$812m Contango, Dolly Varden deal creates new North American miner
Gold miner Contango ORE and explorer Dolly Varden Silver on Monday announced an all-stock merger to create a new North American mid-tier precious-metals producer with operating cash flow, development assets and exploration upside across Alaska and British Columbia.
The combined entity, to be renamed Contango Silver and Gold, would have a pro-forma market value of about $812-million, or C$1.1-billion, with shareholders of each company holding about 50% of the new group, the companies said in an announcement.
The transaction brings together Contango’s producing Manh Choh gold mine in Alaska and Dolly Varden’s high-grade Kitsault Valley assets in British Columbia's Golden Triangle under one banner, while pooling cash of more than $100-million and minimal debt.
“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,” Contango CEO Rick Van Nieuwenhuyse said in a statement.
“With the Manh Choh Gold mine providing significant cash flows... the combined company will have a source of nondilutive funding to advance development of its high-grade Lucky Shot and Johnson Tract projects in Alaska and Kitsault Valley project in British Columbia.”
Dolly Varden CEO Shawn Khunkhun said the deal represented a "step-change for the company, adding production and combining an exceptional portfolio of projects with the potential for high-grade precious-metal development".
Van Nieuwenhuyse will become CEO of the merged company, with Khunkhun serving as president and Mike Clark as CFO. The board will be chaired by Clynt Nauman and include executives from both sides. Headquarters will be in Fairbanks, Alaska, with a secondary office in Vancouver.
Under the terms, Dolly Varden shareholders would receive 0.1652 Contango shares for each Dolly Varden share. Both boards approved the deal unanimously and have locked in voting support from about 22% of each company’s shareholders.
The merger requires shareholder approval from both companies, as well as the British Columbia Supreme Court and relevant exchanges. Closing is expected in late February or early March 2026.
PORTFOLIO
Manh Choh, operated by Kinross Gold, began operations in 2024 and produced 173 400 oz of gold in the first nine months of 2025. Contango, which owns 30%, received $87-million in distributions over the period. The mine’s high grade – about 8 g/t – allows the asset to deliver free cash flow that the companies say will underpin development of the Lucky Shot, Johnson Tract and Kitsault Valley projects.
Kitsault Valley, part of Dolly Varden’s cornerstone Golden Triangle land package, recently returned drill results including 1 422 g/t silver over 21.7 m at the Wolf Vein and high-grade gold intercepts at Homestake Silver.
Johnson Tract, considered a critical-metals asset, was accepted this month to the US federal FAST-41 dashboard, providing streamlined permitting oversight. A May 2025 assessment put its after-tax net present value, using a 5% discount, at $615-million and the internal rate of return at 53%.
The combined company plans to maintain its NYSE American listing and seek graduation to the TSX. Management said the larger market cap and asset base could improve liquidity, research coverage and institutional ownership.
