Contango ORE Announces Underwritten Public Offering of Common Stock

Rhea-AI Summary

Contango ORE (NYSE American: CTGO) has announced an underwritten public offering of its common stock and accompanying warrants. Shares and warrants will be sold separately but must be purchased together. The offering's timing and size remain uncertain. Proceeds will fund general corporate activities, including the exploration of the Lucky Shot Project and HighGold's Johnson Tract, anticipated to close by July 2024. Canaccord Genuity and Cormark Securities will act as joint book-runners. The offering is under an effective shelf registration filed with the SEC.

Positive

• Proceeds to be used for continued exploration of Lucky Shot Project and HighGold's Johnson Tract.
• Anticipated closure of HighGold acquisition by July 2024.
• Joint book-runners include reputable firms Canaccord Genuity and Cormark Securities.
• Offering made under an already effective shelf registration with the SEC.

Negative

• The offering's completion is subject to market conditions, making its success uncertain.
• Potential dilution of existing shares due to the issuance of new common stock and warrants.
• Offering size and terms are not yet determined, leading to uncertainty regarding the capital raised.

Insights

Financial Analyst

Contango ORE's public offering of common stock and accompanying warrants is a strategic move to raise capital for its ongoing and future projects. This is significant for the company, considering they plan to use the proceeds for general corporate purposes, including working capital, exploration of the Lucky Shot Project and the upcoming exploration of HighGold’s Johnson Tract.

From an investor's perspective, raising capital through an offering can lead to dilution of current shares, which may impact the stock price in the short term. However, if the capital is utilized efficiently, such as in successful exploration projects or enhancing operational efficiency, it could yield long-term benefits.

The involvement of Canaccord Genuity and Cormark Securities as joint book-runners provides some assurance regarding the offering's credibility and market execution. Investors should monitor the terms of the offering closely, such as the pricing and the discount at which the new shares are offered.

This approach to fundraising is commonplace in the mining industry, particularly for companies focused on exploration and development. It's important to track how effectively the raised capital is deployed towards the stated projects and whether these ventures generate the expected returns.

Rating: 1

Market Research Analyst

Contango ORE's decision to allocate proceeds towards the Lucky Shot Project and the HighGold's Johnson Tract suggests an aggressive expansion strategy. The success of these exploration activities can significantly influence the company's future valuation. For investors, it's essential to recognize that exploration projects carry inherent risks but also considerable potential rewards. Positive exploration results could drive substantial stock price appreciation.

The company's reliance on capital markets to fund its projects is typical for the mining industry, where extensive capital is required long before any revenues are generated. Investors should be aware of the cyclical nature of the commodities market and the potential for volatility in stock prices as exploration results are announced.

Furthermore, investors need to consider the potential impact of commodity price fluctuations on Contango ORE's projects' viability and the overall market sentiment towards mining stocks. Keeping an eye on industry trends and economic indicators will be important for making informed decisions regarding this stock.

Rating: 1

FAIRBANKS, Alaska--(BUSINESS WIRE)-- Contango ORE, Inc. (“Contango” or the “Company”) (NYSE American: CTGO), today announced it has commenced an underwritten public offering (the “Offering”) of (i) shares of its common stock and (ii) accompanying warrants to purchase shares of its common stock. The shares of common stock and warrants will be issued separately but can only be purchased together in the Offering. All of the shares of common stock and warrants in the Offering are to be sold by Contango. The Offering is subject to market conditions, and there can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.

The Company intends to use the net proceeds from the Offering for general corporate purposes, which may include working capital, continued exploration of the Lucky Shot Project and exploration of HighGold’s Johnson Tract, part of the HighGold acquisition that the Company anticipates closing by July 2024.

Canaccord Genuity and Cormark Securities are acting as joint book-runners for the Offering.

The Offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-260511) previously filed with the U.S. Securities and Exchange Commission (“SEC”) and declared effective on November 17, 2021. The shares and the accompanying warrants may be offered only by means of a prospectus. A preliminary prospectus supplement (the “Supplement”) and the accompanying prospectus relating to and describing the terms of the Offering, which form a part of the effective registration statement, will be filed with the SEC and available on the SEC’s website at www.sec.gov/edgar. When available, copies of the Supplement and accompanying prospectus relating to the Offering may also be obtained by contacting Canaccord Genuity LLC, Attention: Syndication Department, 1 Post Office Square, 30th Floor, Boston, MA 02109, or by email at prospectus@cgf.com or Cormark Securities Inc., Attention: Equity Capital Markets, Royal Bank Plaza, North Tower, Suite 1800, Toronto, Ontario, M5J 2J2, or by email at ecm@cormark.com or telephone at (416) 362-7485.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

ABOUT CONTANGO

Contango is a NYSE American listed company that engages in exploration for gold and associated minerals in Alaska. Contango holds a 30% interest in Peak Gold, LLC (the “Peak Gold JV”), which leases approximately 675,000 acres of land for exploration and development on the Manh Choh project, with the remaining 70% owned by an indirect subsidiary of Kinross Gold Corporation (“Kinross”), operator of the Peak Gold JV. The Company also has a lease on the Lucky Shot project from the underlying owner, Alaska Hardrock Inc. and through its subsidiary has 100% ownership of approximately 8,600 acres of peripheral State of Alaska mining claims. Contango also owns a 100% interest in an additional approximately 145,280 acres of State of Alaska mining claims through its wholly owned subsidiary, which gives Contango the exclusive right to explore and develop minerals on these lands. Additional information can be found on our web page at www.contangoore.com.

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 timing of the offering, satisfaction of customary closing conditions related to the offering and sale of the shares of common stock and the accompanying warrants, and Contango’s ability to complete the offering; the risks of the exploration and mining industry (for example, operational risks in exploring for, 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 U.S. or the inability to obtain mining permits. Additional information on these and other factors which could affect Contango’s exploration program or financial results are included in Contango’s other reports on file with the SEC. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Contango does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240606778209/en/

Contango ORE, Inc.

Rick Van Nieuwenhuyse

(907) 888-4273

www.contangoore.com

Source: Contango ORE, Inc.

FAQ

What is the purpose of Contango ORE's stock offering?

The proceeds will be used for general corporate purposes, including the exploration of the Lucky Shot Project and HighGold's Johnson Tract.

When is the anticipated closing date for Contango ORE's acquisition of HighGold's Johnson Tract?

The acquisition is anticipated to close by July 2024.

Who are the joint book-runners for the Contango ORE public offering?

Canaccord Genuity and Cormark Securities are acting as joint book-runners.

Under what registration statement is Contango ORE's offering being made?

The offering is being made under an effective shelf registration statement on Form S-3, filed with the SEC.