Unpacking the Massive Merger of Contango Ore and Dolly Varden
Summary
Contango Silver & Gold is the new entity born from the merger of Dolly Varden Silver and Contango ORE — a cash-flowing gold …
Transcript
A longtime guest on my show, Sean Kungun was the CEO of a business called Dolly Vardan Silver. Now, he recently merged his company with a gold producer in Alaska called Contango Ore. And this new business, Contango Silver and Gold, is a cash flowing gold producer that intends to use that cash flow to fund their development and exploration assets in both Alaska and BC's famed Golden Triangle. Today, we break it all down. Here's Contango Silver and Gold. >> This is Jay Martin. >> All right, here I am with Rick Van Newuenhouse and Sean Kungun. It's great to have you both in the program. I'm looking forward to this. >> It's great to be here, Jake. >> So, this is exciting because I've been covering Dolly Varden on my show since I believe 2022. Uh maybe 2021. And so Sean and I, you know, we've discussed this merger a few times on the show over the last few months, but obviously today is the first time on my show that we're talking to, Contango Silver, and Gold, the new entity with the cash flowing asset in Alaska that will fund development assets in Alaska and in the Kitsalt Valley. Um, it's an exciting time in the company history. So, we're going to unpack that today. But first, Rick, just because it's your first time on the show. I want to unpack your background a little bit. And um you know, you were the founder of Novagold, a company that my audience is familiar with because I've had Tom Kaplan on the show a couple of times. And we've jumped into the Donland project in Alaska, which is was what you acquired when you were at Novagold, right? So, if I have this right, you acquired the Donland 50% or 70% interest in the Donland project and shortly thereafter uh 50/50 JB with Bareric on this asset. So, um if you could walk through your experience at Nova Gold, wild time to be in the market 99 to 2012. So, you would have ridden through the 2008 GFC and I'm sure there's lessons in there that you could pull forward, but um walk me through just high level experience at Nova Gold, what you learned, what you're pulling forward, and uh why you stayed in Alaska. Yeah. No, it's a it's an interesting um story in history. So, I'm an expiration geologist by background. Um and I actually worked at Plaster Dome and was the the guy responsible for getting that getting Donland into plaster in the first place. And so when when Plaster Dome decided to exit from Donland, uh this would have been, you know, back in uh 1999. Um I put my hand up and said, "Hey, you know, don't just drop it." Which is what they were planning on doing. let's do let's do a deal. So that's really was the foundation of of getting Nova Gold uh up on up on step and they you know there was a discovery there but it was pretty small again we had made that when I was at Pler and so when we took it on um we had Nova Gold had cash flow modest cash flow but we're making about $3 million a year selling sand and gravel uh in real estate in Alaska with a a business plan that we put together. So early on I recognized that we you know in order to be successful in mining business you can't just depend on the markets and of course back at that time um the dot bubble was uh just developing and that was that's where the money was going and this was you know postex so there was nobody interested in investing in a a wild expiration play in Alaska but because we didn't need the markets that's the best time to to raise money and we were So we were drilling holes and and hitting astoundingly good grades and over wide intersections of good grade material. And so we we built what is the the resource there at uh at Donland today. It's it hasn't really changed. I mean the gold price has changed and the cutoff grades changed and the number of ounces has gone up but it's still basically the the same discovery we made 25 years ago. So in there was a number of lessons. One of which is finding a huge deposit in the middle of nowhere is fun and fantastic, but it's a long hard slog for shareholders. Um, and it's literally been and this is, you know, it's not because good people with lots of money haven't worked on this. Um, but you know, just remote projects take a lot of infrastructure and so and it they take a long time to permit them. Big complicated projects take a long time to permit. So those were all you asked about the lessons learned. Those are all kind of what came together in my mind to form contango and take contango in a different direction which was uh in in the context of Alaska looking at direct shipping ore high-grade rocks in a box and send them to a processing facility that has capacity and that and that existed at Kin Ross and we knew it existed at Kin Ross and it took a while to you know be able to put together an agreement But that was basically the that business plan grew out of my experience both at Nova Gold and then later at Trilogy where we we found a nice actually two nice high-grade copper projects again in the middle of nowhere that required a road. We spent seven years permitting that road only to get the permits and then have them taken away by one, you know, given by one administration, taken away by another. >> So again, lessons learned. let's not permit a 200 mile road again if we can avoid it. And so hence the DSO model and I think it's uh it's a beautiful model. Uh it's it it makes us focus on quality high-grade which of course is why we we love the Kitsol asset. It's uh we had a great portfolio of high-grade gold assets in contango and now contango silver and gold has the kit salt uh valley assets which are which bring high-grade silver to the portfolio and we we love both gold and silver. They're they're just we like copper too but we'll stay focused on these two for the moment. >> Yeah. Yeah. Okay. Thank you for unpacking that and that's interesting how that kind of segueed into the the um contango ore model and I was curious about that and for anybody who might not know what DSO is effectively the opportunity that you saw with the the Mano mine was that your neighbor Kin Ross had the Fort Knox mill not fully utilized had some extra capacity and you determined if your economics could support it you could just ship your ore to an existing mill instead of building one, cut your capex way down, reduce your permitting hurdles and utilize some existing infrastructure not that far away and it works if your grade is at a certain uh place I suppose and then so you run the man show mine therefore is it like four campaigns through the year to complement the available capacity at the Fort Knox Mill is that correct? >> Yeah. So, and Ken Ross is the operator. Um, which is actually kind of a nice thing because, you know, we're effectively a royalty company. They send us checks. Uh, they manage the operation. It's, you know, obviously the processing is is theirs. Um, we've had we have a contract minor in Kwit and we have a contract orhauler in a company called BGT. It's a local a local Alaska contractor. They're doing a great job and and Kin Ross is doing a great job managing u all aspects of the of the of the of the mine from the mine to the transportation and and then of course at the Kin Ross plant itself, Kin Ross uh Fort Knox plant. >> Okay, thank you for that. And Sean, I want to pass it over to you and um just walk walk us through the um effectively the funding opportunity that Contango Silver and Gold now presents and you know, you're in a unique situation. The markets have cooled off a little bit. I'm not too concerned about that personally. Actually, I think it's a phenomenal opportunity. I'm on the investment side. If I was running a company, maybe I'd be a bit stressed, but I'm not. I look at this as positive only. um cuz it's a second shot to fill up any positions you weren't completely satisfied with. Um contango silver and gold being one by the way, right? Like it's you know you're uh on a little bit of a correction here and um I think that's a pretty fantastic opportunity. But Sean, in terms of the company treasury and future company cash flow and how you plan on allocating those resources both to exploration and development, what would you share with us today? >> Yeah, I know it's it's a good point, Jay. when I was at your conference, I don't know how you managed to plan this or orchestrate this, but the price of gold and silver went to all-time highs. So, congratulations. But, um, you know, we we have gone through a bit of a pullback here. And I think for a lot of those companies at your conference, unfortunately, they're going into this environment and they're having to issue shares and that's punitive to their existing shareholders. The nice competitive advantage that Contango Silver and Gold has today is not only do we have cash flow, but we have $100 million of cash on hand. And so if you look at the life of mine at Mono, it's producing on average of about $100 million a year of free cash flow. Uh that's about the average. Um so our plan is to take that and reinvest it in the pipeline. And you know that starts at Lucky Shot which is another high-grade Alaska gold mine. You know this is a past producing gold mine that the average grade is over 10 g per ton and we've had recent exploration success. So we've got about a 20,000 meter drill program that's ongoing that produced some recent results in February. And so we're our goal is to get Lucky Shot back into production. you know, it could be back into production by 2028. So, it's going to complement the average uh production at Mono, which is around 60,000 ounces a year. So, by bringing Lucky Shot on, we have a path to get to be a hundred,000 a year producer. And and the way to look at that, you know, on every,000 move in the price of gold, we saw gold move up several thousand last year. Um, you know, that's a that's an additional $100 million in free cash flow if you add $1,000 to 100,000 ounce a year producer. And then you've got the Johnson Track Project. When that comes online, that's another 100,000 ounces a year. So, we've got a path to 200,000 ounces of gold production in Alaska. And then as we continue to explore and develop in the Kitsel Valley, bringing the Torbert mine back into production and the other string of pearls, you know, wolf fain home stake, that's going to contribute about 5 million ounces a year of silver. So, you know, specifically this year, we're doing about 60,000 meters of exploration drilling at Lucky Shot and Kitsalt. We're we're we're doing baseline studies. We're doing a new MRE at Kitsalt Valley. Um, and then we've got more permitting work at Johnson Track, which is maybe a little boring this year, but it's going to set us up to drill under an incredible ore body next year. And that or body uh, you know, some of the drill intercepts, Jay, 220 m of almost 9 g per ton gold. So, you know, you you got used to these spectacular silver intercepts that were coming out of Dolly. You know, a kilo, a kilo and a half of, you know, 20, 30 meters. You know, we've got hundreds of meters of, you know, five, six, seven g gold coming out of Johnson Track. So what excites me here is you know for for the Dolly shareholder you had a seasonal explorer you know now you've got exploration activity and news generation from growth year round right plus you've got you don't we're not relying on the markets to dilute we've got the cash on hand and the cash flow so really what we've created here is we've created the next emerging mid-tier silver and gold producer are high-grade projects, all North American centric. Uh the only other company that's like that in the board today is Hacklo and they're, you know, they're trading at about 20 times our valuation. We've got a pipeline here that I think is going to keep us busy for the next 50 years. >> I Yeah, the valuation is is something. You know, we we talk about this. I I teach at the Commodity University, our online education platform. We often talk about this concept called the melting ice cube problem in that every mining company is a bit of a melting ice cube. By definition, they're worth less than they were the day before because they're extracting some of that value from which they derive their worth. Um, therefore, the pipeline is always as important as the production asset, right? And so, you always need to be looking at how is this company going to be worth more in three years than it is today. And that comes from the pipeline value. And so 100 mil in the treasury re average 100 mil in revenue from MCO over the next three years. Um and that will be invested into I think you're spending 50 million on a drill program this year. Is that correct? >> Yeah. So I can just kind of walk through at Lucky Shot. We've got about a $20 million program underway. That'll be through the year. Um and that's all drilling and and getting underground development access for the to support the drilling. Um, and then at Johnson Track, we we were uh we're going to spend about $15 million and then about 25 these are all US dollar numbers uh at Kitsalt. So, um yeah, it's a it's it's pretty much a $50 million exploration program with uh as I think Sean mentioned about 60,000 meters of drilling. And you know, as an exploration geologist, that's what defines or bodies. You you don't find or bodies unless you're drilling. And uh um you know for a market that is always hungry for good results uh we've got this year we'll be drilling uh at least two of those. Um we'll do more drilling at Mono and so I probably should include that one as well because just because it's production doesn't mean we do don't do expiration there. We have about a $5 million exploration program going on there as well. So yeah, lots of um lots of exciting catalyst and news flow uh for this year for sure. Will Johnson tract and Lucky Shot be eligible for the same DSO model as Mont? >> 100%. Yeah, that's uh that's why we acquired uh uh Johnson Track and Lucky Shot both is that we we saw the the value in this model. We demonstrated that it worked for MOO. We said, okay, what makes it work? Well, grade obviously is the the number one criteria. Uh being close to existing infrastructure is the the the second criteria. And by existing infrastructure, I mean, you know, existing road, railroad or or the water. Water is obviously the cheapest form of transportation. You literally put rocks in a box and put them on a barge and they can go, you know, literally just about anywhere in the world. markets. Uh there's there are processing facilities in Asia uh and in Mexico where you can, you know, basically toll process your or um so those are those are all those those uh those two other assets, you know, certainly meet the criteria. Lucky shots about 18 miles from the railroad uh which can go up to Fort Knox or it can go down to the port of Seward and then it's then it's open to you know where it can go from there. Uh Johnson track is an 18mi road uh to the coast which we're permitting that road right now. We're part of the fast 41 program. We're permitting uh the road and a uh a barge landing site. So uh uh the fast 41 program is a great program that the Trump administration is is using to uh uh efficiently and transparently uh permit uh critical metals projects. And of course, Johnson Track has four critical metals. So, we're we're certainly uh uh in a good spot from a pivoting standpoint there. >> Yeah. Being gold, silver, copper, zinc, all four in the critical metals worth. Yeah. What do you make of the 180° sentiment shift we've seen from politicians suddenly favoring our industry. I mean, this is a business that was arguably the most vilified in the world for the last 15 years. It was like if you wanted to get elected in a western developed country at the podium, you had to tell your constituents your plan to move away from the extraction industries. And media towed the line. Anything counter to the popular narrative wouldn't sell headlines. And in the last 12 months, we've seen uh the the starkest shift in sentiment moving towards not just sentiment, but capital obviously Trilogy Metals Rick being the recipient of direct funding from the US government. Um, what do people need to know about the fast 41 program? Um, and it's this is not new under the Trump administration. I believe this goes back 15 years or so. Doesn't have its origin in mining even though it's being used in the mining sector today. >> Yes. I mean, the the the fast 41 and it doesn't it doesn't mean fast. It means fixing America's surface transportation act that was passed under the Obama administration. So, it recognized the Obama administration recognized that permitting roads or windmills or mines was just taking far too long and it was basically because there was a lack of coordination amongst the different um federal permitting agencies. And so that's what the program was put forward for. Um you you you comment on, you know, was it used for mining? It wasn't. It was used for other things. for the Trump administration has sort of embraced the fast 41, the permitting council and directed them to get critical metals projects permitted. And so, yeah, we have seen a a radical change in attitude of the federal government in a recognition that if we want to control our supply chain for critical metals, first of all, we we recognize that metals are critical. Um, there's a big long I think there's 52 or 53 uh on the lists now. There's a couple of different lists depending on whether you're, you know, Department of War, Department of Energy, USGS, but they're all in the 50-ish neighborhood, but they do recognize the the the value that they are critical in terms of our uh just, you know, everyday life, but also for the military. Lots of talk about rare earths. Um, but it's not just the niche metals like rare earth. It's basically metals like zinc and copper and silver. And silver's a big one. um and gold even a lot of people don't recognize how important gold is uh in AI if if a if a connection has to be made 100% of the time that's a gold switch that's not a silver switch that's not a zinc switch or a copper switch it's a gold switch um and that's the that's because gold's a noble metal and it it just always stays gold um so there's and it what I what's really different now is that in the at least in the United states, whether you're a Democrat or a Republican, you recognize that you need metals. You may want to use them to do different things, build build windmills or or build tanks, but you need metals. And and that's I think that's a very positive change from what we've dealt with for the literally the last 50 years. uh where we offshored all this. Now we're recognizing that parts of that weren't such a good idea. Yeah, we got lots of cheap stuff, but uh we gave up control of our supply chains and uh co demonstrated that that was uh there were problems there and it's and and now of course we have a you know the Iran Iran war and we're seeing the effects of supply chain once again. So it's not just oil and gas, it's helium which is important for AI chips. So it's >> Yeah. Yeah. Now I want to pass to you Sean and maybe like like within that setting that Rick just described the sentiment shift favoring critical metals or just ownership of source of metals. Um the markets corrected a little bit right we had a super frothy specifically the last half of 2025. You mentioned my conference in January, gold and silver both hit highs that I don't think anybody would have predicted 6 months earlier, but it happened. Um, and since cooled off a little bit right now investors over the last 15 years, I think have been conditioned to think in rallies, not secular cycles. Meaning, um, that's been the market behavior, right? It's like, what's the next rally that I should catch as a trader or investor? And I think that a lot of people therefore looked at the gold price appreciation in a similar way. Oh, gold's the next rally. Okay, that's cooled off. What's next? And I'm I'm glad you expanded on that the way you did, Rick, because it kind of underpins the paradigm shift that we're seeing. It's not just a bit of a sentiment shift and a trade. It's not just um a bit of um devaluation of the currency. There's there's massive shifts governmentled towards uh our sector in a way that we've never seen in 20 years. So Sean, for somebody who's sitting on a position, they bought at my conference end of January and they're down 30% today. What would you say to them in terms of their time horizon, future expectation, how they should think about the volatility in this market? >> It's a good question. It depends on what they bought, right? It's a It is like, you know, these there's there's 2,000 different opportunities and options for uh the precious metals mining investor. Um I I would say to them, look, you you make your money on the buy, not the sell, right? And you know, the the comfort for those who bought at $5,500 gold and $120 silver on the equity side is if you if we look at a company like First Majestic, for example, and we look at where First Majestic shares were when gold was up at $120 versus where they were when they put out their Q4 and their year-end production numbers. their share price actually moved higher with $70 silver than their share price was at $120 silver because the mining equities are not pricing in spot pricing. Right? So I think it's uh it's a so I I really think that the value proposition for the mining equity investor like what I'm telling friends, loved ones, shareholders is 2025 is going to go down as a historic year for gold and silver is a breakout year. It was an incredible year. I think gold was up 60%. I think silver was up 200%. You know, that doesn't happen. That that happens once a decade, you know, sometimes once a century. But what didn't happen is, you know, the equities didn't keep pace. And that's typical for previous cycles. If you go back and study previous bull markets, that's typically what happens. You know, you have the metals move and then that gets priced into the equity. So, I think you have to take a long-term horizon and you've got to like and you know what another thing to think about here is we've moved as a as a globe as a as a investing globe into a passive investing world. So over half the money out there is passively managed. Now a lot of that gets triggered by algorithms and is momentum based. And that's why we had such a great year last year is because for the first time in a long time, momentum changed to the positive for both gold and silver. Okay? Well, what you need to recognize right now in this moment is that sentiment has turned negative temporarily. We are below the 50-day moving averages. And you know, Jay, you mentioned this is a great buying opportunity for Contango Silver and Gold. I'm a buyer. I'm I'm a buyer and I have been and I will continue to and it's because as we go through this correction and gold is and silver are below the 50-day moving averages, there's a great buying opportunity. And as I said, you make your money on the buy. So, I would just say, you know, the stock market is one of the few markets in the world when it goes on sale, investors don't want to buy it. And so, you you know, I think you need to lean in and you need to get to know the companies. you know, we're trading at two times next year's cash flow. That's a pretty interesting uh value proposition. We've got the pipeline. So, um you know, that's that's what I' that's what I'd say to those investors who are buying in January. >> Let me just ask a follow-up question on that, Sean. So, you mentioned first Majestic share price actually went up as the silver price went down because earnings came out and impressed the market. Obviously, even at $70 silver, they outperformed. You know, could could I make the assumption, therefore, that as we see a few more quarters and more positive earnings that surprised the market to the upside, despite a correction in the metals price, we're higher than we thought we'd be 12 months ago, and we're higher than the anchor prices that Bay Street, for example, was using for their forecasts. So, producers are set to outperform. and after a few more quarters of that like what's your gauge on institutional interest in our sector right now? My assumption of that it's going to take a few more quarters and then they'll get mandates from shareholders saying I don't even know what that industry is but look at the cash it's generating we need more exposure to it or how that may occur but you're always on the road um doing shows Sean meeting with institutions what's your take on institutional sentiment towards our sector and then how does obviously how does contango fit into that decision-m right now >> yeah look I I think that um the institutions are starting to warm up the generalists are starting to warm up you and and that's a reaction to the great price appreciation we saw in in 2025. Um, but it all goes back to our models and our budgets, right? And if you look at Contango, we've we've budgeted $3700 gold, you know, and and you know, we're we're we're seeing a price that's almost $1,000 higher than that budgeted price today at at gold at nearing 4,700 again. So going back to your point about where the gold mining and silver mining industry was and how it factored into pricing. So going back to that first Majestic example, you know, they were $38 a share when silver was $120. They went to $44 on their earnings and uh today they're $30. And again, they're budgeting $50 silver. That's the budget, right? So, you know, as we sell more metal into 70 $100 silver, you know, again, the way to look at it for the the the gold mining investor, a 100,000 ounce a year producer is going to make an extra $100 million a year for every,000. So, if our budget's 3,700, but we're selling at 4,700, that's an extra hundred million a year uh for the 100,000 ounce a year producer. >> Okay. Yeah, I appreciate that. Thank you, Sean. So, let's walk through near-term catalysts for contango silver and gold. What investors can expect this year, and maybe I'll start uh I'll stick with you and start on the Kitsalt Valley, Sean, because I believe uh Q2, maybe Q3, we're going to see an updated mineral resource estimate from the Kitsalt Valley. And what's notable about that is we haven't seen one since 200,000 meters earlier in 2022. That was the last estimate. Is that correct? >> That's correct. So um our guidance is is Q2 end of Q2. So you know I I would suspect sometime in June um we we come out with the new MRE and on the back of that ME we'll get the the drills turning and we'll launch into um another 40,000 meters of drilling which will generate a lot of catalysts. Um but we're looking at the project through multiple lenses this year. you know, we'd been historically very uh discovery oriented and and now we're we're looking at it through a development lens. So, it's you're going to start to see the project move from advanced explorer through development. And again, this was a very very notable historic producer. you know, it it held some some pretty impressive statistics as, you know, one of the richest minds when it was producing, you know, back in the 20s uh in in in almost all of the world at the time. And uh you go back to the 50s for for a decade there, this was Canada's third largest primary silver producer in in the Torbert mine. So, um we've got incredible exploration potential. We'll be generating a lot of catalysts in BC. Um but I guess the biggest difference for me this year is that is one component that is that is really one component of a business that is also exploring and driving uh discovery news at a lucky shot. You've got the development work at at Johnson Track and then you have the cash flow um to report for Mono. >> So that campaign uh was February to mid-Marchch at Mono. Is that correct? So can we what can investors expect in terms of reporting um from the Mono bine >> our next quarter results will it'll be included in that um we'll probably get a distribution here and and we may report that I I'll talk with Mike Clark our CFO um but you you'll have regular sort of quarterly updates on the production uh you know we we put our guidance out um and uh you know so that you know that's all out in in the public already. Uh this year has always been the the low year in production at 45,000 ounces. Uh we're switching from the north pit to the south pit. Uh doing a lot of pre-stripping. Um and that all the all the hard work this year gets uh you know translated into the benefit next year. Next year we're guiding 75 to 80,000 ounces of production, lower cash costs. This year's cash costs are in the $1,900 to $2,000 range whereas next year we're uh you know the 12 $1,300 range because we've we've paid for all that pre-stripping this year. So, you know, uh very strong cash flows uh for this year and next year. Uh we don't have guidance for uh uh for 2028 yet, but uh I'm sure next by the end of this year we'll probably again keep two-year guidance out there. Um, I also just wanted to point out when, um, Sean was talking about Torbert, uh, mine production, you know, very high-grade mine, that was a DSO, that was a direct shipping or mine. Uh, there's no mill at Torbett. Never has been. And, uh, that just speaks to the grade quality again. >> Was that part of your incentive for this merger, Rick? >> 100%. Yeah, it's always about grade. Um, Torbit's on the water. There's a road that connects the Torbit mine to the water. It needs to be upgraded. Hasn't been used in a long time, but that won't be difficult to do. It's uh it's a little it's about the same length of road we're actually new construction we're going to be doing um at Johnson Track and it's actually about the same as the amount of road we built at uh at Mano, you know, in the neighborhood of 20 20 miles. So um yeah this is again it just fits right in that sweet spot in terms of grade in terms of uh existing infrastructure close you know close to the water all those things uh make it a great BSO project >> yeah interesting okay I love that you're carry that you're carrying this blueprint um to project after project right tried and tested on Mono um and and moved that forward in what was some pretty pretty tough tough years, right? 2020, 2021, a lot of uncertainty, tough to get around, tough to get visibility on projects. I mean, if something was going wrong in your business in 2021, you weren't blaming the lockdowns, you were doing it wrong. Everybody had massive headaches, right? The fact that you're able to move this project forward um at the speed at which you did, I think like validates obviously your operational expertise, but also validates the DSO model in sort of real time and recent, you know, recent uh events obviously. Um and then just to get really granular with with Johnson Track, what's the big milestone that shareholders could look forward to news flow standpoint with this project? >> As we mentioned, we're part of Fast 41. Uh I think a big milestone is when we start constructing the road this summer. Uh we we're permitted to do that. >> Uh so the plan is to uh build a road between the camp and the portal site, get the portal site layown area all set up. We want a winterized camp uh so that we can operate year round there. Uh right now it's a summer camp, but we we want to be once we get underground, we'll be operating year round. So uh those are the you know they're they're they're not the exciting catalyst of drilling holes and drilling discovery uh new discovery uh targets and things like that. But it's um you know it's a it's a milestone that says, "Okay, hey, this project's real. We're permitted to go underground." Then that's that's the next big step. Get the underground built. Get the drilling done underground. This is a this is or this or body averages 40 m wide and uh average grade is 9.4 g per ton. So very inexpensive from a mining standpoint. Good grade again, high grade and it's completely open down dip and basically the or body steps uh dips steeply and down and then the mountain goes straight up and so you basically can't drill it anymore and to get the holes to go where you want them to go. So getting underground is going to not only be able to allow us to do the feasibility study on what we already know, which is a million ounces of of of gold equivalent at 9.4 grams. Um, but it's going to allow us to uh drill down dip. And as we drill down dip, we're getting u we're seeing more copper and gold, more gold box. We don't have a lot of silver at um at Johnson. That's probably the only knock on the project at this point that I can think of, but uh but we got kits all to make up for it. Yeah, you do. Anything you would add to that, Sean? >> No, I think Rick's articulated that very well. >> Okay, awesome. Look, guys, congratulations on the merger and um yeah, congratulations on becoming the newest sort of self-funding production with development and exploration upside assets in great jurisdictions being Alaska and I guess probably the largest undeveloped silver project in Western Canada in the Kitsalt Valley. I appreciate your time today and um I look forward to the next
Unpacking the Massive Merger of Contango Ore and Dolly Varden
Summary
Contango Silver & Gold is the new entity born from the merger of Dolly Varden Silver and Contango ORE — a cash-flowing gold …Transcript
A longtime guest on my show, Sean Kungun was the CEO of a business called Dolly Vardan Silver. Now, he recently merged his company with a gold producer in Alaska called Contango Ore. And this new business, Contango Silver and Gold, is a cash flowing gold producer that intends to use that cash flow to fund their development and exploration assets in both Alaska and BC's famed Golden Triangle. Today, we break it all down. Here's Contango Silver and Gold. >> This is Jay Martin. >> All right, here I am with Rick Van Newuenhouse and Sean Kungun. It's great to have you both in the program. I'm looking forward to this. >> It's great to be here, Jake. >> So, this is exciting because I've been covering Dolly Varden on my show since I believe 2022. Uh maybe 2021. And so Sean and I, you know, we've discussed this merger a few times on the show over the last few months, but obviously today is the first time on my show that we're talking to, Contango Silver, and Gold, the new entity with the cash flowing asset in Alaska that will fund development assets in Alaska and in the Kitsalt Valley. Um, it's an exciting time in the company history. So, we're going to unpack that today. But first, Rick, just because it's your first time on the show. I want to unpack your background a little bit. And um you know, you were the founder of Novagold, a company that my audience is familiar with because I've had Tom Kaplan on the show a couple of times. And we've jumped into the Donland project in Alaska, which is was what you acquired when you were at Novagold, right? So, if I have this right, you acquired the Donland 50% or 70% interest in the Donland project and shortly thereafter uh 50/50 JB with Bareric on this asset. So, um if you could walk through your experience at Nova Gold, wild time to be in the market 99 to 2012. So, you would have ridden through the 2008 GFC and I'm sure there's lessons in there that you could pull forward, but um walk me through just high level experience at Nova Gold, what you learned, what you're pulling forward, and uh why you stayed in Alaska. Yeah. No, it's a it's an interesting um story in history. So, I'm an expiration geologist by background. Um and I actually worked at Plaster Dome and was the the guy responsible for getting that getting Donland into plaster in the first place. And so when when Plaster Dome decided to exit from Donland, uh this would have been, you know, back in uh 1999. Um I put my hand up and said, "Hey, you know, don't just drop it." Which is what they were planning on doing. let's do let's do a deal. So that's really was the foundation of of getting Nova Gold uh up on up on step and they you know there was a discovery there but it was pretty small again we had made that when I was at Pler and so when we took it on um we had Nova Gold had cash flow modest cash flow but we're making about $3 million a year selling sand and gravel uh in real estate in Alaska with a a business plan that we put together. So early on I recognized that we you know in order to be successful in mining business you can't just depend on the markets and of course back at that time um the dot bubble was uh just developing and that was that's where the money was going and this was you know postex so there was nobody interested in investing in a a wild expiration play in Alaska but because we didn't need the markets that's the best time to to raise money and we were So we were drilling holes and and hitting astoundingly good grades and over wide intersections of good grade material. And so we we built what is the the resource there at uh at Donland today. It's it hasn't really changed. I mean the gold price has changed and the cutoff grades changed and the number of ounces has gone up but it's still basically the the same discovery we made 25 years ago. So in there was a number of lessons. One of which is finding a huge deposit in the middle of nowhere is fun and fantastic, but it's a long hard slog for shareholders. Um, and it's literally been and this is, you know, it's not because good people with lots of money haven't worked on this. Um, but you know, just remote projects take a lot of infrastructure and so and it they take a long time to permit them. Big complicated projects take a long time to permit. So those were all you asked about the lessons learned. Those are all kind of what came together in my mind to form contango and take contango in a different direction which was uh in in the context of Alaska looking at direct shipping ore high-grade rocks in a box and send them to a processing facility that has capacity and that and that existed at Kin Ross and we knew it existed at Kin Ross and it took a while to you know be able to put together an agreement But that was basically the that business plan grew out of my experience both at Nova Gold and then later at Trilogy where we we found a nice actually two nice high-grade copper projects again in the middle of nowhere that required a road. We spent seven years permitting that road only to get the permits and then have them taken away by one, you know, given by one administration, taken away by another. >> So again, lessons learned. let's not permit a 200 mile road again if we can avoid it. And so hence the DSO model and I think it's uh it's a beautiful model. Uh it's it it makes us focus on quality high-grade which of course is why we we love the Kitsol asset. It's uh we had a great portfolio of high-grade gold assets in contango and now contango silver and gold has the kit salt uh valley assets which are which bring high-grade silver to the portfolio and we we love both gold and silver. They're they're just we like copper too but we'll stay focused on these two for the moment. >> Yeah. Yeah. Okay. Thank you for unpacking that and that's interesting how that kind of segueed into the the um contango ore model and I was curious about that and for anybody who might not know what DSO is effectively the opportunity that you saw with the the Mano mine was that your neighbor Kin Ross had the Fort Knox mill not fully utilized had some extra capacity and you determined if your economics could support it you could just ship your ore to an existing mill instead of building one, cut your capex way down, reduce your permitting hurdles and utilize some existing infrastructure not that far away and it works if your grade is at a certain uh place I suppose and then so you run the man show mine therefore is it like four campaigns through the year to complement the available capacity at the Fort Knox Mill is that correct? >> Yeah. So, and Ken Ross is the operator. Um, which is actually kind of a nice thing because, you know, we're effectively a royalty company. They send us checks. Uh, they manage the operation. It's, you know, obviously the processing is is theirs. Um, we've had we have a contract minor in Kwit and we have a contract orhauler in a company called BGT. It's a local a local Alaska contractor. They're doing a great job and and Kin Ross is doing a great job managing u all aspects of the of the of the of the mine from the mine to the transportation and and then of course at the Kin Ross plant itself, Kin Ross uh Fort Knox plant. >> Okay, thank you for that. And Sean, I want to pass it over to you and um just walk walk us through the um effectively the funding opportunity that Contango Silver and Gold now presents and you know, you're in a unique situation. The markets have cooled off a little bit. I'm not too concerned about that personally. Actually, I think it's a phenomenal opportunity. I'm on the investment side. If I was running a company, maybe I'd be a bit stressed, but I'm not. I look at this as positive only. um cuz it's a second shot to fill up any positions you weren't completely satisfied with. Um contango silver and gold being one by the way, right? Like it's you know you're uh on a little bit of a correction here and um I think that's a pretty fantastic opportunity. But Sean, in terms of the company treasury and future company cash flow and how you plan on allocating those resources both to exploration and development, what would you share with us today? >> Yeah, I know it's it's a good point, Jay. when I was at your conference, I don't know how you managed to plan this or orchestrate this, but the price of gold and silver went to all-time highs. So, congratulations. But, um, you know, we we have gone through a bit of a pullback here. And I think for a lot of those companies at your conference, unfortunately, they're going into this environment and they're having to issue shares and that's punitive to their existing shareholders. The nice competitive advantage that Contango Silver and Gold has today is not only do we have cash flow, but we have $100 million of cash on hand. And so if you look at the life of mine at Mono, it's producing on average of about $100 million a year of free cash flow. Uh that's about the average. Um so our plan is to take that and reinvest it in the pipeline. And you know that starts at Lucky Shot which is another high-grade Alaska gold mine. You know this is a past producing gold mine that the average grade is over 10 g per ton and we've had recent exploration success. So we've got about a 20,000 meter drill program that's ongoing that produced some recent results in February. And so we're our goal is to get Lucky Shot back into production. you know, it could be back into production by 2028. So, it's going to complement the average uh production at Mono, which is around 60,000 ounces a year. So, by bringing Lucky Shot on, we have a path to get to be a hundred,000 a year producer. And and the way to look at that, you know, on every,000 move in the price of gold, we saw gold move up several thousand last year. Um, you know, that's a that's an additional $100 million in free cash flow if you add $1,000 to 100,000 ounce a year producer. And then you've got the Johnson Track Project. When that comes online, that's another 100,000 ounces a year. So, we've got a path to 200,000 ounces of gold production in Alaska. And then as we continue to explore and develop in the Kitsel Valley, bringing the Torbert mine back into production and the other string of pearls, you know, wolf fain home stake, that's going to contribute about 5 million ounces a year of silver. So, you know, specifically this year, we're doing about 60,000 meters of exploration drilling at Lucky Shot and Kitsalt. We're we're we're doing baseline studies. We're doing a new MRE at Kitsalt Valley. Um, and then we've got more permitting work at Johnson Track, which is maybe a little boring this year, but it's going to set us up to drill under an incredible ore body next year. And that or body uh, you know, some of the drill intercepts, Jay, 220 m of almost 9 g per ton gold. So, you know, you you got used to these spectacular silver intercepts that were coming out of Dolly. You know, a kilo, a kilo and a half of, you know, 20, 30 meters. You know, we've got hundreds of meters of, you know, five, six, seven g gold coming out of Johnson Track. So what excites me here is you know for for the Dolly shareholder you had a seasonal explorer you know now you've got exploration activity and news generation from growth year round right plus you've got you don't we're not relying on the markets to dilute we've got the cash on hand and the cash flow so really what we've created here is we've created the next emerging mid-tier silver and gold producer are high-grade projects, all North American centric. Uh the only other company that's like that in the board today is Hacklo and they're, you know, they're trading at about 20 times our valuation. We've got a pipeline here that I think is going to keep us busy for the next 50 years. >> I Yeah, the valuation is is something. You know, we we talk about this. I I teach at the Commodity University, our online education platform. We often talk about this concept called the melting ice cube problem in that every mining company is a bit of a melting ice cube. By definition, they're worth less than they were the day before because they're extracting some of that value from which they derive their worth. Um, therefore, the pipeline is always as important as the production asset, right? And so, you always need to be looking at how is this company going to be worth more in three years than it is today. And that comes from the pipeline value. And so 100 mil in the treasury re average 100 mil in revenue from MCO over the next three years. Um and that will be invested into I think you're spending 50 million on a drill program this year. Is that correct? >> Yeah. So I can just kind of walk through at Lucky Shot. We've got about a $20 million program underway. That'll be through the year. Um and that's all drilling and and getting underground development access for the to support the drilling. Um, and then at Johnson Track, we we were uh we're going to spend about $15 million and then about 25 these are all US dollar numbers uh at Kitsalt. So, um yeah, it's a it's it's pretty much a $50 million exploration program with uh as I think Sean mentioned about 60,000 meters of drilling. And you know, as an exploration geologist, that's what defines or bodies. You you don't find or bodies unless you're drilling. And uh um you know for a market that is always hungry for good results uh we've got this year we'll be drilling uh at least two of those. Um we'll do more drilling at Mono and so I probably should include that one as well because just because it's production doesn't mean we do don't do expiration there. We have about a $5 million exploration program going on there as well. So yeah, lots of um lots of exciting catalyst and news flow uh for this year for sure. Will Johnson tract and Lucky Shot be eligible for the same DSO model as Mont? >> 100%. Yeah, that's uh that's why we acquired uh uh Johnson Track and Lucky Shot both is that we we saw the the value in this model. We demonstrated that it worked for MOO. We said, okay, what makes it work? Well, grade obviously is the the number one criteria. Uh being close to existing infrastructure is the the the second criteria. And by existing infrastructure, I mean, you know, existing road, railroad or or the water. Water is obviously the cheapest form of transportation. You literally put rocks in a box and put them on a barge and they can go, you know, literally just about anywhere in the world. markets. Uh there's there are processing facilities in Asia uh and in Mexico where you can, you know, basically toll process your or um so those are those are all those those uh those two other assets, you know, certainly meet the criteria. Lucky shots about 18 miles from the railroad uh which can go up to Fort Knox or it can go down to the port of Seward and then it's then it's open to you know where it can go from there. Uh Johnson track is an 18mi road uh to the coast which we're permitting that road right now. We're part of the fast 41 program. We're permitting uh the road and a uh a barge landing site. So uh uh the fast 41 program is a great program that the Trump administration is is using to uh uh efficiently and transparently uh permit uh critical metals projects. And of course, Johnson Track has four critical metals. So, we're we're certainly uh uh in a good spot from a pivoting standpoint there. >> Yeah. Being gold, silver, copper, zinc, all four in the critical metals worth. Yeah. What do you make of the 180° sentiment shift we've seen from politicians suddenly favoring our industry. I mean, this is a business that was arguably the most vilified in the world for the last 15 years. It was like if you wanted to get elected in a western developed country at the podium, you had to tell your constituents your plan to move away from the extraction industries. And media towed the line. Anything counter to the popular narrative wouldn't sell headlines. And in the last 12 months, we've seen uh the the starkest shift in sentiment moving towards not just sentiment, but capital obviously Trilogy Metals Rick being the recipient of direct funding from the US government. Um, what do people need to know about the fast 41 program? Um, and it's this is not new under the Trump administration. I believe this goes back 15 years or so. Doesn't have its origin in mining even though it's being used in the mining sector today. >> Yes. I mean, the the the fast 41 and it doesn't it doesn't mean fast. It means fixing America's surface transportation act that was passed under the Obama administration. So, it recognized the Obama administration recognized that permitting roads or windmills or mines was just taking far too long and it was basically because there was a lack of coordination amongst the different um federal permitting agencies. And so that's what the program was put forward for. Um you you you comment on, you know, was it used for mining? It wasn't. It was used for other things. for the Trump administration has sort of embraced the fast 41, the permitting council and directed them to get critical metals projects permitted. And so, yeah, we have seen a a radical change in attitude of the federal government in a recognition that if we want to control our supply chain for critical metals, first of all, we we recognize that metals are critical. Um, there's a big long I think there's 52 or 53 uh on the lists now. There's a couple of different lists depending on whether you're, you know, Department of War, Department of Energy, USGS, but they're all in the 50-ish neighborhood, but they do recognize the the the value that they are critical in terms of our uh just, you know, everyday life, but also for the military. Lots of talk about rare earths. Um, but it's not just the niche metals like rare earth. It's basically metals like zinc and copper and silver. And silver's a big one. um and gold even a lot of people don't recognize how important gold is uh in AI if if a if a connection has to be made 100% of the time that's a gold switch that's not a silver switch that's not a zinc switch or a copper switch it's a gold switch um and that's the that's because gold's a noble metal and it it just always stays gold um so there's and it what I what's really different now is that in the at least in the United states, whether you're a Democrat or a Republican, you recognize that you need metals. You may want to use them to do different things, build build windmills or or build tanks, but you need metals. And and that's I think that's a very positive change from what we've dealt with for the literally the last 50 years. uh where we offshored all this. Now we're recognizing that parts of that weren't such a good idea. Yeah, we got lots of cheap stuff, but uh we gave up control of our supply chains and uh co demonstrated that that was uh there were problems there and it's and and now of course we have a you know the Iran Iran war and we're seeing the effects of supply chain once again. So it's not just oil and gas, it's helium which is important for AI chips. So it's >> Yeah. Yeah. Now I want to pass to you Sean and maybe like like within that setting that Rick just described the sentiment shift favoring critical metals or just ownership of source of metals. Um the markets corrected a little bit right we had a super frothy specifically the last half of 2025. You mentioned my conference in January, gold and silver both hit highs that I don't think anybody would have predicted 6 months earlier, but it happened. Um, and since cooled off a little bit right now investors over the last 15 years, I think have been conditioned to think in rallies, not secular cycles. Meaning, um, that's been the market behavior, right? It's like, what's the next rally that I should catch as a trader or investor? And I think that a lot of people therefore looked at the gold price appreciation in a similar way. Oh, gold's the next rally. Okay, that's cooled off. What's next? And I'm I'm glad you expanded on that the way you did, Rick, because it kind of underpins the paradigm shift that we're seeing. It's not just a bit of a sentiment shift and a trade. It's not just um a bit of um devaluation of the currency. There's there's massive shifts governmentled towards uh our sector in a way that we've never seen in 20 years. So Sean, for somebody who's sitting on a position, they bought at my conference end of January and they're down 30% today. What would you say to them in terms of their time horizon, future expectation, how they should think about the volatility in this market? >> It's a good question. It depends on what they bought, right? It's a It is like, you know, these there's there's 2,000 different opportunities and options for uh the precious metals mining investor. Um I I would say to them, look, you you make your money on the buy, not the sell, right? And you know, the the comfort for those who bought at $5,500 gold and $120 silver on the equity side is if you if we look at a company like First Majestic, for example, and we look at where First Majestic shares were when gold was up at $120 versus where they were when they put out their Q4 and their year-end production numbers. their share price actually moved higher with $70 silver than their share price was at $120 silver because the mining equities are not pricing in spot pricing. Right? So I think it's uh it's a so I I really think that the value proposition for the mining equity investor like what I'm telling friends, loved ones, shareholders is 2025 is going to go down as a historic year for gold and silver is a breakout year. It was an incredible year. I think gold was up 60%. I think silver was up 200%. You know, that doesn't happen. That that happens once a decade, you know, sometimes once a century. But what didn't happen is, you know, the equities didn't keep pace. And that's typical for previous cycles. If you go back and study previous bull markets, that's typically what happens. You know, you have the metals move and then that gets priced into the equity. So, I think you have to take a long-term horizon and you've got to like and you know what another thing to think about here is we've moved as a as a globe as a as a investing globe into a passive investing world. So over half the money out there is passively managed. Now a lot of that gets triggered by algorithms and is momentum based. And that's why we had such a great year last year is because for the first time in a long time, momentum changed to the positive for both gold and silver. Okay? Well, what you need to recognize right now in this moment is that sentiment has turned negative temporarily. We are below the 50-day moving averages. And you know, Jay, you mentioned this is a great buying opportunity for Contango Silver and Gold. I'm a buyer. I'm I'm a buyer and I have been and I will continue to and it's because as we go through this correction and gold is and silver are below the 50-day moving averages, there's a great buying opportunity. And as I said, you make your money on the buy. So, I would just say, you know, the stock market is one of the few markets in the world when it goes on sale, investors don't want to buy it. And so, you you know, I think you need to lean in and you need to get to know the companies. you know, we're trading at two times next year's cash flow. That's a pretty interesting uh value proposition. We've got the pipeline. So, um you know, that's that's what I' that's what I'd say to those investors who are buying in January. >> Let me just ask a follow-up question on that, Sean. So, you mentioned first Majestic share price actually went up as the silver price went down because earnings came out and impressed the market. Obviously, even at $70 silver, they outperformed. You know, could could I make the assumption, therefore, that as we see a few more quarters and more positive earnings that surprised the market to the upside, despite a correction in the metals price, we're higher than we thought we'd be 12 months ago, and we're higher than the anchor prices that Bay Street, for example, was using for their forecasts. So, producers are set to outperform. and after a few more quarters of that like what's your gauge on institutional interest in our sector right now? My assumption of that it's going to take a few more quarters and then they'll get mandates from shareholders saying I don't even know what that industry is but look at the cash it's generating we need more exposure to it or how that may occur but you're always on the road um doing shows Sean meeting with institutions what's your take on institutional sentiment towards our sector and then how does obviously how does contango fit into that decision-m right now >> yeah look I I think that um the institutions are starting to warm up the generalists are starting to warm up you and and that's a reaction to the great price appreciation we saw in in 2025. Um, but it all goes back to our models and our budgets, right? And if you look at Contango, we've we've budgeted $3700 gold, you know, and and you know, we're we're we're seeing a price that's almost $1,000 higher than that budgeted price today at at gold at nearing 4,700 again. So going back to your point about where the gold mining and silver mining industry was and how it factored into pricing. So going back to that first Majestic example, you know, they were $38 a share when silver was $120. They went to $44 on their earnings and uh today they're $30. And again, they're budgeting $50 silver. That's the budget, right? So, you know, as we sell more metal into 70 $100 silver, you know, again, the way to look at it for the the the gold mining investor, a 100,000 ounce a year producer is going to make an extra $100 million a year for every,000. So, if our budget's 3,700, but we're selling at 4,700, that's an extra hundred million a year uh for the 100,000 ounce a year producer. >> Okay. Yeah, I appreciate that. Thank you, Sean. So, let's walk through near-term catalysts for contango silver and gold. What investors can expect this year, and maybe I'll start uh I'll stick with you and start on the Kitsalt Valley, Sean, because I believe uh Q2, maybe Q3, we're going to see an updated mineral resource estimate from the Kitsalt Valley. And what's notable about that is we haven't seen one since 200,000 meters earlier in 2022. That was the last estimate. Is that correct? >> That's correct. So um our guidance is is Q2 end of Q2. So you know I I would suspect sometime in June um we we come out with the new MRE and on the back of that ME we'll get the the drills turning and we'll launch into um another 40,000 meters of drilling which will generate a lot of catalysts. Um but we're looking at the project through multiple lenses this year. you know, we'd been historically very uh discovery oriented and and now we're we're looking at it through a development lens. So, it's you're going to start to see the project move from advanced explorer through development. And again, this was a very very notable historic producer. you know, it it held some some pretty impressive statistics as, you know, one of the richest minds when it was producing, you know, back in the 20s uh in in in almost all of the world at the time. And uh you go back to the 50s for for a decade there, this was Canada's third largest primary silver producer in in the Torbert mine. So, um we've got incredible exploration potential. We'll be generating a lot of catalysts in BC. Um but I guess the biggest difference for me this year is that is one component that is that is really one component of a business that is also exploring and driving uh discovery news at a lucky shot. You've got the development work at at Johnson Track and then you have the cash flow um to report for Mono. >> So that campaign uh was February to mid-Marchch at Mono. Is that correct? So can we what can investors expect in terms of reporting um from the Mono bine >> our next quarter results will it'll be included in that um we'll probably get a distribution here and and we may report that I I'll talk with Mike Clark our CFO um but you you'll have regular sort of quarterly updates on the production uh you know we we put our guidance out um and uh you know so that you know that's all out in in the public already. Uh this year has always been the the low year in production at 45,000 ounces. Uh we're switching from the north pit to the south pit. Uh doing a lot of pre-stripping. Um and that all the all the hard work this year gets uh you know translated into the benefit next year. Next year we're guiding 75 to 80,000 ounces of production, lower cash costs. This year's cash costs are in the $1,900 to $2,000 range whereas next year we're uh you know the 12 $1,300 range because we've we've paid for all that pre-stripping this year. So, you know, uh very strong cash flows uh for this year and next year. Uh we don't have guidance for uh uh for 2028 yet, but uh I'm sure next by the end of this year we'll probably again keep two-year guidance out there. Um, I also just wanted to point out when, um, Sean was talking about Torbert, uh, mine production, you know, very high-grade mine, that was a DSO, that was a direct shipping or mine. Uh, there's no mill at Torbett. Never has been. And, uh, that just speaks to the grade quality again. >> Was that part of your incentive for this merger, Rick? >> 100%. Yeah, it's always about grade. Um, Torbit's on the water. There's a road that connects the Torbit mine to the water. It needs to be upgraded. Hasn't been used in a long time, but that won't be difficult to do. It's uh it's a little it's about the same length of road we're actually new construction we're going to be doing um at Johnson Track and it's actually about the same as the amount of road we built at uh at Mano, you know, in the neighborhood of 20 20 miles. So um yeah this is again it just fits right in that sweet spot in terms of grade in terms of uh existing infrastructure close you know close to the water all those things uh make it a great BSO project >> yeah interesting okay I love that you're carry that you're carrying this blueprint um to project after project right tried and tested on Mono um and and moved that forward in what was some pretty pretty tough tough years, right? 2020, 2021, a lot of uncertainty, tough to get around, tough to get visibility on projects. I mean, if something was going wrong in your business in 2021, you weren't blaming the lockdowns, you were doing it wrong. Everybody had massive headaches, right? The fact that you're able to move this project forward um at the speed at which you did, I think like validates obviously your operational expertise, but also validates the DSO model in sort of real time and recent, you know, recent uh events obviously. Um and then just to get really granular with with Johnson Track, what's the big milestone that shareholders could look forward to news flow standpoint with this project? >> As we mentioned, we're part of Fast 41. Uh I think a big milestone is when we start constructing the road this summer. Uh we we're permitted to do that. >> Uh so the plan is to uh build a road between the camp and the portal site, get the portal site layown area all set up. We want a winterized camp uh so that we can operate year round there. Uh right now it's a summer camp, but we we want to be once we get underground, we'll be operating year round. So uh those are the you know they're they're they're not the exciting catalyst of drilling holes and drilling discovery uh new discovery uh targets and things like that. But it's um you know it's a it's a milestone that says, "Okay, hey, this project's real. We're permitted to go underground." Then that's that's the next big step. Get the underground built. Get the drilling done underground. This is a this is or this or body averages 40 m wide and uh average grade is 9.4 g per ton. So very inexpensive from a mining standpoint. Good grade again, high grade and it's completely open down dip and basically the or body steps uh dips steeply and down and then the mountain goes straight up and so you basically can't drill it anymore and to get the holes to go where you want them to go. So getting underground is going to not only be able to allow us to do the feasibility study on what we already know, which is a million ounces of of of gold equivalent at 9.4 grams. Um, but it's going to allow us to uh drill down dip. And as we drill down dip, we're getting u we're seeing more copper and gold, more gold box. We don't have a lot of silver at um at Johnson. That's probably the only knock on the project at this point that I can think of, but uh but we got kits all to make up for it. Yeah, you do. Anything you would add to that, Sean? >> No, I think Rick's articulated that very well. >> Okay, awesome. Look, guys, congratulations on the merger and um yeah, congratulations on becoming the newest sort of self-funding production with development and exploration upside assets in great jurisdictions being Alaska and I guess probably the largest undeveloped silver project in Western Canada in the Kitsalt Valley. I appreciate your time today and um I look forward to the next