Contango Silver & Gold

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from the CEO of the new Kango Silver and Gold, Rick Van Niewenheiser, right in the midst of the joining up of the two companies between the gold producer Kango and the silver large scale developer in Dolly Varden, both DSX listed. So Rick here to give us the story. Perfect, thanks so much. can everybody hear me OK? Just wanna make sure I'm mic'd up. so thanks for joining us this afternoon and, yeah, we're, we're a brand new company, Contango Silver and Gold, North America focused, safe jurisdiction, high grade. We are currently producing about 60,000 ounces from Raman Shoal mine. We have a 5 year plan to get to about 200,000 ounces of gold and about 5 million ounces of silver. So I want to walk you through our plans. Obviously I'll be making some forward looking statements. So currently, we're producing gold at Moncho. On average it's about 60,000 ounces of gold per year. Kinross is the operator. we basically cash checks. We're effectively a royalty company right now. we're traded both in New York and Toronto. we're part of the GDXJ, the Russell 2000, and we'll be on the, the, the SIL and the and the SLJ here, when they get rebalanced, so you can see our. Profile of, of projects in Alaska, Mancho, Johnson Track, and Lucky Shot, and then we've just hopped across the border into, British Columbia with the acquisition now closed, of Dolly Vardon Silver and their Kitsalt asset, Kitsalt Valley asset. So I'll walk through, sort of a high-level overview of the company and as a, as a new company. 2 million ounces of gold, roughly 65 million ounces of silver. We have over $100 million US dollars in the bank. We're generating on average over $100 million of new free cash flow every year at a $3700 gold price, and that's the gold price that Ken Ross uses for planning. So we'll stick with that. If we produce 60,000 ounces and you use 4700, add $1000 to it, that's another $60 million of free cash flow. So, it's pretty easy math. The other thing that's a bit unique is we only have 33 million shares outstanding as a junior producer. Most of our peer group have hundreds of millions of shares outstanding. So I'll be talking a bit more about that. The map here just shows where the distribution of our projects. Man, not too far from the Canadian border. and we, we transport the mine with a DSO model, run of mine material. it's high grade. It's, it's running 78 g per ton, loaded in a truck, hauled to the mill at Fort Knox and processed up there. And you can see the distribution of gold and silver there. It's roughly 50% inferred, 50% measured indicated. We'll have a mineral resource update. Most of the inferred ounces come from the Kitsalt assets, and we'll be upgrading those with a new MRE that we're putting out at the end by the end of June. I'll talk a bit more about that. If you're looking for value, we're something you should take a look at. We're trading well below a multiple of our peer group, and this is, I think everything has gotten reset here about 30% with the war in Iran because we were going through a merger, we got smacked down a little bit harder, but we're coming back pretty strong. If you've looked at our share price in the last couple of weeks, we've We've rebounded pretty solid. so I'm, I'm, I think we'll get back to where we were, pre-Iran war. We'll see, we'll see how that turns out. so if you're looking for leverage to gold, I always tell people to look at leverage per share, not just. There's different kinds of leverage. You can leverage to low grades, and when the gold price goes up, you make more money. That's a certain kind of leverage. But the leverage I like to emphasize is leverage per share ounces of silver or ounces of gold per share. On both those metrics we're at the high end of the peer group, and again this is the same peer group as in the former slide. So if you're looking for leverage to silver, we've got a lot of silver on a per share basis. If you're looking for leverage to gold, we've got a lot of gold, and our gold and silver are both high grade. it's, I like great, great is king. That's what, that's the oldest, quote in the, in the book of mining. so that's the, that's the kind of projects that we've been focused on. So our growth plan, as I mentioned earlier with our Mancho production generating. Over $100 million of free cash flow a year. We'll get our lucky shot asset into production using the same DSO model. Most likely it will end up going to Fort Knox as well. They've got plenty of capacity there in the mill to process the ore, and it's a very simple ore from a processing standpoint. We'll get that in production in 2 years. That adds about 50,000 ounces of production. We use that cash flow, so now we're producing 100,000 ounces of gold at roughly at today's gold price, we're probably generating about $2500 margin. So you're generating over $250 million of free cash flow. Using that cash flow to build Johnson Track and Kitsalt, getting up to 200,000 ounces of gold production plus the 5 million ounces of silver, and that's mostly coming from Kitsalt. So, I want to walk you, through our plan. lots of catalysts here, starting with Mancho, quarterly production, basically, batch process the ore there on a quarterly basis. So every, every quarter we get a, a check from, from Kinross. at Lucky Shot, we're underground drilling, so there's lots of news flow there. About every other month we put out a batch of news releases. we're hitting what we're targeting. We'll have the feasibility study done roughly this time next year and then make the mine construction decision. And with the DSO model, I call it feasibility light because it is basically just a mine plan and a transportation plan and, an off-taker, tolling arrangement with Ken Ross. So, on our Johnson Track project, we're kind of at what I call the boring part of the Lassan curve. We're permitting, we're also doing some construction work, but next year we'll be getting underground and getting, getting the drills turning. so you'll see some more, exciting drill results from that project, in the next year, in the year after. And then of course, Kitsall, we have a, a mineral resource update coming out at the end of June. we are, targeting about 40,000 m of drilling there, and then that will generate a mine plan, development plan for the district. I often refer to this as a string of pearls, so I'll walk you through our plans there. We're roughly about 10% owned by insiders, and then we have a large institutional investor base and it's about 45% institutional high net worth and then 45% retail. We trade about 400,000 shares a day. I think the last time I saw the share price, it was 24 to $25. So there's plenty of liquidity in the stock. That was not the case, you know, 4 or 5 years ago. We used to trade by appointment, so we've really focused on. On getting our trade and liquidity out, We've, we're about, by the end of the year, we'll have the debt taken care of and we'll have delivered into all the hedges. So, we'll be hedge-free and debt-free, by the end of the year. and you can see the analyst coverage there. the board is, a blend of, of Dolly Vardon, board of directors. Darren Devine, and, Tim Clark joined, from the Dolly Vardon side, of course, Sean's on the board. Sean is president. I think we got that wrong on the, on the title there. I'm, I'm CEO, not president and CEO. Clinton Alman, many of you may have, met, through Alexico. Clint and I've known each other a long time since about 1980. he was on my board at Nova Gold. So, and then Mike Cinnamon, president CEO of BT Gold. So it's a very strong mining focused board, very seasoned board. So I'll just walk you through the assets starting with our Mancho mine. the original reserve there is a million ounces of 8 g open pit, on private native owned land owned by an Alaska native tribe. rather than develop the asset ourselves, we decided to partner with Kinross and take advantage of their excess mill capacity at Fort Knox. So we basically just load the ore in a truck and haul it up the, haul it up the highway. That DSO model allowed us to get into production very quickly and for relatively low capital expense. We, we borrowed about $70 million from the banks. And that, that, so that went very quickly. We got into production, we got permits within a year, built the, the road up to the project, got our state mining operating permits, and, by June of 2024, we were producing gold. so what you need for a DSO model to work is you need grade, you need to be close to infrastructure, and it helps to be on private land because that's by far the easiest land to permit projects on. I haven't worked on federal land in the United States for 30 years for a good reason. it's a pain in the butt to permit things on federal land. it's easier under Trump, but Trump's only gonna be around for another 2.5 years, and then I don't know what happens. so we like, we like private land and we've got, all, all of our projects, in Alaska are on private land. So just to put a picture on what DSO looks like, it is really simple. Run up mine ore, rocks in a box, and haul them up in the case of lucky shot up to Fort Knox for processing. You move the boxes around with a large forklift or an overhead crane, load it onto a truck, get it down to the rail, get it down to a barge landing site. It's simple. Now what's really simple about this is you don't have all the permitting headaches of building a mill and a tailings facility and a power plant to run all that, so you're looking at smaller high grade deposits, a million ounces being a small deposit in today's world, but very doable and things that make money. As we're demonstrating at, at Mancho. So our 2025, we just announced our year in guidance about a month ago, or sorry, you know, results for 2025 and the guidance for this year. We produced 60,000 ounces last year, 201616 all in sustaining costs, and we got a check or a series of checks totaling over about $102 million from, from the joint venture. This year's guidance, we're transitioning from the north pit to the south pit. so we're doing a lot of pre-stripping on the South Pit, so lower, lower than average, production this year at about 45,000 ounces, higher cost because of all the pre-stripping. We get the benefit of that next year where we have, you know, 75,000 to 80,000 ounces of guidance and lower cash costs because you, you, you've paid for all the pre-stripping. but again, sort of averaging 60,000 ounces of production. as I mentioned, we'll be hedging debt-free by the end of the year. so that's the, that's how the, the, the DSO model works. Our lucky shot mine, just go through the ticks. It's high grade, resource grade is about 14.5 g. it's, it's fully permitted for mining. It's on, it was on private land. And it's about 25 miles from the railroad. So our objective is to outline about 4000 to 500,000 ounces of gold, subset that into a 250,000 ounce reserve, five year mine plan producing 50,000 ounces of gold. We're underground drilling. This is a historic mine that produced about 250,000 ounces of gold at 40 g per ton. Now they selectively mined it and they hand carve the ore, so we're not going to do that. We're gonna put rocks in a box and haul them up to Fort Knox for processing. So we're underground drilling now, basically just down dip from where they historically mined the lucky shot vein. There's a fault offset up to the Coleman. We've drilled that from the surface. That's where the 100,000 ounces, 110,000 ounces of 14 g is located. The fault just offsets the vein and, so you can see where they historically mined it. We're just underground. Underneath it, drilling the down dip version of the vein. Now, One, so we're gonna spend about $21 million this year and about $35 million next year. This year is drilling, next year is complete the feasibility study and development work to start mining in 2028. it's a very simple plan. It's all about execution now, and we've got the money to execute, and we've got $100 million in the bank and we're generating cash flow from Mochou. Now one of the exciting things about exploration is you find things that you don't know about. this is the KM vein. It's at right angles to the lucky shot vane. It's a conjugate vene set never identified before in the district, and it is really juicy. It's running over 60 g per ton on average. So we're going to extend the tunnel. This was at the end of the tunnel. We put the tunnel across the lucky shot fault so we can make sure we drilled the fan shots to drill across the lucky shot. and, so we'll, we'll get the, extend the tunnel underneath this thing and then we can fan shot above it cause it'll be in the back. and, I'm excited about this cause it's really running high grade. And from a structural standpoint, This vein makes a lot of sense that it's there once you understand the structure. So it gives us a new geologic vector to explore for. So that's That's lucky shot. Next on the ticket is Johnson Track. As I mentioned, it's in the boring part of the Lasan Curve. We're permitting. we're gonna, now this also meets all the criteria. It's high grade. It's on private land owned by an Alaska native tribe. It is polymetallic. gold, silver, zinc, copper, and lead. but that means it's a critical, it's on the critical medals list. It's a, so that means we qualify for the fast track permitting under FAST 41. Which we're currently doing. We completed a preliminary economic assessment, PEA or initial assessment in US terminology last last year about this time. And the $4000 gold, this has a plus $600 million MPV. Basically for every 10 $1000 increase in the gold price, it goes up, for every $500 increase in the gold price, it goes up by about $200 million MPV. So very robust project. The ore body averages about 40 m wide, so it's going to be a very good ore body to mine from underground. We've put all the development rock in a post-mineral intrusion so it has no potential acid generation, which makes it really simple for the permitting agencies to permit. And so we're in the process of doing that. We get a road built between the camp and the. In the portal site, while we're then permitting the road access down to the coast and, and the barge landing, permits for a barge landing site. So that's all underway, and we'll, you know, continue to report on that as we make incremental advancements there. This project will be in production we expect in about 2030, so a five-year plan roughly. Last but not least, of course, Kitsalt, Again located just across the border in BC currently you're sitting on about 700,000 ounces of gold and in the indicated category, measured indicated category, another 1.5 1.3 inferred, and then a big silver, big silver component. So we'll update that resource here at the end of June. We'll initiate about a 40,000 m drill program. I'm going to guess that about 2/3 of that will be continued infill drilling and expansion drilling of the high grade zones, and this is a high grade silver mine. The Silver alone is 300 to 350 g per ton plus the zinc and the gold and the lead. I refer to this as sort of a string of pearls along the Kitsa Valley structural zone. you've got sort of two centers of gravity right now. On the south end is the, the Dolly Vardon, the Torrit, and the Wolfmane, which is a brand new discovery. and, that's silver rich, and then at the north towards the north north end, the homestake and Homestake silver, which are more gold rich, but also a significant amount of silver. you can see that when, when you're drilling on in the Kitsalt Valley, you're drilling really high grades and you're, you're announcing results that are consistently in the top, top 10 drill results for any given month of drilling. so very exciting. I think, we'll work towards getting a PEA out, get the 40,000 m drill program underway and done this summer, and then putting out a PEA. We'll put a mind plan development plan for the district, play together by this time next year. So, lots of news flow. lots of catalysts, huge land position. one of the areas that I'm excited to get to, to drilling this year, is a new target, called Porter, Idaho. historic resource, 13 million ounces of silver plus 1 kg of silver. Average grade, so, we've got lots of things to keep people's interest and lots of catalysts to to keep advancing the, the projects towards the production decision, So if you're looking for. An investment in gold and silver in a safe jurisdiction. in jurisdictions that no mining, we're self-funded. We can, we can execute this plan based on all the cash that we're generating, from our Mancho mine and then from our, Lucky Shot project. They're high quality. We're we're good value right now. We're still recovering from. You know the process of merging and you'll see a lot of index buying as we go on the TSX. We just on Monday we just started trading on the TSX and as the JDXJ and the Russell rebalance and the OJ rebalance will be a significant part of those. Happy to answer any questions. I think we still got a few minutes. Thanks. Yeah, a quick question from the floor, if any. I have one and, that question is, is, Rocks in a box off to Fort Knox. Is that the new corporate motto at this point? It just really emphasizes, when you've got great, how simple life can be. and, because we're not even, you know, we're not looking at doing or sorting, and there's nothing wrong with ore sorting. It works at some places. It doesn't work at a lot of other places, and it is definitely something that can, something else to go wrong at night in the wintertime in the middle of Alaska. So, Nothing wrong with overs sorting, but, I, I like simple, so don't even crush, just. Make sure you've got your. Your, ore control in place, and make sure that's, it's ore going in the box, not waste. And I'm sure all of us are not familiar with what the transport costs are in Alaska these days. Yeah, so right now it's costing us about $70 a ton to move ore from Monchou up to Fort Knox. It's roughly a third of our overall costs. So it's definitely an extra cost to do that, no question about that. but I didn't have to build a $600 million mill. and I didn't have to tell. Tell my investors I'm gonna get my mind permitted in 3 years, because if I told them the truth and told them that it's going to take 6, they'd tell me to get out of here and come back in 4. So this is what makes the DSO model work, but you need the three criteria high grade, close to infrastructure, and relatively easy to permit. Nothing in the mining business is easy, but working on private land in this case an Alaska Native tribe, we got our permits in 9 months, federal permits in 9 months. I don't think anybody else has ever done that. Thank you very much. Thank you.