Contango ORE, Inc. Announces Private Placement of Common Stock, Provides Operational Update and Adopts Limited Duration Stockholder Rights Agreement - Seite 2

Rights Agreement

The Company also announced today that its board of directors (the “Board”) has adopted a limited duration stockholder rights agreement (the “Rights Agreement”) to replace the Company’s prior stockholder rights agreement, which has been terminated. The Board adopted an amendment to accelerate the expiration date of its prior stockholder rights agreement to September 23, 2020, such that, at the close of business on September 23, 2020, the purchase rights thereunder expired and the prior stockholder rights agreement was no longer in force and effect.

Pursuant to the Rights Agreement, the Company will issue one right (a “Right”) with respect to each outstanding share of common stock, par value $0.01 per share, of the Company, held of record at the close of business on October 5, 2020. The Rights Agreement has a one-year duration, expiring on September 22, 2021.

The Rights Agreement is similar to plans adopted by other public companies and would not prevent a combination of CORE with another business. The Rights Agreement is intended to protect shareholder interests by reducing the likelihood that any entity, person or group is able to gain control of CORE through open market accumulation without paying all shareholders an appropriate control premium or providing the Board sufficient opportunity to make informed judgments and take actions that are in the best interests of all stockholders. The Rights Agreement applies equally to all current and future shareholders and is not intended to deter offers that are fair and otherwise in the best interests of CORE’s shareholders.

The Rights will trade with the Company’s common stock and no separate Rights certificates will be issued, unless and until the Rights become exercisable. In general, the Rights will become exercisable only if a person or group acquires beneficial ownership of 18% (or 20% for certain passive investors) or more of the Company’s outstanding common stock or announces a tender or exchange offer that would result in beneficial ownership of 18% (or 20% for certain passive investors) or more of the Company’s common stock. Each Right will entitle the holder to buy one one-thousandth (1/1000) of a share of a series of junior preferred stock at an exercise price of $100.00 per Right, subject to anti-dilution adjustments. The Board may, at its option, redeem all Rights for $0.001 per Right at any time prior to the Distribution Date, as defined in the Rights Agreement. If a person or group acquires beneficial ownership of 18% (or 20% for certain passive investors) or more of the Company’s outstanding common stock, each Right will entitle holders, other than the acquiring person or group, to purchase from the Company for $100.00, subject to certain potential adjustments, shares of the Company’s common stock having a market value of twice that amount. The Board will, prior to the Rights becoming exercisable, in general be entitled to amend the Rights Agreement or to redeem the Rights for $0.001 per Right. Additional details regarding the Rights Agreement, including the restrictions on passive investors, are contained in a Current Report on Form 8-K and in a Registration Statement on Form 8-A filed by the Company with the U.S. Securities and Exchange Commission.