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Contango ORE Announces Results of 2012 Exploration Program

HOUSTON--()--Contango ORE, Inc. (CTGO.PK) announced today the preliminary results on a portion of its 2012 exploration program at its approximately 726,000-acre Tetlin gold-copper project in east-central Alaska. Approximately 675,000 acres of the project are fee-simple lands leased from the Tetlin Village Council near the town of Tok, Alaska. The prospective acreage falls within two recognized mineral belts, the prolific Tintina Gold Belt which trends northwest through the northern Tetlin project and a less well defined northeast-trending copper porphyry mineral belt referred to here as the Triple Z Porphyry Copper Belt. No historic mining, or even significant exploration activities, were conducted on Tetlin lands until the Company completed its first reconnaissance exploration program in 2009. Subsequent surface sampling methods revealed several gold and gold-copper anomalies on the project, with the Chief Danny prospect constituting the most advanced of these. Several other identified anomalies have not yet been followed up on due to the Company’s focus on defining the Chief Danny and the Peak zones in the Chief Danny prospect. The Company recently renegotiated its lease terms with Tetlin to release the Company from the obligation to return half of the leased lands after the initial ten year term, allowing for the orderly exploration and follow up of these identified anomalies as well as the exploration of several untested prospects on the lease.

The approximately $6.0 million 2012 exploration program included two diamond core drilling rigs primarily focused on the Chief Danny prospect where promising drill results were generated in 2011. During 2012 the Company collected 82 surface rock samples and 1,029 top of bedrock soil auger samples at the Chief Danny, Taixtsalda and MM prospects and completed 36,004 feet of HQ-size diamond core drilling in 36 holes at the Chief Danny prospect. Geochemical results have now been received for all of the geochemical samples. Additional petrographic, geophysical reinterpretation and data analysis work is on-going and will be reported at a later date when completed.

The Chief Danny prospect is located in the Tetlin Hills approximately 10 miles southeast of Tok, Alaska, and is connected to the paved Alaska Highway via the seasonal Chief Danny and all-weather Tetlin Village roads. Drilling conducted in 2011, along with surface samples, revealed numerous northwest-trending gold and copper zones over a 9-square mile area of the Chief Danny prospect. Drilling completed in 2011 (11 holes, 8,056 feet) intersected gold, silver and copper mineralization in 5 of 11 holes drilled on eight separate geochemical and/or geophysical targets generated during previous work programs. Significant drilling results from 2011 include 12 feet grading 3.1 parts per million (ppm) gold, 300.2 ppm silver and 0.26% copper in hole Tet11-05 and 21.2 feet grading 7.4 ppm gold, 4.9 ppm silver and 0.15% copper in hole Tet11-07.

The 2012 exploration program has expanded on previously drilled areas and intercepted high grade gold and copper mineralization in the newly designated Peak Zone discovery, as shown in Table 1, with copper and silver values shown on Table 2. The results from Holes 1216-1219 contained high gold values over substantial widths, with the best section grading an average 192 feet grading 11.996 ppm gold, 9.1 ppm silver and 0.243% copper in hole 1218 including 14.5 feet grading 46.148 ppm gold, 25.9 ppm silver and 0.518% copper in hole 1218 and 120 feet grading 0.309 ppm gold, 71.6 ppm silver and 1.114% copper in hole 1238 (Table 1). In general, all of the holes intercepted a 100 to 125 foot wide zone of alteration and mineralization. The mineralization dips at a low angle to the north and trends northwest-southeast. In addition to gold, silver and copper, other anomalous metals include arsenic, bismuth, cobalt, molybdenum and tin with lesser, more sporadic anomalous lead and zinc.

Following discovery of the Peak Zone, additional drilling was completed along strike to the northwest and southeast, eventually extending gold and/or copper mineralization over approximately 1700 feet of strike (see holes 1241-1249, and 1258 through 1260, Tables 1 and 2). Gold grades in excess of 1 ppm were encountered in all of these holes. Alteration and sulfide mineralization styles were identical along the entire strike length drilled in 2012.

Mr. Brad Juneau, President of the Company, said, “The preliminary results of our 2012 exploration program at our Tetlin lease site exceeded our expectations in terms of gold and copper grade as well as thickness. While we have found outstanding rocks in terms of grade/thickness, we do not believe we have yet identified a commercial resource. Our challenge now is to determine the extent of the newly discovered Peak zone/Chief Danny areas, and to try to locate additional mineralized zones with similar mineralization. We are currently working on a geophysical model that ties the known drilling results to all available surface samples and geophysical data, in an effort to improve the success rate of our drilling program. Our goal is to identify sufficient mineral resources by the end of 2013 to justify initial reviews of economic and engineering parameters on the Chief Danny prospect. We want to acknowledge the high level of cooperation afforded us by the Tetlin Village Council, as well the significant contribution made by our labor force from Tetlin and Avalon Development”.

The 2012 exploratory program was designed and supervised by Curtis J. Freeman, M.Sc., PGeo, President of Avalon Development Corporation, the primary geological consultant for the project. A sample quality control/quality assurance program was implemented on all drilling and surface geochemical sampling conducted on the Tetlin project. Drill cores were cut in half using a diamond saw, with one-half placed in sealed bags for submission to the geochemical laboratory while the other half was archived for possible future use. Analytical work was contracted to Acme Labs with check assay results of selected drill intervals conducted by ALS Chemex, both of Vancouver, B.C.

Contango ORE, Inc. (CORE) is a Houston-based company that engages in the exploration in Alaska for gold and associated minerals and rare earth elements. Additional information can be found on our web page at www.contangoore.com.

This press release contains forward-looking statements regarding CORE that are intended to be covered by the safe harbor “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995, based on CORE’s current expectations and includes statements regarding future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as “expects”, “projects”, “anticipates”, “plans”, “estimates”, “potential”, “possible”, “probable”, or “intends”, or stating that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved). Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those, reflected in the statements. These risks include, but are not limited to: the risks of the exploration and the mining industry (for example, operational risks in exploring for, developing mineral reserves; risks and uncertainties involving geology; the speculative nature of the mining industry; the uncertainty of estimates and projections relating to future production, costs and expenses; the volatility of natural resources prices, including prices of gold and rare earth elements; the existence and extent of commercially exploitable minerals in properties acquired by CORE; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the interpretation of exploration results and the estimation of mineral resources; the loss of key employees or consultants; health, safety and environmental risks and risks related to weather and other natural disasters); uncertainties as to the availability and cost of financing; inability to realize expected value from acquisitions; inability of our management team to execute its plans to meet its goals; and the possibility that government policies may change or governmental approvals may be delayed or withheld, including the inability to obtain any mining permits. Additional information on these and other factors which could affect CORE’s exploration program or financial results are included in CORE’s other reports on file with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. CORE does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change.

Table 1

Significant 2012 gold drill results from the Peak discovery in the Chief Danny prospect, Tetlin project, Alaska. Sample intervals are calculated using a 0.5 ppm lower cut off for gold with no internal waste greater than 10 feet below cutoff grade. Intercepts shown are drill intercept lengths. True width of mineralization is not known.

                                                                                 

Hole #

        Zone         From_ft         To_ft         Interval_ft         Au_opt         Au_ppm         Ag_ppm         Cu_pct
TET1216         Peak         46         51         5.0         0.123         4.208         7.2         0.096
TET1216         Peak         65.5         150         84.5         0.228         7.832         23.5         0.061
including         Peak         85         95         10.0         0.634         21.750         34.8         0.086
and         Peak         140         145         5.0         1.000         34.300         50.9         0.010
TET1216         Peak         175         197         22.0         0.102         3.499         15.8         0.535
including         Peak         185         187.3         2.3         0.379         13.000         123.0         0.865
TET1216         Peak         212         257         45.0         0.081         2.766         1.4         0.053
including         Peak         230.7         231.7         1.0         0.274         9.385         4.8         0.809
and         Peak         252         257         5.0         0.252         8.632         4.2         0.117
TET1216         Peak         267         374         107.0         0.109         3.735         2.6         0.113
including         Peak         347.7         348.7         1.0         1.604         55.000         9.3         0.727
and         Peak         348.7         354         5.3         0.282         9.661         3.6         0.133
TET1217         Peak         26         187         161.0         0.327         11.218         21.6         0.085
including         Peak         26         106         80.0         0.574         19.677         16.9         0.082
including         Peak         46         61         15.0         1.255         43.033         15.5         0.142
and         Peak         76         86         10.0         0.844         28.950         19.9         0.051
and         Peak         91         106         15.0         0.726         24.900         37.6         0.054
TET1217         Peak         457.6         460.8         3.2         0.122         4.173         48.7         0.110
TET1218         Peak         280         472         192.0         0.422         14.452         9.1         0.243
including         Peak         341         350         9.0         0.945         32.393         8.9         0.324
and         Peak         351.5         366         14.5         1.459         50.007         25.9         0.518
and         Peak         446.7         467         20.3         0.941         32.249         13.2         0.347
TET1218         Peak         497         509.5         12.5         0.064         2.190         6.1         0.194
TET1219         Peak         102.5         107         4.5         0.036         1.223         20.9         0.072
TET1219         Peak         145         264         119.0         0.076         2.589         3.3         0.086
including         Peak         150         195         45.0         0.137         4.696         2.7         0.131
TET1219         Peak         295         304         9.0         0.041         1.400         13.7         0.260
including         Peak         295         296.7         1.7         0.157         5.372         29.2         0.106
TET1219         Peak         316         321         5.0         0.130         4.457         0.8         0.012
TET1219         Peak         356         401         45.0         0.053         1.821         3.2         0.218
TET1219         Peak         457         471         14.0         0.444         15.218         2.3         0.114
including         Peak         457         461         4.0         1.350         46.300         5.9         0.274
TET1235         Peak         553.2         610         56.8         0.635         21.766         7.4         0.319
including         Peak         563.2         578         14.8         1.977         67.797         10.2         0.363
including         Peak         563.2         568         4.8         2.713         93.000         14.2         0.459
and         Peak         568         573         5.0         2.287         78.400         10.9         0.392
TET1235         Peak         620         630         10.0         0.180         6.161         7.6         0.363
TET1235         Peak         650         655         5.0         0.154         5.290         55.8         2.120
TET1236         Peak         510         670         160.0         0.429         14.717         10.1         0.244
including         Peak         540         660         120.0         0.554         18.991         12.9         0.307
including         Peak         545         565         20.0         1.103         37.800         6.0         0.387
and         Peak         635         640         5.0         1.397         47.900         16.1         0.921
and         Peak         655         660         5.0         1.368         46.900         13.1         0.330
TET1238         Peak         405         420         15.0         0.019         0.636         47.1         1.158
TET1238         Peak         445         455         10.0         0.039         1.334         145.9         3.735
TET1239         Peak         389         399         10.0         0.043         1.477         13.4         0.444
TET1239         Peak         449         454         5.0         0.047         1.618         42.6         1.060
TET1241         Peak         119         130         11.0         0.094         3.213         3.4         0.088
TET1241         Peak         150         165         15.0         0.048         1.632         1.9         0.059
TET1241         Peak         198         212         14.0         0.028         0.950         2.6         0.023
TET1241         Peak         450         465         15.0         0.019         0.645         46.9         0.445
TET1242         Peak         64         94         30.0         0.047         1.611         3.7         0.105
TET1242         Peak         139         149.5         10.5         0.043         1.483         1.4         0.048
TET1242         Peak         380         388         8.0         0.026         0.900         0.3         0.011
TET1242         Peak         398         408         10.0         0.048         1.653         1.2         0.021
TET1242         Peak         469         533         64.0         0.080         2.756         2.6         0.154
including         Peak         489         498.5         9.5         0.207         7.098         2.0         0.100
and         Peak         530.3         533         2.7         0.440         15.100         11.5         0.232
TET1243         Peak         99         114         15.0         0.021         0.714         1.3         0.032
TET1243         Peak         329         334         5.0         0.103         3.534         0.8         0.018
TET1244         Peak         286         296         10.0         0.057         1.963         0.0         0.006
TET1244         Peak         316         341         25.0         0.095         3.273         0.8         0.013
TET1244         Peak         356         371         15.0         0.097         3.324         0.9         0.019
including         Peak         356         361         5.0         0.248         8.501         1.0         0.008
TET1244         Peak         517         527         10.0         0.020         0.689         0.0         0.004
TET1246         Peak         238         248         10.0         0.055         1.899         1.6         0.010
TET1246         Peak         1120         1124.3         4.3         0.114         3.919         2.6         0.299
TET1246         Peak         1429         1434.5         5.5         0.035         1.214         5.3         0.193
TET1247         Peak         58.5         67         8.5         0.046         1.561         0.3         0.015
TET1247         Peak         108         125         17.0         0.067         2.283         0.2         0.010
including         Peak         118         120         2.0         0.268         9.175         1.3         0.039
TET1247         Peak         147         148.5         1.5         0.108         3.713         0.6         0.015
TET1247         Peak         208         211         3.0         0.183         6.279         0.8         0.004
TET1247         Peak         245         255.5         10.5         0.047         1.611         0.4         0.021
TET1247         Peak         765         770         5.0         0.039         1.345         0.6         0.012
TET1248         Peak         40         93         53.0         0.030         1.030         1.2         0.012
TET1249         Peak         55         74         19.0         0.022         0.757         1.7         0.008
TET1249         Peak         150         153.5         3.5         0.105         3.602         1.2         0.007
TET1257         Peak         56         79         23.0         0.030         1.012         23.2         0.006
TET1257         Peak         496         548         52.0         0.060         2.070         16.9         0.521
including         Peak         507         513         6.0         0.188         6.447         8.4         0.205
TET1257         Peak         562.2         568.8         6.6         0.065         2.219         27.0         0.827
TET1259         Peak         488         493         5.0         0.042         1.449         18.5         0.191
TET1261         Peak         287         292         5.0         0.093         3.193         0.0         0.037
                                                                                 

Table 2

Significant 2012 copper and silver drill results from the Peak discovery in the Chief Danny prospect, Tetlin project, Alaska. Sample intervals are calculated using a 10.0 ppm lower cut off for silver or 0.10% lower cut off for copper with no internal waste greater than 10 feet below cutoff grade. Intercepts shown are drill intercept lengths. True width of mineralization is not known.

                                                                                 

Hole #

        Zone         From_ft         To_ft         Interval_ft         Au_opt         Au_ppm         Ag_ppm         Cu_pct
TET1216         Peak         65.5         145         79.5         0.240         8.239         24.7         0.062
TET1216         Peak         175         192.5         17.5         0.120         4.113         19.7         0.664
including         Peak         185         187.3         2.3         0.379         13.000         123.0         0.865
TET1216         Peak         281.4         287.2         5.8         0.147         5.032         11.8         0.356
TET1216         Peak         316.3         337         20.7         0.133         4.555         4.9         0.254
TET1216         Peak         347.7         354         6.3         0.492         16.858         4.5         0.227
including         Peak         347.7         348.7         1.0         1.604         55.000         9.3         0.727
TET1217         Peak         46         56         10.0         1.651         56.600         19.9         0.181
TET1217         Peak         71         192         121.0         0.230         7.873         26.4         0.080
including         Peak         116         123         7.0         0.120         4.124         61.9         0.053
TET1217         Peak         220         226.3         6.3         0.017         0.597         29.1         0.103
TET1217         Peak         235         250         15.0         0.001         0.048         13.6         0.074
TET1217         Peak         457.6         472.1         14.5         0.031         1.059         30.9         0.060
including         Peak         470         472.1         2.1         0.013         0.462         90.2         0.116
TET1218         Peak         297         432         135.0         0.442         15.138         10.3         0.281
including         Peak         351.5         376         24.5         1.047         35.902         30.8         0.489
TET1218         Peak         446.7         467         20.3         0.941         32.249         13.2         0.347
including         Peak         462.4         465         2.6         2.167         74.300         44.4         0.553
TET1218         Peak         497         506         9.0         0.066         2.251         7.9         0.250
TET1219         Peak         84.5         107         22.5         0.013         0.445         16.4         0.045
TET1219         Peak         178.5         203.3         24.8         0.122         4.198         3.7         0.218
including         Peak         178.5         179.8         1.3         0.122         4.168         2.4         1.150
TET1219         Peak         225.5         230         4.5         0.137         4.691         7.9         0.326
TET1219         Peak         235         240.5         5.5         0.096         3.288         19.6         0.022
TET1219         Peak         250         258.6         8.6         0.016         0.540         7.3         0.125
TET1219         Peak         269         304         35.0         0.016         0.550         10.5         0.182
TET1219         Peak         361         396         35.0         0.058         1.984         3.8         0.272
TET1219         Peak         457         461         4.0         1.350         46.300         5.9         0.274
TET1235         Peak         502         517         15.0         0.008         0.273         4.3         0.114
TET1235         Peak         553.2         630         76.8         0.495         16.959         6.9         0.305
including         Peak         563.2         573         9.8         2.495         85.551         12.5         0.425
and         Peak         600         610         10.0         0.068         2.348         13.9         0.577
TET1235         Peak         645         660         15.0         0.054         1.855         23.0         0.830
including         Peak         650         655         5.0         0.154         5.290         55.8         2.120
TET1236         Peak         160         197         37.0         0.004         0.145         32.4         0.008
TET1236         Peak         525         660         135.0         0.499         17.117         11.8         0.284
including         Peak         600         620         20.0         0.518         17.775         39.0         0.251
and         Peak         635         645         10.0         1.038         35.600         17.4         0.808
TET1237         Peak         23.5         34         10.5         0.000         0.007         10.8         0.008
TET1237         Peak         160         165         5.0         0.006         0.204         28.1         0.009
TET1238         Peak         180         325         145.0         0.000         0.006         4.4         0.178
including         Peak         305         320         15.0         0.000         0.005         16.4         0.482
TET1238         Peak         370         375         5.0         0.004         0.121         39.7         0.621
TET1238         Peak         390         510         120.0         0.009         0.309         71.6         1.114
including         Peak         440         497         57.0         0.013         0.444         105.8         1.823
including         Peak         440         460         20.0         0.024         0.835         114.2         3.020
including         Peak         445         450         5.0         0.059         2.038         165.0         4.530
and         Peak         495         497         2.0         0.040         1.384         300.0         4.630
TET1239         Peak         249         454         205.0         0.005         0.176         10.3         0.364
including         Peak         319         324         5.0         0.003         0.112         26.1         0.802
and         Peak         424         434         10.0         0.001         0.018         17.8         1.690
and         Peak         439         454         15.0         0.017         0.592         40.8         0.705
TET1239         Peak         464         484         20.0         0.000         0.004         9.9         0.302
TET1240         Peak         191         226         35.0         0.000         0.013         7.5         0.224
TET1240         Peak         352         372.8         20.8         0.001         0.041         4.5         0.120
TET1241         Peak         450         479.5         29.5         0.010         0.346         31.3         0.285
TET1241         Peak         490.5         503.5         13.0         0.003         0.092         10.2         0.121
TET1242         Peak         74         104         30.0         0.045         1.546         3.7         0.116
TET1242         Peak         494         533         40.0         0.081         2.794         3.7         0.215
TET1246         Peak         1108         1124.3         16.3         0.034         1.158         1.4         0.182
TET1246         Peak         1429         1438         9.0         0.022         0.770         6.5         0.200
TET1247         Peak         222         227         5.0         0.007         0.230         3.4         0.259
TET1257         Peak         56         102.5         46.5         0.019         0.637         40.9         0.019
including         Peak         90         96.5         6.5         0.019         0.641         109.7         0.079
TET1257         Peak         113.3         145         31.7         0.002         0.072         17.1         0.016
TET1257         Peak         294         300         6.0         0.007         0.253         18.8         0.300
TET1257         Peak         318         330         12.0         0.001         0.045         13.9         0.131
TET1257         Peak         496         568.8         72.8         0.050         1.718         16.0         0.501
including         Peak         524         536         12.0         0.061         2.092         41.8         1.401
TET1257         Peak         588         627         39.0         0.003         0.117         7.1         0.193
TET1258         Peak         394.5         434         39.5         0.003         0.114         2.5         0.111
TET1259         Peak         265         292         27.0         0.000         0.001         7.3         0.155
TET1259         Peak         354         363         9.0         0.000         0.003         0.0         0.152
TET1259         Peak         381         400         19.0         0.000         0.004         0.0         0.135
TET1259         Peak         438         493         55.0         0.004         0.148         9.1         0.199
including         Peak         438         443         5.0         0.000         0.000         0.0         0.494
and         Peak         478         483.5         5.5         0.000         0.015         24.4         0.501
TET1260         Peak         225         332         107.0         0.002         0.055         28.7         1.339
including         Peak         225         246         21.0         0.003         0.092         82.6         0.326
including         Peak         230         234         4.0         0.002         0.076         116.6         0.262
and         Peak         242         246         4.0         0.004         0.151         172.1         0.592
including         Peak         256.2         287         30.8         0.001         0.020         28.8         3.248
TET1260         Peak         382         576         194.0         0.001         0.019         8.8         0.366
including         Peak         382         387         5.0         0.001         0.041         21.3         1.730
including         Peak         553         557         4.0         0.001         0.029         72.0         0.894
including         Peak         566         576         10.0         0.000         0.012         47.4         1.270
TET1260         Peak         607.8         614         6.2         0.001         0.035         30.8         0.141
TET1261         Peak         217.5         233.5         16.0         0.001         0.036         6.7         0.351

 

 

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