FAIRBANKS, Ala. and VANCOUVER, BC, Dec. 8, 2025 /PRNewswire/ - Contango ORE, Inc. ("Contango" or the "Company") (NYSE American: CTGO) and Dolly Varden Silver Corporation ("Dolly Varden") (TSXV: DV) (NYSE American: DVS) (FSE: DVQ) are pleased to announce that they have entered into an arrangement agreement (the "Arrangement Agreement") to combine Contango and Dolly Varden on a merger-of-equals basis pursuant to a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the "Transaction"). The combination of Contango and Dolly Varden (the combined entity referred to as "MergeCo") would provide investors with a unique opportunity to participate in the upside of a well-funded North American asset portfolio consisting of the cash flowing high-grade Manh Choh gold mine in Alaska as well as several high-grade silver and gold projects located in British Columbia and Alaska including the Kitsault Valley and Johnson Tract projects.
Upon completion of the Transaction, existing Contango and Dolly Varden shareholders will each own approximately 50% of the outstanding shares of MergeCo, on a fully diluted in-the-money basis. MergeCo is expected to be renamed Contango Silver & Gold Inc. and will be led by Rick Van Nieuwenhuyse as CEO, Shawn Khunkhun as President and Mike Clark as Executive Vice President and CFO. The board of directors of MergeCo (the "MergeCo Board") will include Clynt Nauman as Chairman, Brad Juneau, Darren Devine, Mike Cinnamond, Tim Clark, Rick Van Nieuwenhuyse and Shawn Khunkhun.
Rick Van Nieuwenhuyse, President, CEO & Director of Contango, commented: "This merger is an exciting transaction for both Contango and Dolly Varden shareholders given the complementary and synergistic nature of our North American asset portfolios. With the Manh Choh Gold Mine providing significant cash flows in a strong gold and silver price environment, the combined company will have a source of non-dilutive funding to advance development of its high-grade Lucky Shot and Johnson Tract projects in Alaska and Kitsault Valley project in British Columbia. Kitsault Valley and Johnson Tract are particularly synergistic as both are high grade, have similar metallurgy, are located near tidewater and fit the Direct Shipping Ore ("DSO") model. In addition, both have tremendous exploration upside. With Dolly Varden's cornerstone land position in the Golden Triangle, one of the most exciting and prospective mining districts in the world, we see great potential to expand resources and advance Kitsault Valley to production. The combined company will be well financed for growth that is expected to continue to deliver long-term value for its shareholders."
Shawn Khunkhun, President, CEO & Director of Dolly Varden, further commented: "We are very pleased to present this Transaction to the shareholders of Dolly Varden. The merger represents a step-change for the company, adding production and combining an exceptional portfolio of projects with the potential for high-grade precious-metal development. The combined company is poised to become a unique, multi-asset platform for silver and gold production, focused exclusively on the United States and Canada. Our respective boards are fully aligned on how to best realize this vision, sharing a commitment to aggressively expand our resource base, accelerate mine exploration and subsequent development across the portfolio and pursue growth-oriented acquisitions."
Transaction Highlights & Strategic Rationale
-- Complementary Assets: Creation of a North-American focused multi-stage
silver and gold company, with an asset portfolio ranging from
advanced-stage exploration to current production.
-- Well Funded: Over US$100 million combined cash on hand, only US$15
million in debt and annual cash flow from the producing high-grade Manh
Choh gold mine in Alaska, operated in partnership with Kinross Gold
Corporation ("Kinross").
-- High-Grade Projects: Leverage to high-grade development of assets
anchored by the Lucky Shot and Johnson Tract projects in Alaska, and the
Kitsault Valley silver-gold project in British Columbia -- all
strategically located near existing infrastructure supporting a DSO
approach.
-- Shared Capex Strategy: Common development philosophy to pursue low-capex
DSO projects that can be developed using existing processing facilities.
-- Exploration Potential: Track-record of high-grade exploration success
across the portfolio.
-- Enhanced Capital Markets Profile: The combined company's shareholders to
benefit from greater critical mass with a combined market capitalization
of approximately US$812 million (C$1.1 billion), as well as increased
trading liquidity, index inclusion, research coverage and institutional
ownership.
-- Insider and Institutional Support: All directors and officers of Contango
and Dolly Varden, as well as significant shareholders of both companies,
have signed voting support agreements in favour of the Transaction,
representing approximately 22% of the outstanding Contango shares and
approximately 22% of the outstanding Dolly Varden shares.
-- Expanded Presence: Listing on the NYSE American, and intention to apply
to list on the Toronto Stock Exchange following closing of the
Transaction.
Flagship Assets
Manh Choh Mine, Alaska
-- Ore mined at Manh Choh is trucked to Kinross's Fort Knox mine and milling
complex in Fairbanks, Alaska for processing; operations commenced in Q3
2024.
-- One of the highest-grade open pit mines in the world with gold reserves
estimated at approximately 8 grams per tonne ("g/t").
-- Joint venture between Kinross (70%) and Contango (30%), operated by
Kinross.
-- Production of 173,400 gold ounces for the first nine months of 2025
(52,020 gold ounces attributable to Contango) at an all-in sustaining
cost ("AISC") of US$1,505 per ounce ("oz").
-- Total cash distributions for the first nine months of 2025 of US$87
million to Contango.
Lucky Shot Mine, Alaska
-- Current Indicated resource of 0.1 million ounces of gold at 14.5 g/t in
the historically productive Willow Mining District, Alaska.
-- Fully permitted for mining operations.
-- Underground development completed for advanced exploration.
-- 18,000 meter drill program currently underway targeting expansion of
Measured and Indicated resources to 400,000 to 500,000 ounces with a DSO
feasibility study and mine go-ahead decision targeted by 2027.
Johnson Tract, Alaska
-- Current Indicated resource of 0.7 million ounces of silver, 0.6 million
ounces of gold, and 400 million pounds of zinc (1.1 million gold
equivalent ounces ("GEO")) and Inferred resources of 0.2 million ounces
of silver, 31,000 ounces of gold, and 65 million pounds of zinc.
-- Critical metals project (gold, silver, copper, zinc, lead) accepted for
coverage on the FAST-41 Covered Projects dashboard on December 2, 2025.
-- Initial Assessment completed on May 6, 2025 outlined a NPV5% of US$615
million with an IRR of 53% at US$4,000/oz gold, AISC of $860 per gold
equivalent oz and a payback period of less than a year.
-- In August 2024, Contango received a 404-permit to build a road from camp
to the portal site and plans to construct the road in 2026. Targeted
completion of a DSO feasibility study with mine go-ahead decision by
2029.
Kitsault Valley, British Columbia
-- Large cornerstone land position in the Golden Triangle with exploration
upside in one of the most exciting and prospective mining districts in
the world.
-- Current Indicated resource of 34.7 million ounces of silver and 0.2
million ounces of gold and Inferred resources of 29.3 million ounces of
silver and 0.8 million ounces of gold, with an update anticipated in
2026.
-- In 2025, completed a 56,131 meter drill program with initial highlights
including 1,422 g/t silver over 21.70 meters at the Wolf Vein deposit
(see September 2, 2025 press release), 26.74 g/t gold over 14.76 meters
and 14.50 g/t gold and 75 g/t silver over 21.18 meters at the Homestake
Silver deposit (see November 10, 2025 and December 4, 2025 press
releases).
-- Past production of over 20 million ounces of silver in the Kitsault
Valley, including the Dolly Varden Mine, historically the richest silver
mine in the British Empire with production at 1,100 g/t of silver between
1919 and 1923, and the Torbit Mine, historically Canada's third largest
primary silver producer, producing at 466 g/t of silver between 1949 and
1959.
Leadership & Governance
Management of the combined company will draw upon the experience and expertise of both companies, led by Rick Van Nieuwenhuyse as CEO, Shawn Khunkhun as President, and Mike Clark as Executive Vice President and CFO.
The Board of the combined company will consist of Clynt Nauman as Chairman, Brad Juneau, Darren Devine, Mike Cinnamond, Tim Clark, Rick Van Nieuwenhuyse and Shawn Khunkhun.
The corporate office will be based in Fairbanks, Alaska, with a secondary office located in Vancouver, British Columbia.
Transaction Details
Pursuant to the terms and conditions of the Arrangement Agreement, Contango will acquire all of the issued and outstanding common shares of Dolly Varden (the "DV Shares") at an exchange ratio of 0.1652 of a share of voting common stock of Contango (the "CTGO Shares") for each DV Share held (the "Exchange Ratio").
(MORE TO FOLLOW) Dow Jones Newswires
December 08, 2025 07:30 ET (12:30 GMT)
Comments