As filed with the Securities and Exchange Commission on October 26, 2021
Registration No. 333-            
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
 
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
 
Contango ORE, Inc.
(Exact Name of Registrant as Specified in Its Charter)
________________________
Delaware
 
1040
 
27-3431051
(State or Other Jurisdiction of
Incorporation or Organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification Number)
 
 
3700 Buffalo Speedway, Suite 925
Houston, Texas 77098
(713) 877-1311
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
________________________
 
Rick Van Nieuwenhuyse
President and Chief Executive Officer
3700 Buffalo Speedway, Suite 925
Houston, Texas 77098
(713) 877-1311
(Name, address, including zip code, and telephone number, including area code, of agent for service)
________________________
 
Copies of all communications, including communications sent to agent for service, should be sent to:
 
Copies to:
 
Timothy T. Samson
Amy R. Curtis
Holland & Knight LLP
811 Main Street, Suite 2500
Houston, Texas 77002
(713) 821-7000
 ________________________

Approximate date of commencement of proposed sale to the public:
 
From time to time after the effective date of this registration statement.
________________________
 
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ☐
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ☒
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
 
i

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
 
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer
☐
Accelerated filer
☐
 
Non-accelerated filer
☒
Smaller reporting company
☒
     
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 7(a)(2)(B) of the Securities Act. ☐
________________________
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
 
Amount to be
registered(1)
   
Proposed maximum
offering price per
security
   
Proposed maximum aggregate offering
price
   
Amount of
registration fee
 
Primary Offering:
                       
     Common Stock, par value $0.01 per share
   
—
     
—
     
—
     
—
 
     Preferred Stock, par value $0.01 per share
   
—
     
—
     
—
     
—
 
     Warrants
   
—
     
—
     
—
     
—
 
     Subscription Rights
   
—
     
—
     
—
     
—
 
     Units
   
—
     
—
     
—
     
—
 
Primary Offering Total


(2)
 
    (2)
 
 
$
100,000,000
(2) 

$
9,270
(3) 
Secondary Offering:
                               
     Common Stock, par value $0.01 per share
   
415,000
   
$
21.10
(4)
 
$
8,756,500

 
$
812
(5)
Total
                 
$
108,756,500

 
$
10,082


(1)
Pursuant to Rule 416 under the Securities Act of 1933, as amended (the "Securities Act"), the shares being registered hereunder include such indeterminate number of shares of common stock and preferred stock as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions.

(2)
With respect to the primary offering, there is being registered hereunder such indeterminate number of the securities of each identified class of the registrant as may be sold in an offering pursuant to this Registration Statement, such indeterminate principal amount of securities which shall have an aggregate initial offering price not to exceed $100,000,000. The proposed maximum aggregate offering price per security and proposed maximum aggregate offering price per class of security will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act. The securities registered also include such indeterminate number of shares of common stock and preferred stock as may be issued upon conversion of or exchange for preferred stock that provide for conversion or exchange, upon exercise of warrants or pursuant to the anti-dilution provisions of any such securities. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. In addition, separate consideration may or may not be received for securities that are issuable upon exercise, conversion or exchange of other securities, or that are issued in units.

(3)
Calculated pursuant to Rule 457(o) under the Securities Act.

(4)
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) of the Securities Act. With respect to the secondary offering, the price per share and aggregate offering price are based on the average of the high and low prices of the common stock on October 26, 2021 as reported on the OTCQB Tier of the OTC Markets Group Inc.

(5)
Calculated in accordance with Rule 457(c) under the Securities Act.

 
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
 
 

ii

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. NEITHER WE NOR THE SELLING STOCKHOLDER MAY SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
Subject to Completion, dated October 26, 2021
 
PROSPECTUS



Contango ORE, Inc.
 
$100,000,000
Common Stock
Preferred Stock
Warrants
Subscription Rights
Units
 
and
 
415,000 Shares of Common Stock
Offered by the Selling Stockholder
________________________
 
We may, from time to time in one or more offerings, offer and sell up to $100,000,000 in the aggregate of common stock, preferred stock, warrants to purchase common stock or preferred stock, subscription rights, or any combination of the foregoing, either individually or as units comprised of one or more of the other securities.
 
In addition, the selling stockholder named herein may offer and sell up to an aggregate of 415,000 shares of our common stock from time to time in one or more offerings. We will not receive any of the proceeds from the sale of our common stock by the selling stockholder.
 
i

The common stock, the preferred stock, the warrants, the subscription rights and the units collectively are referred to in this prospectus as the "securities".
 
We may offer and sell these securities from time to time in amounts, at prices and on terms to be determined by market conditions and other factors at the time of our offerings. We or the selling stockholder may offer and sell these securities on a continuous or delayed basis through agents, through underwriters or dealers or directly to one or more purchasers, including existing stockholders.  This prospectus provides you with a general description of these securities and the general manner in which we will offer the securities. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering.  The prospectus supplement may also add, update or change information contained in this prospectus.
 
Our common stock is traded on the OTCQB Tier of the OTC Markets Group Inc. under the symbol “CTGO”. The last reported sales price of our common stock on the OTCQB on October 26, 2021 was $20.20 per share.
________________________
 
INVESTING IN OUR SECURITIES INVOLVES RISKS.  YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS DESCRIBED UNDER “RISK FACTORS” ON PAGE 5 OF THIS PROSPECTUS AND IN THE APPLICABLE PROSPECTUS SUPPLEMENT OR ANY OF THE DOCUMENTS WE INCORPORATE BY REFERENCE BEFORE YOU MAKE AN INVESTMENT IN OUR SECURITIES.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
This prospectus may not be used without a prospectus supplement.
________________________
 
The date of this prospectus is                , 2021.

ii

TABLE OF CONTENTS
 

 
Page
 
About This Prospectus
ii
 
Notice Regarding Mineral Disclosure
iii
 
Cautionary Statement Regarding Forward-Looking Statements
iv
 
Summary
1
 
Risk Factors
5
 
Use of Proceeds
16
 
Our Properties
17
 
Description of Capital Stock
33
 
Description of Warrants
38
 
Description of Subscription Rights
39
 
Description of Units
40
 
Selling Stockholder
41
 
Plan of Distribution
42
 
Legal Matters
43
 
Experts
43
 
Where You Can Find More Information
44  
Exhibits
48
 

i

ABOUT THIS PROSPECTUS
 
This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, we may, over time, offer and sell the securities described in this prospectus in one or more offerings or resales up to an aggregate amount of $100,000,000. In addition, under this shelf process, the selling stockholder to be named in a supplement to this prospectus may, from time to time, sell up to 415,000 shares of common stock, as described in this prospectus, in one or more offerings.
 
This prospectus provides you with a general description of the securities we and the selling stockholder may offer. Each time we or the selling stockholder sells any of the securities described herein, we or the selling stockholder may provide a prospectus supplement that will contain specific information about the terms of that offering and may include a discussion of any risk factors or other special considerations that apply to those securities. The prospectus supplement may also add to, update or change the information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any applicable prospectus supplement, you should rely on the information in the applicable prospectus supplement. Please carefully read this prospectus, any applicable prospectus supplement and any free-writing prospectus that we authorize to be distributed to you and any information incorporated by reference into the foregoing, together with additional information described under the heading “Where You Can Find More Information” before buying any of the securities offered under this prospectus.
 
You should rely only on the information contained in this prospectus and in any relevant prospectus supplement or free writing prospectus, including any information incorporated herein or therein by reference. Neither we nor the selling stockholder have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should not assume that the information in this prospectus, any accompanying prospectus supplement, any free writing prospectus or any document incorporated by reference is accurate as of any date other than the date on its front cover. Our business, financial condition, results of operations and prospects may have changed since the date indicated on the front cover of such documents. Neither this prospectus nor any prospectus supplement or free writing prospectus constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities to which they relate, nor does this prospectus or a prospectus supplement or free writing prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

ii

NOTICE REGARDING MINERAL DISCLOSURE
 
(Industry Guide 7 vs. Regulation S-K 1300 et. seq.)
 
In October 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments to its current disclosure rules to modernize the mineral property disclosure requirements for mining registrants. The amendments include the adoption of a new subpart 1300 of Regulation S-K, which will govern disclosure for mining registrants (the “SEC Mining Modernization Rules”). The SEC Mining Modernization Rules replace the historical property disclosure requirements for mining registrants that were included in the SEC’s Industry Guide 7 and better align disclosure with international industry and regulatory practices, including the Canadian National Instrument 43-101—Standards of Disclosure for Mineral Projects. The Company must comply with the SEC Mining Modernization Rules as of the Company’s fiscal year beginning on or after January 1, 2021, which began on July 1, 2021.
 
The Technical Report summary for the Peak Gold JV Property (as defined below) has been prepared in accordance with the SEC Mining Modernization Rules and is included as Exhibit 96.1 to the registration statement that contains this prospectus.
 
These disclosures differ in material respects from the requirements set forth in Industry Guide 7, which remains applicable to U.S. companies subject to the reporting and disclosure requirements of the SEC that have not early adopted the SEC Mining Modernization Rules. These standards differ significantly from the disclosure requirements of Industry Guide 7 in that mineral resource information contained herein may not be comparable to similar information disclosed by U.S. companies that have not early adopted the SEC Mining Modernization Rules.
 
The financial statements, notes thereto and audits for the fiscal years ended June 30, 2020 and 2021, all of which are contained in the documents incorporated by reference into this prospectus, were prepared in compliance with Industry Guide 7. The accounting and definitions used in the notes to the financial statements for the Company’s fiscal years ending June 30, 2020 and 2021 were prepared in compliance with Industry Guide 7 since the SEC Mining Modernization Rules were not applicable during these periods. However, since there are disclosures made in this prospectus that are made to be current when the Company's prospectus is effective and since the effective date of the prospectus will be after June 30, 2021, the disclosure made in certain Items that is not solely based on an historical presentation for periods prior to July 1, 2021 has been made in compliance with the SEC Mining Modernization Rules. Additionally, we anticipate disclosures to be made in prospectus supplements will be made in compliance with the SEC Mining Modernization Rules.
 
The Company has no known reserves as defined under Industry Guide 7 or the SEC Mining Modernization Rules.  There are significant differences in the definitions and in the disclosure required under the SEC Mining Modernization Rules and under Industry Guide 7.  Under Industry Guide 7, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made.  Industry Guide 7 does not define and the SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource and must not be converted to a mineral reserve.
 
Therefore, the reader should be aware that the notes to the financial statements were prepared in compliance with Industry Guide 7, and the balance of this prospectus was prepared (and we anticipate prospectus supplements will be prepared) in compliance with the SEC Mining Modernization Rules. Therefore, those terms that have specific definitions in the SEC Mining Modernization Rules have those meanings ascribed to them by the regulation.

iii

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
Some of the statements contained in or incorporated by reference into this prospectus may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. The words and phrases “should be”, “will be”, “believe”, “expect”, “anticipate”, “estimate”, “forecast”, “goal” and similar expressions identify forward-looking statements and express expectations about future events. These include such matters as:
 
 
•
The Company’s financial position;
 
•
Business strategy, including outsourcing;
 
•
Meeting the Company’s forecasts and budgets;
 
•
Anticipated capital expenditures and the availability of future financing;
 
•
Prices of gold and associated minerals;
 
•
Timing and amount of future discoveries (if any) and production of natural resources on the Peak Gold JV Property and the Company's other properties;
 
•
Operating costs and other expenses;
 
•
Cash flow and anticipated liquidity;
 
•
The Company’s ability to fund its business with current cash reserves based on currently planned activities;
 
•
Prospect development; 
 
•
Operating and legal risks; and
 
•
New governmental laws and regulations.
 

Although the Company believes the expectations reflected in such forward-looking statements are reasonable, such expectations may not occur. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from future results expressed or implied by the forward-looking statements. These factors include among others:
 
 
•
Ability to raise capital to fund capital expenditures;
 
•
Ability to retain or maintain our relative ownership interest in the Peak Gold JV;
 
•
Ability to influence management of the Peak Gold JV;
 
•
Ability to realize the anticipated benefits of the Kinross Transactions, including ability to process ore mined from the Peak Gold JV Property at the existing Fort Knox mining and milling complex;
 
•
Disruption from the Kinross Transactions and transition of the Peak Gold JV's management to Kinross, including as it relates to maintenance of business and operational relationships, potential delays or changes in plans with respect to exploration or development projects or capital expenditures;
 
•
Operational constraints and delays;
 
•
The risks associated with exploring in the mining industry;
 
•
The timing and successful discovery of natural resources;
 
•
Availability of capital and the ability to repay indebtedness when due;
 
•
Declines and variations in the price of gold and associated minerals;
 
•
Availability of operating equipment;
 
•
Operating hazards attendant to the mining industry;
 
•
The ability to consummate acquisitions and the effects of acquisitions on our business;
 
•
Weather;
 
•
The ability to find and retain skilled personnel;
 
•
Restrictions on mining activities;
 
•
Legislation that may regulate mining activities;
 
•
Changes in applicable tax rates and other regulatory changes;
 
•
Impact of new and potential legislative and regulatory changes (including commitments to international agreements) on mining operating and safety standards;
 
•
Uncertainties of any estimates and projections relating to any future production, costs and expenses (including changes in the cost of fuel, power, materials and supplies);
 
•
Timely and full receipt of sale proceeds from the sale of any of our mined products (if any);
 
•
Stock price and interest rate volatility;
 
•
Federal and state regulatory developments and approvals;
 
•
Availability and cost of material and equipment;

iv

 
•
Actions or inactions of third parties;
 
•
Potential mechanical failure or under-performance of facilities and equipment;
 
•
Environmental and regulatory, health and safety risks;
 
•
Strength and financial resources of competitors;
 
•
Worldwide economic conditions;
 
•
Impact of pandemics, such as the worldwide COVID-19 outbreak, which could impact the Company’s or the Peak Gold JV’s exploration schedule and operating activities and result in reduced demand for mined minerals;
 
•
Expanded rigorous monitoring and testing requirements;
 
•
Ability to obtain insurance coverage on commercially reasonable terms;
 
•
Competition generally and the increasing competitive nature of the mining industry;
 
•
Risk related to title to properties; and
 
•
Ability to consummate strategic transactions.

 
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements contained herein. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All forward-looking statements contained in or incorporated by reference into this prospectus are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.  See the information under the heading “Risk Factors” in this prospectus for some of the important factors that could affect the Company’s financial performance or could cause actual results to differ materially from estimates contained in forward-looking statements.
 


v

SUMMARY
 
This summary highlights selected information contained elsewhere in this prospectus or incorporated by reference herein. Because this is only a summary, it does not contain all of the information that you should consider before investing in our securities. You should read the entire prospectus carefully before making an investment decision, including the information presented under the headings “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” and all other information included or incorporated by reference into this prospectus.
 
Unless the context requires otherwise or unless stated otherwise, references in this prospectus to the “Company,” “Contango ORE,” “Contango,” “CORE,” “we,” “our” and “us” refer to Contango ORE, Inc. and its subsidiaries on a consolidated basis.
 

Our Company
 
Contango ORE engages in exploration for gold ore and associated minerals in Alaska.  The Company conducts its operations through three primary means:

●
a 30.0% membership interest in Peak Gold, LLC (the “Peak Gold JV”), which leases approximately 675,000 acres from the Tetlin Tribal Council and holds approximately 13,000 additional acres of State of Alaska mining claims (such combined acreage, the “Peak Gold JV Property”) for exploration and development, including in connection with the Peak Gold JV's plan to mine ore from the Peak and North Peak deposits within the Peak Gold JV Property (the “Manh Choh Project”);
 
●
its wholly-owned subsidiary, Alaska Gold Torrent, LLC, an Alaska limited liability company (“AGT”), which leases the mineral rights to approximately 8,600 acres of State of Alaska and patented mining claims for exploration from Alaska Hard Rock, Inc., located in three former producing gold mines located on the patented claims in the Willow Mining District about 75 miles north of Anchorage, Alaska (the “Lucky Shot Property”); and
 
●
its wholly-owned subsidiary, Contango Minerals Alaska, LLC (“Contango Minerals”), which separately owns the mineral rights to approximately 215,800 acres of State of Alaska mining claims for exploration, including (i) approximately 139,100 acres located immediately northwest of the Peak Gold JV Property (the “Eagle/Hona Property”), (ii) approximately 14,800 acres located northeast of the Peak Gold JV Property (the “Triple Z Property”), (iii) approximately 52,700 acres of new property in the Richardson district of Alaska staked by the Company in the first quarter of 2021 (the “Shamrock Property”) and (iv) approximately 9,200 acres located to the north and east of the Lucky Shot Property (the “Willow Property” and, together with the Shamrock Property, the Eagle/Hona Property and the Triple Z Property, collectively the “Minerals Property”)
 
The Lucky Shot Property and the Minerals Property are collectively referred to in this prospectus as the “Contango Properties”.
 

Properties
 
From 2009 until September 2020, the Company’s primary focus was on the exploration for minerals near Tok, Alaska pursuant to a mineral lease with the Native Village of Tetlin, governed by the Tetlin Tribal Council (the “Tetlin Lease”). The Tetlin Lease covers mineral rights to an estimated 675,000 acres of land in the Tintina Gold Belt. All work conducted by the Company during that period was directed to support exploration of these lands to increase our understanding of the characteristics of, and potential economics of, any mineralization discovered. In addition to the Tetlin Lease, the Peak Gold JV also held additional acres of State of Alaska mining claims peripheral to the Tetlin Lease. The Company's interest in the Peak Gold JV is held by its wholly-owned subsidiary, CORE Alaska, LLC.
 
1

In connection with the Kinross Transactions in 2020 (discussed below), the Lucky Shot Transaction in 2021 (discussed below), and through other activities during and after that time, the Company has acquired to date, through its wholly-owned subsidiaries Contango Minerals and AGT, the rights to approximately 224,400 acres of mining claims for exploration that combined make up the Contango Properties.
 
In April 2021, the Company obtained a Technical Report Summary for the Manh Choh Project prepared by John Sims, C.P.G., and Sims Resources LLC (collectively, “Sims”) as of December 31, 2020 (the “Technical Report”).  The Technical Report was prepared in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K (the “SEC Mining Modernization Rules”).  The Technical Report estimates mineral resources in the following amounts and categories on the Peak Gold JV Property as of December 31, 2020 (both on a 100% basis and a 30% basis attributed to the Company's ownership interest in the Peak Gold JV):

Summary of Mineral Resources as of December 31, 2020
(Peak Gold JV's 100% Ownership)
 
Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
(g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
473
6.4
97
16.7
254
6.6
101
Indicated
8,728
4.0
1,111
14.1
3,945
4.2
1,168
Total
Measured +
Indicated
9,201
4.1
1,208
14.2
4,199
4.3
1,267
               
Inferred
1,344
2.7
116
16.1
694
2.9
126

 
Summary of Mineral Resources as of December 31, 2020
(Contango's 30% Attributable Ownership)
 
Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
(g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
142
6.4
29
16.7
76
6.6
30
Indicated
2,618
4.0
333
14.1
1,183
4.2
350
Total
Measured +
Indicated
2,760
4.1
362
14.2
1,260
4.3
380
               
Inferred
403
2.7
35
16.1
208
2.9
38
 
Notes:

1.
The definitions for Mineral Resources in the SEC Mining Modernization Rules were followed for Mineral Resources.
2.
The point of reference for the Mineral Resources is in situ.
3.
Mineral Resources are estimated at a cut-off value of US$28 NSR/t and US$30 NSR/t.
4.
Mineral Resources are estimated using a long-term gold price of US$1,400 per ounce Au, and US$20 per ounce Ag.
5.
Metallurgical recoveries were 90% Au and 52% Ag for the Main+West Zone and 94% Au and 60% Ag for the North Zone.
6.
Silver equivalents are reported using a ratio of 70 oz silver per 1 oz gold.
7.
Bulk density is 2.75 t/m3.
8.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
9.
Numbers may not add due to rounding.
 
2

The above tables are qualified in their entirety by the Technical Report, and should be read in conjunction with the Technical Report, as well as the warnings and disclaimers set forth in the section entitled “Notice Regarding Mineral Disclosure”.
 
The Company has not obtained a technical report on the Contango Properties, and therefore no disclosure is contained herein regarding mineral resources on the Contango Properties at this time. The Lucky Shot Property has historically produced minerals; however, the Company did not participate in those production operations, and has not verified historical production figures or future production viability, or obtained a technical report on those properties.
 
To date, no proven or probable mineral reserves have been established at the Peak Gold JV Property or any of the Contango Properties.
 

Recent Developments
 
Acquisition of Lucky Shot Property
 
On August 24, 2021 the Company completed the purchase of all outstanding membership interests (the “Interests”) of AGT from CRH Funding II PTE. LTD, a Singapore private limited corporation (“CRH”) (the “Lucky Shot Transaction”). AGT holds rights to the Lucky Shot Property.  The Company agreed to purchase the Interests for a total purchase price of up to $30 million. The purchase price includes an initial payment at closing of $5 million in cash and a promissory note in the original principal amount of $6.25 million, payable by the Company to CRH (the “Promissory Note”), with a maturity date of February 28, 2022 (the “Maturity Date”).  The Promissory Note is secured by the Interests.  If the Company completes the offering contemplated by this prospectus and obtains a listing of its shares on the NYSE American prior to the Maturity Date, the Company will pay the Promissory Note through the issuance to CRH of shares of the Company's common stock.  The common stock will be valued at the per share price in this offering, if available, or (y) the per share price representing a 10% discount to the 30-day volume-weighted average share price as of the Maturity Date. If the public offering is not completed or the Company's common stock is not listed on the NYSE American on or before the Maturity Date, the Company will pay the Promissory Note in cash.
 
In addition to the cash at closing and the Promissory Note, the Company will be obligated to pay CRH additional consideration if production on the Lucky Shot Property meets two separate milestone payment thresholds.  If the first threshold of (1) an aggregate “mineral resource” equal to 500,000 ounces of gold or (2) production and receipt by the Company of an aggregate of 30,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $3.75 million in newly issued shares of CORE common stock.  If the second threshold of (1) an aggregate “mineral resource” equal to 1,000,000 ounces of gold or (2) production and receipt by the Company of an aggregate of 60,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $5 million in newly issued shares of CORE common stock. If payable, the additional share consideration will be issued based on the 30-day volume weighted average price for each of the thirty trading days immediately prior to the satisfaction of the relevant production goal.
 
The Company also agreed to make $10,000,000 in expenditures during the 36-month period following closing toward the existence, location, quantity, quality or commercial value of mineral deposits in, under and upon the Lucky Shot Property.
 
Willow Claims
 
In the third fiscal quarter of 2021, the Company determined that there was available acreage on lands owned by the State of Alaska to the north and east of the existing patented and State of Alaska mining claims that make up the Lucky Shot Property, and expanded its claims block by the acquisition of an additional 72 State of Alaska mining claims covering approximately 9,200 acres.
 
3

Hiring of Mine Manager
 
On August 16, 2021, the Company hired Chris Kennedy, who has prior experience in underground mine operations management, to serve as the Company's Mine General Manager. In his role, Mr. Kennedy will manage the Company's underground exploration and development program on the Lucky Shot Property.

Amendment No. 1 to Rights Agreement
 
On September 21, 2021, the Board of Directors of the Company approved an amendment to the Company’s Rights Agreement dated as of September 23, 2020, between the Company and Computershare Trust Company, N.A., as Rights Agent (as amended, the “Rights Plan”), extending the Rights Plan by an additional year to September 22, 2022.
 

Corporate Information
 
Contango ORE, Inc. was formed on September 1, 2010 as a Delaware corporation for the purpose of engaging in the exploration in the State of Alaska for gold ore and associated minerals.
 
On January 8, 2015, the Company's wholly owned subsidiary, CORE Alaska, LLC (“CORE Alaska”), and a subsidiary of Royal Gold, Inc. (“Royal Gold”) formed Peak Gold, LLC (the “Peak Gold JV”). On September 30, 2020, CORE Alaska sold a 30.0% membership interest (the “CORE JV Interest”) in the Peak Gold JV to KG Mining (Alaska), Inc. (“KG Mining”), an indirect wholly-owned subsidiary of Kinross Gold Corporation (“Kinross”).  The sale is referred to as the “CORE Transactions”.
 
Concurrently with the CORE Transactions, KG Mining, in a separate transaction, acquired 100% of the equity of Royal Alaska, LLC from Royal Gold, which held Royal Gold's 40.0% membership interest in the Peak Gold JV (the “Royal Gold Transactions” and, together with the CORE Transactions, the “Kinross Transactions”). After the consummation of the Kinross Transactions, CORE Alaska retained a 30.0% membership interest in the Peak Gold JV. KG Mining now holds a 70.0% membership interest in the Peak Gold JV and Kinross serves as the manager and operator of the Peak Gold JV.
 
Our principal executive offices are located at 3700 Buffalo Speedway, Suite 925, Houston, Texas 77098. Our telephone number is (713) 877-1311 and our website address is www.contangoore.com. Information contained on our website does not constitute a part of this prospectus.

4

RISK FACTORS
 
An investment in our securities involves a significant degree of risk. Before you invest in our securities, you should carefully consider the risk factors included in, or incorporated by reference into, this prospectus, as updated by our subsequent filings under the Exchange Act, and those risk factors that may be included in any applicable prospectus supplement, together with all of the other information included in this prospectus, any prospectus supplement and the documents we incorporate by reference, in evaluating an investment in our securities.  Any of these risks and uncertainties could have a material adverse effect on our business, financial condition, cash flows and results of operations. If that occurs, the trading price of our securities could decline materially and you could lose all or part of your investment. The risks described in the Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. Past financial and operational performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. Please also read carefully the section above entitled “Cautionary Statement Regarding Forward-Looking Statements”.
 
Risks Related to our Industry
 
Exploration activities involve a high degree of risk, and exploratory drilling activities may not be successful.
 
The Company’s future success will largely depend on the success of the exploration drilling programs on the Contango Properties and the Peak Gold JV Property. Participation in exploration drilling activities involves numerous risks, including the significant risk that no commercially marketable minerals will be discovered. The mining of minerals and the manufacture of mineral products involves numerous hazards, including:

●
Ground or slope failures;
●
Pressure or irregularities in formations affecting ore or wall rock characteristics;
●
Equipment failures or accidents;
●
Adverse weather conditions;
●
Compliance with governmental requirements and laws, present and future;
●
Shortages or delays in the availability and delivery of equipment; and
●
Lack of adequate infrastructure, including access to roads, electricity and available housing.
 
Poor results from the Company’s or the Peak Gold JV’s drilling activities would materially and adversely affect the Company’s future cash flows and results of operations.
 
Underground mining operations are subject to unique risks.
 
While we are not currently conducting mining operations at the Lucky Shot Property, if we begin mining operations on the Lucky Shot Property in the future, such operations will involve underground mining activities. The exploration for minerals, mine construction and mining operations in an underground mine involve a high level of risk and are often affected by hazards outside of our control. Some of these risks include, but are not limited to, underground fires or floods, fall-of-ground accidents, seismic activity and unexpected geological formations or conditions including noxious fumes or gases. The occurrence of one or more of these events in connection with our exploration, mine construction, or production activities may result in the death of, or personal injury to, our employees, other personnel or third parties, the loss of mining equipment, damage to or destruction of mineral properties or production facilities, monetary losses, deferral or unanticipated fluctuations in production, environmental damage and potential legal liabilities, all of which may adversely affect our reputation, business, prospects, results of operations and financial condition.
 
5

The Contango Properties and the Peak Gold JV Property are located in the remote regions of Alaska and exploration activities may be limited by weather and limited access and existing infrastructure.
 
The Company and the Peak Gold JV are currently focused on the exploration of properties in the State of Alaska. The arctic climate limits many exploration and mining activities during certain seasons. In addition, the remote location of the properties may limit access and increase exploration expense. Higher costs associated with exploration activities and limitation on the annual periods in which the Company and the Peak Gold JV can carry on exploration activities might increase the costs and time associated with our planned exploration activities and could negatively affect the value of the Contango Properties, the Peak Gold JV Property and the Company’s securities.
 
The probability that an individual prospect will contain commercial grade reserves is extremely remote.
 
The probability of finding economic mineral reserves on the Contango Properties or the Peak Gold JV Property is extremely small. It is common to spend millions of dollars on an exploration prospect and complete many phases of exploration and still not obtain mineral reserves that can be economically exploited. Therefore, the possibility that the Contango Properties or the Peak Gold JV Property will contain commercial mineral reserves and that the Company will recover funds spent on exploration is extremely remote.
 
Competition in the mineral exploration industry is intense, and the Company is smaller and has a much more limited operating history than most of its competitors.
 
The Company will compete with a broad range of mining companies with far greater resources in their exploration activities. Several mining companies concentrate drilling efforts on one type of mineral and thus may enjoy economies of scale and other efficiencies. However, the Company’s and the Peak Gold JV's drilling strategies currently include exploring for gold ore as well as associated minerals. As a result, the Company may not be able to compete effectively with such companies.
 
Most competitors have substantially greater financial resources than the Company. These competitors may be able to evaluate, bid for and purchase a greater number of properties and prospects than the Company can. In addition, most competitors have been operating for a much longer time than the Company has and have substantially larger staffs. Processing of gold and associated minerals requires complex and sophisticated processing technologies. The Company has no experience in the minerals processing industry.
 
Because of the Company’s limited operating history, the Company has limited insight into trends that may emerge and affect its business. The Company may make errors in predicting and reacting to relevant business trends and will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies.
 
The mining industry is historically a cyclical industry and market fluctuations in the prices of minerals beyond the Company's and the Peak Gold JV's control could adversely affect the Company’s and Peak Gold JV’s business.
 
Prices for minerals tend to fluctuate significantly in response to factors beyond the Company’s control. These factors include:

●
U.S. and global economic conditions;
●
Domestic and foreign tax policy;
●
The price of gold;
●
The cost of exploring for, producing and processing gold;
●
Available transportation capacity; and
●
The overall supply and demand for gold.
 
Changes in gold prices would directly affect revenues and may reduce the amount of funds available to reinvest in exploration activities. Reductions in gold prices not only reduce revenues and profits, but could also reduce the quantities of resources that are commercially recoverable. Declining metal prices may also impact the operations of the Peak Gold JV by requiring a reassessment of the commercial feasibility of any of its mining work.
 
Because the Company’s and Peak Gold JV’s sole source of revenue will be the sale of gold and associated minerals, if their exploration efforts are successful, changes in demand for, and the market price of, gold and associated minerals could significantly affect the Company’s and the Peak Gold JV’s profitability. The value and price of the Company’s common stock may therefore be significantly affected by declines in the prices of gold minerals and products.
 
6

Gold prices fluctuate widely and are affected by numerous factors beyond the Company’s control such as interest rates, exchange rates, inflation or deflation, fluctuation in the relative value of the United States dollar against foreign currencies on the world market, global and regional supply and demand for gold, and the political and economic conditions of gold producing countries throughout the world. The Company and the Peak Gold JV do not have any programs to hedge against fluctuating commodity prices, and as such are highly exposed to those fluctuations.
 
An increase in the global supply of gold and associated minerals may adversely affect the Company’s and the Peak Gold JV’s business.
 
The pricing and demand for gold and associated minerals is affected by a number of factors beyond the Company’s or the Peak Gold JV's control, including global economic conditions and the global supply and demand for gold and associated minerals and products. Increases in the amount of gold and associated minerals sold by competitors of the Company and the Peak Gold JV may result in price reductions and/or reduced margins, and the Company and the Peak Gold JV may not be able to compete effectively against current and future competitors.
 
Concentrating capital investment in the State of Alaska increases exposure to risk.
 
The Company and the Peak Gold JV have focused their capital investments in exploring for gold and associated mineral prospects on the Contango Properties and the Peak Gold JV Property in the State of Alaska. However, the exploration prospects in Alaska may not lead to any revenues, or the Company or the Peak Gold JV may not be able to drill for mineral deposits at anticipated costs due to financing, environmental and other regulatory or operating uncertainties. Because of this concentration in a limited geographic area, the success and profitability of our operations may be disproportionately exposed to regional factors relative to competitors that have more geographically dispersed operations.
 
The Company and the Peak Gold JV are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.
 
The Company’s and the Peak Gold JV’s exploratory mining operations are subject to numerous federal, tribal, state and local laws and regulations governing the operations, discharge, emission, or release of materials into the environment and the protection of the environment and human health and safety, including the Federal Clean Water Act (“CWA”), Clean Air Act (“CAA”), Endangered Species Act, Safe Drinking Water Act, Migratory Bird Treaty Act, National Environmental Policy Act, Resource Conservation and Recovery Act (“RCRA”), and  Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). Federal initiatives are often also administered and enforced through state agencies or tribal authorities operating under parallel state or tribal statutes and regulations. Failure to comply with such rules and regulations could result in substantial penalties or construction or operational delays or requirements to cease production and have an adverse effect on both the Company and the Peak Gold JV. These laws and regulations may, among other things:

●
Require that the Company and/or the Peak Gold JV obtain permits before commencing mining work and to comply with ongoing permit requirements;
●
Restrict the substances that can be released into the environment in connection with mining work and require remediation of substances that are released;
●
Impose obligations to reclaim land in order to minimize long term effects of land disturbance; and
●
Limit or prohibit mining work on protected areas.
 
Under these laws and regulations, the Company and/or the Peak Gold JV could be liable for personal injury and clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. The Company and the Peak Gold JV maintain limited insurance coverage for sudden and accidental environmental damages. Accordingly, the Company and the Peak Gold JV may be subject to liability, or it may be required to cease production from properties in the event of environmental damages. Compliance with environmental laws and regulations and future changes in these laws and regulations may require significant capital outlays, cause material changes or delays in the Company’s and the Peak Gold JV’s current and planned operations and future activities and reduce the profitability of operations. It is possible that future changes in these laws or regulations could increase operating costs or require capital expenditures in order to remain in compliance. Any such changes could have an adverse effect on the Company’s and the Peak Gold JV’s business, financial condition and results of operations.
 
7

The Company and the Peak Gold JV are subject to the Federal Mine Safety and Health Act of 1977 and regulations promulgated thereto, which impose stringent health and safety standards on numerous aspects of their operations.
 
The Company’s and the Peak Gold JV’s exploration and mining work in Alaska is subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating procedures, operating equipment and other matters, and the costs associated with compliance with such laws and regulations can be substantial. The Company’s and the Peak Gold JV’s failure to comply with these standards could have a material adverse effect on their business, financial condition or otherwise impose significant restrictions on their ability to conduct mining work.
 
The Company or the Peak Gold JV may be unable to obtain, maintain or renew permits necessary for the exploration, development or operation of any mining activities, which could have a material adverse effect on its business, financial condition or results of operation.
 
The Company and the Peak Gold JV must obtain a number of permits that impose strict conditions, requirements and obligations relating to various environmental and health and safety matters in connection with their current and future operations. To obtain certain permits, the Company and the Peak Gold JV may be required to conduct environmental studies, collect and present data to governmental authorities and the general public pertaining to the potential impact of its current and future operations upon the environment and take steps to avoid or mitigate the impact. The permitting rules are complex and have tended to become more stringent over time. Accordingly, permits required for mining work may not be issued, maintained or renewed in a timely fashion or at all, or may be conditioned upon restrictions which may impede its ability to operate efficiently.  Furthermore, the issuance or renewal of permits can be opposed by adverse persons before governmental authorities, resulting in significant delays and possibly denial of the permits. The failure to obtain certain permits or the adoption of more stringent permitting requirements could have a material adverse effect on its business, its plans of operation, and properties in that the Company or the Peak Gold JV may not be able to proceed with their exploration, development or mining programs.
 
Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on our business.
 
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us and the Peak Gold JV, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our or the Peak Gold JV's financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our and the Peak Gold JV's operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations and the operations of the Peak Gold JV.
 
8

Opposition to our operations and those of the Peak Gold JV from local stakeholders or non-governmental organizations could have a material adverse effect on us.
 
There is an increasing level of public concern relating to the effect of mining production on its surroundings, communities, and environment. Local communities and non-governmental organizations (“NGOs”), some of which oppose resource development, are often vocal critics of the mining industry. While we and the Peak Gold JV seek to operate in a socially responsible manner, opposition to extractive industries or our operations specifically or adverse publicity generated by local communities or NGOs related to extractive industries, or our operations specifically, could have an adverse effect on our reputation and financial condition or our relationships with the communities in which we operate. As a result of such opposition or adverse publicity, we or the Peak Gold JV may be unable to obtain permits necessary for our operations or to continue operations as planned or at all.
 
We face risks related to health epidemics and other outbreaks, including the recent spread of COVID-19 novel coronavirus, or fear of such an event.
 
Our business could be adversely affected by a widespread outbreak of contagious disease, including the outbreak of the 2019 novel strain of coronavirus, causing a contagious respiratory disease known as COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020. Through June 30, 2021, the spread of this virus and government responses have caused business disruption and are adversely affecting many industries. The spread of COVID-19 has also caused significant volatility in U.S. and international debt and equity markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. economy and consumer confidence. If a significant portion of our workforce or the Peak Gold JV’s workforce becomes unable to work or travel to our operations or the Peak Gold JV’s operations, due to illness or state or federal government restrictions (including travel restrictions and “shelter-in-place” and similar orders restricting certain activities that may be issued or extended by authorities), we or the Peak Gold JV may be forced to reduce or suspend operations at one or more properties, which could reduce exploration activities and development projects and impact liquidity and financial results. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including, but not limited to, risks related to commodity prices and commodity markets, commodity price fluctuations, our ability to raise additional capital, information systems and cyber security and risks relating to operations, impacts of governmental regulations, availability of infrastructure and employees, and challenging global financial conditions.
 
The Company and the Peak Gold JV are monitoring the situation and taking reasonable steps to keep our business premises, properties, vendors and employees in a safe environment and are constantly monitoring the impact of COVID-19. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions taken to contain it or treat its impact. While we have not seen a significant impact to our results from COVID-19 to date, if the virus continues to cause significant negative impacts to economic conditions or impacts the Peak Gold JV’s ability to continue exploration work, our results of operations, financial condition and liquidity could be adversely impacted.
 
Our insurance will not cover all of the potential risks associated with mining operations.
 
Our business, and the business of the Peak Gold JV, is subject to a number of risks and hazards generally, including adverse environmental conditions, environmental or industrial accidents, labor disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena, such as inclement weather conditions, floods, hurricanes and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to our properties or the property of others, delays in construction or mining, monetary losses, and possible legal liability.
 
Although we and the Peak Gold JV maintain insurance to protect against certain risks in such amounts as we or the Peak Gold JV, as applicable, consider reasonable, such insurance will not cover all the potential risks associated with a mining company’s operations. We and the Peak Gold JV may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as loss of title to mineral property, environmental pollution, or other hazards as a result of exploration and production, is not generally available to us or to other companies in the mining industry on acceptable terms. We or the Peak Gold JV might also become subject to liability for pollution or other hazards which may not be insured against or which we may elect not to insure against because of premium costs or other reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect on our financial performance and results of operations.
 
9

Risks Related to our and the Peak Gold JV's Business
 
We may not be able to grow successfully through future acquisitions or successfully manage future growth.
 
We may actively pursue the acquisition of exploration, development and production assets consistent with our growth strategy. From time to time, we may also acquire securities of or other interests in companies with respect to which we may enter into acquisitions or other transactions. Acquisition transactions involve inherent risks, including but not limited to:

●
accurately assessing the value, strengths, weaknesses, contingent and other liabilities, and potential profitability of acquisition;
●
unanticipated costs;
●
diversion of management’s attention from existing business;
●
integrating the acquired business or property;
●
decline in the value of acquired properties or companies; and
●
unanticipated changes in business, industry or general economic conditions that affect the assumptions underlying the acquisition.
 
We may not be able to identify attractive acquisition opportunities or successfully acquire identified targets or successfully integrate assets or companies we acquire. Furthermore, competition for acquisition opportunities may escalate, increasing our cost of making acquisitions or causing us to refrain from making acquisitions. We may also be limited in our ability to generate capital or incur indebtedness in connection with or to fund future acquisitions.
 
Our inability to make acquisitions of properties or companies or to realize the anticipated benefits of any acquisition of properties or companies could have a material adverse effect on our financial condition.
 
Our business depends on the continued contributions made by Rick Van Nieuwenhuyse, as our key executive officer, the loss of who may result in a severe impediment to our business.
 
Our success is dependent upon the continued contributions made by our President and Chief Executive Officer, Rick Van Nieuwenhuyse. We rely on his extensive experience in the mining industry when we are developing new products and services. The Company has no “Key Man” insurance to cover the resulting losses in the event that any of our officers or directors should die or resign.
 
If Mr. Nieuwenhuyse cannot serve the Company or is no longer willing to do so, the Company may not be able to find alternatives in a timely manner or at all. This would likely result in a severe damage to our business operations and would have an adverse material impact on our financial position and operational results. To continue as a viable operation, the Company may have to recruit and train replacement personnel at a higher cost. Additionally, if Mr. Nieuwenhuyse joins our competitors or develops similar businesses that are in competition with the Company or the Peak Gold JV, our business may also be negatively impacted.
 
Our future success depends on our ability to attract and retain qualified long-term management, administrative, geology, and database management personnel. We have a great need for qualified talent, but we may not be successful in attracting, hiring, developing, and retaining the talent required for our success.
 
10

The Company is dependent upon information technology systems, which are subject to disruption, cyber-attacks, damage, failure and risks associated with implementation and integration.
 
The Company is dependent upon information technology systems in the conduct of its operations. Our information technology systems are subject to disruption, damage or failure from a variety of sources, including computer viruses, security breaches, cyber-attacks, natural disasters, extreme weather events and defects in design. Cybersecurity incidents, in particular, are evolving and include, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. The Company believes that it has implemented appropriate measures to mitigate potential risks. However, given the unpredictability of the timing, nature and scope of information technology disruptions, the Company could be subject to manipulation or improper use of its systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on its financial condition and results of operations. The Company faces increased cybersecurity risks due to the COVID-19 pandemic. For example, a portion of the Company’s workforce is working remotely to facilitate social distancing, and these employees may transmit data using unsecured internet connections despite training advising of those risks. In addition, our employees may experience increased phishing and malware attacks and socially engineered cyberattacks which, in some cases, attempt to use the circumstances of the COVID-19 pandemic to gain unauthorized access to the Company’s information technology systems.
 
The Company’s ability to successfully execute its business plan is dependent on its ability to obtain adequate financing.
 
The Company’s business plan, which includes drilling and developing the Contango Properties and funding its proportionate share of the Peak Gold JV’s exploration prospects, will require substantial capital expenditures. The Company’s ability to raise capital will depend on many factors, including the status of various capital and industry markets at the time it seeks such capital. Accordingly, the Company cannot be certain that financing will be available to us on acceptable terms, if at all. In the event additional capital resources are unavailable, the Company may be unable to fund expenditures to explore and develop the Contango Properties in which case the Contango Properties may never produce revenues, or may not produce sufficient revenues to become profitable which would have an adverse effect on the Company’s financial condition. Additionally, the Company may not be able to fund its proportionate share of the expenditures of the Peak Gold JV for exploration and development activities, which could force the Company to sell all or some portion of its interest in the Peak Gold JV in an untimely fashion or on less than favorable terms.
 
The Company has no revenue to date from the Contango Properties or from the Peak Gold JV, which may negatively impact the Company’s ability to achieve its business objectives.
 
To date, the Company and the Peak Gold JV have conducted only exploration activities and to date none of the properties have any proven or probable reserves as defined by the SEC Mining Modernization Rules. The Company’s ability to become profitable will be dependent on the receipt of revenues from the extraction of minerals greater than operational expenses. The Company, and after its formation, the Peak Gold JV, have carried on their business of exploring the Peak Gold JV Property at a loss since inception and the Company expects that the Peak Gold JV will continue to incur losses unless and until such time as one of the properties enters into commercial production and generates sufficient revenues to fund its continuing operations. Similarly, the Company expects to incur expenditures relating to the Contango Properties to drill on the Triple-Z target and continue its exploration efforts on its earlier stage Eagle/Hona projects, as well as the recently acquired Shamrock and Lucky Shot projects. The Company expects to be able to drill on the Triple-Z target once the State of Alaska has received conveyance from the federal government of these state-selected lands – a process that is on-going in Alaska. The amounts and timing of expenditures will depend on the progress of ongoing exploration, the results of consultants’ analysis and recommendations, the rate at which operating losses are incurred, and other factors, many of which are beyond the Company’s control. Whether any mineral deposits discovered would be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the deposit, market prices for the minerals, and governmental regulations. If the Company or the Peak Gold JV cannot discover commercially viable deposits or commence actual mining operations, the Company and the Peak Gold JV may never generate revenues and may never become profitable.
 
The Company’s continued viability depends on the exploration, permitting, development and operation of the Peak Gold JV Property and the Contango Properties.
 
The Peak Gold JV Property and the Contango Properties are all currently in the exploration stage. The Company’s continued viability is based upon the Peak Gold JV and the Company performing appropriate exploratory and engineering work, site assessments and evaluation, and the permitting and construction of mine and processing facilities in a reasonable time frame.
 
11

Neither the Contango Properties nor the Peak Gold JV Property has any proven or probable reserves and the Company and the Peak Gold JV may never identify any commercially exploitable mineralization.
 
Neither the Contango Properties nor the Peak Gold JV Property has any proven or probable reserves as defined by the SEC Mining Modernization Rules. To date, the Company and the Peak Gold JV have only engaged in exploration activities on such properties. Accordingly, the Company does not have sufficient information upon which to assess the ultimate success of their exploration efforts. There is no assurance that either the Company or the Peak Gold JV may ever locate any mineral reserves. Additionally, even if the Company or the Peak Gold JV finds minerals in sufficient quantities to warrant recovery, such recovery may not be economically profitable. Mineral exploration is highly speculative in nature, involves many risks and is frequently non-productive. Unusual or unexpected geologic formations and the inability to obtain suitable or adequate machinery, equipment or labor are risks involved in the conduct of exploration programs. If either the Company or the Peak Gold JV does not establish reserves, it might be required to curtail or suspend operations, in which case the market value of the Company’s common stock will decline, and you might lose all of your investment.
 
The Company relies on the accuracy of the estimates in reports provided to the Company by the Peak Gold JV’s Manager and outside consultants and engineers.
 
The Company has limited in-house mineral engineering capability, and therefore relies on the accuracy of reports provided to it by the Peak Gold JV’s manager and independent third-party consultants. If those reports prove to be inaccurate, the Company’s financial reports could have material misstatements. Further, the Company will use the reports of such independent consultants in its financial planning. If the reports prove to be inaccurate, we may also make misjudgments in our financial planning and forecasts.
 
The Company and the Peak Gold JV have no assurance of title to their properties.
 
The Company, through its wholly-owned subsidiaries, Contango Minerals and AGT, owns the mineral rights to approximately 224,400 acres of State of Alaska unpatented mining claims for gold ore exploration, and the Peak Gold JV holds approximately 13,000 acres of State of Alaska unpatented mining claims in addition to the Tetlin Lease (described below). Unpatented mining claims are unique property interests in that they are subject to the paramount title of the State of Alaska and the rights of third parties to the use of the surface within their boundaries, and are generally considered to be subject to greater title risk than other real property interests. The rights to deposits of minerals lying within the boundaries of the unpatented state claims are subject to Alaska Statues 38.05.185 - 38.05.280, and are governed by Alaska Administrative Code 11 AAC 86.100 - 86.600. The validity of all State of Alaska unpatented mining claims is dependent upon inherent uncertainties and conditions.
 
The Peak Gold JV leases approximately 675,000 acres for exploration and development pursuant to a mineral lease (the “Tetlin Lease”) with the Native Village of Tetlin whose governmental entity is the Tetlin Tribal Council (“Tetlin Tribal Council”). The Company retained title lawyers to conduct a preliminary examination of title to the mineral interest prior to executing the Tetlin Lease. The Peak Gold JV conducted a title examination prior to the assignment of the Tetlin Lease to the Peak Gold JV and performed certain curative title work. In addition, in connection with the assignment of the Tetlin Lease from the Company to the Peak Gold JV, the Company and the Native Village of Tetlin entered into an Estoppel and Agreement and a Stability Agreement, which were approved by the Tetlin Tribal Council and the Native Village of Tetlin members and renewed on September 29, 2020 in connection with the CORE Transactions described in “Summary – Corporate Information” (the “Tetlin Agreements”). The Tetlin Agreements approved the assignment of the Tetlin Lease to the Peak Gold JV and, among other things, confirmed the validity and effectiveness of the Tetlin Lease.
 
We cannot provide assurance that title to our properties will not be challenged. We or the Peak Gold JV, as applicable, may not have, or may not be able to obtain, all necessary surface rights to develop a property. Title insurance is generally not available for mineral properties and our and the Peak Gold JV's ability to ensure that we or the Peak Gold JV, as applicable, have obtained a secure claim to individual mining properties may be severely constrained. Our and the Peak Gold JV's mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. In addition, our ability to continue to explore and develop the property may be subject to agreements with other third parties including agreements with native corporations and first nations groups.
 
12

A deficiency in title or claims by a third party may not be curable. It does happen, from time to time, that the title to a property is defective, having been obtained in error from a person who is not the rightful owner of the mineral interest desired. In these circumstances, the Company or the Peak Gold JV, as applicable, might not be able to proceed with exploration of its properties or might incur costs to remedy a defect. This could result in our not being compensated for our prior expenditures relating to the property. It might also happen, from time to time, that the Company or the Peak Gold JV might elect to proceed with mining work despite any such deficiency or claim.
 
The Tetlin Lease was executed with a Native American tribe for the exploration of gold ore and associated minerals. The enforcement of contractual rights against Native American tribes with sovereign powers may be difficult.
 
Federally recognized Native American tribes are independent governments with sovereign powers, except as those powers may have been limited by treaty or the United States Congress. Such tribes maintain their own governmental systems and often their own judicial systems and have the right to tax, and to require licenses and to impose other forms of regulation (including regarding workers’ safety and the environment) and regulatory fees, on persons and businesses operating on their lands. As sovereign nations, federally recognized Native American tribes are generally subject only to federal regulation. States do not have the authority to regulate them, unless such authority has been specifically granted by Congress, and state laws generally do not directly apply to them and to activities taking place on their lands, unless they have a specific agreement or compact with the state or Federal government allowing for the application of state law. The Tetlin Lease provides that it will be governed by applicable federal law and the law of the State of Alaska. The Company and the Tetlin Tribal Council entered into a Stability Agreement, dated October 2, 2014, that was assigned by the Company to the Peak Gold JV and reaffirmed on September 29, 2020 in connection with the CORE Transactions described in “Summary – Corporate Information”. However, no assurance may be given that the choice of law clause in the Tetlin Lease or the agreements with the Tetlin Tribal Council in the Stability Agreement will be enforceable.
 
Federally recognized Native American tribes also generally enjoy sovereign immunity from lawsuit similar to that of the states and the United States federal government. In order to sue a Native American tribe (or an agency or instrumentality of a Native American tribe), the Native American tribe must have effectively waived its sovereign immunity with respect to the matter in dispute. Moreover, even if a Native American tribe effectively waives its sovereign immunity, there exists an issue as to the forum in which a lawsuit can be brought against the tribe. Federal courts are courts of limited jurisdiction and generally do not have jurisdiction to hear civil cases relating to matters concerning Native American lands or the internal affairs of Native American governments. Federal courts may have jurisdiction if a federal question is raised by the lawsuit, which is unlikely in a typical contract dispute. Diversity of citizenship, another common basis for federal court jurisdiction, is not generally present in a suit against a tribe because a Native American tribe is not considered a citizen of any state. Accordingly, in most commercial disputes with tribes, the jurisdiction of the federal courts, may be difficult or impossible to obtain. The Tetlin Lease contains a provision in which the Tetlin Tribal Council expressly waives its sovereign immunity to the limited extent necessary to permit judicial review in the courts in Alaska of certain issues affecting the Tetlin Lease, and the Stability Agreement contains, among other things, agreement that any disputes under the Tetlin Lease will be submitted to the jurisdiction of the federal and state courts.
 
Risks Related to our interest in the Peak Gold JV
 
The Company is dependent up on a third party manager of the Peak Gold JV who has discretion regarding its operation and the use and allocation of funds for further exploration of the Peak Gold JV Property.
 
Kinross is the manager of the Peak Gold JV and has appointed two of the three designates to the Management Committee of the Peak Gold JV (the “Management Committee”). The Company has appointed one designate to the Management Committee. Kinross has a 70.0% membership interest in the Peak Gold JV, in accordance with the Amended and Restated Limited Liability Company Agreement of the Peak Gold JV (the “Peak Gold JV LLCA”), and, therefore, will continue to have the right to appoint two designates to the Management Committee with the Company appointing one designate. The affirmative vote of a majority of designates will determine most decisions of the Management Committee, including the approval of programs and budgets and the expenditure of the Peak Gold JV’s investments, which will include the level of expenditures. As a result, Kinross has discretion regarding the use and allocation of funds for further exploration of the Peak Gold JV Property. The Company has limited ability to influence the decision of Kinross in its capacity as manager, or as the party controlling the majority of the Management Committee.
 
13

There can be no assurance that the Company will be capable of raising additional funding required to continue development of the Peak Gold JV Property and meet its funding obligations under the Peak Gold JV LLCA.
 
Pursuant to the terms of the Peak Gold JV LLCA, the Company and Kinross, through their respective wholly-owned subsidiaries, are required to jointly fund the operations of the Peak Gold JV in proportion to their respective membership interests in that company. If a member elects not to contribute to an approved program and budget or contributes less than its proportionate membership interest, its percentage membership interest will be reduced. The Company’s ability to contribute funds sufficient to retain its membership interests in the Peak Gold JV may be limited. To date, neither the Company nor the Peak Gold JV has generated any revenue from mineral sales or operations. In the future, the Peak Gold JV may generate revenue from a combination of mineral sales and other payments resulting from any commercially recoverable minerals from the Peak Gold JV Property. The Peak Gold JV currently does not have any recurring source of revenue, and its only source of cash inflows are contributions received from Kinross and the Company. The Company currently does not have any recurring source of revenue. As a result, the Company’s ability to contribute funds to the Peak Gold JV and retain its membership interest will depend on its ability to raise capital. The ability of the Company to arrange financing in the future will depend, in part, on the prevailing capital market conditions and the exploration results achieved at the Peak Gold JV Property, as well as the market price of metals. The Company cannot be certain that financing will be available to the Company on acceptable terms, if at all. If the Company were unable to fund its contributions to the approved programs and budgets for the Peak Gold JV, its membership interest in the Peak Gold JV would be diluted.
 
Further financing by the Company may include issuances of equity, instruments convertible into equity (such as warrants) or various forms of debt. The Company has issued common stock and other instruments convertible into equity in the past and cannot predict the size or price of any future issuances of common stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of the Company’s securities. Any additional issuances of common stock or securities convertible into, or exercisable or exchangeable for, common stock may ultimately result in dilution to the holders of common stock, dilution in any future earnings per share of the Company and may have a material adverse effect upon the market price of the common stock of the Company.
 
There can be no assurance that Kinross will fund the Peak Gold JV to continue exploration work.
 
Pursuant to the Peak Gold JV LLCA, there is no requirement that Kinross contribute any future amounts to the Peak Gold JV to continue exploration work, and the Company will have limited funds to continue exploration of the Peak Gold JV Property, if Kinross fails to contribute additional amounts to the Peak Gold JV.
 
The Company’s interest in the Peak Gold JV may be reduced.
 
Pursuant to the terms of the Peak Gold JV LLCA, the Company and Kinross, through their respective wholly-owned subsidiaries, are required to jointly fund the joint venture operations in proportion to their membership interests in the Peak Gold JV. If a member elects not to contribute to an approved program and budget or contributes less than its proportionate membership interest, its percentage membership interest will be reduced. Going forward, the Company’s ability to contribute funds sufficient to maintain the current level of its membership interests in the Peak Gold JV may be limited. On December 10, 2020, the Management Committee approved a total budget of $18.0 million for the calendar year 2021 to undertake in-fill drilling, engineering and environmental studies necessary to complete a feasibility-level study, additional exploration, community relations, and to prepare the project for formal permitting. On June 22, 2021, the Management Committee voted to increase the exploration budget by $0.2 million for interpretation of archive drilling, adopting oriented core and geological consulting. The Company would need to fund its share of the budget, approximately $5.5 million, to maintain its current level of interest in the Peak Gold JV. If the Company elects not to, or is unable to contribute its proportionate share of the approved exploration budget, its interest in the Peak Gold JV will be reduced.
 
Kinross has far greater financial resources than the Company.
 
Kinross is a large gold producer with a diverse global portfolio and extensive operating experience in Alaska, with a market capitalization of approximately $7.9 billion as of October 20, 2021. Because of its vastly superior financial resources, Kinross may adopt budgets and work programs for the Peak Gold JV that the Company will be unable to fund in the time frame required, and its interest in the Peak Gold JV may be substantially diluted.
 
14

The Peak Gold JV LLCA restricts the Company’s right to transfer or encumber its interests in the Peak Gold JV.
 
The Peak Gold JV LLCA contains certain limitations on transferring or encumbering interests in the Peak Gold JV including any transfer that would cause termination of the Peak Gold JV as a partnership for Federal income tax purposes except none of the restrictions limit the transfer of any capital stock of the Company.
 
The appointment of Kinross as manager of the Peak Gold JV does not provide assurance that further exploration efforts will be successful.
 
The appointment of Kinross as manager of the Peak Gold JV does not provide assurance that further exploration of the Peak Gold JV Property will be successful, any additional resource will be discovered or a commercial deposit of gold ore and associated minerals will be located. The results of any further exploration work will be assayed and analyzed to determine if additional work should be performed and additional funds expended.
 
If we are deemed to be an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) as a result of our ownership of membership interests in the Peak Gold JV, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
 
The Investment Company Act contains substantive legal requirements that regulate the manner in which “investment companies” are permitted to conduct their business activities. Although following the Kinross Transactions our ownership of membership interests in the Peak Gold JV may constitute investments in a non-controlled entity, we believe that we have conducted our business in a manner that does not result in being characterized as an “investment company” under the Investment Company Act.
 
While we intend to conduct our operations such that we will not be deemed an investment company, such a determination would require us to initiate burdensome compliance requirements and comply with restrictions imposed by the Investment Company Act that would limit our activities, including limitations on our capital structure and our ability to transact with affiliates, which would have an adverse effect on our financial condition. To avoid such a determination, we may be required to conduct our business in a manner that does not subject us to the requirements of the Investment Company Act, which could have an adverse effect on our business. For example, we may be required to sell certain of our assets and pay significant taxes upon the sale or transfer of such assets.
 

15

USE OF PROCEEDS
 
Unless otherwise indicated in the applicable prospectus supplement, we intend to use the net proceeds (after the payment of any offering expenses and/or underwriting discounts and commissions) from the sale of the securities offered by this prospectus and any prospectus supplement for our general corporate purposes, which may include, among other things:

●
exploration for possible mineral reserves and resources at the Contango Properties;
●
funding working capital requirements;
●
capital expenditures;
●
repayment or refinancing of indebtedness;
●
strategic acquisitions;
●
general corporate purposes; and
●
repurchases and redemptions of securities.
 
Pending the application of such proceeds, we may invest the proceeds in short-term marketable securities or money market obligations.
 
Any specific allocation of the net proceeds of an offering of securities to a specific purpose will be determined at the time of the offering and will be described in a prospectus supplement relating to such offering. The precise amount and timing of the application of these proceeds will depend upon, among other factors, our funding requirements and the availability and cost of other funds.
 
We will not receive any proceeds from the sale by the selling stockholder of our common stock. We may be required to pay certain offering fees and expenses in connection with the registration of the selling stockholder’s securities and to indemnify the selling stockholder against certain liabilities.
 

16

OUR PROPERTIES
 
Overview
 
On January 8, 2015, the Company and a subsidiary of Royal Gold, Inc. (“Royal Gold”) formed Peak Gold, LLC (the “Peak Gold JV”), and the Company contributed its leasehold interest in a mineral lease with the Native Village of Tetlin whose governmental entity is the Tetlin Tribal Council (“Tetlin Tribal Council”) for the exploration of minerals near Tok, Alaska on a currently estimated 675,000 acres (the “Tetlin Lease”) to the Peak Gold JV.  In addition to the Tetlin Lease, the Peak Gold JV also holds approximately 13,000 additional acres of State of Alaska mining claims for the exploration of gold and associated minerals (together with the Tetlin Lease, the “Peak Gold JV Property”). As of June 30, 2021, the Company held a 30.0% membership interest, and KG Mining held a 70.0% membership interest, in the Peak Gold JV.
 
The Company also separately owns the mineral rights to approximately 224,400 acres of State of Alaska and patented mining claims for exploration through its wholly-owned subsidiaries AGT (consisting of the Lucky Shot Property) and Contango Minerals (consisting of the Eagle/Hona, Triple Z, and Tok prospects and additional state mining claims in the Willow Mining District) and, and has begun allocating more annual resources to exploration of those properties and other new opportunities.
 
The Company believes that it and the Peak Gold JV hold good title to their respective properties, in accordance with standards generally accepted in the mineral industry. Before the Company or the Peak Gold JV begins any mine development work, however, the Company or the Peak Gold JV, as applicable, expects to conduct a full title review and perform curative work on any defects that it deems significant. A significant amount of additional work is likely required in the exploration of the Peak Gold JV Property and the Contango Properties before any determination as to the economic feasibility of a mining venture can be made.
 
Property Summary
 
The following table outlines the land ownership of the three legal entities that own mineral rights in Alaska: the Company's 30% ownership of the Peak Gold JV (through CORE Alaska, LLC, the Company's wholly-owned subsidiary); AGT; and Contango Minerals; each as of October 22, 2021:
 

Property
 
Location
 
Commodities
 
Claims
 
Estimated Acres
 
Type
Peak Gold JV (30.0% Interest):
             
   Tetlin Lease
 
Eastern Interior
 
Gold, Copper, Silver
 
-
 
675,000
   
Lease
   Tetlin-Tok
 
Eastern Interior
 
Gold, Copper, Silver
 
129
 
10,400
   
State Mining Claims
   Eagle
 
Eastern Interior
 
Gold, Copper, Silver
 
30
 
2,600
   
State Mining Claims
           
159
 
688,000
     
AGT (Leased from Alaska Hard Rock Inc.) (100% Interest):
         
   Lucky Shot
 
South Central
 
Gold
 
58
 
7,900
   
State Mining Claims
   Lucky Shot
 
South Central
 
Gold
 
43
 
700
   
Patented Mining Claims
           
101
 
8,600
     
Contango Minerals (100% Interest):
             
   Eagle
 
Eastern Interior
 
Gold, Copper, Silver
 
396
 
64,800
   
State Mining Claims
   Triple Z
 
Eastern Interior
 
Gold, Copper, Silver
 
95
 
14,800
   
State Mining Claims
   Hona
 
Eastern Interior
 
Gold, Copper, Silver
 
482
 
74,300
   
State Mining Claims
   Shamrock
 
Eastern Interior
 
Gold, Copper, Silver
 
361
 
52,700
   
State Mining Claims
   Willow
 
South Central
 
Gold
 
72
 
9,200
   
State Mining Claims
           
1,406
 
215,800
     
       
TOTALS:
 
1,666
 
912,400
     

17

Below is a map showing the location of the Peak Gold JV Property and the Contango Properties, including the ownership percentage for the rights associated with each property held by the Peak Gold JV or the Company, as applicable, and the nature of each interest:



The Peak Gold JV Property and the Contango Properties are all currently in the exploration stage.  The Peak Gold JV Property and the Contango Properties are not currently producing, have not had mineral production during any of the three most recently completed fiscal years of the Company, and are not currently known to host proven or provable mineral reserves as defined by the SEC Mining Modernization Rules.
 
Acquisition of Exploration and Mining Rights
 
Exploration and mining rights in Alaska may be acquired in the following manners: public lands, private fee lands, unpatented Federal or State of Alaska mining claims, patented mining claims, and tribal lands. The primary sources for acquisition of these lands are the United States government, through the Bureau of Land Management and the United States Forest Service, the Alaskan state government, tribal governments, and individuals or entities who currently hold title to or lease government and private lands.
 
Tribal lands are those lands that are under control by sovereign Native American tribes. Areas that show promise for exploration and mining can be leased from or joint ventured with the tribe controlling the land, including land constituting the Tetlin Lease.
 
The State of Alaska government owns public lands. Mineral resource exploration, development and production are administered primarily by the State Department of Natural Resources. Ownership of the subsurface mineral estate, including alluvial and lode mineral rights, can be acquired by staking a 40-acre or 160-acre mining claim, which right is granted under Alaska Statute Sec. 38.05.185 to 38.05.275, as amended. The State of Alaska government continues to own the surface estate, subject to certain rights of ingress and egress owned by the claimant, even though the subsurface can be controlled by a claimant with a right to extract through claim staking. A mining claim is subject to annual assessment work requirements, the payment of annual rental fees and royalties due to the State of Alaska after commencement of commercial production. Both private fee-land and unpatented mining claims and related rights, including rights to use the surface, are subject to permitting requirements of federal, state, tribal and local governments.
 
Mine Types
 
Other than the former-producing mines located on the Lucky Shot Property (described below), which are not currently active, there are no existing mines on either the Peak Gold JV Property or any of the Contango Properties.  Because the Peak Gold JV Property and the Contango Properties are all currently in the exploration stage, the Company has not determined the type of mine that may be established in the future in connection with any possible mineral production.
 
18

Peak Gold JV Property
 
Location of and Access to the Peak Gold JV Property
 
The Peak Gold JV Property is located in the Tetlin Hills and Mentasta Mountains of eastern interior Alaska, 300 kilometers southeast of the city of Fairbanks and 20 kilometers southeast of Tok, Alaska. The Tetlin Lease covers an area measuring approximately 80 kilometers north-south by 60 kilometers east-west in eastern Interior Alaska. The project is located 15 kilometers from the Alaska Highway and 400 kilometers from the Fort Knox Milling Complex.
 
The Peak Gold JV Property is accessible via road connected to the Alaska Highway and via helicopter and via road. The 23-mile long Tetlin Village Road is an all-weather gravel road connecting the village with the town of Tok on the Alaska Highway. The majority of our Peak Gold JV Property is accessible only via helicopter, although many winter trails exist in the Tetlin Hills and Mentasta Mountains in the northern and southwestern parts of the properties, respectively. Winter trails link Tetlin Village to the village of Old Tetlin and continue south to the Tetlin River airstrip, a 1,500 foot long unmaintained gravel strip located in the Tetlin River Valley. Winter trails also provide access to the Tuck Creek valley from the village of Mentasta on the Tok Cutoff Highway.
 
Two seasonal dirt roads have been permitted and constructed to allow surface access to the Chief Danny gold-copper-silver prospect in the northern Tetlin Hills. Both of these roads begin along the Tetlin Village Road and extend to the Chief Danny project and access to both roads is controlled by gates at their junction with the Tetlin Village Road.
 
The paved Alaska Highway passes near the northern edge of the Peak Gold JV Property as does the southern terminus of the Taylor Highway where it joins the Alaska Highway at Tetlin Junction. The 23-mile long Tetlin Village Road provides year-round access to the northern Tetlin Hills, linking Tetlin Village to the Alaska Highway. Buried electrical and fiber-optic communications cables follow this road corridor and link Tetlin Village to the Tok power and communications grid. The Tok public electric facility is capable of generating up to 2 megawatts of power, and the nearest high capacity public electric facilities to the Peak Gold JV Property are in Delta Junction, 107 road miles northwest of the Peak Gold JV Property and Glennallen, 138 road miles southwest of the Peak Gold JV Property. The Company does not have any plant or equipment at the Peak Gold JV Property, and relies on contractors for the Peak Gold JV to perform work. The Company does not believe the Peak Gold JV Property was explored for minerals prior to exploration activities of the Company and the Peak Gold JV.
 
The map below depicts the Peak Gold JV Property and the State of Alaska mining claims owned by the Company:

 

Tetlin Lease
 
Juneau Exploration, L.P. (“JEX”) entered into the Tetlin Lease with the Tetlin Tribal Council, effective as of July 15, 2008. In November 2010, the Tetlin Lease was assigned to the Company and in January 2015, the Tetlin Lease was assigned to the Peak Gold JV. The Tetlin Lease’s current term extends to July 5, 2028, and for so long thereafter as the Peak Gold JV continues conducting exploration or mining operations on the Tetlin Lease.

19
 
The Peak Gold JV was required to spend $350,000 per year annually until July 15, 2018 in exploration costs pursuant to the Tetlin Lease. Exploration expenditures to date under the Tetlin Lease have satisfied this work commitment requirement for the full lease term, through 2028, because exploration funds spent in any year in excess of $350,000 are credited toward future years’ exploration cost requirements. The Tetlin Lease also provides that the Peak Gold JV will pay the Tetlin Tribal Council a production royalty ranging from 3.0% to 5.0% should the Peak Gold JV deliver to a purchaser on a commercial basis precious or non-precious metals derived from the properties under the Tetlin Lease. The Company had previously paid the Tetlin Tribal Council $225,000 in exchange for reducing the production royalty payable to them by 0.75%. These payments lowered the production royalty to a range of 2.25% to 4.25%. The Tetlin Tribal Council had the option to increase its production royalty by (i) 0.25% by payment to the Peak Gold JV of $150,000, (ii) 0.50% by payment to the Peak Gold JV of $300,000, or (iii) 0.75% by payment to the Peak Gold JV of $450,000. The Tetlin Tribal Council exercised the option to increase its production royalty by 0.75% by payment to the Peak Gold JV of $450,000 on December 30, 2020. In lieu of a cash payment, the $450,000 will be credited against future production royalty and advance minimum royalty payments due by the Peak Gold JV to the Tetlin Tribal Council under the lease once production begins.
 
Until such time as production royalties begin, the Peak Gold JV will pay the Tetlin Tribal Council an advance minimum royalty of approximately $75,000 per year, plus an inflation adjustment. Additionally, the Peak Gold JV will pay Royal Gold a production royalty of 3.0% should it deliver to a purchaser on a commercial basis gold or associated minerals derived from the Tetlin Lease.
 
Exploration Overview
 
To date, our exploration activity has been concentrated on the Peak Gold JV Property, with such activity undertaken by the Peak Gold JV.  The Peak Gold JV plans to mine ore from the Peak and North Peak deposits (the “Manh Choh Project”) on the Peak Gold JV Property, and then process ore at the existing Fort Knox milling complex located approximately 250 miles away, as further described below.
 
The Management Committee of the Peak Gold JV (the “Management Committee”) approved an exploration budget for calendar 2019 of $6.9 million, of which the Company’s share was approximately $4.1 million. The program was completed in October 2019 below the budgeted amount. The program included ground geophysics utilizing IP and soil samples within the greater Chief Danny area. A further program of reconnaissance work, drilling and airborne Versatile Time Domain Electromagnetics (“VTEM”) survey was completed that drill tested targets adjacent to the Main Peak deposit, on the Company's Hona claims and a target in the North Saddle area. The budget also included funding to initiate a program of surface and groundwater characterization to support future permitting efforts. The Company funded a total of $4.1 million to the Peak Gold JV during calendar year 2019, which related to both the 2019 and 2018 exploration programs.
 
During the last calendar quarter of 2020, after the consummation of the Kinross Transactions, the Management Committee approved a budget of approximately $5.7 million for drilling and testing, environmental work, engineering studies, and other items in connection with the Manh Choh Project. However, due to weather and COVID-19 related delays, the Peak Gold JV spent approximately $3.0 million during the last calendar quarter of 2020. The additional work that could not be completed in 2020 is included in the calendar 2021 budget.
 
On December 10, 2020, the Management Committee approved a total budget of $18.0 million for the calendar year 2021 to undertake in-fill drilling, engineering and environmental studies necessary to complete a feasibility-level study, additional exploration, community relations, and to prepare the Manh Choh Project for formal permitting. On June 22, 2021, the Management Committee voted to increase the exploration budget by $0.2 million for interpretation of archive drilling, adopting oriented core and geological consulting. The Company’s proportionate share of the approved budget is approximately $5.5 million. As of June 30, 2021, the Company had funded approximately $2.5 million to the Peak Gold JV during calendar year 2021.
 
20

From inception to June 30, 2021, the Peak Gold JV has incurred $59.9 million in exploration program expenditures. As of June 30, 2021, the Company has contributed approximately $14.3 million in cash to the Peak Gold JV. After the consummation of the Kinross Transactions, the Company holds a 30.0% membership interest in the Peak Gold JV, with Kinross, holding the other 70.0%. Kinross is a large gold producer with a diverse global portfolio and extensive operating experience in Alaska. In connection with the Manh Choh Project, Peak Gold JV plans to mine ore from the Peak and North Peak deposits and then transport the ore to the Kinross-owned Fort Knox operation located 250 highway miles from the Peak Gold JV Property where the ore will be processed at the existing Fort Knox mining and milling complex. The use of the Fort Knox mill is expected to accelerate the development of the Peak Gold JV Property and result in significantly reduced upfront capital development costs, smaller environmental footprint, a shorter permitting and development timeline and less overall execution risk for the Peak Gold JV Property.  However, the Peak Gold JV has not yet established known mineral reserves on the Peak Gold JV Property, and the proposed program remains exploratory in nature.
 
The exploration effort on the Tetlin Lease for the Manh Choh Project has resulted in identifying two prospective mineral deposits (Main Peak and North Peak) and several other gold and copper prospects following drilling programs starting in 2011. Surface, bedrock, and stream sediment data on the Tetlin Lease as well as on the Eagle, Hona and Tok state of Alaska claims adjacent to the Tetlin Lease have been gathered during the summer exploration programs. There was no exploration program in 2014 or 2020. None of the exploration targets are known to host quantifiable commercial mineral reserves and none are near or adjacent to other known significant gold or copper deposits. There has been no recorded past placer or lode mining on Peak Gold JV Property, and the Company and the Peak Gold JV are the only entities known to have conducted drilling operations on the Peak Gold JV Property.
 
The majority of the Peak Gold JV Property is hosted within the Yukon-Tanana Terrane (“YTT”), a regionally extensive package of metamorphic rocks. Rocks of the YTT on the Peak Gold JV Property consist primarily of more deformed, higher temperature metamorphic rocks on the northern third of the project and less deformed, lower temperature metamorphic rocks to the south. Country rocks on the Peak Gold JV Property are intruded by granitic rocks that have not been well mapped. Large-scale structural features within the Peak Gold JV Property are closely tied to movements along the Tintina-Kaltag and Denali-Farewell fault systems, two continental-scale faults between which are a series of district and prospect-scale northeast, northwest and east-west structures. Limited exposures in the northern half of the property make identification of these structures difficult. Prospect to hand-sample scale folding has been noted throughout the project area.
 
Although alpine glaciation has affected elevations above 4,500 feet on the southern edge of the Peak Gold JV Property, most of the Peak Gold JV Property escaped Pleistocene continental glaciation. However, due to its proximity to continental glaciers to the north and east, the Peak Gold JV Property was covered by a variable thickness of wind-blown silt ranging up to 10 meters thick. This extremely fine-grained, metal-barren silt effectively masks the geochemical signature of underlying bedrock containing gold-copper-silver mineralization. Following deposition of this silt layer, the Peak Gold JV Property was subject to an extensive period of surface weathering, which now extends 200-300 feet below surface.
 
From a regional perspective, the Peak Gold JV Property is located in the Tintina Gold Belt in rocks that are highly prospective for gold deposits as well as porphyry copper-molybdenum-gold deposits. These two genetically different types of mineralization overlap in eastern Interior Alaska and the western Yukon Territory and are host to dozens of known prospects, deposits and active mines. In addition, rocks on the southern edge of the Peak Gold JV Property are prospective for nickel-copper-platinum group element deposits. Prior to its discovery in 2009, the style of mineralization discovered on the Chief Danny prospect on the Peak Gold JV Property was unknown in Interior Alaska. Diamond drilling results from 2011 through 2018 have revealed the presence of a distinctive suite of elements and minerals at the Main Peak, North Peak and Discovery Zones that do not match the typical characteristics of gold deposits of the Tintina Gold Belt but do share several diagnostic characteristics of gold-copper-silver skarn deposits, possibly as part of a larger porphyry copper-molybdenum-gold system. “Skarn” is a term that refers to a distinctive class of mineral deposits formed where limestone-bearing rocks are intruded by hot, fluid-bearing granitic rocks. The Main Peak and North Peak Zones mineralization most closely resembles the gold-sulfide skarns mined at the Fortitude deposit in the Battle Mountain Mining District of central Nevada.
 
21

Exploration Activity and Targets
 
Chief Danny Prospect Area. The Chief Danny Prospect Area currently is the most advanced exploration target on the Tetlin Lease and is comprised of several distinct mineralized areas: the Main Peak Zone, Discovery Zone, West Peak Zone, North Peak Zone, Connector Zone, Saddle Zone and the 7 O’clock area. The Chief Danny prospect was discovered during rock, stream sediment and pan concentrate sampling in 2009 and since then has been explored using top of bedrock soil auger sampling, trenching, ground IP geophysics, airborne magnetic and resistivity surveys and core drilling. Results from this work indicate the presence of a zoned metal-bearing system consisting of a gold-copper-iron enriched core covering six square miles at Chief Danny South (includes Main Peak, Discovery, West Peak, and North Peak/Blue Moon) and a fault-offset arsenic-gold enriched zone to the north covering three square miles at the Saddle Zone. The Company has conducted extensive drilling on the Main Peak, North Peak, and Connector Zones. The Company has also conducted some environmental base line studies on the areas surrounding the Chief Danny prospect, as well as airborne magnetic and resistivity programs. From 2009 through July 30, 2021, the Company conducted field-related exploration work at the Chief Danny Prospect, including collecting the following samples:

Year
 
Program
 
Core
Samples
   
Rock
Samples
   
Soil
Samples
   
Pan Con
Samples
   
Stream Silt
Samples
   
Core (feet)
   
IP/Geophysics
(kilometers)
   
Trenching
(feet)
 
2009
 
Chief Danny
   
-
     
958
     
33
     
94
     
11
     
-
     
-
     
2,330
 
2010
 
Chief Danny
   
-
     
613
     
760
     
668
     
795
     
-
     
14
     
-
 
2011
 
Chief Danny
   
1,267
     
20
     
688
     
-
     
-
     
8,057
     
3,957
     
-
 
2012
 
Chief Danny
   
5,223
     
82
     
1,029
     
-
     
-
     
36,004
     
-
     
-
 
2013
 
Chief Danny
   
8,970
     
14
     
1,406
     
85
     
278
     
47,079
     
2,414
     
-
 
2014
 
Chief Danny
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
2015
 
Chief Danny
   
8,352
     
133
     
-
     
-
     
-
     
46,128
     
-
     
-
 
2016
 
Chief Danny
   
10,450
     
21
     
694
     
-
     
-
     
67,336
     
24
     
-
 
2017
 
Chief Danny
   
11,864
     
112
     
975
     
408
     
408
     
59,347
     
48
     
-
 
2018
 
Chief Danny
   
2,973
     
402
     
63
     
45
     
9
     
20,307
     
80
     
-
 
2019
 
Chief Danny
   
1,575
     
839
     
1,563
     
18
     
-
     
10,079
     
1,049
     
-
 
2020
 
Chief Danny
   
-
     
-
     
-
     
-
     
-
     
4,575
     
-
     
-
 
2021
 
Chief Danny
   
-
     
-
     
-
     
-
     
-
     
32,207
     
-
     
-
 
         
50,674
     
3,194
     
7,211
     
1,318
     
1,501
     
331,119
     
7,586
     
2,330
 

22
 
The map below depicts the location of the core holes drilled in the East Peak and North Saddle zones:


The images below includes the Manh Choh Project and surrounding targets:


23
 

The image below shows the approximate location of in-fill, geotechnical, hydrological and metallurgical drill holes during the $18 million 2021 Peak Gold JV program. The objective of the program is to advance the Manh Choh Project, including a feasibility study and permitting for the Peak and North Peak deposits.

 
2021 Drilling Program. Through June 30, 2021, the Peak Gold JV has spent approximately $9.2 million on drilling, environmental and permitting work, engineering studies, community relations, and other related work for the Manh Choh Project. The Peak Gold JV's 2021 drilling program began in late February 2021. Since drilling commenced, the Peak Gold JV has completed the geotechnical drilling that it began in the last quarter of 2020. The geotechnical information collected will be incorporated into the overall pit design and mine plan. The Peak Gold JV also completed 32,207 core feet of in-fill drilling, condemnation drilling, exploration, and drilling of a monitoring well.
 
2020 Drilling Program. During the quarter ended December 31, 2020, the Peak Gold JV spent approximately $3.0 million on drilling, metallurgical testing, environmental and permitting work, engineering studies, and other related work for the Manh Choh Project. The Peak Gold JV commenced drilling on November 22, 2020 and continued through December 19, 2020. The Peak Gold JV completed 10 core holes for metallurgical testing with a total drill length of approximately 2,800 feet. Three geotechnical holes were completed with total drill length of approximately 1,800 feet.

24
 
The map below shows the location of the 2020 and 2021 drilling programs:


Geochemical Analysis and Security
 
All samples from the Phase II and III 2017 program, Phase I 2018 program, and the 2019 program were prepared for assay by Bureau Veritas Minerals at their facilities in Fairbanks, Alaska and analyzed at their Vancouver, British Columbia and Reno, Nevada facilities. Analytical work consisted of gold by fire assay with atomic absorption finish plus multi-element inductively coupled plasma atomic emission spectrography (ICP-AES) analyses using 4-acid digestion. All samples collected in the Phase II and III 2017, Phase I 2018, and the 2019 program were cataloged in the field and shipped via ground transport directly to Bureau Veritas Minerals’ preparation facility in Fairbanks by an Avalon contractor. The Company believes the parties working on sampling of the Peak Gold JV Property followed industry accepted procedures for sample preparation, analysis and security.
 
All samples from the 2020 and 2021 programs were prepared and analyzed by ALS Minerals. Receipt and sample preparation was performed at their facilities in Fairbanks, Alaska, and Whitehorse, Yukon. A third-party expeditor was contracted to move the samples from Tok to the ALS Minerals sample preparation facilities, in Fairbanks, Alaska and Whitehorse, Yukon. Pulps samples were analyzed at both the Reno, Nevada, and Vancouver, British Columbia laboratories. Analytical work consisted of; gold by fire assay, with an atomic absorption (AA) finish, gold by fire assay with gravimetric finish, for all assays greater than 5 ppm Au, multi-element determination for 34 elements by 4-acid digest and inductively coupled plasma-atomic emission spectroscopy (ICP-AES). A subset of samples were selected for carbonate determination, by perchloric acid and coulometric titration. Samples were collected at the leased warehouse in Tok, Alaska.
 
Sampling, Analysis and Security
 
During 2019, Avalon inserted 88 blanks, 397 standards, 54 duplicates and 54 replicates into the flow of rock, soil, RC and drill core samples prior to shipment to the analytical labs. Blanks consisted of Browns Hill Quarry basalt. Twenty different commercial standards provided by Analytical Solutions and Rocklabs were used during 2019 (through August 23, 2019). Values in these standards ranged from 0.016 ppm to 6.66 ppm gold. The quality assurance/quality control procedure was completed on-site at the Avalon warehouse in Tok, Alaska.
 
During 2020 and 2021, prior to shipping, reverse circulation and drill core samples staff inserted blanks and standards at a rate of 5% and collected field duplicates at a rate of 3% of total sample volume. ALS Minerals collected and analyzed 0.5% of samples as crush duplicates and 2% of samples as pulp duplicates, per the sample preparation procedures. Blank material was sourced of Brown’s Hill Quarry Basalt. Certified reference material (CRM) for gold were sourced from OREAS, as prepackaged 60 g satchets. For the 23 different CRM materials used, the gold concentration, ranged from 0.016 ppm to 7.66 ppm Au. The quality assurance/quality control procedure was completed by Kinross staff.

25
 
Mineral Resources on the Peak Gold JV Property
 
In April 2021, the Company obtained a Technical Report Summary for the Manh Choh Project prepared by John Sims, C.P.G., and Sims Resources LLC (collectively, “Sims”) as of December 31, 2020 (the “Technical Report”).  The Technical Report was prepared in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K (the “SEC Mining Modernization Rules”).
 
The below tables from the Technical Report summarizes mineral resource estimates for the Manh Choh Project on the Peak Gold JV Property as of December 31, 2020 (on a 100% basis as held by the Peak Gold JV, and a 30% basis corresponding to the Company's ownership interest in the Peak Gold JV):


Summary of Mineral Resources as of December 31, 2020
(Peak Gold JV's 100% Ownership)
 
Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
(g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
473
6.4
97
16.7
254
6.6
101
Indicated
8,728
4.0
1,111
14.1
3,945
4.2
1,168
Total
Measured +
Indicated
9,201
4.1
1,208
14.2
4,199
4.3
1,267
               
Inferred
1,344
2.7
116
16.1
694
2.9
126

 
Summary of Mineral Resources as of December 31, 2020
(Contango's 30% Attributable Ownership)
 
Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
(g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
142
6.4
29
16.7
76
6.6
30
Indicated
2,618
4.0
333
14.1
1,183
4.2
350
Total
Measured +
Indicated
2,760
4.1
362
14.2
1,260
4.3
380
               
Inferred
403
2.7
35
16.1
208
2.9
38

Notes:

1.
The definitions for Mineral Resources in the SEC Mining Modernization Rules were followed for Mineral Resources.
2.
The point of reference for the Mineral Resources is in situ.
3.
Mineral Resources are estimated at a cut-off value of US$28 NSR/t and US$30 NSR/t.
4.
Mineral Resources are estimated using a long-term gold price of US$1,400 per ounce Au, and US$20 per ounce Ag.
5.
Metallurgical recoveries were 90% Au and 52% Ag for the Main+West Zone and 94% Au and 60% Ag for the North Zone.
6.
Silver equivalents are reported using a ratio of 70 oz silver per 1 oz gold.
7.
Bulk density is 2.75 t/m3.
8.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
9.
Numbers may not add due to rounding.

26
 
The above tables are qualified in their entirety by the Technical Report, and should be read in conjunction with the Technical Report, as well as the warnings and disclaimers set forth in the section entitled “Notice Regarding Mineral Disclosure”.
 
Community Affairs
 
In April 2015, the Peak Gold JV entered into a Community Support Agreement (as amended, the “Support Agreement”) with the Tetlin Village for a one-year period, which was extended for two additional two-year periods under the same terms. Under the extended Support Agreement, the Peak Gold JV provided payments to the Tetlin Village four times during the year for an aggregate amount of $110,000 through January 1, 2017, and an additional $100,000 each year through January 1, 2020. The Support Agreement has been extended for two additional one-year periods under the same terms. Under the latest extension, the Peak Gold JV will provide payments to the Tetlin Village four times during the year for an aggregate amount of $100,000 through January 1, 2022. The Support Agreement defines agreed uses for the funds and auditing rights regarding use of funds. In addition, the Peak Gold JV supports the Tetlin Village in maintenance of the village access road, which is used by the Peak Gold JV in furtherance of the Manh Choh Project.  
 
Lucky Shot Property
 
Location of and Access to the Lucky Shot Property
 
The Lucky Shot Property, acquired by the Company through its acquisition of Alaska Gold Torrent, LLC in August 2021, covers three former producing gold mines in the Willow Mining District located in the southern Talkeetna Mountains of south central Alaska and covering an area of approximately 175 square kilometers. The three former mines include the Coleman, Lucky Shot and War Baby mines, located along a continuous low angle structural zone occupied by a series high-grade quartz vein hosting free gold and minor sulfide and telluride mineralization.  The Lucky Shot project consists of a mine site located 180 road kilometers (112 road miles) north of Anchorage, Alaska, and a processing site located about 48 road kilometers (30 road miles) west of the mine site. There is established infrastructure providing access to the Lucky Shot Property, including road access between the mine site and plant site via unsealed secondary road, sealed 2-lane highway, and the 4-lane Parks Highway connecting Anchorage and Fairbanks.
 
Geology
 
The Willow Creek Mining District straddles the margin of a granodiorite batholith that forms the Talkeetna Mountains and is bounded on the south by the Castle Mountain fault system.  The Lucky Shot vein system was determined to be continuous from the War Baby to the Coleman across the project area – a distance of approximately 1.6 kms (1 mile), with two high-angle faults structures segmenting the vein into three blocks (i.e. the Coleman block, Lucky Shot block and War Baby block).  A third fault structure further east was determined to separate the War Baby block from drilling that intersected the vein structure in what is known as the Murphy block – extending the known vein structure another 600 meters (~2000’) further east. Between the Coleman and War Baby mines the vertical and lateral offset is a few meters up to tens of meters which allowed historic mining to continue across faults in a near-continuous manner. This similar magnitude of vertical and lateral displacement is defined as an oblique-slip fault and is typical of a transpressional structural environment.  District geologic mapping shows that the Castle Mountain fault is a major regional strike slip fault and that the Hatcher Pass Fault is a sympathetic fault that places a thick section of Cretaceous schists up against a rigid body made up of the late Cretaceous Willow Creek batholith.  The Company believes the contact environment between these two disparate lithologies is an ideal location for low angle, listric fault-controlled quartz vein hosted gold deposits, characteristic of the Willow district.
 
The three historic mines at the Coleman, Lucky Shot and War Baby properties are controlled by a continuous low angle, listric fault zone occupied by a series of quartz veins and sheared breccia zones from 1 meter wide up to several meters in width.  The veins are hosted by a granodiorite composition intrusive rock which is part of the Willow Creek batholith described above.  The quartz veins are central to a broader alteration zone that extends tens of meters adjacent to the veins and consists of sericite, chlorite, albite, leucoxene, and ankerite/siderite.  The quartz veins contain native gold, pyrite, arsenopyrite, tetrahedrite-tennantite, sphalerite, galena, and various telluride minerals (coloradoite and nayagite have been identified).
 
27

The mines located in the Lucky Shot Property have historically produced minerals prior to their shut down in 1942 due to the World War II effort, after which little happened on the property until the 1980s when Enserch Exploration conducted an exploration program which included soil sampling, drilling, and underground exploration.
 
A qualified person (as defined by the SEC Mining Modernization Rules) has not done sufficient work to classify any historical estimates for the Lucky Shot Property in connection with past mineralization operations as a current estimate of mineral resources, mineral reserves or exploration results.
 
CORE Exploration Plan
 
CORE plans to re-establish access to drill the down-dip extension of the Lucky Shot and Coleman mines.  The Company plans to either initiate construction of a road from the existing mine access road to the Lucky Shot tunnel entrance (a distance of approximately one quarter mile/400 meters) or extend the existing tunnel created during the Ensearch exploration program to access the same target area from underground.  Once access has been established, the Company plans to refurbish the old underground workings, where the granodiorite host rock generally needs little support.  The Company plans to then embark on a three-phase exploration plan.  Phase 1 is expected to include 600 meters (~2,000’) of new 3mx4m (10’x12’) drift parallel to the vein.  This will allow the Company to establish underground drill stations which can be used to conduct a detailed fan drilling program infilling mineralized vein that has already been identified by previous drilling by previous operators.  The Company estimates that 2,400 meters (~7,800’) of diamond drilling will be necessary to define qualified resources that meet Securities and Exchange Commission standards for disclosure.  The area targeted for drilling measures approximately 600 meters by 250 meters. In Phase 2, the Company anticipates a further extension of the Lucky Shot target area and a second cross-cut put in above the vein to continue to drill the vein further down dip.  In Phase 3, the Company envisions extending the Ensearch tunnel (located approximately 500’ (~150 meters) below the Lucky Shot adit level and then extending the Ensearch tunnel to both the Lucky Shot and Coleman areas to provide access for future mine development of the entire Coleman-Lucky Shot portion of the vein system.  These plans are preliminary in nature and subject to modification as the Company gathers additional information.
 
Contango Minerals Property
 
Compared to the exploration activities conducted to date on the Peak Gold JV Property, the Company, through its subsidiaries, has performed significantly less exploration work on the mining claims wholly owned by Contango Minerals, consisting of the Triple Z, Eagle/Hona, Shamrock, and Willow projects, all of which remain in the exploration stage. The Company plans to fund an approximately $3.0 million exploration program to explore for additional resources on the Triple Z and Eagle/Hona prospects in 2021, and field work on the Eagle/Hona and Shamrock prospects began in July 2021.
 
Triple Z Prospect
 
The Triple Z claims were originally staked in 2009 and the claim block expanded in 2011, and again in 2019, with the claim block now covering an area of approximately 14,800 acres immediately adjacent to the Alaska Highway to the south and west, and the Taylor Highway to the north and east. The area was identified as prospective for porphyry copper-gold-silver-molybdenum mineralization based on regional government sponsored stream sediment sampling. Surface rock (82 samples) and soil samples (115 samples) were collected in 2009. Follow up auger soil sampling completed between 2009 and 2011 identified a large-scale copper-gold-silver-molybdenum anomaly centered along a low-profile ridge with little to no outcrop. An airborne magnetic and resistivity survey conducted over the area in 2011 showed a coincident magnetic low and resistivity high (classic porphyry signatures) over the geochemically anomalous area. A follow up Induced Polarization (“IP”) survey conducted in 2019 across four orthogonal lines and outlined multiple IP anomalies broadly coincident with the soil and mag/resistivity anomalies. Drilling was completed in 2012 (before the IP survey) with six core holes drilled to depths ranging from 230 meters (755 feet) to 380 meters (1246 feet). Holes 1202 and 1204 encountered several zones of anomalous copper, gold and silver.
 
28

The Company has exploration targets that have not yet been drilled because the Company is waiting for a land transfer to be completed between the Bureau of Land Management and the State of Alaska. The Company has been working with the State and Federal agencies to prioritize this transfer because of the highly prospective drill-ready target. Once the land transfer is completed, the Company plans to drill this well-defined porphyry copper-gold-silver-molybdenum target, potentially in 2022.
 
Eagle/Hona Prospect
 
The Eagle/Hona prospect consists of two claim blocks, the Eagle and Hona blocks, which are immediately adjacent to each other and which the Company treats as a single prospect.
 
The 64,800-acre Eagle claim block was staked in 2012 and 2013 to cover favorable stratigraphy mapped along trend by state geologists. The Eagle block is underlain by similar geology as the northern Tetlin Hills and limited reconnaissance stream sediment and pan concentrate samples collected by Federal government agencies in the 1970’s revealed widespread copper and arsenic (a pathfinder element for gold) anomalies within the area now covered by the Eagle claims (gold was not analyzed for in the original government sampling). In 2013, a reconnaissance level stream sediment and pan concentrate sampling program was completed over most of the southern part of the Eagle claim block and identified an area over 10 kilometers along a northwest corridor where every creek draining the northeast slopes of the mountains are strongly anomalous in gold, arsenic and copper. Further sampling continued along the northwest trend shows additional anomalous creeks up towards the Dome prospect, albeit far fewer streams have been sampled.
 
The claim block that makes up the Hona portion of the Eagle/Hona prospect is located on Alaska state mining claims approximately 25 kilometers west of the Main Peak deposit and is immediately adjoining the Eagle claim block. A reconnaissance program was carried out on the Hona claim block in 2017, which consisted of 363 pan concentrate and 364 stream sediment samples. Anomalous gold and copper values were found during the 2017 program and in 2019 when follow-up reconnaissance work was completed. This effort consisted of taking 615 rock chip samples and surface mapping. The two programs identified three target areas, Hona 1, Hona 2 and Hona 3. Exploration drilling in 2019, consisting of two core holes, totaling 1,301 meters, tested a portion of the Hona 2 target. As part of the 2019 program, 1,006 line-km of helicopter-borne magnetic and VTEM survey was completed over a portion of the Hona Prospect.
 
Exploration activities on the Eagle/Hona prospect are still in the early stages, and follow up field exploration on the project began in July 2021. Field crews completed a regional follow up sampling and mapping program in August 2021 and have collected approximately 2,000 rock samples from outcrops and hand dug trenches on the Eagle/Hona claims blocks. Assay results should be available in the fourth calendar quarter of 2021.
 
Shamrock Prospect
 
In early 2021, The Company staked the Shamrock prospect in the Richardson Mining District located in central Alaska right along the Alaska Highway corridor approximately 70 miles from Fairbanks, Alaska. The property includes a total of 361 Alaska state mining claims covering approximately 52,700 acres and gives the Company a dominant land position in the Richardson district (see the map below). The property has excellent infrastructure being right along the Alaska Highway and adjacent to the Trans Alaska Pipeline with several gravel roads and ATV trails providing good access to entire property. In addition, a high-voltage power line traverses along the southern property boundary. This electrical grid provides power to the Pogo gold mine operated by Northern Star Resources Limited which produced approximately 175,000 ounces of gold in 2020 and is located approximately 50 miles to the northeast of the Shamrock property. During the 2021 field season, field crews have collected approximately 900 soil and rock samples from the claim block. Results are expected by the end of the fourth calendar quarter of 2021.
 
Placer gold was discovered in the Richardson District on Tenderfoot Creek in 1905 and alluvial mining has continued intermittently until as recently as 2010. The Richardson District produced over 100,000 ounces of gold since the early 1900s. The Richardson District is characterized by gentle slopes and broad, alluvium-filled valleys. The area is unglaciated but largely overlain by windblown loess, generally a few meters in thickness but locally up to 50 meters thick.
 
29

The Shamrock prospect is underlain by a series of metamorphic schists and gneisses that make up the Lake George Subterrane of the more broadly distributed Yukon Tanana Terrane across interior Alaska and the Yukon, which is host to a number of large gold deposits. Peak metamorphism occurred around 110 million years. Retrograde metamorphism resulted in cooling, gneiss dome formation and a transition from ductile deformation of the metamorphic fabric to brittle deformation, as well as a series of low-angle shears across the region. Mid- Cretaceous extension resulted in regional uplift and denudation of the metamorphic gneiss domes. Post-uplift plutonic activity often occurs along the margins of these domes where zones of extreme thinning are common. Two ages of intrusive activity are noted at 105 Ma and 85 Ma. Both mid-Cretaceous intrusive rocks are genetically related to lode gold mineralization.
 
There are three types of gold deposit types that the Company plans to explore for on the Shamrock prospect: (1) Gold in the low angle quartz veins characterized as “Pogo Type” mineralization; (2) Intrusive Related Gold deposits (IRG) associated with igneous intrusions where they intersect deep seated crustal structures; and (3) high level rhyolite intrusive dikes associated clay and silica alteration which occurs in the Democrat and Banner Dikes areas of the property.
 
The Shamrock prospect was previously owned by Coeur Mining, who inherited the property as a result of acquiring North Empire Resources for their Sterling Gold Project located in Nevada. The Richardson property (as it was referred to by Coeur Mining) was non-core, and the claims were dropped in 2020. Based on historic activity, there are a number of well-defined soil anomalies with limited drilling that remain under-explored.
 
Willow Prospect
 
The Willow claims staked in the third fiscal quarter of 2021 cover 9,232 acres of mineral rights on State of Alaska land located immediately north and east of the Lucky Shot Property owned by the Company's wholly owned subsidiary, AGT.  The Willow claims cover a number of historically active mines in the Willow Mining District that were all mandated to shut down as a result of the War Act in 1942. Very little exploration work has occurred since that time. The Company plans to conduct geologic mapping, geochemical sampling and geophysical surveys to identify potential exploration drill targets to find additional gold resources. Given the Willow claims' location adjacent to the Lucky Shot Property, the Company treats these claims as an addition to, and expansion of, the Lucky Shot Property for purposes of its planned exploration activities.
 
Environmental Regulation and Permitting
 
Peak Gold JV Property
 
The Company believes that it and the Peak Gold JV are currently operating in compliance with all environmental regulations. While the Alaska Department of Natural Resources, Office of Project Management and Permitting coordinates the permitting of mine projects on state lands, it has no jurisdiction on Native American land such as the Tetlin Lease. However, the Peak Gold JV has voluntarily elected, with the concurrence of the Tetlin Tribal Council, to conduct its mineral exploration activities under the same terms and conditions as required on State of Alaska mining claims.
 
Hard Rock Exploration Permits and Temporary Water Use Permits covering past and planned activities on the Manh Choh Project were issued by the Alaska Department of Natural Resources to the Company and the Peak Gold JV and consist of the following multi-year permits (the “State Permits”):

1.
Alaska Hard Rock Exploration and Reclamation Permit #2626 covering exploration drilling activities on the Tetlin Lease. This permit now extends through December 31, 2025. Each year during the term of the permit, the Peak Gold JV will submit a reclamation statement detailing reclamation actions taken and a letter of intent to do reclamation for the following year.
2.
Alaska Temporary Water Use Permit F2020-093, allowing a seasonal average water use of 21,600 gallons per day during the period May 20 to October 15.  The permit expires December 31, 2025. These water use authorizations are specific to Alaska Hard Rock Exploration permit #2626.
3.
Alaska Mining Permit Application (APMA) F192900 covering exploration activities for a 5-year period on the Hona Exploration Project was received on August 6, 2019.

30

4.
Alaska Department of Fish & Game (ADF&G), Habitat Division issued the Fish Habitat Permit FH19-III-0117 for activities associated with F192900 on June 4. The Fish Habitat Permit will expire on December 31, 2023.
5.
Alaska Department of Natural Resources (ADNR), Division of Mining, Land and Water issued a Temporary Water Use Authorization (TWUA) for the Hona exploration area on August 12, 2019.
 
The State Permits were issued to the Company and assigned to the Peak Gold JV to cover its access road, drill pad and core drilling impacts. The Company does not anticipate that the Peak Gold JV will require additional permits from the State of Alaska for the remainder of the 2021 calendar year. Reclamation of surface disturbance, if any, associated with our exploration activities is conducted concurrently where required.
 
The Peak Gold JV also has received a Clean Water Act Nationwide Permit #6, Permit #POA-2013-286, from the U.S. Department of the Army Corps of Engineers with respect to the Peak Gold JV’s intended drilling and access-related disturbances on wetlands within the Tetlin Lease, which is valid through December 31, 2022. However, such lands were classified as wetlands more than 20 years ago and much of the land covered by such permit has since been burned by natural wildfires. As a consequence of the wildfires and natural habitat changes that have taken place since the wildfires, the Peak Gold JV Property may no longer be considered wetlands according to Corps of Engineers guidelines.
 
The Company began collecting baseline environmental data on the Manh Choh Project in 2012, and the Peak Gold JV has continued this process. The Peak Gold JV has not developed a comprehensive environmental permitting strategy as the Manh Choh Project remains in an exploration stage. If and when its exploration work is significantly advanced that additional baseline environmental studies and prefeasibility studies are desirable, the Peak Gold JV will be required to expend considerable funds and resources for an environmental impact statement and related studies to advance any mining project, including the Manh Choh Project.
 
Shamrock Prospect
 
Hard Rock Exploration Permits and Temporary Water Use Permits covering planned activities on the Shamrock Prospect were issued by the Alaska Department of Natural Resources to the Company and consist of the following multi-year permits (the “State Permits”):

1.
Alaska Hard Rock Exploration and Reclamation Permit #2849 covering exploration drilling activities on the Buck State Mining Claims. This permit now extends through December 31, 2025. Each year during the term of the permit, the Company will submit a reclamation statement detailing reclamation actions taken and a letter of intent to do reclamation for the following year.
2.
Alaska Temporary Water Use Permit F2021-083, allowing a seasonal average water use of 21,600 gallons per day during the period June 1 to October 31.  The permit expires December 31, 2025. These water use authorizations are specific to Alaska Hard Rock Exploration permit #2849.
3.
Alaska Department of Fish & Game (ADF&G), Habitat Division issued the Fish Habitat Permit FH21-III-0147 for activities associated with F212849 on June 16, 2021. The Fish Habitat Permit will expire on December 31, 2025.
 
The State Permits were issued to Contango Minerals Alaska, LLC to cover its access road, drill pad and core drilling impacts. Reclamation of surface disturbance, if any, associated with our exploration activities is conducted concurrently where required.
 
Additional Permit Conditions
 
Any future mining operations undertaken by the Company or the Peak Gold JV are subject to local, state, tribal, and federal regulation governing environmental quality and pollution control, including air quality standards, greenhouse gas, waste management, reclamation and restoration of properties, plant and wildlife protection, cultural resource protection, handling and disposal of radioactive substances, and employee health and safety. Extraction of mineral ore is subject to stringent environmental, health, and safety regulation by state and federal authorities, including the United States Environmental Protection Agency (“EPA”), and may also be subject to additional regulation of local and tribal authorities. Such regulation can increase the cost of planning, designing, constructing, installing and operating mining facilities or otherwise delay, limit or prohibit planned operations.

31

Significant fines and penalties may be imposed for failure to comply with environmental laws. Some environmental laws provide for joint and several strict liability for remediation of releases of hazardous substances. In addition, the Company and the Peak Gold JV may be subject to claims alleging personal injury or property damages as a result of alleged exposure to hazardous substances or other environmental impacts.
 
The Federal Mine Safety and Health Act of 1977 and regulations promulgated thereunder, and the State of Alaska Department of Labor and Workforce Development, impose a variety of health and safety standards on numerous aspects of employee working conditions related to mineral extraction and processing operations, including the training of personnel, operating procedures and operating equipment. In addition, the Company and the Peak Gold JV may be subject to additional state and local mining standards. The Company believes that it and the Peak Gold JV currently are in compliance with applicable mining standards; however, the Company cannot predict whether changes in standards or the interpretation or enforcement thereof will have a material adverse effect on the Company's or the Peak Gold JV’s business, financial condition or otherwise impose restrictions on its ability to conduct mining operations.
 
A typical time frame for baseline environmental studies and permitting for a gold mine in Alaska may consume a decade or more. There are numerous state and federal permits and authorizations required from many different state and federal agencies. Federal legislation and regulations adopted and administered by the EPA and other governmental or tribal authorities, Forest Service, Bureau of Land Management, Fish and Wildlife Service, Mine Safety and Health Administration, and other federal agencies, legislation such as the CWA, Safe Drinking Water Act, CAA, National Environmental Policy Act, Migratory Bird Treaty Act, Endangered Species Act, RCRA and CERCLA and various laws and regulations administered by the State of Alaska including the Alaska Department of Fish and Game, the Alaska Department of Environmental Conservation, Alaska Department of Transportation and Public Facilities and the Alaska Department of Natural Resources, have a direct bearing on exploration and mining operations conducted in Alaska. The scope, breadth and complexity of these regulations make the process for preparing and obtaining approval of a plan of operations much more time-consuming, expensive, and uncertain. The Alaska Department of Natural Resources coordinates the permitting of mining operations in the State of Alaska, has developed a process to integrate federal, state and local government requirements to obtain mine permits, and also provides an opportunity for public comment. Plans of operation will be required to include detailed baseline environmental information and address how detailed reclamation performance standards will be met. In addition, all activities for which plans of operation are required will be subject to a new standard of review by the U.S. Bureau of Land Management, which must make a finding that the conditions, practices or activities do not cause substantial irreparable harm to significant scientific, cultural, or environmental resource values that cannot be effectively mitigated.
 
CERCLA, also known as the “superfund” law, and analogous state laws impose liability, regardless of fault or the legality of the original conduct, on certain classes of persons that contributed to the release of a “hazardous substance” into the environment. These persons include the current or previous owner and operator of a site where a hazardous substance has been disposed and persons who disposed or arranged for the disposal of a hazardous substance at a site, or transported a hazardous substance to a site for disposal. CERCLA also authorizes the EPA and, in some cases, private parties to take actions in response to threats to the public health or the environment and to seek recovery from such responsible classes of persons of the costs of such an action. The Company’s and the Peak Gold JV’s mining operations may generate wastes that fall within CERCLA’s definition of “Hazardous Substances”, and, thus, subject the Company or the Peak Gold JV to CERCLA liability.
 
Finally, environmental, social, and governance (“ESG”) goals and programs, which typically include extralegal targets related to environmental stewardship, social responsibility, and corporate governance, have become an increasing focus of investors, shareholders and activists across many industries.  While reporting on ESG metrics remains voluntary, access to capital and investors is likely to favor companies with robust ESG programs in place.  In addition, if ESG metrics and/or reporting become mandatory, the Company’s and the Peak Gold JV’s costs of planning, designing, constructing, operating, and maintaining their mining facilities and associated operations and the costs of their compliance obligations in connection with those facilities and operations could increase.
 
32

DESCRIPTION OF CAPITAL STOCK
 
Authorized Capitalization
 
Common Stock
 
Our Certificate of Incorporation authorizes us to issue 45,000,000 shares of common stock, par value $0.01 per share. As of September 30, 2021, there were 6,685,746 shares of our common stock outstanding, all of which are fully paid and non-assessable.
 
Holders of our common stock are entitled to one vote for each share held of record on all matters on which stockholders are generally entitled to vote. The majority of votes cast by the holders of shares entitled to vote on an action at a meeting at which a quorum is present is generally required to take stockholder action, unless a greater vote is required by law. Directors are elected by a plurality of the votes cast at any election and there is no cumulative voting of shares.
 
Upon the liquidation, dissolution or winding up of our business, after payment of all liabilities and payment of preferential amounts to the holders of preferred stock, if any, the shares of common stock are entitled to share equally in our remaining assets. Pursuant to our Certificate of Incorporation, no stockholder has any preemptive rights to subscribe for our securities. The common stock is not subject to redemption.
 
We do not intend to declare or pay any cash dividends on our common stock. We currently intend to retain future earnings in excess of preferred stock dividends, if any, for operations and to develop and expand our business. We do not anticipate paying any dividends on our common stock in the foreseeable future. Any future determination with respect to the payment of dividends on the common stock will be at the discretion of the board of directors of the Company (the “Board”) and will depend on, among other things, operating results, financial condition and capital requirements, the terms of then-existing indebtedness, general business conditions and other factors the Board deems relevant.
 
Other Rights
 
The holders of our common stock have no preemptive rights and no rights to convert their common shares into any other securities, and our common shares are not subject to any redemption or sinking fund provisions.
 
Preferred Stock
 
Our Certificate of Incorporation authorizes us to issue 15,000,000 shares of preferred stock, par value $0.01 per share, in one or more series with such voting powers, full or limited, or no voting powers and such designations, preferences and relative participation, optional or other special rights, and the qualifications, limitations or restrictions thereof as shall be stated in the resolutions of the Board providing for their issuance. As of September 30, 2021, there were no shares of preferred stock issued and outstanding. In addition, in connection with the adoption of the Rights Agreement (defined below), effective September 23, 2020, the Company filed a Certificate of Designations of Series A-1 Junior Participating Preferred Stock (the “Certificate of Designations”) with the Secretary of State of the State of Delaware designating 100,000 shares of Series A-1 Junior Participating Preferred Stock.
 
Stock Options and Warrants
 
As of September 30, 2021, we had no outstanding warrants to purchase shares of common stock. As of September 30, 2021, we had 100,000 options to purchase shares of common stock outstanding, which were issued under the Company’s Amended and Restated 2010 Equity Compensation Plan, as amended. We have in the past issued, and may in the future issue restricted shares of common stock to certain officers and directors and to third-party consultants.
 
Rights Plan
 
On September 23, 2020, the Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”) entered into a limited duration stockholder rights agreement (the “Rights Agreement”). On September 21, 2021, the Board of Directors of the Company approved an amendment to the Rights Agreement to extend the expiration date of the Rights Agreement to September 22, 2022.
 
33

Pursuant to the Rights Agreement, the Board declared a dividend of one preferred stock purchase right (a “Right”) for each share of the Company’s common stock, par value $0.01 per share, of the Company, held of record as of October 5, 2020 (the “Record Date”). Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one one-thousandth (subject to adjustment) of one share of Series A-1 Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”) at a price of $100.00, subject to certain adjustments (as adjusted from time to time, the “Exercise Price”). The description and terms of the Rights are set forth in the Rights Agreement.
 
Subject to certain exceptions, the Rights will not be exercisable until the earlier to occur of (i) the close of business on the tenth business day after a public announcement or filing (A) that a person has, or group of affiliated or associated persons have, become an “Acquiring Person,” which is defined as a person or group of affiliated or associated persons who, at any time after the date of the Rights Agreement, have acquired, or obtained the right to acquire, beneficial ownership of 18% or more of the Company’s outstanding shares of common stock, subject to certain exceptions, or (B) that discloses information which reveals the existence of an Acquiring Person or (ii) the close of business on the tenth business day after the commencement by any person of, or the first public announcement of the intention of any person to commence, a tender offer or exchange offer or other transaction, the consummation of which would result in any person becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”). Certain interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are treated as beneficial ownership of the number of shares of common stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the common stock are directly or indirectly held by counterparties to the derivatives contracts or their affiliates or associates.
 
No person that, together with all affiliates and associates of such person, is the beneficial owner of common stock representing less than 20% of the common stock then outstanding, and which is entitled to file, and files, a statement on Schedule 13G (“Schedule 13G”) pursuant to Rule 13d-1(b) of the General Rules and Regulations under the Exchange Act, as in effect at the time of the public announcement of the declaration of the Rights with respect to the common stock beneficially owned by such person (a “13G Investor”), shall be deemed to be an “Acquiring Person”; provided, that a person who was a 13G Investor shall no longer be a 13G Investor if it either (i) files a statement on Schedule 13D pursuant to Rule 13d-1(a), 13d-1(e), 13d-1(f) or 13d-1(g) of the General Rules and Regulations under the Exchange Act or (ii) becomes no longer entitled to file a statement on Schedule 13G pursuant to Rule 13d-1(b) (the earlier to occur of (i) and (ii), the “13D Event”), and such person shall be an Acquiring Person if it is the beneficial owner (together with all affiliates and associates) of 18% or more of the common stock then outstanding at any point from and after the time of the 13D Event; provided, however, such person shall not be an Acquiring Person if (i) on the first Business Day (as defined in the Rights Agreement) after the 13D Event such person notifies the Company of its intent to reduce its beneficial ownership to below 18% as promptly as practicable and (ii) such person reduces its beneficial ownership (together with all affiliates and associates of such person) to below 18% of the common stock then outstanding as promptly as practicable (but in any event not later than 10 days after such 13D Event); provided, further that such person shall become an “Acquiring Person” if after reducing its beneficial ownership to below 18%, it subsequently becomes the beneficial owner of 18% or more of the common stock then outstanding or if, prior to reducing its beneficial ownership to below 18%, it increases (or makes any offer or takes any other action that would increase) its beneficial ownership of the then-outstanding common stock above the lowest beneficial ownership of such person at any time during such ten-day period.
 
With respect to certificates representing shares of common stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates for shares of common stock registered in the names of the holders thereof, and not by separate Rights Certificates, as described further below. With respect to book entry shares of common stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by the balances indicated in the book entry account system of the transfer agent for the common stock. Until the earlier of the Distribution Date and the Expiration Date (as defined below), the transfer of any shares of common stock outstanding on the Record Date will also constitute the transfer of the Rights associated with such shares of common stock. As soon as practicable after the Distribution Date, separate certificates evidencing the Rights (“Rights Certificates”) will be mailed to holders of record of the common stock as of the close of business on the Distribution Date, and such Right Certificates alone will evidence the Rights.
 
The Rights, which are not exercisable until the Distribution Date, will expire prior to the earliest of (i) the close of business on September 22, 2022, unless extended prior to expiration; (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement; (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement; and (iv) the time at which the Rights are terminated upon the occurrence of certain transactions (the earliest of (i), (ii), (iii) and (iv) is referred to as the “Expiration Date”).
 
34

Each share of Preferred Stock will be entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal to the greater of (i) $1.00 per share or (ii) 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, in each case, paid to holders of common stock during such period. Each share of Preferred Stock will entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other transaction in which shares of common stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per one share of common stock.
 
The Exercise Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock; (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock or convertible securities at less than the then-current market price of the Preferred Stock; or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). The number of outstanding Rights and the number of one one-thousandths of a Preferred Stock issuable upon exercise of each Right are also subject to adjustment in the event of a stock split, reverse stock split, stock dividends and other similar transactions.
 
In the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than the Rights beneficially owned by the Acquiring Person, affiliates and associates of the Acquiring Person and certain transferees thereof (which will thereupon become null and void), will thereafter have the right to receive upon exercise of a Right that number of shares of common stock having a market value of two times the Exercise Price.
 
In the event that, after a person or a group of persons has become an Acquiring Person, the Company is acquired in a merger or other business combination transaction, of 50% or more of the Company’s assets or earning power are sold, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then-current Exercise Price of the Right, that number of shares of common stock of the acquiring company having a market value at the time of that transaction equal to two times the then-current Exercise Price.
 
With certain exceptions, no adjustment in the Exercise Price will be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price. No fractional shares of Preferred Stock will be issued (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the trading day immediately prior to the date of exercise.
 
At any time after any person or group of persons becomes an Acquiring Person and prior to the acquisition of beneficial ownership by such Acquiring Person of 50% or more of the outstanding shares of common stock, the Board, at its option, may exchange each Right (other than Rights owned by such person or group of persons which will have become void), in whole or in part, at an exchange ratio of one share of common stock per outstanding Right (subject to adjustment).
 
At any time before the Distribution Date, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (subject to certain adjustments) (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish.
 
Immediately upon the action of the Board electing to redeem or exchange the Rights, the Company shall make announcement thereof, and upon such election, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price for each Right held.
 
Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.
 
35

Anti-Takeover Effects of Provisions of our Certificate of Incorporation, our Bylaws and Delaware Law
 
Some provisions of Delaware law, and our Certificate of Incorporation and our Bylaws (the “Bylaws”), described below, contain provisions that could make the following transactions more difficult: acquisitions of us by means of a tender offer, a proxy contest or otherwise; or removal of our incumbent officers and directors. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.
 
These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection and our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.
 
Delaware Law
 
We are not subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), regulating corporate takeovers. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that such stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger or consolidation, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation’s outstanding voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

●
the transaction is approved by the Board before the date the interested stockholder attained that status;
●
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; and
●
on or after such time, the business combination is approved by the Board and authorized at a meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
 
Certificate of Incorporation and Bylaws
 
Provisions of our Certificate of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock.
 
Among other things, our Certificate of Incorporation and Bylaws:

●
permit the Board to issue up to 15,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate;
●
provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office;
●
provide that our Bylaws may only be amended by the affirmative vote of the majority of the Board or the holders of two-thirds of our then outstanding common stock;
●
provide that special meetings of our stockholders may only be called by the Board, the president or the holders of a majority of our then outstanding common stock;
●
eliminate the personal liability of our directors for monetary damages resulting from breaches of their fiduciary duty to the extent permitted by the DGCL and indemnify our directors and officers to the fullest extent permitted by the DGCL;
●
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a stockholder’s notice; and
●
do not provide for cumulative voting rights, therefore allowing the holders of a plurality of votes cast in any election of directors to elect all of the directors standing for election, if they should so choose.
 
36

Limitation of Liability and Indemnification Matters
 
Our Certificate of Incorporation limits the liability of our directors for monetary damages for breach of their fiduciary duty as directors, except for liability that cannot be eliminated under the DGCL. Delaware law provides that directors of a company will not be personally liable for monetary damages for breach of their fiduciary duty as directors, except for liabilities:

●
for any breach of the director’s duty of loyalty to the corporation or its stockholders;
●
for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
●
for unlawful payment of dividend or unlawful stock purchase or redemption; or
●
for any transaction from which the director derived an improper personal benefit.
 
Our Certificate of Incorporation and Bylaws also provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. We believe that the limitation of liability provision in our Certificate of Incorporation will facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.
 

Ticker Symbol
 
Our common stock is traded on the OTCQB Tier of the OTC Markets Group Inc. under the symbol “CTGO”.
 
 
Transfer Agent and Registrar
 
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
 

37
 
DESCRIPTION OF WARRANTS
 
Description of Warrants
 
We may issue warrants for the purchase of preferred stock or common stock. Warrants may be issued independently or together with other securities and may be attached to or separate from any such offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent, all as set forth in the prospectus supplement relating to the particular issue of warrants. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders of warrants or beneficial owners of warrants. The following summary of certain provisions of the warrants does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all provisions of the warrant agreements. A copy of the warrant agreement will be filed with the SEC in connection with the offering of warrants.
 
Stock Warrants
 
The prospectus supplement relating to a particular issue of warrants to purchase common stock or preferred stock will describe the terms of the common stock warrants and preferred stock warrants, including the following:

●
the title of the warrants;
●
the offering price for the warrants, if any;
●
the aggregate number of the warrants;
●
the designation and terms of the common stock or preferred stock that may be purchased upon exercise of the warrants;
●
if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants issued with each security;
●
if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;
●
the number of shares of common stock or preferred stock that may be purchased upon exercise of a warrant and the price at which the shares may be purchased upon exercise;
●
the dates on which the right to exercise the warrants will commence and expire;
●
if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
●
the currency or currency units in which the offering price, if any, and the exercise price are payable;
●
if applicable, a discussion of material U.S. federal income tax considerations;
●
anti-dilution provisions of the warrants, if any;
●
redemption or call provisions, if any, applicable to the warrants;
●
any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants; and
●
any other information we think is important about the warrants.
 

Exercise of Warrants
 
Each warrant will entitle the holder of the warrant to purchase at the exercise price set forth in the applicable prospectus supplement the shares of preferred stock or common stock being offered. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants are void. Holders may exercise warrants as set forth in the prospectus supplement relating to the warrants being offered.
 
Until you exercise your warrants to purchase our preferred stock or common stock, you will not have any rights as a holder of our preferred stock or common stock, as the case may be, by virtue of your ownership of warrants.

38
 
DESCRIPTION OF SUBSCRIPTION RIGHTS
 
We may issue subscription rights to purchase our common stock or preferred stock. These subscription rights may be offered independently or together with any other security offered hereby and may or may not be transferable by the stockholder receiving the subscription rights in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
 
The prospectus supplement relating to any subscription rights we offer, if any, will, to the extent applicable, include specific terms relating to the offering, including some or all of the following:

●
the price, if any, for the subscription rights;
●
the exercise price payable for our common stock or preferred stock upon the exercise of the subscription rights;
●
the number of subscription rights to be issued to each stockholder;
●
the number and terms of our common stock or preferred stock which may be purchased per each subscription right;
●
the extent to which the subscription rights are transferable;
●
any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;
●
the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;
●
the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities or an overallotment privilege to the extent the securities are fully subscribed; and
●
if applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by us in connection with the offering of subscription rights.
 
The descriptions of the subscription rights in this prospectus and in any prospectus supplement are summaries of the material provisions of the applicable subscription right agreements. These descriptions do not restate those subscription right agreements in their entirety and may not contain all the information that you may find useful. We urge you to read the applicable subscription right agreements because they, and not the summaries, define your rights as holders of the subscription rights. For more information, please review the forms of the relevant subscription right agreements, which will be filed with the SEC promptly after the offering of subscription rights and will be available as described in the section of this prospectus captioned “Where You Can Find More Information”.

 
39

DESCRIPTION OF UNITS
 
Below is a description of certain general terms and provisions of the units that we may offer. Particular terms of the units will be described in the applicable unit agreements and the applicable prospectus supplement for the units. We urge you to read the applicable prospectus supplements related to the units that we sell under this prospectus, as well as the complete unit agreements that contain the terms of the units.
 
We may issue units comprised of our common stock, our preferred stock, warrants, subscription rights, or any combination of such securities under this prospectus. Units may be issued in one or more series, independently or together with shares of our common stock, our preferred stock, warrants, or subscription rights, and the units may be attached to or separate from such securities. We may issue units directly or under a unit agreement to be entered into between us and a unit agent. We will name any unit agent in the applicable prospectus supplement. Any unit agent will act solely as our agent in connection with the units of a particular series and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of units. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. We will describe in the applicable prospectus supplement the terms of the series of units, including the following:

●
the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
●
the price or prices at which the units will be issued;
●
the date, if any, on and after which the securities included in the units will be separately transferable;
●
any provisions of the governing unit agreement that differ from those described in this section; and
●
any provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities comprising the units.

 
40

SELLING STOCKHOLDER
 
This prospectus also relates to the possible resale by the Kenneth R Peak Marital Trust, who we refer to in this prospectus as the “selling stockholder,” of up to 415,000 shares of our common stock that were issued and outstanding prior to the original date of filing of the registration statement of which this prospectus forms a part. The shares of our common stock included in this prospectus were originally acquired by Kenneth R. Peak, the Company's former Chairman, (i) in private placements of our common stock, or (ii) upon the exercise or vesting of previously issued awards granted under a compensatory plan or arrangement with us.  The shares were transferred to the selling stockholder following Mr. Peak's death on April 19, 2013. Donna Peak, Mr. Peak's spouse, is the sole trustee and executor of the selling stockholder.
 
The information contained in the table below in respect of the selling stockholder (including the number of shares of common stock beneficially owned and the number of shares of common stock offered) has been obtained from the selling stockholder and has not been independently verified by us. The registration for resale of the shares of common stock does not necessarily mean that the selling stockholder will sell all or any of these shares. In addition, the selling stockholder may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, shares of common stock in transactions exempt from the registration requirements of the Securities Act, after the date on which the selling stockholder provided the information set forth in the table below.
 
The information set forth in the following table regarding the beneficial ownership after resale of the shares of common stock is based upon the assumption that the selling stockholder will sell all of the shares of common stock beneficially owned by it that are covered by this prospectus. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares of common stock and the right to acquire such voting or investment power within 60 days through the exercise of any option, warrant or other right. The selling stockholder has not held any position or office or had any other material relationship with us or our affiliates during the three years prior to the date of this prospectus. The inclusion of any shares of common stock in this table does not constitute an admission of beneficial ownership for the selling stockholder.
 

Name of
selling stockholder
Shares of common stock
beneficially owned prior to the
offering
Shares of
common
stock to
be offered
Shares of common stock
beneficially owned after the
offering(1)
Number
Percentage
Number
Percentage
Kenneth R. Peak Marital Trust
788,102
11.8%
415,000
373,102
5.6%
 

(1) Based on 6,685,746 shares of common stock outstanding as of September 30, 2021.
 
41
 
PLAN OF DISTRIBUTION
 
We and/or the selling stockholder may sell the securities being offered hereby in one or more of the following ways from time to time:

●
through agents to the public or to investors;
●
to one or more underwriters for resale to the public or to investors;
●
in “at the market” offerings, within the meaning of Rule 415(a)(4) of the Securities Act of 1933, as amended, or the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise;
●
directly to investors; or
●
through a combination of these methods of sale.
 
We will set forth in a prospectus supplement the terms of an offering of shares of our securities, including.

●
the name or names of any agents or underwriters;
●
the purchase price of the securities being offered and the proceeds we will receive from the sale;
●
any over-allotment options under which underwriters may purchase additional securities from us;
●
any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation;
●
the public offering price; and
●
any discounts or concessions allowed or re-allowed or paid to dealers.
 
Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more than two scheduled business days after the trade date for your securities. Accordingly, in such a case, if you wish to trade securities on any date prior to the second business day before the original issue date for your securities, you will be required, by virtue of the fact that your securities initially are expected to settle in more than two scheduled business days after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
 
We may issue to the holders of our common stock, on a pro rata basis for no consideration, subscription rights to purchase shares of our common stock or preferred stock. These subscription rights may or may not be transferable by stockholders. The applicable prospectus supplement will describe the specific terms of any offering of our common or preferred stock through the issuance of subscription rights, including the terms of the subscription rights offering, the terms, procedures and limitations relating to the exchange and exercise of the subscription rights and, if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of common or preferred stock through the issuance of subscription rights.
 
Sales Through Underwriters or Dealers
 
We and/or the selling stockholder may also, from time to time, authorize dealers, acting as our agents, to offer and sell securities upon the terms and conditions set forth in the applicable prospectus supplement. We and/or the selling stockholder, or the purchasers of securities for whom the underwriters may act as agents, may compensate underwriters in the form of underwriting discounts or commissions, in connection with the sale of securities. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a “best efforts” basis and a dealer will purchase securities as a principal, and may then resell the common stock at varying prices to be determined by the dealer.
 
The applicable prospectus supplement will describe any compensation paid to underwriters or agents in connection with the offering of securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers. The dealers and agents participating in the distribution of securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We and/or the selling stockholder may enter into agreements to indemnify underwriters, dealers and agents against certain civil liabilities, including liabilities under the Securities Act and to reimburse these persons for certain expenses. We and/or the selling stockholder may grant underwriters who participate in the distribution of securities we are offering under this prospectus an option to purchase additional shares to cover over-allotments, if any, in connection with the distribution.
 
42

Market Making, Stabilization and Other Transactions
 
Unless the applicable prospectus supplement states otherwise, all securities we may offer, other than common stock, will be new issues of securities with no established trading market. We may elect to list any series of offered securities on an exchange. Any underwriters that we use in the sale of such offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Accordingly, we cannot assure you that the securities will have a liquid trading market.
 
To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than we and/or the selling stockholder sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them is repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
 
Other Services
 
Certain underwriters, dealers or agents and their associates may engage in transactions with and perform services for us in the ordinary course of our business.
 

LEGAL MATTERS
 
Certain legal matters in connection with our common stock offered hereby will be passed upon for us by Holland & Knight LLP, Dallas and Houston, Texas.  Any underwriter or agent will be advised about other issues relating to any offering by its own legal counsel identified in the applicable prospectus supplement.

 
EXPERTS
 
The consolidated financial statements of Contango ORE, Inc. as of June 30, 2021 and June 30, 2020, and the financial statements of Peak Gold, LLC as of December 31, 2020 and June 30, 2020 and 2019 incorporated in this prospectus by reference from Contango ORE, Inc.'s Annual Report on Form 10-K for the year ended June 30, 2021 have been audited by Moss Adams LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference.  Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
 
The information appearing in this prospectus concerning estimates of our mineral resources for the Manh Choh Project was derived from the Technical Report, and has been included herein upon the authority of John Sims, AIPG Certified Professional Geologist and President of Sims Resources LLC, as qualified person with respect to the matters covered by such report and in giving such report.  Mr. Sims is not an employee of the Company or the Peak Gold JV, and neither Mr. Sims nor Sims Resources LLC is affiliated with the Company, the Peak Gold JV or another entity that has an ownership, royalty or other interest in the property that is the subject of the Technical Report.

43

WHERE YOU CAN FIND MORE INFORMATION
 
We file annual, quarterly and current reports and other information with the SEC (File No. 001-35770) pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”). You may read and copy any documents that are filed at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates from the public reference section of the SEC at its Washington address. Please call the SEC at 1-800-SEC-0330 for further information.
 
Our filings are also available to the public through the SEC’s website at www.sec.gov.
 
The SEC allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you to documents previously filed with the SEC. The information incorporated by reference is an important part of this prospectus, and the information that we later file with the SEC will automatically update and supersede this information. The following documents that we filed with the SEC pursuant to the Exchange Act are incorporated herein by reference:

●
our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, filed with the SEC on August 31, 2021;
●
our Current Reports on Form 8-K filed with the SEC on August 25, 2021, September 22, 2021; and October 21, 2021;
●
our Definitive Proxy Statement on Schedule 14A filed with the SEC on October 4, 2021; and
●
the description of our shares of common stock contained in Exhibit 99.1 filed with our Current Report on Form 8‑K on October 21, 2021, including any amendment or report filed for the purpose of updating such description.
 
These reports contain important information about us, our financial condition and our results of operations.
 
All documents subsequently filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any Current Report on Form 8-K) before the termination of the offering under this prospectus shall be deemed to be incorporated in this prospectus by reference and to be a part hereof from the date of filing of such documents. Any statement contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
 
We will furnish without charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated by reference into such documents. You should direct any requests for documents to the following address:


Contango ORE, Inc.
3700 Buffalo Speedway,
Houston, Texas 77098
Attention: Corporate Secretary
(713) 877-1311
 
We also maintain a website at www.contangoore.com. However, the information on our website is not part of this prospectus.

44

PART II
 
INFORMATION NOT REQUIRED IN PROSPECTUS
 
Item 14.    Other Expenses of Issuance and Distribution
 
The following table sets forth an itemized statement of the amounts of all expenses payable by us in connection with the registration of the common stock offered hereby. With the exception of the SEC Registration Fee, the amounts set forth below are estimates.

SEC Registration Fee
 
$
10,082

Accountants’ fees and expenses
   
*
 
Legal fees and expenses
   
*
 
Printing and engraving expenses
   
*
 
Transfer agent and registrar fees
   
*
 
Miscellaneous
   
*
 
Total
 
$
*
 
------------
 
*
These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
 

Item 15.    Indemnification of Directors and Officers
 
Section 145 of the DGCL provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with any threatened, pending or completed actions, suit or proceeding, whether civil, criminal, administrative or investigative, in which such person is made a party by reason of the fact that the person is or was a director, officer, employee or agent of the corporation (other than an action by or in the right of the corporation—a “derivative action”), if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification extends only to expenses (including attorneys’ fees) incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation’s bylaws, disinterested director vote, stockholder vote, agreement or otherwise.
 
Our certificate of incorporation provides that no director shall be liable to us or our stockholders for monetary damages resulting from breaches of their fiduciary duty to the extent permitted by the DGCL. Our certificate of incorporation also contains indemnification rights for our directors and our officers. Specifically, our certificate of incorporation provides that we shall indemnify our officers and directors to the fullest extent authorized by the DGCL. Further, we may maintain insurance on behalf of our officers and directors against expense, liability or loss asserted incurred by them in their capacities as officers and directors.
 
We maintain liability insurance policies that indemnify our directors and officers and those of our subsidiaries against various liabilities, including certain liabilities arising under the Securities Act and the Exchange Act that may be incurred by them in their capacity as such.
 
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
 
45

Item 16.    Exhibits and Financial Statement Schedules
 
A list of exhibits filed herewith is contained in the exhibit index that immediately precedes the signature page to this registration statement and is incorporated herein by reference.

 
Item 17.    Undertakings
 
The undersigned registrant hereby undertakes:

(a)
to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);

(ii)
to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)
to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;
 
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by us pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement;

(b)
that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(c)
to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

(d)
that, for purposes of determining liability under the Securities Act to any purchaser:

(i)
If the registrant is relying on Rule 430B:

(1)
each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed part of and included in this registration statement; and

46

(2)
each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
 
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
 
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

47

EXHIBITS
 
(a) Index to Exhibits

Exhibit
Number
  
Description
1.1
 
Form of Underwriting Agreement.**
3.1
  
Certificate of Incorporation of Contango ORE, Inc. (Filed as Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).
3.2
 
Certificate of Amendment to Certificate of Incorporation of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).
3.3
  
Bylaws of Contango ORE, Inc. (Filed as Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).
3.4
 
Amendment No. 1 to the Bylaws of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 21, 2021).
4.1
  
Form of Certificate of Contango ORE, Inc. Common Stock (Filed as Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2013, as filed with the Securities and Exchange Commission on November 14, 2013).
4.2
 
Certificate of Designations of Series A-1 Junior Participating Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).
4.3
 
Certificate of Designation of Series A Junior Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 21, 2012).
4.4
 
Certificate of Elimination of Series A Junior Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).
4.5
 
Registration Rights Agreement dated as of June 17, 2021, by and between Contango ORE, Inc. and the Purchaser named therein (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on June 21, 2021).
4.6
 
Registration Rights Agreement dated as of August 24, 2021, by and between the Company and CRH Funding II Pte. Ltd. (Filed as Exhibit 4.1 to the Company's current report on Form 8-K, as filed with the Securities and Exchange Commission on August 25, 2021).
4.7
 
Rights Agreement, dated as of September 23, 2020, between Contango ORE, Inc. and Computershare Trust Company. N.A. as Rights Agent (Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).
4.8
 
Amendment No. 1 to Rights Agreement, dated as of September 22, 2021, between Contango ORE, Inc. and Computershare Trust Company. N.A. as Rights Agent (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 22, 2021).
5.1
 
23.1
 
23.2
 
23.3
 
Consent of Holland & Knight LLP (included as part of Exhibit 5.1 hereto).*
23.4
 
24.1
 
Powers of Attorney (included on signature page of this Registration Statement).*
96.1
 
99.1
 
Audited Financial Statements of Peak Gold, LLC as of December 31, 2020 (Filed as Exhibit 99.11 to the Company's annual report on Form 10-K, as filed with the Securities and Exchange Commission on August 31, 2021).
101
 
Interactive Data Files*
     
* 
 
Filed herewith
**
 
To be filed, if applicable, by amendment or incorporated by reference pursuant to a Current Report on Form 8-K.

48

SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on October 26, 2021.
 

 
Contango ORE, Inc.
 
 
 
 
By:
/s/ Rick Van Nieuwenhuyse
 
Name:
Rick Van Nieuwenhuyse
 
Title:
President, Chief Executive Officer and Director
 
 
Each person whose signature appears below hereby constitutes and appoints Rick Van Nieuwenhuyse and Leah Gaines, and each of them, any of whom may act without the joinder of the other, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign any or all amendments or post-effective amendments to this Registration Statement, or any Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits hereto and other documents in connection therewith or in connection with the registration of the securities under the Securities Act of 1933, as amended, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorneys-in-fact and agents or his substitutes may do or cause to be done by virtue hereof.
 
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated on October 26, 2021.
 

Signature
 
Title
     
/s/ Rick Van Nieuwenhuyse
 
President, Chief Executive Officer and Director
(Principal Executive Officer)
Rick Van Nieuwenhuyse
 
     
/s/ Leah Gaines
 
Vice President, Chief Financial Officer,
Chief Accounting Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
Leah Gaines
 
     
/s/ Brad Juneau
  Chairman
Brad Juneau
   
     
/s/ Joseph Compofelice
 
Director
Joseph Compofelice
   
     
/s/ Joseph G. Greenberg
 
Director
Joseph G. Greenberg
   
     
/s/ Richard Shortz
 
Director
Richard Shortz
   

 
Exhibit 5.1

 
October 26, 2021
 
Contango ORE, Inc.
3700 Buffalo Speedway, Suite 925
Houston, Texas 77098
 
Re: Contango ORE, Inc. Registration Statement on Form S-3
We have acted as counsel for Contango ORE, Inc., a Delaware corporation (the “Company”), with respect to certain legal matters in connection with the preparation and filing of the Registration Statement to which this opinion is an exhibit with the Securities and Exchange Commission (the “Commission”) relating to the offer and sale by the Company from time to time of:

(1)
shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”);
(2)
shares of the Company’s preferred stock, par value $0.01 per share, (the “Preferred Stock”);
(3)
warrants to purchase Common Stock or Preferred Stock (the “Warrants”);
(4)
subscription rights to purchase Common Stock or Preferred Stock (the “Subscription Rights”);
(5)
units comprised of any combination of Common Stock, Preferred Stock, Warrants and Subscription Rights (the “Units”);

all of which may be issued and sold from time to time pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), at an aggregate initial offering price not to exceed $100,000,000.

The Common Stock, Preferred Stock, Warrants, Subscription Rights, and Units are collectively referred to herein as the “Securities.” We have also participated in the preparation of the prospectus (the “Prospectus”) contained in the Registration Statement. The Securities will be offered in amounts, at prices and on terms to be determined in light of market conditions at the time of sale and to be set forth in supplements (each a “Prospectus Supplement”) to the Prospectus contained in the Registration Statement.

We have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Certificate of Incorporation and the Bylaws of the Company, each as amended to date, (ii) the Registration Statement, (iii) resolutions of the Company’s board of directors (the “Board”) and (iv) such other certificates, statutes and other instruments and documents as we considered appropriate for purposes of the opinions hereafter expressed. In addition, we have reviewed certain certificates of officers of the Company and of public officials, we have relied on such certificates with respect to certain factual matters that we have not independently established and we reviewed such questions of law as we considered appropriate.
Page 2


In connection with rendering the opinions set forth below, we have assumed that:

(i)
all information contained in all documents reviewed by us is true and correct;
(ii)
all signatures on all documents examined by us are genuine;
(iii)
all documents submitted to us as originals are authentic and all documents submitted to us as copies conform to the originals of those documents;
(iv)
the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective;
(v)
one or more Prospectus Supplements will have been prepared and filed with the Commission describing the Securities offered thereby and will comply with applicable laws;
(vi)
all Securities will be issued and sold in compliance with applicable federal and state securities laws and in the manner specified in the Registration Statement and the applicable Prospectus Supplement;
(vii)
the form and terms of any Securities, the issuance, sale and delivery thereof by the Company and the incurrence and performance of its obligations thereunder or in respect thereof in accordance with the terms thereof, will be in full compliance with, and will not violate, the formation documents and agreements of the Company or any applicable law, rule, regulation, order, judgment, decree, award or agreement binding upon it, or to which the issuance, sale and delivery of such Securities, or the incurrence or performance of such obligations, may be subject, or violate any applicable public policy, or be subject to any defense in law or equity;
(viii)
each person signing the documents we examined has the legal capacity and authority to do so;
(ix)
at the time of any offering or sale of any shares of Common Stock and/or Preferred Stock, that the Company shall have such number of shares of Common Stock and/or Preferred Stock, as set forth in such offering or sale, authorized or created and available for issuance;
(x)
a definitive purchase, underwriting or similar agreement with respect to any Securities offered will have been duly authorized and validly executed and delivered by the Company and the other parties thereto; and
(xi)
any Securities issuable upon conversion, exchange or exercise of any Preferred Stock being offered will have been duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange or exercise.

Based on the foregoing, and subject to the assumptions, qualifications, limitations, and exceptions set forth herein, we are of the opinion that:

1.    With respect to shares of the Common Stock offered by the Company, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of the offering thereof and related matters and (b) certificates representing the shares of Common Stock have been duly executed, countersigned, registered and delivered either (i) in accordance with the applicable definitive purchase, underwriting or similar agreement approved by the Board, then upon payment of the consideration therefor (not less than the par value of the Common Stock) provided for therein; or (ii) upon conversion, exchange or exercise of any other Security in accordance with the terms of such Security or the instrument governing such Security providing for the conversion, exchange or exercise as approved by the Board, for the consideration approved by the Board (not less than the par value of the Common Stock), such shares of Common Stock will be, duly authorized, legally issued, fully paid and non-assessable;
Page 3


2.    With respect to shares of any series of Preferred Stock offered by the Company, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of the shares of the series, the terms of the offering thereof and related matters, including the adoption of a resolution establishing and designating the series and fixing and determining the preferences, limitations and relative rights thereof and the filing of a certificate of designations, preferences and rights with respect to the series with the Secretary of State of the State of Delaware (the “Certificate of Designation”) and (b) certificates representing the shares of the series of Preferred Stock have been duly executed, countersigned, registered and delivered either (i) in accordance with the applicable definitive purchase, underwriting or similar agreement approved by the Board, then upon payment of the consideration therefor (not less than the par value of the Preferred Stock) provided for therein or (ii) upon conversion, exchange or exercise of any other Security in accordance with the terms of such Security or the instrument governing such Security providing for the conversion, exchange or exercise as approved by the Board, for the consideration approved by the Board (not less than the par value of the Preferred Stock) the shares of the series of Preferred Stock will be, duly authorized, legally issued, fully paid and non-assessable;
 
3.    With respect to the Warrants offered by the Company, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of the Warrants, the terms of the offering thereof and related matters and (b) the terms of any Warrants and of their issuance and sale have been duly established in conformity with the applicable Warrant Agreement so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirements or restrictions imposed by any court or governmental body having jurisdiction over the Company, and the Warrants have been duly executed and authenticated in accordance with the applicable Warrant Agreement and issued and sold as contemplated in the Registration Statement, the Warrants will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and to general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law);
 
4.    With respect to the Subscription Rights offered by the Company, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of the Subscription Rights and related matters and (b) the Subscription Rights have been duly executed and delivered against payment therefor pursuant to the applicable definitive purchase, underwriting or similar agreement that has been duly authorized, executed and delivered by the Company, then the Subscription Rights will be validly issued and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and to general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law); and
 
5.    With respect to the Units offered by the Company, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of the Units (including any Securities underlying the Units) and related matters; (b) the Units (including any Securities underlying the Units) have been duly executed and delivered against payment therefor pursuant to the applicable definitive purchase, underwriting, or similar agreement that has been duly authorized, executed and delivered by the Company and any applicable unit or other agents, and (c) the certificates for the Units (including any Securities underlying the Units) have been duly executed and delivered by the Company and any applicable unit or other agents, then the Units will be validly issued and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and to general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law).
Page 4


This opinion is rendered solely in connection with the filing of the Registration Statement, is limited to the matters stated herein, and no opinions may be implied or inferred beyond the matters expressly stated herein. This opinion may not be relied upon for any other purpose without our prior written consent in each instance. Further, no portion of this letter may be quoted, circulated or referred to in any other document for any other purpose without our prior written consent.

The opinion expressed herein is limited to the federal securities laws of the United States of America and the corporate laws of the State of Delaware and we express no opinion as to matters governed by laws of any jurisdiction other than the federal securities laws of the United States of America and the corporate laws of the State of Delaware, as in effect on the date hereof. This opinion speaks only as of the date hereof and we assume no obligation to update or supplement such opinions to reflect any facts or circumstances that may hereafter come to our attention, whether existing before or arising after the date hereof, or any changes in law that may hereafter occur.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. In giving such consent, we do not admit that we come within the category of persons whose consent is required by Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.

  Sincerely yours,
   
   
  /s/ Holland & Knight LLP
   
 
HOLLAND & KNIGHT LLP

 
Exhibit 23.1



Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Registration Statement (Form S-3) of Contango Ore, Inc. of our report dated August 30, 2021, relating to the consolidated financial statements of Contango Ore, Inc., which report appears in the Form 10-K of Contango Ore, Inc. for the year ended June 30, 2021, and to the reference to our firm under the heading “Experts” in the Prospectus, which is part of this Registration Statement.

/s/ Moss Adams LLP

Houston, Texas
October 26, 2021
Exhibit 23.2



Consent of Independent Auditor

We consent to the incorporation by reference in this Registration Statement (Form S-3) of Contango Ore, Inc. of our report dated July 22,2021, relating to the financial statements of Peak Gold, LLC, which report appears as an exhibit to the Form 10-K of Contango Ore, Inc. for the year ended June 30, 2021, and to the reference to our firm under the heading “Experts” in the Prospectus, which is part of this Registration Statement.

/s/ Moss Adams LLP

Houston, Texas
October 26, 2021
Exhibit 23.4


Consent of Third-Party Qualified Person
 
Sims Resources LLC and its President, John Sims, in connection with the Registration Statement on Form S-3 (and any amendments, supplements and/or exhibits thereto, the “Registration Statement”) of Contango ORE, Inc. (the “Company”), hereby consent to:
 
●
The public filing and/or incorporation by reference by the Company and use of the technical report summary titled “Technical Report Summary on the Manh Choh Project, Alaska, USA” (the “Technical Report”), with an effective date of April 8, 2021 and that was prepared in accordance with Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission, as an exhibit to and referenced in the Registration Statement;

●
The use of and references to their name, including their status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission) on the Company’s website, or in connection with the Registration Statement; and

●
Any extracts from or a summary of the Technical Report on the Company’s website and in the Registration Statement and the use of any information derived, summarized, quoted or referenced from the Technical Report, or portions thereof, that was prepared by them, that they supervised the preparation of and/or that was reviewed and approved by them, that is made available on the Company’s website or included in the Registration Statement.

Sims Resources LLC and John Sims are responsible for authoring, and this consent pertains to, the Technical Report.  Sims Resources LLC and John Sims certify that they have read the Registration Statement and that it fairly and accurately represents the information in the sections of the Technical Report for which Sims Resources LLC and John Sims are responsible.


 
Dated: October 26, 2021
 
 
 
 
 
 
 
Executed by John Sims both in his individual capacity, and in his capacity as President of Sims Resources LLC
 
 
 
 
 
 
 
By:
/s/ John Sims
 
Name:
John Sims, AIPG CPG
 
Title:
President

Exhibit 96.1


 
TECHNICAL REPORT SUMMARY ON
THE MANH CHOH PROJECT, ALASKA,
USA
 
 
PREPARED FOR CONTANGO ORE, INC.
 

S-K 1300 Report




Qualified Person:
John Sims, C.P.G.




April 8, 2021
 
TABLE OF CONTENTS
 
    PAGE
     
1
EXECUTIVE SUMMARY
1-1
 
Conclusions
1-2
 
Recommendations
1-3
 
Technical Summary
1-4
2
INTRODUCTION
2-1
 
Site Visits
2-2
 
Sources of Information
2-2
 
List of Abbreviations
2-3
3
PROPERTY DESCRIPTION
3-1
 
Location
3-1
 
Land Tenure
3-3
 
Encumbrances
3-6
 
Other Royalties
3-6
4
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY
4-1
 
Accessibility
4-1
 
Climate
4-3
 
Local Resources and Infrastructure
4-3
 
Physiography
4-4
5
HISTORY
5-1
 
Prior Ownership
5-1
 
Exploration History
5-1
 
Past Production
5-12
6
GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT
6-1
 
Regional Geology
6-1
 
Local Geology
6-4
 
Property Geology
6-10
 
Mineralization
6-13
 
Deposit Types
6-15
7
EXPLORATION
7-1
 
Exploration
7-1
 
Drilling
7-14
 
Hydrogeology Data
7-23
 
Geotechnical Data
7-26
8
SAMPLE PREPARATION, ANALYSES, AND SECURITY
8-1
 
Surface Sampling Methods and Approaches
8-1
 
Drill Core Processing Procedures
8-3
 
Specific Gravity
8-6
 
Sample Preparation
8-7

Page i
 
Geochemical Analysis and Security
8-7
 
Quality Assurance and Quality Control
8-9
 
Sample Security
8-15
9
DATA VERIFICATION
9-1
10
MINERAL PROCESSING AND METALLURGICAL TESTING
10-1
 
2014 Metallurgical Testwork
10-1
 
Recent Testwork – 2016 to present
10-2
11
MINERAL RESOURCE ESTIMATES
11-1
 
Summary
11-1
 
Resource Database
11-3
 
Geological Interpretation
11-4
 
Resource Assays
11-7
 
Treatment of HIGH-GRADE Assays
11-7
 
Trend Analysis
11-10
 
Bulk Density
11-12
 
Block Models
11-12
 
Search Strategy and Grade Interpolation Parameters
11-15
 
Classification
11-18
 
Block Model Validation
11-20
 
Mineral Resource Reporting
11-21
12
MINERAL RESERVE ESTIMATES
12-1
13
MINING METHODS
13-1
14
PROCESSING AND RECOVERY METHODS
14-1
15
INFRASTRUCTURE
15-1
16
MARKET STUDIES
16-1
17
ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS
17-1
 
Social or Community Requirements
17-1
18
CAPITAL AND OPERATING COSTS
18-1
19
ECONOMIC ANALYSIS
19-1
20
ADJACENT PROPERTIES
20-1
 
Triple Z
20-3
 
Hona
20-4
 
Eagle
20-6
21
OTHER RELEVANT DATA AND INFORMATION
21-1
22
INTERPRETATION AND CONCLUSIONS
22-1
23
RECOMMENDATIONS
23-1
24
REFERENCES
24-1
25
RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT
25-1
26
DATE AND SIGNATURE PAGE
26-1

Page ii
LIST OF TABLES


    PAGE
     
Table 1-1
Phase 1 Proposed Program and Budget
1-4
Table 1-2
Summary of Mineral Resources as of December 31, 2020 – Peak Gold, LLC’s 100% Ownership
1-10
Table 1-3
Summary of Mineral Resources as of December 31, 2020 – Contango’s 30% Attributable Ownership
1-10
Table 4-1
Tok, Alaska Monthly Climate Summary, Period of Record June 1954 to April 2016
4-3
Table 5-1
Summary of Historical Work on Manh Choh Project
5-4
Table 7-1
Summary of Drill Holes from the Manh Choh Project, Alaska
7-14
Table 8-1
Specific Gravity Information Utilized in Tonnage Calculations
8-6
Table 8-2
Gold Blanks above 0.100 g/t 2011-2018
8-12
Table 10-1
Summary of Comminution Test Results
10-5
Table 11-1
Summary of Mineral Resources as of December 31, 2020 – Peak Gold, LLC’s 100% Ownership
11-2
Table 11-2
Summary of Mineral Resources as of December 31, 2020 – Contango’s 30% Attributable Ownership
11-2
Table 11-3
Uncapped Assay Statistics
11-7
Table 11-4
Cap Values Applied to Assay Intervals
11-8
Table 11-5
Basic Statistics of 2.5m Composites on Capped Assays by Domain for grade estimation  
11-9
Table 11-6
Block Model Geometry and Extents
11-15
Table 11-7
Block Grade Estimation Parameters
11-17
Table 11-8
Economic Input to Resource Floating Cone
11-22
Table 11-9
Summary of Mineral Resources as of December 31, 2020 – Peak Gold, LLC’s 100% Ownership
11-23
Table 11-10
Summary of Mineral Resources as of December 31, 2020 – Contango’s 30% Attributable Ownership
11-23
Table 20-1
Contango’s 100% Owned State Mining Claims
20-1
Table 26-1
Phase 1 Proposed Program and Budget
23-2



LIST OF FIGURES


  PAGE

   
Figure 3-1
Location Map
3-2
Figure 3-2
Tenure Map
3-4
Figure 4-1
Site Access
4-2
Figure 6-1
Regional Geology Map
6-3
Figure 6-2
Tectonic Map of the Manh Choh Project
6-3
Figure 6-3
Stratigraphy of the Manh Choh Project, Chief Danny Area
6-8
Figure 6-4
Typical Cross Section of Local Geology
6-9
Figure 6-5
Geology of the Chief Danny Area
6-12
Figure 6-6
Location of Peak Deposit within an Idealized Model of a Hydrothermal System
6-17
Figure 7-1
Chief Danny District Prospectivity Analysis.
7-4

Page iii
Figure 7-2
Main Peak Deposit Cross-Section 9735 oriented 045° - MAG and IP Chargeability
7-6
Figure 7-3
North Peak Deposit Cross-Section 10030 oriented 045° - MAG and IP Chargeability
7-7
Figure 7-4
West Peak Resource Target Area
7-9
Figure 7-5
Inverse Distance Grid of Gold in Soils, Chief Danny Area
7-10
Figure 7-6
Inverse Distance Grid of Copper, Arsenic, Lead, and Zinc in Soils, Chief Danny Area  
7-11
Figure 7-7
Chief Danny Drill Target Location Map
7-15
Figure 8-1
Standards Pairs Plot, 2011 through April 2017
8-11
Figure 8-2
Pulp Replicate Assay Results\
8-13
Figure 8-3
Coarse Reject Replicate Assay Results
8-14
Figure 11-1
Section Showing some of the Domains and Codes for the Manh Choh Project
11-6
Figure 11-2
Main peak, Example Gold Variograms
11-11
Figure 11-3
North Peak, Example Gold Variograms
11-11
Figure 11-4
Block Model Geometry and Rotation
11-14
Figure 11-5
Measured and Indicated Class Blocks
11-19
Figure 11-6
Cumulative Frequency Plot of Estimated Blocks, Gold at Main Manh Choh Project
11-20
Figure 20-1
Contango’s 100% Owned State Mining Claims
20-2
Figure 20-2
Hona Geology, Prospects, Drill Holes and Geophysics
20-5
Figure 20-3
Hona - Coincident Mag-VTEM with Geochemistry and Favorable Porphyry/IRG Geology
20-6
Figure 20-4
Strong Multiple-Element Geochemistry on Dome and Eagle Target Areas ..
20-7


Page iv
1
EXECUTIVE SUMMARY

Sims Resources LLC (SR) was retained by Contango ORE, Inc. (Contango) to prepare a Technical Report Summary on the Manh Choh Project (the Project), located near Tok, Alaska, U.S.A.  The purpose of this Technical Report Summary is to support the disclosure of Mineral Resources on the Project as of December 31, 2020 in the proposed registration statement on Form S-1 and periodic filings with the United States Securities and Exchange Commission (SEC).  This Technical Report Summary (TRS) conforms to SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary.

Contango is an Over the Counter Venture Market (OTCQB) company that engages in exploration for gold and associated minerals in Alaska.  It holds a 30% interest in Peak Gold, LLC (or Peak Gold JV), which leases approximately 675,000 acres of exploration and development, with the remaining 70% owned by a subsidiary of Kinross Gold Corporation (Kinross), operator of the Project.  Contango also owns a 100% interest in approximately 167,000 acres of State of Alaska mining claims through Contango Mineral Alaska, LLC, its wholly owned subsidiary, which gives Contango the exclusive right to explore and develop minerals on these lands..

The Project has been actively explored since 2009 when gold mineralization was discovered in a favourable geological environment for mid-Cretaceous intrusive-related gold deposits of the Tintana Gold Belt as well as late Cretaceous to mid Tertiary porphyry copper-molybdenum gold and related gold skarn deposits.  Two distal gold skarn deposits have been delineated, Main Peak and North Peak, and there is excellent potential to discover additional deposits on the Project.

As of December 31, 2020, the Mineral Resources held 100% by Peak Gold, LLC are estimated to total 9.2 million tonnes (Mt) at 4.1 g/t Au and 14.2 g/t Ag for 1.2 million ounces (Moz) Au and 4.2 Moz Ag in the Measured and Indicated categories and 1.3 Mt grading 2.7 g/t Au and 16.1 g/t Ag for 116,000 ounces (oz) Au and 694,000 oz Ag in the Inferred category.  Contango’s 30% attributable ownership of the Manh Choh Measured and Indicated Mineral Resources comprises 2.8 Mt at 4.1 g/t Au and 14.2 g/t Ag for 362,000 oz Au and 1.3 Moz Ag and Inferred Mineral Resources comprise 400,000 t at 2.7 g/t Au and 16.1 g/t Ag for 35,000 oz Au and 208,000 oz Ag.

Page 1-1
The Project was previously named “Peak Gold” but was renamed “Manh Choh” in March 2021 after close consultation with the local Upper Tacana Athabascan Village of Tetlin.  The Project contains a relatively high-grade gold deposit.  Kinross subsidiary, KG Mining (Alaska), Inc., operator and manager of the Project, plans to compile and review all available information and then carry out engineering and economic studies to advance the Project.  The primary concept being explored is the processing of material from the Project at Kinross’ mill operation at Fort Knox, which is located approximately 400 km northwest of the Project.

 
CONCLUSIONS
 
Based on the review of the available information, the Qualified Person (QP) provides the following conclusions:

●
The northern part of the Manh Choh Project is located in rocks that are highly prospective for mid-Cretaceous intrusive related gold deposits as well as two intersecting belts of mid-Cretaceous to mid-Tertiary porphyry copper-molybdenum-gold deposits and porphyry related distal gold skarn deposits.
●
The Project contains two deposits, the Main Peak and North Peak. Main Peak is a largely unoxidized distal skarn hosted in recumbent folded calcareous schist and marble interbedded with amphibolite grade argillaceous schist and quartzite. North Peak is a largely oxidized distal skarn hosted in recumbent folded calcareous schist and marble interbedded with amphibolite grade argillaceous schist and quartzite.
●
The drilling, sampling, sample preparation, analysis, and data verification procedures meet or exceed industry standard, and are appropriate for the estimation of Mineral Resources.
●
The Mineral Resources held by Peak Gold, LLC, effective as of December 31, 2020, comprise Measured and Indicated Mineral Resources of 9.2 Mt grading 4.1 g/t Au and 14.2 g/t Ag for 1.2 Moz Au and 4.2 Moz Ag and Inferred Resources of 1.3 Mt grading 2.7 g/t Au and 16.1 g/t Ag for 116,000 oz Au and 694,000 oz Ag.
o
On Contango’s 30% attributable ownership basis, the Manh Choh Measured and Indicated Mineral Resources, effective as of December 31, 2020, comprise 2.8 Mt grading 4.1 g/t Au and 14.2 g/t Ag for 362,000 oz Au and 1.3 Moz Ag.
o
On Contango’s 30% attributable ownership basis, Inferred Mineral Resources comprise 400,000 t grading 2.7 g/t Au and 16.1 g/t Ag for 35,000 oz Au and 208,000 oz Ag.
●
The deposits remain open and present exploration potential beyond the current Mineral Resources.  As the area is underexplored there is good potential to delineate additional exploration targets on the Lease.

Page 1-2
The QP is confident in the technical and economic assessment presented in this TRS.  The QP also recognizes that the results of this TRS are subject to many risks including, but not limited to: commodity and foreign exchange assumptions (particularly relative movement of gold), unanticipated inflation of capital or operating costs, and geotechnical assumptions in pit designs.  Mineral Resource estimates that are not Mineral Reserves do not have demonstrated economic viability.
 

RECOMMENDATIONS
 
The QP makes the following recommendations with respect to resource modelling and estimation work:

●
Move the database to a relational database such as acQuire moving forward.
●
Complete a geochemical and structural model for future work to support the estimation domains.  The QP notes that there is a large amount of multi-element data that could support a geochemical model to better understand the impact of elements such as arsenic, mercury, etc., on the gold distribution and recoveries.
●
Carry out an analysis on capping at the composite level to test the impact of capping the raw assays vs. the capped assays.  The Project mineralization is spatially complex with high grade variability with respect to gold and silver.
●
Incorporate independently estimated multi-element data into the block model to assess the impacts on the Mineral Resource.
●
Carry out additional block model validation checks between the composite and block model grades.  These would consist of visual section inspections, swath plots, and domain analysis.

Peak Gold JV prepared a Phase 1 budget as summarized in Table 1-1. The confirmation drilling will be comprised of geotechnical, infill, and metallurgical drilling.  The exploration drilling will focus on delineating potential new resources and reconnaissance and exploration targeting on the Project.  The environmental baseline, ongoing community relations, and the permitting process will form a large component of Phase 1.  The QP has reviewed and concurs with the proposed budget.

Contango’s share of the budget is 30%, or $5.413 million.

Page 1-3
TABLE 1-1   PHASE 1 PROPOSED PROGRAM AND BUDGET

Item
Description
2021 FY Total
(US$M)
1a
Field Program: Confirmation Drilling, Testing, and related costs
6.039
1b
Field Program: Exploration Drilling, Testing, and related costs
1.774
2
Environmental Baseline and Permitting
2.392
3
Community Relations
0.900
4
Engineering and Studies
1.827
5
Other Costs
0.030
6
Manager and Affiliate Employees
1.814
 
Subtotal Before Contingency and Administrative Charge
14.776
7
Contingency (15%)
2.216
8
Administrative Charge
0.850
 
Other Costs w/o Administrative Charge)
0.200
10
Total with Contingency and Administrative Charge
18.042

Note. The budget is based on 100% ownership, of which Contango would pay 30%, or $5.413 million.

A Phase 2 program, including engineering studies to advance to a feasibility study, will be carried out contingent on results of Phase 1 work.

 
TECHNICAL SUMMARY
 
PROPERTY DESCRIPTION
 
The Project is located in the Tetlin Hills and Mentasta Mountains of eastern Interior Alaska. The property is located 300 km southeast of the city of Fairbanks and 15 km southeast of Tok, Alaska.

 
LAND TENURE
 
The Manh Choh Project consists of a mineral lease from the Tetlin Tribal Council (Tetlin Lease or the Lease) covering approximately 675,000 acres.  The Project is owned by Peak Gold JV, which is owned by a subsidiary of Kinross (70%) and Contango (30%).  Contango is also the 100% owner of an Alaska State Claims exploration land package, located to the northwest and northeast of the Project.

All the State Claims and the Leased Land are subject to royalties held by Royal Gold Inc. (Royal Gold).  The rate of such royalty is 3% in respect of the Leased Land and certain State Claims and 2% in respect of certain other State Claims.

Page 1-4
In addition, the State of Alaska has a 3% Net Income Royalty on State mining claims.  It also levies a mining license tax on mining net income and royalties received in connection with mining properties and activities in Alaska.

The Mining Lease between the Peak Gold JV and the Tetlin Tribe provides the Peak Gold JV with the exclusive, complete, and unrestricted right to make any use or uses of the Leased Land to explore for, develop, mine, remove, treat, and sell all ore and minerals on the Leased Land. Pursuant to the Lease, Peak Gold JV is required to make minimum expenditures in order to maintain the Lease in addition to making certain production royalty payments to the Tetlin Tribal Council.  Peak Gold JV must spend a minimum of $350,000 a year exploring, evaluating, or developing the Leased Land. Peak Gold JV makes annual advanced minimum royalty payments to the Tetlin Council of $75,000 a year, plus an escalation adjustment equal to $75,000 multiplied by the consumer price index (CPI) percentage increase (as published by the U.S. Bureau of Labor Statistics) during the period from January 1, 2012 to the immediately preceding January 1 prior to the date of disbursement. Upon production being achieved, Peak Gold JV will pay the Tetlin Tribal Council a net production royalty (NPR).

In 2011, at the initiation of the Tetlin Tribal Council, Peak Gold JV and the Tetlin Council negotiated a buy down of the production royalty payments to be made under the Lease in return for up-front cash payments from Peak Gold JV’s predecessor totaling $225,000. As a result of the buy down, the current NPR rate for precious metals is 2.25% of net returns for the first four years of full-scale production, 3.25% for the fifth, sixth and seventh years, and 4.25% for the eighth and following years. On or before December 31, 2020, the Tetlin Tribal Council is entitled to buy back the 0.75% of the royalty by making a payment to Peak Gold JV for $450,000 which payment has recently been modified to be a $450,000 payment deducted from the initial production royalty payments when production starts. As a result of this latest modification, the royalty payments due to the Tetlin Tribal Council will be a 3% NPR over the first four years of production (minus the $450,000 advance payment), followed by 4% NPR for the fifth, sixth, and seventh years, and then increasing to 5% thereafter.

 
HISTORY
 
The first known arrival of a prospector to what is now the Manh Choh Project was in 1908 when James Northway brought a steam prospecting boiler to Tanacross and then set up a trading post at Tetlin Village the following spring.  No other mention of Northway’s prospecting efforts is available.  In the fall of 1913, prospector Andrew Taylor recovered about 200 ounces of gold from his discovery on the Chisana River bordering the eastern Project area.  A small rush to the district occurred, however, it was short-lived as the district was soon found to contain few large or paying placer gold deposits.

Page 1-5
Mineral exploration in the Manh Choh Project area came to a halt on June 10, 1930 when the approximately 750,000 acre Tetlin Indian Reserve (Tetlin Reserve) was established by the signing of Executive Order 5365 by President Herbert Hoover.

No other significant prospecting or geological work was reported from the Tetlin lands until the late 1960s. Approximately 40 geochemical samples were collected on the extreme southern edge of the Project during regional geologic mapping and geochemical sampling conducted by the US Geological Survey (USGS) in the late 1960s and early 1970s.  This work revealed no significant gold or base metal anomalies, possibly due to the crude, high detection limit analytical methods used.

The Tetlin Reserve was revoked in 1971 upon passage of the landmark Alaska Native Claims Settlement Act (ANCSA). In the mid-1970s, Resources Associates of Alaska (RAA), a Fairbanks-based mineral consulting firm, was allowed to conduct a limited reconnaissance mineral survey of Tetlin Tribal lands.  The results of this work are not available and attempts to locate data from this effort have not been successful.  Limited information on this program indicated that reconnaissance-level geochemical sampling was conducted in 1976 and eight days of field work were completed in 1980.  This work succeeded in discovering a tungsten skarn occurrence (exact location unknown) and two massive pyrite occurrences with nearby copper-lead-zinc exhalite horizons in the Meiklejohn Pass area.

The Lease was acquired by Juneau Mining Company (Juneau), an affiliate of Contango, in mid-June 2008.  In November 2010, Contango was formed and the Lease was contributed to it at that time.  Mineral exploration work was conducted on the property in 2009 through 2013.  In 2015, Royal Alaska, LLC, a subsidiary of Royal Gold, and Core Alaska, LLC, a subsidiary of Contango, entered into a joint venture with Contango for the Project, and the Lease and interests in the Project where contributed to Peak Gold JV.  Peak Gold JV conducted further mineral exploration work on the Project from 2015 through 2018.

Page 1-6
In September 2018, JDS Energy & Mining Inc. (JDS) prepared an internal Preliminary Economic Assessment (PEA) on the Project, which envisaged a conventional open pit truck and shovel operation with gold processing with cyanide leaching at a rate of 3,500 tonnes per day (tpd) over the potential Project life of eight years.

On September 30, 2020, Contango and Royal Gold each announced that a subsidiary of Kinross had acquired Royal Gold’s 40% interest and an additional 30% interest from Contango and was appointed Manager and Operator of Peak Gold JV, with the resulting ownership being Kinross at 70% and Contango at 30%.

 
GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT
 
From a regional perspective, the northern and western portions of the Project are located in rocks that are highly prospective for mid-Cretaceous intrusive-related gold deposits of the Tintina Gold Belt as well as late Cretaceous to mid-Tertiary porphyry copper-molybdenum-gold and related gold skarn deposits.  These two genetically different types of mineralization overlap in eastern Interior Alaska and the western Yukon Territory and are host to dozens of known prospects, deposits and active mines.  In addition, rocks on the southern edge of the Project which are south of the Denali fault are prospective for Triassic-age nickel-copper-platinum group element deposits hosted in regionally extensive mafic and ultramafic rocks.  Prior to its discovery in 2009, the distal gold skarn mineralization discovered on the Project was unknown elsewhere in Interior Alaska.  Other than the Main Peak, West Peak and North Peak zone resources, none of the other prospects on the Project are known to host quantifiable mineral resources, none have had metallurgical or mineral processing studies conducted on them, and none are near or adjacent to other significant gold or copper projects outside of the Project boundaries.

The majority of the bedrock in the Main Peak and North Peak resource area is a Lower Paleozoic quartz muscovite ± biotite schist unit (QMS) containing conformable layers of calcareous schist and lesser amphibolite schist/greenstone.  Gold-sulfide mineralization is preferentially hosted in the calcareous schist units which have been altered to amphibole–chlorite skarn. Older basement rocks are intruded by small Tertiary (70 Ma to 75 Ma) sills and dikes of intermediate composition, some of which intrude coeval andesitic volcanics.  Age dating of the Main Peak alteration and mineralization indicates that it is contemporaneous with Tertiary intrusive and volcanic activity.

Page 1-7
Recent structural analysis was carried out based on data collected from oriented and unoriented drill core, surface outcrops, airborne and ground geophysical surveys, and past reports on the Project to formalize a comprehensive structural paragenesis for the Main Peak and North Peak resource areas.  Two periods of folding and at least three periods of faulting have been identified by this work, including:

●
D1 Faulting: highly disjointed and deformed by later folding and faulting.  These faults are difficult to trace, probably are pre-kinematic or early syn-kinematic, pre-mineral structures.
●
D2 Faulting: northwest trending, high angle faults with dips to north or south.  These faults likely have both dip slip and/or right-lateral strike slip components, preferential locus in axial plans of F2 folds, may have pre-mineral and/or post-mineral motion on them but likely acted as feeder zones in syn-mineral time.
●
D3 Faulting: north-northeast trending moderately southeast-dipping reverse faults of uncertain age.  These post-mineral faults include the B1 and B2 faults which truncate mineralization in the West Peak area.
●
F1 Folding: northwest striking, isoclinal, often recumbent folds, south over north motion; most axial planes are southwest dipping.  Deformation includes disharmonic folding with greatest deformation in calcareous hosts, and possible late south over north thrust ramp development. There is no documented evidence of later gravity motion of former thrust ramps but this motion has been documented elsewhere in Interior Alaska.  These folds are syn-kinematic and of pre-mineral age.
●
F2 Folding: northwest striking asymmetric open folds with southwest dipping axial planes.  These structures re-fold all F1-related features, sometimes changing apparent fold vergence directions. These folds are also syn-kinematic or late-kinematic and of pre-mineral age.

 
EXPLORATION
 
Mineral exploration work was conducted on the Peak Gold property in 2009 through 2013 and 2015 through 2018.

Gold mineralization was discovered at the property during stream sediment and pan concentrate sampling in 2009 and exploration efforts since then have included top of bedrock soil sampling, induced polarization and DC resistivity and magnetotelluric (Titan-24 DCIP&MT) ground geophysics, airborne magnetic and electromagnetic geophysical surveys, and approximately 85,509 m of diamond core drilling.  These exploration efforts  defined two high-grade gold skarn deposits, Main Peak and North Peak, hosted in skarn-altered calcareous metasediments within an area of anomalous gold, copper and pathfinder metals that measures at least 6 km north-south by 5 km east-west. Several promising near-resource exploration targets have been identified and have been explored during 2017 and 2018.  More recent drilling was completed in 2019 and 2020, which will be included in future Mineral Resource estimate updates.
 
Page 1-8
MINERAL RESOURCE ESTIMATES
 
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300.  The Mineral Resources at the Project were developed using a computer-based block model of the deposit. The block model was assembled based on the drill hole assay information and geologic interpretation of the mineralization boundaries. Mineral Resources were estimated using the block model and open pit design to establish the component of the deposit with reasonable prospects of economic extraction.

Independent Mining Consultants, Inc. (IMC) assembled the block model and the estimate of Mineral Resources. The model was assembled during 2017 based on drilling available on April 29, 2017. Additional ongoing drilling has been reported since that time and will be incorporated into the 2021 updated block model.  Exploration and drilling at the Manh Choh Project has defined several areas of potentially economically extractable mineralization. The Mineral Resources include two deposits called: Main Peak and North Peak. There is an area southwest of Main Peak deposit that contains a few drill holes and was named Discovery Hill. Although the Discovery Hill area is contained within the block model, it was not modeled and is not included in the stated Mineral Resources.

The northwest end of the Main Peak deposit is referred to as West Peak because there are structural offsets between Main and West Peak deposits. The West Peak mineralization was modeled incorporating those structural offsets, and is tabulated as part of the Main Peak deposit on the Mineral Resource tables.

Table 1-2 summarizes a Mineral Resource estimate for the Project effective December 31, 2020 held 100% by Peak Gold, LLC.  Contango’s 30% attributable ownership of the Project is summarized in Table 1-3.

Page 1-9
TABLE 1-2   SUMMARY OF MINERAL RESOURCES AS OF DECEMBER 31, 2020
– PEAK GOLD, LLC’S 100% OWNERSHIP

Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
473
6.4
97
16.7
254
6.6
101
Indicated
8,728
4.0
1,111
14.1
3,945
4.2
1,168
Total Measured + Indicated
9,201
4.1
1,208
14.2
4,199
4.3
1,267
               
Inferred
1,344
2.7
116
16.1
694
2.9
126

TABLE 1-3   SUMMARY OF MINERAL RESOURCES AS OF DECEMBER 31, 2020
– CONTANGO’S 30% ATTRIBUTABLE OWNERSHIP

Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
142
6.4
29
16.7
76
6.6
30
Indicated
2,618
4.0
333
14.1
1,183
4.2
350
Total Measured + Indicated
2,760
4.1
362
14.2
1,260
4.3
380
               
Inferred
403
2.7
35
16.1
208
2.9
38

Notes for Tables 1-2 and 1-3:
1.
The definitions for Mineral Resources in S-K 1300 were followed for Mineral Resources..
2.
Mineral Resources are estimated at a cut-off value of US$28 NSR/t and US$30 NSR/t.
3.
Mineral Resources are estimated using a long-term gold price of US$1,400 per ounce Au, and US$20 per ounce Ag.
4.
Metallurgical recoveries were 90% Au and 52% Ag for the Main+West Zone and 94% Au and 60% Ag for the North Zone.
5.
Silver equivalents are reported using a ratio of 70.
6.
Bulk density is 2.75 t/m3.
7.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
8.
Numbers may not add due to rounding.

The QP is of the opinion that with consideration of the recommendations summarized in Sections 1 and 23 of this report, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.

The estimates of Mineral Resources may be materially affected if mining, metallurgical, or infrastructure factors change from those currently anticipated at the Manh Choh Project. Although the QP has a reasonable expectation that the majority of Inferred Mineral Resources could be upgraded to Indicated or Measured Resources with continued exploration, estimates of Inferred Mineral Resources have significant geological uncertainty and it should not be assumed that all or any part of an Inferred Mineral Resource will be converted to the Measured or Indicated categories.

Page 1-10
2
INTRODUCTION

Sims Resources LLC (SR) was retained by Contango ORE, Inc. (Contango) to prepare a Technical Report Summary on the Manh Choh Project (the Project), located near Tok, Alaska, U.S.A.  The purpose of this Technical Report Summary is to support the disclosure of Mineral Resources on the Project as of December 31, 2020 in the proposed registration statement on Form S-1 and periodic filings with the United States Securities and Exchange Commission (SEC).  This Technical Report Summary (TRS) conforms to SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary.

Contango is an Over the Counter Venture Market (OTCQB) company that engages in exploration for gold and associated minerals in Alaska.  It holds a 30% interest in Peak Gold, LLC (Peak Gold JV), which leases approximately 675,000 acres of exploration and development, with the remaining 70% owned by a subsidiary of Kinross Gold Corporation (Kinross), operator of Peak Gold JV and the Project.  Contango also owns a 100% interest in approximately 167,000 acres of State of Alaska mining claims through Contango Mineral Alaska, LLC, its wholly owned subsidiary, which gives Contango the exclusive right to explore and develop minerals on these lands.

The Project has been actively explored since 2009 when gold mineralization was discovered in a favourable geological environment for mid-Cretaceous intrusive-related gold deposits of the Tintana Gold Belt as well as late Cretaceous to mid Tertiary porphyry copper-molybdenum gold and related gold skarn deposits.  Two distal gold skarn deposits have been delineated, Main Peak and North Peak and there is excellent potential to discover additional deposits on the Project.

As of December 31, 2020, the Mineral Resources held 100% by Peak Gold, LLC are estimated to total 9.2 million tonnes (Mt) at 4.1 g/t Au and 14.2 g/t Ag for 1.2 million ounces (Moz) Au and 4.2 Moz Ag in the Measured and Indicated categories and 1.3 Mt grading 2.7 g/t Au and 16.1 g/t Ag for 116,000 ounces (oz) Au and 694,000 oz Ag in the Inferred category.  Contango’s 30% attributable ownership of the Manh Choh Measured and Indicated Mineral Resources  comprises 2.8 Mt at 4.1 g/t Au and 14.2 g/t Ag for 362,000 oz Au and 1.3 Moz Ag and Inferred Mineral Resources comprise 400,000 t at 2.7 g/t Au and 16.1 g/t Ag for 35,000 oz Au and 208,000 oz Ag.

Page 2-1
The Project was previously named “Peak Gold” but was renamed “Manh Choh” in March 2021 after close consultation with the local Upper Tacana Athabascan Village of Tetlin.  The Project contains a relatively high grade high-grade gold deposit and Kinross subsidiary, KG Mining (Alaska), Inc., operator and manager of the Project, plans to compile and review all available information and then carry out engineering and economic studies to advance the Project.  The primary concept being explored is the processing of material from the Project at Kinross’ mill operation at Fort Knox, which is located approximately 400 km northwest of the Project.

 
SITE VISITS
 
The Qualified Person (QP) for this Technical Report is:
 
●
John Sims, AIPG Certified Professional Geologist, President of Sims Resources LLC (SR)

The QP is of the opinion that with consideration of the recommendations summarized in Sections 1 and 23 of this report, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.

Mr. Sims was unable to visit the site in 2020, due to the COVID-19 virus and associated travel restrictions.  He will travel to site once these restrictions are relaxed, and travel is possible.  The QP relied on Project staff under his direction to inspect core and surface outcrops, drill platforms and sample cutting and logging areas.  Further, the QP discussed the details of geology and mineralization with Project staff.

 
SOURCES OF INFORMATION
 
The QP was Senior Vice President Mineral Resources and Brownfields Exploration at Kinross during the time of the acquisition of the property by Kinross.  Although a site visit was not possible, the QP had discussions with the Kinross due diligence team that interacted with the following Contango and Kinross personnel:

●
Luke Raymond, Project Geologist
●
Shawn Colburn, Field Geology Supervisor, Fairbanks Gold Mining Inc.

The documentation reviewed, and other sources of information, are listed at the end of this report in Section 24 References.

Page 2-2
 
LIST OF ABBREVIATIONS
 
Both metric and imperial units of measurement are used in this report.  The Mineral Resource estimate in Section 11 is reported in metric units, while historic information is reported in both metric and imperial units.  All currency in this report is US dollars (US$) unless otherwise noted.

a
annum
 
L/s
litres per second
A
ampere
 
m
metre
bbl
barrels
 
M
mega (million); molar
btu
British thermal units
 
m2
square metre
°C
degree Celsius
 
m3
cubic metre
C$
Canadian dollars
 
μ
micron
cal
calorie
 
MASL
metres above sea level
cfm
cubic feet per minute
 
mg
microgram
cm
centimetre
 
m3/h
cubic metres per hour
cm2
square centimetre
 
mi
mile
d
day
 
min
minute
dia
diameter
 
mm
micrometre
dmt
dry metric tonne
 
mm
millimetre
dwt
dead-weight ton
 
mph
miles per hour
E
east
 
MVA
megavolt-amperes
°F
degree Fahrenheit
 
MW
megawatt
ft
foot
 
MWh
megawatt-hour
ft2
square foot
 
N
north
ft3
cubic foot
 
NE
northeast
ft/s
foot per second
 
NW
northwest
g
gram
 
oz
Troy ounce (31.1035g)
G
giga (billion)
 
oz/st, opt
ounce per short ton
Gal
Imperial gallon
 
ppb
part per billion
g/L
gram per litre
 
ppm
part per million
Gpm
Imperial gallons per minute
 
psia
pound per square inch absolute
g/t
gram per tonne
 
psig
pound per square inch gauge
gr/ft3
grain per cubic foot
 
RL
relative elevation
gr/m3
grain per cubic metre
 
s
second
ha
hectare
 
S
south
hp
horsepower
 
SE
southeast
hr
hour
 
SW
southwest
Hz
hertz
 
st
short ton
in.
inch
 
stpa
short ton per year
in2
square inch
 
stpd
short ton per day
J
joule
 
t
metric tonne
k
kilo (thousand)
 
tpa
metric tonne per year
kcal
kilocalorie
 
tpd
metric tonne per day
kg
kilogram
 
US$
United States dollar
km
kilometre
 
USg
United States gallon
km2
square kilometre
 
USgpm
US gallon per minute
km/h
kilometre per hour
 
V
volt
kPa
kilopascal
     
kVA
kilovolt-amperes
 
W
west
kW
kilowatt
 
wmt
wet metric tonne
kWh
kilowatt-hour
 
wt%
weight percent
L
litre
 
yd3
cubic yard
lb
pound
 
yr
year

Page 2-3
3
PROPERTY DESCRIPTION
 
LOCATION
 
The Project is located in the Tetlin Hills and Mentasta Mountains of eastern Interior Alaska (Figure 3-1). The property is located 300 km SE of the city of Fairbanks (city and immediate area population 99,357) and 15 km SE of Tok, Alaska (population 1,258).  UTM coordinates for the Project are 404688E, 7007487N, and 900 MASL elevation.



Page 3-1


Page 3-2
LAND TENURE
 
The Project consists of a mineral lease from the Tetlin Tribal Council (Tetlin Lease or the Lease) covering approximately 675,000 acres (Leased Land) (Figure 3-2).

The approximately 750,000-acre Tetlin Indian Reserve (the Tetlin Reserve) was established in 1930.  An airstrip was constructed in 1946, and an all-weather road linking the Tetlin Village with the Alaska Highway was constructed in the 1990s.  When the Alaska Native Claims Settlement Act (ANCSA) was passed in 1971, the “Reserve” status was revoked, and the Tetlin Native Corporation (TNC) was granted fee simple surface and subsurface title to approximately 743,000 acres of land in the former Reserve. TNC later transferred all lands south of the midline of the Tanana River, approximately 675,000 acres, to the Tetlin Village.

Juneau Exploration, LP, doing business as Juneau Mining Company (Juneau), entered into a mineral lease with the Tribe of Tetlin, aka the Native Village of Tetlin, whose governmental entity is Tetlin Tribal Council, effective July 15, 2008 as amended and assigned (the Lease) covering the Leased Land.  By a series of assignments, Peak Gold JV succeeded to Juneau’s interest under the Lease.  The primary term of the Lease has been extended through July 15, 2028 and the Lease can be further extended past the primary term for so long as Peak Gold JV continues exploration, development or mining activities on the Leased Land.

The Tetlin Tribal Council holds fee simple title to the Leased Land. The Lease provides Peak Gold JV the exclusive, complete and unrestricted right to make any use or uses of the Leased Land to explore for, develop, mine, remove, treat and sell all ore and minerals on the Leased Land.

Page 3-3



Page 3-4
Pursuant to the Lease, Peak Gold JV was required to make minimum expenditures in order to maintain the Lease in addition to making certain production royalty payments to the Tetlin Council. Note that Peak Gold JV has accumulated enough work credit to last through December 31, 2029.  Peak Gold JV must spend a minimum of $350,000 a year exploring, evaluating or developing the Leased Land. Peak Gold JV makes annual advanced minimum royalty payments to the Tetlin Tribal Council of $75,000 a year, plus an escalation adjustment equal to $75,000 multiplied by the consumer price index (CPI) percentage increase (as published by the U.S. Bureau of Labor Statistics) during the period from January 1, 2012 to the immediately preceding January 1 prior to the date of disbursement.  If and when production is achieved, Peak Gold JV will pay the Tetlin Tribal Council a net production royalty (NPR).

In 2011, at the initiation of the Tetlin Tribal Council, Peak Gold JV and the Tetlin Council negotiated a buy down of the production royalty payments to be made under the Lease in return for up-front cash payments from Peak Gold JV’s predecessor totaling $225,000. As a result of the buy down, the current NPR rate for precious metals is 2.25% of net returns for the first four years of full-scale production, 3.25% for the fifth, sixth and seventh years, and 4.25% for the eighth and following years. On or before December 31, 2020, the Tetlin Tribal Council is entitled to buy back the 0.75% of the royalty by making a payment to Peak Gold JV for $450,000 which payment has recently been modified to be a $450,000 payment deducted from the initial production royalty payments when production starts. As a result of this latest modification, the royalty payments due to the Tetlin Tribal Council will be a 3% NPR over the first four years of production (minus the $450,000 advance payment along with all previous advanced minimum royalty payments made), followed by 4% NPR for the fifth, sixth, and seventh years, and then increasing to 5% thereafter.

On September 30, 2020, Contango announced that it had entered into an agreement (the Kinross Agreement) through its subsidiary, CORE Alaska LLC, whereby it planned to sell half of its 60% interest in Peak Gold JV to a subsidiary of Kinross for $32.4 million in cash and 809,744 shares.  Contango now owns a 30% interest in Peak Gold JV, with a subsidiary of Kinross owning the remaining 70% interest and acting as Project operator.  Contango is also the 100% owner of the Alaska State Claims exploration land package (see Figure 3-2).  Peak Gold JV has the option to purchase 12,890 acres of these claims for $50,000.

Page 3-5
ENCUMBRANCES
 
The State of Alaska has a 3% Net Income Royalty on State Mining Claims.  It also levies a Mining License Tax on  mining net income and royalties received in connection with mining properties and activities in Alaska.  The tax rate varies based on net income generated per year. Tax rates on mining net income are as follows (AS 43.65.010(c)):

●
No tax if net income is $40,000 or less
●
3% if net income is over $40,000
●
$1,500 plus 5% if net income is over $50,000
●
$4,000 plus 7% if net income is over $100,000

New operations are exempt from the mining tax for a period of 3.5 years after production begins.

There are no significant encumbrances to the Project known at this time.

 
OTHER ROYALTIES
 
In addition to the royalties provided for in the Lease (as described in Land Tenure), all of the State Claims and the Leased Land are subject to royalties held by Royal Gold Inc. (Royal Gold). The rate of such royalty is 3% in respect of the Leased Land and State Mining Claims.

By virtue of the Kinross Agreement, Royal Gold will receive increased royalty interests as follows:

●
An incremental 28% net smelter return (NSR) royalty on silver produced from an area of interest which includes the current resource area. Peak Gold JV retains the right to acquire 50% of this royalty for consideration of $4 million; and
●
An incremental 1% NSR royalty on certain State of Alaska mining claims to be spun out of the land package owned by Peak Gold JV to Contango, increasing Royal Gold’s royalty on this area from 2% to 3%.

The QP is not aware of any environmental liabilities on the property.  Peak Gold JV has all required permits to conduct the proposed work on the property.  The QP is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the property.

Page 3-6
4
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY
 
ACCESSIBILITY
 
The paved Alaska Highway passes through the northern edge of the Leased lands.  The paved Tok Cutoff of the Glenn Highway passes within a kilometer of the Leased Lands and traverses through the Eagle and Hona claim blocks along the NW side of the Project.  The 23-mile (37 km) long Tetlin Village gravel road provides year-round access to the northern Tetlin Hills, linking the Tetlin Village to the Alaska Highway.

Current road access to the resource area utilizes the first 3 km of the Tetlin Village Road from which a purpose-built access road extends approximately 14 km to the Project area (Figure 4-1).



Page 4-1


Page 4-2
CLIMATE
 
The Project area (elevation range 900 MASL to 1,000 MASL) has a dry-winter continental subarctic climate.  Summer daytime temperatures on the Project are typically in the 60°F to 80°F range with summertime lows in the 40°F to 50°F range.  Winter daytime temperatures vary from highs in the +20oF range to lows in the -30°F to -50oF range.  Average annual precipitation in the Project area, including snow fall, is 13 in. to 15 in., most of which falls as snow in the winter months.  The majority of the exploration generally takes place in summer however mines in the are operate on a year-round basis.

The nearest weather station is located in the town of Tok, Alaska (elevation 490 MASL), approximately 15 km from the Project site, which has recorded weather since 1954.

TABLE 4-1   TOK, ALASKA MONTHLY CLIMATE SUMMARY,
PERIOD OF RECORD JUNE 1954 TO APRIL 2016

 
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Annual
Average Max. Temperature (°F)
-6.5
7.6
24.7
44.3
60.4
70.4
72.
68
54.4
31.5
8.6
-3.4
36.1
Average Min. Temperature (°F)
-24.6
-15.9
-6.4
16
29.8
39.9
43.7
39
29.3
12.8
-9.8
-21.1
11.1
Average Total Precipitation (in.)
0.36
0.27
0.18
0.19
0.7
2.31
2.14
1.32
0.82
0.56
0.49
0.45
9.78
Average Total Snow (in.)
4.7
3.6
2.7
2.4
0.7
0
0
0.2
1.4
7.1
6.8
5.
35.7
Average Snow Depth (in.)
15
17
16
9
0
0
0
0
0
2
7
12
7
Source: Western Regional Climate Center

 
LOCAL RESOURCES AND INFRASTRUCTURE
 
The nearest town to the Project is Tok with a population of approximately 1,250 people.  Roads connect Tok to both Fairbanks and Anchorage (two of Alaska's most populous cities), the drive is approximately 3 hours 40 minutes or 6 hours 30 minutes, respectively.  Tok area medical needs are primarily served by Tok Clinic and EMS which are based within the same facility. Once stabilized, patients are typically airlifted via air ambulance to a hospital/medical center in Fairbanks (an approximately 1.5 hour flight) if further treatment is needed.

Tok and the Tetlin Village are part of the Alaska Gateway School District.  Tok School is a K–12 campus while the Tetlin Village school is a P-12 campus.  There is also a small University of Alaska office that provides distance education and even some local classes for the small community.

Page 4-3
Power for the site is being supplied by a local utility company, AP&T, in conjunction with Golden Valley Electrical Association.  The nearest line power is 160 km NW serving the town of Delta Junction.  An existing well (TET) has been used to provide a water supply for exploration and resource drilling.

 
PHYSIOGRAPHY
 
The Project is situated in an area of varied topographic relief with elevations ranging from 1,600 ft along the Tanana River to over 8,300 ft at the top of Noyes Mountain.  Mountainous terrain, primarily in the southern part of the Project, comprises approximately 50% of the Project with the remaining lands being composed of low rolling hills and wetlands.  Two mountain belts are present in the Project.  From north to south these are the Tetlin Hills and the Mentasta Mountains, a subsidiary unit of the Alaska Range. The Tetlin Hills extend from the Tanana River flats on the north and east to the Tok River flats on the west and to the lakeshore of Tetlin Lake on the south.  In the Tetlin Hills, ridges are generally rounded and typically have flat rubble crop and alpine tundra covered summits with maximum elevations reaching 3,300 ft (1,006 m).  North and west facing hillsides are forested with black spruce, aspen, birch, and alder.  Lower elevations are often poorly drained due in part to discontinuous permafrost conditions and are covered by soft muskeg and stunted black spruce forest. Outcrops occur locally along the ridgelines but colluvial and vegetative cover mask bedrock on hillsides and valley bottoms.  Much of the northern and western portions of the Tetlin Hills have been burned by wildfires during the 1990s and early 2000s to as recently as June and July 2016.  In these burned areas, black and white spruce have been largely replaced by deciduous species, including aspen, birch, willow, and alder.


Page 4-4
5
HISTORY
 
PRIOR OWNERSHIP
 
In 2008, Juneau entered into a mineral lease with the Tetlin Council covering the Leased Land.  By a series of assignments, Peak Gold JV succeeded to Juneau’s interest under the Lease. In late 2009, Ken Peak, President & CEO of Contango Oil & Gas Co. acquired 50% of Juneau’s interest and placed this into a newly formed wholly owned subsidiary, Contango Mining Co.   Contango Mining Co. acquired the remaining 50% in 2010 and Contango Ore (Contango) became a public company.  In 2014, Contango entered into a joint venture agreement with Royal Gold, whereby Royal Gold took over operatorship of the Peak Gold JV and spent $30 million by end of October 2018 in order to earn a 40% interest in the Project.  On September 30, 2020, Contango and Royal Gold announced that Kinross had acquired Royal Gold’s 40% interest and an additional 30% interest from Contango.  Contango retains 30% of Peak Gold JV and is a 100% owner of the State Leases.

 
EXPLORATION HISTORY
 
The following is summarized from JDS Energy & Mining Inc. (2018).

 
PRE-2008
 
The first known arrival of a prospector to what is now the Manh Choh Project was in 1908 when James Northway brought a steam prospecting boiler to Tanacross and then set up a trading post at Tetlin Village the following spring (Brown, 1984).  No other mention of Northway’s prospecting efforts is available.  In the fall of 1913, prospector Andrew Taylor recovered approximately 200 ounces of gold from his discovery on the Chisana River bordering the eastern Project area.  A small rush to the district occurred, however, it was short-lived as the district was soon found to contain few large or paying placer gold deposits.  By the summer of 1914, the district had left many of those working in search of better ground (Capps, 1916).

Page 5-1
Mineral exploration in the Project area came to a halt on June 10, 1930 when the approximately 750,000 acre Tetlin Reserve was established by the signing of Executive Order 5365 by President Herbert Hoover (Brown, 1984).  Although mineral prospecting and development under the 1872 Mining Law was contemplated for the Tetlin Reserve at some future date, such activities needed adoption of enabling regulations.  Attempts were made to promote the passage of such regulations, however, no such regulations were put forth and the Tetlin Reserve remained closed to mineral entry.  Part of the reason that the Tetlin Reserve was never opened to mineral entry was the statements by noted U.S. Geological Survey Geologist Dr. Phillip Smith, who indicated that “there was but slight chance of any minerals of consequence being found within the area”.  Dr. Smith also indicated that although he thought the Tetlin Reserve should be open to mineral entry as a matter of principle, “the tentative boundaries of the reservation were laid down so that all areas judged to be mineral bearing were excluded” from the Tetlin Reserve (Brown, 1984).

No other significant prospecting or geological work was reported from the Tetlin lands until the late 1960s. Approximately 40 geochemical samples were collected on the extreme southern edge of the Project area during regional geologic mapping and geochemical sampling conducted by the USGS in the late 1960s and early 1970s (Matson and Richter, 1971a; Matson and Richter, 1971b; Matson and Richter, 1971c).  All of these samples are located in the extreme south end of the Project area and analyses were conducted by atomic absorption for gold and by semi-quantitative emission spectrography for all other elements.  This work revealed no significant gold or base metal anomalies, possibly due to the crude, high detection limit analytical methods used.

The Tetlin Reserve was revoked in 1971 upon passage of the landmark Alaska Native Claims Settlement Act (ANCSA).  ANCSA authorized the formation of 12 Alaska Native regional corporations and over 200 Alaska Native village corporations to which 44 million acres of land (generally including both surface and minerals) have been conveyed.  Because a reserve had been established for the Tetlin Council, ANCSA allowed the TNC to choose whether (1) to make selections of a limited quantity of surface estate under ANCSA in the vicinity of the village and to participate in the broader benefits of ANCSA or (2) to take fee simple title to the lands within its former reserve and thereby forgo all other benefits under ANCSA (including revenue sharing under section 7(i)-(j) of ANCSA).  TNC chose the latter option and took fee simple surface and subsurface title to approximately 743,000 acres of land over the old Tetlin Reserve.  TNC later transferred all lands south of the midline of the Tanana River, approximately 675,000 acres, to the Tetlin Council, which represented the only inhabited village within the 675,000-acre tract.  TNC retained corporate ownership of the remaining lands north of the Tanana River. The mineral location closure that had been in effect since 1930 became permanent on both the TNC lands and on Leased Land.

Page 5-2
In the mid-1970s, the Tetlin Council allowed Resources Associates of Alaska (RAA), a Fairbanks-based mineral consulting firm, to conduct a limited reconnaissance mineral survey of their lands.  The results of this work are not available and attempts to locate data from this effort have not been successful.  Limited information on this program indicated that reconnaissance-level geochemical sampling of some sort was conducted in 1976 and eight days of field work were completed in 1980.  This work succeeded in discovering a tungsten skarn occurrence (exact location unknown) and two massive pyrite occurrences with nearby Cu-Pb-Zn exhalite horizons in the Meiklejohn Pass area (exact location unknown, Eng, 1980).

 
2008 TO 2020
 
The Lease was acquired by Juneau, an affiliate of Contango, in mid-June 2008.  Mineral exploration work was conducted on the property in 2009 through 2013, and 2015 through 2018. Initial field work on the Leased Lands was completed in mid-June 2009 by Avalon Development Corporation (Avalon), a contractor to Peak Gold JV through 2018.  Phase 1 field work included 270 man-days of project-wide helicopter supported reconnaissance geochemical sampling and prospecting.  Field work was conducted with a Hughes 500D helicopter and included evaluation of over 40 high priority sites identified by pre-season remote sensing analysis.  During this one-month work program, the four two-person teams collected a total of 387 rock samples, 94 pan concentrate samples, and 11 stream sediment samples over the Project area (Table 5-1).  Gold was found in a rock sample at the Discovery zone during this phase of work.


Page 5-3
TABLE 5-1   SUMMARY OF HISTORICAL WORK ON MANH CHOH PROJECT

Year
Core (m)
Core Samples
Rock Samples
Soil Samples
Pan Concentrate
Samples
Stream Sediment
Samples
Geophysics
(km)
2009
0.00
0
958
33
94
11
0
2010
0.00
0
613
760
668
795
14
2011
2,456
1,267
20
688
0
0
3,957
2012
10,974
5,223
82
1,029
0
0
0
2013
14,333
8,970
14
1,406
85
278
2,414
2014
0.00
0
0
0
0
0
0
2015
14,059
8,352
133
0
0
0
0
2016
20,523
10,450
21
694
0
0
23.5
2017
18,088
11,864
112
975
408
408
48.0
2018
6,059
2,973
420
0
1
9
32.6
Total
86,509
49,099
2.373
5,585
1,256
1,501
6,489


Phase 2 work in 2009 consisted of limited field follow-up of the initial rock and pan concentrate sample anomalies at the Chief Danny prospect.  The area covers the current North Peak and Main Peak deposits, as well as other prospects.  The work was completed in early September and included collection of 49 rock samples and 33 soil samples.  Possible road access routes were also identified during this phase of work.

Phase 3 work in 2009 was designed to expose mineralization at the Discovery zone using heavy equipment.  This program was completed in October.  Following construction of a 21 km (13 mile) long pioneer trail to the Discovery zone, a total of 2,330 ft of dozer trenching was completed in four trenches.  All trenches were mapped and a total of 522 rocks samples was collected in the trenches and along the access trail constructed to the site.

Encouraging results from the 2009 program prompted Juneau/Contango to expand their efforts in 2010.  The 2010 Phase 1 program included helicopter-supported reconnaissance level stream sediment and pan concentrate sampling and prospect-scale soil auger sampling, rock sampling, induced polarization (IP) ground geophysics, and prospecting (Brown et al., 2010).  The stream sediment and pan concentrate sampling began in drainages surrounding the Chief Danny prospect area and worked concentrically outward from this area to eventually provide geochemical sampling coverage for most major stream drainages of the Tetlin Hills and several of the larger drainages on the southern end of the Project.  The soil sample crews collected top of bedrock soil auger samples on the Chief Danny prospect and surrounding areas.  During this phase of work, the exploration stream sediment/pan concentrate teams collected a total of 296 rock samples, 667 pan concentrate samples, and 795 stream sediment samples over the Project area.  Exploration in the Chief Danny prospect area resulted in collection of 292 rock samples and 560 soil samples.  Zonge Engineering completed 9.65 line-km of dipole-dipole IP ground geophysics over the main Chief Danny prospect area.


Page 5-4
The encouraging results from 2010 Phase 1 soil sampling and IP surveys prompted Juneau/Contango to approve additional IP and soil sampling as part of a Phase 2, 2010 field program.  Phase 2 soil and IP surveys on the Chief Danny prospect were conducted between September 7 and October 8 (Brown et al., 2010; Fleming and Pendrigh, 2010).  Work concentrated on the expansion of the Chief Danny IP geophysics coverage, initial IP coverage of a coincident gold-copper-arsenic anomaly at the Saddle zone, and limited top of bedrock soil auger sampling over the new IP lines completed.  A total of 200 top of bedrock soil auger samples and 25 grab rock samples were collected during Phase 2 work.  In addition, a total of 4.5 line-km of IP geophysics was completed east of the Chief Danny prospects and in the Saddle zone.  Interpretive work was conducted by Windels (2010) and Beasley (2010) using IP, regional-scale magnetics and project geochemical data.

The Tok claim block was staked by Contango in 2010 and expanded in 2012.  There is no record of any mineral exploration work on these lands in the past.  Subsequent exploration of these lands, which are located west of and adjacent to the Leased Land, was conducted in 2010, 2012, 2013, and 2015 through 2018.  The incremental cost of exploration on the Tok lands was not tracked separately in 2010 but in 2012 it was considered part of the MM prospect where soil auger sampling was conducted.  A total of 358 soil auger samples were collected on the MM prospect in 2012.  Airborne magnetic and electromagnetic surveys were conducted over the Tok claims and 99 soil auger samples collected at MM in 2013.

The 2011 exploration program at the Project consisted of three phases of work extending from late April through mid-October.  Phase 1 work consisted of 3,957.3 line-km of DIGHEM airborne magnetics and electromagnetics completed by Fugro Airborne Surveys before the summer field season began (Fugro, 2011).  The survey covered four (non-contiguous) areas including the Tetlin Hills block (includes the Chief Danny-MM-Chisana prospect areas, 2,004.3 line-km), the Taixtsalda Hill block (352.6 line-km), the Copper Hill block (1,421.9 line-km), and the Triple Z block (178.5 line-km.  Flight lines were N-S on all blocks with tie lines at right angles on all blocks except Copper Hill where topographic considerations required modification of the tie line directions to azimuth 123° (303°).  Flight line spacing over the main Chief Danny prospect in the Tetlin Hills block was 100 m while spacing on all other blocks was 200 m.  Instrument height above ground was 35 m for both the magnetic and electromagnetic sensors.  Final digital products delivered from this work included all raw data, electromagnetic anomaly maps, calculated vertical gradient maps, residual magnetic intensity maps, and 56,000 Hz, 7,200 Hz and 900 Hz resistivity maps. A detailed summary of the program and equipment used is presented in Fugro (2011).  Interpretive work was conducted by Windels (2011) using this magnetics and resistivity data.  Geophysical contractors Zonge Engineering, Condor Geophysics, and Kim Cook also conducted geophysical reinterpretation work on data from the Project  area during 2015 through 2018.

Page 5-5
Phase 2 efforts in 2011 consisted of top of bedrock soil auger sampling on the Chief Danny prospect and lesser amounts of reconnaissance soil auger sampling on the MM and Chisana prospects and shovel soil sampling on the Copper Hill prospect.  During this phase of work 668 soil auger and 20 grab rock samples were collected at Chief Danny, 304 soil auger and one grab rock sample was collected at MM, 327 soil auger samples were collected at Chisana and 290 shovel soil samples, 16 grab rock samples, five pan concentrate samples, and one stream sediment sample were collected at Copper Hill.

Phase 3 work in 2011 consisted of 2,455.62 m of drilling in 11 diamond core holes (1,267 core samples, Table 6-1).  With the exception of part of one hole, all core drilled was HQ diameter (2.5 inch).  This drilling was conducted by Connors Drilling of Montrose, Colorado using a CS1000 fly-capable drill rig.

The 2012 exploration program consisted of top of bedrock soil auger sampling at the Chief Danny, Taixtsalda, and MM prospects and 10,974 m (36,004 ft) of diamond core drilling in 50 drill holes at the Chief Danny prospect.  The drilling was conducted by Connors Drilling of Montrose, Colorado using a CS14 wheel mounted drill rig and a CS1000 fly-capable drill rig.  All core drilled was HQ diameter (2.5 inch). Initial field efforts consisted of 137 soil samples at Taixtsalda to cover coincident airborne magnetic and resistivity anomalies and 357 soil samples along the ridges above anomalous pan concentrate and stream sediment gold and pathfinder element anomalies in the streams draining the MM prospect.  A total of 534 soil samples and 82 grab rock samples were collected on the western and southern margins of the Chief Danny prospect during 2012. Drilling with the CS14 drill rig at the Discovery zone at the Chief Danny prospect began on May 23 and continued at several other targets through September 21.

Page 5-6
In addition to exploration work in 2012, several other project improvements were completed. Initial baseline water sampling was conducted by ABR, Inc. of Fairbanks, Alaska in May and September.  The “Eagle” claims were staked on state land adjacent to and west of the Leased Lands.  This new block consists of 217 state claims and covers 32,187 acres.  No field work was conducted on these claims in 2012.  During July and August, an additional 6.5 km (4 mi) of access road was permitted and constructed between the Tetlin Village road and the 2009 Chief Danny Road.  This new spur road cut travel distance to the Chief Danny Prospect by nearly 17 km (10.5 mi) and allowed year-round access to the Project.

The 2013 exploration program at the Project consisted of four phases of work extending from late May through early-October.  Initial work consisted of 1,622.9 line-km (1,420.4 line-km N-W and 202.5 line-km E-W) of frequency-domain DIGHEM airborne magnetics and electromagnetics completed by Fugro Airborne Surveys before the summer field season began (Table 6-1, Fugro, 2013a and Fugro, 2013b, and Beard, 2013).  This part of the survey expanded the 2011 airborne coverage in the Tetlin Hills and included the Eagle prospect to the NW of the Tetlin Hills.  The survey consisted of three separate blocks: the north edge of the Tetlin Hills (274.9 line-km), south margin of the Tetlin Hills (556.8 line-km) and the newly acquired Eagle claims to the NW (791.2 line-km).  Flight lines were N-S on all blocks with tie lines at right angles on all blocks.  Flight line spacing was 200 m. Instrument height above ground was 35 m for both the magnetic and electromagnetic sensors.  Final digital products delivered from this work included all raw data, electromagnetic anomaly maps, calculated vertical gradient maps, residual magnetic intensity maps, and 56,000 Hz, 7,200 Hz and 900 Hz resistivity maps.  In addition, 791.1 line-km of time-domain HELITEM electromagnetic survey (706.1 line-km N-S and 85 line-km E-W) was conducted over the Chief Danny zone and vicinity.  A detailed summary of the program and equipment used is presented in Fugro (2013).  All geophysical survey data from 2010 through 2013 as well as all other technical data was then merged and reinterpreted by Condor Geophysics of Denver, CO (Cunion, 2013).

During 2013, Contango completed 14,349.6 m of diamond core drilling in 69 holes at the Chief Danny prospect. All but eight of these holes, totaling 2,188.8 m, were drilled in the Peak zone.  The majority of the drilling was conducted by Connors Drilling of Montrose, Colorado using a CS14 wheel mounted drill rig and a CS1000 fly-capable drill rig.  A second CS14 was added to the program in mid-August.  Following repeated mechanical issues with one of the CS14 drills, it was replaced in late August by a similar CS14 drill provided by CnC Drilling of Fairbanks, Alaska.  All core drilled was HQ3 diameter (6.06 cm/2.406 in) using ACT 2 and three orientation tools in conjunction with a split tube system.  Drilling commenced on May 29 and continued through October 3.

Page 5-7
Following completion of the 2013 drilling program at the Peak zone, Contango published its first resource estimate for the Peak zone (Giroux, 2013b).  This resource estimate includes data from 130 drill holes totaling 27,767 m for diamond core drilling.  The resource estimate was not made public.

During the 2013 field program, a total of 1,406 top of bedrock, soil samples were collected in the Tetlin Hills.  Samples were collected on 100 m by 100 m grids in twenty target areas and along the Chief Danny drill road over six prospects.  Sample collection targets were selected to expand on previously sampled areas and to collect samples in areas with coincident high magnetic susceptibility and high conductivity geophysical signatures, similar to that seen in the Peak zone. From these sample areas, 243 samples were collected in the Chief Danny prospect, 498 samples were collected in Chisana, 74 samples were collected in Himalaya, 99 samples were collected in MM, 453 samples were collected in Tors, and 30 samples were collected in Wishbone.

The approximately 56,000-acre Eagle claim block was staked in 2012 and 2013 as a response to the Peak zone discovery and subsequent drilling program.  The Eagle block is underlain by similar geology as the northern Tetlin Hills and limited reconnaissance stream sediment and pan concentrate samples collected by Federal government agencies in the 1970s revealed widespread copper and arsenic anomalies within the area now covered by the Eagle claims.  No field work was conducted on the Eagle claims in 2012, however, a reconnaissance level stream sediment and pan concentrate sampling program completed over the Eagle claims in 2013.  This work resulted in collection of eight rock samples, 278 stream sediment samples, 85 pan concentrate samples, and coverage of the SE half of the Eagle claims by DIGHEM airborne magnetic and electromagnetic surveys.

Examination of existing regional geological and geochemical data also prompted Contango to stake the Bush and West Fork claim blocks in early 2013.  Each of these claim blocks consists of 48 State of Alaska mining claims covering 7,680 acres.  These claim blocks, located north of Leased Lands, exhibited copper and arsenic anomalies similar to those within the Eagle block.  No field work was required or conducted on these two claims blocks in 2013.

Page 5-8
The environmental baseline program started in 2012 was continued and expanded during 2013.  Fairbanks-based ABR, Inc. conducted seasonal baseline water quality samples, and completed initial biotic inventories of fish, macroinvertebrates, and periphyton.  Water quality sampling was conducted at 16 sites in June and again in October.  Fish sampling was conducted at six sites during July. In addition to the above baseline environmental monitoring work, an initial Wetland Determination study was completed on 3,180 acres of the Tetlin Hills in mid-August.  This work was centered on the Chief Danny prospect access roads and covered the majority of the prospect’s gold and copper in soil anomalies.  A weather station was also installed at Vertical Angle Bench Mark (VABM) Tetling in July to provide climatic data for environmental baseline studies and to provide weather conditions for flight operations on the Project.  Information from the solar powered wet-cell battery weather station was connected to an internet uplink allowing real-time data analysis.

No field operations were conducted during 2014.

In 2015, Royal Alaska, LLC, a subsidiary of Royal Gold, and Core Alaska, LLC, a subsidiary of Contango, entered into a joint venture agreement for the Project (then named “Peak Gold Project”).

Exploration efforts during 2015 included two phases of drilling in the Chief Danny area, Phase 1 in May through July and Phase 2 in September and October, separated by a month of data analysis and budgeting in August.

In addition to the drilling in 2015, a total of 133 rock samples were collected over the Eagle and Noah prospects and Peak Gold JV continued baseline water quality and wetlands jurisdiction studies.  Late in the fall, the Project acquired a post-wildfire air photo of the northern Tetlin Hills to document the extent of the fire and the nature of disturbances created by the Alaska Division of Forestry during its firefighting efforts.

In 2016, three phases of drilling were completed to test targets in the North Peak, West Peak and East Peak areas.  In addition to the drilling in 2016, the Peak Gold JV completed 23.5 line-km of dipole-dipole ground IP geophysics by Quantec Geosciences Ltd., collected 694 top-of-bedrock soil auger samples over the Ridgeline prospect SW of Main Peak, and continued baseline water quality and wetlands jurisdiction studies. Peak Gold JV also commenced efforts toward completion of the first resource update since late 2013.  Tucson-based Independent Mining Consultants, Inc. (IMC) was selected to complete this work as 2017 Phase 1
data became available.

Page 5-9
Following an interpretive review of the airborne geophysical surveys conducted by Contango in 2011 and 2013 and by the State Division of Geological and Geophysical Surveys in 2014 (Emond et al., 2015), the Peak Gold JV staked 219 State of Alaska mining claims cover 34,440 acres over what is known as the Noah claim block.  In early 2017, the Noah block was expanded with the staking of an additional 222 State of Alaska mining claims coving an additional 34,440 acres.  The Noah claims are located contiguous with and west of the Leased Land block and contiguous with and south of the Eagle claim block.

Phase 1 drilling in the period January through mid-April 2017 consisted of infill and expansion drilling at North Peak as well as scout drilling at the West Peak (PT pad) and True Blue Moon targets.  The drilling consisted of 40 drill holes (3,702 m) in the North Peak zone, one hole (281 m) in the PT target at West Peak zone and six holes (1,251 m) in the True Blue Moon target.  The majority of the North Peak drilling was targeted at infill and perimeter drilling to better define the resource estimate being conducted by IMC.  The drill target at West Peak was an exploration hole targeting a magnetic high not previously tested by drilling.  The True Blue Moon drilling targeted a multi-discipline magnetic-resistivity-soil anomaly along the general NW trend of the North Peak deposit.  SRK was retained to take over all permitting and environmental affairs management for the Peak Gold JV, resulting in submission of the Project’s first individual wetlands permit through the U.S. Army Corps of Engineers.  This work was accompanied by wetlands reclamation conducted in April 2017.

Phase 2 work was conducted from May through August 2017 and consisted of core drilling, IP geophysics, and geochemical sampling.  Core drilling of 16 drill holes (3,373.97 m) was carried out in the Main Peak, 7 O’clock, West Peak Extension, and Waterpump zones.  Drilling at Main Peak was for confirmation and metallurgical purposes while drilling at the other three zones was exploration oriented to follow up on previously identified geochemical and geophysical targets.  Ontario-based Quantec Geosciences Ltd completed 47.9 line-km of pole-dipole IP including:

1.
Infill over the NW extensions of the Main Peak and North Peak deposits (primarily in Waterpump Creek),
2.
Expansion of the 7 O’clock target area; and,
3.
Expansion of the 8 O’clock area.

Page 5-10
Phase 2 work also included collection of 873 top of bedrock soil samples and 14 grab rock samples in the South Limb, String of Pearls and southern 8 O’clock areas. Later in the summer, the Peak Gold JV collected 363 pan concentrate samples, 364 stream sediment, and five grab rock samples over the Noah and southern Eagle claim blocks and completed logging, photographing, and Niton XRF analysis of the 885 m of split core from three Hona prospect core holes loaned to the Project by Kinross.

In June 2017 Peak Gold JV completed a mineral resource estimate update on the Main Peak and North Peak deposits (IMC, 2017).  IMC completed this work using drilling data available through the end of 2017 Phase 1.  The resource estimate was considered compliant with CIM Definition Standards (2014) incorporated by reference in Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects.  Further details of this resource estimate can be found in Section 11 of this TRS.

During Phase 2, SRK continued its efforts to obtain an Individual Permit for the Peak Gold JV from the U.S. Army Corps of Engineers.  This wetlands permit was eventually awarded late in 2017.  In addition, Peak Gold JV conducted extensive reclamation of the greater Chief Danny area with focus on the North Peak, Waterpump, Main Peak, New Moon, and TBM prospect areas.  At the conclusion of this work, all past wetlands disturbances had been reclaimed.

On September 26 and 27, 2017, Peak Gold JV conducted its first use of a drone for airborne photogrammetric work.  The work was conducted by Anchorage-based K2 Dronotics who conducted surveys over 1,096 acres of the Project. Coverage included the Main Peak – North Peak deposits as well as adjacent surrounding areas.  The Main Peak – North Peak area, covering 269 acres, was covered at a resolution of at least 2 inches per pixel from an instrument height above ground of 380 ft.  The surrounding areas, broken up into six additional blocks totaling 827 additional acres, were covered at a resolution of at least 3 inches per pixel from an instrument height above ground of 400 ft.

Phase 3 exploration for 2017 was conducted in September and October and consisted of drilling of 16 core holes (2,966 m) in the, 7 O’clock, West Peak Extension, Forks and North Peak areas.  Other than the North Peak drilling, all of the Phase 3 drilling was exploration in nature and designed to expand or follow up on previously identified targets.  The North Peak drilling was designed to test down-dip mineralization on the southern edge of the North Peak resource.

Page 5-11
During 2018, Phase 1 exploration, conducted from mid-April to June, consisted of 34.1 line-km of pole-dipole IP, 43.4 line-km of Titan 24 DCIP-MT ground geophysics, and core drilling at the 2 O’clock and 8 O’clock zones (nine holes, 957 m).  Additional drilling was conducted in the second half of 2018.  Fairbanks-based ABR Inc. conducted an early summer water quality sampling on May 29 and 30 with another round of sampling planned for mid-September.  Additional Titan 24 DCIP-MT ground geophysics at Copper Hill and Taixtsalda prospects and core drilling at Copper Hill and North Saddle also were conducted in August through October 2018.

In September 2018, JDS Energy & Mining Inc. (JDS) prepared a Preliminary Economic Assessment (PEA) on the Project, which envisaged a conventional open pit truck and shovel operation with gold processing with cyanide leaching at a rate of 3,500 tonnes per day (tpd) over the potential Project life of eight years.

On September 30, 2020, Contango and Royal Gold each announced that a subsidiary of Kinross had acquired Royal Gold’s 40% interest and an additional 30% interest from Contango, and was appointed Manager and Operator of the newly formed Peak Gold JV.  KG Mining (Alaska), Inc, operator and manager of the Project, is reviewing all aspects of the Project and assessing the best approach to advance the Project.

 
PAST PRODUCTION
 
There has been no production from the property up to the effective date of the report.



Page 5-12
6
 GEOLOGICAL SETTING, MINERALIZATION, AND DEPOSIT

The following is taken from JDS (2018) to which the reader is referred from more detailed descriptions of the Regional, Local Property geology.

 
REGIONAL GEOLOGY
 
Terrane models of Alaska refer to the east-central portion of Alaska, between the Yukon River to the north and the Alaska Range to the south, as the Yukon-Tanana Terrane (YTT) (Figure 6-1) (Nokleberg et al., 1994).  Recent work by Allen et al., (2013) and Dusel-Bacon et al., (2006) suggests the rocks underlying the northern portion of the Project are Middle Paleozoic parautochthonous rocks of ancestral North America that were formed in a continental margin setting before being sutured to the YTT in pre-Jurassic time.  For purposes of this report, the distinction between YTT and parautochthonous rocks of ancestral North America will be ignored and the combined subterranes will be referred to collectively as YTT.

The northern 85% of the Project is hosted within the YTT. The current prevailing theory on the origin of the YTT suggests development of a Devonian volcanic arc along the continental margin of the North American craton (Aleinikoff et al., 1981, and Nokleberg et al., 1994).  The YTT in east-central Alaska is bounded on the north by the Tintina Fault and on the south by the Denali Fault.  These parallel, dextral strike slip faults form major sutures with up to 400 km of offset since the middle Cretaceous (Flanigan et al., 2000).

Several smaller subterranes located within and adjacent to the YTT on the south have uncertain structural relationships with the YTT (Figure 6-2).  The Windy McKinley and Pingston Terranes occur along the south margin of the YTT and north of the Denali fault.  These two smaller terranes consist of a collection of island arc-related assemblages whose origins are complex and somewhat controversial. Foster, Keith and Menzie (1994) refer to all of these island arc terranes, with the exception of the Windy McKinley terrane, as additional sub-terranes of the YTT.  Allen et al., (2013) lump Windy McKinley and Pingston Terranes into a single non-YTT subterrane while Nokleberg and others (1994) lump Windy McKinley and Pingston Terranes into the Jarvis Creek Glacier subterrane of the YTT, a simpler convention adopted in this report.

The extreme southern end of the Project is part of the Gravina-Nutzotin terrane, a Jura-Cretaceous sedimentary on-lap assemblage comprised primarily of flysch-type sediments that occur immediately south of the Denali fault.  The Gravina-Nutzotin terrane lies disconformably on the Wrangellia terrane, a complex assemblage of Pennsylvanian and Permian marine volcanic and sedimentary rocks overlain by a thick sequence of Late Triassic submarine and subaerial tholeiitic basalt of the Nikolai Greenstone and associated mafic and ultramafic intrusive rocks and shallow and deep-water calcareous sedimentary rocks.

Page 6-1


Page 6-2


Page 6-3
LOCAL GEOLOGY
 
The Project is located largely within poly-metamorphic rocks of the YTT.  Mapping by Foster (1970) and Richter (1976) has defined several broad lithologic packages which Nokleberg and others (1992) and Foster, Keith and Menzie (1994) correlate with the Jarvis Creek Glacier subterrane, the southern-most of four regionally extensive subterranes identified within the YTT.  Basement rocks in the Jarvis Creek subterrane are generally greenschist to granulite facies metamorphic rocks of Mississippian or older age. A brief description of these rock types on the Project follows.

The only published geologic maps available for the Leased Lands on the Project are 1:250,000 scale (1 inch equals 4 miles) quadrangle maps dating from the 1970s (Foster, 1970; Richter, 1976). These regional scale maps provide only a basic framework geology for the Project.  The northern half of the Project, primarily in the Tetlin Hills and extending to the NW onto the Project’s Eagle claim block, is mapped as poorly exposed calcareous and non-calcareous quartz-muscovite schist, quartz-biotite gneiss and schist, quartz-hornblende gneiss, quartz-feldspar-biotite gneiss, augen gneiss, quartz-muscovite-garnet gneiss, and quartzite (Foster, 1970).  Garnet is a common component in these rocks.  Although not mapped by Foster (1970), the Tetlin Hills hosts a significant amount of carbonate-bearing rocks, ranging from clean marbles to calcareous schists with variable but significant carbonate content.  These calcareous units, which are host to the Main Peak and North Peak skarn mineralization, generally are less than two metres to three metres in individual thickness but can form mixed calcareous schist – pelitic schist packages over 100 m in thickness.

A gradational metamorphic isograd boundary separates higher grade schist and gneiss on the north from lower grade schist and phyllite units to the south. These lower grade rocks consist of light-pink, light green, tan, and gray phyllite, quartz-sericite schist, quartz-sericite-chlorite schist, quartzite, and marble.  In the Alaska Range in the SW part of the Tanacross quadrangle, these rocks are primarily light pink, light green, gray, and tan phyllite with some included greenstone.  Several discontinuous marble beds up to 50 feet thick and associated quartzite units occur in this rock package although they are not mapped separately by Foster (1970) or Richter (1976).  Foster (1970) reported two age dates from the biotite gneiss and schist unit on the SE end of the Eagle claim block about 10 miles south of Tok near the Tok Cutoff to the Glenn Highway.  A Rb87/Sr87 age date returned an age of 120 Ma from biotite while a muscovite sample returned a K40/Ar40 age date of 119 Ma and a Rb87/Sr87 age date of 524 Ma.  A Rb87/Sr87 whole rock age date of 1,173 Ma suggesting that rocks are likely Precambrian to Paleozoic in age and have been reset by more than one period of regional metamorphism.

Page 6-4
Southward, the rocks become more schistose with quartz-sericite schist, quartz-sericite-chlorite schist, quartz-graphite-schist, and quartzite becoming the dominant rock types.  Rocks of this unit are primarily greenschist facies.  These lower-grade schists and phyllites are intruded by small bodies of gray altered and metamorphosed diorite that occur as small sills, dikes, and plugs.  Intrusives become more common to the south and extend into the northern Nabesna Quadrangle where Richter (1976) mapped these rocks as more continuous sillform bodies and described these units as fine to coarse-grained augite and hornblende bearing diorite and gabbro.  These rocks have an equigranular hypidiomorphic to ophitic textures consisting principally of ophitic augite, saussuritized calcic plagioclase, and minor hornblende.  The primary plagioclase and the lack of foliation indicate that these diorite to gabbro units were emplaced after the primary folding and metamorphic events in this part of the Alaska Range.

Dark-greenish-gray massive greenstone consisting chiefly of fine-grained epidote, chlorite and albitized feldspar occur in the Copper Hill area of the Project and appears to be in fault contact with overlying marine metasedimentary rocks to the south (Richter, 1976).  These greenstone units often are actinolite-bearing and in the Copper Hill prospect area contain <0.5% disseminate fine grained pyrite. These mafic extrusive units are commonly in fault contact above and below with dark-gray phyllite, dark-gray to buff quartzite and calcareous quartzite, light-gray slate, buff to light-gray calcareous quartz mica schist, and light-gray marble.  Rocks are isoclinally folded with axial-plane schistosity well defined in the phyllite and schist layers.  These phyllite and quartzite units are structurally overlain by dark-to light-gray phyllite and brownish-gray metaconglomerate containing conspicuous stretched clasts and subordinate quartz mica schist, quartzite, calcareous mica schist, quartz-chlorite schist, and thin marble lenses.  Rocks exhibit well-defined axial plane schistosity deformed by a later period of kink-folding. Thermal metamorphism has locally produced cordierite- and andalusite-bearing knotty schists peripheral to the widespread plutonic rocks just north of the Denali fault.  Gray to dark-gray recrystallized limestone is interbedded with the marine schists and phyllite units, often forming resistant pinnacles along ridgelines.  Rugose and tabulate corals from widely scattered localities indicate a Middle Devonian age (Richter, 1976).

Page 6-5
The southernmost portion of the Project is hosted in post-accretionary Jura-Cretaceous rocks of the Gravina-Nutzotin terrane which are separated from metamorphic rocks of the YTT by the Denali fault.  The Gravina-Nutzotin terrane lies disconformably on the regionally extensive Wrangellia terrane which crops out on the extreme southern edge of the Project (Richter, 1976; Foster et al., 1994).  Rocks of the Gravina-Nutzotin terrane include a 900 m thick sequence of dark gray argillite and minor siltstone, mudstone, greywacke, and impure limestone.  Conspicuous clasts of light-gray massive limestone, ranging in size from cobbles to house-size boulders, occur sporadically through the lowermost section.  Sparsely distributed Buchia fossils throughout the unit indicate a Late Jurassic age.  Clasts in the conglomerate consist of well-rounded volcanic and volcaniclastic rocks, limestone, chert, and crystalline igneous rocks derived from underlying strata, and white quartz and metamorphic rocks probably derived from the metamorphic terrane north of the Denali fault.  These rocks are regionally extensive and correlative with Jura-Cretaceous flysch units of the Kahiltna Terrane to the SW (Nokleberg et al., 1994; Silberling et al., 1994).

The Wrangellia Terrane is a regionally extensive allocthonous terrane separated from the YTT by the Denali fault (Nokleberg et al., 1994).  The contact between the YTT and Wrangellia is obscured by the post-accretionary Gravina-Nutzotin terrane.  Dextral offsets of up to 8 m in a single event have been documented on the Denali fault as recently as 2002.  The southern edge of the Project is hosted in the Slana River subterrane, the northern of two E-W trending Wrangellia subterranes in this part of Alaska.  The Slana River subterrane consists mainly of:

●
A thick sequence of Pennsylvanian and Permian island-arc andesite and dacite overlain by marine limestone, argillaceous chert, volcaniclastics and tuffs of the Tetelna Volcanics, Slana Spur Formation and Eagle Creek Formation which are part of the Skolai arc;
●
A 1,500 m thick sequence of disconformably overlying massive basalt flows of the Late Triassic Nikolai Group and co-genetic gabbroic and ultramafic intrusives; and
●
Late Triassic limestone.

Rocks of the YTT, Pingston, Windy McKinley, Gravina-Nutzotin and Wrangellia Terrane are extensively intruded by Mesozoic and Cenozoic granitic rocks (Foster, Keith and Menzie, 1994; Illig, 2015; Benowitz et al., 2017; Sicard et al., 2017; and Twelker et al., 2018).  These largely unfoliated, predominantly felsic to intermediate, plutonic rocks reach batholithic proportions east of the Shaw Creek fault (Foster, Keith and Menzie, 1994).  Radiometric age dates indicate that most of the plutonic rocks west of the Shaw Creek fault are mid-Cretaceous to early Tertiary, whereas plutonic rocks east of the Shaw Creek Fault range from Late Triassic to Late Tertiary. Age dates have been used to subdivide the plutonic rocks of the YTT into three distinctive groups:

Page 6-6
1.
Late Triassic – Early Jurassic (215 Ma – 188 Ma);
2.
Mid- to Late Cretaceous (110 Ma – 85 Ma, with most clustering from 95 Ma – 90 Ma); and,
3.
Latest Cretaceous to Eocene (70 Ma – 50 Ma) in two subgroups that cluster around 70 Ma and 55 Ma.

Figures 6-3 and 6-4 illustrate the stratigraphic column and a typical cross-section of the local geology, respectively.


Page 6-7


Page 6-8



Page 6-9
PROPERTY GEOLOGY
 
CHIEF DANNY AREA GEOLOGY
 
The majority of the bedrock in the Chief Danny area is a quartz muscovite ± biotite schist unit (QMS) containing conformable layers of amphibolite schist/greenstone.  Figure 6-5 illustrates the property geology in the Chief Danny area.  The QMS unit is primarily comprised of quartz, muscovite, biotite and local garnet with minor actinolite and epidote. QMS is fine to medium grained and varies in color from gray to green, green-gray or blue-gray with opaque to milky white quartz.  This unit is usually tan to dark brown in the weathering zone.  Conformable but discontinuous metamorphic quartz “sweats” are common whereas quartz veins that cross-cut foliation are rare.  The QMS unit is exposed in road cuts and on ridge top outcrops in the Tetlin Hills and is regionally extensive in eastern Interior Alaska.  The muscovite and biotite contents of the QMS unit are variable, with zones several meters thick containing only the muscovite-rich end member to zones a few centimeters thick containing only the biotite end member.  Dodecahedral red garnets (almandine) within the QMS unit range in size from two millimeters to nearly one centimeter in diameter.  Limited petrologic data indicates that some garnets have helicitic textures indicative of shearing and rolling during regional metamorphism (Deininger, 2013).

From an economic standpoint, the most important of the major rock types in the Chief Danny area is a calcareous unit that is interbedded with the QMS unit and which forms the primary host for silicate skarn alteration as well as gold and sulfide mineralization at Main and North Peak.  The composition of this rock type various from rare pure marble (seldom mineralized) through a gradational series of calcareous schists ranging from a calcareous arenite to a silty marble.  The marble unit is equigranular, fine to medium grained, and weakly to strongly foliated.  Unaltered, unmineralized marble is light gray and has been intercepted east and NE of the resource zone and occurs as beds ranging from centimeter to multiple meters thick that are interbedded with QMS.

Calcareous arenite to silty marble forms the primary host for skarn alteration and gold-sulfide mineralization.  Because primary textures and mineralogy are often destroyed by metamorphism, alteration and mineralization, the importance of calcareous schists was not recognized until grid-based drilling at the Main Peak deposit in 2013 produced core exhibiting the entire spectrum of calcareous schists, ranging from barren to completely replaced by alteration and mineralization.  Because calcareous schists are less competent than surrounding MQS, calcareous rocks tend to deform more easily, resulting in their displaying a myriad of complex to simple deformational textures, including structural thickening and thinning, isoclinal and recumbent folding, cascade folding and disharmonic folding.  This behaviour often makes correlation of calcareous schist units, both barren and mineralized, difficult or impossible in drill sections. It is believed that most of the deformation exhibited by calcareous schists in the Chief Danny area is of pre-mineral age, most likely a result of ductile deformation during one or both periods of regional metamorphism that have affected these rocks.

Page 6-10
Layers of massive, equigranular greenstone/amphibolite schist ranging from 5 ft to 50 ft thick are located on the south side of the Chief Danny prospect, primarily south of the Spring fault.  This unit is weakly to moderately foliated with minor calcite and trace to minor disseminated pyrrhotite + chalcopyrite. Greenstone is often interbedded with quartz-mica schist and/or calcareous schist.  The rock is dark greenish-gray to black and can be distinguished in airborne magnetics due to its high magnetic susceptibility.

Southwest of the Spring fault, bedrock is comprised of similar rocks as described above but the ratio of calcareous rocks to QMS/greenstone is significantly lower.

The metamorphic country rocks of the Chief Danny area have been intruded by small plugs and hypabyssal intrusive bodies of felsic, intermediate, and mafic composition.  The largest of these bodies, a porphyritic quartz monzodiorite crops out along the northern end of Mohawk Ridge.  The Mohawk Ridge quartz monzonite body appears to be a sill or dike intruding the QMS.

Tertiary intermediate, mafic and felsic hypabyssal rocks and their more widespread volcanic equivalents are common along the extreme western edge of the Chief Danny area and north of the Tors fault.

Recent structural analysis has identified two periods of folding and at least three periods of faulting, including:

●
D1 Faulting: highly disjointed and deformed by later folding and faulting.  These faults are difficult to trace, probably are pre-kinematic or early syn-kinematic, pre-mineral structures.
●
D2 Faulting: NW trending, high angle with dips to north or south.  These faults likely have both dip slip and/or right-lateral strike slip components, preferential locus in axial plans of F2 folds, may have pre-mineral and/or post-mineral motion on them but likely acted as feeder zones in syn-mineral time.
●
D3 Faulting: N-NE trending moderately SE-dipping reverse faults of uncertain but likely post-mineral age.  These post-mineral faults include the B1 and B2 faults which truncate mineralization in the West Peak area.
●
F1 Folding: NW striking, isoclinal, often recumbent, south over north motion, most axial planes are SW dipping.  Deformation includes disharmonic folding with greatest deformation in calcareous hosts, and possible late south over north thrust ramp development. There is no documented evidence of later gravity motion of former thrust ramps but this motion has been documented elsewhere in Interior Alaska.  These folds are syn-kinematic and of pre-mineral age.
●
F2 Folding: NW striking asymmetric open folds with SW dipping axial planes. These structures re-fold all F1-related features, sometimes changing apparent fold vergence directions.  These folds are also syn-kinematic or late-kinematic and of pre-mineral age.

Page 6-11

 
Page 6-12
MINERALIZATION
 
The Manh Choh Project contains two deposits, the Main Peak and North Peak.  Both deposits have appreciable quantities of gold, silver, and copper associated with pyrrhotite-chalcopyrite-arsenopyrite dominant stratabound replacement bodies interlayered with Ca-Fe amphibole which replace the calcareous portions of the interlayered calcareous to argillaceous schist unit.  High angle discordant pyrrhotite-chalcopyrite-arsenopyrite-spalerite-galena-boulangerite-pyrite-amphibole-calcite-quartz veins show open space textures and are proposed to represent the D2 hydrothermal fluid conduits connecting from the source pluton to the chemically responsive host rock trap.  The highest gold and silver grades are associated with the junctions of the discordant veining and the calcareous schist with precious metal grade rapidly decreasing down dip, and gently tapering up dip.  Two major discordant vein orientations one generally striking E-W dipping steeply N, and one striking NW-SE dipping steeply N control the shape of the mineralized body with their interaction with the composite fold body of calcareous schist, i.e., elongate in the E-W direction with a NW oriented tail. The intersection of these major discordant veins and secondary N-E to N trending faults creates east dipping shoots which have localized and accentuated hydrothermal fluid flow.

 
MAIN PEAK DEPOSIT
 
Main Peak is a largely unoxidized distal skarn hosted in recumbent folded calcareous schist and marble interbedded with amphibolite grade argillaceous schist and quartzite.  A cross section through Main Peak is presented in Figure 6-4.  A penetrative foliation/axial planer cleavage characterizes the Chief Danny prospect, this cleavage is striking 150° and dipping 20°-30° SW. The numerous recumbent isoclinal folds measure 0.1 cm to 2.0 cm across the axis and form a composite overturned isoclinal fold shape with its axis sub parallel to the strike of foliation and opening to the NE.  This larger composite fold body of calcareous schist, also opening to the NE, crops out at the surface, measures 200 m vertically and 300 m horizontally in cross section. In long section, the fold measures just over 500 m.  The calcareous schist body is dissected by three to four high angle NE-SW trending normal faults which display offsets of 2 m to 10 m, appear to be post-mineralization in age, and have a periodicity of 100 m along the strike of the folded calcareous schist body.  The eastern edge of the composite fold is proposed to be truncated by the B1 fault, a N-NE striking, moderately east dipping (45°-50°) reverse fault, also of D2 age.  At least one NW striking, sub-vertical fault, thought to be a D2 feeder zone, can be traced along the long axis of the mineralization.  This fault is characterized by +100 g/t Ag values associated with highly anomalous Pb, Sb, and Zn with the highest-grade concentration of these metals in the extreme SE portion of the Main Peak deposit.

Page 6-13
Gold, silver, and copper mineralization is associated with pyrrhotite-chalcopyrite-arsenopyrite dominant strata bound replacement bodies interlayered with Ca-Fe amphibole dominant gangue which has replaced the calcareous portions of the interlayered calc-schist units.  High angle discordant pyrrhotite-chalcopyrite-arsenopyrite-spalerite-galena-boulangerite-pyrite-amphibole-calcite-quartz veins show open space textures and are thought to represent the hydrothermal fluid conduits connecting the source plutonic system to the chemically responsive host rock.  The highest gold and silver grades are associated with the junctions of the discordant veining and the calcareous schist with precious metal grade rapidly decreasing down dip, and gently tapering up dip. Two major discordant vein orientations have been identified at Main Peak, one generally striking E-W dipping steeply N (the 275 fault), the other striking NW-SE and dipping steeply north (the 305 fault).  Combined, these two feeder systems control the shape of the mineralized body which is elongate in the E-W direction with a NW oriented tail.  The intersection of these major discordant veins and secondary N-E to N trending faults creates east dipping shoots which have localized and accentuated hydrothermal fluid flow.  As is true at the North Peak resource, the eastern portion of these feeders returned significantly higher silver grades (>100 g/t) associated with higher Pb, Sb and Zn, possibly indicating a higher temperature and fluid flow regime on the extreme SE end of the Main Peak resource.

 
NORTH PEAK DEPOSIT
 
North Peak is a largely oxidized distal skarn hosted in recumbent folded calcareous schist and marble interbedded with amphibolite grade argillaceous schist and quartzite. A significant portion of the North Peak resource area is oxidized to depths in excess of 50 m below surface, resulting in widespread iron, copper and arsenic oxides. This strong, pervasive oxidation destroyed the magnetic and conductive pyrrhotite-arsenopyrite-chalcopyrite skarn mineralization, resulting in geophysical signatures unlike those over the unoxidized Main Peak zone.  A cross section through North Peak is presented in Figure 6-4.

Page 6-14
A penetrative foliation/axial planer cleavage characterizes the Chief Danny prospect, this cleavage is striking 150° and dipping 20° to 30° to the SW.  The numerous recumbent isoclinal folds measure 0.1 m to 2 m across the axis and form a larger composite overturned isoclinal fold shape with its axis sub parallel to the strike of foliation and opening to the SW.  This composite fold body of calcareous schist measures 150 m vertically and 100 m horizontally in cross section.  In long section, the fold measures just over 270 m over the NW portion of the resource and is proposed to have had the upper limb and hinge eroded in the SE portion of the resource.  The calcareous schist body is dissected by four to five high angle NE-SW trending normal D3 faults which display offsets of 2 m to 10 m, appear to be post-mineralization in age, and have a periodicity of 100 m along the strike of the folded calcareous schist body.  The eastern edge of the resource area is proposed to be truncated by the B1 fault, a N-NE striking, moderately east dipping (45°-50°) reverse D3 fault.

Gold, silver, and copper mineralization is associated with pyrrhotite-chalcopyrite-arsenopyrite dominant strata bound replacement bodies interlayered with Ca-Fe amphibole dominant gangue which has replaced the calcareous portions of the interlayered calc-schist units in the NW half of the resource.  The weathering product of this mineralization, dominated by hematite, limonite, goethite, and scorodite-rich clays, make up a significant portion of the SE resource area. High angle discordant pyrrhotite-chalcopyrite-arsenopyrite-spalerite-galena-boulangerite-pyrite-amphibole-calcite-quartz veins show open space textures and are thought to represent the D2 hydrothermal fluid conduits connecting the source plutonic system to the chemically responsive host rock.  The highest gold and silver grades are associated with the junctions of the discordant veining and the calcareous schist with precious metal grade rapidly decreasing down dip, and gently tapering up dip. At least two steeply dipping, NW striking D2 feeder faults have been identified within the North Peak zone, the 125 and 110 faults, named for their strike directions.  As in the Main Peak zone, the eastern portion of these feeders returned significantly higher silver grades (>100 g/t) associated with higher Pb, Sb and Zn, possibly indicating a higher temperature and fluid flow regime on the extreme SE end of the North Peak resource.

 
DEPOSIT TYPES
 
Exploration results from 2009 through 2018 revealed the presence of a distinctive suite of elements, sulfide minerals and alteration minerals at the Main Peak, North Peak and Discovery zones that do not match the typical characteristics of an intrusive-related gold system but do share several diagnostic characteristics of distal reduced gold-copper-silver skarns and the larger porphyry copper systems with which such skarns are sometimes associated.

Page 6-15
Petrologic data from Deininger (2012) and Illig (2015) confirmed the rare presence of remnant prograde skarn minerals (hedenbergite and wollastonite). The most pervasive and often abundant alteration assemblage associated with gold-sulfide mineralization, however, is amphibole and chlorite, a mineral assemblage normally associated with retrograde skarn alteration.  This evidence suggests the highest temperatures reached during silicate alteration were stable for amphibole and chlorite but temperatures rarely reached levels where true prograde skarn minerals were stable.  From a strictly technical standpoint, amphibole at Main Peak and North Peak is a prograde mineral., however, to avoid confusion of the reader, the terms “prograde” and “retrograde” will not be used in this report except in places where their use is defined and in compliance with the commonly understood technical meaning of these two terms.

New Pb-isotope data from the Peak zone plots in a zone with other replacement / vein style mineral deposits with 206Pb / 204Pb ratios in the 19.1 to 19.2 range and 207Pb/204Pb ratios in the 15.64 to 15.68 range (Illig, 2015). The Peak zone’s Pb-isotope data are considerably more radiogenic than Devonian-Mississippian volcanogenic massive sulfide deposits that are common to the west in the Delta Mining District. Lead isotope data from Cretaceous and Tertiary plutonic rocks in the Yukon Tanana Terrane plot in a similar range to the Peak zone samples and other skarn samples from Eastern Interior Alaska, leading Newberry et al., (1997) to conclude that the source of lead for Yukon Tanana Terrane skarns was plutonic.

In September 2013, noted economic geologist Richard Sillitoe conducted a two-day site visit to the Project and agreed with the previously drawn conclusion that the gold-rich mineralization at the Peak zone was part of a reduced gold skarn system within a larger porphyry copper setting (Sillitoe, 2013). Additional evidence supporting the presence of a larger porphyry copper-gold system includes:

1.
35 km2 of anomalous copper, gold and pathfinder element soil sample geochemistry zoned from a copper-gold enriched core to arsenic-lead-zinc-manganese enriched rim;
2.
A-type quartz magnetite veins observed in a crowded quartz monzonite porphyry intrusive in drill hole TET11006 on Mohawk Ridge; and
3.
A metal and mineral suite similar to well-known distal gold skarn deposits in other parts of the world.

The link to a porphyry copper system was further strengthened by trace element work conducted by Illig (2015).  On a plot of Y/Sr compared to SiO2 content, the Main Peak skarn at Peak plots clearly in the porphyry copper field with other well-known examples such as Bingham Canyon, Yanacocha, Batu Hijau, Pebble and similar age porphyries in the adjacent Yukon Territory.

Sillitoe (2013) suggested that the Peak zone alteration and mineralization most closely resembles the gold-sulfide skarn deposits mined at the Fortitude deposit in the Battle Mountain Mining District of central Nevada. Figure 6-6 illustrates the location of the Manh Choh Project within an idealized model of a hydrothermal system.

Page 6-16


Page 6-17
7
EXPLORATION
 
EXPLORATION
 
The following is summarized from JDS (2018).

 
MAIN PEAK EXPLORATION
 
The Main Peak deposit area is located 250 m N-NW of VABM Tetling approximately 15 km S-SE of Tok Junction and measures 600 m in the E-W direction and 220 m in the N-S direction with the Tintana Gold Belt.

Following delineation of anomalous gold and pathfinder metals in rock, soil, stream sediment, and pan concentrate samples in 2009 and 2010, the Main Peak deposit was discovered by drilling an Au-As-Cu soil auger anomaly in June 2012.  Drill holes TET12016-12019 targeted a NW-SE oriented elevated gold-in-soil anomaly; the four drill holes were placed to create a crossed scissors section to test either a NE or SW dip to mineralization.  Holes TET12016-12017 were angled at -50° and -70° to the NE and holes 12018-12019 were offset 15 m to the NW, drilled at -50° and -70° to the SW.  From the collar to 114 m downhole, TET12016 intercepted stratiform disseminated to massive pyrrhotite, arsenopyrite, and chalcopyrite mineralization hosted in stratiform semi-massive to massive amphibole-chlorite skarn.  Drill holes TET12017-12019 returned similar results and defined a steep NE dip to the mineralized body, while the host stratigraphy displayed foliation dipping shallowly to the SW.  After assay results of core samples from drill holes TET12016-12019 confirmed the presence of high-grade gold mineralization (1.51 to 845 gram-meters), a series of three-hole fans of -50°, -70°, and -90° were drilled at 100 m step outs from the two fences of scissor holes.  Two fences were drilled to the SE and three to the NW.  This drill program allowed for the initial 2012 resource estimate (Giroux, 2013a).

The 2013 drill program was designed to upgrade the Inferred Resource to the Indicated level.  Drilling was laid out at a nominal 30 m spacing between 225° azimuth, -60° inclination holes as well as between fences.  This drill program allowed for the second Main Peak resource estimate (Giroux, 2013b).  The 2015 drill program at Main Peak extended the resource to the west and explored the depth extent with two 1,000 m deep drill holes.  During 2016, four cardinal direction-oriented drill holes were completed to test the resource integrity between fences.  These holes showed good correlation with previously modeled mineralization and mineralized intervals from these holes were utilized for metallurgical testing.  A total of 106 drill holes totaling 23,027 m have been completed in the Main Peak resource area.

Page 7-1
Limited drilling to the east of the Main Peak resource suggests decreasing gold grades although drill density on the eastern end of the Main Peak resource is sparce.  The down-dip portion of the lower fold limb, heading NE, has not been drilled extensively due to its depth below surface and the lower gold grade returned from the few drill holes that have tested it.  It is proposed that the lower limb of the folded calcareous unit may join the mineralized North Peak folded calcareous unit and that there may be undiscovered D2 feeder structures which would act as fluid conduits to create additional precious metal mineralization between the Main Peak and North Peak resource areas.

Extensive drilling in 2016 and 2017 on the western extension of the Main Peak resource revealed the presence of the N-S striking, shallow east dipping B2 reverse fault.  This post-mineral D3-age fault truncates the western end of the Main Peak zone and juxtaposes it with a thick, distinctive purple-green colored calc-schist unit which contains thinner, lower-grade gold zones characterized by extremely low arsenic values.  Potential for Main Peak grade-thickness intervals is present in the footwall of the B2 fault, known as the West Peak Extension, including hole TET17379 which returned 8.16 m grading 5.22 g/t Au starting at 103.24 m and an additional 29.1 m grading 2.53 g/t Au starting at 116.6 m. Continuity of grade and thickness, however, could not be established during grid-based 2017 drilling.

 
NORTH PEAK EXPLORATION
 
The North Peak deposit area is located 650 m N of VABM Tetling (elevation 1,019.5 m) and measures 540 m in the SE-NW direction and at its maximum is 180 m wide in the NE-SW direction.

The North Peak zone was originally targeted with limited drilling in 2011 (hole 11010) and several follow-up holes in 2013, all of which were targeted on anomalous gold and pathfinder anomalies in top of bedrock soil samples in the resource area.  In addition, construction of the main project access road exposed several areas of highly oxidized gossan that contained iron, arsenic, and copper oxides in rock samples. Geophysical modeling of both airborne magnetic and electromagnetic surveys as well as ground dipole-dipole IP surveys was completed prior to the 2015 field season and revealed coincident airborne magnetic highs and resistivity lows that were coincident with NW trending Au-Cu-As soil anomalies. Magnetic and resistivity anomalies at North Peak were weaker than those at Main Peak and these lower responses were deemed unfavorable indicators of gold skarn mineralization.

Page 7-2
Drilling completed in 2015 revealed several significant grade-thickness intervals, culminating in discovery hole 153 which intercepted 22.72 m grading 9.38 g/t Au starting at 10.2 m and an additional 13.29 m grading 6.52 g/t Au starting at 42.06 m.  Follow-up drilling conducted in the Phase 1 2016 winter drilling program expanded the North Peak mineralization over 200 m to the SE and revealed significant gold mineralization that cropped out at the paleo-surface and was masked only by 2 m to 4 m of aeolian silt. Infill and expansion drilling continued at North Peak through Phases 2 and 3 drilling programs in 2016 and culminated in the Phase 1 2017 drill program that allowed the resource estimate outlined by IMC (2017).

Potential for expansion of the North Peak deposit outside of the current resource area exists down dip to the SW along mineralized carbonate beds toward an area known as Middle Earth where favorable horizons that are correlated with those within the North Peak deposit area.  Hole 12033 intercepted 14.02 m grading 1.36 g/t Au starting at 248.41 m and an additional 12.19 m grading 3.62 g/t Au starting at 268.53 m. Hole 15148 subsequently was drilled to confirm suspected south-dipping geometry of this area and intercepted 5.84 m grading 4.63 g/t Au starting at 229.6 m and 3.00 m grading 1.84 g/t Au starting at 240.84 m.  These intervals fell below the $1,400/oz gold pit bottom modeled during the IMC resource estimation so no further drilling has been conducted at Middle Earth and the relationship between it and the North Peak or Main Peak zones remains uncertain.

 
MAIN AND NORTH PEAK GEOCHEMICAL SIGNATURE
 
Both the Peak and North Peak deposits have unique geochemical signatures.  The soil geochemical data shows elevated Au-As-Cu-Bi as well as other elements.  These elements along with the airborne magnetic and electromagnetic data have been combined into a prospectivity analysis for the Chief Danny area.  Figure 7-1 shows the results of combining leveled and normalized values for Au + Cu + Bi + Reduced to Pole (RTP) Magnetics + 900Hz electromagnetic data.  Each dataset has been leveled to a scale from 1-10 and summed to obtain a total prospectively value.  The highest zones of prospectively are at the Main Peak and North Peak deposits.  Other targets highlighted in the prospectivity analysis are the extensions to the NW from North Peak at True Blue Moon and Waterpump.  Other areas highlighted include Discovery, Saddle, and 8 O’clock. Exploration and limited diamond drilling have concentrated on these target areas within the Chief Danny area.

Page 7-3


Page 7-4
MAIN AND NORTH PEAK GEOPHYSICAL SIGNATURE
 
Both the Main Peak and North Peak deposits have unique geophysical characteristics that help define the mineralized bodies.  The characteristic signature has been used for additional exploration targeting. The key characteristics are that both deposits are located on annular 3D magnetic chimney-like structures and have a bulls-eye target of IP conductivity high that in the case of Main Peak sits on and below the deposit and at North Peak sits below the deposit.

Figure 7-2 shows a cross-section of the Main Peak deposit with a slice of the 3D magnetic isograde shells (red contours) with gridded IP chargeability.  The 3D magnetic shell was derived from UBC inversion of the Dighem RTP-TMI magnetic data (Condor 2016).  The IP data is from the Quantec pole-dipole ground survey and was gridded by Peak Gold JV.  Figure 7-3 is a cross-section for the North Peak deposit that shows a similar 3D inversion magnetic chimney-like feature with a strong IP conductivity anomaly.  The deposit itself sits above the conductivity anomaly presumably because of the deeper oxidation level at North Peak versus the limited near surface oxidation level at Main Peak.

Page 7-5


Page 7-6


Page 7-7
WEST PEAK EXPLORATION
 
The West Peak deposit area is located 550 m NW of VABM Tetling and is believed to be geologically contiguous with the Main Peak resource area. Insufficient drilling has been completed to confirm or negate this supposition, so the West Peak area is treated as a separate mineralized area for purposes of this report.  Known gold mineralization at West Peak measures 120 m NW-SE and 60 m SW-NE.  Drilling intercepted gold mineralization both above and below the B2 fault, a N-NE striking moderately E dipping (45°-50°) D3-age reverse fault.

First drilled in 2012, auriferous skarn mineralization in West Peak is generally less sulfide mineral rich than the Main Peak resource area and contains significantly lower arsenic values than Main Peak mineralization.  Drill holes TET12047-049 contained multi-gram gold grades for multiple meters in an upper skarn zone that returned a combined 54 gram-meters of significant drill intercepts (14 m to 78 m down hole).  Follow-up drilling in 2016 defined an upper hangingwall mineralized body and a lower footwall mineralized body related to the N-NE striking moderately east dipping (45°-50°) B2 reverse fault.  Drill hole sets TET16217-16219, 16262, 16263, 16264, 16265, and 16273 traced the two zones of mineralization to the NW.

Unlike the Main Peak and North Peak resource areas, there is no host rock fold structure or hinge thickening apparent at West Peak.  The B2 fault was identified as a post-mineral D3 fault with a clear IP chargeability signature, most likely the result of the white-yellow unoxidized clay-rich gouge which marks the trace of the B2 fault. Calcareous host rock is present above and below the B2 fault.  The Main Peak 305 and 275 D2 plumbing structures are cut by and appear to be offset by the D3-age B2 fault with an apparent west-side down motion (Figure 7-4).

Page 7-8



Page 7-9
EXPLORATION POTENTIAL
 
During the 2012 through 2019 exploration programs, several areas of the greater Chief Danny area were explored by soil auger sampling, rock sampling, magnetic and electromagnetic airborne geophysics, IP and/or Titan 24 DCIP/MT geophysics, and core drilling.  The exploration targets include the Discovery, 7 O’clock, 8 O’clock, 2 O’clock, Saddle, North Saddle, Tors, Moons, Waterpump, and Forks zones.

Contango began top of bedrock soil auger sampling in 2010, and continued that work in subsequent years, expanding the soil grid.  The result of this work is a remarkably consistent multi-element anomaly, zoned from a copper-rich core, grading outward through a gold-copper zone where the Main Peak and North Peak resources are located, then copper-gold-arsenic and rimmed by lead-zinc-antimony-manganese (Figures 7-5 and 7-6).


FIGURE 7-5   INVERSE DISTANCE GRID OF GOLD IN SOILS, CHIEF DANNY AREA


Page 7-10
Other metallic elements of interest, such as silver, bismuth, cobalt, tungsten, manganese and iron, show more irregular patterns that are not as easily explained when compared with gold, copper, arsenic, lead, and zinc. In general, higher gold values tend to have higher bismuth and arsenic values associated with them while copper tends to be associated with anomalous silver and iron (Figure 7-6).


FIGURE 7-6   INVERSE DISTANCE GRID OF COPPER, ARSENIC, LEAD, AND ZINC IN SOILS, CHIEF DANNY AREA


Page 7-11
Initial drill targets in the Chief Danny area were identified with soil sampling.  Subsequent airborne and ground geophysics and over 80,000 m of diamond core drilling have generated a series of exploration characteristics that allow both pre-drill targeting and post-drill refinement of near-resource targets. These two phases of drill targeting are summarized as follows.

PRE-DRILLING SKARN INDICATORS:
 
1.
Most gold-bearing skarn mineralization is magnetic and conductive because pyrrhotite is the dominant sulfide and causes a positive magnetic response and a negative resistivity response.
2.
The Calculated Vertical Gradient (CVG) product of the airborne magnetic survey emphasizes the magnetic response from the upper 500 m of bedrock, and therefore is the most useful for drill targeting of pyrrhotite-dominant gold skarn.  Chimney-like magnetic highs occur immediately below the Main and North Peak resource areas.
3.
Airborne resistivity has a penetration depth of less than 100 m, and is attenuated by the first conductor it encounters, therefore this tool will only identify very shallow conductors.
4.
Plumbing structures are linear, high angle features, and may be clay and/or pyrrhotite rich resulting in low resistivity response in IP surveys.  A moderate to weak chargeability high caused by disseminated peripheral pyrrhotite/pyrite may form adjacent to an IP resistivity low.
5.
Coincident IP chargeability highs with IP resistivity lows are most likely unmineralized clay-altered shear or gouge zones.
6.
Elevated soil gold or pathfinders (particularly arsenic) occur only where skarn or plumbing-related mineralization is exposed at the surface.  Even one meter of barren QMS overlying mineralization will prevent a gold-pathfinder response in soils. Soils cannot be used as a condemnation tool.
7.
Elevated soil gold or pathfinders may occur with little or no magnetic or resistivity response due to +50 m thick bedrock oxidation zone that has destroyed magnetic minerals and degraded or destroyed magnetic and resistivity responses.

In summary, the best pre-drilling targets are chimney-like CVG highs, coincident with small IP resistivity lows, which are coincident with linear soil sample anomalies containing elevated gold plus pathfinder elements.

Page 7-12
POST-DRILLING INDICATORS:
 
1.
Highest gold grades occur in dark green amphibole-rich skarn with coarse grained arsenopyrite and coarse-grained pyrrhotite.  Visible gold is rare.
2.
The higher the arsenopyrite content, the more likely the interval will contain high-grade gold, however, extremely high arsenic grades can occur in gold-poor zones.
3.
The higher the ratio of chalcopyrite to arsenopyrite, the lower the average gold grade.
4.
The highest gold grades occur in rock with total sulfide percentages ranging from 5% to 15%.  Lower gold values occur at <5% total sulfide percentages, although lower gold also occurs at extremely high sulfide percentages (>20%).
5.
Higher gold grades often occur in skarn horizons containing coarse-grained euhedral amphibole and/or calcite, often in discordant, late structures.
6.
Geochemical signature of a skarn horizon includes highly anomalous gold, silver, arsenic, bismuth, cobalt, and copper and sometimes anomalous molybdenum, lead, tin, or tellurium.
7.
Geochemical signature of a plumbing feature includes extremely high silver, tin, lead, and zinc with highly variable amounts of gold, arsenic, bismuth, cobalt, copper, molybdenum, tin, and tellurium.
8.
Higher grade-thickness intervals are more likely to occur up-dip of a plumbing feature than downdip below a plumbing feature.
9.
Plumbing structures tend to strike to the NW and dip steeply to the NE or SW.

In summary, the QP has reviewed the exploration information and concurs that the best post-drilling targets occur up-dip of discordant plumbing features in dark green amphibole-rich skarn with coarse-grained arsenopyrite and pyrrhotite, high pyrrhotite:chalcopyrite ratios, total sulfide volumes ranging from 5% to 15%, coarse-grained euhedral amphibole and/or calcite, low levels of lead, antimony, and zinc, and silver values generally below 34 g/t.

The QP believes that there is good exploration potential at the Manh Choh Project between the Main and North Peak deposits. This area will be drill tested in 2021 and could potentially expand or add to the Mineral Resource inventory in 2021.  There is additional gold-silver exploration potential as outlined by the geochemistry in Figure 7-5 along the numerous mineralized trends, including the Main Peak, North Peak, Discovery, and Saddle trends.

Page 7-13
DRILLING
 
There is no evidence of exploration drilling on the Project prior to 2011.

A total of 462 diamond core holes comprising 90,059 m have been completed on the Project between 2011 and December 31, 2020.  An annual drilling summary is presented in Table 7-1.  A project map showing many of the various drilling areas discussed in the following section is presented in Figure 10-1.


TABLE 7-1   SUMMARY OF DRILL HOLES FROM THE MANH CHOH PROJECT, ALASKA

Year
Company
Number
of Holes
Total
(m)
2011
Contango/Juneau
11
2,456
2012
Contango/Juneau
50
10,974
2013
Contango/Juneau
69
14,333
2015
Royal Gold/Contango Peak Gold LLC
61
14,059
2016
Royal Gold/Contango Peak Gold LLC
119
20,523
2017
Royal Gold/Contango Peak Gold LLC
107
18,088
2018
Royal Gold/Contango Peak Gold LLC
28
6,455
2019
Royal Gold/Contango Peak Gold LLC
4
1,771
2020
Kinross/Contango
Peak Gold LLC
13
1,400
Total
 
462
90,059


Page 7-14


Page 7-15
DRILLING METHODS AND EQUIPMENT
 
Drilling from 2011 to 2018 at the Project was primarily diamond core HQ diameter (63.5 m/2.5 in.). Select NQ2 diameter (50.7 mm/2.00 in.) drill hole reductions were completed in 2011, 2015, 2017, and 2018.  Select drill holes were started with PQ (85 mm) diameter and reduced to HQ diameter or drilled entirely as PQ to improve near surface recoveries in 2016, 2017, and 2018.  NQ2 and PQ diameter drilling accounts for less than 5% of the total drilling. The majority of annual drill campaigns were completed during May to October months.  Drilling activities in 2016 through 2018 were largely conducted on a 24-hour per day, 7-day per week basis.

The majority of 2011 to 2018 drilling was completed using a combination of a road-supported Atlas-Copco CS14 wheel mounted drill rig and a CS1000 fly-capable drill rig.  Drill productivity from 2013-2017 suggests the larger and more powerful CS14 was more efficient at drilling highly friable oxidized and sheared metamorphic rock found in the Chief Danny area.  The CS14 is also capable of PQ diameter core drilling.  The smaller and more maneuverable CS1000 was more effectively utilized in difficult terrain situations requiring helicopter-support where dozer access was not feasible.

2011 DRILLING
 
During 2011, Contango completed 2,456 m of drilling in 11 diamond core holes.  With the exception of part of one hole that was reduced to NQ2, all core drilled was HQ diameter.  This drilling was conducted by Connors Drilling of Montrose, Colorado using a CS1000 fly-capable drill rig.

2012 DRILLING
 
During 2012, Contango completed 10,974 m of diamond core drilling in 50 holes at the Chief Danny prospect.  The drilling was conducted by Connors Drilling of Montrose, Colorado using a CS14 wheel mounted drill rig and a CS1000 fly-capable drill rig.  All core drilled was HQ diameter.  Drilling with the CS14 drill rig commenced at the Discovery zone at the Chief Danny prospect on May 23 and continued at various prospects through September 21.  The CS1000 drill rig was added on August 14 and continued through September 11.

Page 7-16
2013 DRILLING
 
During 2013, Contango completed 14,350 m of diamond core drilling in 69 holes at the Chief Danny prospect.  All but eight of these holes, totaling 2,189 m, were drilled in the Peak zone.  The majority of the drilling was conducted by Connors Drilling of Montrose, Colorado using a CS14 wheel mounted drill rig and a CS1000 fly-capable drill rig.  A second CS14 was added to the program in mid-August.  Following repeated mechanical issues with one of the CS14 drills, it was replaced in late August by a similar CS14 drill provided by CnC Drilling of Fairbanks, Alaska.  All core drilled was oriented and HQ3 diameter (6.06 cm). Drilling commenced on May 29 and continued through October 3.

There was no drilling in 2014.

2015 DRILLING
 
Exploration efforts during 2015 included two phases of drilling, Phase 1 in May through July and Phase 2 in September and October, separated by a month of data analysis and budgeting in August.  Phase 1 efforts included helicopter supported drilling using two drill rigs, one CS1000 supplied by First Drilling of Montrose, Colorado, and either a CS1000 or CS14 supplied by CnC Drilling of Fairbanks, Alaska.  During Phase 1 in 2015, Peak Gold JV completed 7,162 m of diamond core drilling in 29 holes at the Saddle, 7 O’clock, 8 O’clock, Discovery, Peak Deep, North Peak, and Blue Moon prospects. Extremely dry conditions and a lightning-strike wildfire significantly slowed drilling progress during Phase 1.  All core drilled was HQ diameter. Drilling commenced on May 30 and continued through August 8.

The Phase 2 drilling program was conducted with road support only and was completed after the wildfires had been brought under control and largely after fall rains had replenished water supply sources used for drilling.  In addition, water supplies were supplemented late in the Phase 2 program water from an 800 ft deep, 8 in. diameter water well drilled in September and completed in October.  During Phase 2 in 2015, Peak Gold JV completed 6,897 m of diamond core drilling in 32 holes at the North Peak, Blue Moon, West Peak, and Discovery zones.  All core drilled was HQ diameter.  Drilling commenced on September 2 and continued through October 14.

2016 DRILLING
 
The Project’s first winter drilling program was conducted during February and March 2016.  Phase 1 drilling efforts were road-supported using an Atlas-Copco CS14 drilling rig supplied by CnC Drilling of Fairbanks, Alaska.  The program was designed to test specific targets in the greater Peak deposit area, including some that were only accessible during winter months.  The field portion of the 2016 Phase 1 drilling program was conducted on a 24-hour per day, 7-day per week basis from February 15 through March 29, 2016.  Unseasonably warm spring weather and attendant unsafe road conditions on the Project forced termination of the drilling earlier than had been anticipated.  Water for the drilling was supplied from Water Well #1 and was transported to the drilling rigs via water truck. During Phase 1, Peak Gold JV completed 4,040 m of diamond core drilling in 19 holes at the North Peak, West Peak, 2 O’clock, and Connector zones.  All core drilled was HQ diameter.

Page 7-17
The Phase 2 drilling program was conducted from late May through the end of August 2016.  Phase 2 drilling efforts were road-supported using an Atlas-Copco CS14 drilling rig supplied by CnC Drilling of Fairbanks, Alaska.  The program was designed to test specific targets in the North Peak, West Peak, and East Peak areas.  The field portion of 2016 Phase 2 drilling program was conducted on a 24-hour per day, 7-day per week basis from May 14 through August 31, 2016.  Water for the drilling was supplied from Water Well #1 and transported to the drilling rigs via water truck.  During Phase 2, Peak Gold JV completed 12,601 m of diamond core drilling in 61 holes at the North Peak, West Peak, Main Peak ,and East Peak zone.  All core drilled was HQ diameter.

The Phase 3 drilling program was conducted from October through mid-November 2016.  Phase 3 drilling efforts were road-supported using an Atlas-Copco CS14 drilling rig supplied by CnC Drilling of Fairbanks, Alaska.  The program was designed to test specific targets in the North Peak area.  The field portion of 2016 Phase 3 drilling program was conducted on a 24-hour per day, 7-day per week basis from October 1 through November 5, 2016.  Water for the drilling was supplied from Water Well #1 and transported to the drilling rigs via water truck.  During Phase 3, Peak Gold JV completed 3,881 m of diamond core drilling in 38 holes at the North Peak zone.  Both HQ holes and PQ holes were completed in this program.  Because this phase of drilling targeted at or near surface mineralization at several areas of the North Peak prospect, the PQ holes were drilled in the near-surface oxide environment when core recovery in HQ diameter holes fell below acceptable levels (generally below 80%).  In general, PQ diameter core holes provided remarkably good recovery in places where HQ drilling ranged from 0% to 80%.

Page 7-18
2017 DRILLING
 
Three phases of drilling were completed in 2017 resulting in the completion of 18,088 m of diamond core in 117 holes.

The Phase 1 drilling program was conducted from late January through mid-April 2017.  Phase 1 drilling efforts were road-supported using an Atlas-Copco CS14 drilling rig supplied by CnC Drilling of Fairbanks, Alaska.  The program was designed to optimize in-process resource estimates with the majority of holes directed to the North Peak zone with a smaller number of holes targeting the Main Peak zone.  In addition, the first scout holes were drilled in the True-Blue Moon target.  The field portion of the 2017 Phase 1 drilling program was conducted on a 24-hour per day, 7-day per week basis from February 4 through April 12, 2017.  Water for the drilling was supplied from Water Well #2 and was transported to the drilling rigs via water truck.  During Phase 1, Peak Gold JV completed 5,236 m of diamond core drilling in 47 holes, including 40 drill holes (3,702 m) in the North Peak zone, one hole (281 m) at the PT pad at West Peak zone, and six holes (1,251 m) in the True-Blue Moon target.  A total of 39 HQ holes and eight PQ holes were completed during this program.  Because this phase of drilling targeted at or near surface mineralization at several areas of the North Peak prospect, the PQ holes were drilled in the near-surface oxide environment when core recovery in HQ diameter holes fell below acceptable levels (generally below 80%). In general, PQ diameter core holes provided remarkably good recovery in places where HQ drilling ranged from 0% to 80%.

Phase 2 drilling, which commenced on May 12 and was completed on July 24, was conducted on a 24-hour per day, 7-day per week basis, using one CS1000 drill rig and one CS14 drill rig during the June 15 to July 15 period and then one CS14 drill rig during for the remainder of the program.  The rigs were supplied by Fairbanks-based CnC Drilling with water supplied from the Project’s two water wells.  The Phase 2 exploration drilling totaled 9,761 m in 44 holes.  Drilling, through the end of July, consisted of exploration drilling at West Peak (461 m), West Peak Extension (2,603 m), Discovery (1,034 m), 7 O’clock (1,443 m), New Moon (1,398 m), Waterpump (1,161 m), Main Peak (570 m), and North Peak (1,095 m).  The 2017 Phase II program was completed on July 31, 2017.

Phase 3 drilling was conducted from September 16 through October 17 on a 24-hour per day, 7-day per week basis, using one CS14 drill rig.  The rig was supplied by Fairbanks-based CnC Drilling with water supplied from the Project’s two water wells.  A total of 16 holes (2,966 m) were completed including one hole (203 m) at 7 O’clock, five holes (729 m) at Forks, eight holes (1,707 m) at West Peak Extension, and two holes (326 m) at North Peak.

Page 7-19
2018 DRILLING
 
Drilling in 2018 included 6,455 m of diamond core in 28 drill holes drilled from May through September 2018 using a combination of a CS14 drilling rig and CS1000 drilling rig supplied by CnC Drilling of Fairbanks, Alaska.  Three drill holes included PQ diameter of which one drill hole was completed entirely as PQ diameter for metallurgical sampling at Main Peak.  Three drill holes were reduced for depth extensions to NQ2 diameter at the Saddle prospect.  The remaining core was drilled as HQ diameter. Through June 30, 2018, 1,762 m of diamond core drilling in 12 holes was completed in the Chief Danny prospect.  Exploration drilling consisted of 1,518 m in ten holes in the 2 O’clock area and 244 m in two holes in the 8 O’clock area.

2019 AND 2020 DRILLING
 
Three drill holes were completed in 2019 testing the East Peak area between the Main and North Peak areas.  Drilling in 2019 and 2020 was completed using drill rigs suppled by CnC Drilling and Boart Longyear BLY, respectively.

Due to COVID-19 and the negotiations taking place between March and September 2020, there was no drilling until the agreement was completed and proper COVID-19 protocols could be effectively put in place.  Consequentially, starting in late October and continuing to late December 2020, a total of 1,400 m in 13 holes were drilled by Peak Gold JV primarily for metallurgical and geotechnical studies.  Approximately $3 million was expended in the last quarter of 2020.  This program continued in January of 2021, after the Christmas holiday break.

 
COLLAR AND DOWNHOLE SURVEYS
 
Drill locations are initially set using hand-held global positioning system (GPS) units. High precision surveys are completed periodically during the drill program. All of the drill holes used for the Main and North Peak resource have been precision surveyed.

Collar surveys through August 2016 were found to have a consistent error of less than 2 m due to survey control miss-location. The control was corrected and all collars coordinates adjusted and corrected prior to this estimate of Mineral Resources.

The surveys through 2018 were completed using Leica RTK survey equipment. The Project coordinate system details are:

●
Coordinate System: UTM Zone 7 North
●
Datum: NAD 83
●
Vertical Datum: NAVD88
●
Geoid: AK Geoid 12B

Page 7-20
Site visits have included visits to historic drill locations to verify collar positions. All drill holes visited were monumented and properly located relative to topography and other drill holes.

Downhole surveys are completed for each drill hole to measure variation in orientation.  Downhole surveys are conducted by the drilling contractors at specified downhole intervals while drilling and typically used a REFLEX EZ magnetic probe attached to the drill rig wireline.  Downhole surveys are collected in the field in hard copy and collated by geology staff in MS Excel compilations corrected for average magnetic declination during drilling.

 
RECOVERY
 
The style of mineralization and host rocks at the Main and North Peak deposits require careful collection of downhole core samples to ensure acceptable recoveries. Drilling samples were collected using a triple-tube method to minimize core loss.  Geomechanical recovery measured at the core shack during logging compares core length to drill interval length and is stated as a percent.  Average and median core recovery for Main and North Peak are 92% and 96% respectively.

Previous reports have discussed the occurrences of lower recoveries in HQ diameter core samples particularly in near-surface oxidation and at North Peak.  Local PQ diameter twin holes of HQ diameter drilling oxide zones were completed when HQ diameter recoveries were below 80% to ensure acceptable and representative sample volumes were collected for drilled intervals.  Intervals with calculated recovery greater than 100% or consistently below 75% were evaluated.

 
DEPOSIT DRILLING
 
Drilling at the Project has consisted of angled diamond core holes since 2011.

The 2011 drilling program focused on the Discovery prospect 500 m SW of Main Peak but included two holes targeting the Main and North Peak prospects.  The majority of drilling from 2012-2017 was at Main and North Peak with over 64,000 m of drilling from 340 drill holes, constituting 73% of all Project drilling.  Initial definition drilling was completed at Main Peak in 2013 and 2015 on approximately 33 m spaced section lines with most holes angled 225° SW perpendicular to overall NE dipping mineralization.  Major deposit drilling at North Peak occurred in 2015 through 2017 infilling 33 m spaced section lines with most holes angled 45° NE perpendicular to overall SW dipping mineralization.

Page 7-21
LOGGING PROCEDURES
 
Drill core was transported from the drill sites to the core shack in Tok Junction via helicopter or truck in the morning and evening. When the core arrived at the core shack it was laid out, washed, and quick logged outside the logging area. Once the core was ready to be logged, it was laid out on tables and a geotechnician measured and recorded drill recovery and rock quality designation (RQD). During logging the core was written on with chinagraph markers to identify important features by the logging geologist and these features are visible during photographing of the core.

In 2011 and 2012, all logging data was recorded using Coreview logging software running on Toshiba netbooks. Starting in 2013, all logging data was recorded using MS Excel on a template designed by Avalon specifically for logging the Tetlin Project drill core.  The MS Excel logging template was modified in 2016 to include more features prevalent at both Main and North Peak and for other prospects.  Logging includes relevant hole collar and prospect information, lithology, alteration, mineralization, structural vein, and fault intervals with comment annotations at the geologist’s discretion.

In 2013 and in six 2016 holes, oriented core information was also recorded in the core shack after quick log and orientation line preparation by a geologist logging at the drill rig.  Orientation angles for structural features including foliation, veins, fault planes, contacts, and dikes were recorded.

After the core was logged, it was photographed and stacked for cutting. Core was split in half lengthwise with one side of split core sampled.

The half the core that was not sampled remained in the core box and was stored in wooden boxes under permanent cover in Tok. In 2013 and 2015, prior to the core boxes being stored, geotechnicians took readings every 50 cm over the entire hole with an Instrumentation GDD Inc. MPP- EM2S+ Multi Parameter Probe (MPP). The MPP records magnetic susceptibility, conductivity (MHOS/M), and conductor response (Hz) in the core.

Sample interval blocks were placed by the logger, leaving every tenth sample number open for blanks and standards. Full sample bags were stacked in polyvinyl supersacks and stored in the core shack warehouse until they were sent out for assay, approximately three times per week depending on program year.

In the QP’s opinion, there are no drilling, sampling, or recovery factors that could materially impact the accuracy and reliability of the results.

Page 7-22
HYDROGEOLOGY DATA
 
ABR Inc. - Environmental Research and Services (ABR) was contracted by Avalon, Project Manager for the Project, to collect baseline data on water chemistry, biological resources, and aquatic habitat for the Project during 2012, 2013, 2015, 2016, and 2018.  No data were collected in 2014 or 2017. ABR was once again contracted to continue collection of predevelopment baseline water chemistry for the Project in 2019.

In 2012, ABR conducted water chemistry sampling at 10 stations on five waterbodies in three subwatersheds during survey events in May and August. These stations were originally chosen for monitoring because they were permitted as temporary water use sources by the Alaska Department of Natural Resources (AKDNR) in support of mineral exploration for the Project. Additionally, ABR conducted limited fish trapping and collected periphyton and macroinvertebrates to analyze stream health in August 2012. (Note: macroinvertebrates collected in 2012 were analyzed with those collected in 2013 [see ABR 2014].)

In 2013, as Avalon expanded exploration activities at the Project to a larger area, ABR increased environmental survey efforts during three stream survey events.  Sampling was carried out by Avalon during June 17-21 (water chemistry analysis, habitat descriptions, and periphyton collections), July 7-18 (fish survey and invertebrate collections), and October 1-5 (water chemistry analysis and habitat descriptions). Avalon increased the spatial scale of baseline environmental surveys from five waterbodies in three subwatersheds to eight waterbodies in six subwatersheds and  increased the number of water chemistry stations from 10 to 16 stations. Detailed habitat surveys were conducted at all project survey waterbodies and additional macroinvertebrate and periphyton samples were collected to assist in establishing baseline productivity of project area streams.  Avalon also sampled fish with fyke nets and minnow traps in four project area streams and collected a subset of voucher fish specimens for baseline chemical analysis of tissues during the 2013 survey seasons (ABR 2014).

Page 7-23
In 2015, ABR was contracted by Avalon, on behalf of Peak Gold JV to repeat baseline water chemistry surveys at the 16 previously-sampled stations and establish three new stations, for a total of 19 stations on 10 waterbodies, on the Project.  It sampled only 17 of the 19 stations during September 23 to 25 due to dry stream-bed conditions at two stations (ABR, 2016).

In 2016, ABR sampled the same 19 stations from 2015, and sampled water from a newly established Project well location (Well Site 01). Surveys were conducted during two events in June/July and in September. The well-site water sample was collected only once on July 2 (ABR 2017).

Two project water wells were drilled in 2015 and 2016 respectively as 8 in. diameter, 800 ft (244 m) water wells with 6 in. stand pipe.  Water Well #2 located approximately two miles north of North Peak was flow-tested at over 450 gpm for 20 hours without discernable draw-down with calculated recharge rate at 100 gpm.  The QP is not aware of other dedicated hydrological drilling at the Project.

During 2018, ABR sampled water from 11 stations on eight waterbodies, and from a new well location (Water Well #2) for a total of 12 stations. Surveys were conducted during two events in May and September (ABR 2018).

The primary objectives of the 2019 water quality surveys on the Project were to continue collecting the baseline water quality and stream habitat data first measured in 2012.

Page 7-24
There were a total of 20 unique water chemistry stations surveyed in or near the Project area in 2019, 11 of which were sampled in June and 17 of which were sampled in September 2019. Of the 39 water chemistry analytes tested, aluminum, arsenic, iron, lead, manganese, and hardness were the only analytes to register above United States Environmental Protection Agency (USEPA) or Alaska Department of Environmental Conservations (ADEC) standards for aquatic life and/or water quality at one or more water chemistry stations. Overall, Hillside Creek (HI02 and HIT2-01), Eagle Creek (EAT2-01), and Tok River (TK01) appear to naturally contain the highest concentrations of metals, with up to three analytes measuring above agency standards. The analytes aluminum, iron, and manganese were the most commonly occurring metals measured above agency standards across all survey stations at the Project in 2019. Most analytes, however, were below the upper limits defined by USEPA and ADEC. Due to the mostly pristine nature of the Project site, Avalon concluded that elevated analyte concentrations are reflective of natural local geology and seasonal stream flow conditions which in turn influence total suspended sediment loads in Project streams. In 2019, sampling and reporting responsibilities for groundwater well stations were shared with Peak Gold JV’s sub-contractor, hydrologist company Piteau Associates (Piteau).  Groundwater monitoring wells were completed in 2019 to measure groundwater levels and ground temperatures and to sample for water quality to augment the baseline monitoring program (Piteau, 2020).  Temperature measurements to date measured in monitoring wells indicated that discontinuous, warm (greater than 1°C) frozen zones (permafrost) may extend from approximately 9 m (30 ft) to greater than 122 m (400 ft) below ground surface.  Water quality results indicate that both groundwater and surface water in the Project area is a calcium-bicarbonate type.  Concentration of constituents are mostly higher in groundwater than in surface water.  Total dissolved solids concentrations are elevated in higher order streams and drainages along the SE slopes of the Tetlin Hills, Tok River, and Tetlin Lake.  Reduced pH and above-average sulfate concentrations occur in the NW drainages which drain from the area of the deposits.

In 2020 surface water and groundwater monitoring was limited due to COVID-19 related travel and work restrictions.  Monthly water sampling, geochemistry, and wetlands mapping will continue in 2021.  Additional groundwater monitoring well installations, and exploratory wells are planned together with a new meteorological station and several additional hydrometric stations.  An updated water and mass balance model would be developed to support the engineering studies, integrating continuous stream discharge, water quality, and climate data.

Page 7-25
GEOTECHNICAL DATA
 
All core drilled on the Project in 2013 was oriented using the Reflex ACT II RD orientation tool. This tool allows the core to be oriented to its original position in the ground. Once a drill run was complete and the core barrel was out of the hole, the drill helper would place the barrel in a horizontal stand, attach the ACT II hand-held controller, and rotate the barrel until the controller indicated the down position. At this point the rig geologist, using the bubble level supplied with the ACT II tool, would mark the bottom of the core on the down hole side with a red chinagraph marker. The shoe of the core barrel, containing the piece of core with the orientation mark was removed from the core barrel and set aside. A split tube containing the shoe was pieced back together with the core in the tube and an orientation line was extended up the core as far as possible from the initial orientation mark. Orientation was not able to extend beyond areas of spun core, gouge, or zones of broken rock if the rock could not be pieced back together and the line, extend up core beyond this zone with confidence in orientation accuracy. Recovery, RQD, and the number of fractures in the core were then recorded by the rig geologist and important features noted in a quick log. Orientation lock quality was recorded by measuring the orientation line lock with the previous or following drill run and assigned a value of 1 to 5.  A value of 5 was recorded if the orientation line locked with the previous and/or following drill run’s orientation line and had a lock angle within 10°. A value of 4 had the same requirements except the lock angle between the two orientation lines was greater than 10° but no more than 20°. A value of 3 was assigned if no lock was available with the previous or next run but an orientation line was able to be drawn up the core from the orientation mark from the shoe. The value 2 was unused, and a value of 1 was assigned if the lock angle between orientation lines was greater than 20°. Core was placed in wooden core boxes by the rig geologists, a run block was placed and hole number, box number, and depths were recorded on the top and front of the box and the box lid secured with wood screws.

Structural data was processed with a structural calculator program running in Microsoft Excel. Any orientation measurements recorded in core that did not have an orientation lock quality of 3 or greater were not used. In 2013, oriented core reference lines were preserved where possible in the remaining half core after sampling.

As this is an advanced exploration project, the geotechnical information is based on drilling information.


Page 7-26
8
SAMPLE PREPARATION, ANALYSES, AND SECURITY

The following is mostly taken from JDS (2018).

 
SURFACE SAMPLING METHODS AND APPROACHES
 
Geochemical samples collected in 2009 through 2016 varied in detail but generally were described in the field and located using hand-held GPS methods.  Sample descriptions collected in hard copy and digital version in the field were then transferred to a master database to allow plotting, statistical analysis, and GIS manipulation.

 
STREAM SEDIMENT SAMPLING
 
During 2009, 2010, 2011, and 2013, pan concentrate samples were collected using 15-inch wide Garrett Super Sluice gold pans.  Sample material was dug from creek gravels and sieved through #4 (0.187 inch) mesh sieves then through #12 (0.066 inch) mesh sieves directly into the 15-inch gold pans.  This procedure was repeated four times to guarantee enough material would be available for a 30-gram charge for fire assay.  Stream sediment samples were collected at the pan concentrate sample sites where -80 mesh silt material was available.  In instances where sufficient alluvial gravels were not available for proper pan concentrate sampling, stream sediment samples were often available for collection.  Pan concentrate and stream sediment samples were collected from first through third order drainages.  Crews began sampling the first site encountered at the heads of drainages where adequate water and alluvial gravels were available for panning. Sample sites were spaced 400 m apart.  A total of 874 stream sample sites were visited during the 2010 Project program.  A total of 820 stream sediment samples and 693 pan concentrate samples were collected at these sites giving a 76% success rate for pan concentrate samples and a 91.2% success rate for stream sediment samples.  A total of 345 stream sample sites were visited during the 2013 Eagle prospect sampling program.  A total of 278 stream sediment samples and 85 pan concentrate samples were collected at these sites giving a 25% success rate for pan concentrate samples and an 80% success rate for stream sediment samples.  The low pan concentrate success rate was due in large part to the extremely dry summer of 2013 which saw many smaller streams run dry by early June and the small catchment and steep gradients on many of the Eagle prospect streams.


Page 8-1
SOIL SAMPLING
 
Soil samples on the Manh Choh Project were collected using shovels in 2009 (Chief Danny only) and 2011 (Copper Hill only), and from top of bedrock using power augers during the 2010 through 2013 and 2015-2016 programs.  Field personnel collected soil samples from the C-horizon soil-bedrock interface. Shovel samples were collected in 2009 at depths ranging from 12 in. to 40 in.  The power augers, flights, bits, tools, and fuel weighed up to 60 lb total and were carried by personnel in the field between soil sample sites. Two-man auger crews used steel auger flights with carbide tipped bits to penetrate the soil overburden, allowing collection of soil samples at the soil/bedrock interface.  Spacing between soil sample collection sites was approximately 100 m, with sample sites in reconnaissance settings being spaced at no more than 200 m.  Soil overburden in the Tetlin Hills has an average depth of 5 ft and samples were collected within the range of 2.5 ft to 12 ft in depth, averaging at 5 ft. Soils in this part of Alaska are derived largely from fine periglacial aeolian silt deposited during the Pleistocene and as such are geochemically unrelated to the bedrock it covers.  No samples were collected at sites where a good quality C-horizon soil sample could not be obtained (too deep, frozen, rocky, etc.).

The two-person auger teams augered until mineral soils were reached, preferably reaching bedrock.  The mineralized soil was collected and placed in cloth sample bags.  The sample location was recorded on a hand-held GPS, and the UTM coordinates written in a field book along with the sample number, soil color, moisture content, and sample depth.  Lithic fragments were also collected from the soil, identified in the field, recorded, and placed in Ziploc bags with the soil samples.  These lithologic samples were later washed, logged, and stored in chip trays.  At the end of each day, soil samples were laid out to dry for the night. Field data was entered into a spreadsheet nightly.  Approximately every fourth day during 2012 and 2013, the samples were analyzed with a Niton XRF gun for the content of various elements and the lithologic fragments logged.  Based on the Niton results the soil grid could be changed to target areas of interest. Soil samples were then sent out for assay.

Page 8-2
ROCK CHIP SAMPLING
 
Several types of rock samples were collected during the 2009 through 2013 and 2015-2016 Project exploration programs including channel, grab, select, and float.  Grab samples were collected from outcrop or rubble crop. Select samples were taken specifically from well-mineralized rock.  Float samples represent transported rock of uncertain origin.  Channel samples were collected in trenches and in outcrops and consisted of continuous chips sampling over a specified interval. All rock samples were located in the field using GPS methods and field descriptions and notes were entered into a master digital database at the end of each field day.

 
DRILL CORE PROCESSING PROCEDURES
 
Drill core from the 2011 through 2012 drilling programs was transported from the drill site to the core shack via helicopter or truck in the morning and evening where it was quick logged and stored until it could be logged.  When the core arrived at the core shack it was laid out, washed, and quick logged outside the logging area. Once the core was ready to be logged it was laid out on tables and a geotechnician measured and recorded drill recovery and rock quality designation (RQD).  During logging the core was written on with china markers to identify important features for the logger and so it is visible during photographing of the core.  Sample interval blocks were placed by the logger, leaving every tenth sample number open for blanks and standards.  All data was recorded using Coreview logging software running on Toshiba netbooks.  After the core was logged it was photographed and stacked for cutting.  Core was split in half lengthwise using MK tile saws.  Core cutters were instructed to cut so the foliation was the same on both halves.  Loggers drew cut lines on the core in areas where they wanted the core cut a specific way.  Split core was placed back in the core boxes until it was sampled.  During sampling, one side of the split core from each sample was placed in a cloth bag with the sample number written on the bag and the sample tag inside the bag and the bag was tied closed.  The half the core that was not sampled remained in the core box and was stored in wooden boxes under permanent cover in Tok.  Full sample bags were stacked in supersacks and stored in the warehouse until they were sent out for assay.

As described above in the Geotechnical Data section, all core drilled on the Project in 2013 was oriented using the Reflex ACT II RD orientation tool.

Page 8-3
In 2013, drill core was transported from the drill site to the core shack twice a day via truck or by helicopter if the core was coming from one of the three fly rig holes.  When the core arrived at the core shack it was laid out, washed, quick logged outside the logging area and stored until it could be logged.  During logging the core was written on with china markers to identify important features for logging, which would visible during photographing of the core.  Sample interval blocks were placed by the logger, leaving every 10th sample number open for blanks and standards.  Orientation angles for structural features including foliation, veins, fault planes, contacts and dikes were recorded where possible from the orientation line drawn on the core buy the rig geologists.

All logging data was recorded using Microsoft Excel on a template designed by Avalon specifically for logging the Manh Choh Project’s 2013 drill core.  After the core was logged it was photographed and stacked for cutting. Core was split in half lengthwise using MK tile saws.  A cut line was drawn on the core for the core cutters to follow in order to preserve the orientation line on the half core that was not sampled.  Split core was placed back in the core boxes until it was sampled.  During sampling, the side of the split core from each sample that did not contain an orientation line if present was placed in a cloth bag with the sample number written on the bag and the sample tag inside the bag and the bag was tied closed.

The half of the core that was not sampled remained in the core box.  Prior to the core boxes being stored, geotechnicians took readings every 50 cm over the entire hole with an Instrumentation GDD Inc. MPP-EM2S+ Multi Parameter Probe (MPP).  The MPP records magnetic susceptibility, conductivity (MHOS/M) and conductor response (Hz) in the core.  Core was stored under permanent cover in a wooden core storage shed constructed in Tok.  Full sample bags were stacked in supersacks and stored in the warehouse until they were sent out for assay.  Once this entire procedure was complete and assay results were received, the assay data and MPP data were entered into the Excel logging template for the appropriate hole and the Excel file was imported into Rockware LogPlot 7 logging software to create a finished core log.

Structural data was processed with a structural calculator program running in Microsoft Excel.  Any orientation measurements recorded in core that did not have an orientation lock quality of 3 or greater were not used.

Page 8-4
Except for six oriented core holes completed in 2016 (which were processed the same as oriented core in 2013), all drill core from the 2015, 2016, 2017, and 2018 drilling programs was drilled using conventional wireline core drilling techniques.  The core was transported from the drill site to the core shack via helicopter or truck in the morning and evening where it was quick logged and stored until it could be logged.  When the core arrived at the core shack it was laid out, washed, and quick logged outside the logging area.  Once the core was ready to be logged it was laid out on tables and a geotechnician measured and recorded drill recovery and RQD.  During logging the core was written on with china markers to identify important features for the logger and so it is visible during photographing of the core. Sample interval blocks were placed by the logger, leaving every 10th sample number open for blanks and standards.  A cut-line was marked on each interval by the logging geologist, indicating precisely where the core should be cut during core sawing.  All data was digitally recorded using MS Excel software and drop-down menus created by the Manh Choh Project specifically for logging of Manh Choh Project core.  After the core was logged it was photographed and stacked for cutting.  Core was split in half lengthwise using MK tile saws.  Split core was placed back in the core boxes until it was sampled and weighed.  During sampling, one side of the split core from each sample was placed in a cloth bag with the sample number written on the bag and the sample tag inside the bag and the bag was tied closed.  The half the core that was not sampled remains in the core box and is stored in wooden boxes under permanent cover in Tok.  Full sample bags were weighed, then placed in supersacks or wooden shipping crates and stored in the warehouse until they were sent out for assay, approximately three times per week.

The half of the core that was not sampled remained in the core box.  Prior to the core boxes being stored, geotechnicians took readings every 50 cm over the entire hole with an Instrumentation GDD Inc. MPP-EM2S+ Multi Parameter Probe (MPP).  The MPP records magnetic susceptibility, conductivity (MHOS/M) and conductor response (Hz) in the core. Once this entire procedure was complete and assay results were received, the Excel file containing all pertinent data was imported into Rockware LogPlot 7 logging software to create a finished core log.

Page 8-5
SPECIFIC GRAVITY
 
Samples for specific gravity measurement are weighed wet and weighed dry at the sample logging facility in Fairbanks. Samples are collected and specific gravity measured every 20 m down hole.

Specific gravity procedures are as follows:

1.
Samples are pulled from whole core every 20 m;
2.
Samples are 4 in. to 6 in. long;
3.
Oxides and highly broken sulfides are dried at 230°F for 24 hours;
4.
The dried samples are vacuum sealed in plastic;
5.
Intact sulfides are not dried;
6.
Samples are weighed dry, and immersed in water; and
7.
The weights are recorded by hand on paper and then transferred into the database.

Previous reports have confirmed that intact specific gravity samples were in the core tray with the remaining split core after density analysis.

Specific gravity information that was available through 2018 (Table 8-1) was used to establish bulk density estimates applied to the block model.


TABLE 8-1   SPECIFIC GRAVITY INFORMATION UTILIZED IN TONNAGE CALCULATIONS

Area of the Deposit
Number of
Samples
Mean SG
Correction
Applied
Model Bulk
Density
Main and West Peak
Sulfur Depleted (Oxide)
66
2.635
3.0
2.556
Sulfur Present
       
Inside Domains
147
3.122
1.5
3.075
Outside Domains
236
2.817
1.5
2.774
         
North Peak
Sulfur Depleted (Oxide)
       
Inside Domains
65
2.288
3.0%
2.219
Outside Domains
176
2.558
3.0%
2.481
Sulfur Present
       
Inside Domains
121
2.882
1.5%
2.839
Outside Domains
465
2.719
1.5%
2.678
Default, Average of All Data
       
All Data, All Areas
1,330
2.750
1.5%
2.709
Source: IMC (2017)

Page 8-6
SAMPLE PREPARATION
 
Sample preparation was carried out by ALS Minerals between 2009 and 2017 and Bureau Veritas Minerals starting in 2017.  Sample preparation procedures have varied throughout the drill programs but were completed similar to the steps outlined below for samples prepared by Bureau Veritas Minerals.

Upon receipt by the preparation laboratory, samples are entered into a Laboratory Information Management System (LIMS) with a laboratory number printed on barcoded labels.  Sample submission information is verified to confirm submitted samples are present.  Samples are then sorted, weighed when wet weights are requested, dried at 160°F to 180°F in fan forced ovens, and re-weighed for dry sample weight.

A primary TM Engineering Terminator Jaw Crusher is used to crush the core samples to 70% passing 2 mm.  Historic ALS preparation included two stages of crushing with coarse crushing to 70% passing 19 mm and secondary fine crushing to 70% passing 2 mm. The fine crushed samples are riffle-split to obtain a 250 g sub-sample for pulverization. The split is pulverized to >85% passing 75 μm (-200 mesh) with a TM Engineering TM Vibratory Ring Pulverizer.

The 250 g pulp is split with 100 g to 120 g sent the primary analytical laboratory and 10 g to 20 g for separate multi-element analysis. Remaining pulp fraction is retained as the master pulp.  An extra pulp is prepared from every tenth coarse and pulverized sub-sample for coarse and pulp replicate analysis.

 
GEOCHEMICAL ANALYSIS AND SECURITY
 
All samples submitted in 2009, 2010, and 2011 were prepared for assay by ALS Chemex,  Fairbanks, an independent laboratory with ISO/IEC 17025:2005 accreditation and analyzed at their Vancouver, British Columbia facility.  Analytical work consisted of gold by fire assay with atomic absorption spectroscopy (AAS) finish plus multi-element inductively coupled plasma atomic emission spectrography (ICP-AES) analyses using four-acid digestion.  All samples processed in 2009 through 2011 were catalogued in the field and shipped via ground transport to Avalon’s secure warehouse in Fairbanks and then transported by ALS Chemex employees to the ALS Chemex preparation facility in Fairbanks.

Page 8-7
All original samples submitted in 2012 were prepared by Acme Analytical Laboratories Ltd. (Acme) in Fairbanks, an independent laboratory with ISO/IEC 17025 accreditation and analyzed for gold at their Fairbanks, Alaska facility and for all other elements at their Vancouver, British Columbia facility.  Analytical work consisted of gold by fire assay with AAS finish plus multi-element ICP-AES analyses using four-acid digestion.  All samples collected in 2012 were catalogued in the field and shipped via ground transport: either directly to Acme’s preparation and analysis facility in Fairbanks by an Avalon contractor; or to Avalon’s secure warehouse in Fairbanks and then transported by Acme employees to the Acme facility in Fairbanks.  Sample reject material was submitted as check assays to be prepared by ALS Chemex at their facilities in Fairbanks and analyzed at their Vancouver, British Columbia facility.  Analytical work consisted of gold by fire assay with AAS finish plus multi-element ICP-AES analyses using four-acid digestion.

All original samples submitted in 2013 for geochemical analysis were prepared by two different labs, Acme and ALS Minerals (ALS), at their respective facilities in Fairbanks and analyzed at their respective facilities in Vancouver, British Columbia.  Analytical work consisted of gold by fire assay with AAS finish plus multi-element ICP-AES analyses using four-acid digestion.  All samples collected in 2013 were catalogued in the field and shipped via ground transport directly to Acme’s or ALS’s preparation facility in Fairbanks by an Avalon contractor.  Sample reject material from 2012 was submitted as check assays to be prepared by ALS’s facility in Fairbanks and analyzed at their Vancouver, British Columbia facility.

All 2013 surface samples (soils, sediments, etc.) were prepared and analyzed by ALS.  Initially, all 2013 drill core samples also were prepared and analyzed by ALS.  As the field season progressed, the turn-around time for geochemical results from ALS increased due primarily to delays at the ALS preparation facility in Fairbanks.  The decision was made to send drill samples from selected holes to Acme for analysis so results could be received sooner.  The first drill samples were sent to Acme on August 20. As the season continued further, ALS’s turnaround time degraded to the point that all drill samples were eventually sent to Acme. Included in this were 2,282 samples that Acme picked up from ALS that were stored in ALS’s secure yard awaiting preparation.  At the conclusion of the field season, ALS analyzed 57% of the samples and Acme analyzed 43% of the samples.

All original samples submitted in 2015, 2016, and 2017 Phase 1 were prepared for assay by ALS at its facilities in Fairbanks and analyzed at their Vancouver, British Columbia facility.  Analytical work consisted of gold by fire assay with atomic absorption finish plus multi-element ICP-AES analyses using four-acid digestion.  All samples processed in 2015 through 2017 Phase 1 were catalogued in the field and shipped via ground transport: either directly to ALS preparation facility in Fairbanks by an Avalon contractor or to Avalon’s secure warehouse in Fairbanks and then transported by ALS employees to the ALS preparation facility in Fairbanks.

Page 8-8
In 2016, select drill core pulps from 2012, 2013, 2015, and 2016 were re-analyzed for Au, Ag, and Cu by cyanide leach with AAS finish.  These samples were analyzed by ALS at its Vancouver, British Columbia facility.

All original samples submitted in 2017 (Phase 2 and 3) and 2018 were prepared for assay by Bureau Veritas Minerals, an independent laboratory which has achieved ISO/IEC 17025 accreditation, at their facilities in Fairbanks and analyzed at their Vancouver, British Columbia and Reno, Nevada facilities.  Analytical work consisted of gold analysis by fire assay with AAS finish plus multi-element ICP-AES analyses using four-acid digestion.  All samples were catalogued in the field and shipped via ground transport: either directly to Bureau Veritas preparation facility in Fairbanks by an Avalon contractor or to Avalon’s secure warehouse in Fairbanks and then transported by Bureau Veritas Minerals’ employees to the Bureau Veritas Minerals preparation facility in Fairbanks.

 
QUALITY ASSURANCE AND QUALITY CONTROL
 
Quality assurance (QA) consists of evidence to demonstrate that the assay data has precision and accuracy within generally accepted limits for the sampling and analytical method(s) used in order to have confidence in the resource estimation.  Quality control (QC) consists of procedures used to ensure that an adequate level of quality is maintained in the process of sampling, preparing, and assaying the drill core samples.  In general, QA/QC programs are designed to prevent or detect contamination and allow analytical precision and accuracy to be quantified.  In addition, a QA/QC program can disclose the overall sampling – assaying variability of the sampling method itself.

A blank or standard is inserted approximately every tenth sample for drill samples collected since 2011. For a submittal of 100 samples, there would be typically two blanks and eight standards inserted. The standards are purchased from Rock Labs and Ore Research and Exploration and reflect a range of gold, silver, and copper grades that span the grade range at Tetlin.  Blank material is sourced from Browns Hill Quarry in North Pole, Alaska and  approximately one kilogram of material is in each blank.  Blank material has been assayed for gold concentration verification prior to use.

Since the contractor laboratory does the sample preparation, and the standards are pulps, the laboratory  knows which samples are either blanks or standards, however, it is not informed of the value of the inserted standard or blank.

Page 8-9
There are 3,884 gold bearing standards in the database (12.5% of the database intervals). There are fewer measured results for copper and silver because some of the standards are not certified for silver or copper.

 
STANDARDS
 
Figure 8-1 is a summary plot of all of the assay results for standards versus the certified standard value on the X axis. The graph indicates that there is no observed bias and that sample swaps are not apparent. There is more scatter in the high-grade silver assay than the others, however, that is to be expected in the 18 g/t Ag standard value range. Standard performance indicates no significant areas of concern.



Page 8-10
FIGURE 8-1   STANDARDS PAIRS PLOT, 2011 THROUGH APRIL 2017


Page 8-11
BLANKS
 
Blank values are inserted by Tetlin geologists with each laboratory submission of samples. The first sample in every submittal is a blank. A submittal of 100 samples would include two blanks.

The blanks data set contained 1,791 blanks, not including standards. This amounts to approximately one blank insertion for every 30 assay values collected, or approximately a 3% insertion rate.  There were five occurrences out of all the blanks that were reported with gold values above 0.100 g/t (Table 8-2). Notes included with the blanks database show whether the potential contamination triggered a reanalysis.  Copper analyses above 200 ppm occurred twice and were noted with one reanalysis.  No silver analyses of blanks were above accepted tolerance of 10 ppm.  Blank performance shows no areas of concern.

TABLE 8-2   GOLD BLANKS ABOVE 0.100 G/T 2011-2018

Sample
Number
Year
Notes
Au
(ppm)
328580
2015
Confirmed sample contamination. Some of the previous sample (328579) was left in the pan during crushing.
0.145
944390
2015
Unconfirmed sample contamination at the lab.
0.119
241400
2016
Au is too high, lab says acceptable error, prepped after 32.4 ppm sample.
0.106
398310
2017
Unknown contamination, lab re-ran samples, Au is too high.
0.144
401970
2017
Lab error, Au contamination, wait for ICP.
0.280

 
REPLICATES
 
Pulp and coarse reject replicates were inserted every 20 samples, directly after core samples with sample numbers ending in “5”. The pulp replicates were intended to measure the repeatability of the assay procedures. The coarse reject replicates were intended to measure the repeatability of sample preparation and assay procedures. The insertion of replicates was started in 2015. There are no replicates for the drilling and assaying completed from 2011 through 2013. The pulp replicates were inserted by the assay laboratory based on instructions issued by Avalon. These could not be blind samples because the sample preparation was completed at the commercial laboratory so that pulps and immediate coarse rejects were not available at the core shed.  Figure 8-2 illustrates the results of the pulp replicate assays versus the original assays.  Figure 8-3 illustrates the results of the coarse reject replicate assays versus the original assays. Sample repeatability is good with both data sets.

Page 8-12
FIGURE 8-2   PULP REPLICATE ASSAY RESULTS
 

Page 8-13
FIGURE 8-3   COARSE REJECT REPLICATE ASSAY RESULTS

 

Page 8-14
SAMPLE SECURITY
 
All samples processed in 2009 through 2018 at the Project were catalogued in the field and shipped via ground transport either directly to the preparation facility by an Avalon contractor or to Avalon’s secure warehouse in Fairbanks and then transported by analytical laboratory employees to their respective preparation facilities in Fairbanks. A sample submittal document was prepared, and chain of custody forms were signed by both project staff and analytical laboratory employees when samples were submitted.

In the QP’s opinion, the sample preparation, analysis, and security procedures at the Manh Choh Project are adequate for use in the estimation of Mineral Resources.

In the QP’s opinion, the Chain of Custody implemented by Contango is adequate and the assay results within the database are suitable for use in a Mineral Resource estimate.




Page 8-15
9
DATA VERIFICATION

The drilling, data collection, and database management for the Project was completed and administered by Avalon as a contractor to Peak Gold JV through 2018. Drilling at the Project that was used in this estimate spanned the period of 2011 through September 2018. No drilling was completed on site during 2014. Additional limited drilling was completed in 2019 and 2020 within the resource area and its results will be incorporated into the 2021 Mineral Resource estimate update. Kinross geologists and database staff have reviewed the data collection procedures, QA/QC procedures, and QA/QC results through 2018 to verify the Project drill hole database.

The database verification applied the following steps:

1.
A spot check of assay of the Project database against assay certificates from the laboratory for all years except 2011;
2.
A statistical analysis of the QA/QC inserted standards;
3.
A statistical analysis of the QA/QC inserted blanks;
4.
A statistical analysis of the replicate pulps and replicate coarse rejects;
5.
A statistical comparison of the two assay laboratories using nearest neighbor methods;
6.
Review of the specific gravity data collection;
7.
Review of the drill hole collar survey information; and
8.
During site visits in 2019 and 2020, the Project staff QP under the QP’s supervision observed and reviewed the sample procedures and quality control data handling as described in this text.

As a result of the data verification work that is summarized in this section, the QP finds that the Project data through 2020 is reliable for the estimation of Mineral Resources.  The QP recommends that a relational database be put in place for future work.

Because of the travel restrictions due to COVID-19, the QP relied on data verification by the Contango and Kinross geologists assigned to the Project and reviewed by Kinross Corporate Geology area experts.  The 2021 review of drilling methods, collar and survey data, logged data, sample submittals, and sample certificates by Kinross Corporate Geologists has confirmed the validity of historic and current data acquisition methods and results.  The QP plans to visit the site once the travel restrictions are lifted.

The QP is of the opinion that database verification procedures for the Project comply with industry standards and are adequate for the purposes of Mineral Resource estimation.




Page 9-1
10
MINERAL PROCESSING AND METALLURGICAL TESTING
 
2014 METALLURGICAL TESTWORK
 
In 2014, two metallurgical testing programs were performed on the Main Peak deposit; one on behalf of Contango and the other for Kinross. These initial programs indicated that plant feed grade materials from the Project could be treated with basic cyanidation techniques.

 
CONTANGO TESTING AT SGS
 
Three separate core samples from Main Peak were tested for Au, Ag, and Cu response to a gravity concentration/rougher flotation flowsheet. The flowsheet envisioned primary gravity separation by Knelson concentrator with a Mozley table to produce a final gravity concentrate; gravity tailing was then subjected to rougher flotation. The three samples also underwent mineralogical testing to determine sulfide mineralogy, and a gold deportment study was completed.

The combined gravity and rougher flotation concentrates recovered in excess of 90% of the Au, Ag, and Cu; however, the mass of the concentrates generated was significant (ranging from 36% up to 79% of the feed weight).

 
KINROSS TESTING AT KAPPES, CASSIDAY & ASSOCIATES
 
Initially, 18 assay reject samples from Main Peak were collected by Kinross in 2014 (as part a due diligence process) and supplied to Kappes, Cassidy & Associates (KCA) for head analyses, bottle roll leach testing, flotation testing and gravity concentration testing with leaching of the gravity tailing. An additional twelve assay rejects and three samples of quarter core were subsequently shipped to KCA for testing by three more recovery methods (flotation, gravity concentration with cyanidation of the tailing, and direct cyanidation).  The QP’s review of the Kinross metallurgical test work on Main Peak samples indicated that there did not appear to be any major drawbacks to treat the plan feed grade materials with basic cyanidation techniques.

Page 10-1
RECENT TESTWORK – 2016 TO PRESENT
 
Peak Gold JV performed two phases of metallurgical testing on both the North Peak and Main Peak areas. The initial phase of testing, Phase 1, consisted of running “shake leach” tests (i.e., cyanide soluble assays) on the assay pulps from North Peak and Main Peak drill hole intervals.

The second phase of testing, Phase 2, was comprised primarily of bottle roll leaching, agitated vessel leaching, abrasion testing, and ball mill and rod mill grind index determinations. Limited reagent strength optimization, oxidation techniques, and gravity separation were also examined in Phase 2 testing.  Composites generated for the Phase 2 test programs were constructed from consecutive “significant” drill hole intervals totaling at least 5 m in length.

 
PHASE 1 TEST PROGRAMS
 
The Phase 1 testing had the objective of looking at the amenability and potential variability of gold and silver mineralization to cyanidation.  As Peak Gold JV was primarily looking at the potential amenability of North Peak material(s) to cyanidation, the decision was made to selectively run shake leach tests on the assay pulps from intervals identified in the North Peak drilling program.

North Peak intervals were initially chosen for Phase 1 testing due to relatively fresh samples being available.  A substantial number of the historic Main Peak assay rejects demonstrated extreme oxidation in the higher sulfide content intervals and it was initially thought that this might skew results.  As the North Peak Phase 1 results came in, the decision was made to proceed with shake leach testing on Main Peak intervals to see if there were any noticeable differences from North Peak.

Results from the shake leach test program were not expected to replicate metal extractions that would be obtained from more detailed metallurgical testing (e.g., 48-hour agitated leach). It was anticipated that the cyanide soluble assays could provide insight into potentially problematic areas within the deposit. If large differences in gold and/or silver assay values were observed, the intervals could subsequently be subjected to additional testing.

The overall results from both the North Peak and Main Peak fire assay versus cyanide soluble assay test programs demonstrated that the gold is amenable to cyanidation leaching techniques. At the end of Phase 1 testing, it was thought that cement addition and/or pre-oxidation would need to be incorporated to some degree to improve gold extraction from simple cyanidation.

Page 10-2
While the test work showed that the majority of samples exhibited acceptable (>50%) to good (>75%) cyanide soluble gold results, low cyanide soluble gold generally correlated with high cyanide soluble copper content and high sulphur content.  Based on the shake leach results, it appears that the overall group of Main Peak intervals exhibits lower gold cyanide solubility than the group of North Peak intervals.

 
PHASE 2
 
Phase 2 testing commenced with North Peak assay reject materials since it was the most recently drilled (i.e., potentially least oxidized from assay preparation) and was readily available for shipment to a metallurgical testing facility. The initial objective for Phase 2 testing on North Peak was to determine the difference(s) between the shake leach results and a standard set of bottle roll conditions.

Peak Gold JV drilled three new core holes in Main Peak to obtain fresh metallurgical testing materials. The Phase 2 test program was expanded to include abrasion testing, rod and ball mill work index testing, and some preliminary optimization testing on grind size, reagent strength, dissolved oxygen management, and leach time.

NORTH PEAK
 
Peak Gold JV utilized consecutive intervals of assay reject materials from individual drill holes as this would simulate potential plant feed from mining and allow testing numerous individual composites across the deposit. McClelland Labs in Sparks, Nevada, was selected as the metallurgical test facility.  Nineteen composites were prepared from the assay rejects from 18 different drill holes in North Peak.

North Peak materials responded well to standard bottle roll cyanidation (i.e., 80% passing 74 µm grind, 48-hour leach time, 40% w/w slurry density, and 2.0 g/l NaCN concentration). Gold extractions in the 19 composites ranged between 90.4% and 99.6% (overall average of 96.1%) after 48 hours of leaching. Gold extraction was generally rapid (majority of composites substantially complete after 12 hours). Silver extractions in the 19 composites ranged between 26.1% and 92.1% (overall average of 69.0%) after 48 hours of leaching. Silver extraction rates were rapid (also substantially complete after 12 hours). Reagent consumptions (cyanide and lime) were generally high and showed significant variability between composites. Cyanide consumption ranged from 0.49 kg/t up to 6.40 kg/t (average of 1.46 kg/t). Lime consumption ranged from 2.0 kg/t up to 12.2 kg/t (average of 6.7 kg/t).

Page 10-3
MAIN PEAK
 
Peak Gold JV made the decision to drill three new core holes in Main Peak (17393, 17395, and 17397) to obtain metallurgical samples for Phase 2 testing.  These holes were oriented to provide the maximum amount of intercept per drill hole and therefore did not provide complete coverage across the Main Peak deposit. Composites were generated using the same methodology employed for North Peak, resulting in 19 individual composites generated for Main Peak.  Additionally, there were enough individual intervals within the 19 composites to allow creation of four master composites.  The 19 individual composites and four master composites were initially subjected to the standard bottle roll conditions utilized in the North Peak Phase 2 tests.

The 19 individual composites tested achieved gold extractions ranging from 82.9% to 96.9% (average 90.0%). The cyanide consumptions were significantly higher than North Peak, ranging from 1.12 kg/t to 14.39 kg/t (average 8.52 kg/t). Nine of the 19 composites showed cyanide consumption of 10.0 kg/t or greater. Interim solution samples indicated that gold extraction was virtually complete after 24 hours for the majority of the individual composites. Eleven of the individual composites and three of the master composites demonstrated significantly reduced levels of dissolved oxygen (i.e., dissolved oxygen < 2.0 ppm) in the interim and final solution sampling.

The next step in testing was to examine the use of Portland cement and standard alkaline pre-aeration to determine which method would work better to reduce cyanide consumption. In addition, the high cyanide consumptions indicated that lowering the cyanide concentration to 1.0 g/l NaCN (from 2.0 g/l NaCN) could potentially assist in lowering consumption. A cement addition in grinding equivalent to 2.0 kg/t was utilized for the initial cement tests and leaching was performed for 48 hours in a mechanically agitated vessel sparged with air. Alkaline pre-aeration was performed at a pH of 11 for eight hours in a mechanically agitated vessel sparged with air followed by leaching in same vessel for 48 hours. However, in initial testing, higher lime consumption and potential additional capital costs associated with eight hours of alkaline pre-aeration did not appear to indicate favourable economics for alkaline pre-aeration.

Page 10-4
Given the low dissolved oxygen levels observed in prior tests, later tests were sparged with oxygen in a mechanically agitated vessel, while the cement addition during grinding was increased to 4 kg/t. These tests showed significantly improved cyanide consumption ranging from 0.91 kg/t up to 2.03 kg/t (average of 1.21 kg/t vs. original tests at 8.74 kg/t) and better correlation to gold extraction ranging from 81.2% to 86.7% (average of 83.5% vs. original tests at 85.6%).

Results from solution analyses conducted on the final pregnant solutions from selected leach tests indicated on average that without cement, about 40% of the observed cyanide consumption was due to the formation of thiocyanate (SCN-), 55% to iron dissolution, and 8% to copper dissolution. Gold and silver dissolution made negligible contributions to the observed cyanide consumption. With cement added, average contributions to consumption changed to about 46% for SCN-, only 8% for iron dissolution and 44% for copper dissolution. The average cyanide consumption for those selected tests with cement added was only approximately 30% of that without cement. Results seem to indicate that adding cement during grinding was effective in limiting iron and sulphur dissolution, and perhaps the resulting higher free cyanide concentrations resulted in higher copper dissolution. The net effect was a substantially lower cyanide consumption when cement was added during grinding.

 
COMMINUTION TESTING
 
Seven core intervals (four from Main Peak and three from North Peak) associated with the assay reject composites used for the Phase 2 test program were submitted for abrasion testing, and Bond ball and rod mill work index determinations.

TABLE 10‑1   SUMMARY OF COMMINUTION TEST RESULTS

Composites
Sample
Location
Ball Mill Work Index
Rod Mill Work Index
Abrasion Index
kWh/t
Classification
kWh/t
Classification
g
Classification
PK18-MET-001
Main Peak
13.71
med
13.8
med
0.1737
Moderately Abrasive
PK18-MET-002
Main Peak
13.91
med
12.63
med
0.0959
Lightly Abrasive
PK18-MET-003
Main Peak
11.58
med
10.66
soft
0.1357
Moderately Abrasive
PK18-MET-004
Main Peak
10.58
soft
12.85
med
0.0971
Lightly Abrasive
 
Average
12.45
 
12.49
 
0.1256
 
PK18-MET-005
North Peak
12.45
med
9.88
soft
0.1242
Moderately Abrasive
PK18-MET-006
North Peak
12.25
med
7.78
soft
0.1008
Moderately Abrasive
PK18-MET-007
North Peak
13.38
med
10.98
med
0.0079
Lightly Abrasive
 
Average
12.69
 
9.55
 
0.0776
 
Main & North Peak Average
12.55
 
11.23
 
0.1050
 
Source: Royal Gold, 2018

Page 10-5
GRAVITY CONCENTRATION
 
Gravity concentration tests were conducted on each of the four master composites at a P80 of 75 μm. Milled feeds were each concentrated by hand panning to produce a rougher concentrate and rougher tail. Each rougher concentrate was cleaned by further panning to produce a cleaner concentrate and cleaner tail.

All four composites responded moderately well to gravity concentration treatment at the 75 μm feed size. Gold values reporting to the rougher concentrates (up to 11.6% of the plant feed weight) represented between 30.3% and 63.3% of the gold contained in the whole plant feed. Gold values reporting to the cleaner concentrate (up to 2.4% of the plant feed weight) represented between 15.1% and 51.6% of the contained gold. Gold recovery to gravity concentrates and concentrate grade tended to increase with increasing plant feed grade.

A series of optimization leach tests were completed on Main Peak composites with the objective to reduce cyanide consumption while maintaining the gold recovery. The most effective conditions at controlling cyanide involved the addition of Portland cement during grinding.

●
Adding cement to the material during grinding was effective in substantially decreasing cyanide consumption during agitated leaching. Under optimized conditions, including 4.0 kg/t cement during grinding, average cyanide consumption was 2.32 kg NaCN/t material in 36 hours of leaching. This cyanide consumption was about one-third that observed during baseline testing with cement addition. The decreased cyanide consumption appears to be caused by an inhibition of iron and sulfur dissolution during leaching. This may have been somewhat offset by moderately higher copper extraction which also resulted from adding cement.
●
Adding cement during grinding caused significantly lower (14% lower average) gold recovery from three of the 23 composites. Gold recovery from the other 20 composites were essentially the same with or without cement added. Further testing is required to better understand the cause for the lower recoveries when cement was added to those three composites. However, cement addition has been included as a key aspect of the process design.
●
Results seem to indicate that adding cement during grinding was effective in limiting iron and sulfur dissolution, and perhaps the resulting higher free cyanide concentrations resulted in higher copper dissolution. The net effect was a substantially lower cyanide consumption when cement was added during grinding.

Page 10-6
Composite components underwent geochemical testing and length weighted composite geochemical attributes were averaged. Geochemical data was compared to metallurgical results in an attempt to formulate relationships between elemental concentrations and metal recovery and reagent consumption rates.

The geological block model contains Au, Ag, Cu, Co, Bi, and S grades for each block. As such, metallurgical analysis was focused on determining relationships associated with these variables; as relationships could be applied to blocks for determining deposit results. Best subset regression was used to determine optimal linear relationships between these predictor elements and metallurgical outputs. Equations were established for gold recovery, silver recovery, and cyanide consumption for both Main and North Peak as shown below:

Main Peak (including West Peak):
Au Recovery (%) = 92.2 + 0.243 ∗ Auppm − 0.01184 ∗ Coppm

NaCN Consumption (Kg/Tonne) = 0.319 − 0.04 ∗ Auppm + 0.00028 ∗ Cuppm + 0.2611 ∗ Spct

Ag Recovery (%) = 50.47 + 2.203 ∗ Auppm − 0.304 ∗ Agppm − 0.019 ∗ Coppm

North Peak
Au Recovery (%) = 106.39% −  0.2325 ∗Auppm + 0.0351 ∗Agppm − 5.30 ∗ Spct − 0.002436 ∗
Coppm − 11.33 ∗ exp(−0.0547906 ∗ Auppm )

NaCN Consumption (Kg/Tonne) = 0.313 + 0.0288 ∗ Auppm + 0.000349 ∗ Cuppm − 0.001499 ∗
Bippm + 0.320 ∗ Spct + 0.000265 ∗ Coppm

Ag Recovery = 75.48% + 0.00945 ∗ Coppm − 0.0212 ∗ Bippm − 40.8 ∗ Spct

There are no known deleterious elements at this time, however, additional work is planned to determine this.

The SR QP is of the opinion that the data derived from the testing activities described above are adequate for the purposes of Mineral Resource estimation.

Page 10-7
11
MINERAL RESOURCE ESTIMATES

SUMMARY
 
Mineral Resources have been classified in accordance with the definitions for Mineral Resources in S-K 1300.  The Mineral Resources at the Manh Choh Project were developed using a computer-based block model of the deposit. The block model was assembled based on the drill hole assay information and geologic interpretation of the mineralization boundaries. Mineral Resources were estimated using the block model and open pit design to establish the component of the deposit with reasonable prospects of economic extraction.

Independent Mining Consultants, Inc. (IMC) assembled the block model and the estimate of Mineral Resources. The model was assembled during 2017 based on drilling available on April 29, 2017. Additional drilling has been reported since that time which was not incorporated into the IMC block model, but will be included in the 2021 JV resource model update.  Exploration and drilling at the Manh Choh Project has defined several areas of potentially economically extractable mineralization. The Mineral Resources include two deposits called: Main Peak and North Peak. There is an area SW of Main Peak deposit that contains a few drill holes and was named Discovery Hill. Although the Discovery Hill area is contained within the block model, it was not modeled and is not included in the stated Mineral Resources.

The NW end of the Main Peak deposit is referred to as West Peak because there are structural offsets between Main and West. The West Peak mineralization was modeled incorporating those structural offsets, and is tabulated as part of Main Peak deposit on the Mineral Resource tables.  Contango is a 30% owner of the Peak Gold JV with Kinross owning the remaining 70% and acting as Project operator.

Table 11-1 summarizes a Mineral Resource estimate for the Project effective December 31, 2020 held by Peak Gold, LLC.  Contango’s 30% attributable ownership of the Project is summarized in Table 11-2.

Page 11-1
TABLE 11-1   SUMMARY OF MINERAL RESOURCES AS OF DECEMBER 31, 2020 –
PEAK GOLD, LLC’S 100% OWNERSHIP

Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
473
6.4
97
16.7
254
6.6
101
Indicated
8,728
4.0
1,111
14.1
3,945
4.2
1,168
Total Measured + Indicated
9,201
4.1
1,208
14.2
4,199
4.3
1,267
               
Inferred
1,344
2.7
116
16.1
694
2.9
126

TABLE 11-2   SUMMARY OF MINERAL RESOURCES AS OF DECEMBER 31, 2020 –
CONTANGO’S 30% ATTRIBUTABLE OWNERSHIP

Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
142
6.4
29
16.7
76
6.6
30
Indicated
2,618
4.0
333
14.1
1,183
4.2
350
Total Measured + Indicated
2,760
4.1
362
14.2
1,260
4.3
380
               
Inferred
403
2.7
35
16.1
208
2.9
38

Notes for Tables 11-1 and 11-2:
1.
The definitions for Mineral Resources in S-K 1300 were followed for Mineral Resources.
2.
Mineral Resources are estimated at a cut-off value of US$28 NSR/t and US$30 NSR/t.
3.
Mineral Resources are estimated using a long-term gold price of US$1,400 per ounce Au, and US$20 per ounce Ag.
4.
Metallurgical recoveries were 90% Au and 52% Ag for the Main+West Zone and 94% Au and 60% Ag for the North Zone.
5.
Silver equivalents are reported using a ratio of 70.
6.
Bulk density is 2.75 t/m3.
7.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
8.
Numbers may not add due to rounding.

The QP reviewed consensus long-term (10 year) metal price forecasts for gold and silver and verified that the selected metal prices for estimating Mineral Resources are in line with independent forecasts from banks and other lenders.

The QP is of the opinion that with consideration of the recommendations summarized in Sections 1 and 23 of this report, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.

Page 11-2
The estimates of Mineral Resources may be materially affected if mining, metallurgical, or infrastructure factors change from those currently anticipated at the Manh Choh Project. Although the QP has a reasonable expectation that the majority of Inferred Mineral Resources could be upgraded to Indicated or Measured Resources with continued exploration, estimates of Inferred Mineral Resources have significant geological uncertainty and it should not be assumed that all or any part of an Inferred Mineral Resource will be converted to the Measured or Indicated categories.

Mr. Sims was unable to visit the site in 2020, due to the COVID-19 virus and associated travel restrictions.  He will travel to site once these restrictions are relaxed, and travel is possible.  The QP relied on Project staff to inspect core and surface outcrops, drill platforms and sample cutting and logging areas; discussed geology and mineralization with Project staff.

 
RESOURCE DATABASE
 
The database for the block model assembly was provided by Avalon in April 2017 and verified by IMC prior to application of model assembly. There were 357 drill holes in the Manh Choh Project database as of April 29, 2017. However, not all the drill holes were used for assembly of the block model. Only those drill holes within the areas defined as Main Peak, North Peak and West Peak were used for block grade estimation. There are 318 holes within the block model limits. Discovery was not modeled as there is limited potential for resources at Discovery.

As a result, the drill hole database used for modeling the Main, West, and North Peak zones included the following:

1.
Number of Drill Holes 300
2.
Meters of Drilling 55,321 m
3.
Number of assay intervals in those holes 30,989

All drill hole data is from diamond drilling methods.

The QP has reviewed the reports and is of the opinion that the data verification programs undertaken adequately support the geological interpretations, the analytical work and database quality. The QP recommends that the database be moved to a relational database such as acQuire going forward.
 
Page 11-3
GEOLOGICAL INTERPRETATION
 
The Manh Choh Project gold-copper mineralization is hosted by metasedimentary rocks, which are tentatively considered to be Late Proterozoic or Paleozoic in age. The rocks consist of mainly schists, which underwent complex folding. The folding appears to have concentrated calcareous components of the host rock along the axial plane of the folding.

Later hydrothermal events intersected the calcareous units and formed highly localized skarn bodies. The contact metamorphic event that formed the skarns likely also controlled the placement of the gold, silver, and copper mineralization. The distribution of the potentially economic elements of gold, silver, and copper is highly controlled by the fold geometry. Grade changes for the metals are abrupt with relative high grades within the mineralized skarn folds and low grades outside of these zones. As a result, the modeling of these fold sequences is important to the estimation of Mineral Resources.

IMC completed hand interpretation on SW-NE sections spaced 25 m to 30 m apart in the NW direction. Several iterations were completed to assure tie through from section to section where appropriate. Once hand interpretation was complete, the sections were digitized into Vulcan software and wireframe solids were completed using the section interpretations. Several iterations of edit and correction were made to the 3D wireframe solids. Once the hand interpretation was complete, the individual assays were coded by hand to match the interpretation. The assay codes were assigned to match the limb and zone of the deposits.
The mineralized envelope codes (domain codes) that are assigned to the model are:

●
30 = Main Peak Area
●
22,21,99,98 = North Peak Upper Limbs
●
10 = North Peak Nose Zone
●
11,12,13,14 = Lower North Peak Limbs
●
50 = Middle Earth (An isolated zone between North and Main)

The domain codes were assigned to the model blocks on a nearest whole block basis. Fractional blocks were not applied. IMC added the following codes to the assay database in case they were required to further segregate the estimate of mineralization.

●
31 = Lower bed of Main Peak Project
●
35 = Main Peak Axial Planar Feature
●
40 = Upper bed of Main Peak
●
20 = Component of the North Peak Nose Zone

Page 11-4
The last three codes reflect the zones in Main Peak where there is a slight change in the direction of the mineralization. Although the extra codes were assigned, they were not necessary during estimation and could have combined into Code 30.

IMC also assigned codes to the model to represent the zones, which were used primarily for reporting purposes. The codes are: Main = 1, North = 2, West = 3, and Discovery = 4.

Figure 11-1 illustrates the interpretation of domains codes in the Main Peak and North Peak deposits respectively. This cross section is looking NW and illustrates the domain shapes spatially.





Page 11-5


Page 11-6
The QP has reviewed the geologic model wireframes and is of the opinion that the data verification programs undertaken adequately support the geological interpretations.

The QP recommends that a geochemical and structural model be completed for future work to support the estimation domains.  The QP notes that there is a large amount of multi-element data that could support a geochemical model to better understand the impact of elements like arsenic, mercury, and others on the gold distribution and recoveries.  The QP also recommends the use of implicit modeling for the future wireframes.

 
RESOURCE ASSAYS
 
Basic statistics were initially completed on the individual assay intervals sorted by the deposit area and the domains listed in the previous section. This work was completed in several iterations from September 2016 through May 2017 as drill data was received from Phase 2, 3, and 4. Table 11-3 summarizes the uncapped assay data within the Main + West and North Peak areas.


TABLE 11-3   UNCAPPED ASSAY STATISTICS

Metal
Number of
Assays
Mean
Grade
Standard
Deviation
Maximum
Value
Basic Statistics as of May 2017, Main and West Peak Area
Gold (g/t)
15,397
0.808
4.796
207.700
Silver (g/t)
15,397
3.46
18.04
828.00
Copper %)
15,397
0.067
0.280
8.320
Basic Statistics as of May 2017, North Peak Area
Gold (g/t)
15,586
0.864
8.134
416.000
Silver (g/t)
15,586
4.77
36.37
3,210.00
Copper %)
15,586
0.033
0.098
5.290
Source: IMC (2017)        


TREATMENT OF HIGH-GRADE ASSAYS
 
COMPOSITING AND GRADE CAPPING LEVELS
 
Cumulative frequency plots of both raw assays and 2.5 m composites were developed by domain and zone. The plots of the raw assay information were used to determine outlier populations that were capped prior to further work. A different cap was applied to each metal in each of the domains described in the previous section.

Page 11-7
The number of capped assays was generally small. For example, there are a total of five gold assays in the Main and West Peak grade zone that are above 80.0 g/t before capping. Within the North Peak area there are 14 assays above 100.0 g/t Au. Ten of the assays occur in the “nose” of the North deposit (domains 10 and 20). The remaining four occur in the upper limb of North Peak (code = 21). Table 11-4 illustrates the cap values that were applied to each metal in each of the mineralized domains.


TABLE 11-4   CAP VALUES APPLIED TO ASSAY INTERVALS

Model Area
Domain Code
Gold Cap
(g/t)
Silver Cap
(g/t)
Copper Cap
(%)
Main and West Peak
30, 31, 35, 40
80.00
300.0
5.00
North Peak
99, 98, 22, 21, 20, 10, 11, 12, 13, 14
100.0
500.0
1.00
Outside of Mineral Zones
No Code (less than 10)
20.00
200.0
1.00
Source: IMC (2017)


The procedure for capping that is applied by IMC is to copy the assay information into additional columns in the database, then apply the caps to the added columns. For example, the capped gold value was stored in a variable labeled as “au_cap”. From this point forward, the cap values were utilized in compositing and for grade estimation.

In May 2018, IMC was requested to add sulfur, bismuth, and cobalt to the block model. They were capped as follows for all domains: cobalt at 5,000 ppm, bismuth at 2,000 ppm, and sulfur at 20%. There are 468 sulfur assay intervals (10% of the data) that report assays of exactly 10.01%. One of the assay laboratories did not report sulfur values above this level. As such high-grade sulfur zones may be locally low biased.

Prior to grade estimation, the assay data was composited to nominal 2.5 m long intervals that respect the domain wireframe geologic boundaries. The composite procedure applied to the Peak Project is designed to respect the distinct grade changes at the domain boundaries. The process is as follows:

●
Compositing was applied to the “capped” assay values.
●
Within each drill hole, the length of the assay interval within each domain was subdivided into an integral number of approximately 2.5 m intervals.
●
The composite intervals start and stop at the domain boundaries. Consequently, there is no averaging across domain boundaries.
●
Composites range in length between 0.37 m and 3.32 m. The average composite length is 2.493 m.
●
Short composites (minimum 0.37 m) were allowed due to the narrow width of some of the high-grade zones. If short intervals were not allowed, some of the higher-grade zones would not be represented.

Page 11-8
Table 11-5 summarizes the basic composite statistics for the economic metals that were used for block grade estimation.


TABLE 11-5   BASIC STATISTICS OF 2.5M COMPOSITES ON CAPPED ASSAYS BY DOMAIN FOR GRADE ESTIMATION

Model Area
Domain
Code
Number
Gold Avg
(g/t)
Gold Std Dev
(g/t)
Silver Avg
(g/t)
Silver Std Dev
(g/t)
Copper Avg
(%)
Copper Std Dev
(%)
Main and West Peak
 
Total
1,951
3.28
8.39
10.3
28.4
0.209
0.418
Assay Domain Codes
30
1,459
3.14
8.10
10.6
31.4
0.236
0.473
31
34
2.25
4.30
2.7
3.7
0.070
0.070
35
72
1.43
1.99
3.3
6.4
0.105
0.167
40
386
4.23
10.19
11.4
17.6
0.136
0.134
Main + West Outside
 
8,475
0.03
0.09
1.0
3.3
0.016
0.033
                 
North Peak
 
Total
1,982
3.67
13.00
16.61
50.03
0.084
0.114
Assay Domain Codes
99
55
0.36
0.64
21.08
52.54
0.058
0.085
98
11
0.11
0.06
2.99
2.53
0.049
0.048
22
58
4.08
6.80
38.01
67.66
0.106
0.104
21
247
6.06
17.15
6.71
13.48
0.043
0.046
20
441
5.71
21.15
23.48
86.27
0.090
0.122
10
576
3.67
9.31
10.92
23.53
0.080
0.103
11
291
1.59
3.85
15.54
34.06
0.101
0.131
12
128
1.67
2.90
31.33
49.56
0.135
0.177
13
173
1.29
2.26
15.29
28.49
0.078
0.094
14
2
0.16
 
22.25
 
0.037
 
Middle Earth
50
20
2.00
2.69
4.25
7.00
0.049
0.044
North Peak Outside
 
9,467
0.02
0.11
0.83
2.64
0.014
0.023
Source: IMC (2017)


The average grades of the interpreted domains versus the external, or “outside”, zones are strong support for the application of hard boundaries between the interpreted domains and the surrounding low-grade material.

The Main and West Peak model domain code 30 was comprised of assay codes 30, 31, 35, and 40 which were all contained within the solid for model code 30. A change or search orientation was applied to respect the “C” geometry, but all information within model domain 30 was used for estimation of blocks coded as 30.

Page 11-9
In North Peak, the nose of the “C” was modeled with two domain codes: 10 and 20 for the upper and lower arms of the C. They were combined statistically and treated as one population.

The North Peak upper limbs labeled 21, 22, 98, and 99 were treated as independent populations during grade estimation. For example, assays in limb 21 could not be used to estimate limb 22 etc.

The North Peak lower limbs labeled 11, 12, 13, and 14 were treated as independent populations.

The QP has reviewed the grade capping and compositing strategy and is of the opinion that they adequately support the resource estimation.  The QP, however, recommends that an analysis on capping at the composite level be carried out to test the impact of capping the raw assays vs. the capped assays.  The deposit is spatially complex with high grade variability so contact plots would also be advantageous.

 
TREND ANALYSIS
 
VARIOGRAPHY
 
Variograms were tabulated for the metals to determine a reasonable estimate of the search radius. Figures 11-2 and 11-3 are examples of the gold grade variograms from Main Peak, Domain 30, and North Peak Domains 10 and 20, which represent the nose of the C.



Page 11-10
FIGURE 11-2   MAIN PEAK, EXAMPLE GOLD VARIOGRAMS



FIGURE 11-3   NORTH PEAK, EXAMPLE GOLD VARIOGRAMS



The QP notes that the high nugget shown in the variograms is indicative of skarn gold deposits and great care needs to be taken in the estimation work to restrict high grades.

Page 11-11
BULK DENSITY
 
Bulk density was assigned to each block based on the area, domain, and oxidation state. Specific gravity samples are measured in the core shed on a regular basis as outlined in Section 8. That information was utilized to establish estimated bulk densities for assignment to the block model.

The specific gravity tests are spot samples of relatively intact rock. Areas where rock strength is low are difficult to collect samples for density testing. As a result, it is often difficult to properly reflect the density of highly weathered or broken zones.

The RQD information was paired with the associated specific gravity data to understand the general trend of density loss due to poor rock quality and high levels of fracturing. As a result, a reduction factor was applied to reduce the measured density to better reflect bulk density of each zone. Within the sulfide zones, a 1.5% reduction in sample density was applied across the board to reflect nominal fracturing. A higher reduction value was applied in the sulfur depleted (oxide) zones to better reflect the bulk density of that material. The bulk density information assigned to the model is summarized in Table 8-1 in Section 8 of this TRS.

 
BLOCK MODELS
 
IMC was contracted to complete a resource estimate for Peak, North Peak, and West Peak deposits at the end of 2016. It used the end of year drill hole database for the 2016 season and published a Mineral Resource estimate dated February 15, 2017 including gold, silver, and copper.

Subsequently, Peak Gold JV drilled additional holes primarily in North Peak and West Peak in a 2017 Phase 1 drill program.  These additional holes were used to update the geologic wireframes and the resource model was recalculated and the updated resource was released with a May 24, 2017 date.  Both of these estimates used a 5m x 5m x 2.5m block size.

Page 11-12
In 2018, as part of the preliminary work for an internal PEA, IMC used the May 24, 2017 model and did an additional interpolation for sulfur and copper.  No additional drill hole data or modifications to the wireframes were made.  This model was dated March 14, 2018.

In May 2018, the model was further amended to include bismuth.  The model was still unchanged from the May 24, 2017 model and only bismuth was added.

The block model was developed using blocks sized 5 m x 5 m on plan with a 2.5 m bench height. The small block size was selected to model the interpreted geology. There are components within the North Peak deposit where the mineralization is narrow, and the small block size was selected to help define those geometries.

The mineralization within the Main and North deposits generally strikes N45W (315 degrees). To improve the representation of the geologic contacts, the block model is rotated 45 degrees to align with the strike of the mineralized material and the orientation of the drilling (Figure 11-4).



Page 11-13
FIGURE 11-4   BLOCK MODEL GEOMETRY AND ROTATION



Table 11-6 provides the model location. The project has been developed in the metric system and the project coordinate system for the drilling and Mineral Resources is UTM Zone 7, NAD 83.

Page 11-14
TABLE 11-6   BLOCK MODEL GEOMETRY AND EXTENTS

May 2017 Model Area, Outside Block Corners
 
Southwest
Northwest
Northeast
Southeast
Easting
404,550.00
403,560,05
404,762.13
405,752.08
Northing
7,006,300.00
7,007,289.95
7,008,492.03
7,007,502.08
Elevation Range
 
0.00
1,027.50
 
Model Rotation, Primary Axis =
45 degrees
Model Size
340 columns block in 45 bearing)
280 rows (block in 315 bearing)
411 levels
Source: IMC (2017)  


The QP has reviewed the resource model block size and is of the opinion that they adequately support the reporting of Mineral Resources. The QP recommends that the selective mining unit (SMU) be reviewed as a bigger block size may better optimize the resultant Mineral Resources with respect to dilution and metal grades.  In addition, the QP recommends that the multi-element data be modeled independently to assess the impacts on the Mineral Resource.

 
SEARCH STRATEGY AND GRADE INTERPOLATION PARAMETERS
 
Alternative methods of grade estimation were evaluated before selecting the inverse distance method (1/D2). Ordinary linear kriging and 1/D2 were compared as options for grade estimation. A number of statistical checks were completed to arrive at the inverse distance selection. The primary reason for selecting inverse distance was that ordinary kriging appeared to “over smooth” the block grades, meaning that the block variance between blocks was less than what would be predicted by 1/D2.

Search distances are generally 50 m x 50 m x 10 m within the plane of each domain. The domain boundaries are as discussed in the previous section. Within the Main domain, the search orientation was changed at the 950 m elevation. Above the 950, the search dipped to the SW. Below the 950, the search dips to the NE. This is not a hard bound but a change in orientation to reflect the “C” geometry of the deposit. In all cases, the inverse distance estimation utilized composite counts of:

●
Maximum Composites = 12
●
Minimum Composites = 1
●
Maximum per Drill Hole = 3

Page 11-15
HIGH GRADE RESTRICTION
 
Search limits on higher gold grade values were established to additionally limit their impact on areas that they represent. The high-grade search limit was guided by testing alternative discriminators with indicator variograms.

Silver and copper were estimated with the same procedures and domains as were applied to gold. The number of silver and copper assays is the same as for gold. For both silver and copper, no high-grade limit searches were applied. The same maximum (12), minimum (1) and maximum per hole (3) were applied. Table 11-7 summarizes the block estimation parameters.




Page 11-16
TABLE 11-7   BLOCK GRADE ESTIMATION PARAMETERS


Source: IMC (2018)

Page 11-17
Cobalt, bismuth, and sulfur were added to the model at a later date. Cobalt used the same estimation plan as gold, silver, and copper. Bismuth and sulfur had the additional constraint of resecting the top of sulfide surface assigned to the model. That surface was treated as an additional hard bound for bismuth and sulfur.

The QP has reviewed the resource model block search criteria and orientations and is of the opinion that they adequately support the estimation of Mineral Resources.  The QP recommends that a more detailed analysis of the high-grade restriction criteria be completed in future studies as the variography shows that there is a high nugget effect.

 
CLASSIFICATION
 
Definitions for resource categories used in this report are those defined by SEC in S-K 1300.  Mineral Resources are classified into Measured, Indicated, and Inferred categories.

Blocks were coded as Measured, Indicated, or Inferred based on the 1/D2 gold grade estimate, the average distance to the closest composite, and the number of composites used to estimate the block.

●
Main + North, Inside Interpreted Domains
o
Measured: Composites = 12, Average Distance < 15 m
o
Indicated: Composites ≥ 4, Average Distance < 30 m
o
Inferred: Remaining to the search radius

●
Main + North, Outside Interpreted Shapes
o
Measured: Composites = 12, Average Distance < 10 m
o
Indicated: Composites ≥ 4, Average Distance < 18 m
o
Inferred: Remaining to the search radius

Figure 11-5 shows Measured and Indicated classifications in the IMC (2017) block model.


Page 11-18
FIGURE 11-5   MEASURED AND INDICATED CLASS BLOCKS


Source: IMC (2017)

The QP has reviewed the resource block model and classification and is of the opinion that they adequately support the reporting of Mineral Resources. The QP, however, recommends that more continuous classification shapes be created to eliminate areas of discontinuity. This would be most likely carried out using a combination of confidence distance criteria and wireframes.

Page 11-19
BLOCK MODEL VALIDATION
 
Figure 11-6 illustrates that inverse distance lies between the two limit lines and would be an improvement for mine planning prediction over the results from ordinary kriging as discussed under Search Strategy and Grade Interpolation Parameters.

The primary reason for selecting inverse distance was that ordinary kriging appeared to “over smooth” the block grades, meaning that the block variance between blocks was less than what would be predicted by 1/D2. Figure 11-6 presents cumulative frequency plots of the block grades in the Main Peak. Three alternatives are shown on each graph: 1) nearest neighbor (NN) estimation, 2) Ordinary linear kriging, and 3) 1/D2. Once mining operations have commenced, the expected result of grade control would lie between the nearest neighbor and ordinary kriging because the blast hole selection would not be as variant as the composite values (nearest neighbor), but certainly less variant than ordinary kriging.


FIGURE 11-6   CUMULATIVE FREQUENCY PLOT OF ESTIMATED BLOCKS,
GOLD AT MAIN MANH CHOH PROJECT


The QP has reviewed the resource block model provided by Contango and is of the opinion that while the validation of the estimation method is reasonable, additional validation checks should be carried out between the composite and block model grades.  These would consist of visual section inspections, swath plots, and domain analysis.  The QP recommends that this be undertaken in future resource model updates.
 
Page 11-20
MINERAL RESOURCE REPORTING
 
Mineral Resources summarized in this section follow the definitions for Mineral Resources in S-K 1300. The following paragraphs are quoted from those documents. “A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geologic characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.”

“The phrase ‘reasonable prospects for economic extraction’ implies a judgment by the Qualified Person in respect to the technical and economic factors likely to influence the prospects of economic extraction. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable. These assumptions must be presented explicitly in both public and technical reports.” “The reader is cautioned that mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be realized or that they will convert to mineral reserves.”

Many companies use a computer algorithm to generate open pit shells that have reasonable prospects for economic extraction. Table 11-8 summarizes the input parameters that were applied to the floating cone algorithm to define the statement of Mineral Resources. Mining recovery and dilution were not applied to the determination of Mineral Resources.

Overall slope angles for the resource pits are based on the use of 20 m bench heights as reported from a June 2018 study by SRK Consulting (U.S.), Inc. (in Section 16 of the JDS, 2018). Multiple benches will necessarily be faced up to establish the 20 m spacing between catchment structures.

Page 11-21
TABLE 11-8   ECONOMIC INPUT TO RESOURCE FLOATING CONE

Parameter
 
Units
 
Main + West
   
North
 
Mining Cost
 
$/t
   
3.50
     
3.50
 
                     
Process Cost
 
$/t
   
22.00
     
20.00
 
G&A Cost
 
$/t
   
8.00
     
8.00
 
   
$/t
   
30.00
     
28.00
 
                     
Process Recoveries (direct cyanidation)
                   
Gold
 
%
   
90
     
94
 
Silver
 
%
   
52
     
60
 
Direct Cyanidation is assumed, no copper recovery
                   
                     
Slope Angles
                   
Northeast Wall
 
degrees
   
41
     
41
 
Remaining Pit
 
degrees
   
47
     
47
 
                     
Refining Charges
                   
Gold
 
$/oz
   
5.00
     
5.00
 
Solver
 
$/oz
   
0.50
     
0.50
 
                     
Refining Recovery
                   
Gold
 
%
   
99.9
     
99.9
 
Silver
 
%
   
90.0
     
90.0
 
                     
Metal Prices
                   
Gold
 
$/oz
   
1,400
     
1,400
 
Silver
 
$/oz
   
20.00
     
20.00
 
                     
Cut-off Grade, no mining
 
NSR $/t
   
30
     
28
 
                     
Values for NSR or Equivalent
                   
NSR Calculation for Main + West
Au x 0.90 x 0.992 x (1400-5.0)/31.1035 = Ag x 0.52 x 0.99 x (20-0.5)/31.1035
 
NSR Calculation for North
Au x 0.94 x 0.992 x (1400-5.0)/31.1035 = Ag x 0.60 x 0.99 x (20-0.5)/31.1035
 

Page 11-22
Table 11-9 summarizes a Mineral Resource estimate for the Project effective December 31, 2020 held 100% by Peak Gold, LLC.  Contango’s 30% attributable ownership of the Project is summarized in Table 11-10.


TABLE 11-9   SUMMARY OF MINERAL RESOURCES AS OF DECEMBER 31, 2020 – PEAK GOLD, LLC’S 100% OWNERSHIP

Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
473
6.4
97
16.7
254
6.6
101
Indicated
8,728
4.0
1,111
14.1
3,945
4.2
1,168
Total Measured + Indicated
9,201
4.1
1,208
14.2
4,199
4.3
1,267
               
Inferred
1,344
2.7
116
16.1
694
2.9
126

TABLE 11-10   SUMMARY OF MINERAL RESOURCES AS OF DECEMBER 31, 2020 – CONTANGO’S 30% ATTRIBUTABLE OWNERSHIP

Category
Tonnage
(000 t)
Grade
(g/t Au)
Contained Metal
(000 oz Au)
Grade
(g/t Ag)
Contained Metal
(000 oz Ag)
Grade
g/t AuEq)
Contained Metal
(000 oz AuEq)
Measured
142
6.4
29
16.7
76
6.6
30
Indicated
2,618
4.0
333
14.1
1,183
4.2
350
Total Measured + Indicated
2,760
4.1
362
14.2
1,260
4.3
380
               
Inferred
403
2.7
35
16.1
208
2.9
38

Notes for Tables 11-9 and 11-10:
1.
The definitions for Mineral Resources in S-K 1300 were followed for Mineral Resources.
2.
Mineral Resources are estimated at a cut-off value of US$28 NSR/t and US$30 NSR/t.
3.
Mineral Resources are estimated using a long-term gold price of US$1,400 per ounce Au, and US$20 per ounce Ag.
4.
Metallurgical recoveries were 90% Au for the Main+West Zone and 52% Ag and 94% Au and 60% Ag for the North Zone.
5.
Silver equivalents are reported using a ratio of 70.
6.
Bulk density is 2.75 t/m3.
7.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
8.
Numbers may not add due to rounding.

Due to the nature of the mineralization (skarn) and folded geometries of the deposit there may be a need to increase the drill density in some areas of the deposit to capture the erratic gold distributions properly.  This will be reviewed during the 2021 Mineral Resource update where drilling and classification criteria will be adjusted accordingly.

The QP has reviewed the inputs for the reporting of Mineral Resources and is of the opinion that they are reasonable.  The QP recommends that these inputs be revised during any future studies.

Page 11-23
The QP is of the opinion that with consideration of the recommendations summarized in Sections 1 and 23 of this report, any issues relating to all relevant technical and economic factors likely to influence the prospect of economic extraction can be resolved with further work.

The estimates of Mineral Resources may be materially affected if mining, metallurgical, or infrastructure factors change from those currently anticipated at the Manh Choh Project. Although the QP has a reasonable expectation that the majority of Inferred Mineral Resources could be upgraded to Indicated or Measured Resources with continued exploration, estimates of Inferred Mineral Resources have significant geological uncertainty and it should not be assumed that all or any part of an Inferred Mineral Resource will be converted to the Measured or Indicated categories.




Page 11-24
12
MINERAL RESERVE ESTIMATES

No Mineral Reserve estimate has been established at the Manh Choh Project to date.




Page 12-1
13
MINING METHODS

This section is not applicable.




Page 13-1
14
PROCESSING AND RECOVERY METHODS

This section is not applicable.




Page 14-1
15
INFRASTRUCTURE
 
This section is not applicable.




Page 15-1
16
MARKET STUDIES

This section is not applicable.




Page 16-1
17
ENVIRONMENTAL STUDIES, PERMITTING, AND PLANS, NEGOTIATIONS, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS
 
SOCIAL OR COMMUNITY REQUIREMENTS
 
Contango and Tetlin Council have developed a strong community relationship during the exploration phase of this Project.   Community meetings are held annually including site visits to see exploration programs and an Education Support Program offering computer programs and business readiness is in place.  A quarterly newsletter was identified and implemented as a tool to effectively communicate with the community members, vendors, partners, and interested parties. These communication pieces “tell the story” of the partnership behind the Project, provide a high-level update of the current activities on the Project and overview of the current plans for the Project including community programs and events as well as current mining-related topics, such as best practices for reclamation.

Since the start of the term of the Tetlin Lease, the Company has worked closely with the Tetlin Tribal Council to train and employ Tetlin Tribal members and their family members during the Peak Gold JV’s exploration programs.  During the Peak Gold JV’s exploration programs, there were typically 10 to 15 Tetlin residents working on the Manh Choh Project employed on a seasonal basis through Avalon.  Their duties included reconnaissance soil, stream sediment and pan concentrate sampling, diamond drill core processing, drill pad construction and related tasks, expediting services, food services, database management, vehicle transportation and maintenance services, reclamation activities, and project management tasks.

In April 2015, the Peak Gold JV entered into a Community Support Agreement (as amended, the “Support Agreement”) with the Tetlin Village for a one-year period, which was extended for two additional two-year periods under the same terms. Under the extended Support Agreement, the Joint Venture Company provided payments to the Tetlin Village four times during the year for an aggregate amount of $110,000 through January 1, 2017, and an additional $100,000 each year through January 1, 2020. The Support Agreement has been extended for two additional one-year periods under the same terms. Under the latest extension, the Peak Gold JV will provide payments to the Tetlin Village four times during the year for an aggregate amount of $100,000 through January 1, 2022. The Support Agreement defines agreed uses for the funds and auditing rights regarding use of funds. In addition, the Peak Gold JV supports the Tetlin Village in maintenance of the village access road, which is used by the Peak Gold JV.

Kinross has expressed a commitment to continue with meaningful community programming in Tetlin and in the sub-region. It will communicate with the community on project updates and next steps. There will not be a gap in communication or programming. The Peak Gold JV is planning to implement important programs in Tetlin and expects to have long-term relationships with community members and the Tetlin Village Council.

Page 17-1
18
CAPITAL AND OPERATING COSTS

This section is not applicable.




Page 18-1
19
ECONOMIC ANALYSIS

This section is not applicable.





Page 19-1
20
ADJACENT PROPERTIES
 
There are three adjacent properties located immediately north and west of the Tetlin Lease; Triple Z, Hona, and Eagle, including the Tok Option Block (Table 20-1, Figure 20-1).


TABLE 20-1   CONTANGO’S 100% OWNED STATE MINING CLAIMS

Property
Location
Commodities
Claims
Acres
Type
Contango Ownership
Triple Z
Eastern Interior
Gold, Copper
95
14,810
State Mining Claims
100%
Hona
Eastern Interior
Gold, Copper
482
74,310
State Mining Claims
100%
Eagle
Eastern Interior
Gold, Copper
396
64,900
State Mining Claims
100%
Tok Option Block
Eastern Interior
Gold, Copper
159
12,890
State Mining Claims
100% now,
30% after option*
Totals
   
1,132
166,910
   

Note. Peak Gold JV has the option to purchase the Tok Option Block.

Page 20-1


Page 20-2
TRIPLE Z
 
The Triple Z claims were staked in 2009 and the claim block expanded in 2011 and again in 2019, and now covers an area of 14,810 acres immediately adjacent to the Alaska Highway to the south and west, and the Taylor Highway to the north and east.  The Alaska Resource Data Files (ARDF) indicate that the Triple Z prospect received limited surface exploration in 1970 and Cities Service Minerals Corp. completed three drill holes on the prospect in 1971.  No technical details from this work are available in the public domain. Inquiries with Kinross, the assumed current owner of the 1970s work, indicate that these records have not survived.

The area was identified as prospective for porphyry copper-gold-silver-molybdenum mineralization based on regional government sponsored stream sediment sampling.  Several dozer trenches were discovered on the west side of the prospect during 2009 field investigations shortly after staking the claims.  Eighty-two surface rock and 115 soil samples were collected in 2009.  Follow-up auger soil sampling completed between 2009 and 2011 identified a large-scale copper-gold-silver-molybdenum anomaly centered along a low-profile ridge with little to no outcrop.  An airborne magnetic and resistivity survey conducted over the area in 2011 showed a coincident magnetic low and resistivity high (classic porphyry signatures) over the geochemically anomalous area.  A follow-up IP survey conducted in 2019 across four orthogonal lines outlined multiple IP anomalies broadly coincident with the soil and magnetic/resistivity anomalies.

To date the main targets have not yet been drilled because a land transfer is yet to be completed between the Federal Government (Bureau of Land Management – BLM) and the State of Alaska.  This is part of a process that has been on-going since Statehood.  Contango has been working with the State and Federal agencies to prioritize this transfer because of the highly prospective drill-ready target.  Drilling was completed in 2012 (before the IP survey) with six core holes drilled to depths ranging from 230 m (755 ft) to 380 m (1,246 ft).  Holes 1202 and 1204 encountered several zones of anomalous copper, gold, and silver.

The best results were obtained in hole 1203 which intersected 27.3 m (90 ft) grading 0.129% Cu, 11.5 g/t Ag, and 0.129 g/t Au starting at 275.5 m (902 ft), and 9.3 m (30.5 ft) grading 0.146% Cu, 17.4 g/t Ag, and 0.163 g/t Au starting at 306.3 m (1,005 ft).  Holes 1204, 1205, and 1206 contained narrow intervals of anomalous precious metals with lead and zinc – typical mineralization seen in the distal portions of a porphyry system.  Once the land transfer is completed, Contango plans to drill this well-defined porphyry copper-gold-silver-molybdenum target.

Page 20-3
HONA
 
The Hona prospect is located immediately south and west of the Eagle block and there is an arbitrary separation of the two large claim blocks.  The Hona block was staked in 2016 and is centered around a series of prospects generally referred to as Hona but also known as the Noah or Natahona prospects.  The prospect currently is accessible via helicopter but is within 10 km of the State maintained all-weather Tok Cut-off to Glenn Highway #1.  The prospect sits at elevations ranging from 914 MASL (3,000 ft) to 2,036 MASL (6,680 ft) centered on VABM Hona.  The prospect was originally identified and drilled by Kennecott Exploration Company (Kennecott) during 1997 and 1998.

Kennecott drill three holes for a total of 885 m (2,904 ft) for which no published results are available.  Later follow-up logging demonstrated that the holes intersected narrow high-grade zones of gold and associated metals analyzed by a Niton Portable XRF unit.  Follow-up sampling in the area included a regional scale stream sediment and pan concentrate program which outlined several broad areas of anomalous gold and associated pathfinder elements and included some particularly high pan concentrate samples containing 1 g/t Au to 9 g/t Au in multiple samples from upper Hona Creek and 9 Gram Creek.  Rock sampling of mineralized skarn areas identified gold rich skarn mineralization with samples containing 4 g/t Au to 14 g/t Au.

Figure 20-2 shows the geology, location of prospects, geophysical surveys, and drilling at Hona.

Page 20-4
FIGURE 20-2   HONA GEOLOGY, PROSPECTS, DRILL HOLES AND GEOPHYSICS


Early in 2017, the Hona prospect and adjacent lands were evaluated using Advanced Spaceborne Thermal Emission and Reflection Radiometer - Short Wave Infrared (ASTER-SWIR) processing and interpretation.

The resulting imagery indicated widespread montmorillonite clay alteration around the Hona prospect area as well as several other areas on the Eagle prospect. In addition, kaolinite clay alteration was concentrated within a phaneritic granodiorite based on field mapping at the Hona prospect. Both kaolinite and montmorillonite are common hydrothermal alteration minerals in porphyry and certain types of gold systems.

A number of geophysical surveys have been flown by government agencies including the most recent in 2016 when the State of Alaska Division of Geological and Geophysical Surveys (DGGS) released public sector magnetic and frequency-domain resistivity surveys over the Hona prospect as well as lands located to the south and west of Hona.

Page 20-5
In October 2019, the Peak Gold JV contracted Geotech Ltd. to fly helicopter-supported airborne Magnetics and Versatile Time-Domain Electromagnets (VTEM) surveys over the Hona prospect (Figure 20-3). The total survey size was 1,006 line-km with flight lines oriented N-S at 100 m spacings with E-W tie lines at 1,000 m spacing.

FIGURE 20-3   HONA - COINCIDENT MAG-VTEM WITH GEOCHEMISTRY AND FAVORABLE PORPHYRY/IRG GEOLOGY

 
EAGLE
 
The 64,900 acre Eagle claim block was staked in 2012 and 2013 to cover favorable Peak stratigraphy mapped along trend by State Geologists.  The Eagle block is underlain by similar geology as the northern Tetlin Hills and limited reconnaissance stream sediment and pan concentrate samples collected by Federal government agencies in the 1970s revealed widespread copper and arsenic (a pathfinder element for gold) anomalies within the area now covered by the Eagle claims.  Gold was not analyzed for in the original government sampling. 

Page 20-6
In 2013 a reconnaissance level stream sediment and pan concentrate sampling program was completed over most of the southern part of the Eagle claim block and identified an area over 10 km along a NW corridor where every creek draining the NE slopes of the mountains was strongly anomalous in gold, arsenic, and copper (Figure 20-4).  Further sampling along the NW trend showed additional anomalous creeks up towards the Dome prospect, however, far fewer streams were sampled in that area.

Contango intends to complete follow-up field exploration for this early-stage project during the field program which is planned for Eagle, Hona, and Triple Z targets in 2021.  The objective of the geologic investigation on the Eagle claim block will focus on identifying drill targets in the highly prospective area between the Eagle and Dome prospects.

FIGURE 20-4   STRONG MULTIPLE-ELEMENT GEOCHEMISTRY ON DOME AND EAGLE TARGET AREAS



Page 20-7
21
OTHER RELEVANT DATA AND INFORMATION
 
No additional information or explanation is necessary to provide a complete and balanced presentation of the value of the Project to Contango.




Page 21-1
22
INTERPRETATION AND CONCLUSIONS

Based on the review of the available information, the QP provides the following conclusions:

●
The northern part of the Manh Choh Project is located in rocks that are highly prospective for mid-Cretaceous intrusive related gold deposits as well as two intersecting belts of mid-Cretaceous to mid-Tertiary porphyry copper-molybdenum-gold deposits and porphyry related distal gold skarn deposits.
●
The Project contains two deposits, the Main Peak and North Peak. Main Peak is a largely unoxidized distal skarn hosted in recumbent folded calcareous schist and marble interbedded with amphibolite grade argillaceous schist and quartzite. North Peak is a largely oxidized distal skarn hosted in recumbent folded calcareous schist and marble interbedded with amphibolite grade argillaceous schist and quartzite.
●
The drilling, sampling, sample preparation, analysis, and data verification procedures meet or exceed industry standard, and are appropriate for the estimation of Mineral Resources.
●
The Mineral Resources held by Peak Gold, LLC, effective as of December 31, 2020, comprise Measured and Indicated Mineral Resources of 9.2 Mt grading 4.1 g/t Au and 14.2 g/t Ag for 1.2 Moz Au and 4.2 Moz Ag and Inferred Resources of 1.3 Mt grading 2.7 g/t Au and 16.1 g/t Ag for 116,000 oz Au and 694,000 oz Ag.
o
On Contango’s 30% attributable ownership basis, the Manh Choh Measured and Indicated Mineral Resources, effective as of December 31, 2020, comprise 2.8 Mt grading 4.1 g/t Au and 14.2 g/t Ag for 362,000 oz Au and 1.3 Moz Ag.
o
On Contango’s 30% attributable ownership basis, Inferred Mineral Resources comprise 400,000 t grading 2.7 g/t Au and 16.1 g/t Ag for 35,000 oz Au and 208,000 oz Ag.
●
The deposits remain open and present exploration potential beyond the current Mineral Resources.  As the area is underexplored there is good potential to delineate additional exploration targets on the Lease.

The QP is confident in the technical and economic assessment presented in this TRS.  The QP also recognizes that the results of this TRS are subject to many risks including, but not limited to: commodity and foreign exchange assumptions (particularly relative movement of gold), unanticipated inflation of capital or operating costs, and geotechnical assumptions in pit designs.  Mineral Resource estimates that are not Mineral Reserves do not have demonstrated economic viability.

Page 22-1
23
RECOMMENDATIONS

The QP makes the following recommendations with respect to resource modelling and estimation work:

●
Move the database to a relational database such as acQuire moving forward.
●
Complete a geochemical and structural model for future work to support the estimation domains.  The QP notes that there is a large amount of multi-element data that could support a geochemical model to better understand the impact of elements such as arsenic, mercury, etc., on the gold distribution and recoveries.
●
Carry out an analysis on capping at the composite level to test the impact of capping the raw assays vs. the capped assays.  The Project mineralization is spatially complex with high grade variability with respect to gold and silver.
●
Incorporate independently estimated multi-element data into the block model to assess the impacts on the Mineral Resource.
●
Carry out additional block model validation checks between the composite and block model grades.  These would consist of visual section inspections, swath plots, and domain analysis.

Peak Gold JV prepared a Phase 1 budget as summarized in Table 26-1. The confirmation drilling will be comprised of geotechnical, infill, and metallurgical drilling.  The exploration drilling will focus on delineating potential new resources and reconnaissance and exploration targeting on the Project.  The environmental baseline, ongoing community relations, and the permitting process will form a large component of Phase 1.  The QP has reviewed and concurs with the proposed budget.

Contango’s share of the budget is 30%, or $5.413 million.


Page 23-1
TABLE 26-1   PHASE 1 PROPOSED PROGRAM AND BUDGET

Item
Description
2021 FY Total
(US$M)
1a
Field Program: Confirmation Drilling, Testing, and related costs
6.039
1b
Field Program: Exploration Drilling, Testing, and related costs
1.774
2
Environmental Baseline and Permitting
2.392
3
Community Relations
0.900
4
Engineering and Studies
1.827
5
Other Costs
0.030
6
Manager and Affiliate Employees
1.814
 
Subtotal Before Contingency and Administrative Charge
14.776
7
Contingency (15%)
2.216
8
Administrative Charge
0.850
 
Other Costs w/o Administrative Charge)
0.200
10
Total with Contingency and Administrative Charge
18.042

Note. The budget is based on 100% ownership, of which Contango would pay 30%, or $5.413 million.


A Phase 2 program, including engineering studies towards a feasibility study, will be carried out contingent on results of Phase 1 work.

Page 23-2
24
REFERENCES
 
Dusel-Bacon, C., Hopkins, M.J., Mortensen, J.K., Dashevsky, S.S., Bressler, J.R., and Day, W.C., 2006, Paleozoic tectonic and metallogenic evolution of the pericratonic rocks of east-central Alaska and adjacent Yukon: Geological Association of Canada, Special Paper no. 45, p. 25–74

Ebert, S., Dilworth, K., Roberts, P., Smith, M and Bressler, J, 2003, Quartz veins and gold prospects in the Goodpaster Mining district in Ebert, S.[ed], 2003, Regional geologic framework and deposit specific exploration models for Intrusion-related gold mineralization, Yukon and Alaska: Mineral Deposits Research Unit, Spec. Pub. 3, pp. 256-281.

Ellis, W.T., Hawley, C.C. and Dashevsky, S., 2004, Alaska Resource Data File for the Mount Hayes Quadrangles, Alaska: U.S. Geol. Surv., Open File Rept. 2004-1266, 742 p.

Flanigan, B., Freeman, C., Newberry, R., McCoy, D., Hart, C., 2000, Exploration models for mid and late cretaceous Intrusion-related gold deposits in Alaska and the Yukon Territory, Canada, in Geology and Ore Deposits 2000: The Great Basin and Beyond, Geological Society of Nevada, p. 138-157.

Foster, H.L., 1970, Reconnaissance geologic map of the Tanacross quadrangle, Alaska: U.S. Geol. Surv. Misc. Geol. Investigations Map I-593, 1 sheet, scale 1:250,000.

Foster, H.L., Keith, T.E.C., and Menzie, W.D., 1994, Geology of the Yukon-Tanana area of eastcentral Alaska, in, Plafker, G., and Berg, H.C., eds., The Geology of Alaska: Boulder, Colorado, Geological Society of America, The Geology of North America, v. G-1, p. 205-240.

Freeman, C.J., and Marek, J., 2017, Technical report on the mineral resource update for the Tetlin Project, Tanacross and Nabesna Quadrangles, Eastern Interior, Alaska: Report prepared for Peak Gold, LLC, June, 2017, 150 p.

Fugro Airborne Surveys Corp., 2011, Project report for the airborne geophysical survey, Contango ORE Inc., Tok area, Alaska: Fugro Airborne Surveys Corp., August 29, 2011,

Fugro Airborne Surveys Corp., 2013a, Geophysical Survey Report, Airborne magnetic and Dighem survey: unpub. Report, project 13021, prepared for Avalon Development Corp., July 17, 2013, 85p.

Fugro Airborne Surveys Corp., 2013b, Geophysical Survey Report, Airborne magnetic and helitem survey: unpub. Report, project 13024, prepared for Avalon Development Corp., July 19, 2013, 76p

Giroux, G., 2013a, Inferred resource estimate for the Peak zone, Tetlin project, Alaska: Internal report prepared for Contango ORE, Inc., February, 2013, 26p.

Giroux, G., 2013b, Indicated and inferred resource estimate for the Peak zone, Tetlin project, Alaska: Report prepared for Contango ORE, Inc., November, 2013, 44p.

Page 24-1
Gopinathan, I., Pilotto, D., Bolu, M., Embree, K., Freeman, C. Marek, J., Wellman, E., Isto, M., 2018, Preliminary Economic Assessment – NI 43-101 technical report, Peak Gold Project Alaska, USA, 724 p.

Hansen, V.L., and Dusel-Bacon, Cynthia, 1998, Structural and kinematic evolution of the Yukon-Tanana upland tectonites, east-central Alaska—a record of late Paleozoic to Mesozoic crustal assembly: Geological Society of America Bulletin, v. 110, no. 2, p. 211–230

Hart, C.J.R., McCoy, D.T., Smith, M, Roberts, P., Hulstein, R., Bakke, A.A., and Bundtzen, T.K., 2002, Geology, exploration and discovery in the Tintina Gold Province, Alaska and Yukon: Soc. Econ. Geol., Spec. Pub. 9, p. 241-274.

Hart, Craig J.R., Goldfarb, Richard J., Lewis, Lara L., and Mair, John L., 2004, The northern cordilleran mid-Cretaceous plutonic province: ilmenite/magnetite-series granitoids and intrusion-related mineralization. Resource Geology, Vol. 54, pp. 253-280.

Illig, P.E., 2015, Geology and origins of the Peak gold-copper-silver skarn deposit, Tok, Alaska: Master of Science Thesis, University of Alaska – Fairbanks, 167p.

Klipfel, P. and Giroux, G., 2009, January 2009 Summary report on the Livengood Project, Tolovana District, Alaska: NI 43-101 report for International Tower Hill Mines, 99 p.

Lang, J.R., and Baker, T., 2001, Intrusion-related gold systems: the present level of understanding. Mineralium Deposita, Vol. 36, pp. 477-489

McCoy, D.T., 1999, Regional overview of the geologic setting of the Tintina Gold Belt: in Abstracts of the 16th Annual Cordilleran Exploration Roundup, Vancouver, pp. 20-21.

McCoy, D.T.; Newberry, R.J.; Layer, P., DiMarchi, J.; Bakke, A.; Masterman, J.S. and Minehane, D.L., 1997, Plutonic-related gold deposits of interior Alaska: in Econ. Geol. Mono. 9, “Mineral Deposits of Alaska”, pp. 191-241.

McCoy, D.T., Newberry, R. J., Severin, K., Marion, P., Flanigan, B. and Freeman, C.J., 2002, Paragenesis and metal associations in Interior Alaska gold deposits: an example from the Fairbanks District: Mining Engineering, Jan., 2002, p. 33-38.

Meyers, G.L. and Meinert, L.D., 1991, Alteration, mineralization and gold distribution in the Fortitude gold skarn deposit in Raines, G.L., Lisle, R.E., Schafer, R.W. and Wilkinson, W.H., editors, 1991, Geology and Ore Deposits of the Great Basin: Symposium Proceedings of the Geological Society of Nevada, pp. 407-417.

Mortensen, J.K., Hart, C.J.R., Murphy, D.C., and Heffernan, S., 2000, Temporal evolution of early and mid-Cretaceous magmatism in the Tintina Gold Belt: The Tintina Gold Belt: concepts, exploration and discoveries, BCYCM Spec. Vol. 2 (Cordilleran Roundup Jan. 2000), pp. 49-57.

Newberry, R.J.; Allegro, G.L., Cutler, S.E., Hagen-Levelle, J.H., Adams, D.D., Nicholson, L.C., Weglarz, T.B., Bakke, A.A., Clautice, K.H., Coulter, G.A., Ford, M.J., Meyers, G.L and Szumigala, D.J., 1997, Skarn deposits of Alaska: in Econ. Geol. Mono. 9, “Mineral Deposits of Alaska”, pp. 355-395.

Page 24-2
Newberry, R.J., Layer, P.W., Burleigh, R.E. and Solie, D.N., 1998, New 40Ar39Ar Dates for Intrusions and Mineral Prospects in the Eastern Yukon-Tanana Terrane, Alaska-Regional Patterns and Significance: U.S. Geol. Surv., Prof. Paper 1595, pages 131-159.

Newberry, R.J., 2000, Mineral deposits and associated Mesozoic and Tertiary igneous rocks within the interior Alaska and adjacent Yukon portions of the ‘Tintina Gold Belt’: a progress report: in The Tintina Gold Belt: Concepts, Exploration, and Discoveries, British Columbia and Yukon Chamber of Mines, Cordilleran Roundup, 59-88.

Nokleberg, W.J., Aleinikoff, J.N., Lange, I.M., Silva, S.R., Miyaoka, R.T., Schwab, C.E., and Zehner, R.E, 1992, Preliminary Geologic Map of the Mount Hayes Quadrangle, Eastern Alaska Range, Alaska, U.S.G.S. Open File Report 92-594.

Nokleberg, W.J., Brew, D.A., Grybeck, D., Yeend, W., Bundtzen, T.K., Robinson, M.S., Smith, T.E., 1994, Metallogeny and major mineral deposits of Alaska, in Plafker, G., and Berg, H.C., eds, The Geology of Alaska: Boulder, Colorado, Geological Society of America, The Geology of North America, v. G-1, p. 855-903.

Richter, D. H., 1976, Geologic map of the Nabesna Quadrangle, Alaska: U.S. Geol. Surv., Misc. Inv. Map I-932.

Silberling, N.J., Jones, D.L., Monger, J.W.H., Coney, P.J., Berg, H.C. and Plafker, G., 1994, Lithotectonic terrane map of Alaska and adjacent parts of Canada in Plafker, G. and Berg, H.C., editors, The Geology of Alaska: Geological Soc. Amer., Geology of North Amer., V. G-1, Plate 1, 1:2,500,000, 1 sheet.

Sillitoe, R.H., 2010, Porphyry copper systems: Econ. Geol., Vol. 105, pp. 3-41 Sillitoe, R.H., 2013, Comments on the Tetlin gold-copper project, Alaska: Report prepared for Contango ORE, Inc., September 2, 2013, 12p

SRK Consulting (U.S.), Inc., 2018, Tetlin Gold Project Geochemical Characterization – FINAL, prepared for Peak Gold, LLC, September 2018.

Twelker, E., Freeman, L.K., Sicard, K.R., and Busk, A.C., 2016, Preliminary report on mineral occurrences in the Tok River area, Alaska: Alaska Division of Geological & Geophysical Surveys Preliminary Interpretive Report 2016-2, 7 p.

Van Treeck, C., Freeman, C.J., Wolf, K., and Raymond, L., 2013, Geology and mineralization of the Tetlin project, Tanacross and Nabesna Quadrangles, Eastern Interior Alaska: Report for Contango ORE, Inc., January 18, 2013, 119p.

Van Treeck, C., Wolf, K., 2013, 2012 Triple Z project drill program, Tanacross Quadrangle, Eastern Interior Alaska: Report for Contango ORE, Inc., February 15, 2013, 22p.

Van Treeck, C., Freeman, C.J., Wolf, K., Raymond, L. and Giroux, G., 2014, 2013 final report for the Tetlin project, Tanacross and Nabesna Quadrangles, Eastern Interior Alaska: Report for Contango ORE, Inc., January 24, 2014, 211p.

Windels, C., 2010, Preliminary interpretation of geophysical data from the Tetlin project, Alaska: Report by Carl Windels for Contango ORE Company, November, 2010.

Page 24-3
Windels, C., 2011, Full flight block geophysical sections, Chief Danny area, Tetlin project, Alaska: Report by Carl Windels for Contango ORE Company, December, 2011.

Wypych, A., Sicard, K.R., Twelker, Evan, Freeman, L.K., Lande, Lauren, and Reioux, D.A., 2015, Major-oxide and trace-element geochemical data from rocks collected in 2015 in the Tok area, Tanacross A-5, A-6, and parts of adjacent quadrangles, Alaska: Alaska Division of Geological & Geophysical Surveys Raw Data File 2015-15, 3 p.

Young, L.E., St. George, P. and Bouley, B.A., 1997, Porphyry copper deposits in relation to the magmatic history and Palinspastic reconstruction of Alaska in Goldfarb, R.J., ed. Ore Deposits of Alaska, Economic Geology Monograph, No. 9, Society of Economic Geologists, pp. 306-333




Page 24-4
25
RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT

This Technical Report Summary has been prepared by SR for Contango.  The information, conclusions, opinions, and estimates contained herein are based on:

●
Information available to SR at the time of preparation of this report,

●
Assumptions, conditions, and qualifications as set forth in this report, and

●
Data, reports, and other information supplied by Contango and other third party sources.

It is believed that the basic assumptions are factual and accurate, and that the interpretations are reasonable.

For the purpose of this report, SR has relied on ownership information provided by Contango.  SR has not researched property title or mineral rights for the Manh Choh Project as we consider it reasonable to rely on Contango’s legal counsel who is responsible for maintaining this information.

The Qualified Person has taken all appropriate steps, in their professional opinion, to ensure that the above information from Contango is sound. The Qualified Person does not disclaim any responsibility for the Technical Report Summary.  Except for the purposes legislated under US securities laws, any use of this report by any third party is at that party’s sole risk.


Page 25-1
26
DATE AND SIGNATURE PAGE

This report titled “Technical Report Summary on the Manh Choh Project, Alaska, USA” and dated April 8, 2021 was prepared and signed by:



 
(Signed & Sealed) Sims Resources LLC
 
 
 
 
Dated at Missoula, MT
 
April 8, 2021                                                                                    
Sims Resources LLC


Page 26-1