Manh Choh partner Contango may sell up to $75 million in stock as loan payments near

Fairbanks-based Contango Silver & Gold signed an agreement Nov. 13 that lets it sell up to $75 million of its stock from time to time on the open market. The company owns 30% of the Peak Gold joint venture, which runs the Manh Choh gold mine near Tok.

The sale comes as payments on its secured loan near. Contango owed $45.3 million on the loan on Sept. 30, its quarterly report shows, due as $1.0 million on Dec. 31, $15.5 million on March 31 and $28.8 million on June 30, 2027. The loan is secured by all of Contango's assets, including its Manh Choh share, except its Lucky Shot mine subsidiary.

Much of that debt traces to gold hedges. To borrow, Contango had to agree to sell 124,600 ounces of Manh Choh gold at about $2,025 an ounce. It realized $4,275 an ounce on gold sold in the third quarter. Settling the hedges cost $46.4 million in February and $33.0 million on July 1. That July payment was funded by adding $33.7 million to the loan. All hedges were settled by Sept. 30.

Cantor Fitzgerald leads eight co-agents under the agreement and will be paid up to 3% of sales. Contango is not obligated to sell any shares. At the Nov. 12 closing price of $13.08, the full amount would mean about 5.73 million shares, roughly 17% of the 33,813,100 shares outstanding. Proceeds may go to working capital and general corporate purposes, including exploration, debt repayment or acquisitions, the prospectus says.

Contango lost $23.0 million in the third quarter, compared with $5.4 million a year earlier. Exploration spending rose to $26.9 million from $2.1 million. Its share of Manh Choh's earnings fell to $6.9 million from $29.5 million.

The venture paid Contango $18.0 million in the first nine months, none of it in the third quarter, down from $87.0 million a year earlier. It paid another $6 million Oct. 7. Cash stood at $56.6 million, down from $64.8 million at the end of 2025.

Contango's share of gold sold fell to 7,333 ounces from 16,669 a year earlier. The company had already said September rain cut short a Manh Choh ore run at the Fort Knox mill.

Management believes it has enough cash, the quarterly report says, but "no assurance can be given" it can raise money or refinance debt "on acceptable terms, or at all."

The next ore run is expected to start in mid-November and produce 13,000 to 15,000 gold-equivalent ounces for Contango, keeping it at the low end of its 40,000-ounce forecast for the year. The company expects a final $16 million payout this quarter.