What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-08-31 compared with 2020-09-25 · 413 added, 336 removed, 469 unchanged (61% of the section changed)

31 unchanged sentences

The consolidated financial statements of the Company are set forth in pages 39 to 59 of this Form 10-K.

The financial statements of the Company’s subsidiary, Peak Gold, LLC, are included as an exhibit to this Form 10-K.

The financial statements of the Joint Venture Company, Peak Gold, LLC, are included as an exhibit to this Form 10-K.

No other financial statement schedules have been filed since they are either not required, not applicable, or the information is otherwise included.

1 unchanged sentence

Where so indicated by a footnote, exhibits, which were previously filed, are incorporated herein by reference.

Purchase Agreement, dated as of September 29, 2020, by and among CORE Alaska, LLC, Contango ORE, Inc.

and Skip Sub, Inc.

(Filed as Exhibit 2.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 6, 2020).

Certificate of Incorporation of Contango ORE, Inc.

2 unchanged sentences

Securities and Exchange Commission on November 26, 2010).

Certificate of Amendment to Certificate of Incorporation of Contango ORE, Inc.

(Filed as Exhibit 3.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).

Bylaws of Contango ORE, Inc.

3 unchanged sentences

Form of Certificate of Contango ORE, Inc.

Common Stock.

(Filed as Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2013,

Common Stock (Filed as Exhibit 4.1 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2013,

as filed with the Securities and Exchange Commission on November 14, 2013).

6 unchanged sentences

Rights Agreement, dated as of December 20, 2012, between Contango ORE, Inc.

and Computershare Trust Company, N.A., as Rights Agent.

(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 21, 2012).

and Computershare Trust Company, N.A., as Rights Agent (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 21, 2012).

Amendment No.

1 unchanged sentence

and Computershare Trust Company, N.A.

as Rights Agent.

(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on March 25, 2013).

as Rights Agent (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on March 25, 2013).

Amendment No.

1 unchanged sentence

and Computershare Trust Company,.

as Rights Agent.

(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 2, 2014).

as Rights Agent (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 2, 2014).

Amendment No.

3 to Rights Agreement, dated as of December 18, 2014, between Contango ORE, Inc and Computershare Trust Company.

as Rights Agent.

(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 18, 2014).

as Rights Agent (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 18, 2014).

Amendment No.

4 to Rights Agreement, dated as of November 11, 2015, between Contango ORE, Inc and Computershare Trust Company.

as Rights Agent.

(Filed as Exhibit 4.7 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2015, as filed with the Securities and Exchange Commission on November 12, 2015).

as Rights Agent (Filed as Exhibit 4.7 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2015, as filed with the Securities and Exchange Commission on November 12, 2015).

Amendment No.

9 unchanged sentences

and Computershare Trust Company, N.A.

as Rights Agent.

(Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

as Rights Agent (Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

Rights Agreement, dated September 23, 2020 between Contango ORE, Inc.

and Computershare Trust Company.

as Rights Agent.

(Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

as Rights Agent (Filed as Exhibit 4.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on September 24, 2020).

Registration Rights Agreement dated October 23, 2017, among Contango ORE, Inc.

and the several purchasers named therein .

(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 26, 2017).

and the several purchasers named therein (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 26, 2017).

Registration Rights Agreement dated November 10, 2017, among Contango ORE, Inc.

and the investors named therein.

(Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 16, 2017).

and the investors named therein (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 16, 2017).

Registration Rights Agreement dated as of June 17, 2021, by and between Contango ORE, Inc.

and the Purchaser named therein (Filed as Exhibit 4.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on June 21, 2021).

Description of Securities.*

Form of 2010 Equity Compensation Plan.

(Filed as Exhibit 10.3 to Amendment No.

Form of 2010 Equity Compensation Plan (Filed as Exhibit 10.3 to Amendment No.

2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).

2 unchanged sentences

2 to the Company’s Registration Statement on Form 10, as filed with the Securities and Exchange Commission on November 26, 2010).

Separation and Distribution Agreement, dated as of September 29, 2020, by and among Peak Gold, LLC, Contango Minerals Alaska, LLC, Contango ORE, Inc., CORE Alaska, LLC, Royal Gold, Inc.

and Royal Alaska, LLC (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 6, 2020).

Option to Purchase State Mining Claims, dated as of September 29, 2020, by and between Contango Minerals Alaska, LLC and Peak Gold, LLC (Filed as Exhibit 10.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 6, 2020).

Stock Purchase Agreement dated as of June 14, 2021, by and between Contango ORE, Inc.

and the Purchaser named therein (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on June 21, 2021).

Stock Purchase Agreement dated as of June 17, 2021, by and between Contango ORE, Inc.

and the Purchaser named therein (Filed as Exhibit 10.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on June 21, 2021).

Master Agreement, by and between Contango ORE, Inc.

and Royal Gold, Inc..

dated September 29, 2014.

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 2, 2014).

dated September 29, 2014 (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 2, 2014).

Management Services Agreement by and between Contango ORE, Inc.

and Juneau Exploration effective October 1, 2016.

(Filed as Exhibit 10.20 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2016, as filed with the Securities and Exchange Commission on November 10, 2016).

and Juneau Exploration effective October 1, 2016 (Filed as Exhibit 10.20 to the Company’s quarterly report on Form 10-Q for the three months ended September 30, 2016, as filed with the Securities and Exchange Commission on November 10, 2016).

Amended and Restated Management Services Agreement by and between Contango ORE, Inc.

and Juneau Exploration L.P., dated November 20, 2019.

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 21, 2019).

and Juneau Exploration L.P., dated November 20, 2019 (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 21, 2019).

Second Amended and Restated Management Services Agreement, dated as of December 11, 2020, between Contango ORE, Inc.

and Juneau Exploration, L.P.

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).

Contango ORE, Inc.

Amended and Restated 2010 Equity Compensation Plan.

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 16, 2017).

Amended and Restated 2010 Equity Compensation Plan (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 16, 2017).

First Amendment to the Contango ORE, Inc.

Amended and Restated 2010 Equity Compensation Plan.†(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on November 20, 2019).

Peak Gold, LLC Limited Liability Company Agreement, dated as of January 8, 2015, between CORE Alaska, LLC and RG Alaska, LLC.

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 8, 2015).

Peak Gold, LLC Limited Liability Company Agreement, dated as of January 8, 2015, between CORE Alaska, LLC and RG Alaska, LLC (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 8, 2015).

Amended and Restated Limited Liability Company Agreement of Peak Gold, LLC, dated as of October 1, 2020, by and between CORE Alaska, LLC and Skip Sub, Inc.

(Filed as Exhibit 10.3 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 6, 2020).

Amendment No.

1 to the Peak Gold, LLC Limited Liability Company Agreement, dated as of November 10, 2017 between CORE Alaska, LLC and Royal Alaska, LLC.

(Filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2017, as filed with the Securities and Exchange Commission on November 30, 2018).

1 to the Peak Gold, LLC Limited Liability Company Agreement, dated as of November 10, 2017 between CORE Alaska, LLC and Royal Alaska, LLC (Filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2017, as filed with the Securities and Exchange Commission on November 30, 2018).

Amendment No.

2 to the Peak Gold, LLC Limited Liability Company Agreement, dated as of January 18, 2019 between CORE Alaska, LLC and Royal Alaska, LLC.

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 25, 2019).

2 to the Peak Gold, LLC Limited Liability Company Agreement, dated as of January 18, 2019 between CORE Alaska, LLC and Royal Alaska, LLC (Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 25, 2019).

Retention Agreement dated February 6, 2019 between Contango ORE, Inc.

and Brad Juneau.

† (Filed as Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2018, as filed with the Securities and Exchange Commission on February 7, 2019).

and Brad Juneau † (Filed as Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2018, as filed with the Securities and Exchange Commission on February 7, 2019).

Retention Agreement dated February 6, 2019 between Contango ORE, Inc.

and Leah Gaines.

† (Filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2018, as filed with the Securities and Exchange Commission on February 7, 2019).

and Leah Gaines † (Filed as Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2018, as filed with the Securities and Exchange Commission on February 7, 2019).

Form of Amendment to Retention Agreement, between Contango ORE, Inc.

3 unchanged sentences

(Filed as Exhibit 10.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 10, 2020).

First Amendment to Offer Letter to Rick Van Nieuwenhuyse, dated December 11, 2020.

† (Filed as Exhibit 10.3 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).

Incentive Stock Option Agreement between Contango ORE, Inc.

4 unchanged sentences

(Filed as Exhibit 10.3 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on January 10, 2020).

Form of Restricted Stock Award Agreement † (Filed as Exhibit 10.4 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).

Retention Payment Agreement dated June 10, 2020, between Contango ORE, Inc.

6 unchanged sentences

(Filed as Exhibit 14.1 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2012, as filed with the Securities and Exchange Commission on September 11, 2012).

Corporate Code of Business Conduct and Ethics of Contango ORE, Inc.

(Filed as Exhibit 14.1 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on December 17, 2020).

List of Subsidiaries.*

Consent of Moss Adams LLP, Independent Registered Public Accounting Firm.*

Consent of Moss Adams LLP, Independent Auditor for the Audited Financial Statements of Peak Gold, LLC as of June 30, 2020*

Consent of Moss Adams LLP, Independent Auditor for the Audited Financial Statements of Peak Gold, LLC as of December 31, 2020.*

Section 302 CEO Certification.

2 unchanged sentences

Section 906 CFO Certification.

Original Schedule of Gold Properties (Excluding Tetlin Lease).

(Filed as Exhibit 99.1 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2011, as filed with the Securities and Exchange Commission on September 19, 2011).

Original Schedule of REE Properties.

(Filed as Exhibit 99.2 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2011, as filed with the Securities and Exchange Commission on September 19, 2011).

Original Schedule of Gold Properties (Excluding Tetlin Lease) (Filed as Exhibit 99.1 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2011, as filed with the Securities and Exchange Commission on September 19, 2011).

Original Schedule of REE Properties (Filed as Exhibit 99.2 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2011, as filed with the Securities and Exchange Commission on September 19, 2011).

Schedule of Revised TOK Claims

8 unchanged sentences

(Filed as Exhibit 99.3 to the Company’s quarterly report on Form 10-Q for the three months ended December 31, 2011, as filed with the Securities and Exchange Commission on February 6, 2012).

Schedule of Noah Claims.

(Filed as Exhibit 99.8 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2017, as filed with the Securities and Exchange Commission on September 15, 2017).

Schedule of Noah Claims (Filed as Exhibit 99.8 to the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2017, as filed with the Securities and Exchange Commission on September 15, 2017).

Schedule of Shamrock Claims.

Voting Agreement, dated as September 29, 2014, between Royal Gold, Inc.

1 unchanged sentence

(Filed as Exhibit 99.2 to the Company’s current report on Form 8-K, as filed with the Securities and Exchange Commission on October 2, 2014).

Audited Financial Statements of Peak Gold, LLC as of June 30, 2020.

Audited Financial Statements of Peak Gold, LLC as of December 31, 2020.

Interactive Data Files*

12 unchanged sentences

President, Cheif Executive Officer

September 25, 2020

August 30, 2021

RICK VAN NIEUWENHUYSE

2 unchanged sentences

Vice President, Chief Financial Officer, Chief Accounting Officer , Treasurer

September 25, 2020

August 30, 2021

and Secretary

2 unchanged sentences

Executive Chairman and Director

September 25, 2020

August 30, 2021

B RAD J UNEAU

/s/ J OSEPH C OMPOFELICE

September 25, 2020

August 30, 2021

J OSEPH C OMPOFELICE

/s/ J OSEPH G.

September 25, 2020

August 30, 2021

/s/ RICHARD SHORTZ

September 25, 2020

August 30, 2021

RICHARD SHORTZ

1 unchanged sentence

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm s

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

4 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Contango Ore, Inc.

To the Shareholders and the Board of Directors of Contango Ore, Inc.

Opinion on the Financial Statements

16 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Significant Unusual Transaction

As described in note 7, on September 29, 2020, the Company and its subsidiary, CORE Alaska, LLC, and a wholly-owned subsidiary of Kinross Gold Corporation, entered into a purchase agreement in which CORE Alaska, LLC sold a 30.0% membership interest in the Peak Gold, LLC joint venture company to the subsidiary of Kinross Gold Corporation (the “CORE Transactions”).

For the Peak Gold, LLC joint venture interest, the Company received $32.4 million in cash and 809,744 shares of the Company’s own common stock.

Of the $32.4 million cash consideration received, $1.2 million constituted a reimbursement prepayment for the Company’s portion of potential future royalty payment obligations.

The Company recorded the $32.4 million cash proceeds and the 809,744 shares of the Company’s common stock at fair value and recognized a gain on sale of $39.6 million.

In conjunction with the CORE Transactions, through a series of legal transactions, the Company (through a subsidiary) obtained sole control of approximately 167,000 acres of Alaska State mining claims (collectively, the “Transactions”).

These claims have been recorded at a book value of zero as that was the historical book value on the date which full control of the claims was obtained, and fair value could not be measured.

In consideration for full control of these claims, the Company granted Royal Gold Corporation new royalties from certain production that may be generated from these claims.

We identified management’s accounting and reporting of the Transactions as a critical audit matter.

Auditing the Company’s accounting for the Transactions was complex due to the significant judgment used by management in determining the proper accounting treatment for the unique terms and conditions of the agreements, including the valuation of the consideration received and the estimated income tax impact.

This in turn required a high degree of auditor judgment and an increased effort when performing audit procedures to evaluate the reasonableness of management’s accounting conclusions, valuation of the consideration received, the income tax impact and the related presentation and disclosure of the Transactions in the consolidated financial statements.

The primary procedures we performed to address this critical audit matter included:

Assessing the significant terms and provisions of the Transactions for the appropriate accounting treatment to evaluate management’s conclusion of the appropriate accounting treatment.

Testing the appropriateness of the methodology and assumptions used in the calculation of the fair value of the consideration transferred.

This included using our internal valuation specialist to evaluate the reasonableness of the fair value calculated by management as well as evaluating key inputs, data and assumptions used in the calculation.

Recalculating the gain on the Transactions, including assessing the completeness and accuracy of the data used in the calculation.

Utilizing our internal tax specialist in evaluating the appropriateness of the income tax accounting impact from the Transactions.

Evaluating the completeness and accuracy of the presentation and disclosures of the Transactions.

/s/ Moss Adams LLP

Houston, Texas

September 25, 2020

August 30, 2021

We have served as the Company’s auditor since 2017.

3 unchanged sentences

Prepaid expenses and other

Income tax receivable

Total current assets

OTHER ASSETS:

LONG-TERM ASSETS:

Investment in Peak Gold, LLC (NOTE 8)

Property, plant, & equipment

Total long-term assets

LIABILITIES AND SHAREHOLDERS ’ EQUITY

3 unchanged sentences

Total current liabilities

NON-CURRENT LIABILITIES:

Advance royalty reimbursement

Total non-current liabilities

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES (NOTE 10)

2 unchanged sentences

Common Stock, $0.01 par value, 45,000,000 shares authorized;

6,590,113 shares issued and 6,557,239 outstanding at June 30, 2020;

6,675,746 shares issued and outstanding as of June 30, 2021;

6,590,113 shares issued and 6,557,239 outstanding at June 30, 2020

Additional paid-in capital

Treasury stock at cost (32,874 shares at June 30, 2020;

and 0 at June 30, 2019)

Treasury stock at cost (0 at June 30, 2021;

and 32,874 shares at June 30, 2020)

Accumulated deficit

5 unchanged sentences

Year Ended June 30,

Exploration expense

General and administrative expense

3 unchanged sentences

Loss from equity investment in Peak Gold, LLC

Gain on sale of a portion of the equity investment in Peak Gold, LLC

Total other income/(expense)

LOSS BEFORE INCOME TAXES

Benefit (provision) for income taxes

LOSS PER SHARE

Basic and diluted

INCOME/(LOSS) BEFORE INCOME TAXES

Income tax expense

NET INCOME/(LOSS)

NET INCOME/(LOSS) PER SHARE

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Basic and diluted

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash used in operating activities:

Net income/(loss)

Adjustments to reconcile net income/(loss) to net cash used in operating activities:

Stock-based compensation

Loss from equity investment in Peak Gold, LLC

Gain on sale of a portion of the equity investment in Peak Gold, LLC

Changes in operating assets and liabilities:

Decrease/(increase) in prepaid expenses

Increase in accounts payable and other accrued liabilities

Decrease/(increase) in prepaid expenses and other

Increase/(decrease) in accounts payable and other accrued liabilities

Increase in income tax receivable

Increase in advance royalty reimbursement

Net cash used in operating activities

1 unchanged sentence

Cash invested in Peak Gold, LLC

Net cash used by investing activities

Acquisition of property, plant, & equipment

Cash proceeds from the sale of a portion of the equity investment in Peak Gold, LLC

Net cash provided/(used) by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash paid for shares withheld from employees for payroll tax withholding

Net cash used in financing activities

NET DECREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS, END OF PERIOD

Cash proceeds from capital raises, net

Net cash provided/(used) in financing activities

NET INCREASE/(DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

CASH, END OF PERIOD

Supplemental disclosure of cash flow information

Cash paid for:

Non-cash investing activities:

Shares received from partial sale of the investment in Peak Gold, LLC and retired

The accompanying notes are an integral part of these consolidated financial statements.

6 unchanged sentences

Restricted shares activity

Stock option exercises

Net loss for the period

Treasury shares withheld for employee taxes

Balance at June 30, 2020

1 unchanged sentence

Restricted shares activity

Treasury stock activity

Net loss for the period

Issuance of common stock

Cost of common stock issuance

Shares received from partial sale of the investment in Peak Gold, LLC and retired

Treasury shares withheld for employee taxes

Balance at June 30, 2021

4 unchanged sentences

Contango ORE, Inc.

(“CORE” or the “Company”) is a Houston-based company that engages in the exploration in Alaska for gold and associated minerals through a joint venture company, Peak Gold, LLC (the “Joint Venture Company”).

The Company was formed on September 1, 2010 as a Delaware corporation for the purpose of engaging in the exploration in the State of Alaska for gold ore and associated minerals.

CORE participates in the Joint Venture Company through its wholly owned subsidiary, CORE Alaska, LLC.

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

The Company’s wholly-owned subsidiary, CORE Alaska, LLC (“CORE Alaska”) has a 30.0% membership interest in Peak Gold, LLC (the “Joint Venture Company”), which leases approximately 675,000 acres from the Tetlin Tribal Council (the "Tetlin Lease") and approximately 13,000 State of Alaska mining claims for exploration and development.

The Company's wholly-owned subsidiary, Contango Minerals, LLC (“Contango Minerals”) also owns 100% interest in the mineral rights to approximately 200,000 acres of State of Alaska mining claims located north and northwest of the Tetlin Lease.

During the first calendar quarter of 2021, the Company staked a new property called Shamrock in the Richardson Mining District located in central Alaska, 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.

The Company is in an exploration stage.

The Company’s fiscal year end is June 30.

On November 29, 2010, Contango Mining Company (“Contango Mining”), a wholly-owned subsidiary of Contango Oil & Gas Company (“Contango”), assigned its properties and certain other assets and liabilities to Contango.

Contango contributed the properties and $3.5 million of cash to the Company, in exchange for approximately 1.6 million shares of the Company’s common stock, which were distributed to Contango’s shareholders of record.

The above transactions occurred among companies under common control and were accounted for as transactions among entities under common control, in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations” whereby the acquired assets and liabilities were recognized in the financial statements at their carrying amounts.

The properties contributed by Contango included:

(i) 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 (ii) approximately 18,021 acres in unpatented mining claims from the state of Alaska for the exploration of gold ore and associated minerals.

Juneau Exploration, L.P.

(“JEX”) initially retained a 3.0% production royalty on contributed properties.

On September 29, 2014, JEX sold its 3.0% production royalty to Royal Gold, Inc.

(“Royal Gold”).

- Related Party Transactions.

If any of the properties are placed into commercial production, the Joint Venture Company would be obligated to pay a 3.0% production royalty to Royal Gold.

In September 2012, the Company and JEX entered into an Advisory Agreement in which JEX assisted the Company in acquiring 474 unpatented state of Alaska mining claims consisting of 71,896 acres for the exploration of gold ore and associated minerals in exchange for a 2.0% production royalty on properties acquired after July 1, 2012.

On September 29, 2014, JEX sold its 2.0% production royalty to Royal Gold and the Company terminated its Advisory Agreement with JEX.

- Related Party Transactions.

If any properties acquired after July 1, 2012 are placed into commercial production, the Joint Venture Company will be obligated to pay Royal Gold a 2.0% production royalty relating to those properties.

On September 29, 2014, the Company entered into a Master Agreement (the “Master Agreement”) with Royal Gold, pursuant to which the parties agreed, subject to the satisfaction of various closing conditions, to form a joint venture to advance exploration and development of the Peak Gold Joint Venture Property (defined below), prospective for gold ore and associated minerals (the “Transactions”).

The Transactions closed on January 8, 2015 (the “Closing”).

In connection with the Closing, the Company contributed its Tetlin Lease and state of Alaska mining claims near Tok, Alaska (the “Peak Gold Joint Venture Property”), together with other property, to the Joint Venture Company, a newly formed limited liability company.

The Joint Venture Company is managed according to a Limited Liability Company Agreement (the “JV LLCA”) between subsidiaries of Royal Gold and the Company.

At the Closing, Royal Gold made an initial investment of $5 million to fund exploration activity.

The initial $5 million did not give Royal Gold an equity stake in the Joint Venture Company.

Royal Gold had the option to obtain up to 40% interest in the Joint Venture Company by investing up to $30 million (inclusive of the initial $5 million investment) prior to October 2018.

As of June 30, 2020, Royal Gold has contributed approximately $37.0 million to the Joint Venture Company and has earned a cumulative economic interest of 40.0%.

Now that Royal Gold has funded $30 million, the Company and Royal Gold have an obligation to fund jointly the joint venture operations in proportion to their interests in the Joint Venture Company in order to maintain their respective percentage ownership interests in the Joint Venture Company.

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

Pursuant to the JV LLCA, Royal Gold serves as the Manager of the Joint Venture Company and manages, directs, and controls operations of the Joint Venture Company.

On November 10, 2017, subsidiaries of Royal Gold and the Company entered into Amendment No.

1 to the JV LLCA, which, among other things, amended the JV LLCA to add certain claims, previously purchased by the Joint Venture Company.

The claims that were added consist of 541 unpatented state of Alaska mining claims over 84,840 acres for the exploration of gold ore and associated minerals (the “New Properties”).

In return for locating the New Properties and incurring all related expenses, the Joint Venture Company granted to a subsidiary of Royal Gold a 3.0% production royalty on the New Properties and any additional properties contributed to the Joint Venture Company (all such properties subject to the 3.0% production royalty, “Additional Properties”).

On January 18, 2019, CORE Alaska, LLC and Royal Alaska, LLC, wholly-owned subsidiaries of the Company and Royal Gold, respectively, entered into Amendment No.

2 (the “Amendment”) to the JV LLCA to outline rights of the parties in a joint sale process by the Company and Royal Gold and make certain other clarifying changes.

The Amendment, among other things, (i) defined certain project areas and a resource area in reference to properties owned or controlled by the Joint Venture Company;

(ii) allowed CORE Alaska, LLC and Royal Alaska, LLC to agree to sell their respective interests in the Joint Venture Company in respect of fewer than all such project areas in a joint sale process by the Company and Royal Gold;

(iii) in connection with the joint sale process by the Company and Royal Gold, created (a) a tag right on a transfer by either CORE Alaska, LLC or Royal Alaska, LLC of any portion of its interest in the resource area;

and (b) a drag right in a transfer by Royal Alaska, LLC of its entire interest in the resource area and, if the drag right is not exercised as to the resource area in a transfer of that area, then the drag right may be incorporated into the surviving entities that would hold certain other properties owned by the Joint Venture Company that were not transferred.

The joint sale process has concluded without entering into a definitive change of control transaction.

As a result, the tag right and drag right created in connection with the joint sale process specifically with respect to the resource area also terminated.

The Company has completed ten years of exploration efforts on the Peak Gold Joint Venture Property, which has resulted in identifying two mineral deposits (Main Peak and North Peak) and several other gold, silver, and copper prospects.

The Joint Venture Company completed the 2019 exploration program in October of 2019.

A total of 3,073 meters of drilling was completed during that program.

In December 2019, a novel strain of coronavirus (“COVID-19”) surfaced and spread globally.

Through June 30, 2020, the spread of this virus and government responses have caused business disruption and is adversely affecting many industries.

The Company and the Joint Venture Company are monitoring the situation and taking reasonable steps to keep our business premises, properties, vendors and employees in a safe environment and are constantly monitoring the impact of COVID-19.

Due to the uncertainty related to 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 has approved a $2.7 million budget for calendar year 2020 that will serve to care for and maintain the Peak Gold Joint Venture Property.

New exploration on the Peak Gold Joint Venture Property will be postponed until conditions permit.

The Company’s share of the calendar year 2020 budget is approximately $1.6 million.

In June of 2018, the Company retained Petrie Partners, LLC and Cantor Fitzgerald and Co.

to advise on its strategic options.

The Company is continuing to work with its advisors to evaluate strategic options while advancing the Peak Gold Joint Venture Property through exploration and baseline data collection for project permitting requirements.

As of June 30, 2020 the Company’s 60% interest in the Joint Venture Company plus cash on hand constitute substantially all of the Company’s assets.

The Company has no borrowings.

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, 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 (described below).

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, a corporation formed under the laws of Ontario, Canada (“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”).

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

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 were 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 because 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 closing of the CORE Transactions, KG Mining, in a separate transaction, acquired from Royal Gold (i) 100% of the equity of Royal Alaska, LLC (“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, and KG Mining obtained a 70.0% membership interest in the Joint Venture Company (though the joint venture partners changed after the consummation of the Kinross Transactions, the legal entity remains Peak Gold, LLC, thus it will continue to be referred to as the “Joint Venture Company” throughout the document).

KG Mining 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.

Prior to the Kinross Transactions, 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 and a 1.0% net smelter returns royalty interest on certain of the contributed Alaska state mining claims.

After the formation and contribution to Contango Minerals, the Joint Venture Company made simultaneous distributions to Royal Alaska and CORE Alaska by (i) granting to Royal Gold a new 28.0% net smelter returns silver royalty on all silver produced from a defined area within the Tetlin Lease and also transferring the additional 1.0% net smelter returns royalty on the contributed Alaska state mining claims to Royal Gold and (ii) assigning 100% 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 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.

Subject to the conditions in the Option Agreement, the Joint Venture Company had the right to 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 this option in whole in June 2021 and paid the Company, $50,000.

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

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.

The Company has been involved in the exploration on the Manh Choh Joint Venture Property, formerly the “Peak Gold Joint Venture Property,” for eleven years, which has resulted in identifying two mineral deposits (Peak and North Peak) and several other gold, silver, and copper prospects.

The Joint Venture Company plans to mine ore from the Peak and North Peak deposits and then process the 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 execution risk for the Joint Venture Company to advance the Peak and North Peak deposits to a production decision.

On December 10, 2020, 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 activities began on the Eagle/Hona prospect in July 2021.

The Company’s 30.0% membership interest in the Joint Venture Company, its ownership of Contango Minerals, and cash on hand constitute substantially all of the Company’s assets.

The Company has no debt.

Basis of Presentation

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These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

Since the Company ’s primary business is now the investment in and management of the Joint Venture Company, it expects that its ongoing cash requirements will only be related to general and administration expenses and funding cash calls from the Joint Venture Company.

The Company expects that its ongoing cash requirements will be related to exploration expenses on its 100% owned State Mining claims, general and administration expenses, and funding cash calls from the Joint Venture Company.

The Company's sources of cash have historically been from common stock offerings.

Given this, the Company believes that its current cash balances will be sufficient to meet its working capital requirements for the next twelve months from the date of this report.

The Company believes that its current cash balances will be sufficient to meet its working capital requirements for the next twelve months from the date of this report.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described below.

Cash consist of all cash balances and highly liquid investments with an original maturity of three months or less.

All cash is held in cash deposit accounts as of June 30, 2021, and 2020.

Management Estimates.

The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Cash Equivalents.

Cash equivalents are considered to be highly liquid securities having an original maturity of 90 days or less at the date of acquisition .

Stock-Based Compensation .

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The Company classifies the benefits of tax deductions in excess of the compensation cost recognized for the options (excess tax benefit) as financing cash flows.

The fair value of each option award is estimated as of the date of grant using the Black-Scholes option-pricing model.

The fair value of each restricted stock award is equal to the Company’s stock price on the date the award is granted.

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Deferred tax assets are reduced by a valuation allowance when, based upon management’s estimates, it is more likely than not that a portion of the deferred tax assets will not be realized in a future period.

The Company recognized a full valuation allowance as of June 30, 2020 and June 30, 2019 and has not recognized any tax provision or benefit for any of the periods.

The Company reviews its tax positions quarterly for tax uncertainties.

The Company did not have any uncertain tax positions as of June 30, 2020 or June 30, 2019.

The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and enacts significant changes to U.S.

income tax and related laws.

Among other things, the Tax Cuts and Jobs Act reduces the top U.S.

corporate income tax rate from 35.0% to 21.0%, and makes changes to certain other business-related exclusions, deductions and credits.

Further guidance and clarifications continue to be issued regarding the regulations and provisions of the Act.

The Company will continue to monitor these new regulations and analyze their applicability and impact on the Company.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19.

While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses and increasing the loss carryback period for certain losses to five years, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act.

Investment in the Joint Venture Company.

The Company’s consolidated financial statements include the investment in Peak Gold, LLC which is accounted for under the equity method.

The Company has designated one of the three members of the Management Committee and on June 30, 2019 held a 60.0% ownership interest in Peak Gold.

Royal Gold will initially serve as the Manager of the Joint Venture Company and will manage, direct, and control operations of the Joint Venture Company.

The Company’s consolidated financial statements include the investment in the Joint Venture Company, which is accounted for under the equity method.

The Company held a 30.0% membership interest in the Joint Venture Company on June 30, 2021 and designated one of the three members of the Management Committee.

The Company recorded its investment at the historical cost of the assets contributed.

The cumulative losses of the Joint Venture Company exceed the historical cost of the assets contributed to the Joint Venture Company;

therefore the Company’s investment in Peak Gold, LLC as of June 30, 2020 and 2019 is zero.

therefore, the Company’s investment in the Joint Venture Company as of June 30, 2021 and June 30, 2020 is zero.

The portion of the cumulative loss that exceeds the Company’s investment will be suspended and recognized against earnings, if any, from the investment in the Joint Venture Company in future periods.

Fair Value Measurement.

Accounting guidelines for measuring fair value establish a three-level valuation hierarchy for disclosure of fair value measurements.

The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement.

The three levels are defined as follows:

Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Other inputs that are observable directly or indirectly, such as quoted prices in markets that are not active or inputs, which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Unobservable inputs for which there are little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities.

The Company received 809,744 shares of its Common Stock as part of the consideration received for the sale of a portion of its membership interest in the Joint Venture Company (See Note 8 for further discussion of the sale transaction with KG Mining).

The value assigned to the Company’s remaining 30.0% membership interest in the Joint Venture Company was determined using unobservable data and was a significant component used to determine the value of the shares.

Due to the significance of the unobservable data used, the valuation of the shares were classified as a Level 3 valuation.

Recently Issued Accounting Pronouncements.

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The Company accounts for the Joint Venture Company under the equity method of accounting.

We do not anticipate that this update will have a material impact on our financial statements.

The Company does not anticipate that this update will have a material impact on its financial statements.

The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s consolidated financial statements.

Prepaid Expenses and Other

The Company had prepaid expenses and other assets of $72,244 and $161,195 as of June 30, 2020 and 2019 , respectively, related primarily to prepaid management fees and insurance costs.

The Company had prepaid expenses and other assets of $515,635 and $72,244 as of June 30, 2021 and 2020 , respectively.

Current year prepaids and other assets primarily relate to prepaid claim rentals, prepaid insurance, and capitalized legal fees.

Prepaid expenses during the year ended June 30, 2020 related primarily to prepaid management fees and insurance costs.

Loss Per Share

A reconciliation of the components of basic and diluted net loss per share of common stock is presented in the tables below:

Year Ended June 30, 2020

Basic and Diluted Loss per Share:

Net loss attributable to common stock

Year Ended June 30, 2019

Basic and Diluted Loss per Share:

Net loss attributable to common stock

There were 100,000 options and no warrants outstanding as of June 30, 2020.

There were no options or warrants outstanding as of June 30, 2019 .

The 100,000 options were not included in the computation of diluted earnings per share for the applicable fiscal year, due to being anti-dilutive as a result of the Company’s net loss for all periods presented.

A reconciliation of the components of basic and diluted net income/(loss) per share of common stock is presented in the tables below:

Fiscal Year Ended

June 30, 2021

June 30, 2020

Net income/(loss) attributable to common stock

Weighted average shares for basic EPS

Effect of dilutive securities

Weighted average shares for diluted EPS

There were 100,000 options and no warrants outstanding as of June 30, 2021 and June 30, 2020, respectively.

The 100,000 options were not included in the computation of diluted earnings per share for the fiscal year ended June 30, 2020, due to being anti-dilutive.

Shareholders ’ Equity

The Company ’s authorized capital stock consists of 30,000,000 shares of common stock and 15,000,000 shares of preferred stock.

As of June 30, 2020, we had 6,557,239 shares of common stock outstanding, including 534 ,666 shares of unvested restricted stock.

On December 11, 2020, at the Annual Meeting, the Company’s stockholders approved the proposal to amend the Company’s Certificate of Incorporation to increase the number of authorized shares of its Common Stock from 30,000,000 shares to 45,000,000 shares.

The Company has 15,000,000 authorized shares of preferred stock.

As of June 30, 2021, the Company had 6,675,746 shares of Common Stock outstanding, including 401,333 shares of unvested restricted stock, which takes into account the issuance of shares of Common Stock in the 2020 Private Placement as described below and the redemption of 809,744 shares of Common Stock from KG Mining in the Kinross Transactions.

As of June 30, 2021, the Company also had outstanding options to purchase 100,000 shares of Common Stock of the Company.

No shares of preferred stock have been issued.

The remaining restricted stock outstanding will vest between January 2021 and January 2022.

In September 2016, the Company distributed a Private Placement Memorandum to its warrant holders to give them the opportunity to exercise their warrants at a reduced exercise price and receive shares of common stock, par value $0.01 per share of the Company by paying the reduced exercise price in cash and surrendering the original warrants.

The offering applied to warrant holders with an exercise price of $10.00 per share originally issued in March 2013.

The offering gave the warrant holders the opportunity to exercise the warrants for $9.00 per share.

The offer expired on November 15, 2016.

In conjunction with the offering, a total of 587,500 warrants were exercised resulting in total cash to the Company of $5.3 million.

Of the total warrants exercised, 83,334 were exercised by entities controlled by Mr.

Brad Juneau, who was serving as the Company’s Chairman, President and Chief Executive Officer at the time of exercise of the warrants.

Proceeds from the exercise of the warrants were used for working capital purposes and for funding obligations to the Joint Venture Company.

On October 13, 2017, the Company distributed a Private Placement Memorandum to its warrant holders to give them the opportunity to exercise their warrants at a reduced exercise price and receive shares of common stock, par value $0.01 per share of the Company by paying the reduced exercise price in cash and surrendering the original warrants.

The offering applied to warrant holders with an exercise price of $10.00 per share originally issued in March 2013.

The offering gave the warrant holders the opportunity to exercise the warrants for $9.50 per share.

The offer expired on November 10, 2017.

In conjunction with the offering a total of 124,999 warrants were exercised resulting in total cash to the Company of $1.2 million.

Proceeds from the exercise of the warrants have been used for working capital purposes and for funding future obligations to the Joint Venture Company.

In connection with the exercise offer, the Company entered into a Registration Rights Agreement dated as of November 10, 2017, with each investor who exercised warrants in the offering.

The Company agreed to file up to two demand registration statements with the SEC at any time after expiration of the offer but before three years after expiration of the offer in order to register the resale of shares of common stock, issued in the offer.

In addition, the Registration Rights Agreement granted certain piggyback rights to the investors.

During fiscal year 2018, 580,999 warrants were exercised resulting in the issuance of 404,923 shares of common stock and total cash to the Company of $2.3 million.

All of the outstanding warrants were exercised during fiscal year 2018.

There are no warrants outstanding as of June 30, 2020 and 2019.

On October 23, 2017, the Company completed the issuance and sale of an aggregate of 553,672 shares of common stock, par value $0.01 per share, of the Company at a purchase price of $19.00 per share of common stock, in a private placement (the “Private Placement”) to certain purchasers (the “Purchasers”) pursuant to a Stock Purchase Agreement dated as of October 23, 2017 (the “Purchase Agreement”), by and among the Company and each Purchaser.

The Private Placement resulted in approximately $10.5 million of gross proceeds and approximately $10.0 million of net proceeds.

The Company will use the net proceeds from the Private Placement for working capital purposes and for funding future obligations to the Joint Venture Company.

Petrie Partners Securities, LLC (“Petrie”) acted as sole placement agent in connection with the Private Placement and received a placement agent fee equal to 6.50%, which was reduced to 3.25% for existing stockholders and other Purchasers referred by those existing stockholders, or a total of $0.5 million in placement agent fees.

Juneau Exploration, L.P., which is controlled by Brad Juneau, the Company’s President and Chief Executive Officer at the time of the Private Placement, purchased 13,200 shares of common stock in the Private Placement for a price of $250,800 and on the same terms and conditions as all other Purchasers.

The shares sold in the Private Placement were issued in reliance on an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4 ( 2 ) thereof.

The remaining restricted stock outstanding will vest between December 2021 and December 2023.

The Company entered into Stock Purchase Agreements dated as of June 14, and June 17, 2021 (the “Purchase Agreements”) for the sale of an aggregate of 523,809 shares of Common Stock at a purchase price of $21.00 per share of Common Stock, in a private placement (the “2021 Private Placement”) to certain accredited investors.

The 2021 Private Placement closed on June 17 and 18, 2021.

The 2021 Private Placement resulted in approximately $11.0 million of gross proceeds and approximately $10.9 million of net proceeds to the Company.

The Company will use the net proceeds from the 2021 Private Placement to fund its exploration and development program and for general corporate purposes.

The shares sold in the 2021 Private Placement were issued in reliance on an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof.

The bases for the availability of this exemption include the facts that the issuance was a private transaction which did not involve a public offering and the shares were offered and sold to a limited number of purchasers.

Pursuant to a Registration Rights Agreement dated as of October 23, 2017 ( the “Registration Rights Agreement”), by and among the Company and the Purchasers, the Company agreed to file up to two demand registration statements with the Securities and Exchange Commission at any time after one year after the Private Placement but before three years after the Private Placement in order to register the resale of the shares of common Stock.

In addition, the Registration Rights Agreement granted certain piggyback rights to the Purchasers.

On September 23, 2020, the Company completed the issuance and sale of 247,172 shares of the Company’s common stock, par value $0.01 per share, in a private placement (the “2020 Private Placement”) to certain purchasers who are accredited investors.

Rick Van Nieuwenhuyse, the Company’s President and Chief Executive Officer, purchased 47,619 shares of Common Stock, for a purchase price of approximately $1,000,000, in the 2021 Private Placement pursuant to a Purchase Agreement dated June 17, 2021, on the same terms and conditions as all other purchasers, except that Mr.

Nieuwenhuyse did not receive any of the rights under the Registration Rights Agreement.

The 2021 Private Placement to Mr.

Nieuwenhuyse closed on June 18, 2021.

The Audit Committee of the Company has reviewed and approved all agreements and arrangements relating to Mr.

Van Nieuwenhuyse’s participation in the 2021 Private Placement.

On September 23, 2020, the Company completed the issuance and sale of an aggregate of 247,172 shares of Common Stock, in a private placement (the “2020 Private Placement”) to certain purchasers who are accredited investors.

Of the total 247,172 shares issued, 32,874 were issued from Company’s treasury account.

The shares of the Common Stock were sold at a price of $13.25 per share, resulting in gross proceeds to the Company of approximately $3.3 million and net proceeds to the Company of approximately $3.2 million.

The Company will use the net proceeds from the 2020 Private Placement for working capital purposes and for funding future obligations to the Joint Venture Company.

Petrie Partners Securities, LLC (“Petrie”) acted as the sole placement agent in connection with the 2020 Private Placement and received a placement agent fee equal to 3.25% of the gross proceeds raised from the subscribers whom they solicited, or a total of approximately $0.05 million in placement agent fees.

The Company will use the net proceeds from the 2020 Private Placement for working capital purposes and for funding the Joint Venture Company and Contango Minerals.

Petrie has provided to the Company in the past and may provide from time to time in the future certain securities offering, financial advisory, investment banking and other services for which it has received and may continue to receive customary fees and commissions.

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The bases for the availability of this exemption include the facts that the issuance was a private transaction, which did not involve a public offering and the shares were offered and sold to a limited number of purchasers.

The Company’s President and Chief Executive Officer, Rick Van Nieuwenhuyse, purchased 75,472 of shares of common stock in the 2020 Private Placement, for total consideration of $1.0 million, on the same terms and conditions as all other Purchasers.

As a result of Mr.

Van Nieuwenhuyse’s purchase, as of September 23, 2020, his ownership interest in the Company is 2.2%.

The Company’s President and Chief Executive Officer, Rick Van Nieuwenhuyse, purchased 75,472 shares of Common Stock of the Company in the 2020 Private Placement, for total consideration of $1.0 million, on the same terms and conditions as all other purchasers.

The Audit Committee of the Company has reviewed and approved all agreements and arrangements relating to Mr.

Van Nieuwenhuyse’s participation in the 2020 Private Placement.

- Subsequent Events for information on the 2020 Private Placement

Rights Plan Termination and Rights Agreement

On December 19, 2012, the Company adopted a Rights Plan, which was amended on March 21, 2013, September 29, 2014, December 18, 2014, November 11, 2015, April 22, 2018, and November 20, 2019.

On September 23, 2020, the Company adopted a limited duration stockholder rights agreement (the "Rights Agreement") to replace the Company’s prior stockholder Rights Plan, which has been terminated.

The Board adopted an amendment to accelerate the expiration date of its prior stockholder rights agreement to September 23, 2020, such that, at the close of business on September 23, 2020, the purchase rights thereunder expired and the prior stockholder rights agreement was no longer in force and effect.

On September 23, 2020, the Company adopted a limited duration stockholder rights agreement (the “Rights Agreement”) to replace the Company’s prior stockholder Rights Plan, which has been terminated.

Pursuant to the Rights Agreement, the Board declared a dividend of one preferred stock purchase right (a “Right”) for each share of the Company’s Common Stock, par value $0.01 per share, of the Company, held of record as of October 5, 2020.

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The Rights will trade with the Company’s Common Stock and no separate Rights certificates will be issued, unless and until the Rights become exercisable.

In general, the Rights will become exercisable only if a person or group acquires beneficial ownership of 18% (or 20% for certain passive investors) or more of the Company’s outstanding common stock or announces a tender or exchange offer that would result in beneficial ownership of 18% (or 20% for certain passive investors) or more of the Company’s common stock.

In general, the Rights will become exercisable only if a person or group acquires beneficial ownership of 18.0% (or 20.0% for certain passive investors) or more of the Company’s outstanding Common Stock or announces a tender or exchange offer that would result in beneficial ownership of 18.0% (or 20.0% for certain passive investors) or more of Common Stock.

Each Right will entitle the holder to buy one one-thousandth (1/1000) of a share of a series of junior preferred stock at an exercise price of $100.00 per Right, subject to anti-dilution adjustments.

Formation of Joint Venture Company

On January 8, 2015, the Company and Royal Gold, through their wholly-owned subsidiaries, consummated the Transactions contemplated under the Master Agreement, including the formation of a joint venture to advance exploration and development of the Peak Gold Joint Venture Property, for gold ore and associated minerals prospects.

In connection with the Closing of the Transactions, the Company formed the Joint Venture Company.

The Company contributed to the Joint Venture Company its Peak Gold Joint Venture Property near Tok, Alaska, together with other property with a historical book value of $1.4 million and an agreed fair value of $45.7 million.

At the Closing, the Company and Royal Gold, through their wholly-owned subsidiaries, entered into the JV LLCA.

As of June 30, 2020, Royal Gold serves as manager of the Joint Venture Company (the “Manager”) and manages, directs, and controls the operations of the Joint Venture Company.

As a condition to the Closing, the Company and the Tetlin Tribal Council entered into a Stability Agreement dated October 2, 2014, pursuant to which the Company and the Tetlin Tribal Council, among other things, acknowledged the continued validity of the Tetlin Lease and all its terms notwithstanding any future change in the status of the Tetlin Tribal Council or the property subject to the Tetlin Lease.

At Closing, Royal Gold, as an initial contribution to the Joint Venture Company, contributed $5 million (the “Royal Gold Initial Contribution”).

The Royal Gold Initial Contribution did not entitle Royal Gold to a percentage interest in the Joint Venture Company.

Therefore, at Closing, Royal Gold’s percentage interest in the Joint Venture Company equaled 0% and the Company’s percentage interest in the Joint Venture Company equaled 100%.

In addition, as part of the Closing, Royal Gold paid the Company $750,000, which was utilized to partially reimburse the Company for costs and expenses incurred in the Transactions and is included as an expense reimbursement on our consolidated statements of operations.

The JV LLCA gave Royal Gold the right, but not the obligation, to earn a percentage interest in the Joint Venture Company (up to a maximum of 40%) by making additional contributions of capital to the Joint Venture Company of up to $30 million (inclusive of the Royal Gold Initial Contribution of $5 million) during the period beginning on the Closing and ending on October 31, 2018.

On April 26, 2018, Royal Gold funded its full $30 million investment and earned a percentage interest of 40% in the Joint Venture Company, with the Company retaining a percentage interest of 60% in the Joint Venture Company.

Once Royal Gold earned a 40% interest in the Joint Venture Company, the Company and Royal Gold began to contribute funds in proportion to their respective percentage interests in the Joint Venture Company.

From inception through June 30, 2020, Royal Gold has contributed approximately $37.0 million (inclusive of the Royal Gold Initial Contribution of $5 million) and the Company has contributed approximately $10.4 million in cash and $1.4 million in properties to the Joint Venture Company.

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

Pursuant to the terms of the JV LLCA, the members contribute funds to approved programs and budgets in proportion to 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 recalculated by dividing (i) the sum of (a) the value of its initial contribution plus (b) the total of all of its capital contributions plus (c) the amount of the capital contribution it elects to fund, by (ii) the sum of (a), (b) and (c) above for both members, and multiplying by 100.

The Company and Royal Gold have the right to transfer their respective percentage interests in the Joint Venture Company to a third party, subject to certain terms and conditions set forth in the JV LLCA.

If either member intends to transfer all or part of its percentage interest to a bona fide third-party purchaser, the other member has the right to require the transferring member to include in the intended transfer the other member’s proportionate share of its percentage interests at the same purchase price and terms and conditions.

Now that Royal Gold has earned a 40% interest in the Joint Venture Company, it has the additional right to require the Company to sell up to 20% of the interest in the Joint Venture Company in a sale of Royal Gold’s entire 40% interest in the Joint Venture Company.

If Royal Gold exercises this right, the Company will be obligated to sell 20% of the membership interest to a bona fide third-party purchaser on the same terms and conditions as the interest being sold by Royal Gold.

On January 18, 2019, CORE Alaska, LLC and Royal Alaska, LLC, wholly-owned subsidiaries of the Company and Royal Gold, respectively, entered into an Amendment No.

2 (the “Amendment”) to the JV LLCA to outline rights of the parties in a joint sale process by the Company and Royal Gold and make certain other clarifying changes.

The Amendment, among other things, (i) defined certain project areas and a resource area in reference to properties owned or controlled by the Joint Venture Company;

The joint sale process has concluded without entering into a definitive change of control transaction.

As a result, the tag right and drag right created in connection with the joint sale process specifically with respect to the resource area also terminated.

The Joint Venture Company is a variable interest entity as defined by FASB ASU No.

Sales Transaction with KG Mining

On September 29, 2020, the Company, CORE Alaska, LLC and KG Mining, entered into the CORE Purchase Agreement pursuant to which CORE Alaska sold a 30.0% membership interest in the Joint Venture Company to KG Mining.

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 Common Stock.

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

Of the $32.4 million cash consideration, $1.2 million constituted a reimbursement prepayment to the Company relating to its proportionate share of silver royalty payments that the Joint Venture Company may be obligated to pay to Royal Gold, with the understanding that KG Mining will bear the entire economic impact of those royalty payments due from the Joint Venture Company.

Concurrently with the CORE Purchase Agreement, KG Mining acquired from Royal Gold (i) 100% of the equity of Royal Alaska, LLC , which held a 40.0% membership interest in the Joint Venture Company and (ii) 809,744 shares of Common Stock held by Royal Gold.

After the consummation of the Kinross Transactions, CORE Alaska retains 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 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.

The Company recorded the $32.4 million cash proceeds and the 809,744 shares of Common Stock, received from the CORE Transactions, at fair value and recognized a gain on sale of $39.6 million.

The Company valued the Common Stock consideration from the CORE Transactions consistent with the accounting guidance for non-monetary exchanges.

The stock consideration was valued based on the implied fair value of the CORE Transactions in total less the cash proceeds.

The total value of the CORE Transactions was equated to the value of the Company's 30.0% ownership in the Joint Venture Company, post the 30.0% membership interest transferred to KG Mining.

The Common Stock consideration received in the CORE Transactions is classified within Level 3 of the fair value hierarchy referenced in Note 3 - Summary of Significant Accounting Policies.

As of the date of the CORE Transactions, the Company's investment in the Joint Venture Company had a zero balance, therefore the $39.6 million gain approximates the full fair value of the JV Interest surrendered in the CORE Transactions.

The Company recorded a non-current liability totaling $1.2 million associated with the cash received for the reimbursement prepayment to the Company of its proportionate share of certain silver royalty payments that the Joint Venture Company may be obligated to pay Royal Gold.

The liability arises, because pursuant to Article IV of the A&R JV LLCA, if the Joint Venture Company is dissolved, or the Company’s membership interest in the Joint Venture Company falls below 5% prior to when the prepaid royalty is paid out, the $1.2 million (less any portion already paid out) is refundable to KG Mining.

Immediately prior to the Kinross Transactions, the Joint Venture Company, Contango Minerals, the Company, CORE Alaska, Royal Gold and Royal Alaska entered into 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, and retained an additional 1.0% net smelter returns royalty interest on certain of the contributed 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 to Royal Gold a new 28.0% net smelter returns silver royalty on all silver produced from a defined area within the Tetlin Lease and also transferring the additional 1.0% net smelter returns royalty described above on the contributed Alaska state mining claims to Royal Gold (bringing the total net smelter royalty due to Royal Gold to 3%) and (ii) assigning one hundred percent (100%) 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.

The distribution of the Alaska state mining claims to Contango Minerals meets the definition of a non-reciprocal nonmonetary transfer as defined in Accounting Standards Codification (“ASC”) 845 and would generally be recorded at fair value to the extent fair value is determinable.

However, to date, the Joint Venture Company's gold exploration has concentrated on the Tetlin Lease (which was retained by the Joint Venture Company), with only a limited amount of work performed on the State of Alaska mining claims.

The Company has concluded that the fair value of the state claims is not determinable within reasonable limits, and therefore has recorded the distribution at historical book value.

The Joint Venture Company’s historical book value associated with the Alaska state mining claims is zero as of the date of the CORE Transactions because the costs associated with exploration performed on these claims were expensed when incurred.

Therefore, the Company's balance sheet has a net book value of zero for these claims as of the date of the CORE Transactions.

In connection with the Separation Agreement, the Joint Venture Company and Contango Minerals entered into the Option Agreement.

The signing of the Option Agreement did not result in any accounting implications for the Company.

The Joint Venture Company exercised the option in whole in June 2021, and paid the Company $50,000.

The $50,000 payment was recorded to income.

On October 1, 2020, CORE Alaska and KG Mining entered into the A&R JV LLCA.

The A&R JV LLCA supersedes and replaces in its entirety the Limited Liability Company Agreement of the Joint Venture Company, dated as of January 8, 2015, as amended.

The A&R JV LLCA is the operating agreement for the Joint Venture Company and provides for understandings between the members with respect to matters regarding percentage ownership interests, governance, transfers of ownership interests and other operational matters.

CORE Alaska and KG Mining will be required, subject to the terms of the A&R JV LLCA, to make additional capital contributions to the Joint Venture Company for any approved programs budgets in accordance with their respective percentage membership interests.

After the consummation of the Kinross Transactions, Kinross, through KG Mining, replaced Royal Gold as the Company’s joint venture partner and as manager of the Joint Venture Company.

After consummation of the Kinross Transactions, CORE Alaska holds a 30.0% membership interest in the Joint Venture Company and KG Mining holds a 70.0% membership interest in the Joint Venture Company.

The A&R JV LLCA established the Management Committee to determine the overall policies, objectives, procedures, methods and actions of the Joint Venture Company.

The Management Committee currently consists of one representative designated by CORE Alaska and two representatives designated by KG Mining (each a “Representative”).

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.

Prior to the CORE Transactions, the Joint Venture Company was a variable interest entity as defined by FASB ASU No.

2015 - 02, Consolidation (Topic 810 ):

Amendments to the Consolidation Analysis.

The Company is not the primary beneficiary since it does not currently have the power to direct the activities of the Joint Venture Company.

The Company’s ownership interest in the Joint Venture Company is therefore accounted under the equity method.

The Company was not the primary beneficiary since it did not have the power to direct the activities of the Joint Venture Company.

The Company’s ownership interest in the Joint Venture Company has therefore historically applied the equity method of accounting for its investment.

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

The Company continues to have significant influence in the Joint Venture Company pursuant to its right to designate one of the three seats on the Management Committee.

Therefore, the Company will continue to account for its investment in the Joint Venture Company under the equity method.

Investment in Peak Gold, LLC

The Company recorded its investment at the historical book value of the assets contributed to the Joint Venture Company which was approximately $1.4 million.

As of June 30, 2020, Royal Gold has contributed approximately $37.0 million to the Joint Venture Company, and earned a cumulative interest of approximately 40.0%.

Therefore, as of June 30, 2020, the Company holds a 60.0% interest in the Joint Venture Company.

As of June 30, 2019, the Company also held a 60.0% interest in the Joint Venture Company.

The Royal Gold Initial Contribution did not entitle Royal Gold to a percentage interest in the Joint Venture Company.

During fiscal year 2020 and 2019 the Company contributed $3.7 million and $4.1 million, respectively, to the Joint Venture Company.

As of June 30, 2021, the Company has contributed approximately $15.7 million to the Joint Venture Company.

KG Mining acquired 70% of the Joint Venture Company on September 30, 2020 in connection with the Kinross Transactions.

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

The following table is a roll-forward of our investment in the Joint Venture Company from January 8, 2015 ( inception) to June 30, 2021:

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Investment balance at June 30, 2020

The following table presents the condensed balance sheet for Peak Gold, LLC as of June 30, 2020 and 2019:

Investment in Peak Gold, LLC

Loss from equity investment in Peak Gold, LLC

Investment balance at June 30, 2021

In conjunction with the CORE Transactions, and Kinross assuming the role of manager of the Joint Venture Company, the Joint Venture Company converted its method of accounting from US GAAP to International Financial Reporting Standards (“IFRS”) and changed its fiscal year end from June 30 to December 31, effective for the quarter ended December 31, 2020.

The condensed financial statements presented below have been converted from IFRS to US GAAP for presentation purposes for the fiscal year ended 2021.

The following table presents the condensed balance sheets for the Joint Venture Company as of June 30, 2021 and 2020 in accordance with US GAAP:

June 30, 2021

June 30, 2020

Cash and cash equivalents

Mineral properties

Current assets

Non-current assets

LIABILITIES AND MEMBERS’EQUITY

Accounts payable and other liabilities

Current liabilities

Non-current liabilities

TOTAL LIABILITIES

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TOTAL LIABILITIES AND MEMBERS’ EQUITY

The following table presents the condensed results of operations for the Joint Venture Company for the year ended June 30, 2021 and 2020, and for the period from inception through June 30, 2021 in accordance with US GAAP:

Period from Inception January 8, 2015 to

June 30, 2021

June 30, 2020

June 30, 2021

Exploration expense

General and administrative

Total expenses

The Company’s share of the Joint Venture Company’s results of operations for the year ended June 30, 2021 was a loss of $4.0 million.

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The suspended losses for the period from inception to June 30, 2021 are $23.0 million.

The following table presents the condensed results of operations for Peak Gold, LLC for the periods ended June 30, 2020 and 2019:

Period from Inception January 8, 2015 to

June 30, 2020

June 30, 2019

June 30, 2020

Exploration expense

General and administrative

Total expenses

Stock Based Compensation

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The grant date fair value may differ from the fair value on the date the individual’s restricted stock actually vests.

Stock Options.

Under the Equity Plan, options granted must have an exercise price equal to or greater than the market price of the Company’s common stock on the date of grant.

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Treasury bills with a duration equal to or close to the expected term of the options at the time of grant.

The total fair value of stock options vested in fiscal year 2020 and 2019 was approximately $0.

The fair value of stock options vested in fiscal year 2021 and 2020 was approximately $7.42 and $0, respectively.

As of June 30, 2021, the total unrecognized compensation cost related to nonvested stock options was $192,089 .

As of June 30, 2021 the stock options had a weighted average remaining life of 3.5 years .

In connection with the appointment of Rick Van Nieuwenhuyse as the President and Chief Executive Officer of the Company, on January 6, 2020, the Company granted to Mr.

Van Nieuwenhuyse options to purchase 100,000 shares of Common Stock of the Company, with an exercise price of $14.50 per share, which is equal to the closing price on January 6, 2020, the day on which he began employment with the Company.

The options vest in two equal installments, half vested on the first anniversary of Mr.

Van Nieuwenhuyse’s employment with the Company and half will vest on the second anniversary of his employment with the Company, subject to acceleration upon a change of control of the Company.

A summary of the status of stock options granted under the 2010 Plan as of June 30, 2021 and 2020, and changes during the fiscal years then ended, is presented in the table below:

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Restricted Stock.

In November 2010, the Company granted 70,429 restricted shares of common stock to its executives and directors and an additional 23,477 restricted shares to its former technical consultant, the owner of Avalon.

In December 2013, the Company’s directors, executives and technical consultant were granted an aggregate of 95,000 shares of restricted stock.

All of the restricted stock from both of those grants are fully vested.

In November 2014, the Company granted 27,000 restricted shares of common stock to its executives.

In January 2015, the Company granted an aggregate of 30,000 restricted shares of common stock to two of its non-executive directors.

In addition, the Company granted 10,000 restricted shares of common stock to a former technical consultant.

In September 2015, the Company granted 85,000 shares to its executives, and in December 2015 the Company granted 40,000 shares to its non-executive directors.

In August 2016, the Company granted 100,000 restricted shares of common stock to its executives.

In November 2016, the Company granted 75,000 restricted shares of common stock to its non-executive directors.

In November 2017, the Company granted 155,000 restricted shares to its executives and non-executive directors, and in November 2018 , the Company granted 155,000 restricted shares of common stock to its executives and non-executive directors.

In December 2018, the Company cancelled 117,332 shares of unvested restricted stock held by two of its executives and the non-executive directors that were set to vest on January 1, 2019.

In December 2018, the Company also granted 146,666 restricted shares of common stock to two of its executives and non-executive directors.

In November 2019, the Company also granted 158,000 restricted shares of common stock to two of its executives and non-executive directors.

In January 2020, the Company granted 75,000 restricted shares of common stock to its newly appointed President and Chief Executive Officer.

As of June 30, 2020, there were 534,666 shares of such restricted stock that remained unvested.

Under the Equity Plan, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) shall determine to what extent, and under what conditions, the Participant shall have the right to vote shares of Stock Awards and to receive any dividends or other distributions paid on such shares during the restriction period.

The terms and applicable voting and dividend rights are outlined in the individual restricted stock agreements.

All restricted stock grants are expensed over the applicable vesting period based on the fair value at the date the stock is granted.

The grant date fair value may differ from the fair value on the date the individual’s restricted stock actually vests.

A summary of the Company ’s restricted stock as of June 30, 2020 and June 30, 2019 and the change during the years then ended, is as follows:

The total grant date fair value of the restricted stock granted in the fiscal years ended June 30, 2021 and 2020 was $3.7 million and $3.5 million, respectively.

In November 2019, the Company granted 158,000 restricted shares of Common Stock to its executives and non-executive directors.

The restricted stock granted vests in January 2022.

As of June 30, 2021, there were 158,000 shares of such restricted stock that remained unvested.

In connection with the appointment of Rick Van Nieuwenhuyse as the President and Chief Executive Officer of the Company, on January 9, 2020, the Company issued 75,000 shares of restricted stock to Mr.

Van Nieuwenhuyse.

The shares of restricted stock will vest in two equal installments, half on the first anniversary of Mr.

Van Nieuwenhuyse’s employment with the Company and half on the second anniversary of his employment with the Company, subject to acceleration upon a change of control of the Company.

As of June 30, 2021, there were 37,500 shares of restricted stock from this grant that remained unvested.

On December 1, 2020, the Company granted an aggregate 20,000 shares of Common Stock to two new employees.

The restricted stock granted to such employees vests in equal installments over three years on the anniversary of the grant date.

On December 11, 2020, the Company granted 162,500 restricted shares of Common Stock to its executives and non-executive directors.

The restricted stock granted to the executives and non-executive directors vests between January 2022 and January 2023.

On December 11, 2020 the Company also granted Mr.

Van Nieuwenhuyse 23,333 shares of restricted stock in conjunction with his short-term incentive plan, and such shares will vest in January 2022.

As of June 30, 2021, all 205,833 shares of restricted stock granted in December 2020 remained unvested.

As of June 30, 2021, there were 401,333 shares of such restricted stock that remained unvested.

A summary of the Company ’s restricted stock as of June 30, 2021 and 2020 and the change during the years then ended, is as follows:

Weighted Average

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Nonvested balance at June 30, 2020

Forfeited/Cancelled

Nonvested balance at June 30, 2021

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Additionally, should the Joint Venture Company derive revenues from the properties covered under the Tetlin Lease, the Joint Venture Company is required to pay the Tetlin Tribal Council a production royalty ranging from 3.0% to 5.0%, depending on the type of metal produced and the year of production.

As of June 30, 2020, the Company had paid the Tetlin Tribal Council $225,000 in exchange for reducing the production royalty payable to them by 0.75%.

The Company previously paid the Tetlin Tribal Council $225,000 in exchange for reducing the production royalty payable to them by 0.75%.

These payments lowered the production royalty to a range of 2.25% to 4.25%.

On or before July 15, 2020, the Tetlin Tribal Council had the option to increase their 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 Management Committee of the Joint Venture Company extended the Tetlin Tribal Council’s option until November 15, 2020.

The Tetlin Tribal Council had the option to increase their 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 the option to increase its production royalty by 0.75% by payment to the Joint Venture Company of $450,000 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 exercise of this option by the tribe did not have an accounting impact to the Company.

Until such time as production royalties begin, the Joint Venture Company must pay the Tetlin Tribal Council an advance minimum royalty of $50,000 per year.

On July 15, 2012, the advance minimum royalty increased to $75,000 per year, and subsequent years are escalated by an inflation adjustment.

Mineral Exploration.

The Joint Venture Company’s Triple Z, Tok/Tetlin, Eagle, Bush, West Fork, and Noah claims are all located on state of Alaska lands.

Gold Exploration.

The Company’s Triple Z, Tok/Tetlin, Eagle, Bush, West Fork, Shamrock and Noah claims are all located on state of Alaska lands.

The Company released the Bush and West Fork claims in November 2020.

The annual claim rentals on these projects vary based on the age of the claims, and are due and payable in full by November 30 of each year.

Annual claims rentals for the 2020-2021 assessment year totaled $349,955.

The Joint Venture Company has met the annual labor requirements for the state of Alaska acreage for the next four years, which is the maximum time allowable by Alaska law.

The Company paid the current year claim rentals in November 2020 and recorded the payment within prepaid assets.

The associated rental expense is amortized over the rental claim period, September 1 - August 31 of each year.

As of June 30, 2021, the Joint Venture Company had met the annual labor requirements for the state of Alaska acreage for the next four years, which is the maximum time allowable by Alaska law.

The Company obtained 100% ownership of these claims in conjunction with the Separation Agreement (described in Note 1).

Royal Gold Royalties .

The Joint Venture Company is obligated to pay Royal Gold (i) an overriding royalty of 3.0% should the Joint Venture Company derive revenues from the Tetlin Lease, the Additional Properties and certain other properties and (ii) an overriding royalty of 2.0% should the Joint Venture Company derive revenues from certain other properties.

Initially, the Joint Venture Company was obligated to pay Royal Gold (i) an overriding royalty of 3.0% should the Joint Venture Company derive revenues from the Tetlin Lease, the Additional Properties and certain other properties and (ii) an overriding royalty of 2.0% should the Joint Venture Company derive revenues from certain other properties.

In conjunction with the Separation Agreement, the Joint Venture Company granted a new 28.0% net smelter returns silver royalty on all silver produced from a defined area within the Tetlin Lease and transferred an additional 1.0% net smelter returns royalty on the state mining claims to Royal Gold.

Therefore, Royal Gold currently holds a 3.0% overriding royalty on the Tetlin Lease and the state mining claims that were transferred to the Company in conjunction with the Separation Agreement.

Retention Agreements.

In February 2019, the Company entered into Retention Agreements with its then Chief Executive Officer, Brad Juneau, its Chief Financial Officer, Leah Gaines, and one other employee providing for payments in an aggregate amount of $1,500,000 upon the occurrence of certain conditions.

The Retention Agreements, as amended, are triggered upon a change of control (as defined in the applicable Retention Agreement) that takes place prior to August 6, 2025, provided that the recipient is employed by the Company when the change of control occurs.

The Retention Agreements are triggered upon a change of control (as defined in the applicable Retention Agreement), provided that the recipient is employed by the Company when the change of control occurs.

On February 6, 2020, the Company entered into amendments to the Retention Agreements to extend the term of the change of control period from August 6, 2020 until August 6, 2025.

Juneau and Ms.

Gaines will receive a payment of $1,000,000 and $250,000, respectively, upon a change of control.

Gaines will receive a payment of $1,000,000 and $250,000, respectively, upon a change of control that takes place prior to August 6, 2025.

On June 10, 2020, the Company entered into a Retention Payment Agreement with Rick Van Nieuwenhuyse, the Company’s President and Chief Executive Officer, providing for a payment in an amount of $350,000 upon the occurrence of certain conditions.

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Short Term Incentive Plan .

The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) adopted a Short Term Incentive Plan (the “STIP”) effective as of June 10, 2020, for the benefit of Mr.

The Compensation Committee adopted a Short-Term Incentive Plan (the “STIP”) effective as of June 10, 2020, for the benefit of Mr.

Van Nieuwenhuyse.

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Van Nieuwenhuyse’s annual base salary if the minimum performance target established by the Compensation Committee is met, 100.0% of his annual base salary if all performance goals are met, and up to 200.0% of his annual base salary if the maximum performance target is met.

Amounts due under the STIP will be payable 50% in cash and 50% in the form of restricted stock granted under the Contango ORE, Inc.

Amended and Restated 2010 Equity Incentive Plan (as amended, the “Equity Plan”), vesting in two equal annual installments on the first and second anniversaries of the grant date, and subject to the terms of the Equity Plan.

Amounts due under the STIP will be payable 50.0% in cash and 50.0% in the form of restricted stock granted under the Equity Plan, vesting in two equal annual installments on the first and second anniversaries of the grant date, and subject to the terms of the Equity Plan.

In addition, in the event of a Change of Control (as defined in the Equity Plan) during the term of the STIP, the Compensation Committee, in its sole and absolute discretion, may make a payment to Mr.

Van Nieuwenhuyse in an amount up to 200.0% of his annual base salary, payable in cash, shares of Common Stock of the Company under the Equity Plan or a combination of both, as determined by the Compensation Committee, not later than 30 days following such Change of Control.

In conjunction with STIP plan, in December 2020, Mr.

Van Nieuwenhuyse received a $350,000 cash bonus and 23,333 restricted shares of Common Stock, which vest on January 1, 2022.

Year Ended June 30,

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State tax benefit

Return to provision

Permanent differences

Transaction costs

Stock based compensation

Restricted stock shortfall

Other valuation allowance

Income tax provision/(benefit)

The benefit for income taxes for the periods indicated below are comprised of the following:

The provision for income taxes for the periods indicated below are comprised of the following:

Year Ended June 30,

Total current income tax expense

Total deferred income tax expense

The net deferred tax asset is comprised of the following:

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The Company will continue to monitor these new regulations and analyze their applicability and impact on the Company.

On March 27, 2020, the CARES Act was enacted which is aimed at providing emergency assistance due to the impact of the COVID-19 pandemic.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) was enacted which is aimed at providing emergency assistance due to the impact of the COVID-19 pandemic.

The CARES Act includes provisions related to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax deprecation methods for qualified improvement property.

The Company does not expect to be materially impacted by the CARES Act and does not anticipate the CARES Act to have a material effect on its ability to realize deferred tax assets.

During fiscal year 2020, we had a change in our valuation allowance of approximately $2.4 million.

At June 30, 2020, we have U.S.

federal tax loss carry-forwards of approximately $19.1 million.

These net operating loss carry-forwards (“NOL”) will begin expiring in 2031.

NOLs generated in tax years ending June 30, 2019 and later carry forward indefinitely and are limited to 80% of taxable income.

Use of NOLs, however, may be limited if we undergo an ownership change.

The Company does not expect to be materially impacted by the CARES Act and does not anticipate the CARES Act to have a material effect on its ability to realize deferred tax assets with the exception of the relief from the 80% limitation on some of its NOLs available to be utilized this year.

At each reporting period, we weigh all positive and negative evidence to determine whether our deferred tax assets are more likely than not to be realized.

As a result of this analysis at June 30, 2021, we have determined a valuation allowance is necessary as we have a history of book and tax losses with the exception of June 30, 2021, we have not generated any revenue from mineral sales or operations and do not have any recurring sources of revenue.

During fiscal year 2021, we had a decrease in our valuation allowance of approximately $7 million due to utilization of federal and Alaskan NOLs.

At the beginning of the tax year ending June 30, 2021 we had U.S.

federal NOLs of $16.8 million and Alaskan NOLs of $10.1 million.

We estimate we will fully utilize all U.S.

federal and Alaskan tax loss carry-forwards for the tax year ended June 30, 2021 as a result of the income driven by the gain on the sale of the CORE JV Interest in connection with the Kinross Transactions.

Use of future NOLs may be limited if we undergo an ownership change.

Generally, an ownership change occurs if certain persons or groups, increase their aggregate ownership in us by more than 50 percentage points looking back over a rolling three-year period.

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Related Party Transactions

Brad Juneau, who served as the Company’s Chairman, President and Chief Executive Officer until January 6, 2020, and serves as the Company’s Executive Chairman effective January 6, 2020, is also the sole manager of JEX, a private company involved in the exploration and production of oil and natural gas.

JEX was responsible for securing and negotiating the Tetlin Lease and assisting in obtaining other properties and initially engaged Avalon Development Corporation (“Avalon”) to conduct mineral exploration activities on the Tetlin Lease.

In agreeing to transfer its interests in such properties to Contango Mining, a predecessor of the Company, JEX retained a 3.0% overriding royalty interest in the properties transferred.

In September 2012, the Company and JEX entered into an Advisory Agreement in which JEX provided assistance in acquiring additional properties in Alaska in exchange for an overriding royalty of 2.0% on properties acquired after July 1, 2012.

On September 29, 2014, pursuant to a Royalty Purchase Agreement between JEX and Royal Gold (the “Royalty Purchase Agreement”), JEX sold its entire overriding royalty interest in the Peak Gold Joint Venture Property to Royal Gold.

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

On November 20, 2019, the Company entered into an Amended and Restated Management Services Agreement (the “A&R MSA”), with JEX, which amends and restates the Management Services Agreement between the Company and JEX dated as of October 1, 2016.

Pursuant to the A&R MSA, JEX will continue, subject to the direction of the Board of Directors, to manage the general and administrative affairs of the Company and its interest in Joint Venture Company.

The services provided to the Company by JEX include corporate finance, accounting, budget, reporting, risk management, operations and stockholder relation functions of the Company.

(“JEX”), a private company involved in the exploration and production of oil and natural gas.

On December 11, 2020, the Company entered into a Second Amended and Restated Management Services Agreement (the “A&R MSA”) with JEX, which amends and restates the Amended and Restated Management Services Agreement between the Company and JEX dated as of November 20, 2019.

Pursuant to the A&R MSA, JEX will continue, subject to direction of the board of directors of the Company (the “Board”), to provide certain facilities, equipment and services used in the conduct of the business and affairs of the Company and management of its membership interest in the Joint Venture Company.

Pursuant to the A&R MSA, JEX will provide to the Company office space and office equipment, and certain related services.

The A&R MSA will be effective for one year beginning December 1, 2020 and will renew automatically on a monthly basis as of December 1, 2021 unless terminated upon ninety days’ prior notice by either the Company or JEX.

Pursuant to the A&R MSA, the Company will pay to JEX a monthly fee of $10,000, which includes an allocation of approximately $6,900 for office space and equipment.

JEX will also be reimbursed for its reasonable and necessary costs and expenses of third parties incurred for the Company.

No part of the fee payable to JEX pursuant to the A&R MSA is allocated for compensation of our Executive Chairman, Brad Juneau, who is compensated separately as determined by the independent directors of the Company.

In addition, executives of JEX may be granted restricted stock, stock options or other forms of compensation by the independent directors of the Company.

The amount of time and expertise required to effectively manage and administer the business and affairs of the Company will continue to be monitored by the board of directors of the Company for necessary adjustments or modifications depending upon the amount of time required to be spent on the business and affairs of the Company by the executives and the progress of the Joint Venture Company in its exploratory programs in Alaska.

On October 23, 2017, the Company completed the Private Placement described in Note 6 - Shareholder’s Equity.

JEX, which is controlled by Brad Juneau, the Company’s then-President and Chief Executive Officer, purchased 13,200 shares of Common Stock, in the Private Placement for a price of $250,800 and on the same terms and conditions as all other Purchasers.

On April 16, 2018, Royal Gold filed a Schedule 13D with the Securities and Exchange Commission to reflect Royal Gold’s acquisition from an existing stockholder of 13.6% of the Company’s outstanding common stock at a price of $26 per share, subject to certain adjustments.

Royal Gold also filed amendments to its Schedule 13D on June 29, 2018, October 4, 2018, January 22, 2019, and August 2, 2019.

As of August 2, 2019 Royal Gold reported beneficial ownership of approximately 12.7% of the Company’s outstanding common stock.

Royal Gold is the parent company of Royal Alaska LLC, CORE’s joint venture partner in the Joint Venture Company.

The Company retained Petrie Partners, LLC ("Petrie") and Cantor Fitzgerald and Co.

to advise on its strategic options, including in connection with a joint sale process with its joint venture partner, Royal Gold.

Royal Gold retained Scotia Capital Inc.

to conduct a joint process for the sale directly or indirectly of the Joint Venture Company’s properties in Alaska.

On September 23, 2020, the Company completed the issuance and sale of an aggregate of 247,172 shares of the Company’s common stock, par value $0.01 per share, in a private placement (the “2020 Private Placement”) to certain purchasers who are accredited investors.

The A&R MSA includes customary indemnification provisions.

For the years ended 2021 and 2020, the management fees paid to JEX totaled $305,000 and $504,000, respectively.

Management fees are reflected on the statement of operations within general and administrative expenses.

The Company entered into Stock Purchase Agreements dated as of June 14, and June 17, 2021 for the sale of an aggregate of 523,809 shares of Common Stock at a purchase price of $21.00 per share of Common Stock, in the 2021 Private Placement to certain accredited investors.

The 2021 Private Placement closed on June 17 and 18, 2021.

The 2021 Private Placement resulted in approximately $11.0 million of gross proceeds and approximately $10.9 million of net proceeds to the Company.

The Company will use the net proceeds from the 2021 Private Placement to fund its exploration and development program and for general corporate purposes.

The shares sold in the 2021 Private Placement were issued in reliance on an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof.

Nieuwenhuyse did not receive any of the rights under the Registration Rights Agreement.

The 2021 Private Placement to Mr.

Nieuwenhuyse closed on June 18, 2021.

On September 23, 2020, the Company completed the issuance and sale of an aggregate of 247,172 shares of the Company’s Common Stock, in the 2020 Private Placement to certain purchasers who are accredited investors.

Of the total 247,172 shares issued, 32,874 were issued from Company's treasury account.

1 unchanged sentence

As a result of Mr.

Van Nieuwenhuyse’s purchase, as of September 23, 2020, his ownership interest in the Company is 2.2%.

Van Nieuwenhuyse’s purchase, as of September 23, 2020, his ownership interest in the Company was 2.2%.

Petrie acted as the sole placement agent in connection with the 2020 Private Placement and received a placement agent fee equal to 3.25% of the gross proceeds raised from the subscribers whom they solicited, or a total of approximately $0.05 million in placement agent fees.

2 unchanged sentences

Van Nieuwenhuyse’s participation in the 2020 Private Placement.

- Subsequent Events for information on the 2020 Private Placement.

On September 30, 2020, in a series of related transactions, Kinross, through its wholly owned subsidiary, acquired all of the interest in the Joint Venture Company held by Royal Gold and an additional 30.0% membership interest in the Joint Venture Company held by the Company.

The Company, through its wholly owned subsidiary, retained a 30.0% membership interest in the Joint Venture Company, with Kinross acquiring a 70.0% membership interest in the Joint Venture Company and becoming the manager and operator of the Joint Venture Company.

Prior to and in connection with the Kinross Transactions, on September 29, 2020, Contango Minerals entered into an Omnibus Second Amendment and Restatement of Royalty Deeds (the “Contango Minerals Royalty Agreement”) with Royal Gold.

Under the terms of the Contango Minerals Royalty Agreement, in addition to certain existing 2.0% royalties (the “2% Royalties”) and 3.0% royalties in favor of Royal Gold on the Alaska state mining claims, Contango Minerals granted an additional 1% net smelter returns royalty on those Alaska state mining claims that were already subject to the 2% Royalties, increasing the royalty rate on those Alaska state mining claims to 3.0%.

These Alaska state mining claims were transferred to Contango Minerals as part of the transactions with Kinross, with Royal Gold retaining the 3.0% royalty.

As a result of the Contango Minerals Royalty Agreement, Contango Minerals will be obligated to pay Royal Gold a 3.0% net smelter returns royalty on all properties subject to the Contango Minerals Royalty Agreement, subject to the terms and conditions of that agreement.

In addition, on September 29, 2020, the Joint Venture Company entered into an Omnibus Second Amendment and Restatement of Royalty Deeds and Grant of Additional Royalty (the “JV Royalty Agreement”) with Royal Gold.

Pursuant to the JV Royalty Agreement, the Joint Venture Company (i) granted to Royal Gold a 28.0% net smelter returns royalty interest on all silver produced from a defined area within the Tetlin Lease and (ii) transferred to Royal Gold the additional 1.0% net smelter returns royalty that it had retained on the Alaska State mining properties which were contributed to Contango Minerals, all subject to the terms of the JV Royalty Agreement.

The Company will be required to fund any royalty payments the Joint Venture Company is obligated to make to Royal Gold under the JV Royalty Agreement in proportion to its membership interests in the Joint Venture Company.

The Company’s proportionate share of the additional royalty granted to Royal Gold pursuant to the JV Royalty Agreement has been partially offset by a cash payment of $1.2 million to the Company, designated as a reimbursement prepayment by Kinross for the Company’s estimated proportionate share of the additional silver royalty, in proportion to Company’s membership interest in the Joint Venture Company after the consummation of the transactions described above.

On April 16, 2018, Royal Gold filed a Schedule 13D with the Securities and Exchange Commission to reflect Royal Gold’s acquisition from an existing stockholder of 13.6% of the Company’s outstanding Common Stock at a price of $26 per share, subject to certain adjustments.

Royal Gold also filed amendments to its Schedule 13D on June 29, 2018, October 4, 2018, January 22, 2019, August 2, 2019, and September 30, 2020.

Immediately prior to the consummation of the Kinross Transactions, Royal Gold held 809,744 shares of Common Stock, representing approximately 11.9% of the issued and outstanding shares of Common Stock immediately prior to the Kinross Transactions.

On September 30, 2020, Royal Gold reported beneficial ownership of approximately 0.0% of the Company’s outstanding Common Stock.

Royal Gold sold all of the Common Stock it owned to KG Mining as a part of the Royal Gold Transactions described in Note 1.

Royal Gold is the parent company of Royal Alaska, CORE’s former joint venture partner in the Joint Venture Company.

Subsequent Events

The shares of the common stock were sold at a price of $13.25 per share, resulting in gross proceeds to the Company of approximately $3.3 million and net proceeds to the Company of approximately $3.2 million.

The Company will use the net proceeds from the 2020 Private Placement for working capital purposes and for funding future obligations to the Joint Venture Company.

The shares sold in the 2020 Private Placement were issued in reliance on an exemption from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof.

As a result of Mr.

Van Nieuwenhuyse’s purchase, as of September 23, 2020, his ownership interest in the Company is 2.2%.

The Audit Committee of the Company has reviewed and approved all agreements and arrangements relating to Mr.

Van Nieuwenhuyse’s participation in the 2020 Private Placement.

On August 16, 2021, the Company granted 10,000 shares of Common Stock to a new employee.

The shares will vest in three equal annual installments.

On August 24, 2021 the Company completed the purchase of 100% of the outstanding membership interests (the “Interests”) of Alaska Gold Torrent, LLC, an Alaska limited liability company ("AGT"), from CRH Funding II PTE.

LTD, a Singapore private limited corporation ("CRH").

AGT holds rights to the Lucky Shot Mine and related mining claims (the “Lucky Shot Prospect”) about 75 miles north of near Anchorage, Alaska.

CORE agreed to purchase the Interests for a total purchase price of up to $30 million.

The purchase price includes an initial payment at closing of $5 million in cash and a secured promissory note payable by CORE (the "Promissory Note") in the original principal amount of $6.25 million, with a maturity date of February 28, 2022 (the “Maturity Date”).

The Promissory Note is secured by the Interests.

If, prior to the Maturity Date, CORE completes a public offering of newly issued shares of CORE and obtains a listing of its shares on the NYSE American, CORE will pay the Promissory Note through the issuance to CRH of shares of CORE Common Stock, valued at (x) if available, the per share price in the public offering, or (y) the per share price representing a 10% discount to the 30-day volume-weighted average share price as of the Maturity Date.

If the public offering is not completed or the CORE Common Stock is not listed on the NYSE American on or before the Maturity Date, CORE will pay the Promissory Note in cash.

On the date of closing, the Company paid CRH $3.8 million in cash (equal to $5 million, net of $1.3 tax withholding, and increased by approximately $01.

million in working capital purchase price adjustments).

The purchase price will be also be adjusted for any necessary post closing adjustments within 60 days of closing.

In addition to the cash at closing and the Promissory Note, if production on the Lucky Shot Prospect meets two separate production thresholds, then CORE will pay CRH additional consideration.

If the first production threshold of (1) an aggregate “mineral resource” equals 500,000 ounces of gold or (2) CORE produces and receives an aggregate of 30,000 ounces of gold (which includes any silver based on a 1:65 gold:silver ratio) is met, CORE will pay CRH $5 million in cash and $3.75 million in newly issued shares of common stock of CORE.

If the second production threshold of (1) an aggregate “mineral resource” equals 1,000,000 ounces of gold or (2) CORE produces and receives an aggregate of 30,000 ounces of gold (which includes any silver based on a 1:65 gold:silver ratio) is met, CORE will pay CRH $5 million in cash and $5 million in newly issued shares of common stock of CORE.

The shares of CORE common stock will be issued based on the 30-day volume weighted average price for each of the thirty trading days immediately prior to the satisfaction of the relevant production goal.

Pursuant to the transaction, during the 18-month period following the closing, CORE shall spend at least $5 million toward the existence, location, quantity, quality or commercial value of mineral deposits in, under and upon the Lucky Shot Prospect (“Exploration Expenditures”), and prior to the 36 month anniversary of the closing date, CORE shall have spent at least $10 million on Exploration Expenditures.

After CORE has complied with such Exploration Expenditure requirements and additional exploration, mining and development expenditures on the Lucky Shot Prospect equal at least $5 million (for an aggregate of at least $15 million when added to the required Exploration Expenditures described above), CORE is permitted to assign and be relieved of, its additional consideration payment obligations under the purchase agreement.

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 9A. Controls and Procedures