FAIRBANKS, AK - Contango ORE, Inc. (NYSE American: CTGO), a company specializing in gold and mineral exploration in Alaska, has announced the receipt of a $12.0 million cash distribution from the Peak Gold Joint Venture (JV) on October 24, 2024. This payment represents Contango's 30% share of profits from the second campaign of processing Manh Choh ore. Since the commencement of ore processing in July 2024, Contango has accumulated $31.5 million in cash distributions from the JV.
The Peak Gold JV, in which Contango holds a 30% interest and KG Mining (Alaska), Inc. owns the remaining 70%, has successfully completed two production campaigns this year, with a third currently in progress. Contango's share from the first two campaigns amounts to roughly 30,000 ounces of gold. The ongoing third campaign is projected to contribute an additional 8,500 ounces, bringing the company's total gold production for 2024 to an estimated 38,500 ounces.
Contango's business operations involve exploring for gold and associated minerals primarily in Alaska. The company has a diverse portfolio, including a 30% stake in the Peak Gold JV, which oversees exploration and development activities on approximately 675,000 acres of land at the Manh Choh project. Contango also leases the Johnson Tract project from CIRI Native Corporation, the Lucky Shot project from Alaska Hardrock Inc., and owns 100% of roughly 8,600 acres of peripheral State of Alaska mining claims through its subsidiary. Furthermore, Contango exclusively explores and develops minerals on an additional 145,000 acres of State of Alaska mining claims held by its wholly owned subsidiary.
The company's recent press release also contains forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect Contango's current expectations and projections about future operations and performance. However, they are subject to various risks, uncertainties, and other factors that could cause actual results to differ significantly from those anticipated.
Contango's financial results and exploration activities could be influenced by a range of industry risks, including operational hazards, geological uncertainties, market volatility, and potential regulatory changes. The company does not undertake any obligation to update forward-looking statements if circumstances or management's estimates or opinions change. This article is based on a press release statement from Contango ORE, Inc.
In other recent news, Contango ORE has received a significant cash distribution of $19.5 million from its gold mining operations as part of the Peak Gold Joint Venture (JV) with Kinross Gold (TSX:K) (NYSE:KGC) Corporation's subsidiary KG Mining (Alaska), Inc. The company anticipates its gold production for the year to be between 30,000 to 40,000 ounces. In addition, the Fort Knox mill processed about 210,000 tons of ore, resulting in the production of approximately 55,000 ounces of gold and 11,000 ounces of silver, which led to sales totaling $32.2 million for Contango's 30% share of the production.
The company has also completed the acquisition of HighGold Mining Inc., which includes the Johnson Tract project, expected to triple Contango's resources by adding over 1 million ounces of gold equivalent. In terms of analyst feedback, Roth/MKM has lowered Contango Ore's price target to $33.00, down from $38.00, while maintaining a Buy rating for the stock.
These developments are part of recent strategic moves by Contango ORE, which also include a public offering of its common stock and warrants, managed by Canaccord Genuity (TSX:CF) and Cormark Securities. Furthermore, Contango ORE is progressing with its Manh Choh project, expecting the first gold production by the third quarter of 2024. The project, 30% owned by Contango, is currently operated by a Kinross Gold Corporation subsidiary.
InvestingPro Insights
Contango ORE's recent cash distribution from the Peak Gold Joint Venture aligns with several key financial indicators from InvestingPro. Despite the company's recent success in gold production, InvestingPro data reveals that Contango ORE has not been profitable over the last twelve months, with an adjusted operating income of -$63.62 million USD. This underscores the significance of the recent cash distributions in potentially improving the company's financial position.
An InvestingPro Tip suggests that net income is expected to grow this year, which could be directly influenced by the ongoing gold production campaigns and cash distributions. This expectation is further supported by another InvestingPro Tip indicating that analysts predict the company will be profitable this year.
Interestingly, Contango ORE has shown a strong return over the last three months, with InvestingPro data reporting a 17.34% price total return over this period. This performance may reflect investor optimism about the company's recent operational successes and future prospects in gold production.
For investors seeking a more comprehensive analysis, InvestingPro offers 4 additional tips for Contango ORE, providing deeper insights into the company's financial health and market position.
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