company ramping up its gold activity in Alaska is merging with another precious metal producer to broaden its asset base. Contango ORE, headquartered in Fairbanks, and Dolly Varden Silver Corporation, based in British Columbia, recently announced their intent to merge, pursuant to a statutory plan of arrangement under the Business Corporations Act of British Columbia.
Structured as a merger of equals, the companies say combining would provide investors with exposure to a diversified portfolio of well-capitalized North American assets. These holdings include the cash-generating, high-grade Manh Choh gold mine near Tok and the Johnson Tract and Lucky Shot projects in Alaska, and, post-merger, several high-grade silver and gold projects in British Columbia, collectively called the Kitsault projects. The merger also plugs Dolly Varden Silver into the direct shipping ore (DSO) business model that Contango uses, which seeks high-grade ore that can be sent to mills without expensive concentration processes.
Upon completion of the merger, scheduled this spring, existing Contango and Dolly Varden shareholders will each own approximately 50 percent of the outstanding shares of the new company on a fully diluted, in-the-money basis. The company is expected to be renamed Contango Silver & Gold Inc. and will be led by Contango’s Rick Van Nieuwenhuyse as CEO and Dolly Varden’s Shawn Khunkhun as president. Among the board of directors is Contango co-founder Brad Juneau, whose Juneau Oil & Gas has interests in Arctic offshore exploration.
“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,” says Van Nieuwenhuyse. “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 the Kitsault Valley project in British Columbia.”
Khunkhun adds, “We are very pleased to present this transaction to the shareholders of Dolly Varden. 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.”
“Unlike gold, silver is primarily produced as a byproduct of zinc and lead mining, making its supply dynamics closely linked to base metal production rather than standalone silver output,” explains Van Nieuwenhuyse. “The supply of silver is fixed, so when new applications—such as solid-state batteries—are developed, they increase demand on a system that cannot easily boost production, and prices go up.”
Since silver is often a byproduct, meeting this extra demand is challenging. “Roughly a billion ounces of silver are used each year, but there are only about 800 million ounces of silver produced a year. So you have to convince people who own bars of silver to sell to you,” says Van Nieuwenhuyse. “Looking at the big picture, we like silver, we still like gold, and we love the exposure and timing.”
The merger of Contango and Dolly Varden was driven by the goal to create a premier North American high-grade silver-gold producer. Van Nieuwenhuyse says, “We like gold, but we also like silver, and we don’t have a lot of it in our portfolio. The merger with Dolly Varden adds significant gold and silver resources to Contango. We’ve been very timely in acquiring Dolly Varden as the silver price has doubled.”
The companies anticipate several other benefits from merging. In addition to an asset portfolio ranging from advanced-stage exploration to current production, the merger brings additional exploration potential based on a track record of high-grade exploration success across the portfolio. The projects in development are strategically located near existing infrastructure supporting a DSO approach. Furthermore, the companies share a common development philosophy to pursue DSO projects with low capital expenditures that can be developed using existing processing facilities.
Shareholders would benefit from greater “critical mass” with a combined market capitalization of approximately $1 billion (C$1.5 billion), as well as increased trading liquidity, index inclusion, research coverage, and institutional ownership. And finally, the merger would enable both companies to trade on the New York Stock Exchange, with the intention to apply to list on the Toronto Stock Exchange as well.
The merger has received insider and institutional support, with all directors and officers of Contango and Dolly Varden, as well as significant shareholders of both companies, having signed voting support agreements in favor of the transaction, representing approximately 22 percent of the outstanding Contango shares and approximately 22 percent of the outstanding Dolly Varden shares.
“Things are steady, operations have been running for a year and a half now, and things are operating smoothly,” says Van Nieuwenhuyse. Manh Choh has operated as one of the highest-grade open pit mines in the world, with gold reserves estimated at approximately 8 grams per tonne. The Peak Gold JV represents the joint venture between Kinross (70 percent) and Contango (30 percent), and with Kinross as the operator, the outlook for 2026 remains positive.
Ore mined at Manh Choh is trucked to the Fort Knox mill north of Fairbanks. The 2026 production campaign began in February 5. “It has been a cold winter in Alaska, but ore has continued to be delivered to the Manh Choh stockpile at Fort Knox,” says Van Nieuwenhuyse. “Despite a conveyor belt fire reported at Fort Knox in late January, there has been no interruption to processing Manh Choh Ore.”
Income from Manh Choh has sustained Contango’s exploration of other prospects in Southcentral. “Lucky Shot and Johnson Tract are gold-rich projects, and the development plan is focused on bringing them into production as gold-dominant operations, targeting approximately 200,000 ounces of gold in annual production,” he says.
Lucky Shot is in the headwaters of Craigie Creek, a few miles west of where century-old mineshafts pierce the hillsides of Hatcher Pass, remnants of the historic Independence Mine. In November 2025, Contango announced the start of the Lucky Shot drill program to support completion of a feasibility study. The drill program will be conducted in four phases, focusing on a combination of underground drilling from drifts and surface exploration, through 2026.
Contango exploration manager David Larimer says, “It’s exciting to get back underground at the Lucky Shot mine. The initial phase of drilling is a decisive resource ‘in-fill’ program on the Lucky Shot Vein. In addition, we will be drill testing mineralized conjugate and raleigh structures off the Lucky Shot Vein system that have recently been mapped underground in the West Drift.” The feasibility study is expected to be completed in 2027.
Farther off the beaten path, but on a literal fast track, is the Johnson Tract. Acquired by Contango in 2024, the prospect sits on 21,000 acres owned by Cook Inlet Region Incorporated within the boundaries of Lake Clark National Park and Preserve.
Contango is advancing exploration, engineering, and environmental baseline studies for the Johnson Tract, which holds potential for copper, zinc, and lead production in addition to gold and silver. On January 30, Johnson Tract permitting was officially placed on the FAST-41 dashboard, a Congressionally established tracking tool for infrastructure projects that require federal environmental review that aims to ensure the project’s development stays on track and remains coordinated among all involved parties.
Contango is evaluating an underground exploration tunnel to improve access for completion of feasibility-level definition drilling. The company also plans to build a road to connect the campsite at Johnson Tract to the proposed portal site and to upgrade the camp.
“We are pleased that our Johnson Tract project is now up and running on the FAST 41 Dashboard and posting progress in real time with our first initial application submitted for a permit on February 2, 2026,” says Van Nieuwenhuyse.
The Kitsault Valley project encompasses two sites: the Dolly Varden and Homestake Ridge properties. Underground mines had penetrated the area historically, but Kitsault itself is now a ghost town.
Homestake Ridge is being evaluated as a prospect for both gold and silver. “The deposit remains open for expansion, and we look forward to accelerating drilling and engineering studies to advance the Homestake Main and Homestake Silver deposits during 2026,” says Khunkhun.
No decision has been made whether to mill Kitsault Valley ore on site or to truck it to nearby Golden Triangle projects, but the proximity to an inlet of the Inside Passage creates supply chain options.
“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 model,” says Van Nieuwenhuyse. “With Dolly Varden’s cornerstone land position in the Golden Triangle, one of the most exciting and prospective mining districts in the world, we see great potential to expand resources and advance Kitsault Valley to production. The combined company will be well-financed for growth that is expected to continue to deliver long-term value for its shareholders.”