Silver Ore Market Boom Fuels Contango-Dolly Varden Strategic Alliance

The precious metals sector is experiencing unprecedented momentum, with silver reaching historic record prices. This market environment has catalyzed a major consolidation in North American mining. Contango ORE and Dolly Varden Silver have completed an all-stock merger agreement, creating a mid-tier operator poised to capitalize on elevated silver and gold valuations.

Silver’s ascent tells the story. After surpassing its previous all-time high in October, the metal decisively broke through US$54 in late November, driven by shifting macroeconomic expectations and quantitative easing signals from the Federal Reserve. The rally intensified following December’s rate cut, with silver subsequently hitting US$64.31 on December 11—its highest-ever recorded level. This pricing environment has reshaped investment priorities across the precious metals industry.

The Merger Architecture and Asset Consolidation

The newly combined entity, set to be renamed Contango Silver & Gold, will operate as a balanced precious metals platform with dual listings: NYSE American and TSX. Each company’s shareholders will hold approximately 50 percent of the resulting organization. Leadership has been structured to reflect the integration: Clynt Nauman assumes board chair responsibilities, Rick Van Nieuwenhuyse becomes CEO, Shawn Khunkhun takes the president role, and Mike Clark serves as executive vice president and CFO.

The partnership’s foundation rests on two distinct geographic and asset profiles. Contango brings proven cash generation, while Dolly Varden contributes high-grade development potential, particularly in silver-rich jurisdictions.

Alaska: Established Production Meets Development Upside

Contango’s Alaskan portfolio anchors the combined company with immediate cashflow. The Manh Choh gold mine, operated under agreement with Kinross Gold, delivered 173,400 ounces of gold during the first nine months of 2025, generating US$87 million in distributions. This production base provides non-dilutive capital to fund expansion projects.

Beyond Manh Choh, Contango holds two advanced development assets. The Lucky Shot project, currently permitted and executing a comprehensive drill program, targets a multi-hundred-thousand-ounce gold resource. Johnson Tract, a gold-silver-zinc property, recently secured FAST-41 federal permitting approval and features an initial assessment projecting US$615 million in net present value at US$4,000 per ounce gold pricing.

British Columbia’s High-Grade Silver Ore Potential

Dolly Varden’s principal contribution centers on the Kitsault Valley silver ore project in British Columbia’s Golden Triangle. Recent drilling has exceeded 56,000 meters, with early-stage results demonstrating exceptional grades. The Wolf vein intercepted mineralization averaging 1,422 grams per metric ton silver across 21.7 meters, while the Homestake Silver zone returned high-grade gold intercepts. The district’s historic production exceeds 20 million ounces, providing geological precedent for substantial reserves.

The elevated silver price environment significantly enhances Kitsault Valley’s economic profile, making this silver ore asset increasingly attractive for accelerated development.

Strategic Positioning and Future Outlook

Van Nieuwenhuyse emphasized that the merger leverages complementary assets within a favorable metals market. The Manh Choh cashflow stream will finance advancement of Lucky Shot, Johnson Tract, and Kitsault Valley, reducing equity dilution while maintaining aggressive exploration pace. Khunkhun highlighted that the consolidated platform positions the company as a North American-focused operator capable of pursuing exploration intensity and acquisition opportunities at scale.

The combination reflects calculated timing: strong precious metals valuations, particularly silver’s record highs, create optimal conditions for mid-tier consolidation. By uniting producing and development-stage assets across Alaska and British Columbia, the merged entity establishes a balanced portfolio designed to generate returns across the full commodity cycle.