Contango Ore Merges with Dolly Varden Silver to Expand Alaskan Ventures

Contango Ore, a prominent mining company based in Alaska, has announced its merger with Canadian firm Dolly Varden Silver Corp. The deal is part of a broader trend of consolidation in the mining sector, particularly in Alaska, where several companies are actively pursuing new opportunities. This merger is expected to nearly double Contango’s operational scale and enhance its financial capacity for future projects.

The newly formed entity, to be named Contango Silver & Gold, will oversee a diverse portfolio of mining assets. Contango Ore has been instrumental in the development of Alaska’s latest major mining operations, including the operational Manh Choh mine located in the Interior region. The company is also engaged in significant exploratory initiatives at two other sites: one in the scenic Hatcher Pass area and another on Indigenous-owned land within Lake Clark National Park, which is situated southwest of Anchorage.

Rick Van Nieuwenhuyse, Chief Executive Officer of Contango Ore, emphasized the merger’s potential to transform the companies into a multibillion-dollar business. In a call with investors, he stated, “We had a good five-year plan, and now we’ve got a good 20-year business.” This expansion aims to provide the resources necessary for the exploration and potential development of new mining operations, although it may take several years before any new mines begin production.

Contango’s current projects include the Johnson Tract, a significant deposit of gold, zinc, copper, lead, and silver. Located beneath Indigenous-owned land in a remote area of Cook Inlet, this project has sparked considerable controversy. Stakeholders, including commercial fishermen, environmental groups, and tribal governments, have raised concerns regarding its potential environmental impacts, particularly due to its proximity to a national park and habitats for endangered species such as the beluga whale.

The merger also involves the Lucky Shot project, which aims to revitalize a historic underground gold mine in Hatcher Pass. Although Contango has established itself as a key player in Alaska’s mining landscape, Dolly Varden’s focus has been on its Kitsault Valley silver project in British Columbia, near the border with Southeast Alaska. Despite not currently operating in Alaska, Dolly Varden benefits from significant backing, including support from Hecla Mining Company, which manages the large Greens Creek silver mine in Juneau.

Industry observers note that such mergers are common among smaller mining firms, often referred to as juniors. Bob Loeffler, an industry consultant and research professor at the University of Alaska Anchorage’s Institute of Social and Economic Research, remarked that these transactions can be difficult for outsiders to interpret. He characterized the dynamics of junior mining companies as “part of the mysterious, impenetrable workings of the churnings” within the industry.

The recent merger announcement follows a trend of significant deals in the mining sector, including an agreement involving Teck Resources, which operates the massive Red Dog mine in Northwest Alaska. The move indicates a strategic shift for Contango towards focusing on what some critics call “vanity metals” like gold and silver, rather than “critical minerals.”

Cooper Freeman, Alaska director at the Center for Biological Diversity, expressed his concerns, stating, “Gold and silver do nothing for humanity but plunder spectacular places like Lake Clark National Park and Tuxedni Bay for corporate profit.” Despite the backlash, Van Nieuwenhuyse and Shawn Khunkhun, CEO of Dolly Varden, affirmed their commitment to advancing both the Johnson Tract and Lucky Shot projects.

As the merger moves forward, Contango will retain its base in Fairbanks, ensuring continuity in its operations. The combined expertise and resources are expected to position the new entity favorably in the competitive mining sector, even as it navigates the complexities of environmental and community relations surrounding its projects.