What changed in this filing

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Item 1. Business

2021-08-31 compared with 2020-09-25 · 107 added, 84 removed, 196 unchanged (49% of the section changed)

Contango ORE, Inc.

(“CORE” or the “Company”) is a Houston-based company, whose primary business is the participation in a joint venture to explore in the State of Alaska for gold ore and associated minerals.

On January 8, 2015, the Company and Royal Gold, Inc.

(“Royal Gold”), through their wholly-owned subsidiaries, consummated the transactions (the “Transactions”) contemplated under the Master Agreement, dated as of September 29, 2014 (the “Master Agreement”), including the formation of the Joint Venture Company (as defined below), to advance exploration of the Peak Gold Joint Venture Property (as defined below), which is prospective for gold and associated minerals.

As of June 30, 2020, the Joint Venture Company leased or controlled over an estimated 860,000 acres for the exploration of gold ore and associated minerals.

Contango Mining Company (“Contango Mining”), a wholly owned subsidiary of Contango Oil & Gas Company (“Contango”), was formed for the purpose of mineral exploration in the State of Alaska.

The Company was formed on September 1, 2010 as a Delaware corporation and on November 29, 2010, Contango Mining assigned all its properties and certain other assets and liabilities to Contango.

Contango contributed the properties and $3.5 million of cash to the Company, pursuant to the terms of a Contribution Agreement (the “Contribution Agreement”), in exchange for approximately 1.6 million shares of the Company’s common stock.

The transactions occurred between companies under common control.

Contango then distributed all of the Company’s common stock to Contango’s stockholders of record as of October 15, 2010, promptly after the effective date of the Company’s Registration Statement Form 10 on the basis of one share of common stock for each ten (10) shares of Contango’s common stock then outstanding.

Contango Mining acquired an interest in properties from Juneau Exploration, L.P.

(“JEX”), in exchange for $1 million and a 3.0% overriding royalty interest in the properties granted to JEX.

JEX assisted the Company in acquiring additional properties in Alaska pursuant to an Advisory Agreement dated September 6, 2012, and the Company granted to JEX a 2% overriding royalty interest in the additional properties acquired.

On September 29, 2014, pursuant to a Royalty Purchase Agreement between JEX and Royal Gold, JEX sold its entire overriding royalty interest in the properties to Royal Gold.

On the same date, the Company terminated the Advisory Agreement with JEX.

In connection with the closing of the Transactions with Royal Gold (the “Closing”), the Company formed Peak Gold, LLC (the “Joint Venture Company”) and contributed to the Joint Venture Company the Peak Gold Joint Venture Property (as defined below) near Tok, Alaska, together with other personal property with a historical cost of $1.4 million and an agreed value of $45.7 million.

At the Closing, the Company and Royal Gold, through their wholly-owned subsidiaries, entered into a Limited Liability Company Agreement for the Joint Venture Company (the “JV LLCA”).

Upon Closing, Royal Gold initially contributed $5.0 million to fund exploration activity of the Joint Venture Company.

The initial $5.0 million did not give Royal Gold an equity stake in the Joint Venture Company.

In connection with the initial contribution, Royal Gold received an option to earn up to a 40% interest in the Joint Venture Company by investing up to $30.0 million (inclusive of the initial $5.0 million investment) prior to October 2018.

As of June 30, 2020, Royal Gold has contributed $37.0 million (including its initial $5.0 million investment) to the Joint Venture Company and earned a 40.0% interest in the Joint Venture Company.

The proceeds of the investment were used by the Joint Venture Company for additional exploration of the property it controls.

Now that Royal Gold has funded $30 million to the Joint Venture Company, pursuant to the terms of the JV LLCA, the Company and Royal Gold are obligated to jointly fund the joint venture operations in proportion to their interests in the Joint Venture Company in order to maintain their respective percentage interests in the Joint Venture Company.

If a member elects not to contribute to an approved program and budget or contributes less than its proportionate interest, its percentage interest will be reduced.

As of June 30, 2020, the Company had approximately $3.0 million of cash, cash equivalents, and short term investments.

Due to the effects of COVID-19 and for the safety of the Joint Venture Company’s field personnel and the surrounding community, the management committee of the Joint Venture Company (the "Management Committee") approved a $2.7 million budget for calendar year 2020 that would serve to care for and maintain the Peak Gold Joint Venture Property, and postpone new exploration until conditions permit.

The Company’s share of the budget is approximately $1.6 million, of which $1.0 million had been funded as of June 30, 2020.

Since 2009, the Company’s primary focus has been the exploration of a mineral lease with the Native Village of Tetlin whose governmental entity is the Tetlin Tribal Council (“Tetlin Tribal Council”) for the exploration of minerals near Tok, Alaska on a currently estimated 675,000 acres (the “Tetlin Lease”) and almost all of the Company’s resources have been directed to that end.

All significant work presently conducted by the Company has been directed at exploration of the Tetlin Lease and increasing understanding of the characteristics of, and economics of, any mineralization.

There are no known quantifiable mineral reserves on the Tetlin Lease or any of the Company’s other properties as defined by the Securities and Exchange Commission (“SEC”) Industry Guide 7.

(“CORE” or the “Company”) engages in exploration for gold, silver, and copper ores in the State of Alaska.

The Company’s largest asset is a 30.0% membership interest in Peak Gold, LLC (the “Joint Venture Company”), which leases approximately 675,000 acres from the Tetlin Tribal Council and approximately 13,000 acres of State of Alaska mining claims (the “Manh Choh Joint Venture Property,” which the Company previously referred to as the “Peak Gold Joint Venture Project”) for exploration and development and through its wholly-owned subsidiary, CORE Alaska, LLC (“CORE Alaska”).

The Company’s wholly-owned subsidiary, Contango Minerals Alaska, LLC (“Contango Minerals”), owns a 100% interest in the mineral rights to approximately 200,000 acres of State of Alaska mining claims located north and northwest of the Manh Choh Joint Venture Property (the “Contango Property”).

As of June 30, 2021 the Company had approximately $35.2 million in cash and is actively working to acquire additional properties in Alaska for exploration.

The acquisitions may include leases or similar rights from Alaska Native corporations or may include filing Federal or State of Alaska mining claims by staking claims for exploration.

In February 2021, the Village of Tetlin Tribal Council approved of a new name, the “Manh Choh Project,” for the Peak Gold Joint Venture Project.

The renaming was a result of close consultation with the local Upper Tanana Athabascan Village of Tetlin on whose land the project is situated.

The name “Manh Choh” (“mon-CHO”) can be translated from the Upper Tanana Athabascan language to “Big Lake,” referring to the nearby Tetlin Lake, a site of high cultural and subsistence significance for the community.

Kinross Transaction

On September 29, 2020, the Company, CORE Alaska, LLC and KG Mining (Alaska), Inc.

(“KG Mining”), an indirect wholly-owned subsidiary of Kinross Gold Corporation (“Kinross”), entered into a Purchase Agreement (the “CORE Purchase Agreement”), pursuant to which CORE Alaska sold a 30.0% membership interest (the “CORE JV Interest”) in the Joint Venture Company, to KG Mining (the “CORE Transactions”).

The CORE Transactions closed on September 30, 2020.

In consideration for the CORE JV Interest, the Company received $32.4 million in cash and 809,744 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”).

The 809,744 shares of Common Stock had been acquired by KG Mining from Royal Gold, as part of the Royal Gold Transactions (described below) and were subsequently canceled by the Company.

Of the $32.4 million cash consideration, $1.2 million constituted a reimbursement prepayment to the Company by KG Mining of amounts relating to CORE Alaska’s proportionate share of certain silver royalty payments that the Joint Venture Company may be obligated to pay to Royal Gold, with the understanding that as a result of such reimbursements, KG Mining would bear the entire economic impact of those silver royalty payments due from the Joint Venture Company.

Concurrently with the CORE Purchase Agreement, KG Mining acquired 100% of the equity of Royal Alaska, LLC (“Royal Alaska”) from Royal Gold, which held a 40.0% membership interest in the Joint Venture Company.

As of June 30, 2021, the Company held a 30.0% membership interest, and KG Mining held a 70.0% membership interest, in the Joint Venture Company.

Immediately prior to the Kinross Transactions (described below), the Joint Venture Company, the Company, Contango Minerals, CORE Alaska, Royal Gold and Royal Alaska entered into a Separation and Distribution Agreement, dated as of September 29, 2020 (the “Separation Agreement”).

Pursuant to the Separation Agreement, the Joint Venture Company completed the formation of Contango Minerals and contributed approximately 167,000 acres of Alaska state mining claims to it, subject to an Option Agreement, dated as of September 29, 2020 (the “Option Agreement”).

Under the Option Agreement, Contango Minerals granted the Joint Venture Company an option, subject to certain conditions contained in the Option Agreement, to purchase approximately 13,000 acres of the Alaska state mining claims which were contributed to Contango Minerals pursuant to the Separation Agreement, together with all extralateral rights, water and water rights, and easements and rights of way in connection therewith, that are held by Contango Minerals.

As a result, at the closing of the CORE Transactions, the Company received the equity of Contango Minerals and control of approximately 167,000 acres of Alaska state mining claims.

Peak Gold subsequently exercised the Option Agreement and now owns the 13,000 acres of the Alaska state mining claims previously subject to the Option Agreement.

Concurrently with the closing of the CORE Transactions, KG Mining, in a separate transaction, acquired from Royal Gold (i) 100% of the equity of Royal Alaska, which held a 40.0% membership interest in the Joint Venture Company and (ii) 809,744 shares of Common Stock held by Royal Gold (the “Royal Gold Transactions” and, together with the CORE Transactions, the “Kinross Transactions”).

After the consummation of the Kinross Transactions, CORE Alaska retained a 30.0% membership interest in the Joint Venture Company.

KG Mining now holds a 70.0% membership interest in the Joint Venture Company and serves as the manager and operator of the Joint Venture Company.

KG Mining and CORE Alaska entered into the Amended and Restated Limited Liability Company Agreement of the Joint Venture Company (the “A&R JV LLCA”) on October 1, 2020 to address the new ownership arrangements and to incorporate additional terms that will permit the Joint Venture Company to further develop and produce from its properties.

Kinross is a large gold producer with a diverse global portfolio and extensive operating experience in Alaska.

The Joint Venture Company plans to mine ore from the Peak and North Peak deposits and then process ore at the existing Fort Knox mining and milling complex located approximately 250 miles away.

The use of the Fort Knox mill is expected to accelerate the development of the Manh Choh Joint Venture Property and result in significantly reduced upfront capital development costs, smaller environmental footprint, a shorter permitting and development timeline and less overall risk for Manh Choh Joint Venture Property.

On January 8, 2015, the Company and a subsidiary of Royal Gold, Inc.

(“Royal Gold”) formed the Joint Venture Company.

The Company contributed a 100% leasehold interest in an estimated 675,000 acres (the “Tetlin Lease”) from the Tetlin Tribal Council, the council formed by the governing body for the Native Village of Tetlin, an Alaska Native Tribe (the “Tetlin Tribal Council”);

and State of Alaska mining claims near Tok, Alaska (together with other property, formerly the “Peak Gold Joint Venture Property”), and Royal Gold made an initial investment into the Joint Venture Company of $5.0 million.

By September 29, 2020, Royal Gold had contributed approximately $37.1 million to the Joint Venture Company and earned a cumulative economic interest of 40.0%.

The proceeds from the investments were used for exploration of the Peak Gold Joint Venture Property.

Royal Gold served as the manager of the Joint Venture Company and managed, directed, and controlled operations of the Joint Venture Company until the Kinross Transactions.

As of June 30, 2021, the Company had approximately $35.2 million of cash.

On December 10, 2020, the Management Committee of the Joint Venture Company (the “Management Committee”) approved a total budget of $18.0 million for the calendar year 2021 to undertake in-fill drilling, engineering and environmental studies necessary to complete a feasibility-level study, additional exploration, community relations, and to prepare the project for formal permitting.

On June 22, 2021 the Management Committee voted to increase the exploration budget by $0.2 million for interpretation of archive drilling, adopting oriented core and geological consulting.

The Company’s proportionate share of the approved budget is approximately $5.5 million.

As of June 30, 2021, the Company had funded approximately $2.5 million to the Joint Venture Company during calendar year 2021.

In addition, the Company plans to fund an approximately $3.0 million exploration program to continue its exploration efforts on its earlier stage Eagle and Hona projects located immediately north of the Manh Choh project area, and to explore for additional resources on 100%-owned Triple Z prospect in late 2021, focused on the areas immediately adjacent to the known Joint Venture Company resources.

Field work on the Eagle/Hona project began in July 2021.

During the first quarter of calendar year 2021, the Company staked a new property called Shamrock in the Richardson Mining District located in central Alaska right along the Alaska Hwy corridor approximately 70 miles from Fairbanks, Alaska.

The property includes a total of 361 Alaska state mining claims covering approximately 52,640 acres and gives the Company a dominant land position in the Richardson district.

The property has excellent infrastructure being right along the Alaska Hwy and adjacent to the Trans Alaska Pipeline with several gravel roads and ATV trails providing good access to entire property.

Since 2009, the Company’s primary focus has been the exploration of a mineral lease with the Native Village of Tetlin whose governmental entity is the Tetlin Tribal Council (“Tetlin Tribal Council”) for the exploration of minerals near Tok, Alaska on a currently estimated 675,000 acres (the “Tetlin Lease”) constituting the Manh Choh Joint Venture Property and almost all of the Company’s resources have been directed to that end.

All significant work presently conducted by the Company has been directed at exploration of the Manh Choh Joint Venture Property and increasing understanding of the characteristics of, and economics of, any mineralization.

The Company also separately owns the mineral rights to approximately 200,000 acres of State of Alaska mining claims for exploration.

There are no known quantifiable mineral reserves on the Manh Choh Joint Venture Property, the Contango Property or any of the Company’s other properties as defined by the SEC Industry Guide 7.

The Tetlin Lease originally had a ten-year term beginning July 2008, which was extended for an additional ten years to July 15, 2028.

If the properties under the Tetlin Lease are placed into commercial production, the Tetlin Lease will be held throughout production and the Company will be obligated to pay a production royalty to the Tetlin Tribal Council, which initially varied from 2.0% to 5.0%, depending on the type of metal produced and the year of production.

If the properties under the Tetlin Lease are placed into commercial production, the Tetlin Lease will be held throughout production and the Company would be obligated to pay a production royalty to the Tetlin Tribal Council, which varies from 3.0% to 5.0%, depending on the type of metal produced and the year of production.

In June 2011, the Company paid the Tetlin Tribal Council $75,000 in exchange for reducing the production royalty payable to them by 0.25%.

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These payments lowered the production royalty to a range of 2.25% to 4.25%, depending on the type of metal produced and the year of production.

On or before July 15, 2020, the Tetlin Tribal Council had the option to increase its production royalty by (i) 0.25% by payment to the Joint Venture Company of $150,000, or (ii) 0.50% by payment to the Joint Venture Company of $300,000, or (iii) 0.75% by payment to the Joint Venture Company of $450,000.

The Management Committee extended the Tetlin Tribal Council’s option until November 15, 2020.

As of June 30, 2020, the Joint Venture Company also held certain State of Alaska unpatented mining claims for the exploration of gold ore and associated minerals.

The Company believes that the Joint Venture Company holds good title to its properties, in accordance with standards generally accepted in the mineral industry.

As is customary in the mineral industry, the Company conducts only a preliminary title examination at the time it acquires a property.

The Tetlin Tribal Council had the option to increase its production royalty by (i) 0.25% by payment to the Joint Venture Company of $150,000, (ii) 0.50% by payment to the Joint Venture Company of $300,000, or (iii) 0.75% by payment to the Joint Venture Company of $450,000.

The Tetlin Tribal Council exercised this option on December 30, 2020.

In lieu of a cash payment, the $450,000 will be credited against future production royalty and advance minimum royalty payments due by the Joint Venture Company to the Tetlin Tribal Council under the lease once production begins.

The Joint Venture Company has also historically held certain State of Alaska unpatented mining claims for the exploration of gold ore and associated minerals.

Prior to the Kinross Transactions, the Joint Venture Company, Contango Minerals Alaska, LLC, an Alaska limited liability company formed by the Joint Venture Company (“Contango Minerals”), the Company, CORE Alaska, Royal Gold and Royal Alaska entered into a Separation and Distribution Agreement, dated as of September 29, 2020 (the “Separation Agreement”).

Pursuant to the Separation Agreement, the Joint Venture Company formed Contango Minerals, contributed approximately 167,000 acres of Alaska state mining claims to it (Eagle, Noah, Triple Z, and Tok), and retained an additional 1.0% net smelter returns royalty interest on certain of the Alaska state mining claims that were contributed.

After the formation and contribution to Contango Minerals, the Joint Venture Company made simultaneous distributions to Royal Alaska and CORE Alaska by (i) granting a new 28.0% net smelter returns silver royalty on all silver produced from a defined area within the Tetlin Lease and transferring the additional 1.0% net smelter returns royalty described above to Royal Gold and (ii) assigning 100.0% of the membership interests in Contango Minerals to CORE Alaska, which were in turn distributed to the Company, resulting in Contango Minerals becoming a wholly-owned subsidiary of the Company.

The Separation Agreement contains customary representations, warranties and covenants.

In connection with the Separation Agreement, the Joint Venture Company and Contango Minerals entered into an Option Agreement, dated as of September 29, 2020 (the “Option Agreement”).

Under the Option Agreement, Contango Minerals granted to the Joint Venture Company the option, subject to certain conditions contained in the Option Agreement, to purchase approximately 13,000 acres of the Alaska state mining claims, together with all extralateral rights, water and water rights, and easements and rights of way in connection therewith, that are held by Contango Minerals, and which were transferred to Contango Minerals pursuant to the Separation Agreement.

Subject to the conditions in the Option Agreement, the Joint Venture Company had the right exercise the option to purchase the Alaska state mining claims, in whole or in part, at an exercise price of $50,000.

The Joint Venture Company exercised the option in June 2021, and paid the Company 50,000 for all of the Alaska state mining claims outlined in the Option Agreement.

The Company believes that it and the Joint Venture Company hold good title to their properties, in accordance with standards generally accepted in the mineral industry.

As is customary in the mineral industry, the Company conducted only a preliminary title examination at the time it entered into the Tetlin Lease.

The Joint Venture Company conducted a title examination prior to the assignment of the Tetlin Lease to the Joint Venture Company and performed certain curative title work.

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A significant amount of additional work is likely required in the exploration of the properties before any determination as to the economic feasibility of a mining venture can be made.

The following table summarizes the Tetlin Lease and unpatented mining claims (collectively, the “Peak Gold Joint Venture Property”) held by the Joint Venture Company as of June 30, 2020:

The following table summarizes the Tetlin Lease and unpatented mining claims held by the Joint Venture Company and the Company as of June 30, 2021 :

Estimated Acres

Contango Minerals (100% Interest):

Eastern Interior

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State Mining Claims

Joint Venture Company (30.0% Interest):

Tetlin-Village

Eastern Interior

Gold, Copper, Silver

State Mining Claims

Eastern Interior

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State Mining Claims

Tetlin-Village

Eastern Interior

Gold, Copper, Silver

Retaining Proven Executive Leadership .

Effective as of January 6, 2020, Rick Van Nieuwenhuyse was appointed to serve as President and Chief Executive Officer of the Company.

Van Nieuwenhuyse will perform the functions of the Company’s principal executive officer.

Also effective on January 6, 2020, the size of the Board was increased from four to five directors with Mr.

Van Nieuwenhuyse appointed to the Board to fill the vacancy created by the increase.

Van Nieuwenhuyse, 65, previously served as President and Chief Executive Officer of Trilogy Metals Inc.

from January 2012 until December 2019.

Between May 1999 and January of 2012, he served as the President and Chief Executive Officer of NOVAGOLD Resources, Inc.

In December 2020, Mr.

Van Nieuwenhuyse hired two employees to assist with the execution and field management of the Company's exploration of its 100% owned properties.

Partnering with strategic industry participants to expand future exploration work.

In connection with an evaluation of the Company’s strategic options conducted by the Company's board of directors (the "Board of Directors" or "Board") and its financial advisor in 2014, the Company determined to continue its exploration activities on the Peak Gold Joint Venture Property through a joint venture with an experienced industry participant.

As a result, the Company formed the Joint Venture Company pursuant to the JV LLCA with Royal Gold.

Under the JV LLCA, Royal Gold was appointed as the manager of the Joint Venture Company (the “Manager”), initially, with overall management responsibility for operations of the Joint Venture Company through October 31, 2018, and, thereafter, provided Royal Gold earned at least a forty percent (40%) percentage interest by October 31, 2018.

As of June 30, 2020, Royal Gold had earned a 40% interest in the Joint Venture Company, and continues to serve as its Manager.

Royal Gold may resign as Manager, and can be removed as Manager for a material breach of the JV LLCA, a material failure to perform its obligations as the Manager, a failure to conduct the Joint Venture Company operations in accordance with industry standards and applicable laws, and other limited circumstances.

In January 2015, the Company formed the Joint Venture Company pursuant to the JV LLCA with Royal Gold.

Under the JV LLCA, Royal Gold was appointed as the manager of the Joint Venture Company, initially, with overall management responsibility for operations of the Joint Venture Company.

As of October 1, 2020, in conjunction with the Kinross Transactions and the signing of the A&R JV LLCA, KG Mining became the manager of the Joint Venture Company (the “Manager”).

KG Mining may resign as Manager and can be removed as Manager for a material breach of the A&R JV LLCA, a material failure to perform its obligations as the Manager, a failure to conduct the Joint Venture Company operations in accordance with industry standards and applicable laws, and other limited circumstances.

The Manager will manage and direct the operation of the Joint Venture Company, and will discharge its duties, in accordance with approved programs and budgets.

The Manager will implement the decisions of the Management Committee and will carry out the day-to-day operations of the Joint Venture Company.

Except as expressly delegated to the Manager, the JV LLCA provides that the Management Committee has exclusive authority to determine all management matters related to the Joint Venture Company.

The Management Committee consists of one appointee designated by the Company and two appointees designated by Royal Gold.

Each designate on the Management Committee is entitled to one vote.

Except for the list of specific actions set forth in the JV LLCA, the affirmative vote by a majority of designates is required for action.

Effective as of January 6, 2020, Rick Van Nieuwenhuyse was appointed to serve as President and Chief Executive Officer of the Company, replacing Brad Juneau.

Juneau continues to be active in the Company as Executive Chairman.

Van Nieuwenhuyse, 64, brings to the Company a wealth of experience in the mining industry.

He previously served as President and Chief Executive Officer of Trilogy Metals Inc.

from January 2012 until January 6, 2020.

Between May 1999 and January of 2012, he served as the President and Chief Executive Officer of NOVAGOLD Resources, Inc.

Except as expressly delegated to the Manager, the A&R JV LLCA provides that the Management Committee has exclusive authority to determine all management matters related to the Company.

The Management Committee currently consists of one appointee designated by the Company and two appointees designated by KG Mining.

The Representatives designated by each member of the Joint Venture Company vote as a group, and in accordance with their respective membership interests in the Joint Venture Company.

Except in the case of certain actions that require approval by unanimous vote of the Representatives, the affirmative vote of a majority of the membership interests in the Joint Venture Company constitutes the action of the Management Committee.

Structuring Incentives to Drive Behavior .

The Company believes that equity ownership aligns the interests of the Company’s executives and directors with those of its stockholders.

As of June 30, 2020, the Company’s directors and executives beneficially owned approximately 19.2% of the Company’s common stock.

As of June 30, 2021, the Company’s directors and executives beneficially own approximately 23.5% of the Company’s Common Stock.

An additional 11.8% of the Company’s Common Stock is beneficially owned by the Marital Trust of Mr.

Peak, the Company’s former Chairman, who passed away on April 19, 2013.

Acquiring exploration properties .

The Company anticipates from time to time acquiring additional properties in Alaska for exploration, subject to the availability of funds.

The acquisitions may include leases or similar rights from Alaska Native corporations or may include filing Federal or State of Alaska mining claims by staking claims for exploration.

Acquiring additional properties will likely result in additional expense to the Company for minimum royalties, minimum rents and annual exploratory work requirements.

Exploration and Mining Property

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The primary sources for acquisition of these lands are the United States government, through the Bureau of Land Management and the United States Forest Service, the Alaskan state government, tribal governments, and individuals or entities who currently hold title to or lease government and private lands.

Tribal lands are those lands that are under control by sovereign Native American tribes, such as land constituting the Tetlin Lease or Alaska Native corporations established by the Alaska Native Claims Settlement Act of 1971.

Areas that show promise for exploration and mining can be leased or joint ventured with the tribe controlling the land, including land constituting the Tetlin Lease.

Tribal lands are those lands that are under control by sovereign Native American tribes.

Areas that show promise for exploration and mining can be leased from or joint ventured with the tribe controlling the land, including land constituting the Tetlin Lease.

The State of Alaska government owns public lands.

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Both private fee-land and unpatented mining claims and related rights, including rights to use the surface, are subject to permitting requirements of federal, state, tribal and local governments.

Consulting Services provided by Avalon Development Corporation

Until January 8, 2015, the Company was a party to a Professional Services Agreement (“PSA”) with Avalon Development Corporation (“Avalon”) to provide certain geological consulting services and exploration activities with respect to the Peak Gold Joint Venture Property.

Pursuant to the PSA, Avalon provided geological consulting services and exploration activities, including all field work at the Tetlin Lease.

In connection with the Transactions, the Company terminated the PSA with Avalon.

Avalon continued to provide services to the Joint Venture Company until February 28, 2020, when its owner, Curtis J.

Freeman, retired.

The Joint Venture Company has retained key administrative, geology, and database management personnel from Avalon on a contract basis.

The Company's CEO, Rick Van Nieuwenhuyse, who has extensive experience in the mining industry, and personnel previously employed by Avalon are assisting the Joint Venture Company as independent contractors in place of Avalon.

Services Provided by Tetlin Village Members

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Under the extended Support Agreement, the Joint Venture Company provided payments to the Tetlin Village four times during the year for an aggregate amount of $110,000 through January 1, 2017, and an additional $100,000 each year through January 1, 2020.

The Support Agreement was extended a third time for an additional one-year period under the same terms.

Under the third extension, the Joint Venture Company will provide payments to the Tetlin Village four times during the year for an aggregate amount of $100,000 through January 1, 2021.

The Support Agreement has been extended for two additional one-year periods under the same terms.

Under the latest extension, the Joint Venture Company will provide payments to the Tetlin Village four times during the year for an aggregate amount of $100,000 through January 1, 2022.

The Support Agreement defines agreed uses for the funds and auditing rights regarding use of funds.

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Adverse Climate Conditions

Weather conditions affect the Joint Venture Company’s ability to conduct exploration activities and mine any ore from the Peak Gold Joint Venture Property in Alaska.

Weather conditions affect the Company’s and the Joint Venture Company’s ability to conduct exploration activities and mine any ore from the Contango Property and the Manh Choh Joint Venture Property in Alaska.

While the Company believes exploration, development work and any subsequent mining may be conducted year-round, the arctic climate limits many exploration and mining activities during certain seasons.

The Company currently faces strong competition for the acquisition of exploration-stage properties as well as extraction of any minerals in Alaska.

The Company currently faces strong competition for the acquisition of any new exploration-stage properties as well as extraction of any minerals in Alaska.

Numerous larger mining companies actively seek out and bid for mining prospects as well as for the services of third party providers and supplies, such as mining equipment and transportation equipment.

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Government Regulation

The Joint Venture Company’s mineral exploration activities are generally affected by various laws and regulations, including environmental, conservation, tax and other laws and regulations relating to the exploration of minerals.

The Company and the Joint Venture Company’s mineral exploration activities are generally affected by various laws and regulations, including environmental, conservation, tax and other laws and regulations relating to the exploration of minerals.

Various federal and Alaskan laws and regulations often require permits for exploration activities and also cover extraction of minerals.

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However, the Joint Venture Company has voluntarily elected, with the concurrence of the Tetlin Tribal Council, to conduct its mineral exploration activities under the same terms and conditions as required on State of Alaska mining claims.

Hard Rock Exploration Permits and Temporary Water Use Permits covering past and planned activities on the Peak Gold Joint Venture Property were issued by the Alaska Department of Natural Resources to the Joint Venture Company and consist of the following multi-year permits:

Hard Rock Exploration Permits and Temporary Water Use Permits covering past and planned activities on the Manh Choh Joint Venture Property were issued by the Alaska Department of Natural Resources to the Company and the Joint Venture Company and consist of the following multi-year permits:

Alaska Hard Rock Exploration and Reclamation Permit #2626 covering exploration drilling activities on the Tetlin Lease.

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Each year during the term of the permit, the Joint Venture Company will submit a reclamation statement detailing reclamation actions taken and a letter of intent to do reclamation for the following year.

Alaska Temporary Water Use Permit F2016-23, allowing a seasonal average water use of 21,600 gallons per day during the period May 20 to October 15.

Alaska Temporary Water Use Permit F2020-093, allowing a maximum withdrawal of 12,000 gallons per day.

The permit expires December 31, 2025.

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However, such lands were classified as wetlands more than 20 years ago and much of the land covered by such permit has since been burned by natural wildfires.

As a consequence of the wildfires and natural habitat changes that have taken place since the wildfires, the Peak Gold Joint Venture Property may no longer be considered wetlands according to Corps of Engineers guidelines.

As a consequence of the wildfires and natural habitat changes that have taken place since the wildfires, the Manh Choh Joint Venture Property may no longer be considered wetlands according to Corps of Engineers guidelines.

The Company began collecting baseline environmental data in 2012 and the Joint Venture Company has continued this process.

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The Joint Venture Company’s mining operations may generate wastes that fall within CERCLA ’s definition of “Hazardous Substances”.

The Company has one full-time employee, Rick Van Nieuwenhuyse, its President and Chief Executive Officer who is responsible for the management of the Company.

The Company has six full-time employees.

Rick Van Nieuwenhuyse, its President and Chief Executive Officer is responsible for the management of the Company.

Brad Juneau serves as the Company’s Executive Chairman.

Leah Gaines is the Vice President, Chief Financial Officer, Chief Accounting Officer, Treasurer and Secretary of the Company and is responsible for the financial and accounting affairs of the Company.

Juneau and Ms.

Gaines provide their services to the Company through a management agreement with JEX.

- Related Party Transactions.

The Company also uses the services of independent consultants and contractors to perform various professional services, including land acquisition, legal, environmental and tax services.

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Juneau was appointed Chairman of the Board in April 2013.

Juneau is the sole manager of the general partner of JEX, an oil and gas exploration and production company.

Juneau is the sole manager of the general partner of Juneau Exploration L.P.

(“JEX”), an oil and gas exploration and production company.

Prior to forming JEX in 1998, Mr.

4 unchanged sentences

Juneau holds a Bachelor of Science degree in Petroleum Engineering from Louisiana State University.

Juneau previously served as a Director of Contango from April 2012 to March 2014, and is currently a director of Talos Energy.

Juneau previously served as a Director of Contango Oil & Gas from April 2012 to March 2014, and is currently a director of Talos Energy.

Rick Van Nieuwenhuyse .

47 unchanged sentences

There are no family relationships between the Company’s directors or executive officers.

The Board elected Mr.

Juneau as Executive Chairman for a number of reasons.

Juneau beneficially owns approximately 9.0% of the Company’s common stock, making him one of the largest shareholders.

Juneau has been an active entrepreneur who founded JEX, an exploration and production company.

Corporate Offices

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business