Contango Bets on Gold Rally with $50M Strategic Capital Raise

FAIRBANKS, AK – February 12, 2026 – Alaska-focused gold developer Contango Ore, Inc. (NYSE American: CTGO) has successfully closed a $50 million underwritten offering, a strategic move designed to reshape its financial posture and capitalize on a fiercely bullish outlook for gold prices. The capital, raised from two institutional investors, will primarily be used to unwind existing gold hedge contracts, significantly increasing the company's exposure to the spot price of the precious metal.

The offering consisted of 1,678,206 shares of common stock priced at $24.96 per share, along with 325,000 pre-funded warrants. In a clear signal of its market strategy, Contango has earmarked approximately $45 million of the net proceeds to buy back its gold hedges. An additional $700,000 will be used to purchase gold put options, providing a layer of downside insurance against potential price volatility. The remaining funds will be directed toward general corporate purposes and bolstering working capital for its portfolio of Alaskan mining projects.

A Strategic Pivot to Capture Gold's Upside

Contango's decision to dismantle a large portion of its hedge book represents a significant strategic pivot. By buying back contracts that previously locked in prices, the company is positioning itself to benefit more fully from a gold market that many analysts predict is on the verge of a major rally. This move comes as forecasts for 2026 have grown increasingly optimistic, with major investment banks like J.P. Morgan, Goldman Sachs, and UBS projecting that gold could climb to between $5,000 and $6,200 per ounce by year-end. These forecasts are underpinned by strong central bank buying, persistent geopolitical uncertainty, and anticipated interest rate cuts from central banks globally.

The rationale for this financial restructuring is also evident in the company's recent financial statements. In the third quarter of 2025, while Contango reported a record $25 million in income from operations, its bottom line was impacted by a non-cash unrealized loss of $14.4 million on derivative contracts. By unwinding these positions, the company aims to better align its reported earnings with its strong operational performance, particularly from its share of the Manh Choh mine. The concurrent purchase of put options is a prudent risk management tactic, creating a price floor that protects the company from unexpected downturns while leaving the upside potential largely uncapped.

Institutional Confidence Fuels Alaskan Ambitions

The infusion of $50 million from two institutional investors is a powerful vote of confidence, not only in Contango's management and strategy but also in the potential of its Alaskan asset base. Such a substantial investment in a junior development company signals a broader market belief that Contango is undervalued and poised for growth. This sentiment is echoed by market analysts, who have largely assigned "Strong Buy" or "Moderate Buy" ratings to CTGO stock, with some 12-month price targets reaching as high as $38.00 per share.

Investor confidence has been building for some time, reflected in the company's remarkable stock performance. Over the past year, Contango's share price surged by over 160%, climbing from under $11 to a recent close of $28.87 before the offering was announced. This momentum, combined with the new institutional backing, provides a solid foundation as the company enters a capital-intensive phase of development across its portfolio. The transaction was managed by a team of underwriters led by Canaccord Genuity as the Sole Bookrunner, further validating the offering's appeal to the financial community.

Bolstering a Pipeline of Key Projects

While the headline focus is on financial strategy, the capital raise provides crucial support for Contango's primary mission: developing gold mines in Alaska. The strengthened balance sheet and additional working capital will help accelerate progress across its three core projects, each at a different stage of the development cycle.

The company's 30% interest in the Manh Choh Project, operated by majority partner Kinross Gold, is already a source of cash flow. With ore being mined and transported to the Fort Knox mill for processing, Contango is expecting an average of 60,000 ounces of gold production annually over the mine's life. The new funding provides a robust financial cushion for the company's share of ongoing operational expenditures.

Further down the development pipeline is the wholly-owned Johnson Tract Project, a high-grade polymetallic deposit with significant potential. Contango is actively advancing this project, with plans for an expanded airstrip and a road to a future barge landing. The project received a major boost in December 2025 when it was accepted into the federal FAST-41 program, designed to streamline and coordinate the permitting process for large infrastructure projects. The capital injection will be instrumental in funding this pre-development work, including road construction planned for 2026, as the company targets the start of mining operations by the end of the decade.

At the Lucky Shot Project, a historic high-grade mine, Contango is engaged in an aggressive exploration campaign. A 15,000-meter underground drilling program is currently underway, with the goal of defining a new resource of 400,000 to 500,000 ounces of gold. Results from this program, expected in the first quarter of 2026, will inform a feasibility study planned for 2027. This fresh capital ensures the exploration work can proceed without interruption, moving the project closer to a potential production decision.

Fortifying the Financial Foundation for Growth

Ultimately, the $50 million offering serves to fortify Contango Ore's financial foundation as it executes its multi-pronged growth strategy. By strategically realigning its exposure to the gold market and ensuring its development projects are well-funded, the company is enhancing its ability to create shareholder value. The move aligns with its overarching "Direct Ship Ore" (DSO) model, which prioritizes developing high-grade, economically robust deposits that are close to existing infrastructure. This approach is designed to minimize initial capital costs and shorten timelines to production. With a stronger balance sheet and a clear path forward for its Alaskan assets, Contango Ore is now better positioned to navigate the opportunities and challenges of the global gold market.