Contango Ore (NYSE American: CTGO) has secured a US$70 million loan from two banks to cover its share of the pre-production capex for the Peak Gold Joint Venture, owner of the Manh Choh gold project in Alaska.
Mining banks ING Capital and Macquarie arranged the loan. "Along with our upcoming equity raise, we will fully fund our obligation to the joint venture through production...," said Contango's president and CEO Rick van Nieuwenhuyse in Mar. 20 news release.
The company said the project had received the federal permits needed for road construction, and early work construction had already started.
In Sept. 2020, Kinross acquired 70% of the Manh Choh project (formerly the Peak project), about 400 kilometres southeast of Fort Knox.
In mid-2022, Kinross, as operator of the joint venture, announced that it was proceeding with the Manh Choh project. Initial production is expected to start in the second half of 2024. The project is expected to increase Kinross' production profile in Alaska by about 640,000 attributable gold-equivalent oz. over the life of the operation.
Manh Choh is a high grade, 8 grams gold-equivalent per oz. open pit project. Kinross plans to process Manh Choh ore at Fort Knox using the existing mill and infrastructure to benefit both the project and the mine.
According to Kinross, Manh Choh holds 698,000 oz. gold and 1.2 million oz. silver in proven and probable reserves as of Dec. 2022.
Contango's New York-quoted shares rose as much as 8.6% on Tuesday before settling at US$25.17 apiece. It has a market cap of US$181.7 million.