HOUSTON--(BUSINESS WIRE)--Contango ORE, Inc. (“CORE” or the “Company”) (OTCQB: CTGO) announced today that Peak Gold, LLC, the Company’s joint venture with Royal Alaska, a wholly-owned subsidiary of Royal Gold, Inc., completed its 2017 Phase II drilling program on July 31, 2017 which was comprised primarily of testing targets within 1.5 kilometers of known mineralization in Main and North Peak, in addition to three holes drilled through the Main Peak zone to prove the geometry of that deposit and to provide samples for further metallurgical testing. There was also a significant surface recon program carried out in the Tetlin Hills, and at our state claims on the Noah block. The Company also announced approval of a calendar year 2017 Phase III drilling program and increase to the 2017 calendar year capital budget.
The exploratory effort resulted in the discovery of a new mineralized area northwest of the Main Peak deposit referred to as West Peak Extension. The table below shows all of the core holes that had significant mineralization in this new mineralized area, with the most significant being Hole 17379 that intercepted two separate gold bearing intervals: the first containing 8.1 meters with a grade of 5.22 gpt gold from 103m to 111m depth; and the second containing an additional 29 meters with a grade of 2.53 gpt gold from 117m to 146m depth. The new mineralization is open to mineralization up-dip to the southwest as well as along strike and down-dip to the southeast along the undrilled north side of the Main Peak deposit.
Results of Metallurgical Testing
The results of the recent 48-hour cyanide leach bottle roll metallurgical testing on samples from the North Peak zone showed that gold recoveries from 19 composites in the samples ranged from 90.4% to 99.6% and averaged 97.5%. Only three of the 19 composites were lower than 93% gold extraction. The majority of the composites (15 of 19) demonstrated gold leaching was primarily completed within 24 hours. Average silver extraction was 65% (low of 26%; high of 92%) with silver grades ranging from 2.0 gpt up to 147 gpt.
The 3 holes drilled for metallurgical testing in the Main Peak zone returned outstanding grades, as expected. The significant intercepts for these holes are included in the table below, and it should be noted that these particular holes were designed to follow the known mineralization such that the interval thicknesses are not a true width thickness. Composite samples from the Main Peak metallurgical holes will be submitted for 48-hour cyanide leach bottle roll testing similar to the North Peak composites described above.
Surface Recon Results
The surface recon data from the Noah prospect resulted in multiple gold bearing samples in streams draining the Hona prospect, and visible gold was reported in pan concentrate samples from elsewhere on the Noah block. There are still multiple samples for which we do not yet have assay data returned from the lab, and we will make decisions about follow-up activities in this area after all the data is received and interpreted. No drilling is planned for the Noah block in 2017.
The following table shows the most recent significant intercepts drilled on the project for which assay results have not been previously released. Sample intervals are calculated using 0.5 grams per tonne (gpt) lower cut off for gold with no internal waste less than cutoff grade that is greater than 3 meters in thickness. Intercepts shown are drill intercept lengths. True width of mineralization is unknown. The data below includes 24 new drill holes with significant intervals between drill hole TET17349 and TET17401 and their locations are shown on the accompanying base map:
|Zone||Drill Hole||From (meters)||To (meters)||Interval (meters)||Au_gpt||Au_gpt x Interval|
|True Blue Moon||TET17353||91.97||93.73||1.76||9.15||16.10|
|True Blue Moon||TET17357||56.43||61.77||5.34||0.87||4.65|
|West Peak Ext.||TET17368||117.15||118.00||0.85||2.70||2.30|
|West Peak Ext.||and||123.75||126.70||2.95||0.70||2.06|
|West Peak Ext.||and||142.35||147.22||4.87||0.76||3.70|
|West Peak Ext.||and||175.41||178.11||2.70||1.14||3.08|
|West Peak Ext.||TET17369||172.82||186.91||14.09||2.75||38.75|
|West Peak Ext.||TET17371||196.94||199.75||2.81||0.74||2.08|
|West Peak Ext.||TET17379||103.24||111.40||8.16||5.22||42.60|
|West Peak Ext.||and||116.60||145.70||29.10||2.53||73.62|
|West Peak Ext.||TET17381||135.90||138.17||2.27||1.27||2.88|
|West Peak Ext.||TET17385||154.53||160.07||5.54||2.06||11.41|
|West Peak Ext.||TET17386||135.87||141.09||5.22||0.81||4.23|
|West Peak Ext.||TET17388||6.71||12.48||5.77||0.67||3.87|
|West Peak Ext.||and||20.47||22.08||1.61||2.59||4.17|
|West Peak Ext.||and||127.56||133.50||5.94||0.55||3.27|
|West Peak Ext.||and||151.66||166.73||15.07||1.66||25.02|
|West Peak Ext.||TET17389||162.60||166.12||3.52||0.66||2.32|
|West Peak Ext.||TET17390||57.15||60.33||3.18||1.92||6.11|
|West Peak Ext.||and||206.96||213.17||6.21||1.31||8.14|
|West Peak Ext.||and||264.99||266.49||1.50||6.31||9.47|
Brad Juneau, CEO of the company, commented, “We are very pleased to have identified a new mineralized area at West Peak Extension, and we look forward to further delineation of this mineralized area. While the other areas drilled did not return material amounts of gold, we encountered significant thickness of oxidized iron-rich skarn in some surface exposures that may warrant further exploration. The results of past metallurgical studies combined with the recently completed work in North Peak indicate that the gold and silver are recoverable with standard cyanide leaching. A Phase III drilling program has been approved for the remainder of calendar year 2017, and will begin before the end of September. This drilling will further explore the West Peak Extension, as well as, drill additional holes on two other prospects. The budget for Phase III is approximately $1.5 million bringing spending for the calendar year 2017 to approximately $11.8 million. Phase III spending is expected to bring Royal Gold’s cumulative spending very close to the $30 million aggregate contribution that would result in Royal Gold owning 40% of the joint venture, at which point the Company will own the remaining 60%. Once Royal Gold has funded the full $30 million, the company will be required to begin funding its share of future capital costs and we are reviewing options for raising capital to finance any future capital expenditures. The Company currently has approximately $5 million in cash and no debt, and we are very encouraged by our drilling, metallurgical and recon results.”
CORE is a Houston-based company that engages in the exploration in Alaska for gold and associated minerals through Peak Gold, LLC, its joint venture company with Royal Gold, Inc. Additional information can be found on our web page at www.contangoore.com.
This press release contains forward-looking statements regarding CORE that are intended to be covered by the safe harbor "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, based on CORE’s current expectations and includes statements regarding future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as "expects", “projects”, "anticipates", "plans", "estimates", "potential", "possible", "probable", or "intends", or stating that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved). Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those, reflected in the statements. These risks include, but are not limited to: the risks of the exploration and the mining industry (for example, operational risks in exploring for, developing mineral reserves; risks and uncertainties involving geology; the speculative nature of the mining industry; the uncertainty of estimates and projections relating to future production, costs and expenses; the volatility of natural resources prices, including prices of gold and associated minerals; the existence and extent of commercially exploitable minerals in properties acquired by CORE; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the interpretation of exploration results and the estimation of mineral resources; the loss of key employees or consultants; health, safety and environmental risks and risks related to weather and other natural disasters); uncertainties as to the availability and cost of financing; inability to realize expected value from acquisitions; inability of our management team to execute its plans to meet its goals; and the possibility that government policies may change or governmental approvals may be delayed or withheld, including the inability to obtain any mining permits. Additional information on these and other factors which could affect CORE’s exploration program or financial results are included in CORE’s other reports on file with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. CORE does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change.