CTGO

LLM Evaluations

Transcript Summary

Contango Ore management discussed a strong financial performance in 2025, driven by $102 million in distributions from the Manh Choh project. These funds were primarily used to pay down debt and address hedge obligations, leaving the company with $65 million in cash. While 2026 AISC is expected to rise to $2,200–$2,300 due to pre-stripping activities during the South Pit transition, management anticipates a highly profitable 2027. Guidance for 2027 forecasts 75,000–80,000 ounces of gold at cash costs of $1,200–$1,300 per ounce. The company is also advancing its Lucky Shot and Johnson Tract projects, with the latter benefiting from the federal FAST-41 permitting program. A transformative merger with Dolly Varden Silver is scheduled to close in late March 2024, creating Contango Silver and Gold and bolstering the balance sheet to over $100 million in cash. The merger adds the Kitsault project, where a 50,000-meter drill program is planned to support a future Preliminary Economic Assessment. Overall, Contango is positioning itself to be debt-free and hedge-free by early 2027, leveraging significant internal cash flow to fund its multi-district exploration and development strategy across Alaska and British Columbia.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Filing Risk Scores

Contango Silver & Gold: The Dilution Treadmill Powered by Crushing Derivative Weights

Full Earnings Call Transcript — Q4 • 2026-03-16

Romeo Maione: I've got with me today, Rick Van Nieuwenhuyse, CEO of Contango Ore and Mike Clark, the company's CFO, to discuss both 2025 year-end earnings and guidance for 2026, 2027, among other things, keep a broad list of topics today. Here's how today it's going to work or those of you in the room. I see at least, it looks like 40 but have never been in the 6ix webinar before, so this next part is mostly for you. I'll say that I have got some questions to the gentlemen just to get us started. The chat is interactive. here's a button in the middle bottom of your screen. If you pop up, you should be able to ask questions at any time during today's event.  We'll be trying to get as many as we can. We're trying to stick to about half an hour today. The recording, we believe, will be available about 4:00 p.m. Eastern Time. It will pop right in your inbox. It will aslo be available on 6ix' YouTube channel at that time.
Romeo Maione: Enough of the boring stuff out of me. I want to get right to the good stuff. And Mike, that means I will start with you. So you're on mute before you start. The cash distributions from the Peak Gold JV came in at $102 million for 2025. So I'd love if you could walk us through how that flows down to Contango's balance sheet and what the unrestricted cash position looks like today versus where you started the year. You're on mute, Mike, sorry?
J. Clark: Good morning, Romeo. Thanks for the question. So the way that we account for the Peak Gold JV is equity accounting because we own 30%. So what you see happening is we recognize 30% of the net income of the joint venture, which for '25 was $88.6 million. And so you see that go into our statement of operations with a corresponding increase to the investment in the Peak JV on the balance sheet. The $102 million distributions actually gets a direct increase to our cash with a corresponding reduction to the investment in Peak Gold. So what you would have seen at the beginning of the year was a balance of $60 million in that investment on the balance sheet, and that's been reduced to $47 million at the end of the year, which is the difference between $102 million and $88 million. To answer your second question, it's -- the cash increase from $20 million to start the year to $65 million at the end of the year, that was primarily driven by the equity investment -- equity raise we did in September. That's really what drove that. The profits from Manh Choh effectively funded our pay down of the debt for $37.5 million and that realized hedge losses of $63 million, which was incidentally about $100 million. So those funds more or less took care of paying down our debt.
Romeo Maione: Great. No, I appreciate that very much. Rick, I got one question about ASIC. I know it came in at about $1,616 per ounce sold in 2025, which is, I believe, almost right on guidance, like almost exactly on guidance. Now the 2026 number jumps to that $2,200 to $2,300 range. So what drives the increase? And how much of that is just the math on lower ounces versus cost inflation? Just what are we looking at there?
Rick Van Nieuwenhuyse: Yes. Obviously, we're pleased to be slightly under guidance. I think guidance was $1,625. So I think a good job there. In terms of next year -- or I should say, this year, 2026, guidance has always been higher because of the mine plan. And the mine plan is -- there's more stripping. We're switching from the North pit to the south pit. And because of that, a lot of the fleet sort of mine fleet is distracted they're doing a bunch of pre-stripping. So -- and that results -- when you're stripping waste, that's a higher all-in sustaining cost on across the board basis. So that's the main driver of the increased cost is you're doing a lot of pre-stripping in 2026.  And that's why you see the cost go down in 2027 because now you're just mining ore and in fact, a bunch of the fleet is going to go away, and that's just sort of the sequencing of the mine plan. So that's the big driver. Now a couple of things in terms of continued guidance going forward. That's based on the mine plan, and we're executing the mine plan, plus or minus where it's always where it was originally in terms of grade and things like that, grades and tons ounces delivered. Where we are starting to see inflation, in particular, wage -- more wage-related inflation. It's relatively small but we're certainly seeing that. And I think that's, in general, what the gold price still tells you, right? Gold price is going up, it's usually an indicator. The other thing, obviously, the recent developments related to the Iran war and the closing of the Strait of Hormuz, that's probably inflation -- potential inflation to come. But in rough numbers, 1/3 of our costs are related to transporting the ore from Manh Choh to Fort Knox. So if we see higher diesel prices as a result of a $200 spike in oil costs, which some people are talking about, if that happens, obviously, our costs are going to go up. So that's more of a cautionary thing. We don't have anything now. And obviously, we buy fuel in advance in Alaska, particularly and for this project, particularly. So a lot of it is locked in. I don't have any sort of specific numbers at this point. I noticed -- I just got back from traveling, and I was seeing in the Lower 48, a lot of really high costs for gas and diesel. Haven't seen that here interestingly enough. And again, I think that's that we buy a lot and gets barged up and it gets stored. So we have a lot of storage capacity in Alaska. And -- but I think it is something that we certainly expect to happen if the Iran situation continues.
Romeo Maione: Sure. Okay. No, makes sense. Appreciate it. Mike, on another quick accounting question. So I know you raised $50 million in September and another $50 million in February. With the credit facility already down to under $15 million, how should investors think about the capital structure from here, especially going into 2027 when distributions could be north of $165 million?
J. Clark: Yes. The debt is around just under $15 million right now. It's scheduled to be down to $10 million at the end of this year. The hedges are scheduled to be down from -- we'll pay down another -- deliver another 11,000 this year with 50,000 in the remainder of this year. Our objective still is to early deliver into those and potentially early pay off that debt. So either you're going to see the debt and hedges all kind of extinguished by the end of this year or in early '27. Now where -- how that kind of ties through to our cash is we have about $65 million to start the year. We've got exploration and development expenditures at Lucky Shot and Johnson Tract. So you're going to see us spend around $40 million on those projects. But what you should see is with the Manh Choh profits, with the expenditures on those projects, our cash should stay relatively flat for this year. So we should finish the year around, say, $60 million. But then going into '27 and '28, you're going to be debt-free, hedge-free and generating a significant amount of free cash flow for Manh Choh. So -- and we'll continue to put money into the Lucky Shot and Johnson Tract and Kitsault but you should still see us be able to fund all those planned expenditures while the cash is continuing to grow by a significant amount over those -- over the next couple of years. Rick, anything to add to that?
Rick Van Nieuwenhuyse: Yes, I was just going to add, obviously, once the merger is completed, which is coming up here very shortly and get -- Dolly Varden comes with a significant amount of cash. So Mike $60 million number is actually going to grow significantly over $100 million, so with the Dolly Varden merger. But we'll let all that kind of come out in the wash when we come out with new financials in -- well, for Q2, I guess.
Romeo Maione: Sounds good. Coming in with cash, always sounds nice to me. So there you go. I got one question that just came up by [ Irina Pierre. ] So the transition from the North pit to the South pit creates this kind of 4-month lag between mining and then getting credited. I love if you could just explain the mechanics for folks who might not be familiar with how Fort Knox does batch processing arrangements. So just give us some color on how that works.
Rick Van Nieuwenhuyse: Yes. So just the batch processing, basically, it's the middle month of every quarter. That's sort of the target plan. It can vary a week or 2 on either side of that, just depending on conditions, weather conditions and when everything is ready. And it is a little confusing when you look at things that are mined at Manh Choh and stockpiled at Manh Choh. So that's the 225,000 ounces of gold that's mined and stockpiled at Manh Choh. It's not processed yet. And so if you took 30% of that, I think you get 63,500. So what's going on here because you're saying you're going to produce between 40,000 and 45,000. And so that's the confusion. Now you take that ore and 4 months later, it gets transported and batch processed and sold and Mike gets a check for it, that takes 4 months. And so that's the difference between what's processed and paid for and sold versus what was mined in a particular quarter or a particular year at Manh Choh. So that's -- if you're looking at why is one number 30% of the total of mine is 225, it's actually a big year for mining ounces. So they don't get processed until 4 months later, which is obviously 2027 is the benefactor of that, which is part of why '27 is such a banner year. As we mentioned, we're doing a fair bit of pre-stripping on the South pit, while we're finishing up mining on the North pit. And it's one of those good news, bad news things. The good news is there's more ore in the North pit that we're finding at the bottom of the pit, and that's not uncommon. And it's a bench or 2. So it's not like it's not doubling the size or anything but it is more. And that delays moving all that equipment over to the south pit because once you're done with the North pit, we're filling it back up, right? That was part of the mine plan. That's part of that sequencing that we're talking about. So the bottom line, mined at Manh Choh the ounces that are sitting on a pad at Manh Choh are different, and there's a 4-month lag between the ounces that are processed and sold and Mike getting a check in, I say, roughly 4 months later.
Romeo Maione: Awesome. I appreciate that. Just the mechanics of it. I think it's helpful people to get an understanding of. But speaking of 2027, which I think we all know to expect to be a pretty sexy year at this point. Michael, I'll ask you, gold production guidance for '27 is 75,000, 80,000 ounces of cash cost of $1,200 to $1,300. So obviously, at today's spot prices, it's pretty wild margin. What are the assumptions baked into that number just so folks understand?
J. Clark: Yes. Yes. It's basically based on what's in the feasibility study and what's in the mine plan. With some updates for actual costs and the tonnes and grade that we're mining in front of us. But really, what's really driving that is what Rick talked about is that huge amount pre-strip done in '26, you're getting all the benefits in '27. Additionally to that, that grade is much higher in '27 and you're processing a lot more tonnes. So all those things drive to a much lower cash costs and all-in sustaining costs. And I think if you -- the remaining life of mine ASIC is about $1,700 when you look at all the remaining years of the mine. You just have one -- '26 is a higher year and '27 and '28 are much lower, but it all averages out. So -- yes, does that answer your question?
Romeo Maione: I think so. Yes, no, I appreciate it. I want to move over to Lucky Shot for a second. So Rick, I'll throw this to you. I know you're targeting 400,000 to 500,000 measured and indicated ounces to support a feasibility study with a production decision, I think, in 2027 is what you're targeting. So I got kind of two questions for you, which is, one, what are you seeing with early drill results? What are they telling you so far? And what is the classic contango DSO approach actually look like in practice at Lucky Shot?
Rick Van Nieuwenhuyse: Yes. So because Lucky Shot is a fully permitted mine site and -- technically is an operating mine, even though we're not producing gold, we're doing all the things that you would if you were -- or if you were mining from a mining standpoint, from a permitting standpoint, particularly. So we're -- we've got a roughly 18,000 meter drill program under well underway now. We are in the next few -- next month or so, we'll finish up the drilling in the West drift and then we'll bring the miners in and continue putting the underground development in. That will give us a bit of a breather to do some other work. And we're particularly excited about the KM vein, which I think we talked about on the last webinar, that's a new discovery. It's a vein at right angles to the one, the Lucky Shot vein that we've been drilling. And it's very high grade, it's averaging a couple of ounces per tonne. So we're going to put together a specific plan to continue to explore that. It's -- because it's at the right angles, it's sort of an awkward angle to drill from the infrastructure we have in place. So we're going to do some extent -- extending the drift and get underneath the vein because it's basically dipping back towards us. It's offset by the Lucky Shot fall, which, of course, we put the West drift in over to the Lucky Shot fall because we know the lucky Shot fall offsets the whole Lucky Shot vein system over to the Coleman, somewhere around 150 meters is what we're estimating. So that means the hang wall side on the Lucky Shot fault for the KM vein is quite a ways below it. So we got to drill that, and we want to get the infrastructure underneath on the footwall side of the Lucky Shot vein to get that going. So those are the sort of the modifying, adjusting the program as we're moving along here. Obviously, we're sort of targeting 10 to 15 grams for the Lucky Shot vein. And if we're hitting 50, 60 grams in the KM vein, well, guess which one I want to drill first, I mean it's not too hard. But we do need to get the extra infrastructure in place to do that. So -- and once we bring the miners back, that's certainly one of the top priorities that we'll do. The overall, the exploration program will take all the -- most of the year here, but that might actually go into a little bit into 2027. And then once we have all that information and data, we'll roll that into a feasibility level mine plan and transportation plan. We'll decide where the ore is going? Is it going up Fort Knox? Is it going over to Asia? Is it going to a tolling operation in BC, British Columbia. Those are all options that we're looking at. And that -- it will be -- I kind of refer to as feasibility light because it's -- because we're not building a mill in the tailing facility, that really is -- it basically just a mine plan and a transportation plan. And transportation is pretty simple, put rocks in a box. So and just decide where they're going. That's -- it's -- that's what we like about the DSO model. It is simple, and simple is good. That means that program this year will cost about $25 million. And so far, we're tracking pretty well on our drilling costs. We get the miners back and we'll see how the costs are going there. But I feel pretty comfortable about that budget. And then once we have all the data, and we're doing a completed feasibility study and lay out the infrastructure necessary to start mining. We think that's another $25 million to be spent in 2027, which would then get us in place to produce gold in 2028.
Romeo Maione: Awesome. Jumping around to Johnson Tract, I'm going to hit on every project here, so [indiscernible] I know just landed on the FAST-41 dashboard in January. So for anybody unfamiliar with that program, I know there's a lot of Canadians in the room. What does that mean for the permitting time line and what's happening on the ground at Johnson Tract this year?
Rick Van Nieuwenhuyse: Yes. So FAST-41, and I'll always point out, it doesn't mean FAST as in quick. It actually stands for Fixing America's Surface Transportation Act. So it was an act of Congress, recognizing that permitting roads and any infrastructure was taking far too long. And so that was the purpose of the permitting counsel and coming up with the FAST-41 program. And basically is a -- permitting council is a coordinating agency amongst the federal agencies that are involved in your project from a permitting standpoint. For us, that means the U.S. Army Corps of Engineers. They are the lead federal agency that's because they're the ones that have to issue sort of the driving permits of the project, which is a 404 permit to build the road connecting the mine site to the coast, the port site, and then the other thing is a port authorization. And that's a combination of U.S. Army Corps of Engineers, the Coast Guard, NOAA, National Marine Fisheries and then there's state permits involved as well. Now the state is participating in the process, but the state permits are actually listed on the FAST-41 dashboard. So the dashboard, what's referred to as a FAST-41 dashboard is a website that has all the projects that are covered under the program. You can go there, so you can track the process of delivery of the information to the agencies, review. And then when the document is determined to be complete is the terminology, then it goes on the dashboard. And so we submit projects or plans, they get reviewed and authorized by a variety of agencies. And again, ours are U.S. Army Corps of Engineers, the Park Service because we're doing the road building and the port will be on -- in park -- on Park Service land, NOAA, NIMs, National Marine Fisheries and then [indiscernible] like are involved, Coast Guard. So the nice thing about -- what we like about the process is it's transparent. It's all out there for everybody to understand what's being review, what plans are being reviewed and what the time line is. And this is the important thing from our standpoint is work with all the agencies, you're agreeing on a time line to get your permits, your final permits from the federal agencies. And that is on the dashboard, it's March 2028. It's actually a date, I think, on there, but the only one I remember is March. And then you work backwards from there. So everybody has a job to do and an expectation that it gets done so that the next thing that needs to happen, the work can get done to get out in the field, the work can be reviewed properly and organized and kept on task. And that's the important thing from our standpoint. So to get our permits by March 2028.
Romeo Maione: Great. No, I appreciate that. And now one last project. So I will say, assuming the merger with Dolly Varden goes through, which I know you and Mike can't say so, but I will say probably looks pretty good. I'd love if you could outline the exploration plans that gets off this year.
Rick Van Nieuwenhuyse: Yes. So first thing on the agenda is an updated mineral resource estimate by the end of Q2 of this year. That base incorporates about 200,000 meters of drilling that Dolly Varden has done over the last 4 -- 3, 4 years. So it's a substantial mineral resource update. From there, we'll outline what our exploration plans for this year. We know we're going to spend about USD 25 million in expenditures. And that will be about 50,000 meters of drilling. Now where that 50,000 meters is going to be? I don't know exactly, but I'm going to -- I'll take a bit of a gas or wild guidance and say, 1/3 to 3/4 of it is going to be infill drilling because what we want to do is do a preliminary economic assessment under Canadian provenience or initial assessment under U.S. parlance, say, here's the plan, lay out a plan for developing the Kitsault assets. There's 5 deposits between Torbrit and Dolly Varden and then going up both Homestake Silver and Homestake Ridge. So we want to lay out an overall development plan for that. And so a good part of the drilling is going to be directed at infill expansion. There's obviously some high-grade holes that we add another 2 or 3 holes on that can continue to expand the known resource. And as long we're not getting too deep, we kind of want to stay focused on developing a 10-year plan for the assets. And then I'd say, 1/4 to 1/3 of the drilling would be for greenfield exploration upside, new targets. There's a multitude of new targets to evaluate very, very large land position in the -- it's the southern triangle of the Golden Triangle. So it's good hunting ground.
Romeo Maione: Certainly lots to explore here. It's exciting. I know I'm going to kind of give a wrap-up question before I get into all the stuff that came in over e-mail and the chat, which is pretty active. So I'll get to you guys in a second. But I'll say, with the vote, I believe, tomorrow on the merger and expected to close towards late March, once you're operating as Contango Silver and Gold, which I believe is the new name, how does the combined portfolio change the way you think about capital allocation across all the projects?
Rick Van Nieuwenhuyse: Mike, do you want to start on this one, and I'll -- I mean you talk about from a financial standpoint...
J. Clark: It doesn't change much for us because we already have our plans with Lucky Shot and Johnson Track. We know we're more or less fully funded to deliver on those plans. Kitsault is just kind of the fourth leg of the chair, I guess, coming into the company. I think there's a little more work for us to do on the MRE and the drilling this year to kind of decide what our plans will be for '27 and '28. So I still think there's plenty of cash available to fund that internally. But we'll need to do more work to get there. But I don't think much changes. We're going to close this merger at the end of March. We're going to have over $100 million in the bank. We have 33 million shares outstanding. We're nearly debt-free and hedge free. So we're just -- we're going to be in a good position to deliver on all these assets and be done with these hedges on the debt. Rick, is there anything you want to add to that?
Rick Van Nieuwenhuyse: Yes. I was just going to just emphasize that we still want to stay focused on getting out from underneath the hedges. I think we're a long ways there. I think if we deliver in this current batch and the next batch, we'll be sitting in a really good position for the future. And the market right now, and I think the war in Iran has the market a little bit freaked out. And naturally, people go to the dollar when there's uncertainty going around the world, and that's certainly what we have right now and gold is priced in U.S. dollars. And so strength in the dollar, weaken the gold. It's a little frustrating to see the equities all get punished as much as they have, but it's sort of a risk-off environment. So just got to muscle through. The assets are still there, the gold and the silver is in the ground. And as a former associate of mine said it's not steam, so it's not going away.
Romeo Maione: There you go. Well, I appreciate because I had what the 4-letter word is going on with the markets question that we can now skip because I think that gives some color for people in the audience. Now there's one, 4 people asked this question. I don't think you can answer it, but I'm a good soldier, so I'm going to ask it anyway. And Rick, that is people are looking for an update on acquisition of a permitted mill.
Rick Van Nieuwenhuyse: Yes. Stay tuned. We're working on a number of opportunities. And we are going to be patient. We're not trying to rush into anything here. We think there are a couple of good opportunities, 2 or 3 different opportunities we're taking a look at. So just stay tuned. We're definitely working on it.
Romeo Maione: Perfect. I had one. There's a couple of people asking just a question generally, and I think this is for folks unclear on how mining works. People know that you mine a lot more than you actually produce at Manh Choh. So just some confusion there. I love if you could give some color to what those numbers mean and why that looks like that to investors watching.
Rick Van Nieuwenhuyse: I'm going to guess it's this difference between how much is mined in a year versus how much is processed in the year and the 4-month lag that we talked about. So -- and like I said, I had some inbound e-mails this morning asking that, I think pretty much that same question. Looking at the guidance, you're going to produce 225 ounces of gold is what the question was, well, why isn't that 30% of that 62,500 ounces. And I said, well, yes, it's mined. It's not produced. It's actually mined and sitting on a pad. And so -- and we have this -- you have to build a pad up. And then while you're building the pad up, you're transporting it and building another pad up at Fort Knox. And then by the time it actually gets processed in the middle quarter -- middle month or every quarter, and then again, Mike getting paid for it. So it gets processed, gets produced in dore bars at Fort Knox, those go to the refinery, they produce 99.99% gold. And they sell that 99.99% gold, Mike eventually gets a check. And so that's that 4 months. All those things have to happen, that's that 4-month lag period.
Romeo Maione: There's nothing I like more than days when Mike gets a check. Those are the better days. So I'm jumping into questions from the chat today. One, we've kind of already gone over, but I'd love just a quick recap. I think it's helpful. David says he's a Dolly Varden shareholder. He's looking forward to the merger. What's the update? So what's the time line from here? I guess, the best way to answer.
Rick Van Nieuwenhuyse: Mike, you have that one.
J. Clark: Sure. Yes. The vote for both of us is tomorrow morning at 10:00 a.m. Pacific. We expect that to be successful. And then the B.C. courts need to approve it on March 26, and that's when it will close. So you will see Q1 consolidated between the 2 entities. And then we'll plan to give more guidance in April on plans moving forward. Just need to get there first. We don't want to get ahead of ourselves. But yes, I don't know what else I can add to that. But yes, everything is looking great.
Rick Van Nieuwenhuyse: I'll just say we will press release the results of the vote and when the court approves. So we'll make sure shareholders know all these steps are actually -- they've happened and when the timing right.
J. Clark: So you'll see news tomorrow after the market.
Romeo Maione: Great. So stay tuned folks on the chat. Jan has a question -- one of those impossible questions, but I'm still interested to hear your perspective on it. So any expectations on a rerating of the stock anytime soon?
Rick Van Nieuwenhuyse: I mean, I would -- there's a couple of different triggers here that I would think would help rerate the stock because as we just talked about, you've had a $200 decrease in the gold price and which is de minimis in terms of percentage and yet the equities are all off 10-plus percent. So it's a risk off -- war is a risk-off environment. I mean that's all you can say. I can't -- it's -- we're not -- the $5,000 gold price is -- we're going to make a lot of money at $5,000 gold. If you just do quick math, it's not hard to figure out. This is a very, very profitable company, and we've got lots of more ounces of gold that are being developed. We've got the cash to develop them and the cash flow to continue to advance them. So yes, short answer, I think there's a hell of a rerate story here on a number of different fronts. The fact that I don't think we get a lot of value. I think we're being valued fundamentally on our cash flow from Manh Choh, which will dramatically increase when we stop delivering the hedges when the hedges are gone, and that's imminent. I think there's a lot of value that we can add that we should be able to capture with -- as we advance Lucky Shot. And I think there's a lot of cash we can -- or a lot of value we can add as we continue to advance Johnson Track. And Kitsault, look, I mean, we're going to continue to put out these banger holes that are always among the top 10 intersections worldwide. So we're not going to stop doing any of these things, and we have the money to do them all. So yes, I think a rerate is in the cards. And I think this -- the merger should start to -- obviously, we're going to do a lot of marketing on what this combined company is and how strong it is as an explorer -- as a producer, developer and explorer.
Romeo Maione: Awesome.
Rick Van Nieuwenhuyse: We've got 4 big districts to continue this effort. So I think we're all pretty excited about what we can accomplish here.
Romeo Maione: Awesome. Lots more to come. I know we've hit the half-hour mark. There's 2 more quick questions. I'm just going to throw those. One, Rick, I'll throw it to you and then one, I think, is for you, Mike, to close this off. Rick, Kontakt from the chat ask, what's the plan with the life of mine at Manh Choh? Are Kinross and Contango planning to add a few years to it? Where does that stand right now?
Rick Van Nieuwenhuyse: Yes. Short answer is, yes, we'd love to add a few years. We're spending about $5 million on exploration this year. And I'll say that's near-mine exploration. It's not looking at new stuff way far away. So I'd say there's good potential for that for extending the mine life a year or 2. And the one thing I'll point out is, and we said this before that the feasibility study was done at $1,400 gold. So -- and Kinross are pretty sharp operators. They know the gold price is $5,000. We're sticking to the mine plan. We're mining to the mine plan in terms of grade tonne and ounces delivered to the mill. But we're not throwing the other stuff away. It's in a great big stockpile. And when you get done with the mine plan, the feasibility level mine plan, we'll take a look at how much of that material should -- that pays for going to -- being processed at the Fort Knox mill at a $5,000 gold price. Obviously, it's not something you want to plan on until and give guidance on now because we don't know in 3 years we'll have $5,000 gold. But in 3 years, and probably before that, say, 2, 3 years here, we'll have that -- we'll make that decision. It's just like doing a feasibility study all over again on this mineralized waste material. It's categorized as waste, but we know it's got a lot of gold in it. It's low grade. So we got to -- we're not stockpiling high grade. We get high grade up to the Fort Knox mill [indiscernible]. But I see that's an upside and then just the new exploration, finding more ore around the edges, things like that, yes.
Romeo Maione: Perfect. And just to answer -- sorry, 2 of the questions that just came in at the same time. What is the current according to the current feasibility Manh Choh mine life? So when will you start looking at the rest of that material?
Rick Van Nieuwenhuyse: Mine life goes to 2029. And so then I'd say it's probably second half of 2028 when you start putting some numbers to pace.
Romeo Maione: I think that answered both those last questions that came in. Mike, last one for you from Subhas. Are you preparing your 2027 budget consolidating numbers from Dolly Varden already? Is that how you're thinking about preparation for 2027?
J. Clark: Yes, I have a '26 and '27. There's a little bit more refining to do, but we do have the numbers. And that's going to be a project over the next couple of weeks. But we've got high-level numbers. We just need to get more into the details and make sure we're not missing something and we're getting rid of some of the redundancies. But yes, we have a budget. I just don't know what we're going to spend in '27. I know what we're going to spend in '26. I just don't know where, but it doesn't really matter because it's flow through. But in '27, we'll put a placeholder for some work. We just don't have that yet, and we probably won't have that until the end of the year for Dolly Varden. But I know more or less what we're going to spend at Lucky Shot, Johnson Track and what's going to come in from Manh Choh for the next 3 years.
Rick Van Nieuwenhuyse: Yes. A key driver for 2027 for Kitsault is going to be that the PEA or the initial assessment that we're going to get done.
Romeo Maione: Okay. And there is one question that came in just at the end that I'll sneak in, but we'll call it the last question for today. Wesley say he's heard Kinross has problems with their Fort Knox Mill Foundation. He wants to know does this have the potential to impair processing of Manh Choh ore?
Rick Van Nieuwenhuyse: I haven't heard of any mill problem, foundation mill problems or anything like that. I mean that mill has been operating for 30 years. So those are things that usually show up early in the plan. They did have the belt fire, conveyor belt fire that's -- there was a workaround for Manh Choh ore with just using rented crushers because our ore is pretty simple to work with. But yes, I'm not aware of any foundational issues.
Romeo Maione: Awesome. I'll close it there then. Rick, Mike, thanks so much for letting me grill even going 5 minutes over, which is good for us actually. So that's not terrible. But thank you so much. And I know vote is tomorrow, so everybody stay tuned for more news from Contango as we go forward. But gentlemen, thanks so much. And for everybody in the audience, thanks so much for joining us.
Rick Van Nieuwenhuyse: Thank you.
Romeo Maione: Cheers, everyone.