Title: "Contango Offers the Most Leverage to Gold on a Per-Share Basis" explains CEO Rick Van Nieuwenhuyse
Show: Mining Stock Education (host Bill Powers) — MiningStockEducation.com (YouTube); sponsored company update
Guest: Rick Van Nieuwenhuyse (CEO & director, Contango Silver and Gold — NYSE American / TSX: CTG)
Date: 2026-SEP-14
URL: https://youtu.be/6gE-sZSGHhQ
Length: 31:53
Note: Auto-caption transcript; fillers (um/uh/you know) and stutters removed, wording otherwise verbatim.
      Contango is a show sponsor — this is a paid company update, and the guest is talking his own book.
      Caption garbles left as-is in the text below — map them when reading: "Rick Van Newuenhouse" = Rick Van Nieuwenhuyse;
      "Contango or in Dollyard and Silver" = Contango ORE and Dolly Varden Silver; "Mancho / Mano / Muncho / Mono / Mow" =
      Manh Choh (30% Contango / 70% Kinross JV); "Kin Ross" = Kinross Gold; "Keywood" = Kiewit (contractor);
      "pre-tripping" = pre-stripping; "bore" = ore; "Kitsalt / Kitsol / kits salt / Kitall / Kitsel / Kids Salt" = Kitsault Valley (BC);
      "Dolly Vardarden / Dollyard" = Dolly Varden; "Torit" = Torbrit; "home stake" = Homestake Ridge;
      "Johnson track / Johnson tracted" = Johnson Tract; "fast 41" = FAST-41; "mind plan" = mine plan;
      "Lan curve" = Lassonde curve; "granodite" = granodiorite; "dayight porefree" = dacite porphyry;
      "acidgenerating" = acid-generating; "tailoring facility" = tailings facility; "heart's log" = hard slog;
      "MPV" = NPV; "MRE / M" = mineral resource estimate; "hedge free ... heree ... debtree" = hedge-free / debt-free;
      "contangoor.com / contentor.com" = contangoore.com; "ofund" = of (a hundred) — garbled.

(00:02) You are listening to mining stock education. >> We only have 33 million shares outstanding. I challenge you to find another junior producing company that only has 33 million shares outstanding. If you want leverage to gold on a per share basis, I don't think anybody really comes close to Contango with only [music] 33 million shares outstanding.
(00:26)  gold price moves or the silver price moves, you get the best leverage on a per share basis with Contango. >> I'm Bill Powers. It's Mining Stock Education. Thank you for tuning in. Today's show is a sponsor update with Contango. Silver and Gold trades on the big board in New York and in Toronto under CTG. Just by way of reminder, it's a merger between Contango or in Dollyard and Silver.
(00:52)  and CEO and director Rick Van Newuenhouse joins me again to talk through the projects. Rick, you mentioned to me off air that this is now an execution story. You're targeting growth from about 60,000 gold equivalent ounces to about 200,000 ounces per year production plus 5 million ounces of silver production annually. That's your 5-year plan.
(01:12)  Let's start with your producing flagship the Mancho JV that you have with Kin Ross. Can you please provide an update on this project? >> Sure. Good to see you again, Bill. Yeah, we said this year was really an execution year starting with putting the companies together and putting the teams together and I think we've delivered on that.
(01:34)  But starting with Mano and the production there, we always guided that this was going to be the low production year for the overall mine life because of the transition from north pit to the main pit or south pit. That's now substantially completed. They're still doing more stripping on the main pit.
(01:58)  So we'll see overall this year higher than average cost and lower than average production. So we're guiding between 40 45,000 ounces of gold. That's our 30% share. And then our all-in sustaining costs have been higher than average. On average we're looking at 1,600 but we're well above that for the first half of the year, in the I think 26 $2,700 range.
(02:24) But that'll come down as we get that pre-tripping out of the way. Send a bunch of the equipment home. This is all contract mining with Keywood is the main contractor. So the second half of the year we're in the middle of the third campaign for the year. That's well underway.
(02:47)  We'll probably be processing throughout the month of September and probably a little bit into October. And again we're guiding towards a total of 40 45,000 ounces of production. So we'll be reporting on that of course with our Q3 results. But I think the other big change at Muncho is as we're getting into that heavy sulfide higher grade sulfide ore in the main pit they've added an oxygen plant to help sparge — rather than just sparge the CIL tanks with air they're
(03:26) sparging them with oxygen which just helps the reaction take place quicker and more efficiently with the cyanidation of the gold in the ore. And so that oxygen plant's completed and has been tested and is performing to plan.
(03:47)  So that's all good news for that higher grade sulfide ore in the South Pit, particularly as we get into next year where we're guiding towards 75,000 ounces of gold production and lower cash cost because again higher grades and we've substantially taken care of most of that pre-strip. >> Your reserve report for Mano, is your production results matching what you anticipated with your reserve reports going into the production? >> Yeah, I think in terms of ore ounces produced, yes, >> and the ore body itself.
(04:26) >> Yeah, I was going to say the ore body itself, and this is not untypical. We see more tons at lower grade. And we're not talking a huge differential here, but in terms of when you do the detail drilling, the inpit drilling versus the model, we're seeing a slightly lower grade and more tons, but same number of ounces.
(04:54)  And so that's not untypical, certainly in a high-grade deposit, because you tend to want to restrict that high grade in your modeling. And so when we're seeing that more detailed drilling, inpit drilling, that net result is same number of ounces but spread over a little more tons.
(05:14) >> Are there any indicators that there's expansion potential beyond your existing life of mine? >> Well, certainly in the north pit, we mined two levels deeper than planned. So, there was more ore in the pit than the model predicted. And again we did that detailed [clears throat] inpit drilling, drilling the drill and blast pattern.
(05:36)  We mined two more levels of ore in the north pit. So I think we're going to see the same thing in the main pit and a little bit around the edges, that sort of thing. And that was something that also, when you have sort of unplanned extra ounces, you tend to push the things the other end down the road, right? It's like a train when you have ounces, particularly when we talk about this DSO model, you have to remember that when you mine a ton of bore it's going to be 6
(06:11) weeks before it sees the beginning part of the transportation plan up to the stockpile at Fort Knox. And so there's that delay there. And so, yeah, we certainly have seen some more ounces deeper and around the edges. And then, of course, we're doing about $5 million of exploration work on the rest of the property.
(06:32)  And so we're hopeful that that will yield some positive results as well. >> You mentioned DSO, just for those that don't know, that's direct ship ore where Contango basically mines it, puts it in a truck, and sends it to Kin Ross' Fort Knox Mill in order to be processed. >> Yeah, it's a little different approach than the typical build your own mill and tailings facility at site and of course was the reason we were able to get things into production quickly and for a relatively small amount of capital
(07:03) because we took advantage of that existing mill and tailings facility and power plant that's at Fort Knox and has been operating for 30 years. So it was definitely a real advantage and of course we've adopted that as sort of our modus operandi, if you will, with our other projects which we'll talk about here shortly, but Lucky Shot, Johnson Tract and Kitsalt all fit that model of being high-grade enough to be able to afford that transportation cost to an existing already permitted mill. >> So you
(07:37) actually are proving the DSO model works. But I noticed this over the last 18 months that especially in a gold bull market, it's becoming more trendy for companies that are development stage to take a large bulk sample, send it off, tell the market we're going to get cash from this, and then just throw it out as we're looking to do DSO or direct ship ore.
(07:59)  So my question in that regard is because your business model is built around multiple potential DSO projects, what makes a contender versus a pretender in terms of what makes a DSO actually potentially feasible? >> It [clears throat] really is about grade and delivering grade. Not just a bulk sample, but a mine plan.
(08:20)  And so for example at Lucky Shot we've been busy for going on a year here putting underground tunnels in place to carry out the exploration effort, underground drilling effort, to do the detail drilling to come up with a mine plan. So we've also done some surface work this year.
(08:40) We had a summer program between June and August to drill about 6,000, just shy of 6,000 meters there from the surface. And then now we're back underground. I think the drill actually starts turning tomorrow back underground, while we've been doing more tunneling work and getting those underground exploration tunnels ready for the drill.
(09:07)  So yeah, it's putting together a mind plan that can consistently deliver, again not just a bulk sample but a 5 to 10 year mine plan of delivering ore — in the case of Lucky Shot we're planning on something that's going to deliver ore grades of 10 to 12 gram per ton. So that's the objective.
(09:28)  We've outlined at Lucky Shot a small resource. It's about 110,000 ounces at 14 g. That's a resource grade. And we've got a total of about 20,000 meters of drilling, most of it underground, that will complete between now and February of 2027. And with that we're planning on outlining a resource of 400 to 500,000 ounces of gold.
(09:59)  And then we'll subset that into — these are approximate numbers but something in the neighborhood of 250,000 ounces of reserves that again meets that 10 to 12 g minable grade criteria, and that's a grade that's more than adequate to be able to transport to, say, a mill at Fort Knox just like we've done with Mono and process the ore there.
(10:28)  The other thing about Lucky Shot is it's fully permitted, and so I think that's another criteria that one has to look at when you're evaluating opportunities and particularly these DSO opportunities: is the mine plan fully permitted? And that's the case with Lucky Shot. So once we define the resource and then complete the feasibility study, which I refer to as feasibility light because it is basically just a mine plan and a transportation plan and then a tolling arrangement with say a
(11:00) Fort Knox — and we're looking at Fort Knox but we're also looking at two other opportunities that are alternatives, and obviously the feasibility study will tell us which is the best plan. >> And Lucky Shot you own 100%. Okay. >> 100%. And we purchased one of the large royalties on the property.
(11:24)  So that's a nice package there. We've got all the land we need from a development standpoint. We bought an underlying owner out who had a mill building and a truck shop and a bunk house. So we're pretty well set up to start mining. >> Your next project in your pipeline is the Johnson tract.
(11:48)  This is part of the fast 41 program in the US. So as you talk about Johnson track, could you let me know: the fast 41 program that's supposed to speed up and coordinate all the agencies so that you can get your permits a little quicker — is that working as marketed? >> It is. And I have to say there's been a lot of talk about permitting reform, which we certainly need to happen.
(12:11)  But the fast 41 program — and this is something that started under the Obama administration, so it wasn't started by the Trump administration. Trump administration is using it to advance critical metals more quickly. And Johnson Track fits that mold and we're looking at copper, zinc, gold and silver, all critical metals.
(12:34)  And so we started the program, I guess we've been in about close to a year. We're basically in the data collection portion of the program, and what fast 41 does in a very transparent manner: puts all the reports and documents that we're supposed to put together and that the agencies are supposed to review in preparation for initiating the permitting process.
(13:00)  That's all on the dashboard. So people can go and see, okay, well there's this study that needs to be done, and then it holds our feet to the fire too, but it holds the agency's feet to the fire. If we submit the document then they have 30 or 60 days, kind of the typical timelines, to review documents and say that they're complete, or if they're not complete tell us why they're not complete, and then there's another period.
(13:27)  So it just keeps that process moving as it was intended. I mean, this is all written in statute and regulations. We just haven't been following it. Agencies haven't been following it. And so this puts it all out there and makes people responsible for getting their jobs done, ourselves included.
(13:48)  So my caution is that it's up to the executive branch to use it or not. And so that's why we still need permitting reform. But I think in a nutshell, permitting reform could just be — just do what fast 41 is actually doing. But we need that in law from Congress, not just at the whim of the executive.
(14:10) >> Yeah, that's a great point. And then in Johnson, production in three years, if I'm recalling correctly, that's your approximate timeline. >> Well, we're looking about 2030 31 for actually producing metal. Our process here this year: we finished the road between camp and the portal site.
(14:34)  We'll begin next year building the tunnel to do the feasibility level drilling and analysis that we would need to do. Basically exactly what we're doing at Lucky Shot this year we'll be doing at Johnson Track in the next two years. And of course during that time where we're gathering all the information to support a feasibility study, we're permitting the road down to the coast and the barge landing facility to transport the ore to an existing mill.
(15:01) And so that's the port portion of the program that's under fast 41. We're expecting our permits — and again this is on the dashboard so you can go see this — it says by May of 2028 we'll have our permits in hand to begin construction of the road and the barge landing facility.
(15:22)  So that's the plan. And then it would be roughly a year to get the road and barge landing facility done and a year to get the development work done to support the mining part of the process. So technically we're mining, but we're not necessarily producing until we actually direct ship the ore to a processing facility.
(15:46)  And of course, that's the other thing we're working on with respect to Johnson Track: identifying and securing a mill to process the ore. This is a sulfide ore; it'll produce copper, lead, and zinc concentrates. Good, really good quality concentrates, as well as a precious metal concentrate. And so we're looking at acquiring a mill that can support processing that ore.
(16:16)  And that's where the dovetail is really with the Kitsalt project, which is located in northern British Columbia. It also is a sulfide deposit and it'll produce the same copper, lead and zinc precious metal concentrate. So we see synergies between Kitsol and Johnson track to be able to process them at the same facility.
(16:38)  So we're in active discussions now to acquire a mill and process both Johnson track and kits at that location. >> Are there any internal discussions within your company looking at what it would cost to buy the land and permit a mill and build it yourself relative to acquiring one? >> Short answer is yes.
(16:59)  That is one of the options that we're looking at. And there are a few opportunities where there's an existing already permitted mill site that might fit the bill. >> Okay. Obviously, you can't share with the public at this point anything further. >> Yeah, we're under CA and confidentiality and that, but we're working on it.
(17:23) We're working on a number of different options. And we want to make these decisions quickly. There's a lot of due diligence required, and so we'll complete that process and I'm hopeful that we can get something done this year or early next year.
(17:45) >> Since we talked a lot about permitting with Johnson tracted, is the situation in Alaska and the United States in regards to permitting affected by some of the negative headlines that I've seen out of like northern BC or even the Yukon with Victoria Gold's Eagle mine, their tailings dam collapse? Does any of that affect permitting in Alaska? >> I mean, look, the regulators look at what went wrong sort of things and they want to make sure they're doing their due
(18:16) diligence in terms of specific projects. But in fact, that's actually what makes our projects and our approach, this direct shipping ore approach, work so well from a regulatory standpoint: we're not building a tailings facility. And that's the thing that's the most controversial.
(18:34)  So if you have a tailings facility that's already permitted and has already been demonstrated to operate correctly, then that actually makes their job a lot easier. And of course the Eagle situation, it wasn't a tailings facility. It was a heap leach that failed. And so you have to be kind of specific; if you're a regulator they want to be looking at the things that — here's what went right and here's what went wrong. So but that is one of the
(19:05) simple things about our approach: what we're permitting at Lucky Shot and at Johnson Track and at Kitsalt are basically quarry operations. It's an underground or an open pit. In the case of Mano, it's an open pit, but Lucky Shot, Johnson Track, and Kitsol, we envision those three as underground mines.
(19:27)  And so from a regulatory standpoint, it's not too complicated. At Lucky Shot, a regulator is going to want to understand what are you going to do with the water? You're going to have water. Is it acid generating? And in the case of Lucky Shot, our host rock for the mineralization is a granodite.
(19:48)  So it has no mineralization in it. There's very low sulfide in the ore itself. Same with Johnson track. Our underground development work is 100% in a non acidgenerating volcanic rock. It's a dayight porefree. So it's a nice rock to drill and blast. It has no mineralization in it. So from a water quality standpoint, those are the kind of — if you develop it that way, you make the regulator's job a lot easier.
(20:19)  Now, we could have developed it and put the underground workings in the mineralized sulfide ore body. That'd be closer to where the ore body is, but you create a lot more permitting headaches with regards to water quality. So a lot of it's just how you approach a project.
(20:36)  And sometimes you spend a little more money up front to get something done that has a little less environmental impact long term. And that's something that's part of the calculus now in today's world that wasn't part of the calculus 50 years ago. >> And as you've mentioned previously, even on this show, you are kind of circumventing the valley of death that occurs in that second trough in the Lan curve where companies never actually rise out into production.
(21:03)  You're circumventing that with this DSO model. >> Yeah. If you can get things permitted quickly because you have a simple project to permit, because you're not issuing a lot of permits, you're basically developing a quarry site; if you make sure the water quality is good, then you're generally in pretty good shape.
(21:25)  You're not generating acid with anything that you're mining. You're taking the rock that is potentially acid generating, the sulfide ore, you're taking it somewhere else to process. So from that site's perspective and from a regulatory standpoint it makes it relatively straightforward. But yeah, the problem with trying to permit all those things — a tailoring facility, a mill facility and a power plant to run all that — is one, it requires a lot of permits, which means it requires a
(21:58) lot of baseline information, and that takes time to collect. And then while you're doing all that and permitting that — and typically we've seen it takes 5 to 10 years to permit a full-on project with all those components — in the time it takes, if it takes between 5 and 10 years to do that, what's happened to the market, what's happened to the metal prices? You have to update your feasibility study. That's what makes it tough. That's what makes
(22:30) the Lan curve, that second valley of death as it's been referred to, that's what makes it difficult. It's just a long heart's log. >> Kit, which we are referencing. This is in northern BC as you said. This is a project of projects. It's silver dominant. So when you're forecasting in 5 years 5 million ounces of silver annually potential production, it's coming out of Kitsalt Valley, right? >> Yeah.
(22:58)  Yeah. Just geologically our other deposits just don't have a lot of silver and that's why we had our eye on Kitsalt and we were very pleased with getting the transaction done and putting the teams together. We had planned to drill 40,000 meters of drilling, mostly infill drilling, at Kitsalt this year, and we got 50,000, and that's just because the team came together and we just got more efficiencies out of the program. So we'll have over 50,000 meters of new drilling. Now we're completing
(23:31) a mineral resource estimate based on all the previous drilling before this year's drilling. It's taken a little longer than planned, mainly because of software and making old software and new software speak to each other. I won't get into the details, but it definitely is taking a little longer than we had planned.
(23:54)  But we'll get that out here in the next couple of weeks and it'll demonstrate mostly the improvement of taking inferred resources and improving them from a quality standpoint up to measured indicated. And then of course we'll get that out in the next few weeks, but then when we get all the assays back from this year's 50,000 meters of drilling, we'll incorporate that, and that's both infill and continued expansion.
(24:23)  So we're going to put together a pretty healthy silver resource here. And that's the thing that is unique about Kitsalt: it's mostly silver. There's probably 10% value in the base metals, and there's two main parts of the district that are developed right now.
(24:44)  And that's around [snorts] the Dolly Vardarden, the old Dolly Varden mine. There's a number of other silver lead zinc deposits — silver-centric lead zinc deposits — Wolf and Dolly Varden and Kitsault, Torbrit; those are the silver dominant part of the system. And then up to the north at the Homestake and Homestake Silver, there's more gold up there, so that's more of a 50/50 relationship between gold and silver.
(25:18)  So we've done a lot of drilling at both projects. We've identified some new targets that we'll be reporting on when we start releasing results here in the next couple of weeks. There'll be a lot of flow over the next 3 4 months here from all the drilling that we've completed at Lucky Shot and Kitsalt, and of course on Johnson track.
(25:43)  We've completed that road. So we've demonstrated that we're building things now. We're not just drilling holes. We've got a whole crew that are building roads and we're underground tunneling. So we're definitely making that transition from explorer to developer to producer.
(26:03) >> Could you go over the balance sheet before you go, Rick? Where do you sit? You removed the hedges, but I think you turned some of that into debt, right? So, where does that sit? >> Yes. So we're sitting at around $47 million of debt. And next year is our big banner year of production at Mancho.
(26:23)  We're using $3,700 gold price to do our planning with. So we're being on the conservative end of the spectrum, I think. Certainly at a $4,000 gold price we'll be in excess ofund what about 160 $70 million of free cash flow next year, and obviously if the gold price goes up we'll make more money.
(26:46)  So I think we're going to probably end the year in the neighborhood of $50 million after doing all of our programs this year. And we've spent close to 90 between the four projects, but Mano is making money and the others are spending it. >> And so basically with that cash you expect to earn next year, that free cash flow, you're going to put that in the order first to Lucky Shot, then to Johnson Track, and then Kitall Valley.
(27:14) Is that your order of prioritization of how you spend that money? >> Short answer is yes. I guess paying off the debt — we'll be debtree by the end of next year. That's a priority for us. We want to be hedge free and we got heree and now we want to be debtree.
(27:36)  And we'll accomplish that next year. We'll get a feasibility study done early in the second half of next year — that's what our plan is for Lucky Shot. We'll be underground drilling and blasting at the Johnson track project, creating the tunnel so that we can then the following year do the drilling.
(28:03)  And then at Kitsalt, we had five drill rigs turning this year. We'll probably only have about two next year. But we're going to turn our attention to building, or I should say upgrading, the existing road at Kitsalt that goes from the shoreline, from Tidewater, up to the Torit mine.
(28:23) That road's established. We just want to reestablish it. Hasn't been used in probably almost 50 years. But the fact is that it's there, and there's some permitting we need to do to upgrade it, and we're working on that now. So that would be part of next year's plan for Kids Salt.
(28:42) >> So before you go the last question will be regarding how to value your company right now. In my last interview with Sean, your president, it was referenced next year's forecasted cash flow relative to your market cap. And there was some feedback that said perhaps we should value Contango ore on a price to earnings ratio.
(29:02)  That's not the best way to look at the company. Would you agree with that, or how should investors look at your company in terms of valuation? >> I think we kind of fit more of a — we're a development stage company. With our Mow operation, from our perspective, we're more like a royalty company. Kin Ross does all the work and we get a dividend check once a quarter from the operation, and to date they've been spot on.
(29:28)  We've guided you how much cash flow we're going to generate and we've met that every year. So that's how I would view it. I'd say it's kind of like — I think Lucky Shot could be viewed as its own little junior company, and what valuation would that have if you didn't need to finance it? And that's the thing about our model: we're generating cash flow with Mono and we can finance the advancement of Lucky Shot, Johnson Track and Kitsel.
(29:59) Johnson Track has an initial assessment, which is the same as a preliminary economic assessment in Canadian jargon. At $4,000 gold, it's over $600 million MPV. So what's that worth in a junior company that's self-funded? That's how I sort of think about this. And the same with Kitsalt.
(30:23)  Kitsalt — we have the MRE that's going to be updated, but the M that exists today is 65 million ounces of silver. Well, it's going to grow with all the drilling we've done, and we haven't diluted the shareholders as a result of that. We only have 33 million shares outstanding. I challenge you to find another junior producing company that only has 33 million shares outstanding.
(30:48)  And most of them that are in that category have three or four or 500 million shares outstanding. So if you want leverage to gold on a per share basis, I don't think anybody really comes close to Contango with only 33 million shares outstanding. So gold price moves or the silver price moves,
(31:09)  you get the best leverage on a per share basis with Contango. >> Contango ore is a show sponsor. As I said at the outset, the website to learn more is contangoor.com, which I will link in the show notes, and the ticker symbol is very simple: CTG, either in Toronto or New York on the big boards. Rick, thank you for this update. >> Oh, great.
(31:29)  And just the clarification, it is Contango Silver and Gold. But you're right, the website is Contango ore. It was too big of a challenge to try to change it, frankly. >> Okay, so website's contentor.com. The company is Contango Silver and Gold. Thank you for joining me. >> Take care, Bill.