Contango Ore (CTGO) anchors a Dolly Varden merger of equals to form a North American mid-tier

The Dolly Varden–Contango Ore merger is, in Shawn Khunkhun's telling, less an acquisition than an effort to build a mid-tier North American precious-metals producer from scratch. The strategic logic is straightforward: Contango Ore (CTGO) is producing gold and generating real cash flow in Alaska, while Dolly Varden controls a large, high-grade silver resource in northwest British Columbia. Neither company has what it takes on its own to move the combined asset base forward, but together, Khunkhun argues, they do.

## The Contango side: producing, cash-generative, with a defined pipeline

Contango's side of the equation rests on a producing asset and the track record of its leadership. Khunkhun describes Contango as run by Rick Van Nieuwenhuyse, who built Nova Gold from inception into what Khunkhun calls a roughly $6 billion company advancing the 40-million-ounce Donlin deposit in Alaska, and who also ran Trilogy — a billion-dollar-market-cap developer in the Ambler district whose Arctic project counts the U.S. government as a 10% shareholder. The guest calls that CV one of the deepest in the business.

The production picture at Contango is concrete. The company is currently mining the Moncho deposit at 60,000 ounces of gold per year. In 2025, with average gold prices below $4,000 per ounce, the operation generated $102 million of free cash flow. Contango ended the period with $100 million in the bank. Those, Khunkhun emphasizes, are U.S. dollars — cash on hand and cash flow available to fund Dolly Varden's development.

Growth is tied to a specific mine plan. Lucky Shot, a past-producing gold mine that Contango is drilling and advancing, is expected to enter production in 2028, lifting the company's profile from 60,000 ounces to 100,000 ounces annually. A third project in the pipeline, Khunkhun says, will add another 100,000 ounces when it comes online. The implied run rate, once all three assets are in production, is roughly 200,000 ounces of gold per year — paired with Dolly Varden's silver contribution.

## The Dolly Varden side: a rare high-grade silver asset in a safe jurisdiction

On the silver side, Khunkhun frames Dolly Varden as a rare asset: a set of five past-producing high-grade silver mines in northwest British Columbia, on roughly 100,000 hectares of ground, with what he describes as about 100 million ounces of silver outlined at attractive grade. The investor base includes Eric Sprott, Fidelity, and Hecla — a lineup Khunkhun calls among the most knowledgeable in silver mining and silver investing. Capital raised by Dolly Varden over the past six years totals roughly $185 million.

The development problem is execution capacity, not resource quality. Khunkhun argues that silver prices moved from $16 to $116 over the cycle, which finally makes the project economic to build, but Dolly Varden has neither cash flow nor a permitting/construction team. By merging with Contango, Dolly Varden gains both. Khunkhun says the combined business should produce roughly five to six million ounces per year of silver equivalent (silver plus gold) and gives investors exposure to a North American, high-grade precious-metals platform that, in scale terms, he compares to a Hecla-style mid-tier.

## Why "merger of equals," and the deal timeline

Khunkhun prefers the structure — a merger of equals with Dolly Varden shareholders ending up as 50% owners — because it avoids the dilution that an outright sale to a senior producer would create. He argues that selling into a $20 billion entity and going from $20B to $40B is a less attractive path than combining a roughly $1 billion market-cap Dolly Varden with Contango to build toward a $5–10 billion mid-tier. The transaction timeline, per the discussion: a shareholder vote on March 17, with closing targeted for the end of March.

The broader context is the M&A backdrop Khunkhun paints for junior precious-metals. He argues that the mid-tier of the gold and silver producer universe has been hollowed out by 15 years of mega-mergers (Barrick/Randgold, Newmont/Goldcorp, Newmont/Newcrest), leaving a vacuum between senior producers and depressed, pre-resource juniors. That, he says, is what makes this style of merger — companies combining to *form* a mid-tier — different from the deal activity of past cycles.

## What it means for Contango Ore specifically

For investors looking at Contango Ore, the take-away from Khunkhun's framing is that the company's value is no longer just a single-asset Alaska gold story. With the Dolly Varden merger, the equity becomes a vehicle for a North American precious-metals platform with current production, a defined growth pipeline to roughly 200,000 gold ounces plus a silver contribution, and a treasury built from internal cash generation rather than equity dilution.

The risk is execution. The combined business depends on the Lucky Shot development timeline holding (2028), on silver prices remaining supportive enough to justify Dolly Varden's development, and on the merger closing as scheduled in March. Khunkhun's broader argument — that we are early in a precious-metals bull market and that hard assets are dramatically under-owned — frames why he believes the math works, but those calls remain his, not the company's.

*This article reflects only what was said in the video. Pixys has not independently verified the production, cash flow, or reserve figures cited above.*