Contango ORE, Inc. reported significant financial developments in its recent 10-K filing for the fiscal year ending December 31, 2024. The company achieved a net income of $41.7 million from its equity investment in the Peak Gold Joint Venture (JV), a substantial turnaround from a loss of $21.1 million in the previous fiscal year. This positive performance was primarily driven by the commencement of gold production at the Manh Choh Project, which began in July 2024, resulting in total gold sales of approximately $94.3 million. The average realized gold price was reported at $2,281 per ounce, with production totaling 41,325 ounces for the year.
In comparison to the previous fiscal period, Contango ORE's total expenses increased to $15.4 million from $17.7 million, reflecting a decrease in exploration expenses and general administrative costs. The company also reported a significant increase in cash distributions from the Peak Gold JV, totaling $40.5 million during 2024, compared to no distributions in the prior year. The company’s cash position improved, with cash and restricted cash amounting to $20.3 million as of December 31, 2024, up from $15.7 million a year earlier.
Strategically, Contango ORE completed two significant acquisitions in 2024: HighGold Mining Inc. and Avidian Gold Alaska Inc. The HighGold acquisition was finalized on July 10, 2024, with the company issuing approximately 1.7 million shares valued at $33.4 million to HighGold shareholders. The Avidian acquisition, completed on August 6, 2024, involved a total purchase price of $2.1 million, consisting of cash and shares. These acquisitions are expected to enhance the company's exploration capabilities and expand its asset base in Alaska.
Operationally, the Peak Gold JV, in which Contango holds a 30% interest, has begun mining operations at the Manh Choh Project, with ore being processed at the Fort Knox mill. The project is expected to be mined over approximately five years, with the company having funded $78.6 million towards cash calls for the JV as of December 31, 2024. The company anticipates no further cash calls, as operations are now generating revenue from mineral sales. Additionally, the company has a total of 12 full-time employees and continues to explore other properties in Alaska, including the Johnson Tract and Lucky Shot projects.
Looking ahead, Contango ORE's management expressed optimism regarding the continued cash distributions from the Peak Gold JV and the potential for future exploration success. However, the company acknowledged the inherent risks associated with the mining industry, including fluctuating commodity prices and operational challenges. The company plans to maintain sufficient liquidity to meet its working capital requirements and debt obligations, which include approximately $42.6 million on its secured credit facility.
About Contango ORE, Inc.
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