Contango ORE Raises $50M to Unwind Gold Hedges and Restore Manh Choh Upside

Contango secures financing to unwind gold hedges

Contango ORE, Inc. secures roughly $50 million in gross proceeds through an underwritten equity placement that the company uses primarily to reduce its outstanding gold hedges. The move is aimed at restoring price exposure for its Alaska projects and improving operational and cash‑flow flexibility as the company advances development work at Manh Choh.

De-hedging is central to near-term strategy

Contango is using about $45 million of the net proceeds to buy back gold hedge contracts and roughly $700,000 to purchase gold put contracts that provide downside protection. Management frames the transactions as a repositioning of the company’s price risk — removing hedges that cap upside while retaining limited protection against adverse price moves through put options — which allows Contango to capture more value if gold prices rise as projects progress.

The de‑hedging effort has immediate operational implications for project economics and partner relationships. By reducing hedge obligations, Contango increases its share of future unhedged gold revenue from the Manh Choh development, helping to align cash flows with capital needs and potentially simplifying reserve and mine planning. The strategy also affects how Contango and its joint‑venture partner coordinate decisions on timing of development and investment, since unhedged production is more sensitive to market signals.

Financing and transaction structure

The company closes an underwritten offering of 1,678,206 common shares and concurrent pre‑funded warrants to purchase 325,000 shares, raising approximately $50 million before fees and expenses. Canaccord Genuity acts as sole bookrunner with Cantor, National Bank of Canada Capital Markets and ATB Cormark Capital Markets as co‑managers; the offering is completed under an effective Form S‑3 shelf registration and related prospectus filings with the SEC.

Assets and project context

Contango is a NYSE American‑listed exploration and development company focused on gold and associated minerals in Alaska. It holds a 30% interest in Peak Gold, LLC, which controls roughly 675,000 acres for the Manh Choh project, with the remaining 70% owned by KG Mining (Alaska), an indirect Kinross subsidiary. The de‑hedging initiative is positioned to increase Contango’s exposure to the project’s future development upside.