Contango ORE Enters Into Project Finance Mandate With ING and Macquarie to Fund the Construction of Its Share of the Manh Choh Gold Project Alongside JV Partner Kinross Gold
20 Marzo 2023 - 1:00PM
Business Wire
Contango ORE, Inc. (“CORE,” “Contango” or the “Company”) (NYSE
American: CTGO) is pleased to announce that it has entered into an
agreement with ING CAPITAL LLC (“ING”) and Macquarie to arrange a
US$70 million senior secured loan facility to fund its portion of
the pre-production construction and working capital/operating
expenditures for the Peak Gold Joint Venture (“PGJV”), owner of the
Manh Choh gold project in Alaska. The project has received the
federal permits needed for road construction and early work
construction has already commenced. First gold production is
expected in the second half of 2024.
Highlights
- Contango is the 30% owner and JV partner with a subsidiary of
Kinross Gold Corporation (70% owner and manager) of PGJV which owns
the Manh Choh gold project on land leased from the Tetlin Tribe
within its 675,000 acres fee simple land package. Independently,
the Company also owns the Lucky Shot gold project which it is
actively exploring and developing. In addition, Contango owns the
mineral rights to 137,000 acres of Alaskan state mining claims in
the prolific Tintina Gold Belt north of the PGJV lands.
- Manh Choh is a high grade, 8g/t gold equivalent open pit gold
project. Run-of-mine ore will be transported from the mine site to
Kinross’s already operating Fort Knox processing facility near
Fairbanks, Alaska.
- Contango has received significant interest from banks and
alternative lenders to provide financing for its share of the Manh
Choh project.
- Three potential lenders were chosen for the final round, and
each performed independent due diligence and visited the mine site
with their technical consultants prior to providing detailed term
sheets.
- ING and Macquarie were selected and have now signed an
exclusive mandate with Contango to provide US$70mm senior secured
loan facility to fund the Company’s portion of pre-production
capital requirements.
- The Facility is subject to final documentation, customary final
diligence and credit approvals by the Lenders. The transaction is
expected to close in April 2023.
Rick Van Nieuwenhuyse, the Company’s President and Chief
Executive Officer, said, “We received very competitive terms for
the senior loan facility and an attractive cost of capital for the
company. Along with our upcoming equity raise, we will fully fund
our obligation to the joint venture through production and execute
on our other corporate objectives. Construction is under way and
the project remains on track with first gold production expected in
2024. Contracts have been entered into for contract mining with
Kiewit, a global mining and construction contractor and Black Gold
Transport, a well-known local Alaska trucking company based in
North Pole, Alaska. Capital costs are now 90% committed and the
project remains on schedule and on budget. After we complete our
funding requirements for PGJV, we will focus on continuing to build
shareholder value. There is tremendous exploration upside on the
vast Tetlin Lease and adjacent lands that we control. We also look
forward to updating our shareholders and investors on exploration
drill results at Lucky Shot, and publishing an initial SK1300
Technical Report Resource Estimate before the end of the month. In
addition, we continue to evaluate other attractive strategic
opportunities. This year will be a transformational year for
Contango. I am excited about our plan to transform Contango into a
gold producer and to the opportunities that being a producer will
allow us to achieve.”
Roc Global, LLC, a mining, metals and clean energy focused
investment advisory firm based in New York, is acting as the
exclusive financial advisor to Contango for this financing.
ABOUT CORE
CORE is a company that engages in the exploration in Alaska for
gold and associated minerals through a 30% interest in PGJV, which
leases approximately 675,000 acres for exploration and development;
and through 100% owned subsidiary, Contango Minerals Alaska, LLC,
which leases approximately 137,000 acres for exploration. The
Company also owns the rights to the Lucky Shot, Coleman and War
Baby mines, and approximately 16,600 acres of surrounding mining
claims located in the Willow Mining District about 75 miles north
of Anchorage, Alaska. Additional information can be found on our
web page at www.contangoore.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements regarding
CORE 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 CORE’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 risks
of the exploration and the 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 CORE or PGJV;
ability to realize the anticipated benefits of PGJV; 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; CORE’s inability to retain or maintain its relative
ownership interest in PGJV; 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 the 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 CORE’s exploration program or financial results are included
in CORE’s other reports on file with the U.S. Securities and
Exchange Commission. 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. CORE does not assume any
obligation to update forward-looking statements should
circumstances or management’s estimates or opinions change.
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version on businesswire.com: https://www.businesswire.com/news/home/20230316005752/en/
Contango ORE, Inc. Rick Van Nieuwenhuyse (713) 877-1311
www.contangoore.com
Grafico Azioni Contango Ore (AMEX:CTGO)
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