Contango ORE, Inc. (CTGO) began its Lucky Shot underground drill program on November 19, 2025, marking the first phase of a comprehensive feasibility study for the Alaska‑based project. The program will span four phases, totaling roughly 18,000 meters of drilling across 210 holes, with additional surface exploration to infill the Lucky Shot vein resource into Proven and Probable categories. Core samples will undergo hydrological, geotechnical, metallurgical, and geochemical testing to build a robust reserve model that will support a final feasibility study slated for 2027.
The drill work is designed to convert the existing resource estimate into a more secure reserve base, a critical step for advancing the project under Contango’s Direct‑Ship Ore (DSO) model. By focusing on high‑grade mineralization and integrating advanced testing, the company aims to reduce development risk and accelerate the path to production.
Contango’s recent financial performance provides the capital foundation for this exploration push. The company reported record income from operations and a strong cash position for the quarter ended September 30, 2025, a result that underscores its ability to fund the extensive drilling program without external financing. The earnings beat—EPS of $2.04 versus analysts’ estimate of $0.465—was driven by disciplined cost management and a favorable mix of high‑margin projects, reinforcing confidence in the company’s operational execution.
Exploration Manager Dave Larimer expressed enthusiasm about the program, noting that “It’s exciting to get back underground at the Lucky Shot mine! The initial phase of drilling is a decisive resource ‘In‑Fill’ program on the Lucky Shot Vein. In addition, we will be drill testing mineralized conjugate and relay structures off the Lucky Shot Vein system that have recently been mapped underground in the West Drift.” His comments highlight the strategic focus on resource consolidation and the exploration of adjacent mineralized structures.
Investors have reacted cautiously to the announcement, with market sentiment tempered by the need to digest the company’s strong earnings beat and the implications for future capital allocation. The drill program’s success will be pivotal in determining the feasibility study’s outcome and the potential for a rapid transition to production under the DSO model.
The Direct‑Ship Ore strategy positions Contango to deliver high‑grade gold to market with lower capital intensity and reduced environmental impact. Successful completion of the drilling and testing phases will enable the company to refine its reserve estimates, strengthen its financial profile, and move closer to a 2027 feasibility study that could unlock a new production pipeline for the company’s portfolio.
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