Contango Ore (CTGO) Q3 2024 earnings summary

Executive summary

• Manh Choh mine began production in July 2024, with first gold pour and full commissioning at Fort Knox, producing nearly 28,000 ounces of gold and generating over $62 million in sales at a blended realized price of $2,250 per ounce.

• Received $19.5 million and $12 million cash distributions from Peak Gold JV in Q3 and October 2024, totaling $31.5 million since production commenced.

• Completed acquisitions of HighGold Mining Inc. for $33.8 million in stock and Avidian Gold Alaska Inc. for $2.1 million in cash and stock, expanding the exploration portfolio.

• Ended Q3 with $36.2 million in cash, a $12 million increase from Q2, and positive cash flow from operations.

• 2024 production guidance is at the upper end of 30,000–40,000 ounces, with 2025 expected at 60,000 ounces, pending JV approval.

Financial highlights

• Q3 net loss was $9.7 million ($0.81/share), including a $22.9 million non-cash unrealized loss on derivatives; improved from a $13.2 million loss ($1.47/share) in Q3 2023.

• Equity income from Peak Gold JV was $28.5 million in Q3 2024, compared to a $5.6 million loss in Q3 2023.

• Cash and restricted cash at quarter-end was $36.2 million, up from $24.1 million at June-end and $15.5 million at December-end.

• Net cash from operating activities for the nine months ended September 30, 2024, was $10.6 million, versus net cash used of $7.7 million in the prior year.

• Loss on derivative contracts for Q3 2024 was $28.8 million, including $5.9 million realized and $22.9 million unrealized losses.

Outlook and guidance

• 2024 production is expected at the upper end of 30,000–40,000 ounces; 2025 guidance is anticipated at 60,000 ounces, with formal approval pending.

• No further capital calls anticipated for Peak Gold JV as operations are now self-funding.

• Updated AISC guidance will be provided with year-end financials in early March, reflecting a full half-year of production.

• Company believes it has sufficient liquidity to meet working capital and debt repayment obligations for the next twelve months.

• Plans to aggressively pay down debt in 2025 and advance projects using Direct Shipping Ore approach.