Avidian Gold To Sell Its Alaskan Subsidiary To Contango Ore
Avidian Gold To Sell Its Alaskan Subsidiary To Contango Ore
TORONTO, Ontario, May 2, 2024 – Avidian Gold Corp. (“Avidian” or the “Company”) (TSX-
V: AVG) is pleased to announce that it has entered into a binding Stock Purchase Agreement (the
“Agreement”) with Contango ORE, Inc. (“Contango”) (NYSE-A: CTGO) pursuant to which
Contango has agreed to purchase Avidian’s 100% owned Alaskan subsidiary, Avidian Gold
Alaska Inc. (“Avidian Alaska”) for initial consideration of US$2.4 million (CDN$3.30 million),
plus a potential future upside consideration of US$1.0 million , for a total consideration of up to
US$3.4 million ( CDN$4.68 million at current exchange rate of US$1 = CDN$1.376) (the
“Transaction”). The consideration is a combination of cash plus Contango shares , as more fully
described below.
Avidian Alaska owns and controls the Golden Zone and Amanita NE gold properties and has an
option agreement to purchase 100% of the Amanita gold property . Golden Zone is a large,
prospective property in between Anchorage and Fairbanks near rail and highway infrastructure.
The Amanita and Amanita NE gold properties border Kinross Gold Corporation’s Fort Knox
operation near Fairbanks.
Dino Titaro, Director and Chairman of Avidian Gold st ates, “ On behalf of the Board of
Directors, we are pleased to announce this transaction. We believe Avidian is well served by both
the cash consideration to immediately strengthen its balance sheet and the Contango shares to
better participate in the continued strength in the gold price. Contango is a soon to be producer
of gold that is expected to be generating cash flow by mid to late 2024 from the high grade Manh
Choh Gold Deposit, a 70:30 joint venture between Kinross Gold Corporation and Contango.
Contango has the financial and technical strength to quickly advance these properties. We are of
the opinion that this acquisition will enhance their future production growth strategy, which
Avidian will participate in and greatly benefit from its share ownership.
This transaction is a win-win, particularly considering the current market investment climate for
non-producing junior exploration companies like Avidian. We believe the Alaska properties will
generate more value in Contango’s portfolio as a near term producer, as evidenced by Contango’s
acquisition of these properties for a purchase price plus a future potential upside payment that
well exceeded Avidian’s market capitalization at the time of negotiations, up to CDN$4.68 million
vs a then market capitalization of less than CDN$2.0 million. This at a time where Avidian and
most other junior explorers have not benefited by improving gold prices and have not been able
to raise the suitable equity to adequately advance exploration.
At the conclusion of this transaction, should Shareholders approve, Avidian will be debt free with
a clean balance sheet and will hold cash plus marketable securities, at current equity prices, on
the order of CDN$3.0 million dollars , excluding the potential future upside payment on a
production decision of US$1.0 million. Avidian will then focus on a value creation strategy for its
100% owned Jungo gold-copper project in Nevada and continue ongoing evaluation of a number
of possible strategic opportunities/alternatives that could be transformational for the Company.”
2
Transaction Details
1. Contango to acquire 100% of the capital stock of Avidian Gold Alaska Inc. from Avidian
Gold Corp.;
2. Contango will pay Avidian a n initial purchase price of US$2,400,000 consisting of (i)
US$400,000 in cash (the “ Cash Consideration ”) and (ii) US$2,000,000 in shares of
Contango common stock (the (“Equity Consideration”). The Cash Consideration shall be
paid in the following tranches: (i) a deposit US$50,000 (that has been received) (ii)
US$150,000 due on the Closing Date, and (iii) US$200,000 due on or before the 6-month
anniversary of the Closing Date. The number of shares of common stock constituting the
Equity Consideration will be determined based on Contango’s NYSE-A, 10-day volume-
weighted average price immediately prior to the Closing Date;
3. If Contango makes a positive production decision on either of the Amanita or Golden Zone
properties within 120 months of the Closing Date, Contango will pay Avidian an additional
US$1,000,000 within thirty (30) days of such decision (the “Deferred Purchase Price”).
The Deferred Purchase Price can be paid in either cash or shares of Contango at Contango’s
sole discretion . If at any time prior to this production decision , within the 120 -month
period, Contango enters into a third party transaction on either of the Amanita or Golden
Zone properties , Avidian will receive 20% of the consideration received by Contango
(capped at US $500,000 per property) , to be credited against the total Deferred Purchase
Price; and
4. The Transaction is subject to Avidian Shareholder approval, as well as the receipt of all
required governmental and/or regulatory approvals, including that of the Toronto Venture
Exchange and NYSE -A. Should Avidian Shareholders not approve this transaction the
Agreement will terminate and a termination fee of US$175,000 will be paid to Contango,
representing liquidated damages for the time, resources and opportunities lost in facilitating
this transaction.
Both Avidian’s and Contango’s Board of Directors have unanimously approved the Transaction.
The Board of Directors for Avidian unanimously recommends that shareholders vote in favor of
the Transaction. The Annual General and Special Meeting of shareholders will be held on July 4,
2024. It is expected that closing of this Transaction will happen as soon as practical ly possible
following the shareholder meeting that has approved the Transaction.
About Contango ORE Inc.
Contango ORE, Inc. (NYSE -A: CTGO) owns a 30% interest in the high grade Manh Choh gold
project located in Alaska , in partnership with a subsidiary of Kinross Gold Corporation
(“Kinross”). Kinross a cts as m anager and operator. The Manh Choh project has received all
Federal and State permits and mining operations are underway . Mining started at Manh Choh in
August of 2023 with ore stockpiled at site. Transportation of the ore from Manh Choh to Kinross'
existing Fort Knox mill complex located near Fairbanks, Alaska began in November 2023 .
Additional ore arrives daily to the stockpile at Fort Knox and first gold production is planned for
the second half of 2024 . Annual gold production is expected to be 225,000 ounces with 30% , or
3
approximately 67,500 ounces, credited to Contango’s account (see Technical Summary Report on
the Manh Choh project, dated May 12, 2023 at www.contangoore.com).
The use of the Fort Knox mill has accelerated the development of the Manh Choh project and
resulted in meaningfully reduced environmental impact and upfront capital without the need for
separate milling and tailings storage facilities in addition to a shorter permitting and development
timeline with less overall risk for the Manh Choh project. In addition to Manh Choh, Peak Gold
LLC, the 30/70 joint venture between Contango and Kinross, has had a mining lease since 2008
on 675,000 acres of private lands owned by the Tetlin Tribe and administered by the Tetlin Tribal
Council, which offer excellent exploration potential.
Ore is currently being stockpiled at the Manh Choh site and transported by highway ore haul trucks
to a stockpile area at the Fort Knox mill complex. A stockpile of approximately 250,000 tons is
being built prior to the start of milling in mid 2024.
Contango also controls the Lucky Shot project near Anchorage, Alaska, and through its subsidiary,
has 100% ownership of approximately 8,000 acres of peripheral State of Alaska mining claims.
The Lucky Shot project is a past high-grade gold producer in which Contango has outlined an
initial indicated mineral resource of 226,963 tonnes at 14.5 grams per tonne (“ g/t”) gold (“Au”)
and inferred mineral resource of 82,058 tonnes at 9.5 g/t Au (see Technical Summary Report on
the Lucky Shot project, dated May 26, 2023 at www.contangoore.com). Contango also owns a
100% interest in an additional 137,280 acres of State of Alaska mining claims through its wholly
owned subsidiary, providing additional exploration potential.
For additional details see www.contangoore.com.
About Avidian Gold Corp.
Avidian brings a disciplined and veteran team of project managers together with a focus on
advanced-stage gold exploration projects in Alaska. The Company’s district-scale (over 40sqkm)
Golden Zone property hosts a NI 43 -101 Indicated gold resource of 267,400 ounces (4,187,000
tonnes at 1.99 g/t Au) plus an Inferred gold resource of 35,900 ounces (1,353,000 tonnes at 0.83
g/t Au) within the Breccia Pipe Deposit. This resource is exposed o n the surface and was pit
constrained for an open -pit mining scenario. The Te chnical Report was filed on November 17,
2017, and was authored by Leon McGarry, B.Sc., P.Geo. and Ian D. Trinder, M.Sc., P.Geo.
Additional projects include the Amanita and the Amanita NE gold properties which are both
adjacent to Kinross Gold’s Fort Knox gold mine in Alaska, and the Jungo gold-copper property in
Nevada.
Avidian is a shareholder in High Tide Resources (CSE: HTRC) , which is focused on and
committed to the development of mineral projects critical to infrastructure development using
industry best practices combined with a strong social license from local communities. Avidian
Gold controls approximately 28% of High Tide’s outstanding shares. High Tide owns a 100%
interest in the Labrador West Iron Project which hosts a NI 43-101 Inferred iron resource of 654.9
Mt @ 28.84% Fe and is located adjacent to the Iron Ore Company of Canada’s (“ IOCC”) Carol
Lake Mine in Labrador City, NL operated by Rio Tinto PLC. This resource is exposed at surface
and was pit constrained for an open -pit mining scenario. The Technical Report was filed on
SEDAR on April 6, 2023 and was authored by Ryan Kressall M.Sc., P. Geo, Matthew Herrington,
4
M.Sc., P. Geo, Catharine Pelletier, P. Eng. and Jeffrey Cassoff P. Eng. The Company also owns
a 100% interest in the Lac Pegma copper-nickel-cobalt deposit located 50 kilometres southeast of
Fermont, Quebec.
Further details on the Company and the individual projects, including the NI 43 -101 Technical
reports on the Golden Zone property , can be found on the Company’s website at
www.avidiangold.com.
For further information, please contact:
Steve Roebuck
President & CEO
Mobile: (905) 741-5458
Email: [email protected]
or
Dino Titaro
Director, Chairman of the Board
Mobile: (647) 283 7600
Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this news release.
Forward-looking information
This News Release includes certain "forward-looking statements" which are not comprised of historical facts, including statements
regarding the use of proceeds. Forward -looking statements include estimates and statements that describe the Company’s future
plans, objectives or goals, including words to the effect that the Company or management expects a stated co ndition or result to
occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”,
“could”, “would”, “will”, or “plan”. Since forward -looking statements are based on assumptions and address f uture events and
conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on inform ation
currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations.
Risks, uncertainties and other factors involved with forward -looking information could cause actual events, results, performance,
prospects and opportunities to differ materially from those expressed or implied by such forward -looking information. Forward
looking information in this news release includes, but is not limited to, the progress, timing and potential closing of the Transaction,
the Company’s acquisition of shares in Contango, the Company’s receipt of the Cash Consideration or any part thereof, the
Company’s potential receipt of the Deferred Purchase Price, any receipt by the Company of shareholder, TSX Venture Exchange,
NYSE-A or any other applicable regulatory approval of the Transaction or Agreement, the Company’s objectives, goals or future
plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine
development plans, timing of the commencement of operations by the Company or any other company in which it has an interest,
the material or financial outcomes of any such operations so commenced, any anticipated benefit to the Company or its shareholders
resulting from the Company’s shareholdings, the financial state of the Company should the Transaction be successfully completed,
the payment or non-payment of any termination fee in connection with the Transaction, and estimates of market conditions. Factors
that could cause actual results to differ materially from such forward-looking information include, but are not limited to: the failure
to complete the Transaction on the terms provided or at all, failure to receive requisite approvals in respect of the Transaction, failure
to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study
which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain
required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First
Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates, fluc tuations in commodity prices, delays in the development of projects,
5
capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and
development industry, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes
that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.