company files or furnishes them to the SEC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company,” the Company is not required to provide this information.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) of the Exchange Act, the Company has evaluated, under the supervision and with the participation of its management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that the Company files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2025 at the reasonable assurance level.
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Table of Contents
Changes in Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our third fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a 30% owner of the Peak Gold JV, which operates the Manh Choh mine near Tok, Alaska. Ore from the mine is being trucked to the Fort Knox mill for processing via public roadways in state-of-the-art trucks carrying legal loads. Certain owners of vacation homes along the ore haul route and others claiming potential impact have organized a group to oppose the ore haul plan and disrupt the project. These efforts have included administrative appeals of certain state mine permits unrelated to ore haul. To date, those appeals have been unsuccessful.
On October 20, 2023, the Committee for Safe Communities ("CSC"), an Alaskan non-profit corporation inclusive of certain vacation home owners along the Manh Choh ore haul route, formed for the purpose of opposing the Manh Choh project, filed suit in the Superior Court in Fairbanks, Alaska against the State of Alaska Department of Transportation and Public Facilities ("DOT"). The Complaint sought injunctive relief against the DOT with respect to its oversight of the Peak Gold JV's ore haul plan. On May 9, 2025, and at CSC’s request, the Court entered an Order of Dismissal Without Prejudice as to CSC’s one remaining claim, vacated the trial date and closed the case.
On July 1, 2024, the Village of Dot Lake, a federally recognized Indian Tribe, located approximately 50 miles from the Manh Choh mine on the ore haul route along the Alaska Highway ("Dot Lake"), filed a Complaint in the U.S. District Court for the District of Alaska against U.S. Army Corps of Engineers (the "Corps") and Lt. General Scott A. Spellmon, in his official capacity as Chief of Engineers and Commanding General of the Corps. The Complaint seeks declaratory and injunctive relief based on the Corps' alleged failure to consult with Dot Lake and to undertake an adequate environmental review with respect to the Corps' issuance in September 2022 of a wetlands disturbance permit in connection with the overall permitting of the Manh Choh mine as to approximately five acres of wetlands located on Tetlin Village land. The Peak Gold JV was not named as a defendant in the Complaint and, on August 20, 2024, moved to intervene in the action, which Dot Lake opposed. On October 10, 2024, the Court granted intervention to the Peak Gold JV. On October 18, 2024, the Peak Gold JV joined the partial motion to dismiss that the Corps filed on August 23, 2024. On March 19, 2025, the Court entered an Order on Motion to Partially Dismiss, which Order dismissed three of the four claims asserted in the Complaint. On April 1, 2025, Dot Lake filed an Amended Complaint which sought to reassert one of the claims that was dismissed without prejudice. On May 2, 2025, the Peak Gold JV filed a Motion to Dismiss this reasserted claim, which motion was granted on July 31, 2025. On September 29, 2025, the Court entered an Order dismissing the action with prejudice based on the Stipulated Dismissal of Action filed by the parties and the Court closed the case.
On September 10, 2024, the Corps issued to Johnson Tract Mining Inc, (a wholly owned subsidiary of the Company) a permit under Section 404 of the Clean Water Act to construct an access road and improve an existing air strip on the south parcel of the Johnson Tract project. On May 20, 2025, Cook Inletkeeper, Chickaloon Village Traditional Council, Center for Biological Diversity, and an individual plaintiff filed suit in the United States District Court for the District of Alaska against the Corps and related officials, challenging the Corps’ issuance of the Section 404 permit. Plaintiffs seek to vacate the section 404 permit issued and halt mineral exploration on the lands. The complaint alleges that the Corps Environmental Assessment for the Section 404 permit failed to adequately analyze the potential for acid rock drainage and contaminants leaching into the Johnson River and Cook Inlet and the harmful effects of the project on beluga whales at the Cook Inlet. In July 2025, the Company filed a motion to intervene as a defendant in the lawsuit to protect its legal rights under the Section 404 permit, its significant investment in the Johnson Tract, and its mineral exploration lease with CIRI. The Alaska District Court has not issued any rulings or relief and the permit in question is still active and in good standing.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. Such risks are not the only risks the Company faces. You should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, under the headings “Item 1. Business — Adverse Climate Conditions,” “—Competition,” “— Government Regulation” and “Item 2. Properties—Environmental Regulation and Permitting,” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”which risks could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. An investment in the Company is subject to risks inherent in our business and involves a high degree of risk. The trading price of the shares of the Company is affected by the performance of our business relative to, among other things, competition, market conditions and general economic and industry conditions. The value of an investment in the Company may decrease, resulting in a loss.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On July 9, 2025, the Company issued 11,216 shares of Contango common stock to Avidian Gold Corp. (“Avidian”) in satisfaction of the balance of the equity consideration that was due to Avidian in connection with the Company’s purchase of Avidian’s 100% owned
33
Table of Contents
Alaskan subsidiary, Avidian Gold Alaska Inc. The shares were issued in reliance upon an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act.
Other than as described above, there were no sales of unregistered equity securities during the third quarter of 2025.
Item 4. Mine Safety Disclosures
Pursuant to Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, registrants that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”).
The Company does not serve as the manager of the Peak Gold JV or operator of the Manh Choh mine, and all of its other projects are in the exploration stage. Accordingly, during the nine months ended September 30, 2025, the Company and its properties or operations were not subject to regulation by MSHA under the Mine Act and, thus, no disclosure is required under Section 1503(a) of the Dodd-Frank Act or subpart 104 of Regulation S-K.
Item 5. Other Information
Rule 10b5-1 Trading Plans
On
34
Table of Contents
On October 15, 2025, before Mr. Juneau’s Rule 10b5-1 trading arrangement had commenced and in connection with the closing of the Company’s September underwritten offering and a related lock-up agreement that restricts Mr. Juneau from transferring shares of our common stock for a period of 90 days after closing of the offering, Mr. Juneau
Other than as disclosed above, during the three months ended September 30, 2025, no director or officer of the Company
35
Table of Contents
Item 6. Exhibits
(a) Exhibits:
The following is a list of exhibits filed as part of this Form 10-Q. Where so indicated, exhibits, which were previously filed, are incorporated herein by reference (File No. 001-35770, unless otherwise indicated).
|
|
|
|
|
|
Incorporated by Reference |
||||||
Exhibit |
|
Description |
|
Filed Herewithin |
|
Form |
|
File No. |
|
Ex. |
|
Filing Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1 |
|
Arrangement Agreement, dated as of May 1, 2024, by and among the Company, Contango Mining Canada Inc., and HighGold Mining Inc. |
|
|
|
8-K |
|
001-35770 |
|
10.1 |
|
05/06/2024 |
3.1 |
|
Certificate of Incorporation of Contango ORE, Inc. |
|
|
|
10/A2 |
|
000-54136 |
|
3.1 |
|
11/26/2010 |
3.2 |
|
Certificate of Amendment to Certificate of Incorporation of Contango ORE, Inc. |
|
|
|
8-K |
|
001-35770 |
|
3.1 |
|
12/17/2020 |
3.3 |
|
Bylaws of Contango ORE, Inc. |
|
|
|
10/A2 |
|
000-54136 |
|
3.2 |
|
11/26/2010 |
3.4 |
|
Amendment No. 1 to the Bylaws of Contango ORE, Inc. |
|
|
|
8-K |
|
001-35770 |
|
3.1 |
|
10/21/2021 |
4.1 |
|
Form of Certificate of Contango ORE, Inc. common stock. |
|
|
|
10-Q |
|
001-35770 |
|
4.1 |
|
11/14/2013 |
4.2 |
|
Form of Convertible Debenture |
|
|
|
8-K |
|
001-35770 |
|
4.1 |
|
04/09/2022 |
4.3 |
|
Form of Registration Rights Agreement dated as of December 23, 2022. |
|
|
|
8-K |
|
001-35770 |
|
4.1 |
|
12/23/2022 |
4.4 |
|
Form of Registration Rights Agreement dated as of January 19, 2023. |
|
|
|
8-K |
|
001-35770 |
|
4.1 |
|
01/19/2023 |
4.5 |
|
Form of Pre-Funded Warrants |
|
|
|
8-K |
|
001-35770 |
|
4.1 |
|
09/26/2025 |
31.1 |
|
Certification of Principal Executive Officer pursuant to Rules 13a-14 and 15d-14. |
|
X |
|
|
|
|
|
|
|
|
31.2 |
|
Certification of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14. |
|
X |
|
|
|
|
|
|
|
|
32.1 |
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350. |
|
X |
|
|
|
|
|
|
|
|
32.2 |
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350. |
|
X |
|
|
|
|
|
|
|
|
101 |
|
Financial statements from the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Cash Flows; (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity; and (v) Notes to Unaudited Condensed Consolidated Financial Statements. |
|
X |
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|
X |
|
|
|
|
|
|
|
|
|
|
† |
Management contract or compensatory plan or agreement |
36
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
|
CONTANGO ORE, INC. |
||
|
|
|
|
Date: November 13, 2025 |
By: |
|
/s/ RICK VAN NIEUWENHUYSE |
|
|
|
Rick Van Nieuwenhuyse |
|
|
|
President and Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
Date: November 13, 2025 |
By: |
|
/s/ MIKE CLARK |
|
|
|
Mike Clark |
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
37
