Contango ORE, Inc. Announces Plans for New JV Partner Kinross Gold Corporation to Develop the Peak Gold Deposit and Sale of 30% Interest in Peak Gold, LLC resulting in a Substantially Improved Balance Sheet and Reduction in Outstanding Common Stock

Contango ORE, Inc. (“CORE” or the “Company”) (OTCQB: CTGO), is pleased to announce that it has executed agreements for a series of transactions (collectively, the “Transactions”) that reposition the Company as a well-capitalized US gold developer and explorer, including the important addition of the U.S. subsidiary of Kinross Gold Corporation (“Kinross”), a Tier 1 mine operator, as its venture partner in Peak Gold, LLC (the “Joint Venture Company”) as manager and operator of the Peak Gold project (“Peak Gold”) located near Tok, Alaska. The Transactions are expected to close on or before October 1, 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200930005517/en/

Map of the Peak Gold project. (Graphic: Business Wire)

Transaction Highlights

As a result of the Transactions:

• CORE welcomes Kinross as its new partner in the Joint Venture Company in which CORE will own 30% and Kinross will own 70% and operate Peak Gold. Kinross is a large, diversified gold producer with extensive operating experience in Alaska. Kinross plans to process ore from Peak Gold at its existing Fort Knox mining and milling complex. The use of the Fort Knox mill is expected to accelerate the development of Peak Gold and result in significantly reduced upfront capital development costs, smaller environmental footprint, a shorter permitting and development timeline and less overall risk for the project. Kinross has estimated anticipated production of 1 million ounces of gold equivalent produced at Peak Gold over a 4.5 year mine life based on current resources beginning in 2024 and estimated all-in sustaining costs (AISC) of $750/oz Au Eq., and total capital costs of $110 million.¹

• As a result of the Transactions, CORE substantially strengthens its balance sheet and liquidity with approximately $35 million in cash, including estimated cash proceeds from the Transactions of approximately $32 million after tax.

• CORE reduces its outstanding common stock by 11.9% through the repurchase of 809,744 shares previously owned by Royal Gold, Inc. (“Royal Gold”), its former venture partner in the Joint Venture Company.

• CORE increases its economic ownership to 100% and obtains operational control over Alaska state mining claims adjacent to Peak Gold covering approximately 170,000 acres (or approximately 676 square kilometers) distributed by the Joint Venture Company to the Company. These claims include the Hona, Eagle and Triple Z prospects. CORE believes these state mining claims have good exploration potential which could be realized utilizing the key skillsets of CORE’s management team. Approximately 13,000 acres of the state mining claims are subject to a repurchase option by the Joint Venture Company.

Rick Van Nieuwenhuyse, CORE’s Chief Executive Officer, commented, “This is a momentous transaction for the Company. CORE stockholders will now see a clear and accelerated path to production at Peak Gold with Kinross, a Tier 1 mining operator that has nearly 25 years of operating experience in Alaska. Trucking high-quality ore from Peak Gold to Kinross’ Fort Knox mill is an ideal solution to fast track the project to a production decision. By not having to permit and construct a mill and tailings facility on site, we would greatly reduce the costs, environmental footprint, permitting and construction risks, and reduce the timeline to potential production for Peak Gold. This is a significant benefit for our stockholders. We look forward to working with Kinross and the Tetlin Tribe to develop Alaska’s next gold mine. Meanwhile, we have a great opportunity to find additional gold, silver and copper resources on our 100% owned state mining claims that cover approximately 170,000 acres adjacent to Peak Gold’s 675,000 acre Tetlin Lease, both of which have excellent exploration upside with numerous high-quality exploration targets. CORE will close the Transactions with substantially improved liquidity following the receipt of $32.4 million in cash, while significantly reducing our outstanding shares. We believe we have sufficient cash to meet our near term funding obligations for Peak Gold and to explore for new resources. I am very excited about the future for CORE, including its new partnership with Kinross.”