Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Item 2. Management'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 in our Form 10-K for the year ended December 31, 2025, previously filed with the SEC.

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:

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 II, Item 1A. Risk Factors, of this Form 10-Q and Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2025, these factors include among others:

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.

2026 Highlights and Recent Developments

Dolly Varden Merger

On December 7, 2025, Contango and Dolly Varden entered into the Arrangement Agreement, which was subsequently amended on February 11, 2026. Pursuant to the Arrangement Agreement, Contango agreed to acquire all of the issued and outstanding common shares of Dolly Varden in exchange for Contango common shares at an Exchange Ratio of 0.1652 Contango shares for each Dolly Varden share.

Dolly Varden was amalgamated under the Business Corporations Act (British Columbia) on January 30, 2012. Dolly Varden is a mineral exploration company focused on the acquisition and exploration of mineral properties in Canada.

Dolly Varden's primary asset is its 100%-owned Kitsault Valley Project, which includes the Dolly Varden property and the Homestake Ridge property, located in the Golden Triangle of British Columbia, Canada, approximately 25 kilometers by road to tidewater. The 163-square-kilometer Kitsault Valley Project hosts high-grade silver and gold resources and includes the past-producing Dolly Varden and Torbrit silver mines.

In addition to the Kitsault Valley Project, Dolly Varden has consolidated a land package of six additional exploration properties in the same region. These properties have historically been explored for gold, copper, silver, lead and zinc. Including the Kitsault Valley Project and these additional properties, Dolly Varden holds mineral tenures totaling approximately 100,000 hectares within the region.

Immediately prior to the closing of the Arrangement, all outstanding restricted share units of Dolly Varden vested and were settled for Dolly Varden Shares. All outstanding Dolly Varden Options were exchanged for Contango stock options, adjusted to reflect the Exchange Ratio.

Eligible Canadian stockholders of Dolly Varden were entitled to elect to receive exchangeable shares in a Canadian subsidiary of Contango, which are exchangeable on a one for one basis into Contango common shares, in lieu of receiving Contango Shares directly.

On March 17, 2026, the shareholders of Dolly Varden and Contango voted to approve the acquisition, which was subsequently approved by the Supreme Court of British Columbia on March 23, 2026. The acquisition was completed on March 26, 2026, following the satisfaction of all remaining legal and regulatory requirements.

Manh Choh Project

In July 2024, the Peak Gold JV commenced processing ore at the Fort Knox facility and on July 8, 2024, the Manh Choh Project achieved a significant milestone and poured its first gold bar, on schedule. The Company received $40.5 million and $102.0 million in cash distributions from the Peak Gold JV relating to production at Manh Choh during 2024 and 2025, respectively. During the first and second quarters of 2026, the Company received $9.0 million in cash distributions from the Peak Gold JV, for each quarter, respectively, resulting in $18.0 million in total cash distributions for the nine months ended September 30, 2026. On October 7, 2026, the Company received a $6.0 million cash distribution related to the third quarter production at Manh Choh, bringing the total cash distributions to $24 million relating to production at Manh Choh during 2026.

The third production campaign for 2026 from the Manh Choh mine began on August 20, 2026 and concluded on September 24, 2026. In its September 8, 2026 update, the Company reported that Fort Knox modifications for higher-grade South Pit sulfide ore had been implemented and were performing as planned. Gold production for the quarter came in below budget due to several factors including:

During the first quarter of 2026, the Peak Gold JV (on a 100% basis) processed 187,479 tons of ore with an average grade of 0.125 ounces ("oz") per ton, containing approximately 23,435 oz of gold. Gold recovery averaged 88.5%, resulting in approximately 20,600 oz of recovered gold, of which Contango's 30% share amounted to 6,187 oz of gold. During the first quarter of 2026, a total of 8,012 oz of gold and 15,042 oz of silver were delivered to Contango and sold.

During the second quarter of 2026, the Peak Gold JV (on a 100% basis) processed 253,494 tons of ore with an average grade of 0.145 oz per ton, containing approximately 36,760 oz of gold. Gold recovery averaged 80.4%, resulting in approximately 29,500 oz of recovered gold, of which Contango's 30% share amounted to 8,866 oz of gold. During the second quarter of 2026, a total of 8,627 oz of gold and 10,319 oz of silver were delivered to Contango and sold.

During the third quarter of 2026, the Peak Gold JV (on a 100% basis) mined 304,102 tons of ore (16% increase from the second quarter), and processed 203,720 tons of ore with an average grade of 0.145 oz per ton, containing approximately 30,000 oz of gold. Gold recovery averaged 86.5%, resulting in approximately 25,300 oz of recovered gold, of which Contango's 30% share amounted to 7,595 oz of gold. During the third quarter of 2026, a total of 7,333 oz of gold and 5,349 oz of silver were delivered to Contango and sold.

Kitsault Valley Project

The September 11, 2026 Kitsault Valley mineral resource estimate ("MRE") comprised 7.66 million tonnes of indicated resources containing 58.70 million oz of silver and 394.70 thousand oz of gold, and approximately 6.31 million tonnes of inferred resources containing 22.80 million oz of silver and 620.82 thousand oz of gold. Reported silver equivalent ("AgEq") inventories are 89.55 and 64.92 million oz, respectively. No measured resources or mineral reserves are reported. Mineral resources have no demonstrated economic viability, and inferred resources cannot be directly converted into reserves. Refer to the September 21, 2026 Kitsault Valley TRS, Section 11.7, Tables 11-53 to 11-57, filed with the September 22, 2026 Current Report on Form 8-K. The estimate uses drilling completed through 2025; 2026 drilling is excluded. Seven updated deposits use a 132 g/t AgEq cutoff, while South Reef retains its historical 2.0 g/t AuEq cutoff. Metal-equivalent values use the prices and deposit-specific recovery assumptions described in TRS Section 11.4. Resources are in-situ estimates before mining dilution and recovery; contained metal and AgEq are not estimates of payable production. The technical report identifies Dave Larimer, a Company employee, as the responsible qualified person.

The 2026 drilling scope expanded from 40,000 meters to more than 56,000 meters. The September 15, 2026 results included DV26-480 with 13.90 meters at 506 g/t AgEq and DV26-494 with 4.96 meters at 807 g/t AgEq. Intervening holes showed mineralization consistent with a possible geological connection between Torbrit and North Star, but assays were pending and continuity of grade and economic mineralization remained unestablished. Intervals are downhole lengths; true widths require further validation. For these southern-area exploration assays, AgEq = Ag + 11.64 x Pb + 15.22 x Zn + 58.27 x Au (Ag and Au in g/t; Pb and Zn in %), using $53/oz Ag, $3,500/oz Au, $0.90/lb Pb and $1.25/lb Zn with assumed recoveries of 85%, 75%, 85% and 80%, respectively. These assay

equivalents are distinct from the resource model's deposit-specific assumptions. The results do not establish mineral reserves or economic viability.

Johnson Tract Project

During the second quarter of 2026, activities at the Johnson Tract Project focused on planning, resourcing, permitting coordination, and logistical preparations in support of the Company's planned 2026 field program. On December 1, 2025, the Johnson Tract Critical Metals Project was posted to the Federal Permitting Dashboard as a covered project under Title 41 of the Fixing America's Surface Transportation Act, commonly referred to as FAST-41. The Federal Permitting Improvement Steering Council announced the project's FAST-41 coverage on December 2, 2025. The U.S. Army Corps of Engineers ("Corps") is identified as the lead federal permitting agency for the project. The FAST-41 permitting timetable was separately announced on January 30, 2026. FAST-41 provides coordination and does not itself grant project permits.

As reported on September 8, 2026, environmental and cultural surveys were largely completed within the Johnson Tract and project easements and the baseline program was substantially advanced. The program includes:

As reported on September 8, 2026, geotechnical investigations within the foreshore have been completed and investigations along the proposed coastal road are substantially complete.

During the third quarter, the Company also completed construction of a 2.6-mile access road connecting the existing camp to the proposed portal site, along with the portal lay down area. This work is critical in supporting construction of the underground exploration drift, which is scheduled to begin in 2027. As a result of cost efficiencies achieved during the field season, the Company also completed construction of a new camp pad, which had originally been planned for 2027. Completion of the pad this year advances site preparation ahead of schedule and allows the Company to begin selecting engineering consultants for the new camp, which is targeted for 2027. As of September 30 2026, the construction of the access road represented a capitalized cost of $10.4 million that will be amortized once the asset is commissioned for use.

The Johnson Tract Initial Assessment, effective May 12, 2025 and as amended January 12, 2026, reports post-tax NPV at a 5% discount rate of $224.5 million and IRR of 30.2% at $2,200/oz gold. It includes inferred resources representing approximately 1.3% of life-of-mine tonnage. Excluding inferred resources, the reported NPV at 5% and IRR are $216.4 million and 29.5%. This assessment is preliminary; inferred resources are geologically too speculative for reserve classification, and there is no certainty that the economic results will be achieved. These results do not establish mineral reserves.

Lucky Shot Property

The initial underground drilling phase comprised 65 HQ diamond holes totaling approximately 6,020 meters. Further surface drilling, underground access and KM vein drilling are intended to support an updated resource estimate targeted for the first half of 2027, followed by feasibility evaluation. A possible direct-shipping-ore operation targeting 40,000-50,000 ounces of gold annually remains a study concept, subject to technical results, permitting, financing and a future decision; it is not a demonstrated reserve-based production plan.

The June results included a selected 0.17-meter downhole interval at 972.10 grams per tonne ("g/t") gold in LSU26091. This narrow result is not a representative bulk grade or demonstrated mining width. Visible gold is a logging observation; pending samples require assay validation before grade conclusions are drawn. The geological continuity and mineability of the mineralization remain under evaluation. Underground exploration-access work resumed with GMS. The Company is evaluating the KM vein system identified during initial underground drilling.

The 2026 surface drilling program at Lucky Shot was completed on August 31, 2026, with approximately 5,800 meters in 27 holes from five pads. Results released on September 2, 2026 included hole LSS26016 with 2.45 meters at 86.05 g/t gold. Subsequent to the end of the third quarter, results released on October 6, 2026 included LSS26018 with 0.63 meters at 140.23 g/t gold and LSS26021 with 3.65 meters at 18.16 g/t gold. These are selected downhole intervals; true widths are not established. Other reported holes lacked significant intersections and additional assays remained pending. These exploration results do not establish resources, reserves or economic viability.

KM vein drilling began September 16, 2026, within the third quarter. The October 6, 2026 update described approximately 1,140 meters in 17 planned holes from five stations, with ten holes completed from the first two stations and work continuing from Station 346.

This program evaluates KM vein geometry and its interpreted structural relationship to the Lucky Shot Fault and vein system. Assays are expected in the fourth quarter after receipt and validation. Geological observations and pending samples do not establish grade continuity, a resource update or economic viability.

During the nine months ended September 30, 2026, the Company recorded additions of approximately $13.7 million to mineral properties at the Lucky Shot Property, reflecting the purchase of the underlying lease and 2% net smelter return royalty under the LSA Purchase Agreement and the settlement of the contingent milestone consideration payable to CRH (see Note 11 - Commitments and Contingencies).

Strategy and Asset Management

Partnering with strategic industry participants to expand future exploration work. As of October 1, 2020, in conjunction with the Peak Gold JV acquisition and the signing of the Amended and Restated Limited Liability Company Agreement of the Peak Gold JV ( as amended, 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 JV Management Committee has exclusive authority to determine all management matters related to the Company. The JV 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 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. The Company has implemented an equity compensation program for its executive officers and directors (and other persons) that provides an incentive for such officers to achieve the Company's long-term business objectives. The Company's equity compensation program includes two forms of long-term incentives: restricted stock and stock options. As of September 30, 2026, the Company's directors and executives beneficially own approximately 5.3% of the Company's 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 and/or staking Federal or State of Alaska mining claims. 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.

Results of Operations

Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025

Exploration Expense. Exploration expense for the three months ended September 30, 2026 was $26.9 million compared to $2.1 million for the three months ended September 30, 2025. Current period exploration expense primarily relates to the advances on the 20,000 meter underground and surface drilling program on the Lucky Shot Property, the 56,000 meter drilling program on the Kitsault Valley Project (obtained through the Dolly Varden acquisition completed in the first quarter of 2026) and permitting activities and road costs on the Johnson Tract Property. The prior period exploration expense related primarily to the permitting process for the underground exploration drift and baseline environmental work at the Johnson Tract Project.

General and Administrative Expense. General and administrative expense for the three months ended September 30, 2026 and 2025 was $4.0 million and $2.5 million, respectively. The Company's general and administrative expense primarily relates to professional fees, regulatory fees, marketing and investor relations, payroll and stock-based compensation expense. The increase was primarily due to the expanded scale of the Company's operations, following the acquisition of Dolly Varden, including higher payroll, professional fees and regulatory costs.

Income from Equity Investment in the Peak Gold JV. The income from the Company's equity investment in the Peak Gold JV for the three months ended September 30, 2026 was $6.9 million compared to income of $29.5 million for the same period in 2025. The decrease was mainly driven by a reduction in the revenue generated by the Peak Gold JV, reflecting fewer ounces sold and higher diesel costs related to ore transportation from Manh Choh to Fort Knox and increased reagents and consumables required in the mill to process the higher copper and sulfide content during 2026 compared to 2025. During the third quarter of 2026, production at Manh Choh focused on mining and processing lower grade ore and processing less tons from the North Pit as Manh Choh transitioned to the higher-grade portions of the South Pit.

Interest Expense. For the three months ended September 30, 2026, interest expense was $1.6 million and primarily related to the Queen's Road Capital Investment, Ltd. Debenture (the "Debenture") and interest on the Company's cumulative net draw-down of $45.3 million on the secured credit facility. Prior year interest expense of $1.7 million primarily related to the Debenture and interest on the Company's cumulative net draw-down of $23.1 million on the secured credit facility (see Note 13 - Debt).

Gain/(Loss) on Metal Sales. For the three months ended September 30, 2026 and 2025, the gain/(loss) on metal sales was $0.1 million loss and $2.2 million gain, respectively. These amounts are related to (i) excess ounces purchased from the Peak Gold JV that were not delivered into the hedges and were instead sold to the derivative counterparties, and (ii) hedged volumes sold at spot prices with an obligation to repurchase the ounces at fixed prices prior to delivery into the hedges. During the three months ended September 30, 2026, the Company sold 7,333 ounces at an average spot price of $4,255 compared to 16,669 ounces sold at an average spot price of $3,647 during the three months ended September 30, 2025.

Loss on Derivative Contracts. The $2.0 million loss on derivative contracts for the three months ended September 30, 2026 consisted of an unrealized gain of $44.8 million and a realized loss of $46.8 million, which included $33.0 million paid to settle 15,000 ounces of hedge contracts with maturities ranging between March and June 2027. This compares to a $30.3 million loss on derivative contracts consisting of an unrealized loss of $14.4 million and a realized loss of $15.9 million for the three months ended September 30, 2025. The period over period variance primarily reflects changes in the fair value of derivative contracts driven by increases in spot gold prices and corresponding changes in the forward curves used to value the contracts, and the completion of deliveries under the derivative arrangements.

During the three months ended September 30, 2026, the Company delivered 4,000 gold ounces into the derivative contracts and cash settled the remaining 15,000 ounces that matured on March and June 2027. During the three months ended September 30, 2025, the Company delivered 11,900 gold ounces into the derivative contracts (see Note 14 - Derivative and Hedging Activities).

Gain/(Loss) on Marketable Securities. For the three months ended September 30, 2026, the unrealized gain on marketable securities totaled $0.5 million and was primarily due to changes in the fair value of the Company's investment in Onyx, compared to an unrealized loss of $1.0 million for the three months ended September 30, 2025.

Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025

Exploration Expense. Exploration expense for the nine months ended September 30, 2026 was $43.3 million compared to $3.8 million for the nine months ended September 30, 2025. Current period exploration expense primarily relates to the advances on the 20,000 meter underground and surface drilling program on the Lucky Shot Property, the 56,000 meter drilling program on the Kitsault Valley Project and permitting activities and road costs on the Johnson Tract Property. The prior period exploration expense related primarily to the permitting process for the underground exploration drift and baseline environmental work at the Johnson Tract Project.

General and Administrative Expense. General and administrative expense for the nine months ended September 30, 2026 and 2025 was $13.1 million and $8.1 million, respectively. The Company's general and administrative expense primarily relates to professional fees, regulatory fees, marketing and investor relations, payroll and stock-based compensation expense. The increase was primarily due to the expanded scale of the Company's operations, following the acquisition of Dolly Varden, including higher payroll, professional fees and regulatory costs.

Income from Equity Investment in the Peak Gold JV. The income from the Company's equity investment in the Peak Gold JV for the nine months ended September 30, 2026 was $28.9 million compared to income of $79.2 million for the same period in 2025. The decrease was mainly driven by a reduction in the revenue generated by the Peak Gold JV, reflecting fewer ounces sold and higher diesel costs related to ore transportation from Manh Choh to Fort Knox and increased reagents and consumables required in the mill to process the higher copper and sulfide content during 2026 compared to 2025. During 2026, production at Manh Choh focused on mining and processing lower grade ore and processing less tons from the North Pit as Manh Choh transitioned to the higher-grade portions of the South Pit.

Interest Expense. For the nine months ended September 30, 2026, interest expense was $3.5 million and primarily related to the Debenture and interest on the Company's cumulative net draw-down of $45.3 million on the secured credit facility. Prior year interest expense of $6.5 million primarily related to the Debenture and interest on the Company's cumulative net draw-down of $23.1 million on the secured credit facility (see Note 13 - Debt).

Gain/(Loss) on Metal Sales. For the nine months ended September 30, 2026 and 2025, the gain on metal sales was $1.1 million and $4.3 million, respectively. These gains primarily related to (i) excess ounces purchased from the Peak Gold JV that were not delivered into the hedges and were instead sold to the derivative counterparties, and (ii) hedged volumes sold at spot prices with an obligation to repurchase the ounces at fixed prices prior to delivery into the hedges. During the nine months ended September 30, 2026, the Company sold 23,974 ounces at an average spot price of $4,509 compared to 51,574 ounces sold at an average spot price of $3,300 during the nine months ended September 30, 2025.

Loss on Derivative Contracts. The $10.7 million loss on derivative contracts for the nine months ended September 30, 2026 consisted of an unrealized gain of $87.0 million and a realized loss of $97.7 million, which included $79.4 million paid to settle 30,446 ounces of hedge contracts with maturities ranging between March and September 2026, and March and June 2027. This compares to a $83.7 million loss on derivative contracts consisting of an unrealized loss of $57.0 million and a realized loss of $26.7 million for the nine months ended September 30, 2025. The period over period variance primarily reflects changes in the fair value of derivative contracts driven by increases in spot gold prices and corresponding changes in the forward curves used to value the contracts, and the completion of deliveries under the derivative arrangements.

During the nine months ended September 30, 2026, the Company delivered and cash settled the remaining 43,000 gold ounces into the derivative contracts including the carry trade with maturity dates of March 31, 2026, September 30, 2026 and December 31, 2026. During the nine months ended September 30, 2025, the Company delivered 23,839 gold ounces into the derivative contracts (see Note 14 - Derivative and Hedging Activities).

Gain/(Loss) on Marketable Securities. For the nine months ended September 30, 2026, the unrealized gain on marketable securities totaled $0.3 million and was primarily due to changes in the fair value of the Company's investment in Onyx, compared to an unrealized gain of $5.7 million for the nine months ended September 30, 2025.

Cash Cost on a By-Product Basis and All-In Sustaining Costs on a By-Product Basis (non-GAAP)

The table below presents reconciliations between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost on a By-product Basis, per ounce sold and (ii) All-in Sustaining Costs ("AISC") on a By-product Basis, per ounce sold for the Peak Gold JV operations (Manh Choh) for the three and nine months ended September 30, 2026 and 2025.

Cash Cost on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost on a By-product Basis includes all direct and indirect operating cash costs related directly to the physical activities of producing gold, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. The value of silver sold is deducted from the total production cost of sales as it is considered residual production, i.e. a by-product.

AISC on a By-product Basis includes reclamation, sustaining capital, exploration and joint venture partner operator management costs.

Cash Cost on a By-product Basis, per Ounce sold is an important operating statistic that we utilize to measure a mine's operating performance. We use AISC on a By-product Basis, per Ounce sold as a measure of a mine's net cash flow after costs for reclamation and sustaining capital. This is similar to the Cash Cost on a By-product Basis, per Ounce sold measure we report, but also includes reclamation and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain gold production. Cash Cost on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold also allow us to benchmark the performance of the Peak Gold JV versus those of our competitors. These statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

The increase in costs in 2026 is primarily driven by increased diesel costs related to ore transportation from Manh Choh to Fort Knox and increased reagents and consumables required in the mill to process the higher copper and sulfide content. Additionally, the lower gold ounces processed during the year has resulted in higher cash costs and AISC per ounce of gold sold.

The fourth and final campaign for 2026 is expected to produce 13,000 to 15,000 ounces of gold at cash costs and AISC of $2,700 and $2,900, respectively. The Company is guiding towards the lower end of its 2026 production guidance of 40,000 gold equivalent ounces attributable to its 30% interest in the Peak Gold JV with 2026 cash costs and AISC of $2,700 and $2,900 per ounce of gold sold, respectively. A final cash distribution in the amount of $16 million is expected in the fourth quarter, in addition to the $6 million received on October 7, 2026, for a total of $40 million in cash distributions to be received for 2026.

Cash Costs on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold are calculated by adjusting production cost of sales, as reported on the interim condensed consolidated statements of operations, as follows:

Liquidity and Capital Resources

As of September 30, 2026, the Company had approximately $56.6 million of cash and cash equivalents.

The Company's primary cash requirements have been for general and administrative expenses, capital calls from the Peak Gold JV for the Manh Choh Project, repayment of principal and interest related to debt and exploration expenditures on the Johnson Tract Project, Lucky Shot Property and Kitsault Valley Project. The Company's sources of cash have been from common stock offerings, the issuance of the Debenture, distributions from the equity investment, the proceeds from the Facility (see Note 5 - Investment in the Peak Gold JV, Note 8 - Stockholders' Equity and Note 13 - Debt, for a discussion of the recent activity), and the acquisition of Dolly Varden (see Note 16 - Acquisition).

The Manh Choh Project began production early in the third quarter of 2024 and on July 8, 2024, the Peak Gold JV poured its first gold bar. The Manh Choh Project remains on schedule and ore mining continues along with stockpiling of ore at the Fort Knox facility. Production from the Manh Choh Project has allowed the Peak Gold JV to operate from the cash flows generated from its operations and there are no future anticipated cash calls.

The Company's cash needs going forward will primarily relate to exploration of the Contango Properties, repayment of debt and related interest and general and administrative expenses of the Company. During the first and second quarter of 2026, the Company received cash distributions totaling $9.0 million and $9.0 million, respectively. Subsequent to the end of the third quarter, the Company received an additional $6.0 million related to the third quarter campaign. Although there can be no guarantee that the Peak Gold JV will continue to make distributions to the Company, the Company believes that distributions are probable and that it will maintain sufficient liquidity to meet its working capital requirements, including repayment obligations of approximately $45.3 million on the Facility (see at Note 13 - Debt), for the next twelve months from the date of this report.

On February 12, 2026, the Company sold shares of common stock and pre-funded warrants and received gross proceeds of $50 million. The Company used the net proceeds of approximately $47.0 million to settle gold hedge contracts and purchase put options. Any remaining proceeds will be used for general corporate purposes, including working capital.

On July 1, 2026, the Company amended its Secured Credit Facility and received $33.7 million. The Company used the proceeds to settle its outstanding derivative position and acquire put options.

Beyond the next twelve months, the Company's material cash requirements include (i) the repayment at maturity of the $20.0 million Debenture, which matures on May 26, 2028 (see Note 13 - Debt), and (ii) principal repayments totaling $10.0 million under the secured promissory note entered into in connection with the Lucky Shot Property acquisition, with $2.0 million due on each of the second and third anniversaries of the July 1, 2026 closing date and the remaining principal balance due on the fourth anniversary (see Note 11 - Commitments and Contingencies). The Company expects to fund these longer-term obligations through a combination of anticipated cash distributions from the Peak Gold JV, proceeds from metal sales, potential future equity issuances (including amounts available under its ATM Program), and available cash on hand. The Company may also consider refinancing alternatives or other capital markets transactions as they become available on commercially acceptable terms.

Further financing by the Company may include issuances of equity, instruments convertible into equity (such as warrants) or various forms of debt. The Company has issued 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 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.

Off-Balance Sheet Arrangements

None.

Critical Accounting Estimates

The discussion and analysis of the Company'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. There were no material changes in the Company's critical accounting estimates from those that were previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 other than the accounting policy described in Note 4 - Summary of Significant Accounting Policies.

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. The content of the Company's website is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document it files with the SEC, and any references to the Company's website is intended to be inactive textual references only.