Manh Choh partner expects the low end of its 2026 forecast after rain cut an ore run short

Manh Choh, the gold mine near Tok, is now expected to finish the year near the low end of its production forecast after September rain cut short a run of its ore through the mill, according to the company that owns 30% of it.

Contango Silver and Gold said in an Oct. 28 filing that the run started Aug. 20 and ended Sept. 24, earlier than planned, because of "persistent above average rainy conditions throughout September." The rest of the ore meant for that run will go through the mill in a fourth run starting in November. Contango didn't say how much ore was left over or how much gold the shortened run produced.

Manh Choh's ore is trucked to Kinross Gold's Fort Knox mill northeast of Fairbanks, where it's processed in batches Contango calls campaigns. Kinross owns the other 70% of the mine and runs it.

In August, Contango's chief executive, Rick Van Nieuwenhuyse, said mining was moving into higher-grade parts of the mine's South Pit and that the run would produce 11,000 to 12,000 ounces for Contango, "keeping us firmly on track to meet our 2026 production guidance of 40,000 to 45,000 gold ounces."

Now Contango is guiding toward the low end of that range. By Kinross's figures, Contango's share came to about 25,100 gold-equivalent ounces through September, leaving roughly 14,900 to reach 40,000 by the end of the year.

Kinross reported last week that rain had slowed mining, and that less Manh Choh ore and lower grades at the mill drove a 29% drop in its Alaska output. The mill ran 185,000 metric tons of Manh Choh ore in the third quarter, down from 230,000 in the second quarter and 286,000 a year earlier.

Contango said changes to the mill to handle the ore's higher copper and sulfide content have increased the use of reagents, the chemicals used to recover the metal. Because of those, the delays and diesel costs, it expects third-quarter cash costs similar to the second quarter's $2,641 per ounce sold. In August it projected 2027 production of 75,000 to 80,000 ounces at cash costs of $1,200 to $1,300 an ounce. The October update didn't repeat those numbers.

Royal Gold, which holds a royalty of 3% on the mine's output and 28% on its silver, repeated Contango's account in its quarterly release Wednesday and said Contango expects the whole mine to produce toward the low end of about 133,000 to 150,000 ounces this year. Royal Gold's Manh Choh revenue fell to $3.4 million in the quarter from $6.3 million a year earlier.

Most of the land in the Manh Choh venture is leased from the Tetlin Tribal Council, which is owed a royalty of 3% to 5% on revenue from that land, depending on the metal and the year, according to Contango's quarterly report.

Contango said it will give more detail with its third-quarter results in mid-November.