Good morning, good afternoon, or good evening, wherever you're tuning in from today. I personally am joined live at the Deutsche Goldmesse in Frankfurt, Germany by Contango Ore CEO, Rick Van Nieuwenhuyse, and CFO, Mike Clark, to discuss Contango's Q3 reporting.

Gentlemen, how are you?

Good to see you here in Frankfurt, Romeo.

Awesome. I wish we were in the same room, but we're several feet away, just because of practicalities of movie magic on webinars.

Here's how today is going to work, just for the folks in the room. I've got a number of questions to go through, just eager to just get into these pretty, pretty great Q3 reports.

Then I'm eager to take questions from the live audience. If there is any questions that you've got during today's event, there's a chat button in the bottom right of your screen.

Please jump in at any time. Anything I don't get to, we're going to be a pretty short event today, but any questions I don't get to, I'll be sure to get to both Rick and Mike and the Contango team afterwards, and they'll be able to get back to you as quickly as possible.

I wanted to jump right into the protein as quickly as I can. Rick, obviously, we're looking at a record operating income of $25 million this quarter, while, I think, almost as impressively or more impressively, maintaining AISC below that $1,625 target at $1,597 per ounce.

Two com-- a comment and a question. First, jeez, that's a lot of money, congratulations.

What's kept the AISC in check? I think,

yeah, it's a lot of money. It's record for us.

Our Q3 production level was above plan by about 2,000 ounces. Importantly, the AISC is coming in lower than the $1,625 that we guided to, and obviously we get our guidance from Kinross.

I think a big reason behind that is the mine plan that we outlined, we're delivering into, we're exceeding that. I think that's somewhat typical of a Kinross.

It's a big company. They like to underpromise and overdeliver.

That's good, because that means we're not going to get too far ahead of our skis. I think the other thing overall that we see that has really helped our project specifically is the fact that the oil price is low and diesel prices have not gone up.

We all know that an increasing gold price environment is telling us that inflation is still there, regardless of what the government officially tells us. We know that that's what it is anticipating.

This time what is different about this time around is that we don't see the oil prices going up in Alaska. We've had the same very pretty stable diesel price at the pumps for several years now.

That's a good thing. It's specifically a good thing for our project, because obviously with the transportation aspect of transporting the ore from the mine site to the mill, it's a significant part of our cost structure.

I think that, and I think the other thing is, look, Kinross is doing a great job just delivering into the plan that they've outlined. When you're kind of firing on all cylinders is the way I like to express it.

No, makes a lot of sense. Mike, I want to get you in here for some of the dollars and cents questions.

I know the cash position jumped from $20 million at year-end 2024 to a eye-popping $107 million as of September 30th with the $87 million distribution received from that Peak Gold JV to date. I wonder if you could walk us through just capital allocation priorities.

Now you paid down a bunch of debt, you settled carry trade. What's the strategic thinking behind those moves?

It hasn't changed much from the last couple periods. Our objective all along has been to deliver into the hedges, get those paid off as quickly as possible, pay down the debt on schedule.

To date we're always about a quarter ahead on our production, we're always delivering about three months in advance. That's why we're using the carry trade.

In a rising gold market, that has saved us, I think this quarter we saved about $2.4 million as a result. The strategy is working.

We're going to continue doing that. We're delivering into December hedges right now.

The goal is we'll basically try to get these delivered into all by September of next year. We're waiting for the '26 plan for Manh Choh, but that is currently what our target is internally.

No, appreciate that. Mike, one thing I noticed you added adjusted net income this period, just for the folks in the room and for me, too, to be honest.

Can you provide some insight into that? What are we looking at here?

You can thank Rick for that last minute. Basically, we continue to report a very strong income statement, and you keep having these derivative hedge losses that kind of muddy the waters.

Really what that is is an unrealized loss on the derivatives, which is a function of the forward curve of the gold price. Because it went up so much in September, up to $4,300, the derivative loss went way up.

That had a $30 million impact on our P&L, which took us from what really would be a normal, reoccurring net income position to a net loss. We put it in there so that shareholders could kind of see what the business would look like once those things are gone and what our normal business looks like.

Rick, anything to add to that?

I find the accounting rules somewhat inaccurate in when they're describing this and how they've sort of forced you to describe things. It's unrealized, meaning that if we don't deliver that future gold, yeah, we're in trouble.

We've got to come up with either go buy gold in the market or whatever, because it's a contract and we have to deliver into. That's why it's unrealized.

I would have preferred something like potential loss or something like that. Anyways, accounting rules are what they are.

We're just a little company, we're not going to change them. We try to make it at least clear to the shareholder what the reality is.

No, appreciate that very much. I think that's helpful context.

Romeo, just to emphasize,

the unrealized is the remaining hedges that are on the books as of September 30th. Then for any hedges we delivered into during the quarter and recognized that loss, those are going to be realized losses.

It was about 50/50 split, about $15 million each during the quarter.

Great. No, do appreciate that.

One thing, Rick, I wanted to ask you about, an interesting thing in the PR is the test batch blending Manh Choh's low-grade oxide ore with the Fort Knox ore achieved 94% recovery and is going to add, what, 1,300 ounces in Q4. To me, that looked like a pretty significant technical achievement.

I'm looking for your perspective on what does this successful met test tell us about the potential to process additional Manh Choh material that might have been uneconomic in a previous era?

The short answer is we don't know yet, because all we know is the net result of the test. We processed 44,000 tons at a rough grade of 0.1 ounces per ton, which is 3 grams.

When we say low grade, it's low grade relative to the 8 grams per ton that is the average grade. We have to sort of put that in context.

You're right in the sense that we're doing this test to see what that marginal ore would be like if we just blend it with Fort Knox. It is oxide material, and there's a fair bit of this low-grade material because you have to go back to the original mine plan, the feasibility study mine plan, and that was done at a $1,400 gold price, what, three three years ago or so.

Obviously with the gold price, well, it's down today kind of hard, but it's still above $4,000. That's just a different mine plan.

Testing this low-grade, roughly 3-gram material is the start of taking a look at is there another way of working on processing this low-grade material, just blending it with Fort Knox. The Fort Knox ore, which is much, much lower grade, is somewhere in the 0.6, 0.7 grams per ton, that's the typical Fort Knox ore.

It's not really oxide ore at Fort Knox, it just doesn't have any sulfide. Taking our oxidized, low-grade, 3-gram material and blending it, when you're doing that, you're running the mill at 2,500 tons a day, that's when they run for Fort Knox, that's what you're doing.

Where when we run it for Manh Choh on a batch basis, it's down to 10,000 tons a day. It's looking for those economies of scale.

We don't have the results for all that and the consumables and the cost, the power costs, all the details of what go into determining the milling cost. In the next month, we should have those, and we'll make some decisions on going forward if this makes sense to process this low-grade material on a blended basis versus just the batch basis.

The batches will continue. That's on the higher-grade material.

We're down into the sulfide part of the [unclear], the material we're talking about is all sitting on the surface in stockpiles, the oxide, the low-grade oxide. Does that make sense?

No, absolutely. I appreciate that.

I think I understand a lot better. I know at Manh Choh, it processed 287,000 tons at 0.214 ounces per ton, 92.5% recovery in Q3.

How does this compare to reserve grade expectations? What's your visibility into the ore body as you sequence through that mine plan?

We'll have a detailed mine plan for 2026 here probably in another few weeks once we've had our budget meeting and we've approved the budget and that mine plan. We'll certainly put that out to the public, I think stay tuned for that.

Basically, the grade's a little lower than the feasibility grade which was close to 8 grams per ton, but that's because we're blending it with lower-grade material because the gold price isn't $1,400, it's $4,000. The tendency of that when you're adding more low-grade material in there is to lower the overall grade, but you're making more money because the gold price is more than twice as high as what you planned for.

I think the most important thing is to stay tuned for the 2026 mine plan. Now if we go back to the feasibility study itself, that was always going to be the lowest gold production year for the entire mine life.

Now we've done a few things. We've purchased some additional trucks.

We're obviously blending, looking at this blending strategy, we'll see what the mine plan is in the next couple weeks, and we'll have to have another podcast or interview on a platform here to explain what the plan is.

No, makes sense. Appreciate that.

Now, I know you mentioned in the PR sustaining capital for tractor replacements and ongoing exploration drilling at Manh Choh contributed to the AISC increase. Is this new baseline for sustaining costs or would you expect those to moderate as we kind of complete the capital replacement cycle?

I think you might want to answer this more from an accounting perspective, but from a mining perspective, this was always part of the plan, looking at ways to optimize the transportation aspects of the project.

I think we'll wait for the '26 budget to see for next year, but I think for now, I think it's a good benchmark to follow. Again, it'll become less at the end of the mine life.

I think we're going to continue to be below $1,600 AISC this year and next year probably consistent, but then come much lower in a little later years of the mine life.

Maybe just to add onto that, one of the things in the feasibility-level mine plan, we're wrapping up mining on the north pit, and then so that means you're starting to mine more on the main pit, you're getting your layback in, right? There's a lot of pre-stripping that you're doing in to do that.

I think that's why our all sustaining costs are on the higher end of the average, and then '27, '28 are going to be lower.

Awesome. I do want to get into Lucky Shot just for a quick second, because I know you've mobilized a drill rig for that 15,000-meter underground infill program, looking at, as I understand, a feasibility study in 12, 18 months, and a production decision as quickly as '27.

With production estimates of 30, 40,000 ounces annually using that classic Contango DSO approach, how does Lucky Shot fit into your larger portfolio and what makes you kind of confident in this really cool, but aggressive timeline?

Look, this isn't the biggest mine in the world, but it is really good grade. We've done enough drilling, we put out a modest resource, and I know 100,000, 110,000 ounces of resource doesn't get everybody's attention, get everybody wound up, but the grade should get them wound up.

It's 14 grams per ton. We're underground, we've got the underground infrastructure in place.

We've been caring and maintaining the mine all year, we've been waiting for getting this cash built up that we have now. Now we can execute the plan that we have in place to get the drilling done.

The drill is actually on-site. I don't know if it's actually drilling today, but if it's not today, it'll be in the next day or two.

The plan is to drill 15,000 meters underground, give us about a year to get that done. These are relatively short holes, and we drill kind of what I call a fan shot from underground from a near vertical hole to about a -10, 20°.

You're basically just spraying the side, the vein is sitting here and you're just drilling into it. 30-meter holes on average.

We should start having drill results by middle of January. We're basically using a photon assay that the lab is in Fairbanks, we basically just put the rocks in a box and take them up to the lab, and get them analyzed.

I think we'll start releasing results in, say middle of January sometime, and it'll be kind of constant all year long. We'll be able to know, and the market will understand that our objective here is to outline 400,000 to 500,000 ounces.

This mine produced a 1/4 million ounces of very high grade, 40-gram-per-ton average grade. That was mined, the old style narrow-vein mine that, frankly, wasn't terribly safe.

We're going to be mining on a 3-meter average width and diluting that grade over that width, we're expecting a grade more like 10 to 12 on a diluted mine-diluted basis. We're fully permitted.

Basically give us a year to get the drilling done, another 6 months to get a feasibility-level mine plan. I call it feasibility-lite, because, again, we're not building a mill and a tailings facility and a power plant.

It's basically just a mine plan and a transportation plan, and the transportation plan is to haul it down to the railroad, and then we can decide if we're going north to Fort Knox or if we go south to Seward, and we've had interest from overseas to take this to a smelter. That might work out as good or better than taking it up to Fort Knox.

We've got a lot of choices. That's the thing, when you have grade, you have a lot more choices.

That's the other thing I like about our DSO model is we focus on things that have grade. They're not necessarily the biggest gold mining in the world, but they're going to make our shareholders money.

I think that's the business we want to focus on being in, is having mines that actually make money and can get into production quickly, and the DSO model allows us to do that.

Great. I also still think we should make Rocks in a Box T-shirts.

I just think that's a fun idea for the future, every time you say it. I want to talk about Johnson Tract really quickly, because it represents potentially the highest-grade asset in your portfolio, based on historical drilling at least.

Could you provide us just an update on the permitting process for that underground exploration drift and the transportation infrastructure series? What's up next, basically?

What are the critical path items that determine where this project's going towards

development? Look, Johnson Tract, it's a great project.

We bought it a little over a year ago with the acquisition of HighGold. We're on the boring part of the Lassonde curve.

This is about permitting. We've been working with the state government on permitting the underground tunnel, basically sort of doing exactly what we've got through doing with Lucky Shot, get the underground tunnel in place.

We have to permit that first, and those are permits with the State of Alaska. They're basically two fundamental permits: a mine operating permit, because technically you're a mine, we're still doing exploration, but technically it's a mine; and then because you have a mine, you have the potential for water discharge, and you need a water discharge permit.

Those two permits we expect to receive by Q1 of next year. Assuming that, then we would mobilize next summer.

We'd be mobilizing equipment to build the road. It's about a 5-kilometer or 3-mile road between the camp and the proposed portal site.

There's a couple of bridges to put in place. Again, these are temporary bridges, it's again still exploration, and we use just what are called Bailey bridges.

They just basically go across the creek, and you get your stuff to the other side. We're not permitted for a mining operation at this point for the road.

That will come next. Then we want to get the equipment mobilized to start building the tunnel, and we want to winterize camp so that we can operate year-round.

That's about a $20 million program, and, again, we're funded to do that. That's our plan, and obviously, when we receive the permits, we'll be announcing that, and as we start mobilizing equipment next summer.

A lot of work to do on all that. Then while all that's going on, we're in the process of permitting with the federal government agencies the transportation road route on the transportation easement and the port site easement, which is for us a barge landing site.

We're also in the process, in a parallel fashion, to permit the road and the barge landing site. Lots of work going on in the background, and be exciting to get the drills turning to do the drilling and blasting to build the tunnel starting next probably September's probably what we're pushing for.

Getting the camp winterized is a very important step so that we can work year-round.

Great. No, I think that's really helpful context for that project.

Now, I do want to zoom out here a bit before I get to the questions from the audience, and I'm going to gas up Contango more than I usually do while we zoom out, but you transitioned the company from explorer to cash-generating producer, $107 million in the treasury, at this point, minimal debt, and two development projects advancing. As you're looking at the next five years with potential to extend into a longer plan, what does success look like?

Are you focused on organic growth through Lucky Shot and Johnson Tract or does this new financial position allow you to consider consolidation options elsewhere?

I'd say the way I like to express it is I think we have a really solid, executable five-year plan, and we have the money to execute, so that's why I say it's executable. We have the team to do it.

We know Alaska. This is our backyard.

We know how to get stuff done here. Now we're starting to think, okay, well, that's a great five-year plan.

Why don't we put a five-year plan into a 10-year or 20-year plan? To do that growth, we want to be looking at M&A.

We're taking a look at opportunities. We're not going to try stray too far from home, Alaska, BC, Yukon, that's kind of our backyard.

We know how to work there. We've all worked there before.

That's where I would say we're looking, and we've got half a dozen different opportunities that fit the DSO model. They're all going to fit this model.

We like this model. We demonstrated that it works, and so we see another half a dozen opportunities like Johnson Tract, like Lucky Shot-type opportunities to continue to invest in and continue to grow the company beyond the five to seven years out with the existing resources.

Don't ever forget, we're not going to forget about doing exploration at Johnson Tract and Lucky Shot. We can have a five-year plan at Lucky Shot, and we can have a five-year plan for the next 10, 15 years, just like the Kensington mine has had.

They've been operating for 25 years and they've never had more than five years of mine life ahead of them. That's how an underground mine works.

We will be spending money doing exploration once the mine's up and running. First thing is get the mines up and running.

Awesome. It's very helpful.

I always like seeing what the plan is for the future. Mike, I'm going to get you in on one.

I promised you six months ago one question about hedges maximum per webinar, here's your one question about hedges. Somebody from the chat asked, when do you expect the old hedges to be fulfilled and get to 100% of market price?

Our objective is to get these hedges paid off as early as possible. Any shipments that are coming now, we're delivering 100% into these kind of carry trades because we're always a quarter ahead.

Assuming we can have a 50,000-ounce '26 year of gold, the objective is to try to deliver into those hedges by September, all of them by September. Technically, the last ones mature in mid-2027, but I think we have the cash to kind of support that approach, and so I think we can deliver into these and be done with them by September, assuming the '26 budget is where we think it'll be.

Does that answer your question?

I reckon so. There, that's it for hedges.

You can relax. No more hedge for the rest of this webinar.

Somebody else from the chat asked, and this, I think, is also for you, Mike: how large is the net operating loss carryforward?

Losses, oh, they're a little more complicated in the States, because there's these non-operating losses that you can only apply 80% of against net income. We are set up in a way where any costs incurred, let's say, Lucky Shot can be offset against Manh Choh profit.

We don't anticipate paying any taxes this year or next year. I think as we move forward on Johnson Tract, the idea is to offset those costs.

My hope and my goal is that we will never actually have to pay taxes related to Manh Choh, but if we want to actually achieve that, we're going to have to be continuing to spend on Lucky Shot and JT. Right now we don't anticipate anything this year, and I'd be surprised if we had to pay next year.

We are starting to dwindle down on our loss positions in the States. At some point we will be taxable, but that's a good problem to have because it means we're making money.

Paying taxes means you're making a lot of money, I'm good with it.

It's a champagne problem to some degree, for sure. Looking at the last question that just came in, is there going to be a Q3 earnings presentation, as somebody just asked?

We updated the presentation on the website. There's not going to be anything else.

If you take a look at the website, we just recently updated that with the Q3 results. Just take a look at the website.

It should be on there.

I think we'll hopefully be able to get guidance in December for '26, and at that point we'll update it and probably have a call at that point.

As always, if you have questions, you can email us at the generic [email protected]. If you've got our addresses, I'm not going to put them out there in public, but if you've got our addresses or phone numbers, just give us a call or email.

Great, thanks. I have one question from Jan in the chat, and there's one of two things he probably meant with this, but he asks, 'How many ounces were there in Q4 2024?'

I'm not sure if you recall total ounces from Q4 2024?

I know how many ounces we produced in '24. I think we produced about 42,000 ounces in six months.

We did two batches in Q4. I don't know the actual number, but I just know over the two quarters it was 42,000 ounces.

Just keep in mind, we started mining almost a year before that. We opened the mine and then we weren't hauling with all the trucks right away, you're building up a stockpile and you start hauling ore.

We had a fair bit of ore built up for that first half year of production. What I would describe now in the 60,000 ounces is more of a steady-state plan.

Again, next year, 2026 was always going to be a low year because of the stripping going on at the main pit. We'll all have the details on that 2026 mine plan here in a few weeks, stay tuned for that.

Awesome. I know this was meant to be a short event today, I'll wrap up with one real quick one.

That's, Rick, what are you most excited about coming up? What's keeping you up with excitement at this point about Contango Ore?

Oh,

it's great to be drilling underground at Lucky Shot again. Look, we think Lucky Shot, again, it's not going to be the biggest mine in the world.

We'll never tell anybody it will be, but we think it's going to make a lot of money. The drills turning, and so stay tuned for the drill results.

It's always exciting to see free gold in a quartz vein underground. As a geologist, this is what it's all about, stay tuned.

Awesome, appreciate it very much. Thanks everyone.

I know this is a big audience today. You guys don't know how difficult it is to set up stuff at a conference, but Rick and Mike do, and thank you for joining us very much, being able to get this done today and answer everybody's questions.

I really appreciate your time. If anybody has any additional questions, make sure to shoot them through.

Otherwise, hope everybody has a great end to their day.

Thanks, Romeo.

Cheers.