Contango Announces Results for the Quarter Ended September 30, 2026

Contango Silver & Gold Inc. (CTGO) reported a net loss of $23.0 million, or $0.66 per diluted share, for the third quarter of 2026, marking a sharp reversal from the $25.0 million income from operations and $24.9 million adjusted net income recorded in the same period last year. The company’s adjusted net loss for the quarter was $20.9 million. While derivative mark-to-market losses contributed to the bottom line, the deterioration was largely driven by a surge in exploration expenses, which rose to $26.9 million from $2.1 million in the prior-year period. This increase was attributed to the addition of the Kitsault Valley project alongside Dolly Varden in the first quarter of 2026, as well as expanded spending at the Lucky Shot and Johnson Tract projects. Additionally, income from the Peak Gold joint venture fell to $6.9 million from $29.5 million.

Cash reserves declined to $56.6 million as of September 30, 2026, down from $64.8 million at the end of 2025 and $89.0 million at the end of the second quarter. The company’s 30%-owned interest in the Peak Gold joint venture, operated by Kinross, produced 7,657 gold-equivalent ounces net to Contango in the third quarter. Sales during the period included 7,333 gold ounces and 5,349 silver ounces, with cash costs of $2,699 per ounce and all-in sustaining costs (AISC) of $2,909 per ounce. For the fourth quarter of 2026, Contango guided for production of 13,000 to 15,000 gold-equivalent ounces at cash costs of $2,700 per ounce and AISC of $2,900 per ounce. The full-year guidance has been lowered to the lower end of the previous range, targeting 40,000 gold-equivalent ounces.

Regarding distributions from the Peak Gold joint venture, the third-quarter financial table showed nil cash distributions received during the period. However, $6 million was received on October 7, 2026, following the quarter-end. Year-to-date distributions totaled $18 million, bringing the total received in 2026 to $24 million. A final distribution of $16 million is expected in the fourth quarter, which would bring total 2026 distributions to $40 million.

In corporate finance news, Contango established a new $75.0 million at-the-market (ATM) equity program with Cantor Fitzgerald and other agents, terminating the previous 2023 ATM. The company is not obligated to sell shares under the new program, but it creates potential dilution of roughly 12% of basic shares at the current price, with proceeds designated for general corporate purposes. On the debt front, the principal on the secured credit facility stood at $45.3 million after a $1.0 million repayment in the third quarter. Remaining repayments are scheduled for $1.0 million in December 2026, $15.5 million in March 2027, and $28.8 million in June 2027. The company also holds a 7,000-ounce carry trade due December 31, 2026, and 15,000 put options with a $3,100 strike price maturing in March and June 2027. Other hedge delivery obligations have been eliminated.

Project development continued across Contango’s portfolio. The Kitsault Valley project completed 56,000 meters of drilling, approximately 40% over plan. The September 2026 mineral resource estimate (MRE) contains 89.55 million ounces of silver-equivalent indicated resources and 64.92 million ounces of silver-equivalent inferred resources. The 2026 drilling data is excluded from this estimate, with an updated MRE planned for the first half of 2027 and an initial assessment targeted for late 2027.

At the Lucky Shot project, the company completed over 11,000 meters of surface and underground drilling, along with 536 meters of underground development. Underground drilling resumed in mid-September using two rigs. An updated MRE is targeted for the first half of 2027, with a feasibility study planned for late 2027. The project aims for a direct shipping ore (DSO) target of 40,000 to 50,000 ounces per year.

The Johnson Tract project saw the completion of a 2.6-mile access road, a portal laydown area, and camp expansion. The U.S. District Court for the District of Alaska upheld the Section 404 permit on September 14, 2026, with final judgment entered on September 15, 2026. Construction of the underground exploration drift is scheduled for 2027.

The third-quarter results follow a series of developments throughout 2026, including the April 2026 TSX listing and exploration plan, a Peak Gold distribution in April, and the acquisition of the Lucky Shot lease and 2% net smelter return (NSR) in May. Drilling at Kitsault Valley launched in May-June, followed by hedge settlements and Lucky Shot drill results in June. A milestone settlement for Lucky Shot was reached on June 29, and remaining hedges were converted into $33.7 million of additional credit facility debt in July. Second-quarter results were released in August, followed by the Kitsault MRE and high-grade silver assays in September. An operations update in late October pre-announced Manh Choh third-quarter delays and lower-end 2026 production, leading to the November 13 confirmation of the third-quarter results and the new ATM program.

The latest full-year guidance of $2,700 per ounce in cash costs and $2,900 per ounce in AISC represents a significant deterioration compared to the first-quarter 2026 MD&A and investor presentation, which had guided for cash costs of $1,900 to $2,000 per ounce and AISC of $2,200 to $2,300 per ounce.

Contango Silver & Gold Inc. (CTGO) announced a $75.0 million at-the-market (ATM) equity offering, a move that introduces significant dilution against its roughly $625 million basic market capitalization. The financing comes as the company’s cash position has declined to $56.6 million, with $44.3 million in credit facility repayments due by June 2027.

Third-quarter earnings quality was weak, even when excluding derivative swings. The company reported an adjusted net loss of $20.9 million and year-to-date operating cash flow of negative $109.1 million. The cash balance fell by $32.4 million between June 30 and September 30.

Cost guidance was reset significantly higher than previous expectations. The company previously guided 2026 cash costs of $1,900-$2,000/oz and all-in sustaining costs (AISC) of $2,200-$2,300/oz. It now guides cash costs of $2,700/oz and AISC of $2,900/oz, representing a roughly 35% to 42% increase at the midpoint depending on the cost line. This increase is only partly explained by higher copper/sulfide ore content and weather issues.

Production at the Manh Choh mine was weak in the third quarter, yielding 7,657 gold-equivalent ounces net to Contango, a sharp year-over-year decline. Full-year production is now guided to the lower end of 40,000 ounces. An operations update on October 28 pre-announced this production shortfall and lower-end guidance, meaning that portion of the news was expected. However, the Q3 net loss, cash drawdown, and ATM offering are fresh developments.

While there are positive offsets, they are not sufficient to counter near-term negatives. Q3 gold recovery improved to 86.5% from 80.4% in Q2. The South Pit transition is advancing, Kitsault’s indicated resource grew, Johnson Tract’s Section 404 permit was upheld, and Peak Gold JV distributions remain a cash source. These factors are largely long-dated or already known.

The release frames the quarter as a period of de-risking and execution. Financial statements show a company still consuming cash, carrying new debt from the hedge restructuring, and now authorizing up to $75 million of equity sales.

Contango Silver & Gold Inc. (NYSE American: CTGO; TSX: CTGO) is a gold and silver producer and explorer with operations in Alaska and British Columbia. The company’s primary cash-generating asset is a 30% interest in the Peak Gold joint venture, which owns and leases the Manh Choh mine. Kinross Gold’s subsidiary holds the remaining 70% interest and operates the joint venture.

In British Columbia’s Golden Triangle, Contango owns the 100% Kitsault Valley project, covering approximately 247,000 acres. A mineral resource estimate released in September 2026 reported 89.55 million ounces of silver-equivalent indicated resources and 64.92 million ounces of silver-equivalent inferred resources. The company plans to release an updated mineral resource estimate in the first half of 2027 and an initial assessment by late 2027.

The company’s other assets include the 100%-owned Lucky Shot project in Alaska and the Johnson Tract project, which is held under a lease from CIRI. Contango is advancing Lucky Shot toward a direct shipping ore operation and a feasibility study. An initial assessment for Johnson Tract previously reported a post-tax net present value at a 5% discount rate of $615.4 million and an internal rate of return of 60% at a gold price of $4,000 per ounce.

While Manh Choh serves as the near-term cash engine, it is non-operated and only 30% owned. Lucky Shot, Johnson Tract, and Kitsault are development and exploration assets with first production targeted for later this decade; they do not currently fund the company.

Contango recently closed the purchase of the underlying Lucky Shot lease and a 2% net smelter return royalty from Alaska Hardrock Inc. for $16.074 million, which included a $10 million secured promissory note. As a result, Lucky Shot is described as 100% unencumbered by that royalty. Royalty terms for the Manh Choh/Peak Gold joint venture, Johnson Tract/CIRI, and Kitsault Valley were not provided in the materials.

Management includes CEO Rick Van Nieuwenhuyse, President Shawn Khunkhun, and CFO Michael Clark. The board of directors is chaired by Clynt Nauman.