Contango Announces Acquisition of HighGold

Contango ORE, Inc. (“Contango” or the “Company”) (NYSE American: CTGO) and HighGold Mining Inc. (“HighGold”) (TSXV: HIGH, OTCQX: HGMIF) are pleased to announce that they have entered into a definitive arrangement agreement (the “Agreement”) pursuant to which Contango will acquire all of the issued and outstanding shares of HighGold by way of a court approved plan of arrangement under the Business Corporations Act (British Columbia) (the “Transaction”).

Under the terms of the Agreement, each HighGold share (“HighGold Share”) will be exchanged for 0.019 shares of Contango common stock (each whole share, a “Contango Share”) (the “Exchange Ratio”) based on the respective volume weighted average price (“VWAP”) of Contango for the five-day period ending on May 1, 2024. The Exchange Ratio implies total consideration of C$0.55 (approximately US$0.40) per HighGold Share and total HighGold equity value of approximately US$37 million (Cdn$51 million)¹. The consideration represents a premium of 59% based on Contango’s and HighGold’s 20-day VWAP².

Upon completion of the Transaction, existing Contango shareholders will own approximately 85% and HighGold shareholders will own approximately 15% of the combined company³.

In connection with the Transaction, Contango will grant to HighGold the right to appoint one (1) director to its board of directors.

CONFERENCE CALL AND WEBCAST

Contango and HighGold management will host a joint conference call and webcast to discuss the Transaction on May 2, 2024, at 12:00pm EST / 9:00am PST. Participants may join the webcast using the following call-in details: Contango ORE Announces Acquisition of HighGold (6ix.com)

TRANSACTION HIGHLIGHTS

• Creation of a leading Alaskan gold company with a low-risk and properly sequenced portfolio – Manh Choh is Alaska’s next gold mine with first gold pour expected in the second half of 2024. Organic path to +100 thousand (“k”) ounces (“oz”) in annual gold production with the potential to apply the direct ship ore (“DSO”) model used at Manh Choh to both HighGold’s Johnson Tract Project and Contango’s Lucky Shot Project.
• Addition of a third high-quality deposit with long term upside potential – Immediately increases Contango’s current resources threefold by adding +1 million (“M”) oz of gold equivalent (“AuEq”) @ approximately 9.4 grams per tonne (“g/t”) AuEq ⁴. Further exploration potential along the Johnson Tract Project’s highly prospective 7.5-mile mineralized trend.
• Management of Contango is ideally positioned to unlock value at Johnson Tract – Consistent with the development of Manh Choh, which is on schedule and on budget, Contango expects to unlock value from the Johnson Tract Project without the burden of large upfront capital requirements. The Johnson Tract Project’s strategic seaside location expands opportunities for applying the DSO model.
• Financial flexibility to fund growth through existing balance sheet capacity and near-term cash flow – Contango has the ability to progress the Johnson Tract Project with enhanced financial capacity underpinned by organic cash flow to be generated at Manh Choh and a track-record of successful project development and execution in Alaska.
• Partnerships with Cook Inlet Region, Inc. (“CIRI”) and the Alaska Native Tetlin Tribe (“Tetlin Tribe”) – HighGold has a lease agreement with CIRI, a regional corporation established by the Alaska Native Claims Settlement Act of 1971, authorizing the exploration and development of the Johnson Tract Project while Contango, through its joint venture with Kinross, has an existing partnership with the Tetlin Tribe authorizing mining and exploration activities at Manh Choh.
• Compelling re-rate potential – Re-rating to be driven by multiple near-term catalysts, led by achieving commercial production at Manh Choh, and an enhanced combined capital markets profile.

Rick Van Nieuwenhuyse, President and CEO of Contango said, “Darwin Green and his team have done an excellent job adding value to the Johnson Tract Project in a very tough market. The combination of HighGold and Contango makes a tremendous amount of strategic sense for both sets of shareholders – it is a true win-win for all. With the cash flow expected in the second half of 2024 from our high grade Manh Choh operation achieving commercial production, we will be able to continue to create value for the Johnson Tract Project and advance this high-quality project through to production. When combined with our Manh Choh and Lucky Shot projects, the Johnson Tract Project represents another asset that meets our criteria to be a run-of-mine, direct shipping ore operation. Contango will now develop a growth plan to advance these three assets to a production decision and target producing well in excess of 150,000 ounces of gold per year.”