Contango Silver & Gold Inc. (CTGO) announced on May 5 2026 that it had completed the purchase of the Lucky Shot lease and its associated net smelter returns royalty in Alaska. The transaction, valued at $16,074,000, gives the company full control of the lease and positions the Lucky Shot Project for a feasibility study and potential production in the first half of 2027.
The company also reported that the first phase of its 2025/2026 underground diamond drilling program at Lucky Shot has been successfully finished. The 18,000‑meter program, which began in November 2025, is the initial step of a multi‑phase exploration campaign designed to expand the resource base, increase confidence in the geological model, and support a mineral resource update and feasibility study slated for the first half of 2027.
By securing the lease and initiating drilling, Contango is accelerating its Direct Shipping Ore (DSO) strategy, which aims to generate cash flow from high‑grade ore without building a dedicated mill. The move is expected to strengthen the company’s exploration pipeline and enhance its ability to fund future development without additional equity raises.
CEO Rick Van Nieuwenhuyse said, "Our latest drilling at Lucky Shot has exceeded expectations, providing a better understanding of the system's continuity and productivity. The presence of visible gold in multiple intervals is a powerful indicator of the high‑grade nature of this deposit. By confirming these multiple vein structures, we have significantly expanded the underground footprint while continuing to de‑risk the project. This is not just additional drill and assay data; it is a roadmap to expansion."
Contango’s Q4 2025 earnings reflected a miss, with earnings per share of –$4.22 versus a forecast of –$0.0067, and a loss of $2.80 per share over the last twelve months. The miss is likely attributable to higher-than-expected costs associated with the acquisition and ongoing exploration expenditures. The company’s financial health remains solid, with a “GOOD” rating, $64.8 million in unrestricted cash, and a debt‑to‑equity ratio of 134.9%. The merger with Dolly Varden Silver, completed earlier this year, has expanded Contango’s portfolio to include the Manh Choh, Johnson Tract, and Kitsault Valley projects, and the company’s five‑year development pipeline targets 200,000 gold‑equivalent ounces and 5 million ounces of silver annual production.
The acquisition and drilling progress position Contango to advance Lucky Shot toward a feasibility study and potential production, while the DSO strategy and robust pipeline provide a clear path to cash‑generating operations. The company’s focus on high‑grade deposits and capital‑efficient development is expected to enhance its competitive position in the North American mining sector.
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