Contango Announces S-K 1300 Technical Report Summary with Robust Economics and One Year Payback for its Johnson Tract Project
We look forward to investigating potential upsides to improve the economics and extend the mine life, which includes additional underground drilling to expand the resource to extend the known orebody down dip and along strike. Another upside that we plan to evaluate is the use of ore sorting to upgrade run of mine ore grades at site by using sensor-based sorters (for example: Optical, XRT, Laser, X-Ray) to separate waste material from higher grade ore. This would result in two improvements - fewer tonnes to transport and higher head grade feed to the mill, resulting in improved economics.
We are currently focused on permitting the underground tunnel to access the million-ounce resource and conduct a detailed underground in-fill drill program. We will also conduct metallurgical, geotechnical and hydrology studies necessary to complete a feasibility study, which will include a detailed mining and transportation plan, as well as select a specific site for processing the ore along with any modifications necessary. In addition, we will need to conduct detailed environmental baseline work along the Road and Port Easements that have already been granted to
Part of Contango's management team just spent a week in
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1 AISC includes all direct and indirect operating cash costs related directly to the physical activities of producing gold, copper, zinc, lead and silver including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, sustaining capital and reclamation costs. Excluded from AISC are initial capital costs in the amount of |
IA HIGHLIGHTS:
- Pre-Tax net present value discounted at 5% ("NPV5") of USD
$359.0 million - Pre-Tax Internal Rate of Return ("IRR") of 37.4%
- Post-Tax NPV5 of USD
$224.5 million with a post-tax IRR of 30.2% - 7-year LOM
- LOM annual average production of 102,258 GEO at 7.58 g/t
-
Initial Capital costs of$213.6 million , including$36 million for contingency costs - Sustaining Capital costs of USD
$61.3 million , including$12.3 million for contingency costs - AISC estimated at
$860 per GEO sold - Discounted payback period of 1.3 years
BACKGROUND:
- As a
U.S. domestic and domiciled company, Contango is required to report its mineral resources in accordance with Subpart 1300 of Regulation S-K ("S-K 1300"). - S-K 1300 was adopted by the
Securities and Exchange Commission (the "SEC") to modernize mineral property disclosure requirements for mining registrants and to alignU.S. disclosure requirements for mineral properties with current industry and global regulatory standards. - The mineral resource estimate set forth in this TRS for the
Johnson Tract Project has not previously been reported under the S-K 1300 format. The TRS was prepared in accordance with S-K 1300 and will be filed on or beforeMay 12, 2025 with theSEC through EDGAR on Form 8-K.
IA SUMMARY
The IA is preliminary in nature and includes Indicated and Inferred resources that are considered too speculative to apply the economic considerations that would enable them to be categorized as mineral reserves. There is no certainty the estimates presented in the IA will be realized. This economic analysis is based on a Resource Estimate for the deposit listed in Table 3.
TABLE 1:
KEY ECONOMIC PARAMETERS (Base Case -
|
ITEM |
Description |
Unit |
Value |
|
Finance |
|
|
|
|
|
NPV (Pre-Tax) |
US$ (m) |
359.0 |
|
|
IRR (Pre-Tax) |
% |
37.4 % |
|
|
NPV (Post-Tax) |
US$ (m) |
224.5 |
|
|
IRR (Post-Tax) |
% |
30.2 % |
|
|
Non-Discounted Payback Period |
yr |
1.1 |
|
|
Discounted Payback Period |
yr |
1.3 |
|
Economics Summary |
|
|
|
|
|
Revenue (NSR less Royalties) |
US$ (m) |
1,296.7 |
|
|
Operating Costs |
US$ (m) |
484.8 |
|
|
Initial Capital Costs |
US$ (m) |
213.6 |
|
|
Sustaining Capital Costs |
US$ (m) |
61.3 |
|
|
Payable Metal Value |
|
|
|
|
Copper |
US$ (m) |
120.2 |
|
|
Zinc |
US$ (m) |
274.2 |
|
|
Lead |
US$ (m) |
36.6 |
|
|
Gold |
US$ (m) |
1,014.0 |
|
|
Silver |
US$ (m) |
5.1 |
|
|
|
|
|
|
|
Project Team |
US$ (m) |
5.0 |
|
|
Development - Lateral + Ramp |
US$ (m) |
19.5 |
|
|
Development - Vertical |
US$ (m) |
0.6 |
|
|
Mobile Equipment |
US$ (m) |
18.9 |
|
|
Surface Infrastructure |
US$ (m) |
91.5 |
|
|
Underground Infrastructure |
US$ (m) |
13.3 |
|
|
Capitalized Operating |
US$ (m) |
28.8 |
|
|
Contingency |
US$ (m) |
36.0 |
|
|
Initial Capital Total |
US$ (m) |
213.6 |
|
Sustaining Capital |
|
|
|
|
|
Project Team |
US$ (m) |
0.0 |
|
|
Development - Lateral + Ramp |
US$ (m) |
8.9 |
|
|
Development - Vertical |
US$ (m) |
0.4 |
|
|
Mobile Equipment |
US$ (m) |
2.5 |
|
|
Surface Infrastructure |
US$ (m) |
1.2 |
|
|
Underground Infrastructure |
US$ (m) |
6.0 |
|
|
Closure |
US$ (m) |
30.0 |
|
|
Capitalized Operating |
US$ (m) |
0.0 |
|
|
Contingency |
US$ (m) |
12.3 |
|
|
Sustaining Capital Total |
US$ (m) |
61.3 |
|
Operating |
|
|
|
|
|
Mining |
US$ (m) |
213.4 |
|
|
Mill |
US$ (m) |
102.9 |
|
|
Transport to Dock |
US$ (m) |
11.6 |
|
|
Surface Transportation (Barge) |
US$ (m) |
85.0 |
|
|
Surface Transportation (Truck to Mill) |
US$ (m) |
18.8 |
|
|
G&A |
US$ (m) |
53.1 |
|
|
Operating Total |
US$ (m) |
484.8 |
|
Ore Production |
|
|
|
|
|
Ore Milled |
mt |
2.7 |
|
|
Payable Metal |
|
|
|
|
Copper |
mlb |
32.2 |
|
|
Zinc |
mlb |
279.3 |
|
|
Lead |
mlb |
41.8 |
|
|
Gold |
moz |
0.5 |
|
|
Silver |
moz |
0.5 |
|
|
|
|
|
|
Metrics |
|
|
|
|
|
|
US$/tonne |
85.97 |
|
|
Cash Cost per |
US$/tonne |
191.25 |
|
|
All–In-Sustaining Costs2 |
US$/ GEO |
860.00 |
|
|
Average Annual GEO Produced |
Au Eq Oz / Yr |
102,258 |
|
|
Average Annual GEO Payable |
Au Eq Oz / Yr |
90,692 |
|
|
|
|
|
|
|
LHOS Mining Cost per |
US$/tonne |
85.24 |
|
|
C&F Mining Cost per |
US$/tonne |
90.89 |
|
____________________________ |
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2 AISC includes all direct and indirect operating cash costs related directly to the physical activities of producing gold, copper, zinc, lead and silver including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, sustaining capital and reclamation costs. Excluded from AISC are initial capital costs in the amount of |
TABLE 2: GOLD PRICE SENSITIVITY ANALYSIS
|
Sensitivity |
|
|
|
|
|
Post-Tax NPV5 (US$ m) |
|
|
|
|
TABLE 3: RESOURCE ESTIMATE
|
Category |
|
Tonnes |
Au |
|
Ag |
|
Cu |
|
Pb |
|
Zn |
|
AuEq |
|
|
Indicated |
|
3,489 |
|
5.33 |
|
6.0 |
|
0.56 |
|
0.67 |
|
5.21 |
|
9.39 |
|
Inferred |
|
706 |
|
1.36 |
|
9.1 |
|
0.59 |
|
0.30 |
|
4.18 |
|
4.76 |
|
Contained Metal |
||||||||||||||
|
Category |
|
|
|
Au |
|
Ag |
|
Cu |
|
Pb |
|
Zn |
|
AuEq |
|
Indicated |
|
|
|
598 |
|
673 |
|
43.1 |
|
51.5 |
|
400.8 |
|
1,053 |
|
Inferred |
|
|
|
31 |
|
207 |
|
9.2 |
|
4.7 |
|
65.1 |
|
108 |
|
Notes |
|
|
1. |
Includes all drill holes completed at Johnson Tract Deposit, with drilling completed between 1982 and most recently as |
|
2. |
Assumed metal prices are |
|
3. |
Gold Equivalent (AuEq) is based on assumed metal prices and payable metal recoveries of 97% for Au, 85% for Ag, 85% Cu, 72% Pb and 92% Zn from metallurgical testwork completed in 2022. |
|
4. |
AuEq equals = Au g/t + Ag g/t × 0.01 + Cu% × 1.27 + Pb% × 0.31 + Zn% × 0.59 |
|
5. |
An average bulk density value of 2.84 used as determined by conventional analytical methods for assay samples |
|
6. |
Capping applied to assays to restrict the impact of high-grade outliers |
|
7. |
Preliminary underground constraints were applied, including the elimination of isolated or scattered blocks above cut-off grade to define the "reasonable prospects of eventual economic extraction" for the Mineral Resource Estimate |
|
8. |
Mineral resources as reported are undiluted |
|
9. |
Mineral resource tonnages have been rounded to reflect the precision of the estimate |
|
10. |
Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability |
QUALIFIED PERSON DISCLOSURE:
This report dated May 6, 2025 was prepared as an Initial Assessment Technical Report Summary, in accordance with the
In accordance with the SEC S-K regulations,
In accordance with the SEC S-K regulations,
CONFERENCE CALL AND WEBCAST
Contango will host a conference call and webcast to discuss this release on
ABOUT CONTANGO
Contango is a NYSE American listed company that engages in exploration for gold and associated minerals in
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements regarding Contango that are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, based on Contango's current expectations and includes statements regarding future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as "expects", "projects", "anticipates", "plans", "estimates", "potential", "possible", "probable", or "intends", or stating that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved). Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to: the risks of the exploration and the mining industry (for example, operational risks in exploring for and developing mineral reserves; risks and uncertainties involving geology; the speculative nature of the mining industry; the uncertainty of estimates and projections relating to future production, costs and expenses; the volatility of natural resources prices, including prices of gold and associated minerals; the existence and extent of commercially exploitable minerals in properties acquired by Contango or the Peak Gold JV; ability to realize the anticipated benefits of the Peak Gold JV; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the interpretation of exploration results and the estimation of mineral resources; the loss of key employees or consultants; health, safety and environmental risks and risks related to weather and other natural disasters); uncertainties as to the availability and cost of financing; Contango's inability to retain or maintain its relative ownership interest in the Peak Gold JV; inability to realize expected value from acquisitions; inability of our management team to execute its plans to meet its goals; the extent of disruptions caused by an outbreak of disease, such as the COVID-19 pandemic; and the possibility that government policies may change, political developments may occur or governmental approvals may be delayed or withheld, including as a result of presidential and congressional elections in the
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