Contango ORE, Inc. (NYSE American: CTGO) and Dolly Varden Silver Corporation (TSXV: DV) announced a merger‑of‑equals that will create a new public company, Contango Silver & Gold Inc. The transaction is structured under a statutory plan of arrangement in British Columbia and will be governed by a merger agreement that treats the two parties as equals.
The combined entity will be led by Rick Van Nieuwenhuyse as chief executive officer, Shawn Khunkhun as president, and Mike Clark as executive vice president and chief financial officer. Shareholders of both companies will own roughly 50 % each of the new company on a fully diluted basis, and the deal is expected to close in late February or early March 2026, pending regulatory and shareholder approvals.
Contango’s cash‑flowing Manh Choh gold mine in Alaska will provide immediate production, with 52,020 gold ounces attributable to Contango in the first nine months of 2025 and an average of 60,000 ounces per year projected over the mine’s five‑year life. Dolly Varden’s Kitsault Valley project in British Columbia contains 3.4 million indicated tonnes at 299.8 g/t silver (32.9 million ounces) and 1.2 million inferred tonnes at 277 g/t silver (11.4 million ounces). The combined company will hold approximately $100 million in cash, $15 million in debt, and an implied equity value of $812 million. A reciprocal termination fee of $15 million is included, and the exchange ratio is 0.1652 Contango shares for each Dolly Varden share.
The merger is designed to combine Contango’s proven, cash‑generating gold production with Dolly Varden’s high‑grade silver and gold development assets, creating a diversified producer that can fund further exploration and development through a direct‑ship‑ore (DSO) model. The partnership leverages the high‑grade resources of Kitsault Valley and Johnson Tract, which are geographically close and share similar metallurgy, to accelerate production timelines and reduce capital intensity.
Rick Van Nieuwenhuyse said the deal “creates a well‑funded platform that can accelerate development of high‑grade projects while maintaining strong cash flow from Manh Choh.” Shawn Khunkhun added that the merger “represents a step‑change for Dolly Varden, adding production and combining an exceptional portfolio of projects with the potential for high‑grade precious‑metal development.”
Investors have taken a cautious stance on the announcement, reflecting uncertainty about valuation and integration timing. The market reaction has been muted, with analysts awaiting further details on the combined company’s financial outlook and the execution of the DSO strategy.
The transaction has received fairness opinions from Canaccord Genuity Group Inc. for Contango and from Haywood Securities Inc. and Raymond James & Associates, Inc. for Dolly Varden. Voting support agreements have been signed by directors, officers, and significant shareholders representing about 22 % of each company’s shares, and the merger requires approval from two‑thirds of Dolly Varden shareholders and a majority of Contango shareholders at special meetings scheduled for February 2026.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.