First Batch Of Gold Production From Manh Choh Gold Mine

FAIRBANKS, AK - Contango ORE, Inc. reported on gold production from the First Batch of Manh Choh ore processed at the Fort Knox mill located near Fairbanks, Alaska and operated by Kinross Alaska. Processing of ore from the First Batch started on July 3rd and continued through August 2nd.

Fort Knox processed approximately 210,000 tons (190,500 tonnes) of Manh Choh ore with an average grade of approximately 0.276 ounce/ton (9.46 grams/tonne (g/t)), with an average recovery of 95%. Recoveries were slightly better than the 90% estimated in the Manh Choh Technical Report Summary2 (the “TRS”), which is in part due to oxidized ores tending to have higher recoveries than sulfide ores. Attributable to the Peak Gold JV, approximately 55,000 ounces of gold and 11,000 ounces of silver contained in doré bars were poured at Fort Knox and sent to a third-party refinery for further refining.

For Contango’s 30% share of the gold and silver production, 8,900 ounces of gold were delivered into its hedges at an average price of $2,025/ounce and 5,800 ounces of gold were sold at an average spot price of approximately $2,440. The blended weighted average of hedged and spot gold price realized was $2,188 per ounce of gold sold. In addition, 3,218 ounces of silver were sold at an average spot price of $27.58. Furthermore, there is still approximately 6,000 ounces of gold in Recoverable Inventory at Fort Knox (30% to the account of Contango equal to approximately 1,500 ounces of gold plus a small amount of silver). To date, the Company’s share of gold and silver sales totaled $32.2 million. The ounces of gold and silver in Recoverable Inventory will be sold and reported with Batch #2.

Rick Van Nieuwenhuyse, CEO and President, said, “The start of Q3 has been a transformative time for Contango - starting with Manh Choh’s first gold pour on July 8th and continuing with the first batch of production into early August. In addition, we closed the acquisition of HighGold and its Johnson Tract property, which increased the Company’s estimated mineral resources by threefold. At Manh Choh, the Peak Gold JV completed the first batch of ore processed through Fort Knox, producing approximately 55,000 ounces of gold and 11,000 ounces of silver. Contango sold its portion of gold and silver for proceeds of $32.2 million. I would like to acknowledge and thank Kinross, and in particular both the Manh Choh and Fort Knox teams, for achieving this important milestone. Mining and transportation of ore mined at Manh Choh continues to be delivered to the stockpile at Fort Knox and at this stage we believe All-In-Sustaining-Costs (AISC) remain in line with the feasibility study (TRS). In late October 2024, the Company expects to receive the Peak JV financial results for the quarter ended September 30, 2024, which we will report and discuss in our earnings for the quarter when we announce in the first half of November.

Having exceeded Contango’s internal production expectations from the first batch, we can now look forward to two more batches planned in the Fall for the remainder of 2024. Our guidance for Contango’s 30% share of production from Manh Choh is to produce a total of 30,000 to 40,000 ounces of gold in 2024. Assuming we can meet these production targets and the price of gold remains at current levels, the Company expects to be in a strong cash position by the end of the year after funding working capital and delivering into our hedges. We then look forward to executing on our ‘Hybrid Royalty’ model focusing on our Lucky Shot and Johnson Tract properties, which we believe can both be developed efficiently by using our DSO (Direct Shipping Ore) approach.”

Manh Choh ore is batch processed at the Fort Knox mill roughly once a quarter. Each batch will take approximately one month to complete. Ore stored on the Manh Choh stockpile starts by being transferred to the run of mine (ROM) feed stockpile located next to the Fort Knox mill. The first processing step involves the ore being conveyed to the large gyratory crusher, then on to the SAG mill (semi-autogenous grinding mill), and from there to a dedicated ball mill where material is ground to approximately 80% passing 75 microns size particles. From the ball mill, the ground ore material enters a thickener and then moves to a series of leach tanks where cyanide leaches the gold out of the finely ground rock material and then passes onto a series of Carbon in Pulp (CIP) extraction tanks, where activated charcoal carbon absorbs the gold in the CIP leach solution. From the CIP tanks the carbon is screened off and separated, and then sent to the desorption facility where the gold is stripped off the carbon and put back into solution using caustic soda. The now highly concentrated gold in solution is sent for electrolysis where electrical current is used to plate the gold onto steel wool and then on to the furnace for the final step of pouring a doré bar containing mostly gold, silver and a few minor metals such as copper. The doré bars are then sent to a third-party refinery to produce 4-Nines or 99.99% gold and silver bars, which are then sold on market.