Contango Ore (CTGO) M&A announcement summary

Deal rationale and strategic fit

• Merger creates a new mid-tier North American precious metals producer with a diversified portfolio in Alaska, British Columbia, and Canada, combining production and advanced exploration projects.

• Combined company leverages high-grade gold and silver assets, strong cash flow, and experienced management.

• Multi-asset platform reduces risk compared to single-asset companies and enables growth.

• Balanced 50/50 ownership split between former Contango and Dolly Varden shareholders ensures aligned interests.

• Access to both Canadian and Alaskan jurisdictions enhances project pipeline and operational flexibility.

Financial terms and conditions

• Combined entity holds over US$100 million in cash and minimal debt.

• Each Dolly Varden share exchanged for 0.1652 Contango share or exchangeable share, subject to arrangement terms.

• Contango issued 13,686,278 shares and 1,597,301 exchangeable shares, with 30,507,599 Contango shares outstanding post-transaction.

• $50 million budgeted for exploration and project advancement in the coming year.

• Manh Choh mine projected to generate $50 million free cash flow this year, with higher output and lower costs expected next year.

Synergies and expected cost savings

• Synergies identified in processing polymetallic ores from Johnson Tract and Kitsault Valley using similar milling infrastructure.

• Direct Ship Ore (DSO) model reduces capital and permitting timelines, leveraging existing mills.

• Combined technical and marketing expertise enhances project development and capital raising.