Contango ORE Q2 Earnings Call Highlights

Manh Choh production is expected to accelerate in the second half of 2026 as mining shifts to higher-grade South Pit ore, supporting full-year production of just over 41,000 ounces and lower cash costs of approximately $1,900–$2,000 per ounce.

Contango eliminated its gold hedges in July, giving shareholders direct exposure to spot prices.

Management projects roughly $36 million in joint-venture cash distributions during the second half of 2026 at a $3,700 gold price, with total 2026 distributions potentially exceeding $60 million at higher prices.

The company is advancing growth projects, including drilling at Lucky Shot toward a 2027 feasibility study and completing a major Kitsault Valley drill program focused on its silver-rich assets; it also reported $89 million in cash and sufficient funding for planned work over the next 12 months.

Contango ORE NYSEAMERICAN: CTGO, which management referred to during its quarterly update as Contango Silver & Gold, said it expects stronger production, lower costs and increased cash distributions in the second half of 2026 as mining advances into higher-grade material at the Manh Choh joint venture.

Chief Executive Officer Rick Van Nieuwenhuyse said the company has expanded its portfolio through the addition of the Kitsault Valley assets, including the Dolly Varden project, while also eliminating its gold hedges as of July.

He said the company is now positioned to provide shareholders with direct exposure to gold-price movements.

“We’re generating strong cash flows,” Van Nieuwenhuyse said, adding that the company expects its better production periods at Manh Choh to occur in the second half of 2026 and in 2027.

Contango’s 30% share of Manh Choh production was about 8,900 ounces during the reported quarter, while 8,627 ounces were sold at an average spot price of $4,328 per ounce.

The operation had been processing lower-grade material from the North Pit while completing pre-stripping work at the South Pit.

The company expects to produce roughly 12,000 ounces in each of the third and fourth mining campaigns, which would bring full-year production to slightly more than 41,000 ounces.

That outlook remains within Contango’s 2026 guidance range of 40,000 to 45,000 ounces.

First-half cash costs were $2,665 per ounce and all-in sustaining costs were $2,830 per ounce.

However, full-year cash-cost guidance of approximately $1,900 to $2,000 per ounce remains intact.

The expected second-half cost improvement is primarily tied to the completion of South Pit pre-stripping and the transition to higher-grade ore and higher processing volumes.

“The pre-strip is behind us,” he said.

With hedges no longer in place, the company’s gold sales will be priced at spot beginning in the third quarter.

The company retains put options at $3,100 per ounce, which he characterized as insurance rather than a core part of the company’s price outlook.

Contango budgets at $3,700 gold.

At a hypothetical $4,400 gold price and $2,000 cash cost, the implied margin would be about $2,400 per ounce.

He projected approximately $36 million in joint-venture cash distributions during the second half of the year using a $3,700 gold price.

If gold were to average $4,400, he said distributions could increase by an additional $7 million, bringing total 2026 distributions to slightly more than $60 million.

Contango completed the purchase of mineral claims, a 2% net smelter royalty,...