A Strategic Merger Forges a New North American Precious Metals Contender

Contango ORE is poised for a fundamental corporate evolution. The company has announced plans to merge with Dolly Varden Silver, a move that will rebrand the combined entity as "Contango Silver & Gold Inc." and position it as a significant producer in the North American precious metals sector. While the initial market reaction was measured, the underlying strategy presents a compelling growth narrative.

Entering this transformative period from a position of strength, Contango ORE reported a record operating profit of $25 million for the third quarter of 2025, alongside an impressive adjusted net profit margin. The company's cash position swelled to a notable $107 million, bolstered by a distribution from a joint venture. Operationally, production costs were contained at $1,597 per ounce, coming in below annual targets.

A key contributor to this robust performance is the Manh Choh gold mine in Alaska, a joint venture with Kinross Gold. In the first nine months of 2025, Contango's share of production from this asset amounted to approximately 52,020 ounces of gold.

Should investors sell immediately? Or is it worth buying Contango ORE?

The Merger Blueprint: Uniting Production with Development

The merger, structured as an all-share transaction unveiled in December, is anticipated to close in the first quarter of 2026. Under the terms, Dolly Varden Silver shareholders will receive 0.1652 of a Contango ORE share for each share they hold. Upon completion, existing shareholders of both companies are expected to each own roughly 50% of the new, combined corporation. The pro-forma market capitalization for the merged entity is projected to be around $812 million.

The strategic rationale is clear-cut: to leverage the steady cash flow generated from Contango's producing Manh Choh mine to accelerate the development of Dolly Varden's high-grade silver projects. These assets are located in the prolific "Golden Triangle" region of British Columbia, Canada.

• The combination creates a diversified precious metals company with both immediate production and long-term growth projects.
• Operational strength from Alaska is intended to fund and de-risk the silver development pipeline in Canada.
• An integrated management team, drawing experience from both organizations, will oversee the consolidation.

Attention now turns to the successful execution of the merger in spring 2026. Key upcoming milestones for investors to watch include the fourth-quarter 2025 production results and further updates on the regulatory approvals required to finalize the union.