Dolly Varden Silver (TSXV: DV) evidently had one more major transaction up it’s sleeve for 2025. The company this morning announced that it has entered into an arrangement agreement to merge with Contango ORE (NYSE: CTGO) in what is being called a merger of equals.
The transaction is set to bring together Dolly Varden’s flagship Kitsault Valley project with that of Contango’s Lucky Shot and Johnson Tract projects in Alaska, along with Contango’s operating interest in the Manh Choh gold mine in Alaska, to create a what is defined as a North-American focused multi stage silver and gold company.
The operating Manh Choh mine is currently 30% owned by Contango, with the remainder owned by Kinross Gold, who is the current operator of the project. Ore mined at the project is trucked to Kinross’ Fort Knox mine and milling complex in Fairbanks, Alaska, for processing with operations having commenced just a year ago. The operation produced 173,400 ounces of gold in the first nine months of 2025, at an AISC of US$1,505 per ounce and total cash distributions to Contango of US$87 million.
The combined entity meanwhile is expected to be well funded, with US$100 million in combined cash on hand and just US$15 million in debt. Moving forward, ‘MergeCo’, is set to have the development philosophy of pursuing low-CAPEX direct ship ore projects that can be developed using existing processing facilities.
“This merger is an exciting transaction for both Contango and Dolly Varden shareholders given the complementary and synergistic nature of our North American asset portfolios,” commented Rick Van Nieuwenhuyse, CEO of Contango.
“With the Manh Choh Gold Mine providing significant cash flows in a strong gold and silver price environment, the combined company will have a source of non-dilutive funding to advance development of its high-grade Lucky Shot and Johnson Tract projects in Alaska and Kitsault Valley project in British Columbia. Kitsault Valley and Johnson Tract are particularly synergistic as both are high grade, have similar metallurgy, are located near tidewater and fit the Direct Shipping Ore (“DSO”) model.”
Shawn Khunkhun, CEO of Dolly Varden Silver, followed that commentary up by stating, “The merger represents a step-change for the company, adding production and combining an exceptional portfolio of projects with the potential for high-grade precious-metal development. The combined company is poised to become a unique, multi-asset platform for silver and gold production, focused exclusively on the United States and Canada.”
Under the terms of the arrangement, Contango is set to acquire Dolly Varden Silver, with Dolly Varden shareholders to receive 0.1652 of a share of voting common stock of Contango for each Dolly Varden share held. Upon closing, Dolly Varden shareholders are expected to hold 50% of the resulting company.
Directors, officers, and major shareholders of Dolly representing 22% of the outstanding shares have entered into voting support agreements for the transaction, as have 22% of the shareholders of Contango.
The resulting company is expected to see Rick Van Nieuwenhuyse lead as CEO, while Shawn Khunkhun will take on the role of President, and Mike Clark as Executive Vice President and CFO. The board meanwhile is set to consist of Clynt Nauman as Chairman, and also contain Brad Juneau, Darren Devine, Mike Cannamond, Tim Clark, Rick Van Nieuwenhuyse and Shawn Khunkhun.
The arrangement remains subject to shareholder and regulatory approval, with a US$15 million break fee currently in play. The transaction is expected to close by early March 2026.
Dolly Varden Silver last traded at $6.51 on the TSX Venture.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
