| Rick Van Nieuwenhuyse | executive |
| J. Clark | executive |
Folks are actually coming pretty fast. I'm going to say good morning, good afternoon, depending on where in the world you're signing in from today. I'm very fortunate today to be joined by Rick Van Nieuwenhuyse, Contango Ore's President and CEO; and Mike Clark, company CFO. Gentlemen, how are you doing today?
Doing well, Romeo, thanks for hosting us.
No, I appreciate it.
You're live from Zurich.
So thanks for joining us all the way in Europe.
I wanted to just let you guys know in the audience, here's the format for today's event. We're going to start with a really quick presentation from Rick and Mike about some additional context for this week's news release. Then I've got some questions of my own to go through, but then we'll jump into audience questions. I'm going to start with the ones that were sent in advance over e-mail then questions in the live chat. There's a chat button on the bottom right of your screen. Please use it to ask questions at any time during today's event. If for whatever reason we don't get to your question today, I'm still going to pass it on to the Contango team so they can get back to you as soon as possible.
So no worries if we don't get to it, but we'll try to get to as many as we can today.
Also I'll say just for housekeeping, today's event is being recorded, and the replay will be available sometime this afternoon. It will come right into your inbox. But enough out of me to get into the protein.
I'll shoot it directly to Rick and Mike to get started.
Again, thanks, Romeo, and thanks for hosting us on 6ix here. We always appreciate the platform.
Mike and I'll be making some forward-looking statements.
So just draw your attention to that. Also we have a Q3 corporate presentation we just uploaded to the website.
So we invite you to take a look at that as well at www.contangoore.com.
All the dollars we've been -- we'll be talking about today, we're a U.S. company, so they're all U.S. dollars. And I'll just start by just kind of give you an overview of -- from my perspective of our Q3 results and then ask Mike to give his more CFO view of the results.
So I'll just point out that we are reporting on a -- going forward, our production on a quarterly basis. In this quarter, Q3, we produced 28,000 -- just shy of 28,000 ounces of gold. We -- a little bit of silver. We sold that for a little over $62 million, plus the silver. And we realized a price of $2,250, and that's a blended price between what we delivered to the hedges, which is the 14,800 ounces and then what we sold at spot price, so 12,850 ounces.
And so when you -- we've got a little bit more gold that was sold in Q4.
So that will be included in our Q4 statement. But our costs were $1,181.
So if you like do quick math in your head, that's roughly $1,000 margin based on our blended realized gold price. We did receive a distribution in the quarter from the Peak Gold joint venture of $19.5 million.
So it's nice to finally see some money coming back into the treasury, and we ended the quarter with $36 million.
So -- which is about a $12 million increase from Q2 reporting.
And as I mentioned earlier, we have been updating shareholders with our first campaign and then second campaign numbers in terms of ounces produced and realized gold prices and delivery of the hedges. But going forward, we will just transition to just -- we're quarterly reporting. We're not going to report specific campaigns going forward. It will be whatever is produced during the quarter.
And so that just would be reporting more like a regular company. And of course, Q3 is our first quarter where we're reporting on a quarterly basis.
So the last thing I wanted to just outline is our guidance for the -- for this year, we're definitely going to be towards the higher end of the original guidance we gave between 30,000 ounces and 40,000 ounces with batch 3 that's underway right now and should probably finish up in the next 2 or 3 weeks.
2025 guidance, it's not formal yet.
We have yet to -- we'll have a joint venture meeting here shortly and report -- sorry, where we'll approve the joint venture budget and in that will be our guidance. But we're believing that's going to be, based on our discussions with Kinross, somewhere in the neighborhood of 60,000 ounces of production in the year 2025.
So obviously, we'll expect to make additional money on that -- on the sale of those ounces. And the first priority of business is to pay back the debt. And of course, the second priority is to continue to advance our Lucky Shot and Johnson Tract projects and use -- continue to use our direct shipping or DSO approach, which, of course, lowers our environmental footprint, which reduces the permitting risk and lowers our overall capital that way by not building a mill and not building a tailings facility.
So just with that overview and perspective -- my perspective on our Q3 results, I'll ask Mike to give us his more CFO-hat perspective on the Q3 results. Mike?
Yes. Thanks, Rick. Good morning, everybody.
We finished -- as Rick mentioned, we finished the quarter at about $36.2 million of cash, and this compares to about $24 million at the end of June of this year and $15.5 million at the end of December of last year. And as Rick mentioned, we also received our second distribution from the joint venture of $12 million subsequent to quarter end.
And so for the quarter, we reported a loss of $9.7 million or a loss of $0.81 per share. That does include a noncash expense of $22.9 million, which relates to the unrealized loss on the mark-to-market derivative contracts for the hedges.
So this compares to a net loss of $13.2 million or a loss of $1.47 per share for Q3 2023. The primary reason for the reduction in the net loss is in the 2024 period is due to the Peak Gold JV commencing production at Manh Choh and resulting in income from our equity investment in the amount of about $28.5 million. And this compares to a $5.6 million loss in Q3 of 2023.
In addition, we did -- the company did report a $28.8 million loss on the derivative contracts in Q3 2024, which compares to a $2.7 million loss in Q3 2023.
On the statement of cash flow for the 9-month period September 30, 2024, I'd like to highlight that the company had positive net cash provided from operating activities in the amount of $10.6 million. And this compares to net cash used of $7.7 million for year-to-date 2023.
As I mentioned, the primary result is because of the commencement of production at Manh Choh and the receipt of the company's first cash distribution of $19.5 million from the Peak Gold JV.
That completes my portion of the presentation, and I'll pass it back to Romeo.
Thanks, Mike. Appreciate it.
So I do -- I still really get the chance to grill you, Mike.
So I've got a couple of questions for you, if you don't mind.
Just in looking at the gold sales and cash costs, to my eyes, it looks like they don't show up in the kind of traditional way on your statements.
So I'm curious, just if you could clarify why that is? And how a reader should look at it to kind of better understand those?
Yes. No, it's a good question, and they're very -- they're quite complicated, these financials. And a lot of it has to do with the fact that we only have a minority interest in Manh Choh. We only own 30%, so we don't consolidate those results.
And so the first thing I'll mention is the portion of our profits related to that all comes through the investment in equity income, which you see as a gain in the financials just below kind of the -- it's in operating activities, but just below the main expenses.
So you see that $28.5 million coming into the income statement.
So that's where you kind of focus on the profitability of the operations, which is our 30% share of those profits.
The gold sales, the revenue and the cost of sales that you would typically see in a mining company, those don't show up as topline. And the main reason is because selling gold and silver is not core to our business as it is today.
And so -- and because of the way that we're set up, Manh Choh gives us 30% of gold. The whole reason they do that is just so we can deliver into our hedge agreements, and we sell the remainder at spot.
And so what you would actually see if we had that in our financials as revenue and cost of sales, you'd see revenue of, say, $60 million, then you'd have cost of sales of just slightly less than that because we're paying back the JV for that gold and silver.
And so this avoids confusing the market and making it look like it's unprofitable when it really isn't. And those sales and cost of sales actually just flow through the Peak JV.
So I'm not sure if that's clear, but it's not normal, and it took a while to figure that out and get there.
No, that's helpful. I do appreciate that. But on that, do you expect any more cash calls from the JV?
Currently, we do not expect any cash calls unless there are some unforeseen expenses that we were just not aware of. But the last cash call was in July for $4.1 million, and we don't expect any more going forward.
Great. And what do you reckon your debt balance will be at the end of this year? And what do you expect to the end of 2025?
Yes.
Our debt balance is currently at $52 million, and that's where we expect it to the end -- at the end of this year, and that's for the credit facility. And right now, we're scheduled to pay down another $42 million next year.
So we should finish just shy of $10 million at the end of 2025.
Great. I'll shift to you, but good to hear Rick's perspective on it, too. And that's -- the $36.4 million in cash, I think you said and strong cash flow, as I don't get to say about most of my companies, from Manh Choh. How are you thinking about capital allocation between debt reduction, Lucky Shot advancement, Johnson Tract development? I know there were a lot of questions in e-mail about that.
Just curious of what that looks like?
You want me to start with that? From my opinion, my focus is making sure we pay down the debt on schedule, on time. And if we can accelerate that, we will look to do that. And then ensuring we deliver it to the hedges. And outside of that, that's where Rick comes in to decide how he wants to spend any excess cash.
Yes. We -- I guess I would just say we love our bankers, but we like to also say goodbye. And just the first order of business is really to pay down the debt. And then advancing our projects. We're -- we have a plan for Lucky Shot. We've talked about that, getting the drilling done and outlining a mineable resource in the neighborhood of 400,000 to 500,000 ounces. If we're producing with that mine plan, say, producing 40,000 to 50,000 ounces with a sort of a 10-year horizon. We think that makes really good sense for Lucky Shot. It will take a couple of years to execute that plan. And then likewise, for Johnson Tract, it's a little longer timeline because -- the nice thing about Lucky Shot is it's fully permitted as a mining operation, whereas Johnson Tract, we still have more permitting to do to be able to build the tunnel, to get underground to be able to do the drilling.
So it's just -- it's more of a stepwise process there.
So clearly, our revenues are going to depend on the price of gold, which just took a nice big Trump dump.
So if we're -- if there's pressure on the gold price, we're going to have to go slower. And because again, we want to get out from underneath the debt is the most important thing. And we'll -- we're still going to have good strong cash flows with producing 60,000 ounces of gold.
But that does -- that margin depends on the price of gold.
So price of gold is going to continue to tumble, we're going to have to watch how we spend our money. And the most important thing for a junior company is not to run out of money.
That's true.
You can see Mike's shaking his head. He's definitely agreeing with me on that one.
That's the CFO head shake. I'm familiar with that. I did notice -- this is back to you, Mike -- that there was a $718,000 income tax expense, which I believe is new for Contango.
So I'm curious, there were no losses to shelter that income?
Yes. No, it was -- it's purely a direct result of the high gold price we had during the quarter and the fact that you can only apply 80% of your loss as carryforwards against your current year income.
So unfortunately, the JV made too much money in the quarter, and we had to estimate a tax accrual for the period. And we'll do our best to bring that down by the end of the year, but that was what we had to come up with.
I appreciate that.
It's terrible thing about making money. Uncle Sam needs his share.
He always takes the piece. Yes. One thing regarding -- just getting to Johnson Tract real quick.
Regarding the drilling program, I'm curious if you could elaborate on what you're seeing from the hydrological testing and metallurgical work that's going on, as I understand alongside the resource drilling?
Yes. I mean, okay, I'll start with -- there was infill drilling, so we'll definitely be reporting results on that for all the holes that intersected the orebody, which is all the holes because it was purposeful drilling to do infill drilling to do the geotechnical and the hydrologic work. The hydrologic work is really just to get more data from the top of the deposit all the way to the bottom of the deposit, understand how much water there is on the orebody side of the fault.
As you recall, there's a main fault, the dayside fault that separates the unmineralized dayside intrusion from the mineralized tops on the other side.
And so that's the main purpose, is to understand how much water is over there.
So you do these hydrologic pump test and monitoring tests.
So there's not like a lot of -- like looking at the holes and saying, "Oh, there's a lot of water, there's a little water." It's really more about water chemistry or is as much about water chemistry as it is about how much water there is.
For the next step, getting the underground incline tunnel in, which we still have to get permitted and we've started that process with the state. That's a state permit.
You're -- when you're building a tunnel near a mine, even though if you're not processing or moving ore, you're still technically a mine and you're under MSHA, which is federal oversight.
So that's the next step. And we're highly confident there that we know we understand how much water and mainly the water quality that we have there.
So -- but that's what we're permitting. We had a good meeting with the office and management and project management for the -- from the state. That was actually a couple of weeks ago when we had the Alaska Mining Association attention.
We also -- since we're all in town, we also met with the -- it's called OPM, project management, Office of Product Management.
So -- and there, that's the group that issues the mine operating permit.
So it will take about a year, 18 months which is kind of good timing. From next year, we build the road. The following year, we get the equipment in and start building the tunnel.
So -- and it will take about a year to build the tunnel. And then plus or minus a year to do the drilling and do all the feasibility level mine planning.
That makes sense.
While we're on Johnson Tract, there were a number of questions that came in the e-mail. I know we've already kind of touched on this, but I can basically summarize all of them together as when are we going to hear more about Johnson Tract? So I'll shoot that to you now. Hopefully, that will cover most of the questions that came out on e-mail.
Yes.
So main thing is we'll have our drill results out in, I'd say, within a week or 2 here.
I think I just saw that they're starting to put the press release together. Waiting for final QA/QC on all the results. And look, I want to -- heads up here. This is all infill drilling.
So we're not trying to build resource here. We're trying to upgrade inferred resources to indicated, and the lion's share of the drilling we did was in the top 1/3 of the deposit that we can access relatively easily from the surface. The rest of -- the other 2/3 of the orebody is not conveniently located from a geometry standpoint when you've got 2 big mountains going up on either side.
So that's why we need the underground and why we have to go permit that. Because the level of drilling that you have to do for a feasibility study would just be prohibitively expensive to do it from the surface. Plus, you're going to mine the orebody underground anyway, so put the development in and get all that done.
We've done all that work at Lucky Shot.
And so we just -- again, we kind of just wash, rinse, repeat, do the same thing at Johnson Tract.
So -- and then the next thing is to the press release in the next week or 2 here on the drill results. And then we'll have a -- we're doing a PEA, preliminary economic assessment, and it's on a direct shipping ore model.
So we've got a -- in place that we're going to be sending this ore to.
Now the ore is polymetallic, so it's copper, lead, zinc, gold, silver.
And so we're going to require specific kind of processing to produce a flotation -- actually 4 flotation concentrates, a copper concentrate that will have some gold with it, a zinc concentrate that usually just has zinc if you're doing a good job of just floating the zinc and the lead concentrate that will have most of the silver since we know that most of the silver occurs with the lead and then a gold concentrate.
So now the working assumption here is there's -- we're sending this place to a place that has an existing mill and a tailings facility, but it's not going to have a specialized flotation equipment.
So that capital will be included in this assessment. And of course, the transportation plan to get it to that location. Since we're very close to the water, the working assumption here is we're transporting the ore down to a barge access point and then barging the ore to the existing mill.
So we'll see that PEA come out, I'm hoping before the end of the year. But as a lot of these things go, if you don't get it done by mid-December, it's probably not getting done until mid-January.
So I won't say we'll absolutely get it done this year, but that's certainly the objective, is to get that out. And it's a little different than under Canadian rule 43-101. In Canada, you can put your results out and then file your report 60 days later. Under S-K 1300, that's one of the big differences in U.S. reporting, under S-K 1300, you can't do it.
You have to put the report out the same day.
So no flashy press releases and then the formal report 60 days later. It's got to be filed at the same time.
So we want to do a good job, so we're crossing all the Ts and dotting the Is.
No, great.
The other question that came in on e-mail was almost all of them were about Johnson Tract. There's one that came in, somebody said that you had a long time ago mentioned the possibility of thinking in the future about running a dividend for Contango.
Just curious as to your current thinking on that?
I'll let Mike weigh in on this, too. But again, philosophically, pay the debt off and obviously advance our projects.
So I think it's going to be a few years before we're in a place to think about that. But I would actually say that that is, selfishly speaking as a shareholder, I'd love to see us either pay a dividend or look at a share buyback. A lot of people have commented to me that what they don't like about dividends is that they have to pay taxes on them. I get the impression that a lot of people just don't like paying taxes.
So -- but it is -- either way, it's obviously a benefit to shareholders, and that's certainly the way we're thinking. That's why we like the tight share structure that we have. I know some people will say, "Oh, you should roll your stock forward 100 to 1 or something like that." And I'm like, well, I don't want to be like everybody else. And if we're in a position where we're making $5 of free cash flow or something like that and we've got 12 million shares, a $1 dividend goes a long way.
So that's certainly philosophically, that's where our head is at. But it's definitely going to be a couple of years before we're seriously thinking about that.
So just to put it in perspective. Mike, just...
Yes, not sure what I could add to that.
I think if we're producing for more than one asset, I think that also kind of will help to be in a more steady position.
And so -- and once you kind of start doing the dividends, we want to continue.
So yes, I would think best-case scenario would be kind of 2 or 3 years out and with the debt behind us.
Great. Jumping into questions from the audience now. There's one from Tate who asks why production drops in Q4 from Q3 based on 2014 production guidance and the Q3 production level?
I'll start, Mike, and then maybe you can fill in from a different perspective.
So I mean, normally, in a half year, so we started production in July, so normally we would have 2 campaigns. Because this was a startup year, we're -- we basically get an extra campaign of campaign 3. But it is going to be lower grade because basically, it's taking a lot of the lower grade material that's been built up over the course of mining for a whole year. And keep in mind, we started mining in November of '23 and building the stockpiles. We were -- we only started transporting them -- sorry, we started mining in July, and we started transporting in November.
So those stockpiles got built up. And obviously, you always want to transport your better grade material first. And you can do -- that's how you run any sort of mine. But you also have a footprint constraint.
You only have stockpiles that you can get so big.
So basically, campaign 3 is trying to get rid of a bunch of that lower grade stockpile and blending it with sort of regular grade material and making room in the stockpile area at Manh Choh just so you can keep a steady operation.
So that's kind of the nature of the third campaign. It's a bit of, I'll call it, almost a cleanup campaign.
So it's smaller and it's lower grade.
So that's -- that's the main drivers.
Yes, I don't think there's anything I can add to that, Rick.
You covered it all.
Great. This next one, I think, is for you, Mike.
Somebody asked the presentation shows potential 2025 free cash flow per share of $6. He wants to know if that's the checks from Kinross from Manh Choh or is it net for exploration expenses, corporate expenses and capital expenditures?
That would be on the Manh Choh production. And that slide came out of one of our banks that follow us, one of our analysts.
Great. Maxim Group, we already covered capital costs, if you have any additional questions about that, let me know on the chat. There's one question, and this is about hedges. I know they make fun of us on Twitter for talking about hedges. But we do get questions.
Somebody asked, it looks like you hedged 54% of production in Q3 '24. They want to know if the amount you hedge is going to vary quarter-to-quarter. And if so, why?
Yes, the amounts that are hedged basically follow the feasibility study.
And so they change each quarter to kind of mirror what was in the feasibility.
And so next year, we have about 60,000 ounces that are hedged, which will end up leaving just 40,000 for 2026, and it varies each period.
And so for this year, we basically just -- we basically just followed the same approach of just selling, kind of delivering 60% of each campaign into the hedges and selling the remainder at spot. Because as -- because the campaigns did not line up directly with the hedge dates.
And so you had to kind of manage the program and just make sure you didn't come up short.
Romeo, I just want to add that -- I wasn't sure the way you asked the question, almost, it seemed like the person asking the question was thinking we're sort of proactively hedging. These are all hedges that are in place and were necessary to secure the debt financing.
So just -- we're not purposely selling gold at a lower price.
And sadly, we locked those in when gold was $1,900.
$1,900, yes.
It went up $800, $700 in less than a year.
Sure. And then the same kind of area, but it's a broader macro question, so I'll throw it to both of you. But Jan van Morse asks from the chat, what's your outlook generally for the price of gold? And all this relates to what you just said, how does that affect your hedges? But I think we've already tackled that. But I'll throw to you guys for the big old question of what's the outlook for price of gold?
Do you want to go first, Mike?
Sure. Well, I don't like to guess the price of gold because I'm usually on the opposite end of that.
So I won't comment on that. But with respect to the hedges, if the gold price goes up, we continue to make more money. The hedge liability also goes up, but we are more profitable. We just have to kind of give half of it back to the hedges, but it's a good thing for us.
Yes. And just -- I wanted to just explain when Mike says hedge liabilities, those are unrealized losses.
So if we don't deliver the gold, we're in trouble. Because that's what that means.
If you -- you're unrealized because that means it didn't happen. And as long as we keep producing gold and delivering the hedges, we're fine. We're just making less money. But just -- it's a terminology that the financial community uses that I think sometimes confuses shareholders.
But on the other side, I'll answer the question about gold price.
I think we need Elon Musk to mention to President-elect Trump that he can be the gold king as well as the crypto king and the king of debt.
So -- it's been interesting, an interesting 2-week period to see crypto just go crazy. And we've had -- and gold's been -- not been the benefactor of that trade. It's buy crypto, short gold.
And so I think the fundamentals for gold are still really good.
I think -- I'm sure China and Russia and Iran and Turkey, all the central banks who loved -- or who have been buying gold are loving the $2,200 discount that they just got, the Trump discount. But I think it's -- my view is it's going to be relatively short-lived because as Trump is fond of saying, he's the king of debt. He grew his empire on debt, and he is not afraid of it.
So we have $36 trillion of debt in the United States. And in 4 years, my -- it's not my guess, other people, expert people who look at these things say our debt is going to be $50 trillion.
So at some point, that's a big number. I don't know when that becomes actually a big number and scary number, but it's a big number already.
Beyond $1 trillion.
Beyond $1 trillion, it's just crazy, right? Hard to think past that. One question that came in over e-mail during the event. It's somebody really excited about Lucky Shot specifically and wants to know what the next catalyst there is?
Drilling.
As I think we've heard our President-elect say, "Drill baby, drill." So that's what we're going to do. The mine is permitted.
So we're all set up for mining and whatever additional work we need to do underground to access the drill points, we can do. And then it really is just drilling. And again, we're underground, right in the footwall of the vein.
So they're relatively short holes. We're looking at overall, again, over a 2-year period, drilling about 15,000 meters underground and maybe 5,000 or 10,000 meters on the surface. And obviously, we won't get started until next year.
So that's -- it's the next May sort of that was what I would expect that we'd get in there, start clearing snow and getting access to the underground. And we keep the road open in that.
So just because you want to maintain things on an ongoing basis. But the activities won't get really started until next summer.
So stay tuned for that.
And obviously, we'll -- just caution, we want to -- we will be looking at the gold price. And if the short gold and go long crypto is still here with us in 6 months, so we're just going to have to be aware of what the gold price is. Because again, the first order of business is to pay back the debt.
Second order of businesses is to advance our projects.
Great.
Speaking of advancing projects, somebody in the chats notes that the Q3 '24 exploration expenses were about $3 million. They want to know if you think quarterly exploration expenses are going to grow from there and what that's going to look like?
You want me to start with that, Rick?
Yes, go ahead, Mike.
That $3 million related to the Johnson Tract surface drill program we did this summer.
So you would expect to see very small exploration expenses for Q4, Q1. And then once we give our guidance for next year on what exploration we're going to do, you're going to -- you'll see it ramp up. But it's all kind of year-by-year and what we decide to do and put in the budget. But this year it was a $3 million budget, so we spent $3 million.
And just to cover it off in case people are wondering, we did -- the joint venture spent $4.7 million of exploration on the Tetlin lands. But that's captured inside the joint venture.
And so we don't -- it doesn't reflect on our books.
Right. One more question about hedges with apologies to Twitter. Seb asks, how far forward in years are you hedged?
Yes, we're hedged -- we have about 110,000 ounces remaining, and those -- we deliver into those next year and then 2026.
And so there's 40,000 of those ounces are in 2026, with the rest going next year.
I appreciate it.
So Vitaly from the chat.
I think I covered half of your question already. I'm just curious if there is an expected revision or additional guidance on ASIC estimates?
I'll just say we'll have, I think, year-end financials, which will be what, in February, Mike?
Early March.
Early March. Yes, we'll have -- not a full year, but a full half year production from 2023.
And so I think that will be -- we'll have all the numbers, and that will be more reflective of a true ASIC.
Yes. And I think as we -- as also as we look to give kind of our guidance for 2025, we'll -- whatever information we get from Kinross, we'll look to incorporate that. And if the numbers change, we'll update the market as soon as we know.
And I know we're bouncing around, but from the chat, Ecki Vas asks, is there any exploration currently at Manh Choh? And are there any discoveries! And throws an exclamation mark at the end of that.
Exploration is -- was wrapped up, let's say, almost 1.5 months ago or so. And we actually will have a joint venture meeting later. And I'm sure we'll see what the results of the exploration program were. And then we can -- obviously, if there's significant results, we'll certainly report those.
Awesome. I got one last question for both of you, unless there's additional ones from the audience when I'm asking it. I'd like to ask this at the end. I'll start with you, Rick, and then go to you, Mike. What are you most excited about in the next near future for Contango?
Just making money and producing gold. I mean it was very exciting to hold that bar of gold up and say, okay, this is from start to finish, finding a deposit, outlining a deposit, figuring out the path forward.
I think we can repeat that success with the cash flow for Manh Choh with advancing Lucky Shot and Johnson Tract in much the same way. I'm excited about our model.
I think it is a little different. And it -- but it does require us to focus on high-quality, high-grade deposits that are close to infrastructure, so we don't have to permit a bunch of that stuff. And relatively simple high-quality ore bodies. I mean both Lucky Shot is high-quality because it's really good grade, and it's a simple, simple ore body, simple metallurgy. In Johnson Tract, again, high quality. Not too many underground ore bodies average 40 meters wide. That's a bit of a beast of an underground. It's not really technically a vein, but it's a vein breccias zone.
So it's just a nice ore body to mine.
So -- and I think there are other opportunities like that for us out there, and we'll take our time. And I think we're just in a really good position.
I think we just have to be patient.
We have to be also be -- look at where the gold price is and what our margins are and just not to get too far ahead of ourselves too quickly either. We don't want to -- the worst thing you can do is for a junior company is run out of money.
Mike, I'll throw you the same question.
Yes. No and I'll echo Rick, I'm looking forward to seeing profitable financial statements and earnings per share, which -- it's tough to do as a junior mining company. And getting out from under having this debt and moving Lucky Shot forward and Johnson Tract, I think that's going to be exciting to put those both in production and have streams of cash coming from 3 different projects and growing this company into a $1 billion company. That's what excites me.
Awesome.
We're nearly a $1 billion company.
So it's a formal prediction from Mike and Rick.
Definitely a forward-looking statement.
Very forward.
I'll throw a slide up. There's one very direct question from the chat, which I think will be fun to end on. I'll throw it to you, Rick. But Mike, if you have any additional thoughts on it, please do. Seb asks, as a potential investor, why should I get in now and not wait for the debt to be repaid?
Well, in 2 weeks, we've lost about $5 of value based on the Trump trade of crypto going crazy. And maybe crypto is worth all that, I don't know. But I know based on our cash flows that that's a hell of a steal, buying the stock for $18.
So yes, your timing is really good to be getting in as an investor in Contango because we've got a good plan, and we're just going to continue to execute.
So as Mike said, we want to grow this company. We've got a strong portfolio of high-quality projects, our 3 projects, Manh Choh, Lucky Shot and Johnson Tract. And we've got a plan that just makes a lot of sense, and it's a simple plan that we can execute.
So we're not here telling you we're going to raise $1 billion to go build a big low-grade mine in the middle of nowhere. There's a lot of stories like that.
So we're not that. We're focused and we're focused on high-quality projects that we can process at existing facilities elsewhere with -- and they can afford the transportation, right? So whether it's by truck or rail or barge or all of the above, that's the plan we're executing on.
Awesome. Mike, I'll throw it to you if you got any additional thoughts on that?
Yes. I guess I think if we can continue to demonstrate profitable operations, quarter over quarter, I think there is potential for a rerate on the stock based on cash flows and then how much money we're making when you compare us to our peer group.
In addition to that, I don't think our stock gets a lot of value for Lucky Shot or Manh Choh -- or sorry, Johnson Tract.
So I think as we kind of advance those projects here in the near term, we may get additional value there because right now, I think we're just valued based on Manh Choh and potential cash flows there.
Certainly, the analysts would agree because their valuations are all significantly higher. And we can't flash those up, but you can go online. And if you go to our corporate presentation, our analysts that cover us are listed there. And from what I understand the -- if people e-mail them, they're happy to share their work because obviously, that's why they cover the company.
So Rick, Mike, thank you so much for going through all the questions today. Everybody who joined us, thanks so much.
If you do think of the perfect question to ask right after the event ends, as I often do, please still send it in. I'll make sure the Contango team gets it and gets back to you as soon as possible. But otherwise, Rick, Mike, thanks so much.
Romeo, thanks. And again, thanks to the 6ix for the platform here, it was great.
Thanks so much. Have a great afternoon, guys. Talk soon.