Contango ORE, Inc. (CTGO)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 showed a larger net loss driven primarily by a non-cash mark-to-market loss on gold hedges; the company remains pre-revenue as Manh Choh advances toward first production in early Q3 2024 .
• Net loss was $(20.5)M, or $(2.14) per share; the quarter included a $(15.6)M non-cash loss on derivative contracts and higher interest expense tied to drawdowns on the secured facility .
• Execution milestones and near-term catalysts are clear: ore mining/hauling are underway, and the first gold pour at Fort Knox was scheduled for July 8, 2024 (early Q3) .
• Balance sheet/liquidity: cash was $7.6M with $22.5M of unused borrowing commitments remaining on the facility; current debt portion rose to $21.7M as the build nears completion .
• Strategic actions: announced acquisition of HighGold (shareholder approval subsequently obtained) and completed a $15M underwritten offering to support exploration and corporate needs .

What Went Well and What Went Wrong

• What Went Well

  • Manh Choh project execution on track: ore mining/hauling are ongoing; mill tie-ins and site work remained on plan; production targeted for early Q3 2024 .
  • Near-term production milestone: “the first gold pour for the Manh Choh mine will take place at the Fort Knox mill facility on July 8, 2024” .
  • Strategic growth: agreed to acquire HighGold; CEO: “the combination of HighGold and Contango makes a tremendous amount of strategic sense… increases Contango’s currently outlined resources three-fold…” (June 28 PR) .

• What Went Wrong

  • Significant P&L volatility from hedges: Q1 recognized a non-cash $(15.6)M loss on derivative contracts as forward gold prices exceeded hedge prices .
  • Higher interest burden: interest expense rose to $(2.03)M vs $(0.45)M YoY as debt balances increased with project funding .
  • Regulatory/legal overhang: ongoing litigation by a community group seeking to enjoin the ore haul plan (preliminary injunction motion pending as of the filing) .

Financial Results

• Income statement highlights (no revenue yet; pre-production)

• Liquidity and leverage snapshot

• Cash flow

• Additional context (Transition period)

• KPIs (development and hedging)

Other operational KPIs and segment detail are not applicable as the company is pre-revenue and does not provide segment reporting .

Guidance Changes

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was found; themes below are drawn from filings and press releases.

Management Commentary

• “This is indeed a grand milestone event for the Company and its shareholders... the Manh Choh project has stood out as a very high-quality deposit… we look forward to sharing video coverage of our first gold pour on July 8th.” — Rick Van Nieuwenhuyse, CEO (First Gold Pour PR) .
• “We are pleased to have this transaction overwhelmingly approved by the HighGold Securityholders… the combination… increases Contango’s currently outlined resources three-fold… Johnson Tract represents the third leg of the stool for solid production growth.” — Rick Van Nieuwenhuyse, CEO (HighGold PR) .
• Q1 operational update (10-Q): ore/waste mining proceeding, haul to Fort Knox ramping, and mill modifications (road completion, conveyor tie-ins, piping/electrical) are advancing as planned .

Q&A Highlights

• No earnings call transcript was available for Q1 2024; no Q&A disclosures were found in company documents [ListDocuments: earnings-call-transcript returned none].

Estimates Context

• Wall Street consensus estimates (S&P Global) for revenue and EPS for this micro-cap were unavailable; as a result, we cannot assess beats/misses versus estimates for Q1 2024. Consensus data was not present in S&P Global for CTGO’s latest reported quarter (no published estimates found).

Key Takeaways for Investors

• Near-term production catalyst: first gold pour scheduled for July 8, 2024, with broader production ramp in early Q3 2024; this transition from developer to producer is the key stock narrative over the next quarter .
• Expect earnings volatility from hedges: large non-cash MTM swings are likely as spot/forward gold prices move vs the fixed $2,025/oz hedge book (124.6k oz through 2026) .
• Funding mostly in place; watch maturities: cash of $7.6M, $22.5M unused on the facility, and higher current maturities ($21.7M) warrant attention as Manh Choh cash flows begin; management expects JV distributions post-start to support liquidity, but timing is key .
• Strategic optionality: HighGold acquisition (subsequently approved by HighGold securityholders) expands the Alaska portfolio and long-term growth pipeline (Johnson Tract), adding exploration and future development upside .
• Legal risk to haul plan persists but has not altered the production timeline to date; monitor court rulings and any operational impacts .
• No revenue yet and rising interest expense underscore the importance of hitting the Q3 start and ramp milestones to turn the liquidity curve and reduce financing overhang .

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Notes and Sources:

• Q1 2024 Form 10-Q (filed May 14, 2024): financial statements, liquidity, derivative and debt details, project updates –.
• 8‑K (May 14, 2024) with earnings press release: net loss/EPS and project updates .
• Transition period 8‑K (Mar 14, 2024): six-month results and Manh Choh development progress –.
• Q3 2023 Form 10‑Q (Nov 14, 2023): prior-quarter baseline, production timeline, hedge initiation, and liquidity –.
• Press releases: First Gold Pour date (June 25, 2024) ; HighGold shareholder approval & offering closing (June 28, 2024) ; $15M offering pricing (June 11, 2024) .