Contango Silver & Gold: Q2 Financials 2026

0:04 Good morning, good afternoon or good evening, depending on where in the world you're logging in from today. I'm lucky enough to have with me today Rick Van Nuenhuysen, CEO of Contango Silver and Gold, and Mike Clark, the company's CFO, discussed their recently released Q2 financials. Gentlemen, how are you doing today?

0:22 Good morning, Bianca, good to see you again. Good morning. And you too, Mike. Always good to see you both. For folks in the room, this is an interactive event. So you can use the chat button at the bottom of at any point at today's event to get to submit your questions. We will try to get to your questions but note that this is only half an hour event today so if for whatever reason we don't get to your questions someone from the Contango team will be able to help you very shortly. You can also request a meeting with the team at any point during today's event by clicking the request meeting button at the bottom of your screen. All right, let's get into it today. Rick, this is the first full quarter reporting as Contango Silver and Gold at Consult Value in the portfolio and the PedgeBook fully behind you as of July.

1:07 Before we get into the numbers, how would you like to frame where the company sits today compared to where it was at this point last year?

1:14 Yeah, I mean, Obviously adding the Dolly Varden asset, the Kitsalt, it really is a world-class asset. I think that's why we were eager to get the transaction completed. The teams are integrated. We'll talk more about the drilling later, but we've got 5 rigs turning at Kitsalt. But there's a lot of other activity going on in the company at Lucky Shot and at Johnson Track. But I think, frankly, the most exciting news for me is we're out from underneath the hedges. We've got a clear exposure for our shareholders to the upside in the Gold price, which I think

1:53 it shot up over US$5,500, went back to US$4,000, seemed to find a floor at US$4,000. And that's when the team said, okay, now it's the time to take care of the hedges. And I think that was the right call. So we've seen Gold price continue to move up and we're seeing now that we're getting the advantage of that. So I think from the macro side, which we can talk about later, but I think the company is in a great position. We're generating strong cash flows. We've got the better half of this year ahead of us with production from Moncho. We always guided that the first half was going to be lower and higher cost.

2:38 And then of course, we're set up well for 2027 when we'll have probably the best year at Moncho with good grades and high grades, good grades and low costs. So yeah, I think I'm really pleased with where we are as a company and we still only have 33 million shares outstanding. So I think we're all pretty proud of that. Very good. And Mike, let's get into the quarter. Your 30% share of Manchot came to about 8,900 ounces, with 8,627 ounces sold at an average spot price of $4,328.

3:17 The JV is still working through lower grade material from the North pit before higher grade South pit ore comes through. With that said, walk us through the production cadence for the back half of the year and why the 40,000oz to 45,000oz guidance is still intact. Yes, thanks, Bianca. Yes, so Rick already kind of alluded to the grade being lower in the North pit, especially as we mined out kind of the outside of the resource model, there was more grade ounces that we did pick up before backfilling. So, this year or the second half of the year, we're fully into the South Pit, which has, there's gonna be more mines, more tons mined, there's going to be higher grade mined. And so we expect there to be about 12,000 ounces produced in both campaigns 3 and 4, which should get us to just slightly above 41,000 ounces of gold production for the year. So it's within our guidance and that's what we're currently estimating as of today.

4:12 Very good. And Cash costs for the first half came in at $2,665

4:19 an ounce, with all in sustaining costs at $2,830. And the full year guidance sits at around $1,900 to $2,000 on cash costs. That implies a meaningful improvement in the second half. Can you bridge that gap for investors so they understand how much of this grade timing, is this great timing versus anything structural? Yeah, it seems like a lot higher number than what we're projecting for the year, but we still maintain that guidance. And it's largely driven by the pre-stripping in the South Pit. And so you spent the whole first 6 months of the year spending money on that while also mining lower grades. And so as we get into the second half of the year, you know, the pre-stripping is behind us, you're going to have higher tons mined and processed as well as the grade going up significantly. So all those things together, we still expect to come close to our guidance.

5:11 Awesome. And Q3 will be the first quarter in the company's history where every single ounce sells its spot, with Gold sitting at about US$4,400 right now. With the puts at $3,100 providing the floor, what does the margin pitcher actually look like on each ounce delivered from here and how does that change the cash flow story for the rest of 2026? Yes, I think of the puts more as just an insurance policy and I don't really focus on those. We're always expecting Gold to be above $4,000 and we budget everything at $3,700. But if you just look at it simply, you'd say $4,400 minus your $2,000 cash costs, you'd expect about a $2,400 margin. But because we're at 30% JV, I kind of look more focused on what the cash distributions will be from the JV from the year, because they always do hold some funds back to pay for the next 3

6:02 or 4 months of production. I expect we should receive about US$36M in the back half of this year from distributions. And if you apply, using that US$3,700, that's using US$3,700 Gold. So, if you apply your US$4,400 Gold price, you'd expect to receive about another $7M. So that should get our total cash distributions this year to slightly above $60M if $4,400 Gold holds. Very good. And Rick, on July 1st, you closed the purchase from Alaska Hard Rock, which brings in the mineral claims around Lucky Shot, along with the 2% net smelter Royalty, plus property and equipment. You now control that project outright with significantly reduced royalties. Why was that important to get that done now ahead of the feasibility study?

6:51 Yeah, we just, it was sort of opportunistic. You know, we've known the underlying landowner for a number of years and, you know, he said, you know, when you're ready to, you know, talk, we'd love to own the asset and buy the Royalty. I think he thought about it for a while. Obviously, when we started this whole, when we acquired Like a Shot, the Gold price was US$2,000-ish. As that Gold price ran up to $5,500, I think he thought, well, we better get something done. So, yes, it was 100% opportunistic. There was no real magic there. We think it's a good deal for him.

7:39 He did a great job in consolidating that district and putting all the different patented claims together, and he's held on it for a long time. So we were grateful to him for doing that because that's a work of, you have to work hard to put all these different patents together. So it worked out well for us. We own the underlying patented mining claims now. Obviously the state mining claims all around it. We control the district effectively. And yeah, we obviously bought the royalty out as well. So we're pleased with the overall transaction. And obviously it's, you know, we obviously wouldn't have done it if we didn't think we're finding good things at LuckyShot. So, I mean, that's, it sort of underscores our belief that we've got a real mind here. Well, speaking of LuckyShot, the final assays from the underground program included an intercept grading 972g

8:34 per tonne with visible Gold in the core. GMS is back underground advancing development and you've got 2 helicopter supported rigs turning on the surface program between Coleman and lucky shot. What are these programs designed to prove ahead of the feasibility study and the 2027 production decision? Yeah, so, you know, basically, we're gathering all the geologic data, the geotechnical data, the assays, obviously, to do a DSO, a direct shipping ore based feasibility study.

9:09 And first step is to get the geologic model put together, the resource model, update that obviously. We're targeting 4,000 to 500,000oz of Gold, grading in the, I'll say 10 to 15, 10 to 14g range. Obviously, it's an underground mine. Historically, an underground mine produced 250,000 ounces at very high grades. We are gonna look at, they used hand sorting back in the day. We will take a look at ore sorting and probably, but obviously more of a modern version of it with these ore sorters that work at incredibly high speeds and they can sort on a lot of different variables. So that is something we'll take a look at, because obviously transportation is a significant amount of the costs and a DSO model. So if you can simply put the geology here as a quartz vein in a granodiorite, And the granodiorite is rock that doesn't have any Gold in it. If you can mine something that's 2-3m wide and a metre of that is granodiorite, you can get rid of it or get rid of 50% of it with the ore sorters, you've upgraded your average grade, your diluted mine grade, and you're not transporting that material. So, yeah, we've got a lot of work to do, but The first step is gathering all the, getting the drill spacing down. We're drilling on about 25m centres.

10:38 And then we do fan shots. So between the time we're hitting the quartz vein, we're probably in the neighbourhood of 10 to 15 metres apart. So this is, this is a, you know, this will be measured, indicated resource, and we'll be able to develop a mine plan around that. And as I said, you know, other metallurgy here is like super simple. It's quartz and Gold, a very small amount of sulphide. We've talked about the possibility of taking it to the Fort Knox mill. That's an obvious choice. I think it's fair to say that Fort Knox is interested. They still have a mill that has plenty of capacity in it. But there are other options that we are evaluating as well. So that's kind of where we're at. I think the drilling will take place between now, I mean, we've been drilling, obviously, the surface drilling, 2 rigs, The underground rig will start back up at the end of the month.

11:34 And then, let's see what else? Oh, we'll be drilling until about March of next year. And obviously, working on all the engineering and what have you, work between now and then. And I don't have a date on when we'll have a Feasibility Study done, but it'll be in 2027. Awesome. And over at Kitsil Valley, you had more than 35,000m of the 40,000m program done by the end of June and a new resource estimate coming together this quarter. This is the first update since the merger closed. What should investors be watching for in that number? And how has the integration of the Dolly Varden team gone on the ground? Yes, I know. Great integration. I mean, it's a really good group of people. And I have to say, they're like really kicking butt on getting the drilling done.

12:24 We've got 5 rigs turning. They're averaging, beginning of the season, when they were drilling the shallower holes, they were over 500 meters a day, 100 meters a rig, which is really good. They're a little under that now, but the high for 74, 80 sort of level. So they're, they're cranking out a lot of core and they're doing it very efficiently from a timing perspective, but also from a cost perspective, which obviously makes me smile and makes Mike smile. But we are smiling because we're going to do more drilling. We're going to get more drilling, bring more drilling out of the budget. And this was flow-through finance, So we're probably going to get another, I'd say, you know, 5 to 10,000 meters drilled with the same budget. So we're excited about that. Obviously we'll have drill results out. I'm going to, you know, guess within a month, you know, That's up to the laboratory gods, which never seem to favour anyone.

13:30 When I go to conferences, that's probably the number 1 complaint of exploration geologists is how long it takes to get assays. But I think we're tracking them and I think we'll have results out within a month. So hopefully sometime later in August at the earliest, but probably more likely early first half of September. And then once we put results out, you're going to have results every 2, 3 weeks after that. Brilliant. Silver is trading around US$65 an ounce, up roughly 70% from a year ago, and it's been leading Gold for stretches of this rally. When you renamed the company Contango Silver and Gold in March, some people saw that as a bet on exactly this kind of market. How does the Silver exposure at Kitsalt change the way investors should think about this story?

14:16 I think I use the term world-class and I don't use that lightly. There are very few Silver only deposits. Most Silver producers are, it's a bit of smoke and mirrors, frankly, because they produce more Gold value-wise than they do Silver. Kitsalt is a Silver-centric Silver deposit. It makes up 90% of the value for the Torbrett and the Wolfvane and Dolly Varden and Northstar, those are all, you know, you're 90% of the values in Silver. You've got some base metals, Lead Zinc, you don't have a lot of Gold. There is Gold at Homestake, which is sort of a separate centre.

15:05 It's part of the same overall geologic system, but it's 5km away and it is Gold-rich. Interestingly enough, between the 2, you do have a Gold and Silver deposit, which is right adjacent and named Homestake Silver, but it has good Silver and good Gold, so nothing wrong with that. But the lion's share of the ounces are Silver ounces. That's going to make for a very interesting story. That's why we kind of, we talk about, you know, our objective in 5 years is to produce 200,000 ounces of Gold and 5Moz of Silver. That and 5Moz of Silver is coming from that Silver-centric part of the district, you know, Torbit, Dolly Varden and the new Wolf Discovery. Now, We're drilling in some really exciting stuff right now and I can't say much more, but you'll wait for the assays and they'll be out within a month here.

16:10 Excellent. And Johnson Track is getting a bit less airtime than the other assets right now, but there's real work happening this summer with bids in for road construction and helicopter support to connect the camp to the proposed portal site. What does the 2026 field season look like there? And where does Johnson Track fit in the queue behind Lucky Shot and Kitsault? Yeah, so yeah, when you're permitting, that's always kind of the boring part of the Lassonde curve, but we're so we're permitting and that's moving your part of FAST 41 and that's all moving along according to the schedule and people can, what I love about Fast 41 is it's transparent and the schedule's on the internet. So everybody can go and see, we have these reports due and we get those reports due and they have, the agencies have so many days to review and that's all happening according to schedule. So That's great.

17:01 But while they're doing that, we've been building roads and bridges. And so I'm actually headed out there next week and we'll take some photos and some video and we'll get that up on the internet. And I'm really excited to walk across the Johnson River on the bridge and I'll send you some photos. Please. It's under budget too, Rick. Love that, that's great. I can't wait to see. The important point of me is, because that's, you know, whenever you, you know, if you look at construction projects, they have a habit of going over budget and taking longer than you plan. I think the guys, again, have just done a great job. The team out there has done a great job of getting it done.

17:47 Allegra and her environmental team have done a great job just working with agencies, getting, keeping everything permitted. And there's still a lot of permitting to do while you're doing all this construction work, right? It's permitting, you're never done permitting. Absolutely. Mike, back over to you. Let's talk about the balance sheet. You ended the quarter with 89 million cash. Repayments on the facility are just 2 million for the rest of this year. And distributions from the JV should build as the South pick grades come through. You're funding 3 projects at once. How do you prioritize where the dollars go over the next 12 months? Yeah, well, we forecast out the next kind of 3 to 4 years, but you know, if you kind of just isolate it over the next 12 months, you know, we have, you know, 90 million, $89 million in the bank as of June 30th. We do have distributions coming from on show. With those, we have sufficient capital to advance all these 3 projects as planned.

18:45 It's just making sure that each of those individual budgets stay within, you know, within where we're currently sitting, then there's plenty of cash to fund those. You know, you'll see the cash probably in the year around 45 million, but what you're, you know, and you'll probably see it dip to its lowest amount in kind of Q1 of next year. But then as we ramp up into 27 with Moncho, you're going to see the cash steadily increase while continuing to advance all those projects. Very good. And Rick, let's close off today by asking a macro question. Gold appears to be making a comeback yet again, despite the feeble warnings of gold bears. What do you think about the macro setup for this year? Up 10% in a month is no slouch. Yeah, I mean, look, we talked about it earlier that we saw gold retrace down to the $4,000 level. It didn't seem to want to go down below 4,000 for any significant period of time. There was always a buyer.

19:43 And then, oh, it turns out that those central, same central banks that had been buying were buying again. And of course, led by China, but other banks as well. So I think it's, you know, kind of the song remains the same sort of a scenario here. You know, we keep printing money. The bed's stuck between a rock and a hard spot. You know, we're still what, close to the US$40T in debt. And it's not just the US, all the other currency, all the other governments are in debt too. And you know, Gold is the commodity that, or I should say the currency, that is no one's liability. So whereas when you keep printing money, at some point somebody says, what are we doing here?

20:34 So yeah, gold is king, and we're unhedged. So we're gonna see that upside delivered to our shareholders, which I think is the most important thing we've done this year. Absolutely, Speaking of, thank you everyone who joined today. If you have a question for the Contango team, and it's just occurring to you just now, please feel free to send them in and we will make sure that they get to the team. Big thank you to you, Rick and Mike, for joining us today. Always a pleasure to have you on the platform and hear an update on the story. But Rick, I'll pass it over to you for a final word. Yes, if there's no other questions from the audience. Look, I mean, we're pleased with where the company sits today. Unhedged, 33M shares outstanding.

21:21 NYSE and Toronto listing, so good liquidity. I think if you're looking for exposure to the Gold business, I've always encouraged people to look at it on a per share basis because as a shareholder, you own a part of the company and that leverage is what you want when you are making an investment in the Gold space. We're in a great spot. We're going to have a lot of news flow, a lot of catalysts coming our way in the next few weeks with Lucky Shot drill results, Kitsault drill results, some great photos of roads and bridges at Johnson Track. And we're on the move. We're going to keep moving. So keep adding value for shareholders.

22:07 That's our job and that's our mission. Fantastic. Thank you