In This Article:
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Gold Production: 28,000 ounces in Q3.
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Revenue from Gold Sales: Over $62 million.
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Realized Gold Price: $2,250 per ounce.
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Production Costs: $1,181 per ounce.
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Cash Distribution from Joint Venture: $19.5 million.
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Ending Cash Balance: $36.2 million.
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Net Loss: $9.7 million or $0.81 per share.
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Unrealized Loss on Derivative Contracts: $22.9 million.
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Income from Equity Investment: $28.5 million.
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Net Cash Provided from Operating Activities: $10.6 million for the nine-month period ending September 30, 2024.
Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Contango Ore Inc (CTGO) reported a significant increase in cash, ending Q3 with $36.2 million, up from $24 million in June and $15.5 million in December of the previous year.
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The company produced nearly 28,000 ounces of gold in Q3, generating over $62 million in sales, with a realized gold price of $2,250 per ounce.
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Contango Ore Inc (CTGO) received a $19.5 million distribution from the Peak Gold joint venture, contributing positively to its financial position.
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The company is on track to meet the higher end of its annual production guidance of 30,000 to 40,000 ounces of gold.
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Contango Ore Inc (CTGO) plans to increase production to approximately 60,000 ounces in 2025, indicating growth potential and increased revenue expectations.
Negative Points
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Contango Ore Inc (CTGO) reported a Q3 net loss of $9.7 million, including a significant non-cash expense of $22.9 million related to unrealized losses on derivative contracts.
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The company faces a high debt burden, with a current balance of $52 million, which it aims to reduce to $10 million by the end of 2025.
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There is uncertainty regarding future cash calls from the joint venture, which could impact financial stability if unforeseen expenses arise.
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The company's financials are complex due to its minority interest in the Manh Choh project, leading to non-traditional reporting of gold sales and costs.
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Contango Ore Inc (CTGO) is exposed to gold price volatility, which could affect its margins and financial performance, especially with existing hedge agreements.
Q & A Highlights
Q: Why don't gold sales and cash costs appear traditionally on your financial statements? A: Michael Clark, CFO, explained that due to Contango Ore's 30% minority interest in Manh Choh, results are not consolidated. Profits appear as equity income, and gold sales are not core to the business, hence not shown as top-line revenue. This setup avoids confusion about profitability.