UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission file number 001-35770

CONTANGO ORE, INC.

(Exact name of registrant as specified in its charter)

Delaware		27-3431051
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3700 BUFFALO SPEEDWAY, SUITE 925
Houston, Texas		77098
(Address of principal executive offices)		(Zip code)

(713) 877-1311

(Registrant’s’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01 per share	CTGO	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” or “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒		Smaller reporting company ☒		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The total number of shares of common stock, par value $0.01 per share, outstanding as of ~~May 11,~~November 14, 2023 was ~~7,619,718.~~ 9,400,128.

Table of Contents

CONTANGO ORE, INC.

TABLE OF CONTENTS




		Page
			PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2023 (unaudited) and June 30, ~~2022~~ 2023	3
	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~March 31,~~September 30, 2023 and 2022 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~March 31,~~September 30, 2023 and 2022 (unaudited)	5
	Condensed Consolidated Statement of ~~Stockholders~~’Stockholders’ Equity (Deficit) for the ~~Nine~~Three Months Ended ~~March 31,~~September 30, 2023 and 2022 (unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	~~Management~~’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations	1922
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2728
Item 4.	Controls and Procedures	2728
			PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	28 29
Item 1A.	Risk Factors	28 29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28 29
Item 4.	Mine Safety Disclosures	28 29
Item 5.	Other Information	28 29
Item 6.	Exhibits	2930

All references in this Form 10-Q to the ~~“Company”~~“Company”, ~~“CORE”~~“CORE”, ~~“we”~~“we”, ~~“us”~~“us” or ~~“our”~~“our” are to Contango ORE, Inc.

Table of Contents

CONTANGO ORE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

Item 1 - Financial Statements

	March 31, 2023			June 30, 2022			*September 30, 2023*			*June 30, 2023*
ASSETS

CURRENT ASSETS:
Cash	$	2,919,091		$	23,095,101		$	18,507,308		$	11,646,194
Restricted cash		231,000			231,000			231,000			231,000
Prepaid expenses and other		977,382			453,353			795,111			413,907
Derivative contract asset								549,116			—
Total current assets		4,127,473			23,779,454			20,082,535			12,291,101

LONG-TERM ASSETS:
Investment in Peak Gold (Note 5)		—			—			21,420,712			—
Property & equipment, net		13,412,607			13,514,531			13,352,637			13,371,638
Total long-term assets		13,412,607			13,514,531			34,773,349			13,371,638

TOTAL ASSETS	$	17,540,080		$	37,293,985		$	54,855,884		$	25,662,739

LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accounts payable	$	74,956		$	633,856		$	2,129,361		$	220,755
Accrued liabilities		506,858			870,981			871,728			2,077,870
Current portion of long-term debt								2,000,000			—
Total current liabilities		581,814			1,504,837			5,001,089			2,298,625

NON-CURRENT LIABILITIES:
Advance royalty reimbursement		1,200,000			1,200,000			1,200,000			1,200,000
Asset retirement obligations		236,921			228,082			243,126			239,942
Contingent consideration liability		1,847,063			1,847,063			1,240,563			1,240,563
Derivative contract liability								3,274,527			—
Debt, net		19,397,832			19,239,960			32,855,385			25,457,047
Total non-current liabilities		22,681,816			22,515,105			38,813,601			28,137,552

TOTAL LIABILITIES		23,263,630			24,019,942			43,814,690			30,436,177

COMMITMENTS AND CONTINGENCIES (NOTE 14)
COMMITMENTS AND CONTINGENCIES (NOTE 12)

STOCKHOLDERS’ EQUITY/(DEFICIT):
Common Stock, $0.01 par value, 45,000,000 shares authorized; 7,306,718 shares issued and outstanding at March 31, 2023; 6,860,420 shares issued and 6,769,923 shares outstanding at June 30, 2022)		73,067			68,604
STOCKHOLDERS’ EQUITY/(DEFICIT):
Common Stock, $0.01 par value, 45,000,000 shares authorized; 9,395,112 shares issued and 9,393,922 outstanding at September 30, 2023; 7,781,690 shares issued and outstanding at June 30, 2023								93,951			77,817
Additional paid-in capital		82,063,409			74,057,859			122,393,198			93,424,283
Treasury stock at cost (0 at March 31, 2023; and 90,497 shares at June 30, 2022)		—			(2,318,182	)
Treasury stock at cost (1,190 at September 30, 2023; and 0 shares at June 30, 2023)								(21,190	)		—
Accumulated deficit		(87,860,026	)		(58,534,238	)		(111,424,765	)		(98,275,538	)
TOTAL STOCKHOLDERS’ EQUITY/(DEFICIT)		(5,723,550	)		13,274,043
TOTAL STOCKHOLDERS’ EQUITY/(DEFICIT)								11,041,194			(4,773,438	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)	$	17,540,080		$	37,293,985
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)							$	54,855,884		$	25,662,739

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

CONTANGO ORE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended March 31,
Nine Months Ended March 31,

2023 2022
2023

2022

EXPENSES:

Claim rental expense $ (126,452 ) $ (157,162 ) $ (399,828 ) $ (464,135 )
Exploration expense (251,927 ) (1,987,345 ) (6,868,410 ) (4,153,027 )
Depreciation expense (34,214 ) (10,239 ) (102,642 ) (23,954 )
Accretion expense (2,865 ) (2,723 ) (8,839 ) (6,283 )
Impairment from casualty loss, net of recovery — (41,249 ) — (41,249 )
General and administrative expense
(1,980,921 ) (3,228,096 ) (6,581,085
)
(7,995,029
)
Total expenses
(2,396,379 ) (5,426,814 ) (13,960,804
)
(12,683,677
)

OTHER INCOME/(EXPENSE):

Interest income
8,402 319 24,746 1,310
Interest expense (447,510 ) (3,103 ) (1,343,687 ) (6,483 )
Loss from equity investment in Peak Gold, LLC (Note 5)
(5,090,000 ) (1,518,000 ) (14,400,000 ) (3,706,000
)
Insurance recoveries — — 338,301 —
Other income — — 15,656 —
Total other income/(expense) (5,529,108 ) (1,520,784 ) (15,364,984 ) (3,711,173 )

LOSS BEFORE TAXES
(7,925,487 ) (6,947,598 ) (29,325,788
)
(16,394,850 )
Income tax benefit — 119,731 — 119,731
NET LOSS $ (7,925,487 ) $ (6,827,867 ) $ (29,325,788 ) $ (16,275,119 )

LOSS PER SHARE

Basic and diluted $ (1.09 ) $ (1.01 ) $ (4.23 ) $ (2.42 )
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Basic and diluted 7,243,345 6,743,528 6,938,664 6,725,079

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~CONTANGO ORE, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

Nine Months Ended March 31,

2023

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss
$ (29,325,788
)
$ (16,275,119
)
Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation
2,206,239 3,175,903
Depreciation expense 102,642 23,954
Accretion expense 8,839 6,283
Loss from equity investment in Peak Gold, LLC 14,400,000 3,706,000
Interest expense paid in stock 338,884 —
Amortization of debt discount and debt issuance fees 143,671 —
Changes in operating assets and liabilities:

Increase in prepaid expenses and other
(524,029 ) (589,749 )
Increase/(decrease) in accounts payable and accrued liabilities
(923,023 ) 850,228
Decrease (increase) in income tax receivable — (341,637 )
Increase (decrease) in income tax payable — 141,906
Net cash used in operating activities
(13,572,565 ) (9,249,683
)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash invested in Peak Gold, LLC (14,400,000 ) (3,706,000 )
Acquisition of property, plant, and equipment — (43,989 )
Cash paid for acquisition of Alaska Gold Torrent, LLC, net of cash received (719 ) (11,642,586 )
Net cash used by investing activities
(14,400,719 ) (15,392,575 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash paid for shares withheld from employees for payroll tax withholding
(126,428 ) (779,622 )
Cash paid for shares purchased from directors for estimated tax obligations associated with stock vesting — (1,538,560 )
Debt issuance costs 14,202 —
Cash proceeds from capital raise, net 7,909,500 (43,560 )
Net cash provided/(used) by financing activities 7,797,274 (2,361,742 )

NET DECREASE IN CASH (20,176,010 ) (27,004,000 )
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD
23,326,101 35,220,588
CASH AND RESTRICTED CASH, END OF PERIOD
$ 3,150,091 $ 8,216,588

Supplemental disclosure of cash flow information

Cash paid for:
Interest expense $ 1,016,689 $ —
Income taxes — 80,000
Non-cash investing and financing activities
Asset retirement obligations — 218,927
Contingent liability for acquisition of Alaska Gold Torrent, LLC — 1,847,063
Total non-cash investing and financing activities $ — $ 2,065,990

	*Three Months Ended September 30,*
	*2023*			*2022*
EXPENSES:
Claim rental expense	$	(127,006	)	$	(146,925	)
Exploration expense		(1,081,927	)		(4,396,570	)
Depreciation expense		(25,997	)		(34,214	)
Accretion expense		(3,183	)		(3,026	)
General and administrative expense		(2,767,477	)		(2,424,068	)
Total expenses		(4,005,590	)		(7,004,803	)

OTHER INCOME/(EXPENSE):
Interest income		39,045			8,546
Interest expense		(847,983	)		(449,470	)
Loss from equity investment in Peak Gold, LLC (Note 5)		(5,609,288	)		—
Insurance recoveries		—			338,301
Unrealized loss on derivative contracts		(2,725,411	)		—
Other income		—			15,656
Total other income/(expense)		(9,143,637	)		(86,967	)

NET LOSS	$	(13,149,227	)	$	(7,091,770	)

LOSS PER SHARE
Basic and diluted	$	(1.47	)	$	(1.05	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic and diluted		8,935,863			6,771,245

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

CONTANGO ORE, INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~STOCKHOLDERS’ EQUITY/(DEFICIT)~~CASH FLOWS

(Unaudited)

Common Stock

Additional
Paid-In
Treasury
Accumulated

Total
Stockholders’

Shares

Amount

Capital
Stock
Deficit

Equity/(Deficit)

Balance at June 30, 2022
6,860,420 $
68,604
$ 74,057,859 $ (2,318,182 ) $
(58,534,238
)
$ 13,274,043
Stock-based compensation

—

—
787,874 —
—
787,874
Treasury shares issued for convertible note interest payment — — — 138,886 — 138,886
Treasury shares withheld for employee taxes — — — (27,693 ) — (27,693 )
Net loss for the period — — — — (7,091,770 ) (7,091,770 )
Balance at September 30, 2022 6,860,420 68,604 74,845,733 (2,206,989 ) (65,626,008 ) 7,081,340
Stock-based compensation — — 810,547 — — 810,547
Issuance of common stock 283,500 2,835 2,844,257 — — 2,847,092
Treasury shares issued in common stock issuance (42,525 ) (425 ) 2,166,228 — 2,165,803
Warrants — — 657,105 — — 657,105
Cost of common stock issuance — — (71,500 ) — — (71,500 )
Treasury shares issued for convertible note interest payment — — — 100,000 — 100,000
Treasury shares withheld for employee taxes — — — (59,239 ) — (59,239 )
Net loss for the period — — — — (14,308,531 ) (14,308,531 )
Balance at December 31, 2022 7,101,395 $ 71,014 $ 79,086,142 $ — $ (79,934,539 ) $ (777,383 )
Stock-based compensation
— — 607,818 — — 607,818
Restricted stock activity 85,166 851 (851 ) — — —
Issuance of common stock 117,500 1,175 1,871,162 — — 1,872,337
Treasury shares issued in common stock issuance (1,527 ) (15 ) — 39,481 — 39,481
Warrants — — 438,182 — — 438,182
Cost of common stock issuance — — (39,000 ) — — (39,000 )
Shares issued for convertible note interest payment 4,184 42 99,956 — — 99,998
Treasury shares withheld for employee taxes — — (39,481 ) — (39,496 )
Net loss for the period — — — — (7,925,487 ) (7,925,487 )
Balance at March 31, 2023 7,306,718 $ 73,067 $ 82,063,409 $ — $ (87,860,026 ) $ (5,723,550 )

	*Three Months Ended September 30,*
	*2023*			*2022*
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(13,149,227	)	$	(7,091,770	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		739,783			787,874
Depreciation expense		25,997			34,214
Accretion expense		3,183			3,026
Loss from equity investment in Peak Gold, LLC		5,609,288			—
Unrealized loss from derivative contracts		2,725,411			—
Interest expense paid in stock		66,658			—
Amortization of debt discount and debt issuance fees		105,633			49,471
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses and other		(381,203	)		13,384
Increase in accounts payable and accrued liabilities		702,464			948,756
Net cash used in operating activities		(3,552,013	)		(5,255,045	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash invested in Peak Gold, LLC		(27,030,000	)		—
Acquisition of property and equipment		(6,995	)		—
Net cash used by investing activities		(27,036,995	)		—

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash paid for shares withheld from employees for payroll tax withholding		(21,190	)		(27,693	)
Cash proceeds from debt		10,000,000			—
Debt issuance costs		(707,296	)		(2,736	)
Cash proceeds from capital raise, net		28,178,608			—
Net cash provided/(used) by financing activities		37,450,122			(30,429	)

NET DECREASE (INCREASE) IN CASH		6,861,114			(5,285,474	)
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD		11,877,194			23,326,101
CASH AND RESTRICTED CASH, END OF PERIOD	$	18,738,308		$	18,040,627

Supplemental disclosure of cash flow information
Cash paid for:
Interest expense	$	472,184		$	416,670
Non-cash investing and financing activities
Interest expense paid with stock		66,658			138,886
Total non-cash investing and financing activities	$	66,658		$	138,886

Common Stock

Additional
Paid-In

Treasury

Accumulated

Total
Stockholders’

Shares

Amount

Capital

Stock

Deficit

Equity

Balance at June 30, 2021

6,675,746
$ 66,757 $ 69,509,606 $
—
$
(35,027,588
)
$
34,548,775

Stock-based compensation

—

—

1,021,851

—

—
1,021,851
Cost of common stock issuance — — (43,560 ) — — (43,560 )
Restricted shares activity
10,000
100

(100
) —

—
—

Net loss for the period — — — — (4,572,213 ) (4,572,213 )
Balance at September 30, 2021 6,685,746 66,857 70,487,797 — (39,599,801 ) 30,954,853
Stock-based compensation — — 1,256,309 — — 1,256,309
Restricted stock activity 123,500 1,235 (1,235 ) — — —
Treasury Shares withheld for employee taxes — — — (69,307 ) — (69,307 )
Net loss for the period — — — — (4,875,039 ) (4,875,039 )
Balance at December 31, 2021 6,809,246 $ 68,092 $ 71,742,871 $ (69,307 ) $ (44,474,840 ) $ 27,266,816
Stock-based compensation 897,742 — — 897,742
Restricted stock activity 27,000 270 (270 ) — — —
Treasury Shares withheld for employee taxes — — — (710,315 ) — (710,315 )
Treasury shares purchased from directors — — — (1,538,560 ) — (1,538,560 )
Net loss for the period — — — — (6,827,867 ) (6,827,867 )
Balance at March 31, 2022 6,836,246 $ 68,362 $ 72,640,343 $ (2,318,182 ) $ (51,302,707 ) $ 19,087,816

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

CONTANGO ORE, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY/(DEFICIT)

(Unaudited)

					*Additional*									*Total*
	*Common Stock*				*Paid-In*			*Treasury*			*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*			*Stock*			*Deficit*			*Equity/(Deficit)*
Balance at June 30, 2023		7,781,690	$	77,817	$	93,424,283		$	—		$	(98,275,538	)	$	(4,773,438	)
Stock-based compensation		—		—		739,783			—			—			739,783
Restricted stock activity		10,140		101		(101	)		—			—			—
Issuance of common stock		1,600,000		16,000		30,384,000			—			—			30,400,000
Cost of common stock issuance		—		—		(2,221,392	)		—			—			(2,221,392	)
Stock issued for convertible note interest payment		3,282		33		66,625			—			—			66,658
Treasury shares withheld for employee taxes		—		—		—			(21,190	)		—			(21,190	)
Net loss for the period		—		—		—			—			(13,149,227	)		(13,149,227	)
Balance at September 30, 2023		9,395,112	$	93,951	$	122,393,198		$	(21,190	)	$	(111,424,765	)	$	11,041,194

					*Additional*								*Total*
	*Common Stock*				*Paid-In*		*Treasury*			*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*		*Stock*			*Deficit*			*Equity*
Balance at June 30, 2022		6,860,420	$	68,604	$	74,057,859	$	(2,318,182	)	$	(58,534,238	)	$	13,274,043
Stock-based compensation		—		—		787,874		—			—			787,874
Treasury stock issued for convertible note interest payment		—		—		—		138,886			—			138,886
Treasury stock withheld for employee taxes		—		—		—		(27,693	)		—			(27,693	)
Net loss for the period		—		—		—		—			(7,091,770	)		(7,091,770	)
Balance at September 30, 2022		6,860,420	$	68,604	$	74,845,733	$	(2,206,989	)	$	(65,626,008	)	$	7,081,340

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

CONTANGO ORE, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business

Contango ORE, Inc. (“CORE” or the “Company”) engages in exploration for gold ore and associated minerals in Alaska. The Company conducts its business through three primary means:

●

30.0% membership interest in Peak Gold, LLC (the “Peak Gold JV”), which leases approximately 675,000 acres from the Tetlin Tribal Council and holds approximately 13,000 additional acres of State of Alaska mining claims (such combined acreage, the “Peak Gold JV Property”) for exploration and development, including in connection with the Peak Gold JV’s plan to mine ore from the ~~Peak~~Main and North ~~Peak~~Manh Choh deposits within the Peak Gold JV Property (“Manh Choh” or the “Manh Choh Project”);

●

its wholly-owned subsidiary, Alaska Gold Torrent, LLC, an Alaska limited liability company (“AGT”), which leases the mineral rights to approximately 8,600 acres of State of Alaska and patented mining claims for exploration from Alaska Hard Rock, Inc., located in three former producing gold mines located on the patented claims in the Willow Mining District about 75 miles north of Anchorage, Alaska ~~(the~~(“Lucky Shot”, “Lucky Shot Property”, or the “Lucky Shot Project”) ~~(See Note~~ 10 ~~- Acquisition of Lucky Shot Property)~~; and

●

its wholly-owned subsidiary, Contango Minerals Alaska, LLC (“Contango Minerals”), which separately owns the mineral rights to approximately 145,280 acres of State of Alaska mining claims for exploration, including (i) approximately 69,780 acres located immediately northwest of the Peak Gold JV Property (the “Eagle/Hona Property”), (ii) approximately 14,800 acres located northeast of the Peak Gold JV Property (the “Triple Z Property”), (iii) approximately 52,700 acres of new property in the Richardson district of Alaska (the “Shamrock Property”) and (iv) approximately 8,000 acres located to the north and east of the Lucky Shot Property (the “Willow Property” and, together with the Eagle/Hona Property, the Triple Z Property, and the Shamrock Property, collectively the “Minerals Property”). The Company relinquished approximately 69,000 acres located on the Eagle/Hona ~~prospect~~Property in November 2022. The Company retained essentially all of the acreage where drilling work was performed in 2019 and 2021, and used sampling data to determine which acreage should be released.

The Lucky Shot Property and the Minerals Property are collectively referred to in these Notes to Unaudited Condensed Consolidated Financial Statements as the “Contango Properties”.

The Company’s Manh Choh Project is in the development stage. All other projects are in the exploration stage.

The Company has been involved, directly and through the Peak Gold JV, in exploration on the Manh Choh Project since 2010, which has resulted in identifying two mineral deposits (Main and North Manh Choh) and several other gold, silver, and copper prospects. The other 70.0% membership interest in the Peak Gold JV is owned by KG Mining (Alaska), Inc. (“KG Mining”), an indirect wholly-owned subsidiary of Kinross Gold Corporation (“Kinross”). The Peak Gold JV plans to mine ore from the Main and North Manh Choh deposits and then process the ore at the existing Fort Knox mining and milling complex located approximately 240 miles (400 km) away. The ~~use of~~Peak Gold JV has entered into an Ore Haul Agreement with Black Gold Transport, located in North Pole, Alaska to transport the run-of-mine ore from the Manh Choh mine site to the Fort Knox Mill complex. Peak Gold JV has also entered into a contract with Kiewit Mining Group to provide contract mining and site preparation work at the Manh Choh site. The Peak Gold JV will be charged a toll for using the Fort Knox facilities ~~is expected~~pursuant to ~~accelerate the development of~~a toll milling agreement by and between the Peak Gold JV ~~Property~~ and ~~result in reduced upfront capital development costs, smaller environmental footprint, a shorter permitting~~Fairbanks Gold Mining, Inc., which was entered into and ~~development timeline and less overall execution risk for the Peak Gold JV to advance the Main and North Manh Choh deposits to production.~~ became effective as of April 14, 2023.

Kinross ~~Gold Corporation (“Kinross”)~~ released a combined feasibility study for the Fort Knox mill and the Peak Gold JV in July 2022. Also, in July 2022, Kinross announced that its board of directors (the “Kinross Board”) made a decision to proceed with development of the Manh Choh Project. Effective December 31, 2022, CORE Alaska, LLC, a wholly-owned subsidiary of the Company (“CORE Alaska”), KG Mining, ~~(Alaska), Inc., an indirect wholly-owned subsidiary of Kinross (“KG Mining”),~~ and the Peak Gold JV executed the First Amendment to the Amended and Restated Limited Liability Company Agreement of the Peak Gold JV ~~(the~~(as amended the “A&R JV ~~LLCA Amendment”~~LLCA”). The First Amendment to the A&R JV LLCA ~~Amendment~~ provides that, beginning in 2023, the ~~budget of the Peak Gold JV shall be determined~~Company may fund its quarterly scheduled cash calls on a ~~quarterly~~monthly basis. ~~The~~To date, the Peak Gold JV management committee (the “JV Management Committee”) has approved a budget for ~~the~~ ~~first~~ ~~and~~ ~~second~~ ~~calendar quarters of~~ 2023, with cash calls totaling ~~$42.7~~approximately $165.1 million, of which the Company’s share is ~~$12.8~~approximately $49.5 million. ~~To date,~~ As of September 30, 2023, the Company ~~has~~ funded ~~$6.1~~$39.8 million of the ~~approved~~ ~~first~~2023 ~~and~~ ~~second~~ calendar quarter budgets. The current year budget primarily relates to access road construction and costs incurred for the refurbishment and expansion of the Manh Choh camp facilities. The Manh Choh camp facilities, located in Tok, Alaska, have now been completed and construction work on the road has an expected completion of ~~August 2023.~~ The Mine Operating permit issued by the State of Alaska Department of Natural Resources has been submitted. Once issued, mine site construction and mine development of the Manh Choh Project site can be undertaken so that the project remains on schedule for ~~first~~ ~~gold production in the~~ ~~second~~ ~~half of~~ ~~2024.~~budget.

At the Lucky Shot Property, in August 2023, the Company ~~engaged Atkinson Construction and Major Drilling as contractors~~began executing a program to ~~execute the~~ ~~2022~~ ~~exploration/development program. The Company completed~~ 29 ~~exploration drill holes~~complete surface drilling on the ~~property. Drilling began in late~~ ~~June 2022,~~ ~~and ended in~~ ~~November~~ ~~when activities ceased in preparation for the winter months. All~~ 29 ~~holes intersected the Lucky Shot vein structure. The Company has engaged a~~ ~~third~~-party structural geologist from Oriented Targeted Solutions Inc. to complete a structural analysis of the vein structure based on underground mapping and drill core logging. The Company will release all assay results once the results have been finalized and quality assurance and quality control has been completed. The Company anticipates completing an initial resource estimate, and then making plans for a follow-up program to continue explorationColeman segment of the Lucky Shot ~~vein structure. Once a sufficient size~~vein. The program was shut down in September 2023 to preserve the safety of the Company's employees and ~~quality of mineralized material has been defined the Company expects~~contractors due to ~~initiate a technical study to determine if commercial mining is viable.~~poor weather conditions.

On the Shamrock Property, the Company conducted soil and surface rock chip sampling during 2021. ~~Follow-up~~Follow up trenching and detailed geologic mapping is planned for the summer of ~~2023.~~2024. At the Eagle/Hona Property, the Company carried out a detailed reconnaissance of the northern and eastern portions of the large claim block that had not previously been detail sampled. Due to the steep topography, a helicopter was used to execute the program safely. ~~Follow-up~~Follow up geologic mapping and sampling is planned for the summer of ~~2023.~~2024.

~~The Company’s 30.0% membership interest~~During the current quarter, the Company obtained office space in ~~the Peak Gold JV, its ownership of AGT~~Vancouver, Canada and created a Canadian subsidiary, Contango ~~Minerals, and cash on hand constitute substantially all of the Company’s assets.~~Mining Canada, Inc.

The Company’s fiscal year end is June 30.

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2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), including instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by US GAAP for complete annual consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated financial statements have been included. All such adjustments are of a normal recurring nature. The consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes included in the ~~Company~~’sCompany’s Form 10-K for the fiscal year ended June 30, 2023~~30,~~~~2022.~~. The results of operations for the three ~~and~~months ended ~~nine~~September 30, 2023 ~~months~~ ~~ended~~ ~~March 31, 2023~~ are not necessarily indicative of the results that may be expected for the fiscal year ending June 30,~~2023.~~2024.

3.Liquidity

The Company’s cash needs going forward will primarily relate to capital calls from the Peak Gold JV, exploration of the Contango Properties, and general and administrative expenses of the Company. The ~~Peak Gold~~ JV ~~management committee~~Management Committee has proposed a significant budget to complete and start the operations of the Manh Choh mine, which will require the Company to either elect to fund its 30% portion or be subject to dilution. The JV Management Committee has approved a budget for 2023, with cash calls totaling approximately $165.1 million, of which the Company’s share is approximately $49.5 million. As of September 30, 2023, the Company ~~anticipates being able to obtain~~had funded $39.8 million of its share of the ~~capital required to~~2023 cash calls. The Company will finance its remaining share of the Manh Choh project ~~however, if the~~by drawing down on its secured credit facility (See Note 14 - Debt). The Company ~~is unable to obtain financing, the Company would elect to~~also completed an Underwritten Offering in ~~not~~July 2023 ~~to fund its interest in the Peak Gold JV and would be diluted. In either case, management~~with net proceeds of $28.2 million. Management believes the Company ~~would~~will maintain sufficient liquidity to meet its working capital requirements for the next twelve months from the date of this ~~report.~~report, because it has sufficient cash on hand to cover its general and administrative expenses and debt obligations. If necessary, the Company could elect not to fund its share of the Manh Choh Project, and have its interest diluted. If the Company’s interest in the Peak Gold JV is diluted, the Company may not be able to fully realize its investment in the Peak Gold JV. Also, if no additional financing is obtained, the Company may not be able to fully realize its investment in the Contango Properties. The Company has limited financial resources and the ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions, the exploration results achieved at the Peak Gold JV Property, as well as the market price of metals. The Company cannot be certain that financing will be available to the Company on acceptable terms, if at all.

4. Summary of Significant Accounting Policies

Please see the Company’s Form 10-K for the fiscal year ended June 30, ~~2022~~ 2023for a summary of the Company's significant accounting policies, as there have been no changes to the Company's significant accounting polices since the time of that ~~filing.~~filing, except for the accounting policy related to derivative instruments below.

Derivative Instruments. The Company utilizes derivative instruments in order to manage exposure to risks associated with fluctuating commodity prices. The Company recognizes all derivatives as either assets or liabilities, measured at fair value, and recognizes changes in the fair value of derivatives in current earnings. The Company has elected to not designate any of its positions under the hedge accounting rules. Accordingly, these derivative contracts are mark-to-market and any changes in the estimated values of derivative contracts held at the balance sheet date are recognized in unrealized (loss) gain on derivative contracts, net in the Condensed Consolidated Statements of Operations as unrealized gains or losses on derivative contracts. Realized gains or losses on derivative contracts will be recognized in (Loss) gain on derivative contracts, net in the Condensed Consolidated Statements of Operations.

55.. Investment in the Peak Gold JV

The Company initially recorded its investment at the historical book value of the assets contributed to the Peak Gold JV, which was approximately $1.4 million. As of ~~March 31,~~September 30, 2023, the Company has contributed approximately ~~$33.8~~$67.5 million to the Peak Gold JV. ~~KG Mining acquired 70% of the Peak Gold JV on September 30, 2020 in connection with the Kinross Transactions.~~ As of ~~March 31,~~September 30, 2023, the Company held a 3~~0.0%~~30.0% membership interest in the Peak Gold JV.

The following table is a roll-forward of the Company’s investment in the Peak Gold JV as of ~~March 31, 2023:~~September 30, 2023:

	~~Investment~~
	~~in Peak Gold, LLC~~
~~Investment balance at June 30, 2021~~	$	—
~~Investment in Peak Gold, LLC~~		~~3,706,000~~
~~Loss from equity investment in Peak Gold, LLC~~		~~(3,706,000~~	)
~~Investment balance at June 30, 2022~~	$	—
~~Investment in Peak Gold, LLC~~		~~14,400,000~~
~~Loss from equity investment in Peak Gold, LLC~~		~~(14,400,000~~	)
~~Investment balance at March 31, 2023~~	$	—

	*Investment*
	*in Peak Gold, LLC*
Investment balance at June 30, 2022	$	—
Investment in Peak Gold, LLC		21,120,000
Loss from equity investment in Peak Gold, LLC		(21,120,000	)
Investment balance at June 30, 2023	$	—
Investment in Peak Gold, LLC		27,030,000
Loss from equity investment in Peak Gold, LLC		(5,609,288	)
Investment balance at September 30, 2023	$	21,420,712

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In conjunction with the CORE Transactions, and KG Mining assuming the role of manager of the Peak Gold JV, the Peak Gold JV converted its method of accounting from US GAAP to International Financial Reporting Standards (“IFRS”). The condensed unaudited financial statements presented below have been converted from IFRS to US GAAP for presentation purposes. The following table presents the condensed unaudited results of operations for the Peak Gold JV for the three ~~and~~ ~~nine~~month periods ended ~~March 31,~~September 30, 2023 and 2022 ~~and for the period from inception through March~~ ~~31,~~~~2023~~in accordance with US GAAP:

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended		Period from Inception January 8, 2015 to		Three Months Ended		Three Months Ended
	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022		March 31, 2023		September 30, 2023		September 30, 2022
EXPENSES:
Exploration expense	$	645,992	$	1,831,148	$	4,636,985	$	7,180,583	$	63,048,512	$	4,509,967	$	1,438,756
General and administrative		34,593		383,659		143,485		1,075,816		12,424,505		65,013		77,050
Total expenses		680,585		2,214,807		4,780,470		8,256,399		75,473,017		4,574,980		1,515,806
NET LOSS	$	680,585	$	2,214,807	$	4,780,470	$	8,265,399	$	75,473,017	$	4,574,980	$	1,515,806

The Company’s share of the Peak Gold JV’s results of operations for the three ~~and~~ ~~nine~~months ended ~~March 31,~~September 30, 2023was a loss of approximately ~~$0.2 million and~~ $1.4 ~~million, respectively.~~ million. The Company’s share in the results of operations for the three ~~and~~ ~~nine~~months ended ~~March~~ 31September 30, 2022~~, 2022~~ was a loss of approximately ~~$0.7 million and $2.5 million respectively~~. $0.4 million. The Peak Gold JV loss does not include any provisions related to income taxes as the Peak Gold JV is treated as a partnership for income tax purposes. As of ~~March 31,~~September 30, 2023and June 30, ~~2022,~~ 2023, the Company’s share of the Peak Gold JV’s inception-to-date results of operations was a cumulative loss of approximately ~~$43.4~~$46.1 million and ~~$42.0~~$44.8 million, ~~respectively,~~respectively. In previous quarters, the Company's cumulative losses exceeded ~~the historical book value of our~~its cumulative investment in the Peak Gold JV and the equity method of ~~$33.8 million. Therefore,~~accounting was suspended, which resulted in suspended losses, and an investment balance of zero at June 30, 2023. During the current quarter, the Company's cumulative investment in the Peak Gold JV, exceeded its cumulative losses. Therefore the company recognized all of the previously suspended losses, approximately $4.3 million, and the investment in Peak Gold had a balance of ~~zero~~ ~~as of~~$21.4 million at ~~each March 31,~~September 30, 2023, ~~and~~compared to $0 at June 30, ~~2022.~~ The Company is currently obligated to make additional capital contributions to the Peak Gold JV in proportion to its percentage membership interest in the Peak Gold JV in order to maintain its ownership in the Peak Gold JV and ~~not~~ ~~be diluted. Therefore, the Company only records losses up to the point of its cumulative investment, which was approximately $33.8 million as of March~~ ~~31,~~2023. The portion of the cumulative loss that exceeds the Company’s investment will be suspended and recognized against earnings, if any, from the Company’s investment in the Peak Gold JV in future periods. ~~The suspended losses for the period from inception to~~ ~~March 31, 2023~~ ~~are approximately $9.6 million.~~

6. Prepaid Expenses and other assets

The Company has prepaid expenses and other assets of ~~$977,382~~$795,111 and ~~$453,353~~$413,907 as of ~~March 31,~~September 30, 2023 and June 30, 2023~~30,~~~~2022,~~, respectively. Prepaid expenses primarily relate to prepaid insurance, surety bond deposits, and ~~prepaid annual claim rentals.~~

commitment fees.

7.Net LossPer Share

A reconciliation of the components of basic and diluted net loss per share of ~~Common Stock~~common stock is presented below:

Three Months Ended March 31,

2023

2022

Net Loss

Weighted Average Shares

Loss
Per Share

Net Loss

Weighted Average Shares

Loss Per
Share

Basic Net Loss per Share:

Net loss attributable to common stock
$ (7,925,487
)
7,243,345 $ (1.09 ) $ (6,827,867 ) 6,743,528 $ (1.01
)
Diluted Net Loss per Share:

Net loss attributable to common stock
$ (7,925,487 ) 7,243,345 $ (1.09
)
$ (6,827,867 ) 6,743,528 $ (1.01
)

																	*Three Months Ended September 30,*
	Nine Months Ended March 31,																*2023*								*2022*
	2023								2022											*Weighted Average*		*Loss*						*Weighted Average*		*Loss Per*
	Net Loss			Weighted Average Shares		Loss Per Share			Net Loss			Weighted Average Shares		Loss Per Share			*Net Loss*			*Shares*		*Per Share*			*Net Loss*			*Shares*		*Share*
Basic Net Loss per Share:
Net loss attributable to common stock	$	(29,325,788	)		6,938,664	$	(4.23	)	$	(16,275,119	)		6,725,079	$	(2.42	)	$	(13,149,227	)		8,935,863	$	(1.47	)	$	(7,091,770	)		6,771,245	$	(1.05	)
Diluted Net Loss per Share:
Net loss attributable to common stock	$	(29,325,788	)		6,938,664	$	(4.23	)	$	(16,275,119	)		6,725,079	$	(2.42	)	$	(13,149,227	)		8,935,863	$	(1.47	)	$	(7,091,770	)		6,771,245	$	(1.05	)

Options and warrants to purchase 501,000 shares of ~~Common Stock~~common stock of the Company were outstanding as of ~~March 31,~~September 30, 2023, and options to purchase 100,000 shares of ~~Common Stock~~common stock were outstanding as of ~~March 31, 2022.~~ September 30, 2022. These options and warrants were not included in the computation of diluted earnings per share for the three ~~and~~ ~~nine~~month periods ended ~~March 31,~~September 30, 2023 and 2022 due to being anti-dilutive. There were no warrants outstanding as of ~~March 31, 2022.~~September 30, 2022.

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8. Stockholders’ Equity

The Company has 45,000,000 shares of ~~Common Stock~~common stock authorized, and 15,000,000 authorized shares of preferred stock. As of ~~March 31,~~September 30, 2023~~7,306,718~~, 9,393,922 shares of ~~Common Stock~~common stock were outstanding, including ~~429,376~~436,183 shares of unvested restricted stock. As of ~~March 31,~~September 30, 2023, options and warrants to purchase 501,000 shares of ~~Common Stock~~common stock of the Company were outstanding. No shares of preferred stock have been issued. The remaining restricted stock outstanding will vest between January 2024 and August 2025.

Underwritten Offering

On July 24,2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC and Freedom Capital Markets (collectively, the “Underwriters”), relating to an underwritten public offering and sale (the “Offering”) of 1,600,000 shares (the “Underwritten Shares”) of the Company’s common stock that was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s registration statement on Form S-3. All of the Underwritten Shares were sold by the Company. The offering price of the Underwritten Shares was $19.00 per share, and the Underwriters agreed to purchase the Underwritten Shares from the Company pursuant to the Underwriting Agreement at a price of $17.77 per share (the “Purchase Price”) which included a 6.5% Underwriters discount. The net proceeds from the Offering were $28.2 million after deducting underwriting discounts and commissions and offering expenses. The Offering closed on July 26,2023.

ATM Offering

On June 8, 2023, the Company entered into a Controlled Equity Offering^SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time up to $40,000,000 of shares of the Company’s common stock through the Agent (the “ATM Offering”). The offer and sale of the common stock was registered under the Securities Act, pursuant to the Company’s registration statement on Form S-3. Sales of the common stock, pursuant to the Sales Agreement, may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through the New York Stock Exchange or on any other existing trading market for the Company’s common stock. The Company has no obligation to sell any of the common stock under the Sales Agreement and may at any time suspend or terminate the offering of its common stock pursuant to the Sales Agreement upon notice and subject to other conditions. The Agent will act as sales agent and will use commercially reasonable efforts to sell on the Company’s behalf all of the common stock requested to be sold by the Company, consistent with the Agent’s normal trading and sales practices, on mutually agreed terms between the Agent and the Company. The Company pays the Agent a commission of 2.75% of the gross proceeds of the Shares sold through it under the Sales Agreement. During the prior fiscal year, the Company had sold a total of 158,461 shares of common stock pursuant to the Sales Agreement for net proceeds of approximately $4.1 million. No further activity has occurred on the ATM Offering to date.

May 2023Warrant Exercise

In May 2023, the Company offered the holders of its December 2022 Warrants and January ~~2025.~~2023 Warrants with an original exercise price of $25.00, (collectively, “the Original Warrants”) the opportunity to exercise those warrants at the reduced exercise price of $22.00 (the “Modified Warrants”) and receive shares of common stock, par value $0.01 per share of the Company by paying the reduced exercise price in cash and surrendering the original warrants on or before May 9, 2023. A total of 313,000 Original Warrants were exercised resulting in total cash to the Company of $6.9 million (the “Warrant Exercise Proceeds”) and the issuance of 313,000 shares of Company common stock upon such exercise. Such shares of common stock were issued in reliance on an exemption from registration under the Securities Act, pursuant to Section 4(a)(2) thereof. The bases for the availability of this exemption include the facts that the issuance was a private transaction which did not involve a public offering and the shares were offered and sold to a limited number of purchasers. The Warrant Exercise Proceeds were used for working capital purposes and for funding future obligations of the Company. In connection with the accelerated exercise of the Original Warrants, the Company agreed to issue new warrants to purchase 313,000 shares of Company common stock at $30.00 per share to the exercising holders in the amount of the respective December 2022 Warrants and January 2023 Warrants that were exercised by such holders (the “May 2023 Warrants”). Consistent with the accounting guidance for modifications of a freestanding equity-classified warrant as a part of an equity offering, the Company recorded the excess in fair value of the Modified Warrants over the Original Warrants as an equity issuance cost, of approximately $383,000. The fair value of the Modified Warrants and the Original Warrants were calculated as of May 9, 2023 with the following weighted average assumptions used: (i) risk-free interest rate of 4.81%; (ii) expected life of 1 year; (iii) expected volatility of 42.5%; and (iv) expected dividend yield of 0%. The May 2023 Warrants were classified within equity and the Warrant Exercise Proceeds were allocated to the May 2023 Warrants based on their relative fair value. The fair value of each of the May 2023 Warrants was estimated as of the date of grant using the Black-Scholes option-pricing model (Level 2 of the fair value hierarchy) with the following weighted average assumptions used: (i) risk-free interest rate of 4.81%; (ii)expected life of 1.5 years; (iii)expected volatility of 43.7%; and (iv)expected dividend yield of 0%.

January 2023 Private Placement

On January 19, 2023, the Company completed the issuance and sale of an aggregate of 117,500 shares (the “January 2023 Shares”) of the Company’s ~~Common Stock,~~common stock, for $20.00 per share, and warrants (the “January 2023 Warrants”) entitling each purchaser to purchase shares of ~~Common Stock~~common stock for $25.00 per share (the “January 2023 Warrant Shares” and together with the January 2023 Shares and the January 2023 Warrants, the “January 2023 Securities”), in a private placement (the “January 2023 Private Placement”) to certain accredited investors (the “January 2023 Investors”) pursuant to Subscription Agreements (the “January 2023 Subscription Agreements”), dated as of January 19, 2023 between the Company and each of the January 2023 Investors. ~~The~~ ~~January 2023~~ ~~Subscription Agreements include customary representations, warranties, and covenants by the~~ ~~January 2023~~ ~~Investors and the Company.~~

Pursuant to the January 2023 Warrants between the Company and each of the January 2023 Investors, the January 2023 Warrants are exercisable, in full or in part, at any time until the second anniversary of their issuance, at an exercise price of $25.00 per share of ~~Common Stock.~~common stock. The January 2023 Warrants also provide for certain adjustments that may be made to the exercise price and the number of shares of ~~Common Stock~~common stock issuable upon exercise due to future corporate events or actions. The January 2023 Warrants were classified within equity and the proceeds from the capital raise were allocated to the warrants based on their relative fair value. The fair value of each of the January 2023 Warrants was estimated as of the date of grant using the Black-Scholes option-pricing model (Level 2 of the fair value hierarchy) with the following weighted average assumptions used: (i) risk-free interest rate of 4.65%; (ii) expected life of 1 year; (iii) expected volatility of 40.4%; and (iv) expected dividend yield of 0%.

Petrie Partners Securities, LLC (“Petrie”) assisted the Company with the January 2023 Private Placement and ~~receive~~dreceived compensation equal to 3.25% of the proceeds from the January 2023 Investors solicited by Petrie. Net proceeds from the January 2023 Private Placement totaled approximately $2.3 ~~million. The Company will use these proceeds~~million and were used to fund ~~its~~the Company’s exploration and development program and for general corporate purposes. The January 2023 Securities sold were not registered under the Securities Act, of ~~1933,~~ ~~as amended (the “Securities Act”),~~ but the January 2023 Shares and the January 2023 Warrant Shares are subject to a Registration Rights Agreement allowing the shares to be registered by the holders at a future date.

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December 2022 Private Placement

On December 23, 2022, the Company completed the issuance and sale of an aggregate of 283,500 shares (the “December 2022 Shares”) of the Company’s ~~Common Stock,~~common stock, for $20.00 per share, and warrants (the “December 2022 Warrants”) entitling each purchaser to purchase shares of ~~Common Stock~~common stock for $25.00 per share (the “December 2022 Warrant Shares” and together with the December 2022 Shares and the December 2022 Warrants, the “December 2022 Securities”), in a private placement (the “December 2022 Private Placement”) to certain accredited investors (the “December 2022 Investors”) pursuant to Subscription Agreements (the “December 2022 Subscription Agreements”), dated as of December 23, 2022 between the Company and each of the December 2022 Investors. ~~The~~ ~~December~~ ~~2022~~ ~~Subscription Agreements include customary representations, warranties, and covenants by the~~ ~~December~~ ~~2022~~ ~~Investors and the Company.~~

Pursuant to the December 2022 Warrants between the Company and each of the December 2022 Investors, the December 2022 Warrants are exercisable, in full or in part, at any time until the second anniversary of their issuance, at an exercise price of $25.00 per share of ~~Common Stock.~~common stock. The December 2022 Warrants also provide for certain adjustments that may be made to the exercise price and the number of shares of ~~Common Stock~~common stock issuable upon exercise due to future corporate events or actions. The December 2022 Warrants were classified within equity and the proceeds from the capital raise were allocated to the warrants based on their relative fair value. The fair value of each of the December 2022 Warrants was estimated as of the date of grant using the Black-Scholes option-pricing model (Level 2 of the fair value hierarchy) with the following weighted average assumptions used: (i) risk-free interest rate of 4.66%; (ii) expected life of 1 year; (iii) expected volatility of 37.73%; and (iv) expected dividend yield of 0%.

Petrie assisted the Company with the December 2022 Private Placement and received compensation equal to 3.25% of the proceeds from the December 2022 Investors solicited by Petrie. Net proceeds from the December 2022 Private Placement totaled approximately $5.6 ~~million. The Company will use these proceeds~~million and were used to fund ~~its~~the Company’s exploration and development program and for general corporate purposes. The December 2022 Securities sold were not registered under the Securities Act, of ~~1933,~~ ~~as amended (the “Securities Act”),~~ but the December 2022 Shares and the December 2022 Warrant Shares are subject to a Registration Rights Agreement allowing the shares to be registered by the holders at a future date.

Rights PlanTermination and Rights Agreement

On September 23, 2020, the Company adopted a limited duration stockholder rights agreement (the “Rights Agreement”) to replace the Company’s prior stockholder rights plan, which was terminated upon adoption of the Rights Agreement.

Pursuant to the Rights Agreement, the Board declared a dividend of one preferred stock purchase right (a “Right”) for each share of the Company’s ~~Common Stock~~common stock held of record as of October 5, 2020. The Rights will trade with the Company’s ~~Common Stock~~common stock and no separate Rights certificates will be issued, unless and until the Rights become exercisable. In general, the Rights will become exercisable only if a person or group acquires beneficial ownership of 18.0% (or 20.0% for certain passive investors) or more of the Company’s outstanding ~~Common Stock~~common stock or announces a tender or exchange offer that would result in beneficial ownership of 18.0% (or 20.0% for certain passive investors) or more of ~~Common Stock.~~common stock. Each Right will entitle the holder to buy one one-thousandth (1/1000) of a share of a series of junior preferred stock at an exercise price of $100.00 per Right, subject to anti-dilution adjustments.

The Rights Agreement had an initial term of one year, expiring on September 22, 2021. On September 21, 2021, the Board of Directors of the Company approved an amendment to the Rights Agreement, extending the term of the Rights Agreement by an additional year to September 22, 2022. On August 31, 2022, the Board of Directors approved an amendment the Rights Agreement, extending the term of the Rights Agreement by an additional year to September 22, 2023.

9. ~~Sales Transaction with KG Mining~~

On September ~~29, 2020,~~13, 2023, the ~~Company, CORE Alaska and KG Mining, entered into~~ ~~entered into a Purchase Agreement (the~~ “~~CORE Purchase Agreement”),~~ ~~pursuant to which CORE Alaska sold a 30.0% membership interest~~ ~~(the “CORE JV Interest”)~~ ~~in the Peak Gold JV, to KG Mining~~ ~~(the “CORE Transactions”). The CORE Transactions closed on~~ ~~September 30, 2020.~~ ~~In consideration for the CORE JV Interest, the Company received $32.4 million in cash and 809,744 shares~~Board of Common Stock. The 809,744 shares of Common Stock were acquired by KG Mining from Royal Gold, as part of the Royal Gold Transactions and were subsequently canceled by the Company. Of the $32.4 million cash consideration, $1.2 million constituted a reimbursement prepaymentDirectors approved an amendment to the ~~Company relating~~Rights Agreement, extending the term by an additional year to ~~its proportionate share of silver royalty payments that the Peak Gold JV~~ ~~may~~ September 23, 2024.~~be obligated to pay to Royal Gold, with the understanding that KG Mining will bear the entire economic impact of those royalty payments due from the Peak Gold JV.~~

Concurrently with the Purchase Agreement, KG Mining, in a separate transaction, acquired from Royal Gold (i) 100% of the equity of Royal Alaska, LLC , which held a 40.0% membership interest in the Peak Gold JV and (ii) 809,744 shares of Common Stock held by Royal Gold. After the consummation of the Kinross Transactions, CORE Alaska retains a 30.0% membership interest in the Peak Gold JV. KG Mining now holds a 70.0% membership interest in the Peak Gold JV and serves as the manager and operator of the Peak Gold JV. KG Mining and CORE Alaska entered into the Amended and Restated Limited Liability Company Agreement of Peak Gold JV (“A&R JV LLCA”) on ~~October 1, 2020~~ ~~to address the new ownership arrangements and to incorporate additional terms that will permit the Peak Gold JV to further develop and produce from its properties.~~

The Company recorded the $32.4 million cash proceeds and the 809,744 shares of Common Stock, received from the CORE Transactions, at fair value and recognized a gain on sale of $39.6 million. The Company valued the Common Stock consideration from the CORE Transactions consistent with the accounting guidance for non-monetary exchanges. The stock consideration was valued based on the implied fair value of the CORE Transactions in total less the cash proceeds. The total value of the CORE Transactions was equated to the value of the Company’s 30.0% ownership in the Peak Gold JV, post the ~~30.0%~~ ~~membership interest transferred to KG Mining. The Common Stock consideration received in the CORE Transactions is classified within Level~~ 3 ~~of the fair value hierarchy. As of the date of the CORE Transactions, the Company’s investment in the Peak Gold JV had a~~ ~~zero~~ ~~balance, therefore the $39.6 million gain approximates the full fair value of the CORE JV Interest surrendered in the CORE Transactions.~~

The Company recorded a non-current liability totaling $1.2 million associated with the cash received for the reimbursement prepayment to the Company of its proportionate share of certain silver royalty payments that the Peak Gold JV ~~may~~ ~~be obligated to pay Royal Gold. The liability arises, because pursuant to Article IV of the A&R JV LLCA, if the Peak Gold JV terminates, or the Company’s membership interest falls below~~ 5% ~~prior to when the prepaid royalty is paid out, the $1.2 million (less any portion already paid out) is refundable to KG Mining.~~

~~Prior to the CORE Transactions, the Peak Gold JV was a variable interest entity as defined by FASB ASU~~ ~~No.~~~~2015~~-~~02,~~ ~~Consolidation (Topic~~ ~~810~~~~): Amendments to the Consolidation Analysis. The Company was~~ ~~not~~ ~~the primary beneficiary since it did~~ ~~not~~ have the power to direct the activities of the Peak Gold JV. The Company’s ownership interest in the Peak Gold JV has therefore historically applied the equity method of accounting for its investment. After the Kinross Transactions, the Company retained a 30.0% membership interest in the Peak Gold JV. The Company continues to have significant influence in the Peak Gold JV pursuant to its right to designate ~~one~~ ~~of the~~ ~~three~~ ~~seats on the Peak Gold JV management committee. Therefore, the Company will continue to account for its investment in the Peak Gold JV under the equity method.~~

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~~10.~~ ~~Acquisition~~Table of ~~Lucky Shot Property~~

On ~~August 24, 2021~~ the Company completed the purchase of all outstanding membership interests (the “Interests”) of AGT from CRH Funding II PTE. LTD, a Singapore private limited corporation (“CRH”) (the “Lucky Shot Transaction”). AGT holds rights to the Lucky Shot Property. The Company agreed to purchase the Interests for a total purchase price of up to $30 million. The purchase price included an initial payment at closing of $5 million in cash and a promissory note in the original principal amount of $6.25 million, payable by the Company to CRH (the “Promissory Note”), with a maturity date of ~~February 28, 2022 (~~the “Maturity Date”). The Promissory Note was secured by the Interests. The Company had the option to pay the Promissory Note through the issuance to CRH of shares of the Company’s common stock if the Company completed an offering and obtained a listing of its shares on the NYSE American prior to the Maturity Date. In ~~November 2021,~~ ~~the Company’s common stock commenced listing on the NYSE American. Since the Company did~~ ~~not~~ ~~complete the required offering, it paid the Promissory Note in cash on~~ ~~February 25, 2022.~~

~~The Company is obligated to pay CRH additional consideration if production on the Lucky Shot Property meets~~ ~~two~~ ~~separate milestone payment thresholds. If the~~ ~~first~~ ~~threshold of (~~1~~) an aggregate “mineral resource” equal to 500,000 ounces of gold or (~~2~~) production and receipt by the Company of an aggregate of 30,000 ounces of gold (including any silver based on a~~ ~~1:65~~ ~~gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $3.75 million in newly issued shares of CORE common stock. If the~~ ~~second~~ ~~threshold of (~~1~~) an aggregate “mineral resource” equal to 1,000,000 ounces of gold or (~~2) production and receipt by the Company of an aggregate of 60,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $5 million in newly issued shares of CORE common stock. If payable, the additional share consideration will be issued based on the 30~~-day volume weighted average price for each of the~~ ~~thirty~~ ~~trading days immediately prior to the satisfaction of the relevant production goal. If the milestones are~~ ~~not~~ ~~met,~~ no ~~additional payments would be made to CRH.~~

~~The Company also agreed to make $10,000,000 in expenditures during the~~ 36~~-month period following closing toward the existence, location, quantity, quality or commercial value of mineral deposits in, under and upon the Lucky Shot Property. As of~~ ~~March 31, 2023,~~ ~~the Company had exceeded the required $10,000,000 in expenditures.~~

~~The Company evaluated this acquisition under ASC~~ ~~805,~~ ~~Business Combinations and the Company concluded that the acquired set of assets did~~ ~~not~~ ~~meet the US GAAP definition of a business (the assembled workforce does~~ ~~not~~ currently perform a substantive process). Therefore, the Company accounted for the purchase as an asset acquisition, and allocated the total consideration transferred on the date of the acquisition, approximately $13.5 million, to the assets acquired on a relative fair value basis. The total consideration transferred was comprised of $5.1 million in cash, a $6.25 million promissory note, $0.3 million in direct transactions costs, plus the fair value of the contingent liability (described above), net of cash received. The Company accounted for the share portion of the contingent liability in accordance with ASC ~~480~~ and measured at fair value at inception, approximately $1.85 million. The fair value of this liability was calculated using management’s projected timing of mining activities and mineral resources being defined and an estimate of the probability of achieving those targets. The share portion of the contingent consideration is classified within Level 3 ~~of the fair value hierarchy. Changes in value in subsequent periods, based on management’s ongoing assessment of probability, will be recorded in earnings. There was~~ no ~~change in probability, and thus~~ no change in value of the liability during the current period. The Company’s accounting policy is to recognize the contingent consideration associated with cash contingent payments related to the asset acquisitions when the contingency is resolved. Any amounts issued in excess of the contingent consideration initially recognized as a liability would be an additional cost of the asset acquisition allocated to increase the eligible assets on a relative fair value basis. Amounts issued that are less than the contingent consideration initially recognized as a liability would be a reduction of the cost of the asset(s) acquired and would reduce the eligible assets on a relative value basis.

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~~11.~~9.Property &Equipment

The table below sets forth the book value by type of fixed asset as well as the estimated useful life:

Asset Type Estimated Useful Life
March 31, 2023

June 30, 2022

Mineral properties N/A - Units of Production $ 11,700,726 $ 11,700,007
Land
Not Depreciated

87,737

87,737
Buildings and improvements
20-39 years
1,455,546
1,455,546
Machinery and equipment
3 - 10 years
287,635
287,635
Vehicles
5 years
135,862

135,862

Computer and office equipment 5 years
16,239

16,239

Furniture & fixtures 5 years 2,270 2,270
Less: Accumulated depreciation and amortization (158,383 ) (55,740 )
Less: Accumulated impairment

(115,025
)

(115,025
)
Property & Equipment, net
$
13,412,607

$
13,514,531

Asset Type	*Estimated Useful Life*	*September 30, 2023*			*June 30, 2023*
Mineral properties	N/A - Units of Production	$	11,700,726		$	11,700,726
Land	Not Depreciated		87,737			87,737
Buildings and improvements (years)	20 - 39		1,455,546			1,455,546
Machinery and equipment (years)	3 - 10		287,635			287,635
Vehicles (years)	5		135,862			135,862
Computer and office equipment (years)	5		23,235			16,239
Furniture & fixtures (years)	5		2,270			2,270
Less: Accumulated depreciation and amortization			(218,238	)		(192,241	)
Less: Accumulated impairment			(122,136	)		(122,136	)
Property & Equipment, net		$	13,352,637		$	13,371,638

1210.. Related Party Transactions

On ~~January 1, 2022,~~ ~~our non-executive directors realized a vesting of 160,000 restricted shares of Common Stock, which resulted in federal and state income tax obligations. Consistent with~~Mr. Brad Juneau, who served as the Company’s ~~treatment~~Chairman, President and Chief Executive Officer until January 6, 2020, and the Company’s Executive Chairman until November 11, 2021, and now serves as the Company’s Chairman is also the sole manager of ~~employees who experience similar tax obligations~~Juneau Exploration, L.P. (“JEX”), a private company involved in ~~connection with their vesting~~the exploration and production of ~~restricted shares,~~ oil and natural gas. On December 11, 2020, the Company ~~purchased~~entered into a ~~total~~Second Amended and Restated Management Services Agreement (the “A&R MSA”) with JEX, which amends and restates the Amended and Restated Management Services Agreement between the Company and JEX dated as of ~~60,100 shares~~November 20, 2019. Pursuant to the A&R MSA, JEX will continue, subject to direction of ~~Common Stock from~~ the ~~non-executive~~board of directors of the Company (the “Board”), to provide certain facilities, equipment and services used in the conduct of the business and affairs of the Company and management of its membership interest in the Peak Gold JV. Pursuant to the A&R MSA, JEX provides the Company office space and office equipment, and certain related services. The A&R MSA was effective for one year beginning December 1, 2020 and renews automatically on a monthly basis unless terminated upon ninety days’ prior notice by either the Company or JEX. Pursuant to the A&R MSA, the Company paid JEX a monthly fee of $10,000, which included an allocation of approximately $6,900 for office space and equipment. JEX is also reimbursed for its reasonable and necessary costs and expenses of third parties incurred for the Company. The A&R MSA includes customary indemnification provisions. In January ~~5, 2022,~~2023, ~~at a price of $25.60 per share (the applicable closing price per share of Common Stock for vesting on~~ ~~January 1, 2022),~~ ~~resulting in aggregate payments of $1.5 million that will be used by~~ the ~~non-executive directors~~monthly fee paid to ~~pay their tax obligations on the vested shares.~~JEX was reduced to $3,000, and only covers office equipment and related services.

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~~13.~~11. Stock-Based Compensation

On September15, 2010, the Board adopted the Contango ORE, Inc. Equity Compensation Plan (the “2010 Plan”). On November 10, 2022, the stockholders of the Company approved and adopted the Second Amendment ~~(the “Second Amendment”)~~ to the Contango ORE, Inc. Amended and Restated 2010 Equity Compensation Plan (as amended, the “Amended Equity Plan”) which increased the number of shares of ~~Common Stock~~common stock that the Company may issue under the Amended Equity Plan by 600,000 shares. Under the Amended Equity Plan, the Board may issue up to 2,600,000 shares of ~~Common Stock~~common stock and options to officers, directors, employees or consultants of the Company. Awards made under the Amended Equity Plan are subject to such restrictions, terms and conditions, including forfeitures, if any, as may be determined by the Board. On November 14, 2023, the stockholders of the Company approved and adopted the 2023 Omnibus Incentive Plan (the “2023 Plan”) which will replace the 2010 Plan with respect to new grants by the Company. Shares available for grant under the 2023 Plan consist of 193,500 shares of common stock plus (i) any shares remaining available for grant under the 2010 Plan (462,567 shares as of September 30, 2023), (ii) unexercised shares subject to appreciation awards (i.e. stock options or other stock-based awards based on the appreciation in value of a share of the Company’s common stock) granted under the 2010 Plan that expire, terminate, or are canceled for any reason without having been exercised in full, and (iii) shares subject to awards that are not appreciation awards granted under the 2010 Plan that are forfeited for any reason.

As of ~~March 31,~~September 30, 2023, there were ~~429,376~~436.183 shares of unvested restricted ~~Common Stock~~common stock outstanding and 100,000 options to purchase shares of ~~Common Stock~~common stock outstanding issued under the Amended Equity Plan. Stock-based compensation expense for the three ~~and~~ ~~nine~~months ended ~~March 31,~~September 30, 2023~~was $607,818 and $2,206,239, respectively.Stock-based compensation expense for the~~ ~~three~~ and ~~nine~~2022 ~~months ended~~ ~~March 31, 2022~~ was ~~$897,742~~$739,783 and ~~$3,175,903,~~$787,784, respectively. The amount of compensation expense recognized does not reflect cash compensation actually received by the individuals during the current period, but rather represents the amount of expense recognized by the Company in accordance with US GAAP. All restricted stock grants are expensed over the applicable vesting period based on the fair value at the date the stock is granted. The grant date fair value may differ from the fair value on the date the individual’s restricted stock actually vests.

Restricted Stock.

On December 1, 2020, the Company granted an aggregate 20,000 shares of ~~Common Stock~~common stock to two new employees. The restricted stock granted to such employees vests in equal installments over three years on the anniversary of the grant date. As of ~~March 31,~~September 30, 2023, 3,334 shares of restricted stock granted in December 2020 remained unvested.

On August 16, 2021, the Company granted 10,000 shares of ~~Common Stock~~common stock to a new employee. The restricted stock granted to the employee vests in equal installments over three years on the anniversary of the grant date. As of ~~March 31,~~September 30, 2023~~6,667~~, 3,334 shares of restricted stock granted in August 2021 remain unvested.

On November 11, 2021, the Company granted 123,500 restricted shares of ~~Common Stock~~common stock to its executives and non-executive directors. The restricted stock granted to the executives and non-executive directors vests between January 2023 and January 2024. As of ~~March 31,~~September 30, 2023, all 113,500 shares of such restricted stock granted remained unvested.

On February 2, 2022, the Company ~~also~~ granted to four employees a total of 12,000 shares of restricted stock. These restricted shares vest between January 2023 and January 2025. As of ~~March 31,~~September 30, 2023, 6,000 shares of such restricted stock granted remained unvested.

In December 2022, the Company cancelled 167,500 shares of unvested restricted stock held by executives and the non-executive directors that were set to vest in January 2023. The Company also granted 209,375 restricted shares of common stock to its executives and non-executive directors. The restricted shares cancellation and the subsequent new grants were accounted for as modification to the original restricted stock grants. The incremental fair value will be recognized over the vesting period. The impact of the modification to the current quarter was immaterial. All of the restricted stock granted in December 2022 vest in January 2025. As of ~~March 31,~~September 30, 2023, there were 209,375 shares of such restricted stock that remained unvested.

On February 7, 2023, the Company granted 90,500 restricted shares of ~~Common Stock~~common stock to its executives and non-executive directors. The restricted stock granted to the executives and non-executive directors vests in January 2025. As of ~~March 31,~~September 30, 2023, all 90,500 shares of such restricted stock granted remained unvested.

On August 18, 2023, the Company granted 10,140 restricted shares of common stock to two executives. The restricted stock vests equally over three years on each anniversary date of the grant. As of September 30, 2023, all 10,140 shares of such restricted stock granted remained unvested.

As of ~~March 31,~~September 30, 2023, the total compensation cost related to unvested awards not yet recognized was ~~$3,952,212.~~$2,666,958. The remaining costs will be recognized over the remaining vesting period of the awards.

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Stock options.There were no stock option exercises during the three ~~and~~ ~~nine~~months ended ~~March 31,~~September 30, 2023. There were also no stock option exercises during the three ~~and nine~~ months ended ~~March 31, 2022.~~ September 30, 2022. The Company applies the fair value method to account for stock option expense. Under this method, cash flows from the exercise of stock options resulting from tax benefits in excess of recognized cumulative compensation cost (excess tax benefits) are classified as financing cash flows. All employee stock option grants are expensed over the stock option’s vesting period based on the fair value at the date the options are granted. The fair value of each option is estimated as of the date of grant using the Black-Scholes options-pricing model (Level 2 of the fair value hierarchy). As of ~~March 31,~~September 30, 2023, the stock options had a weighted-average remaining life of ~~1.77~~1.27 years. All of the compensation cost related to these stock options had been recognized as of ~~March 31, 2023.~~September 30, 2023.

A summary of the status of stock options granted under the Amended Equity Plan as of ~~March 31,~~September 30, 2023and changes during the ~~nine~~three months then ended, is presented in the table below:

		Nine Months Ended			*Three Months Ended*
		March 31, 2023			*September 30, 2023*
		Shares Under Options		Weighted Average Exercise Price	*Shares Under Options*		*Weighted Average Exercise Price*
Outstanding as of June 30, 2022		100,000	$	14.50
Outstanding as of June 30, 2023						100,000	$	14.50
Granted		—				—
Exercised		—				—
Forfeited		—				—
Outstanding at the end of the period		100,000	$	14.50		100,000	$	14.50
Aggregate intrinsic value	$	1,032,000			$	545,000
Exercisable, end of the period		100,000				100,000
Aggregate intrinsic value	$	1,032,000			$	545,000
Available for grant, end of period		473,386				462,567
Weighted average fair value per share of options granted during the period	$	—			$	—

~~14.~~12. Commitments and Contingencies

Tetlin Lease. The Tetlin Lease ~~had an initial ten-year~~has a ten-year term ~~beginning~~ ~~July 2008~~ ~~which was extended for an additional~~ ~~ten~~ ~~years to~~that expires on July 15, 2028, and continues for so long thereafter as the Peak Gold JV initiates and continues to conduct mining operations on the Tetlin Lease.

Pursuant to the terms of the Tetlin Lease, the Peak Gold JV ~~was~~is required to spend $350,000 per year until July15, ~~2018~~2028 in exploration costs. The Company’s exploration expenditures through the ~~2011~~2023 exploration program have satisfied this requirement because exploration funds spent in any year in excess of $350,000 are credited toward future years’ exploration cost requirements. Additionally, should the Peak Gold JV derive revenues from the properties covered under the Tetlin Lease, the Peak Gold JV is required to pay the Tetlin Tribal Council a production royalty ranging from 3~~.0%~~3.0% to 5.0%, depending on the type of metal produced and the year of production. ~~The Company previously paid the Tetlin Tribal Council $225,000 in exchange for reducing the production royalty payable to them by 0.75%. These payments lowered the production royalty to~~In lieu of a ~~range of~~ 2~~.25%~~$450,000 ~~to 4.25%. The Tetlin Tribal Council had the option to increase their production royalty by (i) 0.25% by~~cash payment to the Peak Gold JV ~~of $150,000, (ii) 0.50% by payment to~~from the ~~Peak Gold JV of $300,000, or (iii) 0.75% by payment to the Peak Gold JV of~~ ~~$450,000.~~ ~~The~~ Tetlin Tribal Council ~~exercised the option~~ to increase its production royalty by 0.75%, ~~by payment to~~ the Peak Gold JV ofagreed to credit the $450,000on ~~December 30, 2020.~~ ~~In lieu of a cash payment, the~~ ~~$450,000~~ ~~will be credited~~ against future production royalty and advance minimum royalty payments due ~~by the Peak Gold JV~~ to the Tetlin Tribal Council under the lease once production begins. ~~The exercise of this option by the tribe did~~ ~~not~~ ~~have an accounting impact to the Company.~~ Until such time as production royalties begin, the Peak Gold JV must pay the Tetlin Tribal Council an advance minimum royalty of ~~$50,000 per year. On~~ ~~July~~ ~~15,~~~~2012,~~ ~~the advance minimum royalty increased to~~approximately $75,000 per year, and subsequent years are escalated by an inflation adjustment.

Gold Exploration. The Company’s Triple Z, Eagle/Hona, Shamrock, Willow, and Lucky Shot claims are all located on State of Alaska lands. ~~The Company released its Bush and West Fork claims in~~ ~~November 2020.~~ The annual claim rentals on these projects vary based on the age of the claims, and are due and payable in full by November 30 of each year. Annual claims rentals for the ~~2022~~2023-~~2023~~2024 assessment year totaled ~~$355,805~~.$362,465. The Company paid the current year claim rentals in ~~November~~ ~~2022.~~October 2023. The associated rental expense is amortized over the rental claim period, September 1 through 1 - August 31of each year. As of ~~March 31,~~September 30, 2023, the Peak Gold JV had met the annual labor requirements for the State of Alaska acreage for the next four years, which is the maximum period allowable by Alaska law. ~~The Company obtained~~ ~~100%~~ ~~ownership of these claims in conjunction with the Separation Agreement.~~

Lucky Shot ~~Acquisition~~Property. With regard to the Lucky Shot ~~Acquisition, in addition to the cash at closing and the Promissory Note,~~Property, the Company will be obligated to pay CRH Funding II PTE. LTD, a Singapore private limited corporation (“CRH”), additional consideration if production on the Lucky Shot Property meets two separate milestone payment thresholds. If the first threshold of (1) an aggregate “mineral resource” equal to 500,000 ounces of gold or (2) production and receipt by the Company of an aggregate of 30,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $3.75 million in newly issued shares of CORE common stock. If the second threshold of (1) an aggregate “mineral resource” equal to 1,000,000 ounces of gold or (2) production and receipt by the Company of an aggregate of 60,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $5 million in newly issued shares of CORE common stock. If payable, the additional share consideration will be issued based on the 30-day ~~volume weighted average price for each of the~~ ~~thirty~~ ~~trading days immediately prior to the satisfaction of the relevant production goal.~~ volume.

Royal Gold Royalties. ~~Initially, the Peak Gold JV was obligated to pay~~ Royal Gold ~~(i) an~~currently holds a 3.0% overriding royalty ~~of 3.0% should the Peak Gold JV derive revenues from~~on the Tetlin Lease ~~the Additional Properties~~ and certain ~~other properties and (ii) an overriding royalty of 2.0% should the Peak~~state mining claims. Royal Gold ~~JV derive revenues from certain other properties. In conjunction with the Separation Agreement (described in Note~~ 9~~), the Peak Gold JV~~ ~~granted~~also holds a ~~new~~ 28.0% net smelter returns silver royalty on all silver produced from a defined area within the Tetlin Lease and transferred an additional 1.0% net smelter returns royalty on the state mining claims to Royal Gold. Therefore, Royal Gold currently holds a 3.0% overriding royalty on the Tetlin Lease and the state mining claims that were transferred to the Company in conjunction with the Separation Agreement.Lease.

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Retention Agreements. In February 2019, the Company entered into ~~Retention Agreements~~retention agreements with its then Chief Executive Officer, Brad Juneau, its Chief Financial Officer, Leah Gaines, and one other employee providing for payments in an aggregate amount of $1,500,000 upon the occurrence of certain ~~conditions.~~conditions (collectively, the “Retention Agreements”). The Retention Agreements are triggered upon a change of control (as defined in the applicable ~~Retention Agreement)~~retention agreement), provided that the recipient is employed by the Company when the change of control occurs. On February 6, 2020, the Company entered into amendments to the Retention Agreements to extend the term of the change of control period from August 6, 2020 until August 6, 2025. Mr. Juneau and Ms. Gaines will receive a payment of $1,000,000 and $250,000, respectively, upon a change of control that takes place prior to August 6, 2025. On June 10, 2020, the Company entered into a ~~Retention Payment Agreement~~retention payment agreement with Rick Van Nieuwenhuyse, the Company’s President and Chief Executive Officer, providing for a payment in an amount of $350,000 upon the occurrence of certain ~~conditions.~~conditions (the “Retention Payment Agreement”). The Retention Payment Agreement is triggered upon a change of control (as defined in the Retention Payment Agreement) which occurs on or prior to August 6, 2025, provided that Mr. Van Nieuwenhuyse is employed by the Company when the change of control occurs.  On August 4,2023, the Company entered into a new retention agreement (the “New Retention Agreement”) with Leah Gaines, Vice President, Chief Financial Officer, Chief Accounting Officer, Treasurer and Secretary and one other employee, for payments in the aggregate amount totaling $540,000. The New Retention Agreement replaces Ms. Gaines’ previous retention agreement dated February 6, 2019 and the amendment to the retention agreement dated February 6, 2020. Pursuant to the New Retention Agreement, Ms. Gaines will remain in her positions with the Company (including as the Company’s principal financial officer and principal accounting officer) until the earlier of (i) December 31, 2023 or (ii) a date determined by the Company. Any transition is not the result of any disagreements between the Company and Ms. Gaines.

Employment Agreement. Effective July 11, 2023, Michael Clark was appointed to serve as Executive Vice President, Finance of the Company. Mr. Clark will perform certain of the functions of the Company’s principal financial officer. Pursuant to his employment agreement (the “Employment Agreement”), Mr. Clark will receive a base salary of $300,000 per annum. Beginning with fiscal year 2023, Mr. Clark will be entitled to receive short-term incentive plan and long-term incentive plan bonuses and awards that will be paid in the form of a combination of cash, restricted stock and options, which will be set forth in plans and agreements adopted, or to be adopted, by the Board. He will also receive 12 months of his regular base salary, all bonus amounts paid in the 12 months preceding the termination, and reimbursement for continued group health insurance coverage for 12 months following the termination or the date he becomes eligible for alternative coverage through subsequent employment as severance benefits in the event that his employment with the Company is terminated by the Company other than for just cause or he resigns due to a material, uncured breach of the Employment Agreement by the Company. He is also entitled to enhanced severance benefits if he terminates his employment within 30 days following a change of control. Any payment of severance benefits to him under the Employment Agreement is conditioned on his timely agreement to, and non-revocation of, a full and final release of legal claims in favor of the Company.
Short Term Incentive Plan. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) adopted a Short-Term Incentive Plan (the “STIP”) effective as of June 10, 2020, for the benefit of Mr. Van Nieuwenhuyse. Pursuant to the terms of the STIP, the Compensation Committee ~~will establish~~establishes performance goals each year and ~~evaluate~~evaluates the extent to which, if any, Mr. Van Nieuwenhuyse meets such goals. The STIP provides for a payout equal to 25.0% of Mr. Van Nieuwenhuyse’s annual base salary if the minimum performance target established by the Compensation Committee is met, 100.0% of his annual base salary if all performance goals are met, and up to 200.0% of his annual base salary if the maximum performance target is met. Amounts due under the STIP ~~will be~~are payable 50.0% in cash and 50.0% in the form of restricted stock granted under the Amended Equity Plan, vesting in two equal annual installments on the first and second anniversaries of the grant date, and subject to the terms of the Amended Equity Plan. In addition, in the event of a Change of Control (as defined in the Amended Equity Plan) during the term of the STIP, the Compensation Committee, in its sole and absolute discretion, may make a payment to Mr. Van Nieuwenhuyse in an amount up to 200.0% of his annual base salary, payable in cash, shares of ~~Common Stock~~common stock of the Company under the Amended Equity Plan or a combination of both, as determined by the Compensation Committee, not later than 30 days following such Change of Control. In conjunction with ~~STIP plan, in~~ ~~December 2020,~~ ~~Mr. Van Nieuwenhuyse received a $350,000 cash bonus and 23,333 restricted shares of Common Stock, which vested on~~ ~~January 1, 2022.~~  ~~In conjunction with~~ the STIP plan, in January 2022, Mr. Van Nieuwenhuyse received a $300,000 cash bonus and 15,000 restricted shares of ~~Common Stock,~~common stock, which ~~will~~were to vest on January 15, 2023. These 15,000 restricted shares were cancelled in December 2022, and 18,750 shares were issued to Mr. Van Nieuwenhuyse under the STIP plan which will vest in January 2025.In September 2023, Mr.Van Nieuwenhuyse received a $200,000 cash bonus in conjunction with the STIP plan.

~~Roc Global~~~~Financing Fees.~~ ~~The Company engaged ROC Global, LLC (“ROC Global”) as~~On August 2,2023, CORE Alaska, a ~~financial advisor and investment banker. The engagement term ended on~~ ~~March 31, 2023.~~ ~~If the Company completes or enters into a definitive agreement to complete a debt financing with a party introduced to the Company by ROC Global within the~~ ~~eighteen~~ ~~months of~~ ~~March 31, 2023~~ ~~the Company will pay ROC Global 3.25% of the gross proceeds received by the Company, before any expenses and fees of the loan transaction and/or the securities~~subsidiary of the Company, ~~being offered~~pursuant to an ISDA Master Agreement entered into with ING Capital Markets LLC (the “ING ISDA Master Agreement”) and ~~sold~~an ISDA Master Agreement entered into with Macquarie Bank Limited (the “Macquarie ISDA Master Agreement”), in ~~such~~accordance with its obligations under that certain Credit and Guarantee Agreement, by and among the Company, its subsidiaries, ING Capital LLC and Macquarie Bank Limited, entered into a ~~debt financing.~~series of hedging agreements with ING Capital LLC and Macquarie Bank Limited for the sale of an aggregate of 124,600 ounces of gold at a weighted average price of $2,025 per ounce. The hedge agreements have delivery obligations beginning in July 2024 and ending in December 2026, and represent approximately 45% of the Company’s interest in the projected production from the Manh Choh mine over the current anticipated life of the mine (See Note 15 - Derivatives and Hedging Activities).

~~15.~~13.Income Taxes

The Company recognized a full valuation allowance on its deferred tax asset as of ~~March 31,~~September 30, 2023and June 30, ~~2022~~ 2023and has recognized zero income tax expense for the three ~~and~~ ~~nine~~months ended ~~March 31, 2023.~~ ~~The Company recognized $0.1 income tax benefit for the~~ ~~three~~September 30, 2023 and ~~nine~~September 30, 2022. ~~months ended~~ ~~March 31, 2022.~~The effective tax rate was 0% for the three ~~and~~months ended ~~nine~~ ~~months ending~~ ~~March 31,~~September 30, 2023 and ~~2022.~~2022. The Company has historically had a full valuation allowance, which resulted in no net deferred tax asset or liability appearing on its statement of financial position. The Company recorded this valuation allowance after an evaluation of all available evidence (including the Company's history of net operating losses) that led to a conclusion that, based upon the more-likely-than-not standard of the accounting literature, these deferred tax assets were unrecoverable. The Company is forecasting a book and taxable net loss for its fiscal year end, June 30, 2023.  The Company reviews its tax positions quarterly for tax uncertainties. The Company did not have any uncertain tax positions as of ~~March 31,~~September 30, 2023or June 30, ~~2022.~~  2023.

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~~16.~~14. Debt
The table below shows the components of Debt, net as of September 30, 2023 and June 30, 2023:

September 30, 2023

June 30, 2023

Secured Debt Facility

Principal amount
$ 20,000,000 $ 10,000,000
Unamortized debt discount
(2,388,728 ) (2,342,484 )
Unamortized debt issuance costs
(2,212,417 ) (1,628,012 )
Debt, net
$ 15,398,855 $ 6,029,504

Convertible Debenture

Principal amount
$ 20,000,000 $ 20,000,000
Unamortized debt discount
(438,264 ) (461,639 )
Unamortized debt issuance costs
(105,206 ) (110,818 )
Debt, net
$ 19,456,530 $ 19,427,543

Total Debt, net
$ 34,855,385 $ 25,457,047
Secured Credit Facility
On May  17,2023, the Company entered into a credit and guarantee agreement (the “Credit Agreement”), by and among CORE Alaska, LLC as the borrower, each of the Company, Alaska Gold Torrent, LLC, and Contango Minerals Alaska, LLC, as guarantors, each of the lenders party thereto from time to time, ING Capital LLC (“ING”), as administrative agent for the lenders, and Macquarie Bank Limited (“Macquarie”), as collateral agent for the secured parties. The Credit Agreement provides for a senior secured loan facility (the “Facility”) of up to US$70 million, of which $65 million is committed in the form of a term loan facility and $5 million is uncommitted in the form of a liquidity facility.
The Credit Agreement will mature on December  31,2026 (the “Maturity Date”) and will be repaid via quarterly repayments over the life of the loan. The Facility has an upfront fee and a production linked arrangement fee based upon the projected total production of gold ounces in the base case financial model delivered on the closing date, payable quarterly based on attributable production, with any balance due upon the maturity or termination of the Credit Agreement. The Credit Agreement is secured by all the assets and properties of the Company and its subsidiaries, including the Company’s 30% interest in Peak Gold, LLC, but excluding the Company’s equity interests of AGT in respect of the Lucky Shot mine. As a condition precedent to the second borrowing, the Company was required to hedge approximately 125,000 ounces of its attributable gold production from Manh Choh. On August 2, 2023, CORE Alaska entered into a series of hedging agreements with ING and Macquarie for the sale of an aggregate of 124,600 ounces of gold at a weighted average price of $2,025 per ounce, which satisfied the condition of the second borrowing. The hedge agreements have delivery obligations beginning in July 2024 and ending in December 2026.  See Note 15 - Derivatives and Hedging Activities.
Term loans, which can be made quarterly are to be used only to finance cash calls to the Peak Gold JV, fund the debt service reserve account, pay corporate costs in accordance with budget and base case financial model and fees and expenses in connection with the loan. Liquidity loans, which can be made once a month, are to be used for cost overruns. Any outstanding liquidity loans must be repaid on July 31, 2025.
Loans under the Facility can be Base Rate loans at the Base Rate plus the Applicable Margin or Secured Overnight Financing Rate (“SOFR”) loans at the three month adjusted term SOFR plus the Applicable Margin. The type of loan is requested by the borrower at the time of the borrowing and the type loan may be converted. The “Base Rate” is the highest of Prime Rate, Federal Funds Rate plus .50% or Adjusted Term SOFR for one month plus 1%. “Adjusted Term SOFR” is Term SOFR plus a SOFR Adjustment of .15% per annum. “Term SOFR” is the secured overnight financing rate as administered by the Term SOFR Administrator. The “Applicable Margin” is (i)  6.00% per annum prior to the completion date for the Manh Choh Project and (ii)  5.00% per annum thereafter, which will be payable quarterly.
Interest is payable commencing on the date of each loan and ending on the next payment date. The interest payment dates prior to November 1, 2025 are the last day of July, October, January and April; thereafter the payment dates are the last day of March, June, September and December.  The Company also will pay commitment fee on average daily unused borrowings equal to a rate of 40% of the Applicable Margin. The commitment fee is payable in arrears on each interest payment date with the final on the commitment termination date, which is 18 months after the closing date of May 17, 2023.   As of September 30, 2023, the Company had unused borrowing commitments of $45 million.
The Credit Agreement contains representations and warranties and affirmative and negative covenants customary for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates and entry into hedging arrangements. The Credit Agreement also requires the Company to maintain, as of the last day of each fiscal quarter, (i) a historical debt service coverage ratio of no less than 1.30 to 1.00, (ii) a projected debt service coverage ratio until the Maturity Date of no less than 1.30 to 1.00; (iii) a loan life coverage ratio until the Maturity Date of no less than 1.40 to 1.00; (iv) a discounted present value cash flow coverage ratio until the Manh Choh gold project termination date of no less than 1.70 to 1.00; and (v) a reserve tail (i.e., gold production) ratio until the Maturity Date of no less than 25%. The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by the Company or any of its material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting the Company or any of its material subsidiaries, certain ERISA events, material judgments and a change in control, in each case, subject to cure periods and thresholds where customary. The Company is also required to maintain a minimum cash balance of $2 million. As of September 30, 2023, the Company was in compliance with all of the required debt covenants.
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The Company drew $10 million on the term loan facility at the initial closing and an additional $10 million on September 29, 2023. The Company will repay $2 million of the amount drawn on July 31, 2024, and the remaining $18 million will be divided into quarterly repayments until December 31, 2026.
Borrowings under the term loan facility carried an original issue discount of $2.3 million and debt issuance costs of approximately $1.6 million. As of September 30, 2023, the unamortized discount and issuance costs were $2.4 million and $2.2 million, respectively and the carrying amount, net of the unamortized discount and issuance costs was $15.4 million. As of June 30,2023, the unamortized discount and issuance costs were $2.3 million and $1.6 million, respectively and the carrying amount, net of the unamortized discount and issuance costs was $6.0 million.The fair value of the debt (Level 2) as of September 30, 2023 and June 30, 2023 was $20.0 million and $10.0 million, respectively. The Company recognized interest expense totaling $0.4 million related to this debt for the three months ended September 30, 2023 (inclusive of approximately $292,000 of contractual interest, and approximately $77,000 related to the amortization of the discount and issuance fees). There was no interest expense related to the Facility for the three months ended September 30, 2022, because the Facility was not yet in place. The effective interest rate of the term loan facility was 11.58% as of September 30, 2023 and 11.75% as of June 30, 2023. As of September 30, 2023 and June 30, 2023, the effective interest rate for the amortization of the discount and issuance costs was 4.8% and 2.4%, respectively.
Convertible Debenture

On  April 26, 2022,,the Company closed on a $20,000,000 unsecured convertible debenture to(the “Debenture”) with Queen’s Road Capital Investment, Ltd. (“QRC”). The Company used the proceeds from the sale of the ~~debenture~~Debenture to fund commitments to the Peak Gold JV, the exploration and development at its Lucky Shot ~~properties,~~property, and for general corporate purposes.

In connection with the closing of the Credit Agreement, the Company entered into a letter agreement with QRC (the “Letter Agreement”) which amended the terms of the Debenture. In accordance with the Letter Agreement, QRC acknowledged that the Debenture would be subordinate to the loans under the Credit Agreement, and acknowledged that the Company entering into the loans under the Credit Agreement would not constitute a breach of the negative covenants of the Debenture. QRC also waived its put right in respect of the Debenture that would require Contango to redeem the Debenture in whole or in part upon the completion of a secured financing or a change of control.  In consideration for QRC entering into the Letter Agreement, the Company agreed to amend the interest rate of the Debenture from 8% to 9%. In accordance with the Letter Agreement the interest payment dates were modified to be the last business day of July, October, January, and April, prior to November 1, 2025 and thereafter the last business day of March, June, September, and December. The ~~debenture~~maturity date also changed from April 26, 2026 to May 26, 2028.
The Debenture currently bears interest at 8%9% per annum, payable quarterly, with 6%7% paid in cash and 2% paid in shares of ~~Common Stock~~common stock issued at the market price at the time of payment based on a 20-day volumetric weighted average price (“VWAP”). The ~~debenture~~Debenture is ~~unsecured, with a maturity of~~ ~~four~~ ~~year~~s ~~after issuance. The holder~~unsecured. QRC may convert the ~~debenture~~Debenture into ~~Common Stock~~common stock at any time at a conversion price of $30.50 per share (equivalent to 655,738 shares), subject to adjustment. The Company  may redeem the ~~debenture~~Debenture after the third anniversary of issuance at 105% of par, provided that the market price (based on a 20-day VWAP) of the Company’s ~~Common Stock~~common stock is at least 130% of the conversion price. ~~The Company~~ ~~may~~ ~~also redeem the debenture, and the holder will have rights to put the debenture to the Company, upon a change of control of the Company, with the redemption or put price being 130% of par for the~~ ~~first~~~~three~~ years following issuance and 115% of par thereafter and accrued interest at the time of redemption or put being paid in the same form as other interest payments. Upon the completion of a secured financing the holder has the right to require the Company to redeem the debenture. Additionally, upon announcement of a change of control, the Company has the right to require the holder to convert some or the whole principal amount of the debenture into shares at the conversion price, subject to certain conditions.
In connection with the issuance of the debenture, the Company agreed to pay an establishment fee of 3% of the debenture face amount. In accordance with the investment agreement, QRC elected to receive the establishment fee in shares of Common Stock valued at $24.82 per share, for a total of 24,174 shares. The establishment fee shares were issued to QRC pursuant to an exemption from registration under Regulation S. QRC entered into an investor rights agreement with the Company in connection with the issuance of the debenture. The investor rights agreement contains provisions that require QRC and its affiliates, while they own 5% or more of our outstanding Common Stock, to standstill, ~~not~~ ~~to participate in any unsolicited or hostile takeover of the Company,~~ ~~not~~ ~~to tender its shares of Common Stock unless the Company’s board recommends such tender, to vote its shares of Common Stock in the manner recommended by the Company’s board to its stockholders, and~~ ~~not~~ ~~to transfer its shares of Common Stock representing more than 0.5% of outstanding shares without notifying the Company in advance, whereupon the Company will have a right to purchase those shares.~~

The ~~debt~~Debenture carried an original issue discount of $0.6 million and debt issuance costs of approximately $0.2 million. As of ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, the unamortized discount and issuance costs were ~~$0.6~~$0.5 million and ~~$0.8~~$0.6 million, respectively. The carrying amount of the debt at ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, net of the unamortized discount and issuance costs was ~~$19.4~~$19.5 million and ~~$19.2~~$19.4 million respectively. The fair value of the ~~note~~Debenture (Level 2) as of ~~March 31,~~September 30, 2023 and June 30, ~~2022~~2023 was $20.0 million. The ~~company~~Company recognized interest expense totaling $0.5 million related to this debt for the three months ended September 30, 2023 (inclusive of approximately $450,000 of contractual interest, and approximately $29,000 related to the amortization of the discount and issuance fees). The Company recognized interest expense totaling $0.4 million related to this debt for the quarter ended ~~March 31, 2023~~September 30, 2022 (inclusive of approximately $400,000 of contractual interest, and approximately ~~$47,000~~$49,000 related to the amortization of the discount and issuance fees)~~. The company recognized interest expense totaling $1.3 million related to this debt for the~~ ~~nine~~ ~~months ended~~ ~~March 31, 2023 (~~~~inclusive of approximately $1.2 million of contractual interest, and approximately $144,000 related to the amortization of the discount and issuance fees). The~~.The effective interest rate of the ~~note~~Debenture is the same as the stated interest rate, ~~8.0%~~9.0%. The effective interest rate for the amortization of the discount and issuance costs as of September 30, 2023 and June 30, ~~2022~~2023 was ~~1.0%.~~0.6% and 0.6%, respectively. The Company reviewed the provisions of the debt agreement to determine if the agreement included any embedded features. The Company concluded that the change of control provisions within the debt agreement met the characteristics of a derivative and required bifurcation and separate accounting. The fair value of the identified derivative was determined to be de minimis at April 26, 2022,  June 30, ~~2022,~~2023, and  ~~March 31,~~September 30, 2023 as the probability of a change of control was negligible as of those dates.   For each subsequent reporting period, the Company will evaluate each potential derivative feature to conclude whether or not they qualify for derivative accounting. Any derivatives identified will be recorded at the applicable fair value as of the end of each reporting period.

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15. Derivatives and Hedging Activities
On August 2,2023, CORE Alaska, a subsidiary of the Company, pursuant to an ISDA Master Agreement entered into with ING Capital Markets LLC (the “ING ISDA Master Agreement”) and an ISDA Master Agreement entered into with Macquarie Bank Limited (the “Macquarie ISDA Master Agreement”), in accordance with its obligations under that certain Credit and Guarantee Agreement, by and among the Company, its subsidiaries, ING Capital LLC and Macquarie Bank Limited, entered into a series of hedging agreements with ING Capital LLC and Macquarie Bank Limited for the sale of an aggregate of 124,600 ounces of gold at a weighted average price of $2,025 per ounce. The hedge agreements have delivery obligations beginning in July 2024 and ending in December 2026, and represent approximately 45% of the Company’s interest in the projected production from the Manh Choh mine over the current anticipated life of the mine.
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by gold future pricing. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments.
Non-designated Hedges
Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to gold movements and the Company has elected not to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.
As of September 30, 2023, the Company had the following outstanding derivatives that were not designated as hedges in qualifying hedging relationships:
Period
Commodity

Volume

Weighted Average Price ($/oz)

2024
Gold
21,100 $ 2,025.17
2025
Gold
62,400 $ 2,025.17
2026
Gold
41,100 $ 2,025.17
Fair Values of Derivative Instruments on the Balance Sheet
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2023 and June 30, 2023.

As of September 30, 2023

As of June 30, 2023

Derivatives not designated as hedging instruments
Balance Sheet Location

Gross Recognized Assets / Liabilites

Gross Amounts Offset

Net Recognized Assets / Liabilities

Gross Recognized Assets / Liabilites

Gross Amounts Offset

Net Recognized Assets / Liabilities

Commodity Contracts
Derivative contract asset - current
$ 549,116 $ — $ 549,116 $ — $ — $ —
Commodity Contracts
Derivative contract liability - current
$ — $ — $ — $ — $ — $ —
Commodity Contracts
Derivative contract asset - noncurrent
$ 763,631 $ (763,631 ) $ — $ — $ — $ —
Commodity Contracts
Derivative contract liability - noncurrent
$ 4,038,158 $ (763,631 ) $ 3,274,527 $ — $ — $ —
As of September 30, 2023, the fair value of derivatives in a net liability position, which excludes any adjustment for nonperformance risk, related to these agreements was $2,725,411. As of September 30, 2023, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions as of September 30, 2023, it could have been required to settle its obligations under the agreements at their termination value of $2,725,411.
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Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement
The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Condensed Consolidated Statement of Operations for the three months ended September 30, 2023 and 2022.
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20
Location of Unrealized Gain or (Loss) Recognized in Income on Derivative

Amount of Gain or (Loss) Recognized in Income on Derivative

Three month period ended September 30, 2023

Three month period ended September 30, 2022

Commodity Contracts
Unrealized loss on derivative contracts
$
(2,725,411)
$ —

Total
$ (2,725,411 ) $ —
Credit-risk-related Contingent Features
Cross Default. The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.
Material adverse change. Certain of the Company's agreements with its derivative counterparties contain provisions where if a specified event or condition occurs that materially changes the Company's creditworthiness in an adverse manner, the Company may be required to fully collateralize its obligations under the derivative instrument.
Incorporation of loan covenants. The Company has an agreement with a derivative counterparty that incorporates the loan covenant provisions of the Company's indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.
19

~~17.~~16. ~~Subsequent Events~~Fair Value Measurement

InThe Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic ~~May 2023,~~ 820, defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. FASB ASC Topic 820 provides a framework for measuring fair value, establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of the counterparty’s creditworthiness when valuing certain assets.
The three levels are defined as follows:
Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Other inputs that are observable directly or indirectly, such as quoted prices in markets that are not active or inputs, which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs for which there are little or no market data and which the Company ~~offered~~makes its own assumptions about how market participants would price the ~~holders~~assets and liabilities.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of ~~its~~any input that is significant to the fair value measurement. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are ~~December 2022~~ not~~Warrants~~ available, valuation models are applied. These valuation techniques involve some level of management estimation and ~~January 2023~~ ~~Warrants (with an original exercise~~judgment, the degree of which is dependent on the price ~~of $25.00)~~transparency for the ~~opportunity to exercise those warrants~~instruments or market and the instrument’s complexity. The Company reflects transfers between the three levels at the ~~reduced exercise price~~beginning of ~~$22.00 and receive shares of common stock, par value $0.01 per share of Contango ORE, Inc. by paying~~ the ~~reduced exercise price~~reporting period in ~~cash and surrendering the original warrants on or before~~ ~~May 9,~~ ~~2023.~~ ~~As of~~ ~~May~~ ~~10,~~~~2023,~~ ~~a total of 313,000~~ ~~December 2022~~ ~~Warrants and~~ ~~January 2023~~ ~~Warrants have been exercised resulting in total cash to the Company of~~ ~~$6.9~~ million (the “Warrant Exercise Proceeds”) and the issuance of 313,000 shares of Company Common Stock upon such exercise. Such shares of Common Stock were issued in reliance on an exemption from registration under the Securities Act, pursuant to Section 4~~(a)(~~2~~) thereof. The bases for~~which the availability of ~~this exemption~~observable inputs no longer justifies classification in the original level. There were no transfers between fair value hierarchy levels for the year ended June 30, 2023.
Fair Value on a Recurring Basis
The Company performs fair value measurements on a recurring basis for the following:
• Derivative Financial Instruments - Derivative financial instruments are carried at fair value and measured on a recurring basis. The Company's potential derivative financial instruments include ~~the facts that the issuance was a private transaction which did~~features embedded within its convertible debenture with Queens Road Capital (see Note 14). These measurements were not ~~involve~~material to the Consolidated Financial Statements. The Company also has hedging agreements in place to manage its exposure to changes in gold prices.
• Contingent Consideration - As discussed in Note 12, the Company will be obligated to pay CRH additional consideration if production on the Lucky Shot Property meets two separate milestone payment thresholds. The fair value of this contingent consideration is measured on a ~~public offering~~recurring basis, and is driven by the ~~shares were offered and sold to a limited number~~probability of ~~purchasers. Proceeds from~~reaching the ~~exercise~~milestone payment thresholds.
The following table summarizes the fair value of the ~~warrants will be used for working capital purposes~~Company’s financial assets and ~~for funding future obligations of~~liabilities, by level within the ~~Company. In connection with the accelerated exercise of the~~ ~~December 2022~~ ~~Warrants and~~ ~~January 2023~~ ~~Warrants, the Company agreed to issue new warrants to purchase shares of Company Common Stock at $30.00 per share to the exercising holders in the amount of the respective~~ ~~December 2022~~ ~~Warrants and~~ ~~January 2023~~ ~~Warrants that were exercised by such holders. As a result, the Company has issued new warrants to purchase 313,000 shares of Company Common Stock.~~fair-value hierarchy (in thousands):
As of September 30, 2023

Level 1

Level 2

Level 3

Financial Assets

Derivative contract asset - current
$ — $ 549,116 $ —

Financial Liabilities

Derivative Liability - noncurrent
$ — $ 3,274,527 $ —
Contingent consideration liability - noncurrent
$ — $ — $ 1,240,563

As of June 30, 2023

Financial Assets

Derivative contract asset - current
$ — $ — $ —

Financial Liabilities

Derivative Liability - noncurrent
$ — $ — $ —
Contingent consideration liability - noncurrent
$ — $ — $ 1,240,563

1820

Fair Value on a Nonrecurring Basis
The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its non-financial assets and liabilities, including mineral properties, business combinations, and asset retirement obligations. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments if events or changes in certain circumstances indicate that adjustments may be necessary.

~~Available Information~~17. Subsequent Events

On October 20, 2023, the Committee for Safe Communities (“CSC”), an Alaskan non-profit corporation inclusive of certain owners of vacation homes along the Manh Choh ore haul route and others claiming potential impact and objecting the ore haul plan and project, filed suit (the “Complaint”) in the Superior Court in Fairbanks, Alaska against the State of Alaska Department of Transportation and Public Facilities (“DOT”). The Complaint seeks injunctive relief against the DOT with respect to its oversight of the Peak Gold JV’s ore haul plan. The Complaint alleges that the DOT has approved a haul route and trucking plan that violates DOT regulations, DOT’s actions have created an unreasonable risk to public safety constituting an attractive public nuisance, and DOT has aided and abetted the offense of negligent driving. On November 2, 2023, CSC filed a motion for a preliminary injunction against the DOT and is seeking expedited consideration of its motion. If granted, the motion could impact the Peak Gold JV’s ore haul plans. The Peak Gold JV intends to intervene in the action whether by agreement of the parties or by motion and to vigorously defend its interests and the legality of its ore haul plans. The Peak Gold JV is also in consultation with DOT on addressing the allegations raised. On November 9, 2023, the motion for expedited consideration of the motion for preliminary injunction was denied by the Superior Court Judge.
On November 7, 2023, the Company drew an additional $10 million on the term loan facility with ING and Macquarie.
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Available Information
General information about the Company can be found on the Company’s website at www.contangoore.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through our website as soon as reasonably practicable after the Company files or furnishes them to the SEC.

Item2.Management’~~Management’s~~s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the accompanying notes and other information included elsewhere in this Form 10-Q and our Form 10-K for the fiscal year ended June 30, ~~2022,~~2023, previously filed with the SEC.

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Cautionary Statement about Forward-Looking Statements

Some of the statements made in this report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words and phrases “should be”, “will be”, “believe”, “expect”, “anticipate”, “estimate”, “forecast”, “goal” and similar expressions identify forward-looking statements and express our expectations about future events. Any statement that is not historical fact is a forward -looking statement. These include such matters as:

•
The Company’s financial position;

•
Business strategy, including outsourcing;

•
Meeting Company forecasts and budgets;

•
Anticipated capital expenditures and availability of future financings;
• Risk in the pricing or timing of hedges the Company has entered into for the production of gold and associated minerals;

•
Prices of gold and associated minerals;

•
Timing and amount of future discoveries (if any) and production of natural resources on the Contango Properties and the Peak Gold JV Property;

•
Operating costs and other expenses;

•
Cash flow and anticipated liquidity;

•
The Company’s ability to fund its business with current cash reserves based on currently planned activities;

•
Prospect development;

•
Operating and legal risks; and

•
New governmental laws and regulations.

Although the Company believes the expectations reflected in such forward-looking statements are reasonable, such expectations may not occur. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, that may cause our actual results, performance or achievements to be materially different from future results expressed or implied by the forward-looking statements. In addition to the risk factors described in Part I,II, Item 2.1A. Risk Factors, of this report and Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended June 30, ~~2022,~~2023, these factors include among others:

•
Ability to raise capital to fund capital expenditures;

•
Ability to retain or maintain capital contributions to, and our relative ownership interest in the Peak Gold JV;

•
Ability to influence management of the Peak Gold JV;
• ~~Ability to realize the anticipated benefits of the Kinross Transactions, including ability to process ore mined from the Peak Gold JV Property at the existing Fort Knox mining and milling complex;~~
• ~~Disruption from the Kinross Transactions and transition of the Peak Gold JV’s management to Kinross, including as it relates to maintenance of business and operational relationships potential~~Potential delays or changes in plans with respect to exploration or development projects or capital expenditures;

•
Operational constraints and delays;

•
~~The risks~~Risks associated with exploring in the mining industry;

•
~~The timing~~Timing and successful discovery of natural resources;

•
Availability of capital and the ability to repay indebtedness when due;

•
Declines and variations in the price of gold and associated ~~minerals;~~
•
~~Price~~minerals, as well as price volatility for natural resources;

•
Availability of operating equipment;

•
Operating hazards attendant to the mining industry;

•
Weather;

•
~~The ability~~Ability to find and retain skilled personnel;

•
Restrictions on mining activities;

•
Legislation that may regulate mining activities;
• ~~Changes in applicable tax rates and other regulatory changes;~~

•
Impact of new and potential legislative and regulatory changes  (including commitments to international agreements) on mining operating and safety ~~standards.;~~standards;

•
Uncertainties of any estimates and projections relating to any future production, costs and expenses (including changes in the cost of fuel, power, materials, and supplies);

•
Timely and full receipt of sale proceeds from the sale of any of our mined products (if any);

•
Stock price and interest rate volatility;

•
Federal and state regulatory developments and approvals;

•
Availability and cost of material and equipment;

•
Actions or inactions of third-parties;

•
Potential mechanical failure or under-performance of facilities and equipment;

•
Environmental and regulatory, health and safety risks;

•
Strength and financial resources of competitors;

•
Worldwide economic conditions;

•
Impact of pandemics, such as the worldwide COVID-19 outbreak, which could impact the Company's or the Peak Gold JV’s exploration schedule;

•
Expanded rigorous monitoring and testing requirements;

•
Ability to obtain insurance coverage on commercially reasonable terms;

•
Competition generally and the increasing competitive nature of the mining industry;

•
Risks related to title to properties; and

•
Ability to consummate strategic transactions.

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You should not unduly rely on these forward-looking statements in this report, as they speak only as of the date of this report. Except as required by law, the Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this report or to reflect the occurrence of unanticipated events.  All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Overview

The Company engages in exploration for gold ore and associated minerals in Alaska. The Company conducts its business through three primary means:

●
30.0% membership interest in Peak Gold, LLC (the “Peak Gold JV”), which leases approximately 675,000 acres from the Tetlin Tribal Council and holds approximately 13,000 additional acres of State of Alaska mining claims (such combined acreage, the “Peak Gold JV Property”) for exploration and development, including in connection with the Peak Gold JV’s plan to mine ore from the ~~Peak~~Main and North ~~Peak~~Manh Choh deposits within the Peak Gold JV Property ~~(the~~(“Manh Choh” or the “Manh Choh Project”);

●
its wholly-owned subsidiary, Alaska Gold Torrent, LLC, an Alaska limited liability company (“AGT”), which leases the mineral rights to approximately 8,600 acres of State of Alaska and patented mining claims for exploration from Alaska Hard Rock, Inc., located in three former producing gold mines located on the patented claims in the Willow Mining District about 75 miles north of Anchorage, Alaska ~~(the~~(“Lucky Shot”, “Lucky Shot Property”~~) (See Note 10 - Acquisition of Lucky~~, or the “Lucky Shot ~~Property)~~Property”); and

●
its wholly-owned subsidiary, Contango Minerals Alaska, LLC (“Contango Minerals”), which separately owns the mineral rights to approximately 145,280 acres of State of Alaska mining claims for exploration, including (i) approximately 69,780 acres located immediately northwest of the Peak Gold JV Property (the “Eagle/Hona Property”), (ii) approximately 14,800 acres located northeast of the Peak Gold JV Property (the “Triple Z Property”), (iii) approximately 52,700 acres of new property in the Richardson district of Alaska  (the “Shamrock Property”) and (iv) approximately 8,000 acres located to the north and east of the Lucky Shot Property (the “Willow Property” and, together with the Eagle/Hona Property,  the Triple Z Property, and the Shamrock Property, collectively the “Minerals Property”).  The Company relinquished approximately 69,000 acres located on the Eagle/Hona ~~prospect~~Property in November 2022.   The Company retained essentially all of the acreage where drilling work was performed in 2019 and 2021, and used sampling data to determine which acreage should be released.

The Lucky Shot Property and the Minerals Property are collectively referred to in this Quarterly Report on Form 10-Q as the “Contango Properties”.

The Company’s Manh Choh Project is in the development stage.  All other projects are in the exploration stage.

The Company has been involved, directly and through the Peak Gold JV, in exploration on the Manh Choh Project since 2010, which has resulted in identifying two mineral deposits (Main and North Manh Choh) and several other gold, silver, and copper prospects. The other 70.0% membership interest in the Peak Gold JV is owned by KG Mining (Alaska), Inc. (“KG Mining”), an indirect wholly-owned subsidiary of Kinross Gold Corporation (“Kinross”). Kinross is a large gold producer with a diverse global portfolio and extensive operating experience in Alaska. The Peak Gold JV plans to mine ore from the Main and North Manh Choh deposits and then process the ore at the existing Fort Knox mining and milling complex located approximately 240 miles (400 km) away. Ore from the mine is to be trucked to Fort Knox for processing on public roadways in newly purchased state-of-the-art trucks carrying legal loads. The use of the Fort Knox facilities is expected to accelerate the development of the Peak Gold JV Property and result in reduced upfront capital development costs, smaller environmental footprint, a shorter permitting and development timeline and less overall execution risk for the Peak Gold JV to advance the Main and North Manh Choh deposits to production. The Peak Gold JV has entered into an Ore Haul Agreement with Black Gold Transport, located in North Pole, Alaska to transport the ~~Run-of-Mine~~run-of-mine ore from the Manh Choh ~~mine site~~Project to the Fort Knox ~~Mill complex.~~facilities. Peak Gold JV has also entered into a contract with Kiewit Mining Group to provide contract mining and site preparation work at the Manh Choh ~~site.~~Project. The Peak Gold JV will be charged a toll for using the Fort Knox facilities pursuant to a toll milling agreement by and between the Peak Gold JV and Fairbanks Gold Mining, Inc., which was entered into and became effective ~~as of~~on April 14, 2023.

Kinross ~~Gold Corporation (“Kinross”)~~ released a combined feasibility study for the Fort Knox mill and the Peak Gold JV in July 2022.  Also, in July 2022, Kinross announced that its board of directors (the “Kinross Board”) made a decision to proceed with development of the Manh Choh Project. Effective December 31, ~~2023,~~2022, CORE Alaska, LLC, a wholly-owned subsidiary of the Company (“CORE Alaska”), KG Mining, and the Peak Gold JV executed the First Amendment to the Amended and Restated Limited Liability Company Agreement of the Peak Gold JV ~~(the~~(as amended, the “A&R JV ~~LLCA Amendment”~~LLCA”). The First Amendment to the A&R JV LLCA ~~Amendment~~ provides that, beginning in 2023, the ~~budget of the Peak Gold JV shall be determined~~Company may fund its quarterly scheduled cash calls on a ~~quarterly~~monthly basis. ~~The~~To date, the Peak Gold JV management committee (the “JV Management Committee”) has approved a budget for ~~the  first and second calendar quarters of~~ 2023, with cash calls totaling ~~$42.7~~approximately $165.1 million, of which the Company’s share is ~~$12.8~~approximately $49.5 million. ~~To date,~~As of September 30, 2023, the Company has funded ~~$6.1~~$39.8 million of the ~~approved first~~2023 budget. On May 15, 2023, the Peak Gold JV received approval of its Waste Management Plan, Plan of Operations, and ~~second calendar quarter budgets. The current year budget primarily relates to access road construction~~Reclamation and costs incurred for the refurbishment and expansion of the Manh Choh camp facilities. The Manh Choh camp facilities, located in Tok, Alaska, have now been completed and construction work on the road has an expected completion of August 2023. The Mine Operating permit issued byClosure Plan from the State of Alaska ~~Department~~Departments of Environmental Conservation and Natural ~~Resources has been submitted. Once issued~~, ~~mine site~~Resources. As of August 29, 2023, construction ~~and mine development of~~at the Manh Choh Project is complete and all mining equipment is on site ~~can be undertaken so~~and mining has commenced. Current mining activity consists of mostly pre-stripping the waste material and stockpiling any ore in preparation for transportation to the Fort Knox mill for processing. Kinross, on behalf of the Peak Gold JV, is also continuing its comprehensive community programs and prioritizing local economic benefits as it develops the project. All permitting activities are completed with all major permits received from both Federal and State permitting agencies. The Peak Gold JV believes that ~~the project remains on schedule for first gold~~ production is expected to commence at Manh Choh in the second half of ~~2024.~~  2024, with a mine plan that consists of two small, open pits that will be mined concurrently over 4.5 years.

At the Lucky Shot Property, in August 2023, the Company ~~engaged Atkinson Construction and Major Drilling as contractors~~began executing a program to ~~execute the 2022 exploration/development program. The Company completed 29 exploration drill holes~~complete surface drilling on the property. Drilling began in late June 2022, and ended in November when activities ceased in preparation for the winter months. All 29 holes intersected the Lucky Shot vein structure. The Company has engaged a third-party structural geologist from Oriented Targeted Solutions Inc. to complete a structural analysis of the vein structure based on underground mapping and drill core logging. The Company will release all assay results once the results have been finalized and quality assurance and quality control has been completed. The Company anticipates completing an initial resource estimate, and then making plans for a follow-~~up program to continue exploration~~Coleman segment of the Lucky Shot ~~vein structure. Once a sufficient size~~vein.  The program was shut down in September 2023 to preserve the safety of the Company's employees and ~~quality of mineralized material has been defined the Company expects~~contractors due to ~~initiate a technical study to determine if commercial mining is viable.~~bad weather conditions.

On the Shamrock Property, the Company conducted soil and surface rock chip sampling during 2021. Follow-up trenching and detailed geologic mapping is planned for the summer of ~~2023.~~2024.  At the Eagle/Hona Property, the Company carried out a detailed reconnaissance of the northern and eastern portions of the large claim block that had not previously been detail sampled. Due to the steep topography, a helicopter was used to execute the program safely. Follow-up geologic mapping and sampling is planned for the summer of ~~2023.~~2024.
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Recent Developments and Other Information

On October 20, 2023, the Committee for Safe Communities (“CSC”), an Alaskan non-profit corporation inclusive of certain owners of vacation homes along the Manh Choh ore haul route and others claiming potential impact and objecting the ore haul plan and project, filed suit (the “Complaint”) in the Superior Court in Fairbanks, Alaska against the State of Alaska Department of Transportation and Public Facilities (“DOT”). The Complaint seeks injunctive relief against the DOT with respect to its oversight of the Peak Gold JV’s ore haul plan. The Complaint alleges that the DOT has approved a haul route and trucking plan that violates DOT regulations, DOT’s actions have created an unreasonable risk to public safety constituting an attractive public nuisance, and DOT has aided and abetted the offense of negligent driving. On November 2, 2023, CSC filed a motion for a preliminary injunction against the DOT and is seeking expedited consideration of its motion. If granted, the motion could impact the Peak Gold JV’s ore haul plans. The Peak Gold JV intends to intervene in the action whether by agreement of the parties or by motion and to vigorously defend its interests and the legality of its ore haul plans. The Peak Gold JV is also in consultation with DOT on addressing the allegations raised.  On November 9, 2023, the motion for expedited consideration of the motion for preliminary injunction was denied by the Superior Court Judge.
On August 2, 2023, CORE Alaska, pursuant to an ISDA Master Agreement entered into with ING Capital Markets LLC (the “ING ISDA Master Agreement”) and an ISDA Master Agreement entered into with Macquarie Bank Limited (the “Macquarie ISDA Master Agreement”), in accordance with its obligations under that certain Credit and Guarantee Agreement, by and among the Company, its subsidiaries, ING Capital LLC (“ING”) and Macquarie Bank Limited (“Macquarie”), entered into a series of hedging agreements with ING and Macquarie for the sale of an aggregate of 124,600 ounces of gold at a weighted average price of $2,025 per ounce. The hedge agreements have delivery obligations beginning in July 2024 and ending in December 2026, and represent approximately 45% of the Company’s ~~30.0% membership~~ interest in the ~~Peak Gold JV, its ownership~~projected production from the Manh Choh mine over the current anticipated life of ~~AGT~~the mine.
On July 24, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC and ~~Contango Minerals, and cash on hand constitute substantially all~~Freedom Capital Markets (collectively, the “Underwriters”), relating to an underwritten public offering (the “Underwritten Offering”) of 1,600,000 shares (the “Underwritten Shares”) of the Company’s ~~assets.~~
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common stock. All of the Underwritten Shares are being sold by the Company. The offering price of the Underwritten Shares was $19.00 per share, and the Underwriters agreed to purchase the Underwritten Shares from the Company pursuant to the Underwriting Agreement at a price of $17.77 per share (the “Purchase Price”), which includes a 6.5% Underwriters discount. The net proceeds from the Underwritten Offering were $28.2 million after deducting underwriting discounts and commissions and offering expenses.

Strategy

Partnering with strategic industry participants to expand future exploration work. As of October 1, 2020, in conjunction with the Kinross ~~Transactions~~transactions that established the current ownership interests in the Peak Gold JV and the signing of the A&R JV LLCA, KG Mining became the manager of the Peak Gold JV (the “Manager”). KG Mining may resign as Manager and can be removed as Manager for a material breach of the A&R JV LLCA, a material failure to perform its obligations as the Manager, a failure to conduct the Peak Gold JV operations in accordance with industry standards and applicable laws, and other limited circumstances. Except as expressly delegated to the Manager, the A&R JV LLCA provides that the ~~management committee~~JV Management Committee has exclusive authority to determine all management matters related to the Company. ~~Peak Gold~~The JV ~~management committee~~Management Committee currently consists of one appointee designated by the Company and two appointees designated by KG Mining.  The Representatives designated by each member of the Peak Gold JV vote as a group, and in accordance with their respective membership interests in the Peak Gold JV. Except in the case of certain actions that require approval by unanimous vote of the Representatives, the affirmative vote of a majority of the membership interests in the Peak Gold JV constitutes the action of the ~~management committee.~~JV Management Committee.

Structuring Incentives to Drive Behavior. The Company believes that equity ownership aligns the interests of the Company’s executives and directors with those of its stockholders. As of ~~March 31,~~September 30, 2023, the Company’s directors and executives beneficially own approximately ~~22.8%~~17.8% of the Company’s ~~Common Stock.~~common stock.

Acquiring exploration properties. The Company anticipates from time to time acquiring additional properties in Alaska for exploration, subject to the availability of funds. The acquisitions may include leases or similar rights from Alaska Native corporations or may include filing Federal or State of Alaska mining claims by staking claims for exploration. Acquiring additional properties will likely result in additional expense to the Company for minimum royalties, minimum rents and annual exploratory work requirements.  The Company is open to strategic partnerships or alliances with other companies as a means to enhance its ability to fund new and existing exploration and development opportunities.

Off-Balance Sheet Arrangements

None.

~~Contractual Obligations~~
The Tetlin Lease had an initial ten year term beginning July 2008 which was extended for an additional ten years to July 15, 2028, or so long as the Peak Gold JV initiates and continues to conduct mining operations on the Tetlin Lease. The Peak Gold JV was required to spend $350,000 per year annually until July 15, 2018 in exploration costs pursuant to the Tetlin Lease. Exploration expenditures to date under the Tetlin Lease have satisfied this work commitment requirement for the full lease term, through 2028, because exploration funds spent in any year in excess of $350,000 are credited toward future years’ exploration cost requirements. The Tetlin Lease also provides that the Peak Gold JV will pay the Tetlin Tribal Council a production royalty ranging from 3.0% to 5.0% should the Peak Gold JV deliver to a purchaser on a commercial basis precious or non-precious metals derived from the properties under the Tetlin Lease. The Company had previously paid the Tetlin Tribal Council $225,000 in exchange for reducing the production royalty payable to them by 0.75%. These payments lowered the production royalty to a range of 2.25% to 4.25%. On or before December 30, 2020, the Tetlin Tribal Council had the option to increase its production royalty by (i) 0.25% by payment to the Peak Gold JV of $150,000, (ii) 0.50% by payment to the Peak Gold JV of $300,000, or (iii) 0.75% by payment to the Peak Gold JV of $450,000.  The Tetlin Tribal Council exercised the option ~~to increase its production royalty by 0.75% by payment to the Peak Gold JV of $450,000~~ on December 30, 2020. In lieu of a cash payment, the $450,000 will be credited against future production royalty and advance minimum royalty payments due by the Peak Gold JV to the Tetlin Tribal Council under the lease once production begins.
~~On January 8, 2015, the Company assigned the Tetlin Lease to the Peak Gold JV in connection with the formation of the Peak Gold JV.~~
Until such time as production royalties begin, the Peak Gold JV will pay the Tetlin Tribal Council an advance minimum royalty of approximately $75,000 per year, plus an inflation adjustment. Additionally, the Peak Gold JV will pay Royal Gold an overriding royalty of 3.0% should it deliver to a purchaser on a commercial basis gold or associated minerals derived from the Tetlin Lease, and a 28.0% net smelter returns silver royalty on all silver produced from a defined area within the Tetlin Lease.  The Company will pay Royal Gold an overriding royalty of 3.0% on certain State of Alaska mining claims should it deliver to a purchaser on a commercial basis precious metals, non-precious metals or hydrocarbons. The Company pays claim rentals on State of Alaska mining claims which vary based on the ages of the claims. For the 2022–2023 assessment year, claims rentals totaled $355,805. Also, if the minimum work requirement is not performed on the property, additional minimum labor payments are due on certain state of Alaska acreage.
In February 2019, the Company entered into Retention Agreements with its then-Chief Executive Officer, Brad Juneau, its Chief Financial Officer, Leah Gaines, and one other employee providing for payments in an aggregate amount of $1,500,000 upon the occurrence of certain conditions. The Retention Agreements, as amended, are triggered upon a change of control (as defined in the applicable Retention Agreement), that takes place prior to August 6, 2025, provided that the recipient is employed by the Company when the change of control occurs. Mr. Juneau and Ms. Gaines will receive a payment of $1,000,000 and $250,000, respectively, upon a change of control.
On June 10, 2020, the Company entered into a Retention Payment Agreement with Rick Van Nieuwenhuyse, the Company’s President and Chief Executive Officer, providing for a payment in an amount of $350,000 upon the occurrence of certain conditions. The Retention Payment Agreement is triggered upon a change of control (as defined in the Retention Payment Agreement) which occurs on or prior to August 6, 2025, provided that Mr. Van Nieuwenhuyse is employed by the Company when the change of control occurs.
The Company received $32.4 million in cash consideration in conjunction with the Kinross Transactions. Of the $32.4 million, $1.2 million constituted a reimbursement prepayment to the Company relating to its proportionate share of certain silver royalty payments that the Peak Gold JV may be obligated to pay to Royal Gold, with the understanding that KG Mining will bear the entire economic impact of those royalty payments due from the Peak Gold JV. Pursuant to Article IV of the A&R JV LLCA, if the Peak Gold JV terminates, or the Company’s membership interest falls below 5% prior to when the prepaid royalty is paid out, the $1.2 million (less any portion already paid out) is refundable to KG Mining.
With regard to the Lucky Shot Acquisition, in addition to the cash at closing and the Promissory Note, the Company will be obligated to pay CRH additional consideration if production on the Lucky Shot Property meets two separate milestone payment thresholds. If the first threshold of (1) an aggregate “mineral resource” equal to 500,000 ounces of gold or (2) production and receipt by the Company of an aggregate of 30,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $3.75 million in newly issued shares of CORE common stock. If the second threshold of (1) an aggregate “mineral resource” equal to 1,000,000 ounces of gold or (2) production and receipt by the Company of an aggregate of 60,000 ounces of gold (including any silver based on a 1:65 gold:silver ratio) is met, then the Company will pay CRH $5 million in cash and $5 million in newly issued shares of CORE common stock. If payable, the additional share consideration will be issued based on the 30-day volume weighted average price for each of the thirty trading days immediately prior to the satisfaction of the relevant production goal. The Company also agreed to make $10,000,000 in expenditures during the 36-month period following closing toward the existence, location, quantity, quality or commercial value of mineral deposits in, under and upon the Lucky Shot Property. The Company has exceeded the required $10,000,000 in expenditures.
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Critical AccountingEstimates

The discussion and analysis of the ~~Company~~’sCompany’s financial condition and results of operations is based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company has identified below the ~~policies~~critical accounting estimate that ~~are~~is of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by management. The Company analyzes its estimates, including those related to its mineral reserve estimates, on a periodic basis and bases its estimates on historical experience, independent third party engineers and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. ~~The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements:~~
~~Stock-Based Compensation.~~ The Company applies the fair value method of accounting for stock-based compensation. Under this method, the Company measures and recognizes compensation expense for all stock-based payments at fair value at the date of grant and amortize the amount over the employee’s service period. Management is required to make assumptions including stock price volatility and employee turnover that are utilized to measure compensation expense.
~~Investment in the Peak Gold JV.~~ The Company’s consolidated financial statements include the investment in the Peak Gold JV, which is accounted for under the equity method. The Company has designated one of the three members of the Peak Gold JV management committee and on March 31, 2023 held a 30.0% ownership interest in the Peak Gold JV. KG Mining serves as the manager of the Peak Gold JV and manages, directs, and controls operations of the Peak Gold JV. The Company recorded its investment at the historical cost of the assets contributed. The cumulative losses of the Peak Gold JV exceed the historical cost of the assets contributed to the Peak Gold JV; therefore, the Company’s investment in the Peak Gold JV as of March 31, 2023 is zero. The portion of the cumulative loss that exceeds the Company’s investment will be suspended and recognized against earnings, if any, from the investment in the Peak Gold JV in future periods.

Business Combinations.In determining whether an acquisition should be accounted for as a business combination or asset acquisition, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this is the case, the single identifiable asset or the group of similar assets is not deemed to be a business, and is instead deemed to be an asset. If this is not the case, the Company then further evaluates whether the single identifiable asset or group of similar identifiable assets and activities includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If so, the Company concludes that the single identifiable asset or group of similar identifiable assets and activities is a business. The Company accounts for business combinations using the acquisition method of accounting. Application of this method of accounting requires that (i) identifiable assets acquired (including identifiable intangible assets) and liabilities assumed generally be measured and recognized at fair value as of the acquisition date and (ii) the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed be recognized as goodwill, which is not amortized for accounting purposes but is subject to testing for impairment at least annually.  The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions. Contingent consideration in asset acquisitions payable in the form of cash is recognized when payment becomes probable and reasonably estimable, unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the asset acquisition cost when acquired. Contingent consideration payable in the form of a fixed number of the Company’s own shares is measured at fair value as of the acquisition date and recognized when the issuance of the shares becomes probable. Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.
~~Convertible Debenture~~. The Company ~~accounts~~carries a liability for its convertible debenture in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”), which requires the liability and equity components of convertible debt to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. Debt discount created by the bifurcation of embedded features in the convertible debenture are reflected as a reductioncontingent consideration related to the ~~related debt liability. The discount is amortized to interest expense over the term~~acquisition of ~~the debt using the effective-interest method.~~
~~Derivative Asset/Liability for Embedded Conversion Features.~~  The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately.AGT. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are evaluated and accounted for separately. The result of this accounting treatment is thatestimating the fair value of the ~~embedded derivative is recorded~~contingent consideration at each reporting period, the Company makes estimates regarding the probability and timing of reaching the milestones associated with payment of the consideration, as ~~either an asset or a~~well as the weighted average cost of capital used to discount the liability ~~and marked-to-market each~~to its present value as of the balance sheet ~~date, with the change in fair value recorded in the statements~~date. The estimate of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. The fair value of the embedded conversion features are estimated using several probability weighted binomial lattice models. The Company estimated the fair value of the ~~convertible notes conversion feature~~contingent consideration is sensitive to changes in any one of these estimates.
Derivative Instruments.  The Company utilizes derivative instruments in order to manage exposure to risks associated with fluctuating commodity prices. The Company recognizes all derivatives as either assets or liabilities, measured at fair value, and recognizes changes in the fair value of derivatives in current earnings. The Company has elected to not designate any of its positions under the hedge accounting rules. Accordingly, these derivative contracts are mark-to-market and any changes in the estimated values of derivative contracts held at the ~~time~~balance sheet date are recognized in unrealized (loss) gain on derivative contracts, net in the Condensed Consolidated Statements of ~~issuance and subsequent remeasurement dates, utilizing~~Operations as unrealized gains or losses on derivative contracts. Realized gains or losses on derivative contracts will be recognized in (Loss) gain on derivative contracts, net in the ~~with-and without method, where the value~~Condensed Consolidated Statements of the derivative feature is the difference in values between a note simulated with the embedded conversion feature and the value of the same note simulated without the embedded conversion feature. Estimating fair values of embedded conversion features requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.Operations.

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Table of Contents
Results of Operations

Neither the Company nor the Peak Gold JV has commenced ~~mining or~~ producing commercially marketable minerals. To date, neither the Company nor the Peak Gold JV has generated any revenue from mineral sales or operations. Neither the Company nor the Peak Gold JV has any recurring source of ~~revenue other than~~ ~~contributions~~ ~~by the Company and KG Mining to the Peak Gold JV, and, in addition to the consideration received~~ ~~in the Kinross Transactions, the~~revenue. The Company’s ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund ~~its~~ future exploration and working capital requirements. In the future, the Company and the Peak Gold JV may generate revenue from a combination of mineral sales and other payments resulting from any commercially recoverable minerals from the ~~Peak Gold JV Property.~~Manh Choh Project. The Company does not expect the Peak Gold JV to generate revenue from mineral sales ~~until at least the second half of 2024 based on KG Mining’s current schedule.~~prior to mid-2024. If the ~~Peak Gold JV Property fails~~Company’s properties or the Manh Choh Project fail to contain any proven reserves, ~~our~~the Company’s ability to generate future revenue, and ~~our~~the Company’s results of operations and financial position, would be materially adversely affected. Other potential sources of cash, or relief of demand for cash, include external debt, the sale of shares of ~~our~~the Company’s stock, joint ventures, or alternative methods such as mergers or sale of our assets. No assurances can be given, however, that the Company will be able to obtain any of these potential sources of cash. The Company will need to generate significant revenues to achieve profitability and itthe Company may never do so.

Three Months Ended ~~March 31,~~September 30, 2023 Compared to Three Months Ended ~~March 31,~~September 30, 2022

Claim Rentals Expense.Claim rental expense primarily consists of State of Alaska rental payments and annual labor payments. We recognized claim rental expense of ~~$126,452~~$0.1 million compared to ~~$157,162~~$0.1 million for the three months ended ~~March 31,~~September 30, 2022. ~~The Company relinquished approximately 69,000 acres located on the Eagle/Hona prospect in November 2022.~~

Exploration Expense.Exploration expense for the three months ended ~~March 31,~~September 30, 2023 was ~~$0.2~~$1.1 million compared to ~~$2.0~~$4.4 million for the three months ended ~~March 31,~~September 30, 2022. Current ~~year~~and prior period exploration expense relates to exploration work performed on our Lucky Shot Property. The ~~Company’s~~current period exploration program at Lucky Shot ~~project~~ was ~~on care and maintenance during the winter months therefore, little activity~~shut down in September 2023 due to poor weather conditions. The prior period program was ~~performed during the three months ended March 31, 2023.~~carried out through November 2022.

General and Administrative Expense. General and administrative expense for the three months ended ~~March 31,~~September 30, 2023 and 2022 ~~were $2.0~~was $2.8 million and ~~$3.2~~$2.4 million, respectively. The Company’s general and administrative expense primarily relates to legal fees, management fees, payroll and stock-based compensation expense. General and administrative expenses were higher for the three months ended ~~March 31, 2022~~September 30, 2023, as a result of ~~capitalized legal fees of approximately $0.6 million associated with~~ a ~~potential capital raise that were expensed during that quarter, as well as a $0.3~~$0.2 million bonus paid to Rick Van Nieuwenhuyse during that ~~quarter.  The stock-based compensation expense~~quarter, additional payroll related fees for the ~~three months ended March 31, 2023 was approximately $0.6 million, compared to $0.9 million for~~addition of two employees during the ~~nine months ended March 31, 2022.~~quarter, as well as increased audit fees.
23

Loss fromEquity Investment in the Peak Gold JV.  The loss from the Company’s equity investment in the Peak Gold JV for the three months ended ~~March 31,~~September 30, 2023 and 2022 was ~~$5.1~~$5.6 million and ~~$1.5~~zero, respectively.  The current period expense includes the recognition of $4.3 million ~~respectively.  Pursuant to the terms of the A&R JV LLCA, the Company~~in suspended losses from previous periods and ~~KG Mining are required to jointly fund the joint venture operations~~$1.3 million in ~~proportion to their membership interests~~current period losses from our 30.0% investment in the Peak Gold ~~JV to avoid dilution.~~JV. The Company ~~invested $5.1 million in the Peak Gold JV during the current quarter. The Company invested $1.5 million in~~did not make a capital contribution to the Peak Gold JV during the three months ended ~~March 31, 2022. The current quarter cash needs of~~September 30, 2022, and at that time the cumulative loss exceeded the Company’s cumulative investment thus the prior period losses from the Peak Gold JV were higher compared to prior year, because the Peak Gold JV moved into the development phase in early 2022, and has been incurring costs related to Manh Choh camp and access roads in preparation for first production in 2024.   The portion of the cumulative loss that exceeds the Company’s cumulative investment will be suspended ~~and recognized against earnings, if any, from the Company’s investment in the Peak Gold JV in future periods. The~~losses. There were no suspended losses ~~for the period from inception to March 31, 2023 are $9.6 million.~~ as of September 30, 2023.

Interest Expense.  ~~On April 26, 2022~~,In connection with the closing of the Credit Agreement, the Company ~~closed on a~~entered into an amendment to its $20,000,000 unsecured convertible debenture (the “Debenture”) with Queen’s Road Capital Investment, Ltd. (“QRC”) that raised the stated interest rate from 8% to ~~QRC.~~9%. The ~~debenture~~Debenture currently bears interest at 8%9% per annum, payable quarterly, with 6%7% paid in cash and 2% paid in shares of ~~Common Stock~~common stock of the Company (See Note ~~16 to our Consolidated Financial Statements)~~14 - Debt for discussion of both debt arrangements). The ~~Company acquired AGT in August 2021 for an initial payment at closing~~current quarter interest expense of $5$0.8 million ~~(plus~~includes a ~~working capital adjustment~~full quarter of ~~$0.1 million) in cash~~interest expense related to the Debenture, and a ~~Promissory Note (see Note 10~~full quarter of interest expense related to ~~our Consolidated Financial Statements). Interest~~the Company’s cumulative $20 million draw-down on the Facility. Prior year interest expense ~~for~~of $0.4 million only included the current quarter interest expense related to the Debenture.
Loss on Derivative Contracts. The Company incurred a loss of $2.7 million during the current quarter related to derivative contracts compared to $0 during the quarter ended ~~March 31,~~September 30, 2022. The Company did not enter into any derivative contracts until July 2023 of $0.4 million includes the interest related to the convertible debenture. Interest expense for the quarter ended March 31, 2022 of relates to accrued interest related to the Promissory Note. The Promissory(see Note ~~was paid in full with cash on February 25, 2022.~~
15 - Derivative and Hedging Activities).

~~Nine Months Ended March 31, 2023~~ ~~Compared to Nine Months Ended March 31, 2022~~
~~Claim Rentals Expense.~~  Claim rental expense primarily consists of State of Alaska rental payments and annual labor payments. We recognized claim rental expense of $399,828 compared to $464,135 for the nine months ended March 31, 2022. The Company relinquished approximately 69,000 acres located on the Eagle/Hona prospect in November 2022.
~~Exploration Expense.~~ Exploration expense for the nine months ended March 31, 2023 was $6.9 million compared to $4.2 million for the nine months ended March 31, 2022. Current year exploration expense relates primarily to exploration work performed on our Lucky Shot Property. Lucky Shot was acquired in August 2021, and the development and exploration program did not begin until late 2021.
~~General and Administrative Expense.~~ General and administrative expense for the nine months ended March 31, 2023 and 2022 were $6.6 million and $8.0 million, respectively. The Company’s general and administrative expense primarily relates to legal fees, management fees, payroll and stock-based compensation expense. The current year decrease in general and administrative expenses primarily relates to the reduction in stock-based compensation expense.   The stock-based compensation expense for the nine months ended March 31, 2023 was approximately $2.2 million, compared to $3.1 million for the nine months ended March 31, 2022. The Company also did not pay bonuses during the nine months ended March 31, 2023, compared to $0.5 million in bonuses paid during the nine months ended March 31, 2022.
~~Loss from Equity Investment in the Peak Gold JV~~.  The loss from the Company’s equity investment in the Peak Gold JV for the nine months ended March 31, 2023 and 2022 was $14.4 million and $3.7 million, respectively.  Pursuant to the terms of the A&R JV LLCA, the Company and KG Mining are required to jointly fund the joint venture operations in proportion to their membership interests in the Peak Gold JV to avoid dilution. The Company invested $14.4 million in the Peak Gold JV during the nine months ended March 31, 2023. The Company invested $3.7 million in the Peak Gold JV during the nine months ended March 31, 2022. The current periold cash needs of the Peak Gold JV were higher compared to prior year, because the Peak Gold JV moved into the development phase in early 2022, and has been incurring costs related to Manh Choh camp and access roads in preparation for first production in 2024. The portion of the cumulative loss that exceeds the Company’s cumulative investment will be suspended and recognized against earnings, if any, from the Company’s investment in the Peak Gold JV in future periods. The suspended losses for the period from inception to March 31, 2023 are $9.6 million.
~~Interest Expense.~~  ~~On April 26, 2022~~, the Company closed on a $20,000,000 unsecured convertible debenture to QRC.  The debenture bears interest at 8% per annum, payable quarterly, with 6% paid in cash and 2% paid in shares of Common Stock (See Note 16 to our Consolidated Financial Statements). The Company acquired AGT in August 2021 for an initial payment at closing of $5 million (plus a working capital adjustment of $0.1 million) in cash and a Promissory Note (see Note 10 to our Consolidated Financial Statements). Interest expense for the nine months ended March 31, 2023 of $1.3 million includes the interest related to the convertible debenture. Interest expense for the nine months ended March 31, 2022 of relates to accrued interest related to the Promissory Note. The Promissory Note was paid in full with cash on February 25, 2022.
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Liquidity and Capital Resources

As of ~~March 31,~~September 30, 2023, the Company had approximately ~~$3.1~~$18.7 million of cash.

The Company’s primary cash requirements have been for general and administrative expenses, capital calls from the Peak Gold JV for the Manh Choh Property, and exploration expenditures on the Lucky Shot Property. ~~Besides the Kinross Transactions, the~~The Company’s sources of cash have been from ~~Common Stock~~common stock offerings, ~~and~~ the issuance of the ~~$20 million unsecured convertible debenture to Queens Road Capital Investment, Ltd. (“QRC”). In conjunction with~~Debenture, and the ~~Kinross Transactions,~~proceeds from the ~~Company received $32.4 million~~Facility (see Note 8 - Stockholder's Equity and ~~809,744 shares~~Note 14 - Debt, for a discussion of the Company’s Common Stock. The 809,744 shares of Common Stock were acquired by KG Mining from Royal Gold, as part of the Royal Gold Transactions and were subsequently canceled by the Company. Of the $32.4 million cash consideration, $1.2 million constituted a reimbursement prepayment to the Company of its proportionate share of certain silver royalty payments that the Peak Gold JV may be obligated to pay to Royal Gold, with the understanding that KG Mining will bear the entire impact of those royalty payments due from the Peak Gold JV.recent activity).

~~KG Mining became the Manager~~The JV Management Committee of the Peak Gold JV in conjunction with the Kinross Transactions and the signing of the A&R JV LLCA. Pursuant to the terms of the A&R JV LLCA, the Company and KG Mining are required to jointly fund the joint venture operations in proportion to their membership interests in the Peak Gold JV. If a member elects not to contribute to an approved program and budget or contributes less than its proportionate membership interest, its percentage membership interest will be reduced. The Company’s ability to contribute funds sufficient to retain its membership interests in the Peak Gold JV may be limited. To date, neither the Company nor the Peak Gold JV has generated any revenue from mineral sales or operations. In the future, the Peak Gold JV may generate revenue from a combination of mineral sales and other payments resulting from any commercially recoverable minerals from the Peak Gold JV Property. The Company currently does not have any recurring source of revenue. The Peak Gold JV currently does not have any recurring source of revenue, and its only source of cash inflows are contributions received from KG Mining and the Company. As a result, the Company’s ability to contribute funds to the Peak Gold JV and retain its membership interest will depend on its ability to raise capital.
~~The Peak Gold JV management committee~~ has proposed a significant budget to complete and start the operations of the Manh Choh mine. Specifically, the ~~Peak Gold~~ JV ~~management committee~~Management Committee has approved a budget for ~~the  first and second calendar quarters of~~ 2023, with cash calls totaling ~~$42.7~~approximately $165.1 million, of which the Company’s share is ~~$12.8~~approximately $49.5 million. ToAs of the date of this filing, the Company has funded ~~$6.1~~$45.4 million of the approved ~~first and second calendar quarter budgets.~~2023 budget. This budget primarily relates to ~~access road construction and refurbishment and expansion~~completion of the Manh Choh ~~camp.~~camp, mine access road construction, earthworks, general construction and installation, pre-production stripping, etc.  The Company expects the Peak Gold JV management committee to approve the budgets for the third calendar quarter on or before June 30, 2023, with successive calendar quarterly budgets adopted on a quarterly basis. Upon adoption, the Company will be required to make capital contributions of 30% of the budgeted amounts when cash calls are received from the Peak Gold JV or face the possible dilution of its interest in the Peak Gold JV.  ~~This will require substantial capital raising efforts by the Company in order to avoid dilution in its Peak Gold JV interest.~~

On December 23, 2022, the Company completed the issuance and sale of an aggregate of 283,500 shares of the Company’s Common Stock, for $20.00 per share, and warrants entitling each purchaser to purchase shares of Common Stock for $25.00 per share in a private placement to certain accredited investors. Net proceeds from the December 2022 Private Placement totaled approximately $5.6 million. (See Note 8 – Stockholder’s Equity for further discussion). On January 19, 2023, the Company completed the issuance and sale of an aggregate of 117,500 shares, for $20.00 per share, and warrants entitling each purchaser to purchase shares of Common Stock for $25.00 per share in a private placement to certain accredited investors. Net proceeds from the January 2023 Private Placement totaled approximately $2.3 million. The Company will use the proceeds from the December 2022 and January 2023 private placements to fund its exploration and development program and for general corporate purposes. In May 2023, the Company offered the holders of its December 2022 Warrants and January 2023 Warrants (with an original exercise price of $25.00) the opportunity to exercise those warrants at the reduced exercise price of $22.00 and receive shares of common stock, par value $0.01 per share of Contango ORE, Inc. by paying the reduced exercise price in cash and surrendering the original warrants on or before May 9, 2023. As of May 10, 2023, a total of 313,000 December 2022 Warrants and January 2023 Warrants have been exercised resulting in total cash to the Company of $6.9 million and the issuance of 313,000 shares of Company Common Stock upon such exercise. Such shares of Common Stock were issued in reliance on an exemption from registration under the Securities Act, pursuant to Section 4(a)(2) thereof. The bases for the availability of this exemption include the facts that the issuance was a private transaction which did not involve a public offering and the shares were offered and sold to a limited number of purchasers. Proceeds from the exercise of the warrants will be used for working capital purposes and for funding future obligations of the Company. In connection with the accelerated exercise of the December 2022 Warrants and January 2023 Warrants, the Company agreed to issue new warrants to purchase shares of Company Common Stock at $30.00 per share to the exercising holders in the amount of the respective December 2022 Warrants and January 2023 Warrants that were exercised by such holders. As a result, the Company has issued new warrants to purchase 313,000 shares of Company Common Stock.
~~On April 26, 2022, the Company closed on a $20,000,000 unsecured convertible debenture to QRC. The debenture was purchased at par.~~  The Company’s cash needs going forward will primarily relate to capital calls from the Peak Gold JV, exploration of the Contango Properties,  and general and administrative expenses of the Company. If a large budget is undertaken, and no additional financing is obtained, the Company can elect not to fund its portion of the approved budget, in which case the Company would maintain sufficient liquidity to meet its working capital requirements for the next twelve months; however, its membership interest in the Peak Gold JV would be diluted. If the Company’s interest in the Peak Gold JV is diluted, the Company may not be able to fully realize its investment in the Peak Gold JV. Also, if no additional financing is obtained, the Company may not be able to fully realize its investment in the Contango Properties.
25

On March 20, 2023, the Company entered into a project finance mandate with ING CAPITAL LLC (“ING”) and Macquarie Bank Limited (“Macquarie”) to arrange a US$70 million senior secured loan facility to fund its portion of the pre-production construction and working capital/operating expenditures for the Peak Gold JV. The negotiations for that senior loan facility are progressing and are expected to be completed in May 2023. The Company anticipates that the proposed secured credit facility with ING and Macquarie will provide a substantial portion of the capital necessary to fund the Company’s 30% portion of the projected budget amounts necessary to complete the Manh Choh mine. Other than the initial draw amount, funding under the secured credit facility is conditioned on the Company receiving approximately $32 million in proceeds from the sale of its equity, which will be in addition to the proceeds from the secured loan facility.
If the secured credit facility is not consummated and the Company is unable to obtain other financing, the Company would elect to not to fund its interest in the Peak Gold JV and would be diluted. In either case, management believes the Company would maintain sufficient liquidity to meet its working capital requirements for the next twelve months from the date of this report. If the Company’s interest in the Peak Gold JV is diluted, the Company may not be able to fully realize its investment in the Peak Gold JV. Also, if no additional financing is obtained, the Company may not be able to fully realize its investment in the Contango Properties.  The Company has limited financial resources and the ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions, the exploration results achieved at the Peak Gold JV Property, as well as the market price of metals. The Company cannot be certain that financing will be available to the Company on acceptable terms, if at all. ~~If the Company were unable to fund its contributions to the approved programs and budgets for the Peak Gold JV, its membership interest in the Peak Gold JV would be diluted.~~

Further financing by the Company may include issuances of equity, instruments convertible into equity (such as warrants) or various forms of debt. The Company believes that it is more likely than not that it will raise capital through the issuance of additional equity and or debt securities in the next six months for purposes of funding its proportionate share of future Peak Gold JV exploration and for the Company’s operating costs, including meeting the conditions necessary to close the senior loan facility with ING and Macquarie. The Company has issued ~~Common Stock~~common stock and other instruments convertible into equity in the past and cannot predict the size or price of any future issuances of ~~Common Stock~~common stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of the Company’s securities. Any additional issuances of ~~Common Stock~~common stock or securities convertible into, or exercisable or exchangeable for, ~~Common Stock~~common stock may ultimately result in dilution to the holders of ~~Common Stock,~~common stock, dilution in any future earnings per share of the Company and may have a material adverse effect upon the market price of the ~~Common Stock~~common stock of the Company.

26

Item3.Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company” the Company is not required to provide this information.

Item4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) of the Exchange Act, the Company has evaluated, under the supervision and with the participation of its management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that the Company files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2023 at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting ~~(as~~(as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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Table of Contents

PART II—OTHER INFORMATION

Item1.Legal Proceedings

From time to time, the Company is party to litigation or other legal and administrative proceedings that it considers to be a part of the ordinary course of business. For a discussion of the complaint filed on October 20, 2023 by CSC seeking injunctive relief against the Alaska DOT with respect to its oversight of the Peak Gold JV’s ore haul plan, see Note 17 – Subsequent Events and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments and Other Information. As of the date of this Form 10-Q, the Company is not a party to any material legal proceedings and the Company is not aware of any material proceedings contemplated against us, that could individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company's financial condition, cash flows or results of operations.

Item1A. Risk Factors

In addition to the risk factor set forth below and the other information set forth in this Form 10-Q, you should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended June 30, ~~2022,~~2023, under the headings ~~“Item~~“Item 1. Business — Adverse Climate Conditions,” “—“—Competition,” “—“— Government ~~Regulation”~~Regulation” and ~~“Item~~“Item 2. ~~Properties—~~Properties— Environmental Regulation and Permitting,” ~~“Item~~“Item 1A. Risk Factors,” and ~~“Item~~“Item 7. ~~Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations” which risks could materially affect our business, financial condition or future results.There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K for the year ended June 30, ~~2022.~~2023. The risks described in our Annual Report on Form 10-K for the year ended June 30, ~~2022~~ 2023 are not the only risks the Company faces. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. An investment in the Company is subject to risks inherent in our business and involves a high degree of risk. The trading price of the shares of the Company isaffected by the performance of our business relative to, among other things, competition, market conditions and general economic and industry conditions. The value of an investment in the Company may decrease, resulting in a loss.The updated risk factors are as follows:

~~Our cash~~Opposition to our operations and ~~cash equivalents may be exposed to failure of our banking institutions.~~
While we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of large financial institutions. Notwithstanding, such allocation, we are subject to the risk of bank failure. None of our cash and cash equivalents was held at anythose of the ~~banks that have failed during the reporting period and we do not expect further developments in the banking system to~~Peak Gold JV from local stakeholders or non-governmental organizations could have a material ~~impact~~adverse effect on us.
There is an increasing level of public concern relating to the effect of mining production on its surroundings, communities, and environment. Local communities and non-governmental organizations (“NGOs”), some of which oppose resource development, are often vocal critics of the mining industry. For instance, certain NGOs have recently filed suit against the State of Alaska and the Alaska Department of Transportation to stop trucking of mining ore on public highways, citing safety and environmental concerns. While we and the Peak Gold JV seek to operate in a socially responsible manner, opposition to extractive industries, or our operations specifically, adverse publicity generated by local communities or NGOs related to extractive industries, or our operations specifically, or the modification or increase in enforcement of laws regarding truck weight limits or public road access could prevent us from obtaining permits necessary for our operations or to continue operations as planned or at all. Further, such events could have a material adverse effect on our ~~cash~~reputation, our relationships with the communities in which we operate and ~~cash equivalents balance, expected results of operations, or~~our financial ~~performance for the foreseeable future. However, if the banks where we hold deposits were to experience a similar failure, we could experience additional risk. Any such loss or limitation on our cash~~condition and ~~cash equivalents would adversely affect our business.~~prospects.

Item2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item4. Mine Safety Disclosures

None.

Item5. Other Information

None.

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Table of Contents

Item6.Exhibits
(a)
Exhibits:

The following is a list of exhibits filed as part of this Form 10-Q. Where so indicated, exhibits, which were previously filed, are incorporated herein by reference (File No. 001-35770, unless otherwise indicated).

Exhibit
Number
Description

3.1
Certificate of Incorporation of Contango ORE, Inc. (Filed as Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).

3.2

Certificate of Amendment to Certificate of Incorporation of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).
3.3
Bylaws of Contango ORE, Inc.~~(Filed~~ (Filed as Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).
3.4

Amendment No. 1 to the Bylaws of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 21, 2021).

4.1

Form of Certificate of Contango ORE, Inc. ~~Common Stock.~~common stock. (Filed as Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2013, as filed with the Securities and Exchange Commission on November 14, 2013).

4.2

Certificate of Designation of Series A Junior Preferred Stock of Contango ORE, Inc.~~(Filed~~ (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 21, 2012).

4.3

Certificate of Elimination of Series A Junior Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

4.4

Certificate of Designations of Series A-1 Junior Participating Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

4.5

Registration Rights Agreement dated as of June 17, 2021, by and between Contango ORE, Inc. and the Purchaser named therein (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on June 21, 2021).

4.6

Registration Rights Agreement dated as of August 24, 2021, by and between the Company and CRH Funding II Pte. Ltd. (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on August 25, 2021).

4.7
Rights Agreement, dated as of September 23, 2020, between Contango ORE, Inc. and Computershare Trust Company, N.A., as Rights Agent.
~~(Filed~~ (Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).
4.8

~~4.8~~
Amendment No. 1 to Rights Agreement, dated as of September 22, 2021, between Contango ORE, Inc. and Computershare Trust Company. N.A. as Rights ~~Agent~~ Agent. (~~Filed~~(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 22, 2021).

4.9

Amendment No. 2 to Rights Agreement, dated as of August 31, 2022, between Contango ORE, Inc. and Computershare Trust Company. N.A. as Rights ~~Agent~~Agent. (~~Filed~~(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 2, 2022).

4.10

Form of Registration Rights Agreement dated as of December 23, ~~2022~~2022.. (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 23, 2022).

4.11

Form of Registration Rights Agreement dated as of January 19, 2023. (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 19, 2023).

10.1

~~Form of Subscription~~Employment Agreement, dated ~~as of J~~July 11, 2023 between Michael Clark and the Company ~~anuary 19, 2023(Filed~~ † (Filed as Exhibit 10.1 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~July 17, 2023).

10.2

~~Form~~Amendment No. 1 to the Credit and Guarantee Agreement, dated July 17, 2023, by and among the Borrower, the Guarantors, each of ~~Warrant~~the lenders party hereto from time to time, the administrative agent and the collateral agent. *
10.3
Retention Agreement, dated ~~as of~~August 4, 2023 between Leah Gains and the Company ~~January 19, 2023(Filed~~ † (Filed as Exhibit ~~10.2~~10.1 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~August 4, 2023).

~~10.3~~
10.4

~~Form of Subscription~~ISDA Master Agreement, dated ~~as of January 19,~~May 17, 2023, between ING and Core Alaska~~(Filed~~ (Filed as Exhibit 10.1 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~August 8, 2023).

~~10.4~~10.5 ~~Form of Warrant~~ISDA Master Agreement, dated ~~as of January 19,~~May 17, 2023, between Macquarie and Core Alaska~~(Filed~~ (Filed as Exhibit 10.2 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~August 8, 2023).
10.6 Amendment No. 2 to the Credit and Guarantee Agreement, dated August 15, 2023, by and among the Borrower, the Guarantors, each of the lenders party hereto from time to time, the administrative agent and the collateral agent. *

31.1
Certification of Principal Executive Officer required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. *
31.2
Certification of Principal Financial Officer required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. *
32.1
Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2
Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

29
30
Table of Contents

101
Financial statements from the Company’s quarterly report on Form 10-Q for the three months ended ~~March 31,~~September 30, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Cash Flows; (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity; and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*
Filed ~~herewith.~~herewith

† Management contract or compensatory plan or agreement

31

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

CONTANGO ORE, INC.
Date: ~~May 11,~~November 14, 2023
By:
/s/     RICK VAN NIEUWENHUYSE
Rick Van Nieuwenhuyse
President and Chief Executive Officer
(Principal Executive Officer)
Date: ~~May 11,~~November 14, 2023
By:
/s/     LEAH GAINES
Leah Gaines
Vice President, Chief Financial Officer, Chief Accounting Officer and Controller
(Principal Financial and Accounting Officer)

3132

	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022
EXPENSES:
Claim rental expense	$	(126,452	)	$	(157,162	)	$	(399,828	)	$	(464,135	)
Exploration expense		(251,927	)		(1,987,345	)		(6,868,410	)		(4,153,027	)
Depreciation expense		(34,214	)		(10,239	)		(102,642	)		(23,954	)
Accretion expense		(2,865	)		(2,723	)		(8,839	)		(6,283	)
Impairment from casualty loss, net of recovery		—			(41,249	)		—			(41,249	)
General and administrative expense		(1,980,921	)		(3,228,096	)		(6,581,085	)		(7,995,029	)
Total expenses		(2,396,379	)		(5,426,814	)		(13,960,804	)		(12,683,677	)

OTHER INCOME/(EXPENSE):
Interest income		8,402			319			24,746			1,310
Interest expense		(447,510	)		(3,103	)		(1,343,687	)		(6,483	)
Loss from equity investment in Peak Gold, LLC (Note 5)		(5,090,000	)		(1,518,000	)		(14,400,000	)		(3,706,000	)
Insurance recoveries		—			—			338,301			—
Other income		—			—			15,656			—
Total other income/(expense)		(5,529,108	)		(1,520,784	)		(15,364,984	)		(3,711,173	)

LOSS BEFORE TAXES		(7,925,487	)		(6,947,598	)		(29,325,788	)		(16,394,850	)
Income tax benefit		—			119,731			—			119,731
NET LOSS	$	(7,925,487	)	$	(6,827,867	)	$	(29,325,788	)	$	(16,275,119	)

LOSS PER SHARE
Basic and diluted	$	(1.09	)	$	(1.01	)	$	(4.23	)	$	(2.42	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic and diluted		7,243,345			6,743,528			6,938,664			6,725,079

	Common Stock						Additional Paid-In			Treasury			Accumulated			Total Stockholders’
	Shares			Amount			Capital			Stock			Deficit			Equity/(Deficit)
Balance at June 30, 2022		6,860,420		$	68,604		$	74,057,859		$	(2,318,182	)	$	(58,534,238	)	$	13,274,043
Stock-based compensation		—			—			787,874			—			—			787,874
Treasury shares issued for convertible note interest payment		—			—			—			138,886			—			138,886
Treasury shares withheld for employee taxes		—			—			—			(27,693	)		—			(27,693	)
Net loss for the period		—			—			—			—			(7,091,770	)		(7,091,770	)
Balance at September 30, 2022		6,860,420			68,604			74,845,733			(2,206,989	)		(65,626,008	)		7,081,340
Stock-based compensation		—			—			810,547			—			—			810,547
Issuance of common stock		283,500			2,835			2,844,257			—			—			2,847,092
Treasury shares issued in common stock issuance		(42,525	)		(425	)					2,166,228			—			2,165,803
Warrants		—			—			657,105			—			—			657,105
Cost of common stock issuance		—			—			(71,500	)		—			—			(71,500	)
Treasury shares issued for convertible note interest payment		—			—			—			100,000			—			100,000
Treasury shares withheld for employee taxes		—			—			—			(59,239	)		—			(59,239	)
Net loss for the period		—			—			—			—			(14,308,531	)		(14,308,531	)
Balance at December 31, 2022		7,101,395		$	71,014		$	79,086,142		$	—		$	(79,934,539	)	$	(777,383	)
Stock-based compensation		—			—			607,818			—			—			607,818
Restricted stock activity		85,166			851			(851	)		—			—			—
Issuance of common stock		117,500			1,175			1,871,162			—			—			1,872,337
Treasury shares issued in common stock issuance		(1,527	)		(15	)		—			39,481			—			39,481
Warrants		—			—			438,182			—			—			438,182
Cost of common stock issuance		—			—			(39,000	)		—			—			(39,000	)
Shares issued for convertible note interest payment		4,184			42			99,956			—			—			99,998
Treasury shares withheld for employee taxes		—			—						(39,481	)		—			(39,496	)
Net loss for the period		—			—			—			—			(7,925,487	)		(7,925,487	)
Balance at March 31, 2023		7,306,718		$	73,067		$	82,063,409		$	—		$	(87,860,026	)	$	(5,723,550	)

	Common Stock				Additional Paid-In			Treasury			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Stock			Deficit			Equity
Balance at June 30, 2021		6,675,746	$	66,757	$	69,509,606		$	—		$	(35,027,588	)	$	34,548,775
Stock-based compensation		—		—		1,021,851			—			—			1,021,851
Cost of common stock issuance		—		—		(43,560	)		—			—			(43,560	)
Restricted shares activity		10,000		100		(100	)		—			—			—
Net loss for the period		—		—		—			—			(4,572,213	)		(4,572,213	)
Balance at September 30, 2021		6,685,746		66,857		70,487,797			—			(39,599,801	)		30,954,853
Stock-based compensation		—		—		1,256,309			—			—			1,256,309
Restricted stock activity		123,500		1,235		(1,235	)		—			—			—
Treasury Shares withheld for employee taxes		—		—		—			(69,307	)		—			(69,307	)
Net loss for the period		—		—		—			—			(4,875,039	)		(4,875,039	)
Balance at December 31, 2021		6,809,246	$	68,092	$	71,742,871		$	(69,307	)	$	(44,474,840	)	$	27,266,816
Stock-based compensation						897,742			—			—			897,742
Restricted stock activity		27,000		270		(270	)		—			—			—
Treasury Shares withheld for employee taxes		—		—		—			(710,315	)		—			(710,315	)
Treasury shares purchased from directors		—		—		—			(1,538,560	)		—			(1,538,560	)
Net loss for the period		—		—		—			—			(6,827,867	)		(6,827,867	)
Balance at March 31, 2022		6,836,246	$	68,362	$	72,640,343		$	(2,318,182	)	$	(51,302,707	)	$	19,087,816

Asset Type	Estimated Useful Life	March 31, 2023			June 30, 2022
Mineral properties	N/A - Units of Production	$	11,700,726		$	11,700,007
Land	Not Depreciated		87,737			87,737
Buildings and improvements	20-39 years		1,455,546			1,455,546
Machinery and equipment	3 - 10 years		287,635			287,635
Vehicles	5 years		135,862			135,862
Computer and office equipment	5 years		16,239			16,239
Furniture & fixtures	5 years		2,270			2,270
Less: Accumulated depreciation and amortization			(158,383	)		(55,740	)
Less: Accumulated impairment			(115,025	)		(115,025	)
Property & Equipment, net		$	13,412,607		$	13,514,531


	*September 30, 2023*			*June 30, 2023*
*Secured Debt Facility*
Principal amount	$	20,000,000		$	10,000,000
Unamortized debt discount		(2,388,728	)		(2,342,484	)
Unamortized debt issuance costs		(2,212,417	)		(1,628,012	)
Debt, net	$	15,398,855		$	6,029,504

*Convertible Debenture*
Principal amount	$	20,000,000		$	20,000,000
Unamortized debt discount		(438,264	)		(461,639	)
Unamortized debt issuance costs		(105,206	)		(110,818	)
Debt, net	$	19,456,530		$	19,427,543

Total Debt, net	$	34,855,385		$	25,457,047

Period	Commodity	Volume		Weighted Average Price ($/oz)
2024	Gold		21,100	$	2,025.17
2025	Gold		62,400	$	2,025.17
2026	Gold		41,100	$	2,025.17

		As of September 30, 2023							As of June 30, 2023
Derivatives not designated as hedging instruments	*Balance Sheet Location*	*Gross Recognized Assets / Liabilites*		*Gross Amounts Offset*			*Net Recognized Assets / Liabilities*		*Gross Recognized Assets / Liabilites*		*Gross Amounts Offset*		*Net Recognized Assets / Liabilities*

Commodity Contracts	Derivative contract asset - current	$	549,116	$	—		$	549,116	$	—	$	—	$	—
Commodity Contracts	Derivative contract liability - current	$	—	$	—		$	—	$	—	$	—	$	—
Commodity Contracts	Derivative contract asset - noncurrent	$	763,631	$	(763,631	)	$	—	$	—	$	—	$	—
Commodity Contracts	Derivative contract liability - noncurrent	$	4,038,158	$	(763,631	)	$	3,274,527	$	—	$	—	$	—

Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	*Location of Unrealized Gain or (Loss) Recognized in Income on Derivative*	*Amount of Gain or (Loss) Recognized in Income on Derivative*
		*Three month period ended September 30, 2023*			*Three month period ended September 30, 2022*

Commodity Contracts	Unrealized loss on derivative contracts	$	(2,725,411)		$	—

Total		$	(2,725,411	)	$	—

As of September 30, 2023	Level 1		Level 2		Level 3
Financial Assets
Derivative contract asset - current	$	—	$	549,116	$	—

Financial Liabilities
Derivative Liability - noncurrent	$	—	$	3,274,527	$	—
Contingent consideration liability - noncurrent	$	—	$	—	$	1,240,563

As of June 30, 2023
Financial Assets
Derivative contract asset - current	$	—	$	—	$	—

Financial Liabilities
Derivative Liability - noncurrent	$	—	$	—	$	—
Contingent consideration liability - noncurrent	$	—	$	—	$	1,240,563

	•	Risk in the pricing or timing of hedges the Company has entered into for the production of gold and associated minerals;
	•	Prices of gold and associated minerals;

	•	The Company’s ability to fund its business with current cash reserves based on currently planned activities;
	•	Prospect development;

	•	Operating and legal risks; and
	•	New governmental laws and regulations.

	•	Ability to retain or maintain capital contributions to, and our relative ownership interest in the Peak Gold JV;
	•	Ability to influence management of the Peak Gold JV;
	•	~~Ability to realize the anticipated benefits of the Kinross Transactions, including ability to process ore mined from the Peak Gold JV Property at the existing Fort Knox mining and milling complex;~~
	•	~~Disruption from the Kinross Transactions and transition of the Peak Gold JV’s management to Kinross, including as it relates to maintenance of business and operational relationships potential~~Potential delays or changes in plans with respect to exploration or development projects or capital expenditures;
	•	Operational constraints and delays;

	•	~~Changes in applicable tax rates and other regulatory changes;~~
	•	Impact of new and potential legislative and regulatory changes (including commitments to international agreements) on mining operating and safety ~~standards.;~~standards;

	•	Impact of pandemics, such as the worldwide COVID-19 outbreak, which could impact the Company's or the Peak Gold JV’s exploration schedule;
	•	Expanded rigorous monitoring and testing requirements;

	•	Competition generally and the increasing competitive nature of the mining industry;
	•	Risks related to title to properties; and
	•	Ability to consummate strategic transactions.

Exhibit Number		Description


3.1		Certificate of Incorporation of Contango ORE, Inc. (Filed as Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).

3.2		Certificate of Amendment to Certificate of Incorporation of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).

3.3		Bylaws of Contango ORE, Inc.~~(Filed~~ (Filed as Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).

3.4		Amendment No. 1 to the Bylaws of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 21, 2021).

4.1		Form of Certificate of Contango ORE, Inc. ~~Common Stock.~~common stock. (Filed as Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2013, as filed with the Securities and Exchange Commission on November 14, 2013).

4.2		Certificate of Designation of Series A Junior Preferred Stock of Contango ORE, Inc.~~(Filed~~ (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 21, 2012).

4.3		Certificate of Elimination of Series A Junior Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

4.4		Certificate of Designations of Series A-1 Junior Participating Preferred Stock of Contango ORE, Inc. (Filed as Exhibit 3.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

4.5		Registration Rights Agreement dated as of June 17, 2021, by and between Contango ORE, Inc. and the Purchaser named therein (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on June 21, 2021).

4.6		Registration Rights Agreement dated as of August 24, 2021, by and between the Company and CRH Funding II Pte. Ltd. (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on August 25, 2021).

4.7		Rights Agreement, dated as of September 23, 2020, between Contango ORE, Inc. and Computershare Trust Company, N.A., as Rights Agent. ~~(Filed~~ (Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

4.8
~~4.8~~		Amendment No. 1 to Rights Agreement, dated as of September 22, 2021, between Contango ORE, Inc. and Computershare Trust Company. N.A. as Rights ~~Agent~~ Agent. (~~Filed~~(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 22, 2021).

4.9		Amendment No. 2 to Rights Agreement, dated as of August 31, 2022, between Contango ORE, Inc. and Computershare Trust Company. N.A. as Rights ~~Agent~~Agent. (~~Filed~~(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 2, 2022).

4.10		Form of Registration Rights Agreement dated as of December 23, ~~2022~~2022.. (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 23, 2022).

4.11		Form of Registration Rights Agreement dated as of January 19, 2023. (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 19, 2023).

10.1		~~Form of Subscription~~Employment Agreement, dated ~~as of J~~July 11, 2023 between Michael Clark and the Company ~~anuary 19, 2023(Filed~~ † (Filed as Exhibit 10.1 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~July 17, 2023).

10.2		~~Form~~Amendment No. 1 to the Credit and Guarantee Agreement, dated July 17, 2023, by and among the Borrower, the Guarantors, each of ~~Warrant~~the lenders party hereto from time to time, the administrative agent and the collateral agent. *

10.3		Retention Agreement, dated ~~as of~~August 4, 2023 between Leah Gains and the Company ~~January 19, 2023(Filed~~ † (Filed as Exhibit ~~10.2~~10.1 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~August 4, 2023).

~~10.3~~ 10.4		~~Form of Subscription~~ISDA Master Agreement, dated ~~as of January 19,~~May 17, 2023, between ING and Core Alaska~~(Filed~~ (Filed as Exhibit 10.1 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~August 8, 2023).

~~10.4~~10.5		~~Form of Warrant~~ISDA Master Agreement, dated ~~as of January 19,~~May 17, 2023, between Macquarie and Core Alaska~~(Filed~~ (Filed as Exhibit 10.2 to the ~~Company’s~~Company current report on Form 8-K, as filed with the Securities and Exchange Commission on ~~January 19,~~August 8, 2023).

10.6		Amendment No. 2 to the Credit and Guarantee Agreement, dated August 15, 2023, by and among the Borrower, the Guarantors, each of the lenders party hereto from time to time, the administrative agent and the collateral agent. *

31.1		Certification of Principal Executive Officer required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. *

31.2		Certification of Principal Financial Officer required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. *

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *


101		Financial statements from the Company’s quarterly report on Form 10-Q for the three months ended ~~March 31,~~September 30, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Cash Flows; (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity; and (v) Notes to Unaudited Condensed Consolidated Financial Statements.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed ~~herewith.~~herewith

†	Management contract or compensatory plan or agreement

	CONTANGO ORE, INC.

Date: ~~May 11,~~November 14, 2023	By:	/s/ RICK VAN NIEUWENHUYSE
		Rick Van Nieuwenhuyse
		President and Chief Executive Officer (Principal Executive Officer)

Date: ~~May 11,~~November 14, 2023	By:	/s/ LEAH GAINES
		Leah Gaines
		Vice President, Chief Financial Officer, Chief Accounting Officer and Controller (Principal Financial and Accounting Officer)