Avidian Gold To Sell Its Alaskan Subsidiary To Contango Ore

TORONTO, May 02, 2024 (GLOBE NEWSWIRE) -- Avidian Gold Corp. (“Avidian” or the “Company”) (TSX-V: AVG) is pleased to announce that it has entered into a binding Stock Purchase Agreement (the “Agreement”) with Contango ORE, Inc. (“Contango”) (NYSE-A: CTGO) pursuant to which Contango has agreed to purchase Avidian’s 100% owned Alaskan subsidiary, Avidian Gold Alaska Inc. (“Avidian Alaska”) for initial consideration of US$2.4 million (CDN$3.30 million), plus a potential future upside consideration of US$1.0 million, for a total consideration of up to US$3.4 million (CDN$4.68 million at current exchange rate of US$1 = CDN$1.376) (the “Transaction”). The consideration is a combination of cash plus Contango shares, as more fully described below.

Avidian Alaska owns and controls the Golden Zone and Amanita NE gold properties and has an option agreement to purchase 100% of the Amanita gold property. Golden Zone is a large, prospective property in between Anchorage and Fairbanks near rail and highway infrastructure. The Amanita and Amanita NE gold properties border Kinross Gold Corporation’s Fort Knox operation near Fairbanks.

Dino Titaro, Director and Chairman of Avidian Gold states, “On behalf of the Board of Directors, we are pleased to announce this transaction. We believe Avidian is well served by both the cash consideration to immediately strengthen its balance sheet and the Contango shares to better participate in the continued strength in the gold price. Contango is a soon to be producer of gold that is expected to be generating cash flow by mid to late 2024 from the high grade Manh Choh Gold Deposit, a 70:30 joint venture between Kinross Gold Corporation and Contango. Contango has the financial and technical strength to quickly advance these properties. We are of the opinion that this acquisition will enhance their future production growth strategy, which Avidian will participate in and greatly benefit from its share ownership.

This transaction is a win-win, particularly considering the current market investment climate for non-producing junior exploration companies like Avidian. We believe the Alaska properties will generate more value in Contango’s portfolio as a near term producer, as evidenced by Contango’s acquisition of these properties for a purchase price plus a future potential upside payment that well exceeded Avidian’s market capitalization at the time of negotiations, up to CDN$4.68 million vs a then market capitalization of less than CDN$2.0 million. This at a time where Avidian and most other junior explorers have not benefited by improving gold prices and have not been able to raise the suitable equity to adequately advance exploration.