Blakes advising Contango; Stikeman Elliott representing Dolly Varden
Contango Ore, Inc. and Dolly Varden Silver Corporation have signed an arrangement agreement to merge on a merger-of-equals basis, creating a North American-focused silver and gold company with an estimated market capitalization of about $1.1 billion (US$812 million). The deal would combine an operating cash-flow asset in Alaska with an exploration and development pipeline concentrated in Alaska and British Columbia, positioning the combined company for a multi-asset strategy in established mining jurisdictions.
The new entity, currently referred to as “MergeCo,” will seek to balance near-term cash generation with growth projects. Central to the transaction is the cash flowing, high-grade Manh Choh gold mine in Alaska. Alongside Manh Choh, the portfolio includes several high-grade silver and gold projects, notably Kitsault Valley in British Columbia and Johnson Tract in Alaska. The companies frame the combination as an opportunity to consolidate operational and technical expertise across these assets while maintaining a focus on the United States and Canada.
On closing, existing Contango and Dolly Varden shareholders are expected to own approximately 50 percent each of MergeCo on a fully diluted in-the-money basis. The company is expected to be renamed Contango Silver & Gold Inc. Executive leadership will include Rick Van Nieuwenhuyse as CEO, Shawn Khunkhun as President and Mike Clark as Executive Vice President and CFO. The board will comprise Clynt Nauman as Chairman, along with Brad Juneau, Darren Devine, Mike Cinnamond, Tim Clark, Rick Van Nieuwenhuyse and Shawn Khunkhun.
The corporate footprint will span Alaska and British Columbia. MergeCo’s corporate office will be based in Fairbanks, Alaska, with a secondary office in Vancouver, British Columbia, anchoring the organization near its key assets and within two mature mining ecosystems.
Management describes the strategy as leveraging Manh Choh’s cash flows to fund development. “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,” Contango president, CEO, and director Rick Van Nieuwenhuyse said in a press release. “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. In addition, both have tremendous exploration upside. 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.”
Dolly Varden’s leadership emphasizes scale and a U.S.-Canada production focus. “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,” said Dolly Varden president, CEO, and director Shawn Khunkhun. “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. Our respective boards are fully aligned on how to best realize this vision, sharing a commitment to aggressively expand our resource base, accelerate mine exploration and subsequent development across the portfolio and pursue growth-oriented acquisitions."
Blake, Cassels & Graydon LLP and Holland & Knight LLP are serving as Canadian and US legal counsel, respectively, to Contango, while Canaccord Genuity Corp. is acting as financial advisor.
Stikeman Elliott LLP and Dorsey & Whitney LLP are serving as Canadian and US legal counsel, respectively, to Dolly Varden, while Haywood Securities Inc. is acting as financial advisor. Raymond James Ltd. is acting as financial advisor to the DV Special Committee.
The deal is expected to close in late February or early March 2026, subject to customary closing conditions.
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