Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the related notes and other information included elsewhere in this report.

Overview

The Company engages in exploration for gold, silver, and copper ores in Alaska. The Company's largest asset is a 30% membership interest in the Peak Gold JV, which leases approximately 675,000 acres from the Tetlin Tribal Council and owns approximately 13,000 State of Alaska mining claims for exploration and development through its wholly-owned subsidiary, CORE Alaska. The Company's wholly-owned subsidiary, Contango Minerals, controls 100% interest in the mineral rights to approximately 84,580 acres of State of Alaska mining claims located north and northwest of the Manh Choh Project. The Company is actively working to acquire additional properties for exploration.

In July 2024, the Peak Gold JV commenced ore mining at the Manh Choh Project and processing of the ore at the Fort Knox mill. On July 8, 2024, Manh Choh Project achieved a significant milestone and poured its first gold bar, on schedule. During 2024, the Company received $40.5 million in cash distributions from the Peak Gold JV relating to the production at Manh Choh. During 2025, the Company received $102.0 million in cash distributions from the Peak Gold JV relating to the production at Manh Choh. The Peak Gold JV believes that Manh Choh will be mined over approximately five years.

Recent Developments

Dolly Varden Acquisition

Dolly Varden Silver Corporation ("Dolly Varden") was amalgamated under the Business Corporations Act (British Columbia) on January 30, 2012. Dolly Varden's primary activity is the acquisition and exploration of mineral properties in Canada.

Dolly Varden is a mineral exploration company focused on exploration and advancing its 100% owned Kitsault Valley project (the "Kitsault Valley Project"), which includes the Dolly Varden property and the Homestake Ridge property located in the Golden Triangle of British Columbia, Canada, 25 kilometers ("km") by road to tide water. The 163-square km Kitsault Valley Project hosts the high-grade silver and gold resources of Dolly Varden and Homestake Ridge along with the past-producing Dolly Varden and Torbrit silver mines.

In addition to the Kitsault Valley Project, Dolly Varden has consolidated a land package of six other properties in the same region as the Kitsault Valley Project. These six properties have historically been explored for gold, copper, silver, lead and zinc. Including the Kitsault Valley Project and the recent acquisitions, Dolly Varden now holds a combined area of 100,000 hectares within the region.

On December 8, 2025, Contango and Dolly Varden entered into the Arrangement Agreement in respect of the Arrangement. Under the terms of the Arrangement Agreement, Contango will acquire all of the issued and outstanding Dolly Varden Shares at the Exchange Ratio. The estimated fair value of the shares to be issued based on information available as of December 8, 2025 is $397.5 million.

Immediately prior to Closing, all Dolly Varden RSUs will vest and be settled for Dolly Varden Shares. Pursuant to the Arrangement, all outstanding Dolly Varden Options will be exchanged for stock options to acquire Contango Shares, adjusted to reflect the Exchange Ratio. Eligible Canadian stockholders of Dolly Varden will be able to elect to receive exchangeable shares in a Canadian subsidiary of Contango, which will be exchangeable into Contango Shares, instead of the Contango Shares to which they would otherwise be entitled.

Upon completion of the Arrangement, existing Contango Stockholders and former Dolly Varden Shareholders will own approximately 50.001% and 49.999% each of the combined company, respectively, using the fully diluted in-the-money treasury-stock-method (based on the number of Dolly Varden and Contango securities outstanding as of the date of the Arrangement Agreement).

The Arrangement will be effected pursuant to a court-approved plan of arrangement under the BCBCA and will require approval by (i) the Court, (ii) 66 2/3% of the votes cast by Dolly Varden Shareholders at a special meeting of Dolly Varden Shareholders expected to be held in the first quarter of 2026, and (iii) the affirmative vote of a majority of the Contango Shares present in person or by proxy at the special meeting of Contango Stockholders, expected to be held in the first quarter of 2026, and entitled to vote thereon.

In addition to the approval of the Court and the Dolly Varden and Contango stockholders, the Arrangement is subject to the receipt of applicable regulatory and exchange approvals (including approval of the NYSE American and TSXV), and the satisfaction of certain other closing conditions customary for a transaction of this nature. Subject to the satisfaction of such conditions, the Arrangement is expected to close in the first quarter of 2026. The Arrangement Agreement includes customary deal protections, including reciprocal fiduciary-out provisions, non-solicitation covenants and the right to match any superior proposals. A reciprocal Termination Fee in the amount of $15 million is payable by either party in certain circumstances as set out in the Arrangement Agreement.

As of December 31, 2025, the Company has accrued and capitalized $2.2 million in connection to transaction costs that are direct and incremental costs to the Arrangement.

Manh Choh Project

During 2025, the Peak Gold JV (on a 100% basis) processed 1,069,000 tons of ore with an average grade of 0.20 oz per ton and containing approximately 216,800 oz of gold. Gold recovery averaged 93%, resulting in approximately 198,500 oz of recovered gold, of which Contango's 30% share amounts to approximately 59,500 oz of gold. During 2025, 57,800 oz of gold and 57,315 ounces of silver were delivered to Contango and sold.

Below table summarizes production results from the Manh Choh Project, based on the Company's 30% interest in the Peak Gold JV:

2026 and 2027 Production Guidance

The Company's share of gold production from the Manh Choh mine is estimated to range from 40,000 to 45,000 oz of gold for the fiscal year 2026, with cash costs estimated to range from $1,900 to $2,000 per oz of gold sold, and 75,000 to 80,000 oz of gold production for the fiscal year 2027, with cash costs estimated to range from $1,200 to $1,300 per oz of gold sold. Higher estimated fiscal year 2026 cash costs are the result of lower gold production in 2026, larger royalty payments due to the increasing gold price and, to a lesser degree, higher costs associated with wages and consumables. Given the ongoing conflict in Iran and resulting volatility in global energy markets, forecast fuel prices could move either higher or lower relative to 2025, and current conditions make the direction of change uncertain.

The current gold market is creating exciting opportunities for the Company. While the Company is seeing a slight rise in labor and royalty costs, driven largely by higher gold prices, the overall financial picture is strong:

Gold Production Guidance (Estimates)

Notes:

Cash Cost on a By-Product Basis and All-In Sustaining Costs on a By-Product Basis (non-GAAP Measure)

Cash Cost on a By-product Basis includes all direct and indirect operating cash costs related directly to the physical activities of producing gold, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. The value of silver sold is deducted from the total production cost of sales as it is considered residual production, i.e. a by‐product.

AISC on a By-product Basis includes reclamation, sustaining capital, exploration and joint venture partner operator management costs.

Johnson Tract Project

During 2025, the Company continued with ongoing work to permit the underground exploration drift along with baseline environmental and engineering work to support permitting a road and barge landing facility within the Transportation and Port Easements granted to Cook Inlet Regional Inc. (CIRI) the underlying land owner. Field crews started work in July 2025 and finalized the field program in mid-October.

In May of 2025, the Company completed a Technical Report Summary ("TRS") on the Johnson Tract Project. The TRS summarizes the results of an Initial Assessment ("IA") as of May 12, 2025 of the potential viability for a seven-year life of mine ("LOM"), underground mining operation, utilizing the same direct ship ore ("DSO") approach as the Manh Choh mine.

IA HIGHLIGHTS:

Lucky Shot Project

In November 2025, the Company mobilized a drill rig at the Lucky Shot mine site to commence the first phase of a 15,000-meter underground in-fill drilling program. The Company started reporting assay results in the first quarter of 2026. This work, along with detailed engineering, hydrology and geotechnical work will form the basis for a feasibility level mine and transportation plan for Lucky Shot, with an objective of targeting to produce 40,000 to 50,000 ounces of gold per year using the Direct Shipping Ore (DSO) approach, assuming positive exploration success. The Company expects to complete the feasibility study in the first half of 2027 and make a production decision in 2027.

Underwritten Offering

On September 25, 2025, the Company sold 1,975,000 shares of common stock and pre-funded warrants to purchase up to 525,000 shares of common stock at an offering price of $20.00 per share and $19.99 per pre-funded warrant and received gross proceeds of $50.0 million before deducting underwriting discounts and offering expenses of $3.0 million. The offering price of the pre-funded warrant equaled the public offering price per share of the common stock less the $0.01 per share exercise price of each pre-funded warrant. The September offering was made pursuant to the Company's effective shelf registration statement on Form S-3.

On February 12, 2026, the Company entered into an underwriting agreement with Canaccord Genuity LLC as representative of the several underwriters named therein, relating to an underwritten public offering to two institutional investors of (i) 1,678,206 shares of the Company's common stock, $0.01 par value, at a public offering price of $24.96 per share and (ii) a pre-funded warrant to purchase up to 325,000 shares of the Company's common stock at a purchase price of $24.95 per share with an exercise price of $0.01 per share. The Company received approximately $47.2 million in net proceeds after deducting underwriting discounts and commissions.

As of December 31, 2025, no pre-funded warrants had been exercised.

Index Inclusion

On September 15, 2025, the Company announced that it has been added to the Global Junior Gold Miners Index ("GDXJ"), effective at market close on September 19, 2025, pursuant to the GDXJ's semi-annual review and quarterly rebalance.

Results of Operations

Exploration Expense.Exploration expense for the fiscal year ended December 31, 2025 was $5.8 million, compared to $4.1 million for the fiscal year ended December 31, 2024. The current period expense primarily relates to the permitting process for the underground exploration drift; baseline environmental work at the Johnson Tract Project, and the first phase of a 15,000 meter underground in-fill drilling program on the Lucky Shot Property. The exploration expense for the fiscal year ended December 31, 2024 related to 3,000 meter surface drilling exploration program at the Johnson Tract Property.

General and Administrative Expense.General and administrative expense for the fiscal year ended December 31, 2025 was $13.1 million compared to $10.6 million for the fiscal year ended December 31, 2024. The Company's general and administrative expense primarily relates to professional fees, payroll and benefit related fees, insurance, severance costs, and

stock-based compensation expense. The stock-based compensation expense for the fiscal year ended December 31, 2025 was $3.4 million compared to $2.6 million for the fiscal year ended December 31, 2024. The increase in general administrative expense is mainly driven by expenditures carried for marketing and investor relations, legal costs and professional fees, salaries and benefits and stock-based compensation.

Income from Equity Investment in the Peak Gold JV. The income from the Company's equity investment in the Peak Gold JV for the fiscal year ended December 31, 2025 was $88.6 million, compared to $41.7 million for the fiscal year ended December 31, 2024. The Manh Choh Project commenced production in July 2024.

Interest Expense.For the fiscal year ended December 31, 2025, interest expense was $7.6 million related to the Company's Facility and the Queen's Road Capital Investment, Ltd. Debenture (the "Debenture"). Interest expense for the fiscal year ended December 31, 2024 was $11.7 million. The interest expense decreased in fiscal year ended December 31, 2025 compared to the prior period due to the decrease in overall debt balance. During the fiscal year ended December 31, 2025, the Company made $37.5 million in principal repayments on the Facility. During the fiscal year ended December 31, 2024, the Company made $7.9 million in principal repayments on the Facility. See Note 14 - Debt.

Gain on Metal Sales.For the fiscal year ended December 31, 2025 and 2024, the gain on metal sales was $5.3 million and $1.2 million, respectively. This related to excess ounces that were purchased from the Peak Gold JV that were not delivered into the hedges and sold to the derivative counterparties. During the fiscal year ended December 31, 2025, a total of 57,828 ounces were sold with an average spot price of $3,400 compared to 19,664 ounces with an average spot price of $2,566 for the fiscal year ended December 31, 2024.

Loss on Derivative Contracts.Loss on derivative contracts for the fiscal year ended December 31, 2025 was comprised of unrealized and realized loss of $46.0 million and $63.1 million, respectively, compared to $34.3 million and $19.9 million, respectively, for the fiscal year ended December 31, 2024. The variance was generated from the valuation of the derivative contracts which was affected by the increase of the spot price on sales realized in the period and the corresponding impact in the forward curves used to value and the derivative contracts outstanding at the end of the year. The Company delivered 43,739 gold ounces into the derivative contracts for the fiscal year ended December 31, 2025 while delivering 37,861 gold ounces into the derivative contracts for the fiscal year ended December 31, 2024.

Interest and Other Income.For the fiscal year ended December 31, 2025 and 2024, interest and other income was $1.8 million and $0.5 million, respectively. The overall increase during the fiscal year ended December 31, 2025 is due to the excess cash generated from financings that was invested in money market funds.

Gain/(loss) on Marketable Securities.The gain on marketable securities for the fiscal year ended December 31, 2025 was $4.7 million, compared to a loss of $0.2 million for the fiscal year ended December 31, 2024. The Company generated a gain during the fiscal year ended December 31, 2025 as a result of a realized gain of $0.7 million due to the sale of 1,000,000 of Onyx's shares and an unrealized gain of $4.0 million due to the increase in Onyx's share price.

Cash Cost on a By-Product Basis and All-In Sustaining Costs on a By-Product Basis (non-GAAP Measure)

The table below presents a reconciliation between the most comparable GAAP measure of total cost of sales to the non-GAAP measures of (i) Cash Cost on a By-product Basis and (ii) AISC on o By-product Basis for the Peak Gold JV operations (Manh Choh) for the fiscal years ended December 31, 2025 and 2024.

Cash Cost on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold are measures developed by precious metals companies (including the Silver Institute and the World Gold Council) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost on a By-product Basis includes all direct and indirect operating cash costs related directly to the physical activities of producing gold, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. The value of silver sold is deducted from the total production cost of sales as it is considered residual production, i.e. a by‐product.

AISC on a By-product Basis includes reclamation, sustaining capital, exploration and joint venture partner operator management costs.

Cash Cost on a By-product Basis, per Ounce sold is an important operating statistic that we utilize to measure a mine's operating performance. We use AISC on a By-product Basis, per Ounce sold as a measure of a mine's net cash flow after costs

for reclamation and sustaining capital. This is similar to the Cash Cost on a By-product Basis, per Ounce sold measure we report, but also includes reclamation and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain gold production. Cash Cost on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold also allow us to benchmark the performance of the Peak Gold JV versus those of our competitors. These statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Costs on a By-product Basis, per Ounce sold and AISC on a By-product Basis, per Ounce sold for the Peak Gold JV on a 100% basis are calculated by adjusting production cost of sales, as reported on the consolidated statements of operations, as follows:

Liquidity and Capital Resources

As of December 31, 2025, the Company had approximately $64.9 million of cash.

The Company's primary cash requirements have been for general and administrative expenses, capital calls from the Peak Gold JV for the Manh Choh Property, repayment of principal and interest related to debt, and exploration expenditures on the Johnson Tract Project and Lucky Shot Property. The Company's sources of cash have been from common stock offerings, the issuance of the Debenture, distributions from the Peak Gold JV and the proceeds from the Facility (see Note 10 - Investment in the Peak Gold JV, Note 7 - Stockholders' Equity and Note 14 - Debt, for a discussion of the recent activity).

Production from the Manh Choh Project has allowed the Peak Gold JV to operate from the cash flows generated from its operations and there are no future anticipated cash calls.

The Company's cash needs going forward will primarily relate to exploration of the Contango Properties, repayment of debt and related interest and general and administrative expenses of the Company. In 2025, the Company received cash distributions totaling $102.0 million. Although there can be no guarantee that the Peak Gold JV will continue to make distributions to the Company, the Company believes that distributions are probable and that it will maintain sufficient liquidity to meet its working capital requirements, including repayment obligations of approximately $4.0 million on the Facility and delivery into its hedge contracts, for the next twelve months from the date of this report.

On September 25, 2025, the Company sold shares of common stock and pre-funded warrants and received gross proceeds of $50.0 million. The Company intends to use the net proceeds of approximately $47.5 million to advance its fully permitted Lucky Shot Project to a mine production decision over the next two years by completing underground and surface-based drilling and underground development work. Proceeds will also be used to advance its Johnson Tract Project, subject to receipt of appropriate permits, by mobilizing all equipment necessary to complete road construction to the planned portal, winterizing the project's camp for year-round operations, starting construction of an exploration tunnel in order conduct

advanced exploration drilling, and completing a feasibility-level mine plan. Any remaining proceeds will also be used for general corporate purposes, including working capital. See Note 19 - Subsequent Events to our financial statements.

Further financing by the Company may include issuances of equity, instruments convertible into equity (such as warrants) or various forms of debt. The Company has issued common stock and other instruments convertible into equity in the past and cannot predict the size or price of any future issuances of common stock or other instruments convertible into equity, and the effect, if any, that such future issuances and sales will have on the market price of the Company's securities. Any additional issuances of common stock or securities convertible into, or exercisable or exchangeable for, common stock may ultimately result in dilution to the holders of common stock, dilution in any future earnings per share of the Company and may have a material adverse effect upon the market price of the common stock of the Company.

Off-Balance Sheet Arrangements

None.

Critical Accounting Estimates

The discussion and analysis of the Company's financial condition and results of operations is based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company has identified below the critical accounting estimates that are of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by management. Actual results may differ from these estimates under different assumptions or conditions.

Derivative Instruments. The Company utilizes derivative instruments in order to manage exposure to risks associated with fluctuating commodity prices. The Company recognizes all derivatives as either assets or liabilities, measured at fair value, and recognizes changes in the fair value of derivatives in current earnings. The Company performed a sensitivity analysis on this estimate based on a 10% change on the forward gold price which could result in an increase or decrease of $18.8 million on the fair value of the derivative instrument. The Company has elected to not designate any of its positions under the hedge accounting rules. Accordingly, these derivative contracts are mark-to-market and any changes in the estimated values of derivative contracts held at the balance sheet date are recognized in loss on derivative contracts in the Consolidated Statements of Operations. Realized gains or losses on derivative contracts will be recognized in Loss on derivative contracts in the Consolidated Statements of Operations.

Recently Issued Accounting Pronouncements. See Part II. Item 8. "Financial Statements and Supplementary Data" and "Note 4 - Summary of Significant Accounting Policies" of this Annual Report on Form 10-K.