Contango ORE, Inc. Announces Private Placement of Common Stock, Provides Operational Update and Adopts Limited Duration Stockholder Rights Agreement
Contango ORE, Inc. (OTCQB: CTGO):
Contango ORE, Inc. (“CORE” or the “Company”) (OTCQB: CTGO) announced today that is has completed the sale of 247,172 shares of its common stock, par value $0.01 per share, at a price of $13.25 per share in a private placement to certain investors. The Company will use the net proceeds of approximately $3.2 million from this sale to fund its proportionate share of the future exploration and development programs of Peak Gold, LLC (“Peak Gold”) and for the Company’s general corporate purposes. The Company has no long-term debt and has a cash position of $5.5 million after this private placement. The Company’s CEO, Rick Van Nieuwenhuyse, participated in the capital raise for $1.0 million, on the same terms and conditions as all other investors.
The shares of common stock were sold in an offering that is exempt from registration under the Securities Act of 1933, as amended. Petrie Partners Securities, LLC assisted the Company with the private placement and will be entitled to receive compensation for the sale of the common stock at a fee of 3.25% in conjunction with subscribers that they solicited.
The Company also provided an operational update in the context of the ongoing Coronavirus (COVID-19) pandemic. The Company has approved its share of the 2020 budget for Peak Gold, the Company’s joint venture with Royal Alaska, a wholly-owned subsidiary of Royal Gold, Inc., which totals $1.6 million net to the Company’s 60% share. This budget covers care and maintenance of the project, as well as permitting activities to continue advancing the Peak/N Peak deposits to development stage. As a precautionary measure arising out of health and safety concerns related to COVID-19, Peak Gold determined to postpose exploration activities this summer.
Rick Van Nieuwenhuyse, the Company’s CEO commented, “It was unfortunate that Peak Gold could not execute an exploration program this season, but it was the right decision. The safety of our workforce and especially the health and safety of the communities around our project are of paramount importance. With the private placement completed, the Company is well positioned to continue to advance our high-quality Peak Gold project towards production. We look forward to updating shareholders in the near future.”