UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):    January 18, 2019


CONTANGO ORE, INC.
(Exact name of Registrant as specified in its charter)

 
Delaware
(State or other jurisdiction of
incorporation or organization)
 
 
 
3700 Buffalo Speedway, Suite 925
Houston, Texas
(Address of principal executive offices)
 
 
001-35770
(Commission
File Number)
 
 
27-3431051
(I.R.S. Employer
Identification No.)
 
 
 
 
77098
(Zip Code)

 
Registrant’s Telephone Number, including area code:  (713) 877-1311
 
 
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Item 1.01.
Entry into a Material Definitive Agreement.

  On January 18, 2019, CORE Alaska, LLC (“CORE Alaska”), a wholly-owned subsidiary of Contango ORE, Inc. (the “Company”) and its joint venture partner, Royal Alaska, LLC (“Royal Alaska”), a wholly-owned subsidiary of Royal Gold, Inc. (“Royal Gold”), entered into an Amendment No. 2 (the “Amendment”) to the Limited Liability Company Agreement of Peak Gold, LLC (the “Joint Venture Company”), dated as of January 8, 2015, by and between CORE Alaska and Royal Alaska.  The Amendment, among other things, (i) defines certain project areas and a resource area in reference to properties owned or controlled by the Joint Venture Company; (ii) allows CORE Alaska and Royal Alaska to agree to sell their respective interests in the Joint Venture Company in respect of fewer than all such project areas in a joint sale process by the Company and Royal Gold; (iii) creates a tag right on a transfer by either CORE Alaska or Royal Alaska of any portion of its interest in the resource area; and (iv) creates a drag right in a transfer by Royal Alaska of its entire interest in the resource area.

The foregoing description of the Amendment does not purport to be complete, and is qualified in its entirety by reference to the full text of the Amendment, which is attached as Exhibit 10.1 hereto and incorporated by reference herein .

Item 7.01.
Regulation FD Disclosure.

The Company issued a press release on January 23, 2019 relating to its solicitation of proposals for the potential sale of the Company. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information included herein and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Cautionary Note Regarding Forward-Looking Statements

Many of the statements included or incorporated in this Current Report on Form 8-K and the furnished exhibit constitute “forward-looking statements.” In particular, they include statements relating to future actions, strategies, future operating and financial performance, and the Company’s future financial results. These forward-looking statements are based on current expectations and projections about future events. Readers are cautioned that forward-looking statements are not guarantees of future operating and financial performance or results and involve substantial risks and uncertainties that cannot be predicted or quantified, and, consequently, the actual performance of the Company may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, factors described from time to time in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein).

Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.
Description of Exhibit
 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


  CONTANGO ORE, INC.  
       

By:
/s/ Leah Gaines  
  Leah Gaines  
  Vice President and Chief Financial Officer  
       
   
Dated: January 25, 2019



Exhibit 10.1

AMENDMENT NO. 2
TO
LIMITED LIABILITY COMPANY AGREEMENT
BETWEEN
CORE ALASKA, LLC AND ROYAL ALASKA, LLC
FOR
PEAK GOLD, LLC

This Amendment No. 2 (this “ Amendment ”) to the Limited Liability Company Agreement of Peak Gold, LLC (the “ Company ”), dated as of January 8, 2015, as amended by Amendment No. 1, dated as of November 10, 2017 (as amended, the “ Agreement ”) is made as of January 18, 2018 (the “ Amendment Effective Date ”) between Core Alaska, LLC, a Delaware limited liability company (“ CORE ”), and Royal Alaska, LLC, a Delaware limited liability company (“ Royal ”, and together with CORE, the “ Members ”).

RECITALS


A.
CORE and Royal are the sole Members of the Company.


B.
Capitalized terms used and not separately defined in this Amendment (including in these Recitals) have the meanings given in the Agreement.


C.
Pursuant to Section 18.6 of the Agreement, the Agreement may be modified only by an instrument in writing duly executed by all Members.


D.
The Members wish to modify the Agreement to make certain clarifications to Exhibit E .


AGREEMENT

NOW THEREFORE, for the consideration recited in the foregoing recitals and the mutual covenants set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Royal and CORE hereby agree as follows:

1.   Amendments to Exhibit E.   Exhibit E to the Agreement is hereby amended and restated as attached hereto.

2.   Governing Law . This Amendment shall be governed by and interpreted in accordance with the laws of the State of Delaware, except for its rules pertaining to conflicts of laws.

3.   Further Assurances . Each Member and the Manager agrees to take from time to time such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purposes of this Amendment.


4.   No Other Modifications to Existing Agreement . Except to the extent modified by this Amendment, the Agreement remains in full force and effect according to its terms.

5.   Counterpart Signatures . This Amendment may be executed in one or more counterparts each of which when executed shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment in .pdf or other electronic form shall be effective as delivery of a manually executed counterpart of this Amendment.



[Signatures on next page]


IN WITNESS WHEREOF , Royal and CORE have e x ecuted this Amendment, as Members , as o f the Amendment Effective Date.

CORE ALASKA, LLC
 
By:
              /s/ John B, Juneau                            
Name: John B. Juneau
Title: President and CEO 
 
ROYAL ALASKA, LLC
 
By:
              /s/ William Heissenbuttel                
Name: William Heissenbuttel
Title: Vice President and Treasurer


EXHIBIT E
(See attached)


LIMITED LIABILITY COMPANY AGREEMENT

BETWEEN

CORE ALASKA, LLC AND ROYAL ALASKA, LLC

FOR PEAK GOLD, LLC

EXHIBIT E

RIGHTS ON TRANSFER


1.1
Project Areas; Joint Sale Process.

(a)   For purposes of this Exhibit E , the term “ Project Area ” shall mean all Properties located within any of the following geographic areas, together with all Assets related solely to such Properties:

(i)   Resource Area - All areas under the Tetlin Lease situated to the north of Universal Transverse Mercator (UTM) coordinate 6,990,000N, outlined in blue on Exhibit E-1 (the “ Resource Area ”).

(ii)   Southern Lease Area - All areas under the Tetlin Lease situated to the south of Universal Transverse Mercator (UTM) coordinate 6,990,000N, outlined in blue on Exhibit E-1 .

(iii)   Western State Claims - All areas comprised of the State of Alaska mining claims outlined in red on Exhibit E-1 .

(iv)   Northern State Claims - All areas comprised of the State of Alaska mining claims outlined in purple on Exhibit E-1 .

(b)   If, in response to an offer received pursuant to the “ Joint Sale Process ” as defined under and described in that certain Letter Agreement, dated January 18, 2019, by and between Royal Gold, Inc. and Contango ORE, Inc. (the “ Letter Agreement ”), either or both of the Members or their Affiliates wishes to Transfer, directly or indirectly, such Member’s Membership Interest in respect of any Project Area(s) (but not all Project Areas) to a third party, either or both of the Members or their Affiliates may do so; provided that the Members shall, prior to closing on such Transfer, form one or more new joint ventures in order to hold their Membership Interests in respect of any Project Area(s) which are to be retained by the Members following such sale, on substantially the same terms and conditions as set forth in this Agreement (including the Tag Along Right and Drag Right, subject to such limitations as are described below); and it being understood that if only one Member wishes to sell its Membership Interest in such Project Area(s) in response to such offer, the terms of such offer may be revised by the prospective purchaser and such Member for purposes of this Section 1.1(b) in order to accommodate the sale of such Member’s Membership Interest (as opposed to both Members’ Membership Interests) in such Project Area(s).

EXHIBIT E
Page 1 of 4


1.2
Tag-Along Right .

(a)   If either Member intends to Transfer all or any part of (i) its Membership Interest at any time (including a Transfer of its Membership Interest in the Resource Area as permitted by Section 1.1(b) of this Exhibit E ), or (ii) an Affiliate of either Member intends to Transfer Control of such Member at any time (in any such case, the “ Transferring Entity ”) to a bona fide third party, such Member shall promptly notify the other Member of such intentions. The notice shall state the price and all other pertinent terms and conditions of the intended Transfer and shall be accompanied by a copy of the offer or the contract for sale. If the consideration for the intended Transfer is, in whole or in part, other than monetary, the notice shall describe such consideration and its monetary equivalent (based upon the fair market value of the non-monetary consideration and stated in terms of cash or currency). The other Member shall have forty-five
(45) days from the date such notice is delivered to notify the Transferring Entity (and the Member if its Affiliate is the Transferring Entity) whether it elects to require the Transferring Entity to include in the intended transfer the other Member’s proportionate share of its Membership Interest or its Membership Interest in the Resource Area, as the case may be, to be Transferred (the “ Tag Along Right ”). Thereafter, the Transferring Entity shall be obligated to include in such Transfer the proportionate share of the other Member’s Membership Interests or its Membership Interest in the Resource Area, as the case may be, at the same purchase price and terms and conditions.

(b)   If the other Member fails to so elect within the period provided for above, the Transferring Entity shall have forty-five (45) days following the expiration of such period to consummate the Transfer to the bona fide third party at a price and on terms no less favorable to the Transferring Entity than those offered by the Transferring Entity to the other Member in the aforementioned notice.

(c)   If the Transferring Entity fails to consummate the Transfer to the bona fide third party within the period set forth above, the rights of the other Member in such offered interest under this Exhibit E shall be deemed to be revived. Any subsequent proposal to Transfer such interest or any remaining interest of a Member shall be conducted in accordance with all of the procedures set forth in this Exhibit E .


1.3
Drag-Along Rights .

(a)   If Royal intends to Transfer (i) its entire Membership Interest in the Resource Area as permitted by Section 1.1(b) of this Exhibit E or (ii) its entire Membership Interest at any time, to, in either case, a bona fide third party, Royal may elect to require CORE to sell up to twenty percent (20%) of (1) its entire Membership Interest in the Resource Area in connection with a Transfer under item (i) in this Section 1.3(a) or (2) its entire Membership Interest at such time in connection with a Transfer under item (ii) in this Section 1.3(a) , as applicable, in order to sell, in either such case, a total of up to 60% of all such Membership Interests to such bona fide third party, by notifying CORE of such election (in either case, the “ Drag Right ”).

EXHIBIT E
Page 2 of 4
(b)   The notice shall state the price and all other pertinent terms and conditions of the intended Transfer, and shall be accompanied by a copy of the offer or the contract for sale. If the consideration for the intended Transfer is, in whole or in part, other than monetary, the notice shall describe such consideration and its monetary equivalent (based upon the fair market value of the nonmonetary consideration and stated in terms of cash or currency). CORE shall be obligated to sell its Membership Interest as described above to the bona fide purchaser on the same terms and conditions as the Membership Interest or its Membership Interest in the Resource Area, as the case may be, being Transferred by Royal. Such sale shall take place simultaneously with the Membership Interest or its Membership Interest in the Resource Area, as the case may be, being Transferred by Royal. Royal’s rights set forth in this Section 1.3 shall be binding upon the successors of CORE and any Person acquiring any portion of CORE’S Membership Interest or its Membership Interest in the Resource Area, as the case may be, by Transfer.

(c)   The Drag Right shall terminate and not be exercisable (i) as to any Project Area(s) (or Membership Interest related thereto) in respect of which the Members retain an interest following Royal’s exercise of the Drag Right as permitted by Section 1.1(b) of this Exhibit E or
(ii) in respect of any new joint venture formed by the Members in connection with the Transfer of any one or more Project Areas (but not all Project Areas) pursuant to Section 1.1(b) of this Exhibit E, if the Members agree (1) to the membership interests being owned other than 40% by Royal and 60% by CORE or (2) that there is a farm out, earn-in or other right whereby Royal or CORE’s interests in such new joint venture or any Project Area(s) could be diluted.

(d)   Royal acknowledges and agrees that, if any new joint venture(s) is formed by the Members, CORE may distribute/contribute its economic interest in such joint venture(s) to a new entity to be owned by the Contango ORE, Inc. shareholders.


1.4
Limitations . The rights set forth in this Exhibit E shall not apply to:


(a)
   Transfer by either Member of all or any part of its Membership Interest to an Affiliate;

 
 (b)
    Incorporation of either Member, or corporate consolidation or reorganization of either Member by which the surviving entity shall
possess substantially all of the stock or all of the property rights and interests, and be subject to substantially all of the liabilities and obligations of that Member;

(c)   Corporate merger or amalgamation involving either Member by which the surviving entity or amalgamated company shall possess all of the stock or all of the property rights and interests, and be subject to substantially all of the liabilities and obligations of that Member;

(d)   the transfer of Control of either Member by an Affiliate to such Member or to another Affiliate;

(e)   subject to Subsection 15.2(f) of the Agreement, the grant by either Member of a security interest in its Membership Interest by Encumbrance;



EXHIBIT E
Page 3 of 4
(f)   the creation by any Affiliate of either Member of an Encumbrance affecting its Control of such Member; or

(g)   a sale or other commitment or disposition of Products or proceeds from sale of Products by either Member upon distribution to it pursuant to Article XI of the Agreement; or the sale, transfer or similar transaction of the equity securities of a Member where equity securities are registered with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, as amended.








EXHIBIT E
Page Page 4 of 4 of 4


Exhibit 99.1

Contango ORE, Inc. Starts Process to Solicit Proposals for the Potential Sale of the Company

HOUSTON--(BUSINESS WIRE)--January 23, 2019--Contango ORE, Inc. (“CORE” or the “Company”) (OTCQB: CTGO) announced today that Royal Gold, Inc., the parent of Royal Alaska, LLC (“Royal Alaska”) CORE’s joint venture partner in the Peak Gold, LLC joint venture (“Peak Gold”), which is developing the Peak Gold exploration project located near Tok, Alaska (“the Peak Gold Project”), has retained Scotia Capital Inc. to conduct a joint process for the sale directly or indirectly of the Peak Gold Project’s properties in Alaska. CORE’s 60% interest in the Peak Gold Project plus cash on hand constitute substantially all of CORE’s assets. CORE has no borrowings. As previously announced, CORE has retained Petrie Partners, LLC and Cantor Fitzgerald and Co. to advise CORE on its strategic options. CORE is primarily interested in a sale of CORE stock in exchange for cash and/or liquid publicly traded shares.

Brad Juneau, the Company’s CEO, said, “The Company and its joint venture partner Royal Alaska have spent several years exploring for a commercial gold deposit, and the previously released Preliminary Economic Assessment of the Main Peak and North Peak resource areas are very encouraging. There is significant exploration upside remaining on the acreage, and along with the Main Peak and North Peak resource areas, we believe our project will be one of the most attractive in the North American market.”

ABOUT PEAK GOLD

Peak Gold is a joint venture between Royal Alaska, a wholly-owned subsidiary of Royal Gold, and CORE Alaska, a wholly-owned subsidiary of CORE. Peak Gold holds a 675,000 acre lease with the Native Village of Tetlin and an additional 175,000 acres of State of Alaska mining claims, all located near Tok, Alaska, on which Peak Gold explores for minerals. CORE Alaska holds a 60% membership interest in Peak Gold and Royal Alaska holds a 40% membership interest in Peak Gold and is the manager of the joint venture.

ABOUT CORE

CORE is a Houston-based company that engages in the exploration in Alaska for gold and associated minerals through Peak Gold, its joint venture company with Royal 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 “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 Peak Gold; 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; inability to realize expected value from acquisitions; inability of our management team to execute its plans to meet its goals; and the possibility that government policies may change or governmental approvals may be delayed or withheld, including the inability to obtain any mining permits. Additional information on these and other factors which could affect Peak Gold’s exploration program or financial results are included in CORE’s other reports on file with the 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.

CONTACT:
Contango ORE, Inc.
Brad Juneau, (713) 877-1311
www.contangoore.com