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Newly Formed Contango Delivers $102 Million Cash flowBob Moriarty The average investor today has no idea of how dangerous the investment world has become. The events of the past eleven weeks in the Middle East threaten our entire future. Every day the Strait of Hormuz remains closed makes the situation that much more threatening. As I write President Trump is in China. The outcome of that short visit and his decisions over the next week will determine if we have a future at all. (He’s back now. The China trip was a giant nothing burger.) Israel has been lying about a phantom Iranian nuclear weapons program for forty years. It doesn’t exist. Our expensive eighteen intelligence agencies all understand there is no Iranian nuclear weapons program for a simple reason that even Secretary of State Rubio and Robert Kagan understand. Iran doesn’t need nuclear weapons, having control of the Strait is more effective. But Israel has been planning on the Greater Israel project for yonks. It requires the destruction of Iran in exactly the same way as the destruction of Libya, Somalia, Sudan, Lebanon, Iraq, Gaza, Syria and the West Bank took place. Israel was never the victim. They were and are a criminal state conducting a program of genocide across the entire middle east. Israel has lost this war but refuses to admit it or to allow DJT to exit. Trump’s meeting with China is a key event. As I write we cannot predict how it will unfold. I suspect Trump is going to be sent home with his tail between his legs. The US holds no cards. China holds all the cards in this game. Iran has a Strait. Trump has destroyed the US empire fighting an unnecessary war on behalf of Israel. Epstein was a Mossad agent. We have had two confirmations from within the Mossad. Bibi has the Epstein files with more than 10,000 hours of videos sitting in his office. DJT was mentioned in the Epstein files about 38,000 times. After all, DJT and Epstein were best buddies and shared everything. Probably including young underage women. In all of recorded history there is not a single example written about a tiny meaningless little shit for brains country such as Israel demanding the most powerful country on earth finance and fight a war for them. Until now. I believe and I suspect history will follow that on February 11th of 2026 Bibi visited the White House and threatened DJT with release of certain of the Epstein tapes. Bibi demanded the US participate in a war of aggression on behalf of Israel against Iran. This is not America’s war. It is Israel’s war planned many years ago. Should China not offer meaningful assistance to the US in the war on Iran, and why should they, China and Russia are better off just as long as the US tries to extract itself from the quagmire they constructed. If China does not help the US and DJT along with Israel attacks Iranian infructure Iran has promised to do the same with the rest of the GCC countries supporting the US. If that occurs, we will not be facing a 20% shortfall in energy, we will be facing a 50% shortfall and a billion people are going to die. The war on Iran has proven to the Middle East states that the US is a paper tiger. The promised defense umbrella didn’t exist. Frankly the overpriced military hardware produced by the MIC is crap. Why should the GCC buy expensive equipment for their defense that fails to function. The US has lost dozens of aircraft, depleted our entire store of useless ground to air missiles and have had hundreds of young American kids killed fighting a war for Israel against a country that is not the enemy of the US. By the way, the US still maintains that only thirteen American soldiers have died in this war. That is a total lie. The real toll is in the hundreds. The coffins are sitting in Germany because DJT doesn’t want the families or people paying for his insane war to know the real cost. The Petrodollar is dead. The GCC will no longer be shifting excess cash to treasuries or demanding paying in USD. As a result, the foundation of the US economy other than shuffling pieces of paper around, the MIC is going to go the way of the Dodo bird. Why buy equipment you know doesn’t work as advertised? Both Saudia Arabia and Qatar are making noises that they think the idea of ditching the US and working with Iran might make a lot more sense. The six GCC countries are home to a lot of Shia Muslims who support Iran in this war. The recent surge in the price of gold, silver, platinum and copper suggests hyperinflation is around the corner. The USD will still exist in the same form as the British Pound still is used in some trade but the value will be a lot lower. President Trump’s meaningless war on Iran has destroyed his administration. While the entire general stock market is still in the throes of a giant sugar high pumped up by the AI bubble it remains in search of a pin to pop the bubble. The bond market, the insane debt level of the US, the metals, are all suggesting bad times approach. I happen to believe the tiny 1% fraction of total investments that reflects investments in resources are the sole safe haven. Our financial world has hit a giant tipping point. Things are about to change in a major way. Porter Stansberry has just put out an important video that every investor should watch. I suspect the top will be this week with the Philly Semiconductor Index hitting a new high eighteen days in a row. The Nasdaq went up nineteen days in a row in March of 2000 and marked the very top. Two longtime friends of mine in the resource world recently joined hands in creating what I believe will be a go-to investment choice for American and Canadian resource investors. One giant mistake 99% of management teams running resource companies tend to make is to keep diluting their price and share count with a series of one private placement after another. The largest retail stock market in the world is financed by American investors. Resource companies want and need access to that capital but forget stock brokers can’t recommend shares with a price under $5. So basically, stock brokers never talk about the penny juniors. The guys running the junior resource stocks have locked out the US investment market from throwing some money their way by keeping their share price under $5. Two serious Canadian juniors understood the issue and used it to their advantage by merging. The larger company was Contango Ore with a large Alaskan presence joined recently with the world-famous name of Dolly Varden. I think the resulting company is going to become the North American company for gold and silver. Contango Ore was headed by an old friend Rick Van Nieuwenhuyse founder and head of Novagold. Novagold was the #1 gaining stock in Canada in 2001. Rick and his team understood early on that we were entering a major bull market for gold and silver back in the late 1990s. Novagold was one of the first juniors I ever wrote about in 2001. The partner in Contango Gold and Silver, Dolly Varden, was also headed up by another old friend, Shawn Khunkhun. The resulting Contango Gold and Silver (CTGO on both the TSX and the NYSE Amex) has Rick Van Nieuwenhuyse as the CEO. Shawn Khunkhun has become the President of the merged company. Rick brought a producing gold mine to the deal along with two other Alaska development projects. For 2025, Contango’s 30% interest in the Manh Choh gold mine delivered about $102 million in free cash flow to Contango. Kinross owns the other 70% and operates the Manh Choh mine. Contango’s management team will use the cash flow from Manh Choh to forward the other three advanced gold and silver projects meaning the company can forgo the constant private placements. Manh Choh uses a rarely used mining technique called Direct Shipping Ore or DSO for short. It means they mine it, load it onto truck and ship it 240 miles away to the Fort Knox mill owned by Kinross. DSO drops initial capital, permitting time and speeds up access to cash. They can do that because the Kinross/Contango JV focused on high grade. If you have the grade, DSO is a fast and cheap way to go. CTGO has the highest grade among its peers in all their projects. (Click on images to enlarge)
Having that sort of free cash flow makes it possible for Contango to move their other three projects at high speed without having to resort to constantly diluting existing shareholder. Contango’s second Alaska gold project is named the Lucky Shot Mine. Lucky Shot is a 100% owned fully permitted underground mine with both rail and road access. Past production from the district averaged 40 g/t Au. Contango has begun a 20,000 meter infill and expansion drill program aiming to define 400,000 to 500,000 ounces in time for a H1 2027 Feasibility study. The company plans for production of 40,000 to 50,000 ounces of gold in 2028 using the DSO model from Lucky Shot. The third Alaska gold project in the stable is called the 100% owned Johnson Tract located about 125 miles southwest of Anchorage. I’m going to quote from the description of the Johnson Tract on Contango’s website. “The JT Deposit is interpreted as an intermediate sulfidation epithermal deposit with volcanogenic massive sulfide (VMS) characteristics.” Mineralization consists of gold, silver, copper, zinc and lead. Johnson Tract comes with a 1.15 million ounce resource at 9.39 g/t AuEq. Like Lucky Shot, the grade is high enough to qualify for the low-cost DSO model. Federal permitting is moving forward under the FAST-41 protocol. The access road from the camp to the portal is in progress along with the required permitting environmental studies. A feasibility study is planned for a mine construction decision scheduled for 2028/2029. Dolly Varden’s contribution to the merger consists of the 100% owned Kitsault Valley silver/gold project across the border into the Golden Triangle area of BC, Canada. The Kitsault Valley project shows a 43-101 resource of about 65 million ounces of silver and one million ounces of gold. A more current resource is planned for release in Q2 of 2026. The Kitsault Valley resource also qualifies for DSO shipping. Contango plans for a 40,000-meter drill program this year at Kitsault. Contango’s five year plan calls for production of 200,000 ounces AuEq with an additional five million ounces of silver annually.
With a tiny 30.75 million shares outstanding and free cash flow of $102 million for 2025, each share represented about $3.18 in free cash flow for 2025. Do I need to really point out how cheap that is? In addition, Contango is trading at a substantial discount to their peers showing a tiny 0.32 ratio of price to NAV compared to an average of 0.71 for their peers.
This merger has accomplished something I don’t know of for any junior I have followed in the last 25 years.
Contango is an advertiser. I have been a long-time investor in Dolly Varden so I am exposed to the new Contango. Do your own due diligence. Contango Gold and Silver ### Bob Moriarty 321gold Ltd |
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