Contango ORE Announces Acquisition of HighGold

0:07 Good morning, good afternoon, good evening, depending on where in the world you're signing in from today. It looked like international audience. So thanks everyone for joining us. Today We've got a very exciting event. Gene Rick Van Nuenhuyzen, president and CEO of Contango War, and Darwin Green, president and CEO of Highgold. Gentlemen, welcome. Thanks for joining me today. Great to be here. Thank you, 6, for hosting this conference. We're, I think we're both excited, and I think you know Darwin, you know me from Contango. So appreciate everybody joining us today and to talk about our recent proposal to acquire Highgold and their exciting Johnson Creek project. Of course, we will be making forward-looking statements to draw your attention to our cautionary language here.

0:54 And just want to start out by talking about Moncho just quickly. We continue to mine ore at Moncho and stockpile it and transport it to the Fort Knox mill. Last I checked, there was over 100,000t of ore stockpiled there and about 15,000t coming every week. So We're still scheduled for production in the second half of the year, but I think we're shooting for first Gold pour in July. That forms the backdrop because that will generate cash flow and allow us to advance not only more exploration at Moncho, but Lucky Shot. And our hope is to do the same with the JT prospect project on High Gold. But obviously, we've got to get the transaction closed. So with that, you know, we now have a platform to have 3 mines in Alaska, looking at the prospect of having 3 mines in Alaska. Monchaux, very near-term production.

2:01 Our Lucky Shot project, we've talked about, a wash, rinse, repeat of Mon Chaud, except we own 100% of that one. And now Johnson Track. And they're all high quality projects, all in Alaska, which we, I think, we, and Dartmouth will chime in on this as well, but I think great, great jurisdiction to work in. Yeah, absolutely. And great line of projects. Just start with a map that shows everything. The Red Star, Fort Knox Mill, the Gold Star near the Yukon border there is the Moncho project,

2:37 expecting to be in production shortly and generating very, very strong cash flows. Our Lucky Shop project located just a little bit north of Anchorage there, about 2 hour drive north of Anchorage. 100,000 ounces outline there. Again, good grades, near infrastructure.

2:57 And Darwin, why don't you go ahead and introduce Johnson Track?

3:01 Yeah, well, It's a system that we've generated or defined over 1Moz Gold equivalent at 9.4g per tonne Gold equivalent. It's very well located right next to Tidewater and It's a very fat deposit. That's really what differentiates it from the crowd. It's high-grade and fat, 40m true width. We see a lot of opportunity to find a lot more. Darwin just went through the numbers. It really is a spectacular deposit, not just from the grade. The grade is great, but the true width is one of the things that really impresses me. You want an ore body that will be as easy to mine as possible. And I think this one fits that description very well. Obviously, the critical metals aspect of it is an interesting one to talk to in today's world.

4:03 Darwin, why don't you take this one on? Yes, for sure. I think it sets the stage a little bit for why this transaction makes so much sense in terms of a business model that we've seen Contango execute perfectly with the Manitou project, where you have a high-grade deposit that can overcome the cost of shipping it some distance to an existing mill facility. In that case, it's a joint venture with Kinross and it's going to the Fort Knox mine. This is exactly, for anyone who's been following our story, exactly what we've been talking about. We've kind of been independently pursuing the same opportunity.

4:39 The beauty of being on tidewaters is really the ocean's a highway to anywhere. There's several hungry mills in sort of Alaska on the coast and Northern BC, but there's also opportunities for their field in Asia. And it gives you a lot of optionality in terms of developing a project and, you know, ends up leading to products that are a lot lower capital cost to build, have a lot smaller environmental footprint and fundamentally a lot quicker to reach the finish line, which I think is one of the key advantages of this business model.

5:11 I'll just add in one of the other opportunities in terms of who might process this or the smelters are

5:20 another group. We've got grade and smelters like flux. This is the kind of material that they like. So we'll just add that one to not just existing mills, but the smelter groups as well. I'll just start here. We think this is a win-win transaction. We're going to create a company that has exposure now to 1.6Moz of Gold equivalent. That's a threefold increase from where Contango sits today. And it gives us, we're very bullish on the gold market. Don't wanna get distracted on macro issues, but

5:56 it's clear that the gold market is, the gold price is ahead of the equity valuation. So having more exposure to gold, I think is the right thing, right move for Contango to make. And then I'll let Darwin speak to this slide as well. Yeah, I mean, From my perspective, I think the business model makes a lot of sense. I think in a market where capital is hard to come by, it's a beautiful marriage where you can get basically self-fund organically the advancement and the development of projects. That really gives you a whole lot of strength, a lot more strength than most of the peers in the early stage development space. It's a beautiful pipeline of projects here. Increased ounce count, multiple projects and a great platform for growth.

6:49 That's one of the things I like and I'm added to that, there's still a tremendous amount of exploration upside on this portfolio of properties. Yeah, Darwin and I are both fundamentally explorers and you're a geologist at heart and that's what drives all of our decision-making is driven by the geology, not by a spreadsheet or something.

7:11 I won't let you speak to this one, of course. Yeah, no, for sure. Obviously, when you look at these deals, there's an immediate upfront premium to shareholders. This is speaking directly to the benefits to the high Gold shareholders.

7:24 Going into this, we've certainly been strategically thinking for quite a while on the high Gold side. We like this premium. We've been trading in the really over the last 6-months anywhere from $0.20 to $0.35 and this is a deal that's being done at $0.55. We think there's a very immediate upside win for our shareholders, but that's really not what this is about. This is about forming a company that I think you get early participation in an emerging

7:49 Gold producer that I think is going to be leading the pack in terms of high-grade Gold. It's hard to beat the project profile that I think this combined entity has. And again, that strength of having that cash flow to fund that development and advancement of those projects is, it's got to be a unique story. And I just don't think you can get a better fit, right? Like if you look at strategically, there's a lot of deals done out there in the market. Some make some sense, some you really scratch your head on. This is 1 I think anyone can look at and see the strategic fit from a jurisdiction, from teams that know how to develop in Alaska, from

8:28 the profile of the deposits themselves, the combined grade of now pushing over a million and a half ounces. And fundamentally, all have the same opportunity for DSO type development. You know, further, I think, you know, we've been in a market where the last 2 months, you know, Gold's traded above $2,100. We're still not seeing a lot of inflows into the funds and that dilution risk that hangs out there, that perpetual overhang on the junior explorer that has a single asset.

8:58 And you get a huge discount because of that. Whereas if you're a producer with cash flow, it's the opposite. And so I think this is a deal where it's 1 plus 1 equals 3 or 4. It's a win for high-gold shareholders. It's a win for contango shareholders. Yeah, I'll just add, you know, The market doesn't always reward things. And I think that's the case here. There's been a lot of great work done by the Highgold team

9:25 and advancing a project. But the Lausanne curve is accurate. It's an accurate fit and accurate description of what happens, and particularly in tough markets. And there's no question that we've had a very tough market for the last several years. So as Darwin says, I think this is a 1 plus 1 is 3 story. So We're very excited to

9:48 get this combination done. One last point on that, Rick, there too, is I think the exposure to the US market, the NYSE American listing is actually a huge advantage, is particularly for an American-based assets. And I think when the Gold Bull run does come, I am a believer that will eventually happen. I mean, there's not that many equity issuers on the NYSE that are in the Gold space in the junior market. And you're going to get, I think, an outsized increase in share price as a response to that funnelling of those dollars when that eventually happens. That's a great point. We certainly see a lot more liquidity in the US markets than we are seeing in Canada.

10:27 And the Russell 2000 exposure certainly adds to that liquidity. I won't go through this in any detail. It's a plan of arrangement. We've talked about the premium and the board going forward. I'm really pleased to have Darwin on the board when this is all said and done. Obviously, we do want shareholder support, so we want to explain why this is a really good deal for both companies. Darwin, over to you. Yes, I mean, this is Obviously, I love this project.

11:04 There are not very many assets that carry these kinds of attributes. It is a rare combination of grade and thickness. We've talked about it before, but it really is something unique because that translates directly to lower-cost mining, simpler mining. It is a very attractive and rare combination to have.

11:21 It is polymetallic, so one of the questions you ask is what about the metallurgy? We spent a fair bit of time on this project significantly de-risking the project. We have the metallurgy, it's good. Good recoveries to high-grade concentrates that will be in-demand. Social license is another big question. We are on Alaska's native cork lands. It was selected specifically for mining and they're going to receive direct economic benefits.

11:50 I do think in this modern era, the US is a great place to be and the state of Alaska in particular is a great place to be. This is an awesome looking core. It has some beauty intersections for sure. There's more of it out there. There's no doubt. Yeah, this is, you know, people ask, well, why do you like this project? Well, this is why we like this project. It's a great high quality asset and great grades but over good thicknesses. And as Darman says, you've got 40 meters of this kind of looking stuff, that's pretty awesome to mine.

12:34 Darman, maybe explain who Ciri is a bit and why they're important. Yeah, so Ciri is our partner on the property. They actually are the landowners, the mineral rights owners here. Ciri is a Alaska regional native corporation. They're 1 of 12 land-based native corporation, regional native corporations in Alaska. And Alaska's, it's got a really unique way that it's settled

12:57 indigenous land claims, incredibly progressive. It was done about 50 years ago. And I think it's the model system anywhere on the globe, to be honest. And so what happened out of that, for those that don't know, basically they created these for-profit corporate entities, these large regional corporations. They were then able to select lands with natural resource potential and they became stewards of those lands to develop them. And they become quite good business entities in the process. And some of Alaska's biggest deposits and mines are actually currently being developed on native court lands. So great group to work with, very sophisticated group, wonderful relationship there. They will get royalties from this project if it goes into production.

13:43 I'm gonna just comment a little bit here that I used to work for Anaconda back in the late 70s and 80s, and Siri formed a partnership with Anaconda. And it was out of that joint venture partnership that deposits like Johnson Track were found.

14:00 So my history here goes back a ways too. I know the people at Ciri, know the deposit well. My background in Alaska is a lot of Alaska Native Corporation leadership. I think the good work that Highgold has done will just build on that.

14:22 Let me talk to this one, Rick. Yeah, go ahead. Yeah. Yeah. Just kind of more of a location map. We are, you know, Alaska is well endowed with minerals. A lot of them are not close to infrastructure. We consider the ocean infrastructure because it's you know it's a highway to anywhere in terms of marine transportation. We're close, reasonably close to Anchorage and other communities on the Kenai Peninsula, meaning this workforce close enough at hand but we're not right close to any particular community. So kind of that perfect distance. The history here is quite interesting, right? The native corps selected their lands, and you'll see we're surrounded by a park. Well, that park was created after the land selection occurred, and Siri and other native corps were willing participants in that process and in fact relinquished quite a bit of land to help its creation, but really on the strict and sole provision that they'd be able to mine here. The only reason they selected this land was for its mining potential and so in addition to the land they have an easement right written to federal law for a port and a road.

15:20 So the core asset is sitting down, like the deposit is sitting on that darker coloured portion of the property there, but it's a huge amount of regional land, north and south, that covers similar geology that's been underexplored that we like as well. And there's a nice view of the deposit. It's just behind the hill, the mountain there. It's steep country, but you can see where the camp and the airstrip is located. The next real step in developing the project is the access road over to the proposed portal site and that is work that's underway to get that first permitted and then get underground and drill the heck out of this thing to develop a mine plan. Darwin, any other comments on this? Yeah, just basic P, I have lots of flat ground to work with here. And the deposit is actually sitting, you know, it's been drilled to the depth of the Valley floor. It's a bit counterintuitive for most people to think you'd actually go up to your deposit, but the tunnel we're looking at going in the ramp exploration ramp will get you into the bottom of the deposit.

16:21 And I think the next slide might speak to that. Yeah. You see the 3 dimensional view here and the location of the deposit, kilometer long

16:33 tunnel, That mountain behind is the one that you're seeing in the photo there from Okliften camp and the airstrip. And so the mountain goes up and the drill holes have to go deeper and that gets expensive. And So both for just exploration and for infill building. So that really is the next step here. And Darwin, this team has progressed the permitting on that to is moving along in that, but that is really the next step here.

17:01 And this is just a more of a longitudinal view that shows the decline access point. As Darwin says, you're above the valley floor. That makes for easier amount of water to deal with. And, but you can see the exploration upside here is significant, but it requires

17:23 a lot of capital to get that underground development in, you know, it can be used for exploration, but it also obviously can use as a main haulage tunnel designed appropriately. And that certainly would be the plan.

17:38 And we don't have an exact number, but it's probably in the range of $25M to get that infrastructure in place to be able to talk about how you develop a mine plan around this. I don't know, Darman, if you have any other comments? No, I think you did a good job of capturing it, but you can see the benefits there starting at the bottom and mining your way up as well. You know, the ore passes, drop your ore down. Most of that deposit is all sitting in 1 big chunk. It's very attractive that way, but there is a lot more to be found at depth. Some of it's been displaced deeper down and it is getting challenging to drill from surface. So the ramp makes all the sense in the world at this stage in the project's development.

18:18 I will definitely let you speak to this one. Okay. Yeah. I mean, I think for us and for Rick, and I know you've tracked this project for a long time, there's very clear regional exploration upside. In addition to Johnson Track, we've already discovered a second system called the Ellis Zone. It's 4km to the Northeast where we have some very spectacular numbers. And you follow it up on it and it's growing. It hasn't grown quite at the pace of JT yet, but it defined clearly that there's opportunity for multiple deposits and the style of mineralization you see at JT is clearly present, or the conditions that were present to allow its formation are more widespread on the property. And so last summer we flew for the first time a regional survey.

19:05 It's an MT survey and we did some pretty sophisticated processing with that. And what it did is it kind of was a one-to-one detect of the areas that we knew we had mineralization. And then there were a lot of areas in between those known areas of mineralization that were undercover, under gravel or in the valley floor. And we saw very comparable looking anomalies. So we see a lot of opportunity for future growth here. Separate in addition to that, as you go to the north, are 2 bullseye targets.

19:34 It's hard to get an appreciation for scale here. You know, we're about 12 kilometers long is the main trend of epithermal to GAMS-style mineralization. But we think to the north, We have these big, big systems that are intrusive driven based on multiple layers of data. So it's kind of a unique project in that we've established critical mass, we think, on that deposit itself and are ready to get underground and pursue that advanced exploration phase. But there's this regional exploration upside as well. And this all requires capital. And I think merging a company together like this allows one to do both at the same time. Now I'll just add that it's definitely a district, an early developing district of scale. And when you look at our Tetlin land lease and the Moncho project and the exploration upside that's available there on private land owned by a tribe,

20:30 our lucky shot, We control the lion's share of the Willow Creek district. The district has produced over a million ounces of alluvial Gold and we have demonstrated high grades of low potential mining there. This adds a nice solid third leg of the stool as far as district exploration goes. So I think we'll wrap it up there and turn it over to Q&A period. Awesome. Thank you very much, gentlemen. Now, there are tons and tons of great audience questions. So I'm going to keep mine to just a couple. Just the things that we can run through before we jump to those audience questions. I'm going to start, Rick, with you.

21:12 What made High Gold the most attractive acquisition of all the juniors available? And almost as importantly, why was now the right time? Yeah, well, I think now being the right time, we're on the cusp of generating cash flow, we have a very high degree of confidence that that, you know, gold pour is going to take place and we're going to start to get money coming in the other direction. Cashflow for a junior company is, I don't say it's king, I think grade is king, but cashflow is queen.

21:42 In terms of why High Gold versus other things, It meets our 3 criteria that we've been talking about for looking for opportunities. It's got grade, it's got infrastructure, as Darwin just said, it's on the water. So, and most importantly for a junior company, in my opinion, is the ability to permit something. So you have to have a simple, relatively simple project. An open pit in the bottom of a big river valley is not a simple project.

22:15 This project would be mining above you. Eventually, you may find more stuff deeper, and you can worry about what the permitting and all the other things that need to get done for that. But to start off with, it's a relatively simple project to permit. Road access down to the port,

22:36 which is hardwired with Siri. And then a tunnel into the mountain where your ore body is above you and it's a big, fat, juicy ore body. Can't get better than that. There you go. Darwin, on the flip side, with a significant deposit and existing exploration upside, what made you and your team decide that now was the right time to do a transaction? Yeah, good question. I mean,

23:03 you know, I think Rick touched on earlier a little bit of this Lausanne curve challenge in the space. We're a little bit different because I think we can shorten that dramatically as part of our business model. But we've put a lot of work to get to critical size threshold. And Rick dropped the number of say, US$25M to get underground. There are some big bills to come to really move this forward. And the reality is the market's going to keep you down. It's going to hold you down when it knows you need to raise that money. And it's going to really give you a huge discount to the nav of your project where it should be.

23:38 And so for us, we've been thinking strategically for a while about the path forward. You don't want to languish and just be kind of hand to mouth with your financings. And

23:49 we did actually look and evaluate quite a number of different strategic alternatives. And this was a very, very obvious fit. I don't think you can get a better fit in terms of great profile of assets, business model, jurisdiction. You know, Rick's got a tremendous amount of history in the state, you know, ensuring we're kind of moving the project into hands that we trust and that are going to move forward, that are a good fit with Siri and Alaska in general, are critically important to us. So yeah, we've got a great premium off the baseline right now, but it's really about, to me,

24:24 this timing was the right timing to get in with Rick as they're about to re-rate as they become a producer. And we're at the front of a good gold market. And I think a story that people can get behind where you get early participation of an emerging new gold producer with an awesome profile of gold deposits. Great. And in the same, you know, adjacent to that, in your esteem, why do you think High Gold shareholders should maintain or grow their position at this time?

24:54 Well, a lot of the same reasons. I mean, I think it is a pretty unique business opportunity right here that's being presented, right? I think,

25:02 in my view, in the space, there's not a lot of other peers that kind of have this kind of a business model. And I think to be able to get in on it early, as we are, as prior to Contango actually hitting full Gold production here and build a growing company around this. I think there's more of these kinds of opportunities. I'm going to stay on as a director. I'm really committed to this story and I want to see it be a success. I'm certainly not selling into this. I think it's a great opportunity for shareholders. If guys want to move on and do something else, that's fine. But I actually think this is a very, very unique growth story. That's a very compelling investment opportunity for a shareholder. And Chutney, Rick, actually speaking of your business model, I know there's a lot of investors in the room who are not typically in attendance at Contango events. I was lucky enough to talk to you a few weeks ago about the Contango business model. I'd love to hear your perspective on how this acquisition is simpatico with that model.

26:00 Yeah, so

26:02 When Contango discovered Moncho, it's a great deposit, but it's not huge. It's not a 10Moz deposit, it's a million ounces, but it's great. We had the decision to make, do we advance this ourselves or do we partner? And it was clear that partnering with Ken Ross, who had an existing mill, underutilized mill, and you have good grade so you can afford to transport it. And that's a key part of any of this whole business model. We're not gonna go after 1 grammars that are out in the middle of nowhere. They're just, those are gonna sit there for a while. But this, it saves capital, it saves permitting timeline, it reduces your overall environmental footprint, including things like greenhouse gas measurements, that people are paying attention to, investors are paying attention to now when they decide what do I want to invest in.

26:57 Those are all part of why this model makes a lot of sense, especially for Alaska,

27:05 where we don't have a lot of infrastructure. So if you've got a perimeter project with infrastructure, and I know this like really well, it's gonna take you a long time, and it's gonna be a long, slow, painful process, and the market will not stay with you. It just won't. Darwin mentioned this. This is what's unique about Highgold's asset at JT. It's next to the water. Water is your infrastructure.

27:32 Yeah, you got to find somewhere to go process this but look, we made 50 million or I should say Kinross made $50 million of mill modifications to accommodate the Moncho ore. But that's a lot less draconian than building a new $600M mill with a tailings facility that who knows how long that would take to permit. When you think about this, like the Fort Johnson track, the way we envision it, is being processed offsite. Even your waste rocks going back underground for backfill. So who doesn't like a mine?

28:09 It's an underground mine where at the end of the day, you plug the portal and you walk away and there's really no long-term environmental legacy issues. Like That should be attractive to everyone. The world needs the metals. And these are the kind of mines that I think are a great solution to moving forward. And for the capital markets, for the investors, you're not hung out for 10 years waiting for something to come online. You can actually get these things into a timeline that will maybe bring investors back to our space. Because in my view, that's one of the fundamental things that's been killing the appetite for our business. It just takes too long and people, it's capital destructive.

28:44 True. One thing I wanted to talk about, and this will, I think, cover some of the audience questions as well, certainly not all of them, but some of them. And this will be really for both of you, but I'll start with Rick. I guess this does represent another project in Alaska in Contango's portfolio. Looking for your perspective on why this jurisdiction is such a sweet spot in your esteem and for you personally? I grew up in Alaska, so I know it really well. I've worked up there a long period of time. I've also worked all over the world, so I do have an appreciation for how things work elsewhere. And that is one of the things that I really appreciate about Alaska. Things work well there. The regulatory environment, the regulatory people in Alaska, they understand mines. They know what it takes to permit a mine And they know how to do it so that it's done right.

29:34 And that's something I don't think that the world appreciates or that, you know, we're often that we, the US government, is often investing in projects in Africa while they don't do it right in Africa. I will guarantee you that. So and it probably is easier. But when you look at a mine like Red Dog, in the partnership between Tech and Nana that has developed over a 30-year period, and what that mine has done for the Northwest Arctic Borough region, First of all, it's Northwest Arctic Borough, it's self-governing. That's a native driven governance process. That's ESG to a T. That's what ESG is supposed to be about. So I think it's high time, you know, I don't want to get distracted on our government, but that's investors need to start realizing that, that if they're truly interested in ESG principles, they need that. Those are the metrics they need to really start paying attention to.

30:35 I'll get off my soapbox. We put it right up for you, Rick. Feel free. I think one of the things too, jurisdictionally, when you do have the level of experience that both Rick and I do in Alaska, it does give you an advantage to understand what will work and what won't work, or certainly what has much better odds. There's certain areas that are going to be tougher than just are, and there's certain areas that are going to be less tough. And the Native Corp side of things, I mean, it really is a model for the world. It's very unique, you know, to Rick's point, and it's a tremendous advantage. And anybody spend any time around the Alaska state, you know, government, or just generally the people of Alaska, it's a can-do state, right? They're not looking for handouts, Let's get out there and get it done.

31:21 So we like it. I like it a lot. One last question out of me before I jump to the audience. So just one last one, guys. Curious, just in detail and be as specific as possible. What's up next for the Johnson Track project? What should investors be looking for in the coming months? Yes. So I'll ask Darwin to comment on this as well, to fill in the gaps there. But generally, it's infill drill to known deposit. We want to move this thing, execute our model as quickly as we can. And the next step is permitting and infill drilling, I'd say, on the surface. And so there's some surface infill work to do. That's work that can get done this summer. The underground work has to wait to get the permits to get the access road over there and the plan for the waste rock and all those things.

32:11 Maybe Darwin, you can fill in the gaps there and add to that. Yes, we've been very busy doing the borrowing stuff for a little while, which is great stuff to be doing in a crappy market. You don't get any love for it anyways, but there are things that are fundamental to risk and value add, I think, and then probably helps lead to transactions like this. You know, it means, you know, the starting point now is not starting from now and waiting 2 years to get your permit to get underground or your permit to get road. We're literally weeks away from having the road permit Rick was talking about on the front to get us to the portal. We did a lot of work last year to tee ourselves up to initiate permitting of the underground exploration ramp. That should be initiated in the last half of this year. We're expecting a lot of the team to stay together here, so there's going to be continuity on the project and with our contractors and be able to move this forward.

33:00 It's a nice merge that way as well, I think, for the company in terms of personnel and complementary skill sets. But yeah, those are big pieces and continuing to work on scoping and engineering is what we've been working on in the background as well. And I'm sure Rick and team are going to carry on on that and figuring out what's the best destination to be dropping our ore off at. I think there's several options out there. It's very attractive ore, so there should be folks that are interested. I'll just say 1, I'll add one comment to that. And I think I've said this several times, we've talked in the past Romeo that, 8, 9 grams will displace 5 grams every day. In a mil. Bad 1. I mean, I think as you put it very well, Rick, like looking at Manchot, it's a long ways to truck it. They're trucking it, what, 240 miles, I think? And for Canadians in the audience, it's 400 kilometers.

33:56 I think you described it as, you lose a gram for transportation. You know, when you got, and that's an 8 gram deposit, that's, you know, still not too bad, right? For an open pit at 8 grams, 7 grams. So it's, the grade does give you a lot of flexibility. Awesome. I know There are tons of audience questions, so I'm going to try to get through as many as possible. Some where they're similar, I'll try to group them, but we'll just go through them mostly in order. Otherwise, just we can get through as many as possible. BW King asks, this is for Rick. You once mentioned a royalty angle to Contango. What's the view on that from this point? Yeah, I think that's still a longer term objective. The first thing, the first order of business with cash flow from Moncho, well, we obviously have to pay the bankers back.

34:46 That's something that's the first order of business. But we're going to have a really sweetheart margin here. And we're not going to go out and spend $25 million this year on JT. It's going to, It takes time to execute these plans. But long term, strategically, I still like the idea of looking at paying a dividend to shareholders at some point in time. I appreciate it. A question from Mark, also for Rick, what synergies do you see, if any, with DSO operations at Lucky Shot and Johnson Tract? He's curious if you can now send Lucky Shot or to other places rather than Fort Knox. Sure, short answer is yeah. I mean, Lucky Shot can go a long ways. If you can ship by truck, 1g out of 8 to Fort Knox at 240 miles.

35:41 There are other options out there. The first order of business at Lucky Shot is to demonstrate, like I said, 4,000oz to 500,000oz of ore that's 12g to 15g per tonne range. That's our target. If you have that, you'll be able to put a mine plan around that. And part of that mine plan is, where does the ore go? We've got rail at Lucky Shot, so that gives you a cheaper way to get it to Fairbanks, certainly. But there are certainly other projects without naming names. Or sorry, there are other companies out there, mills out there, without naming names, that would probably be worth a dialogue or 2. Fair enough. This is a question for Darwin. It combines a few questions. So if anybody in the chat thinks I didn't quite capture theirs with this, let me know. They're curious if Highgold is expecting other bids as well.

36:32 Of course. You know, hard to say, honestly, and it's an interesting one, right? Because it's not always just about premium, but premium is important. You know, I highlighted at the beginning about premium plus the ability to really be part of something that I think is a great company going forward. Sometimes this shakes things out. We have a big senior as a 9.9 shareholder and there's others that may have interest, but I'll leave it there. You know, our board recommended this deal. We looked long and hard at some options and we thought this was a very good deal and a constructive deal for our shareholders. If I, if you don't mind me just adding, cause I want to speak to the high-gold shareholders.

37:19 I think what Darwin outlined in the 1 Plus 1 is 3, and building a platform and being able to execute on this plan, which is, our business model is a bit unique. It's a bit more like a royalty company model where you have a fair bit of gold being produced with a small number of people. You have a mine, you're going to have 5 or 600 people reporting to you. Not my cup of tea. So having an operation where the bigger companies are using their existing infrastructure and all their people and all that knowledge that goes into how that mill works and the tailings facility works. That's where the big value is here in my mind with this model.

38:07 Appreciate it. This one, I think we went over a bit, but it might be good to reiterate. Mike from the audience asks, so the focus at the outset beyond exploration of Johnson Tract, will you prioritize production via DSO? He wants to know if the latter, what's your best estimate on when Johnson Track to be selling ore and what are the permitting regulatory hurdles to get there? Yeah, I think it's a bit early to sort of outline a specific timeline. Let us get the access road and the underground permitted and we can lay out a plan for that. Lay out a plan for doing the infill drilling to a, I'll call it a feasibility level of knowledge because there's other stuff we have to do. And the metallurgy is good, but we probably need to do a bit more metallurgy. And that'll depend on where this stuff goes.

38:54 So give us some time to outline a plan. We're going to be talking to potential, I don't know, lack of a better word, offtakers. I mean, people who are aware of where you process this stuff. So give us some time. It's not in the next couple of years, sort of a story. There's a lot of work to do here, but it is a great ore body and it lends itself to the application of this model to ATI. And I think to it though, I do think timelines sync very well with Mancho's as it sits right now. I mean, I think Mancho's going to have some more life to it than what you see in front of it, but above and beyond that, I think they're very well synced from what I see as potential timelines that what things could be achievable for sure. And I'm hoping Rick's going to be putting some budget to the drill in here.

39:44 I'll be on the board, so I'll be voting for him. One quick practical question from the chat. People are looking at how they can get a copy of today's slideshow just so they can read through it. It's on our website and I'm not sure if it's up on yours yet. I think we are on the website right after this presentation. Yeah, not 100% if it's up on our channel. Perfect. Tom Calander asks, thanks for joining us, Tom. He congratulates both of you, but he knows when it comes to Alaska, roads and transport and concerned citizens are always an issue and governments, federal, state, local, et cetera. So he's looking for your thoughts and perspective on that. Well, the water is, as Darwin eloquently referred to, it's the world's highway. So, look, no projects ever without its issues, especially if it's a mining project, but you know, with Lucky Shot, we have the rail. So, you know, that if people are concerned about more trucks on the highway, we can alleviate that because rail is cheaper. And, but barging and shipping is cheaper yet by a big margin. So, it's capital to build the infrastructure to load it onto a ship and all that. So, these things aren't free, but I think, as with any project, the simpler it is, the better, and the fewer things you have to permit, and specifically the fewer things you have to

41:14 permit with the federal government, makes it easier. Those are, like I say, those are all part of our, you know, keep it simple. Criteria when we look at when we say it was a simple project, we were one of the things we're referring to specifically there is it's a simple project from a permitting standpoint. Right. T Solvin from the chat asks if Contango is going to use free cash flow for Manshaw to develop both LuckyShot and Johnson Tract. I'm curious if you're going to use some cash flow to expand the Manshaw asset. So we've got a $4.7 million expiration program approved this year at Manshaw. That's a 100% joint venture budget. So our shares are roughly US$1.5M there. That exploration budget is focused on what I refer to as Minex. It's all within sight of the 2 open pits.

42:06 It's a long strike for the most part. So short answer is yeah, and not expansion in terms of, Again, there's no mill here, so there's no mill to expand. There's plenty of capacity still at the Fort Knox mill. The mill will be referred to as the mill modifications at Fort Knox are wrapping up. And in the month of May, they'd be doing a bunch of commissioning work and commissioning work on all the different mill modifications, which as I've said before, aren't really modifying the mills proper. The sag mill and the ball mills are the same. It's all the ingredients that go into processing the ore, more cyanide, a bigger cyanide destruct circuit, more lime and cement, more carbon, bigger elution circuit, all those things, You need a bigger furnace to pour more gold, which is always a good thing.

43:05 So yeah, that's kind of where we're at there. Makes sense. Steven Sooknotes in the chat, he congratulates you both. He's curious what the timeline to production is that we're thinking for Johnson Tract. I'll start that question, but it's a two-parter. But as we said before, I don't think I want to sort of put any sort of timelines out there, but the timeline for the next event is to get through the permitting for the road and the portal access, and then put a plan together to get the drilling done. But the surface drilling that you can do, that we would like to start doing that this year. So, but then the underground drilling is the key step, putting that roughly kilometer and a half tunnel in. We did that lucky shot.

43:54 It's a little, not quite as long, but it's almost that long. So, this isn't like a really difficult job that we've never done before. So, yeah. I mean, I think one of the key things here is that you've removed that overhang of where are you gonna get the money to move it forward. And so that was the key link. And I think in our timeline going forward, you tell people, it's like, now we've got a path here. You're not going to be spending that money this year. At best, it'll be late next year. But I think when you have that certainty, or a bit greater certainty anyways, on the ability to self-fund something like that, You're a bit more in control of your own timeline versus having to be at the mercy of where the markets are at and wait for the markets to come around.

44:41 And so I think it's a tremendous advantage that way for the project. Absolutely. I mean, the Lassonde curve, it's a tough reality of our business. It's a cruel curve, for sure. The second part of that question, Rick, was what's your relationship with current Siri management and did they have to provide an approval for this transaction? Well, I'll let Darwin speak to that, but I certainly have a lot of relationships in Alaska, including with the folks at Siri. So, they're an integral partner in this and all of the different companies that I've worked with and developed over the years, NovaGold, Trilogy, Contango, having a good working relationship with the Alaska Native Corporation partner is paramount to making things work. So there will certainly be, I think Darwin and his team have done a great job to date and we're just hoping to take it to the next level. Pretty much like we did with Kinross.

45:42 Contango started early on and developed a really good working, healthy working relationship with the Tetlin tribe. And then Kinross was a great platform for Kinross to take it to the next level. So that's how I see that working. Yeah. Yeah. I mean, they're very supportive of the projects and our experience to date. And, you know, again, you know, there were other opportunities for us as we're advancing this project. And interest from other strategic partners say, and, you know, it's critically important to me with the stakeholders we have involved in this project that we find the right fit. I think Rick, given his history in the state, and Alaska-based mining companies that have the kind of experience that Rick has, that was very important to me and I know it's going to be important to Siri.

46:35 When they chose us originally to take on the project, it was based on relations and choosing people that had good history and track record in the state. I think this is just a continuation of that and I will continue to be a part of it as well as we go forwards. We have no hesitation on their support of the deal. Great. One question from Sonia in the chat. What is Contango's cash on hand after this acquisition And will you need to do a placement in the near future? Cash on hand is, I think we're $8-ish million. And with our line of credit, it's going to stay around that level. Great. Thanks. EBL Consultants asked, what is Sirius NSR royalty percentage? And do they still maintain a back and right for up to 25% participating interest?

47:24 It's a sliding scale. I can't remember it off the top of my head. It's pretty conventional in terms of you get to deal with another company. It's from 2 to 4%. So It's not overbearing, but certainly they will generate revenue from it, which is the idea. As far as their back-end, they do have a one-time back-end, right? It's on a production decision and they'd have to fund their pro rata share on a go forward basis. That's anywhere from 15 to 25 percent. You know, it's a little bit of a win if they do and win if they don't. If they do, you've got somebody else funding their share of mine building and you've got a native corp that's got even more skin in the game from a social license and I think political support standpoint. If they don't, you have 100% of the assets. So that's always the way I've looked at it.

48:12 And as kind of a follow on to that, are there obligations to process the ore in Alaska? I don't think so. No. No. Not that we could say. Perfect. We'd love to, but we don't need to. There you go. Mark Erickson asks, and we've kind of touched on it a bit, but it's probably best to reiterate it again. I asked, being in Alaska, do you foresee any situations similar to Ambler Road with respect to U.S. Federal interference? I'll use this to cover a couple of the political questions that are in the chat. Yeah, sure. I mean, good question. I mean, you know, and people know my history with Ambler Road, know it's something we've worked on long and hard. I guess what I would say is part of the experience of Ambler and part of the experience we had with Donlan, which is from a federal standpoint, fully permitted, It just, it takes a long time. It's a heartbreak sort of a process.

49:09 You know, we found Donlan 25 years ago and it's still not built and there's no imminent decision to build it, even though it's fully federally permitted. You know, in the trilogy and Amber Road saga is just, you know, I just I don't want to get angry here. So I'll keep it cool. But, you know, the federal government's breaking the law. So, okay. Well, that's what's new with that This project and and this is why are we've developed our business plan? Okay, basically sir What's the Einstein's definition of insanity's, you know keep doing the same thing Now stop hitting your head against the wall. There's a better way to do this for junior companies. I'm speaking for junior companies here.

49:56 We can't survive the Lassonde curve, going out and trying to tell somebody you're gonna raise $600 million to build a mill facility at Moncho and take 5, 6, 10, maybe never years to build a tailings facility. So that's how we've developed this model. That's why this is a good fit. And that's why it gets around. I can't say all of the federal permitting, but a lion's share of the federal permitting. And the part of the permitting that is the hardest is the infrastructure, building roads. There's NGOs don't like roads. They don't like mines, but they really don't like roads. And so we're on the water. And Siri has the right of way to get to the water.

50:43 And Siri is a native corporation. And now their NGOs tend not to mess with the native corporations. So I think those are all the reasons why we've developed this business plan and this business model of not trying to tackle the difficult, difficult task of building a mill in a tailings facility, find high quality deposits near infrastructure, and that are relatively simple to permit. Nothing's going to be simple to permit and permitting shouldn't be simple. We want to do things right and regulators and regulators in Alaska know how to do things right. They know how to permit things right. Red Dog is the largest zinc mine in the world. It's a fantastic operation.

51:29 So, Fort Knox has been operating outside of Fairbanks. You know, it's what, 20, 90, 20 miles outside of Fairbanks. It's a great piece of infrastructure. Let's use it. So hope that answers your question. No, I think so. I think so. On A quicker question, I think from Sonia. What's the expected closing date of this deal? I believe it's July. I don't think we put a date on it yet. The process is we'll get a mail out to our shareholders. Our shareholders need to vote on it. We anticipate setting the meeting date for that late June, and then usually it takes a bit of a week or so to clear up after that. So InfoCert should be going out within a couple of weeks here, along with information on that meeting date. And that's the timeline we're targeting. These things can always change a little bit. But the idea is it would be nice to have it closed off at the beginning of summer so we can get out there and hit it, assuming our shareholders are on site. And I think they will be.

52:27 Appreciate it. A keeps it a question for Rick. He asks, is Contango looking at Black Wolf and its Niblak mine, which is on an island? Very familiar with work there for Anaconda. Anaconda is a great company because I got the opportunity to work all over the place. I worked in Niblak and Actually, I broke my back there almost, or my collarbone. But yeah, it's not something of interest to Contango. I don't really think it fits our model for a variety of reasons that I won't comment on. But it's an asset I know very well as well. I was involved in the ground there in 2007 and 8. There you go. You cross some paths, Rick, and I change that.

53:15 There's one question that obviously answered to the best of your ability, but CJF PD asks, how does this deal compare to other peer M&A deals in the near past? He's got to tell you if you're smarter than me. I'll just go ahead. I mean, clearly, again, this is, you keep talking about the Lassonde curve and having the reality of the Lassonde curve when you're trying to put your feasibility study together for permitting plan and all that, that's boring to the market. And it's really boring to the market when it's a crappy gold market. And we have, we have not had a good gold market. So, you know, so it doesn't mean the project is not good. And that's what, you know, the market doesn't get it right.

54:04 A lot of the times, and it's it's completely wrong on this one. So, but the reality is, that's the markets the market. It's it, it is what it is. So we you know, The value of the project is a good project, so you're going to have to pay a good, healthy premium. You can see that by other junior companies that have crappy market caps. I think it was McEwen bought Timberline here recently for 100% premium. So, I mean, but if the share price is completely in the, you know, trading at 5 cents, 100% premium is 10 cents. But, you know, you've gone from, you know, paying, I don't know, I'm just making up numbers here, but gone from 10 million to 20 million. So it's a reality of the market.

54:58 Shareholders need to be rewarded, and Darwin's spoken to this. The real attraction here isn't the premium. The real attraction is getting and keeping your shares in the vehicle that's going to take this to production and has exposure to now 1.6 million ounces of gold that's generating plus $50 million of free cash flow a year. Fantastic story. I think that's fair. I mean, in general here, We had a value in mind when we started talking and Rick will know that I was pretty not moving off of that value. It was value driven more than premium driven. We've been talking for a while. But I think it's fair. If you look at Explorers and our comp group, maybe $20 an ounce is the realm. You look at producers, they'll get valued at US$100 or more an ounce. So there's a lot of room there to play with, where we can get a premium that's maybe above market. 30%, 40% is pretty typical. Getting above 50% is not as common sometimes in these really small deals, you'll see plus 100. So we think this is a very respectable premium in the context of the market. But we also think it's still tremendously good value. And those are the best deals when it's a win for both sides.

56:16 And I think it is because these values are going to be valued at 4x what they are in a company like Contango that has that ability to sell fun than a junior where you get this excess discount rate down. And that's That's how I see it. Appreciate that. Unfortunately, we are running out of time for questions. I want to thank everybody who was in the audience. It was quite a large group. So I really appreciate you taking time to watch today's event. Rick and Darren, thank you both very much for running through presentation of this answering questions. I didn't want to give you both the last opportunity to speak to both shareholders and interested parties on the call before we jet. So I'll throw it to both of you before we close for the day. Darwin, go first. Yeah, I was going to say, for any of my shareholders, Please reach out to me. I'm happy to talk more about the deal and the lead up to this deal and again, why I think it's good. Everyone, you're certainly able to make your own decisions and what you want to do, but this wasn't done lightly. We put a lot of thought into it. We think this is a great company going forward.

57:16 And similarly, if any of Contango existing shareholders, I'm happy to field some questions on that if they want to know a little bit more about the asset. Looking forward to getting this done and building a great company together. I genuinely think this is a company that you could see being a billion-dollar company in the next 2 to 3-years or 4. It's got that capacity and it's not often you get that ability to get in early, participate early on a true growth-driven Gold story. Yeah, I'll just, Romeo, Thanks to you and 6 for hosting this platform. Great interaction, great group of questions. And already speaking to High Gold shareholders specifically, we really think this is a 1 plus 1 is 3 or 4 story.

58:03 And we want to work closely with Darwin and his team to continue to advance this project and realize the value that's inherently there. And it's a great fit for our other assets in Alaska and it's a great fit for a business model, which we think is unique. And I'm referring to it as a bit of a hybrid royalty model, which is why I think it should attract a premium valuation in the market once the market really understands why this is different, how it's different, why it does simplify the typical path that a junior unfortunately takes with the Lausanne curve. The cruel curve, as you refer to it. The cruel curve. Well, gentlemen, Thank you so much for your time today. And if anybody in the audience has additional questions that we couldn't get to, I will pass them along to management, but please do reach out to either company for any additional questions you've got. But otherwise, everyone, thank you