'This is a Game-Changer' For Gold & Silver - 'High Prices are Here to Stay'

Commodity Culture: Dolly Varden Silver & Contango Ore Merger - December 15, 2025

Key Concepts:

• Silver Industrial Demand: Increasing demand, particularly from the solar photovoltaic and EV (electric vehicle) sectors, driving silver prices.
• Silver-Gold Ratio: Currently at 65:1, indicating potential for silver to outperform gold.
• Critical Mineral Designation: Silver’s recent designation as a critical mineral by the US and potential export controls by China.
• Direct Shipping Ore (DSO) Model: A mining strategy focused on extracting and processing high-grade ore quickly with minimal capital expenditure.
• Quantitative Easing (QE): Government monetary policy involving injecting liquidity into the economy, often leading to inflation.
• 43-101 Report: A standardized report outlining mineral resource estimates, following guidelines set by Canadian regulatory bodies.
• Hub and Spoke Model: A mining strategy involving a central processing facility (hub) serving multiple smaller mining operations (spokes).

I. Silver Market Overview & Trajectory

The silver market experienced a significant surge in 2025, reaching over $63 per ounce, up from approximately $30 at the start of the year. Discussion centered on the potential for silver to reach triple-digit prices in 2026. Sean Kungkun (CEO, Dolly Varden Silver) attributes this growth primarily to increasing industrial demand, specifically highlighting the role of silver in solar photovoltaics, which now accounts for 55% of total industrial demand (compared to 10% historically).

A key driver is the development of silver batteries by Samsung, enabling EVs to charge in 9 minutes and achieve a 900km range – a significant improvement over traditional lithium-ion batteries (45-minute charge). These silver batteries also offer enhanced safety, mitigating the risk of battery fires associated with rapid charging of lithium-ion technology. Projections estimate EV demand for silver could reach 300 million ounces by 2028-2029, within an 800 million ounce mining supply market.

The US government’s recent declaration of silver as a critical mineral, coupled with China’s impending soft export controls (effective January 1, 2026), underscores the metal’s strategic importance. This is expected to impact both supply and demand dynamics, potentially leading to sustained higher prices. Sean Kungkun drew a parallel to the zinc market’s deficit and subsequent price increase, and the palladium/platinum switch in the early 2000s, suggesting silver could see a similar price surge if demand continues to rise.

II. Gold Market Dynamics & Investment Shift

Gold also achieved all-time highs in 2025, fueled by macroeconomic factors. Rick Van Newanisa (CEO, Contango Ore) noted a significant shift in investment recommendations, citing Morgan Stanley’s suggestion of a 20% allocation to gold (20% gold, 60% stocks, 20% bonds) – a departure from the traditional 60/40 portfolio. This indicates a growing acceptance of gold as a safe haven asset and a hedge against inflation.

The primary driver for gold’s performance is attributed to global monetary policies, specifically quantitative easing (QE) – described as “printing money” despite being labeled differently by the Federal Reserve. Rick Van Newanisa emphasized that governments worldwide are responding to economic imbalances by increasing the money supply, leading to inflation and bolstering gold’s value. He highlighted the enduring principle that gold prices anticipate inflation.

The increasing use of gold in advanced technologies, such as AI, robotics, and electric vehicles (specifically in connections requiring absolute reliability, like airbag deployment switches), is also contributing to demand.

III. Dolly Varden Silver & Contango Ore Merger – Rationale & Benefits

Dolly Varden Silver and Contango Ore announced plans to merge, creating a North American-focused, multi-stage silver and gold company. The rationale behind the merger, as outlined by both CEOs, is to create a more robust and attractive investment vehicle.

• Synergies & Expanded Portfolio: Contango brings a solid 5-year plan with existing production from the Mano mine and development projects like Lucky Shot and Johnson Track. Dolly Varden adds a high-grade silver and gold project in the Kitsalt Valley (Golden Triangle), extending the combined company’s growth potential to 20 years.
• Geographical Consistency: Both companies focus on high-grade deposits in North America, specifically Alaska and British Columbia.
• Increased Liquidity & Market Visibility: The merged entity, to be named Contango Silver and Gold, will have an estimated $800 million market capitalization and is expected to attract approximately $50 million in investment from ETFs and indices. It will maintain listings on the NYSE American and the TSX Venture Exchange, with plans to upgrade to the main TSX board.
• Financial Strength: The combined company will have approximately $100 million in cash on hand, supplemented by ongoing cash flow from the Mano mine (projected $100 million in 2025).
• Operational Efficiency: Contango’s DSO model, utilizing existing infrastructure (like Fort Knox mill) to minimize capital expenditure and permitting timelines, will be leveraged across the combined portfolio.

IV. Post-Merger Catalysts & Future Plans

Shareholders can anticipate several catalysts following the merger’s completion (expected in March 2026):

• Drill Results: Continued release of drill results from the 56,000-meter program at Kitsalt Valley and an 18,000-meter program at Lucky Shot.
• Updated 43-101 Report: A new resource estimate for the Kitsalt Valley, projecting a 50% increase in silver ounces.
• Exploration Programs: A 50,000-meter drill program at Kitsalt Valley.
• Infrastructure Development: Focus on upgrading road access to the Torit mine in the Kitsalt Valley.
• Potential Mill Acquisition: Contango is exploring options to acquire or secure tolling arrangements for a mill to support a “hub and spoke” mining model.
• Continued Production: Ongoing production from the Mano mine.

V. Contango’s Operational Strategy & Challenges

Rick Van Newanisa emphasized Contango’s focus on the DSO model, prioritizing high-grade deposits near existing infrastructure to minimize capital expenditure and permitting challenges. He highlighted the importance of a skilled team and strategic use of contractors to manage operations efficiently. A key challenge in the mining sector is securing and retaining qualified personnel. He also noted the lengthy permitting processes for new mines, citing the Donlin Gold project as an example of a project with significant resources that has been stalled in permitting for 20 years despite a quadrupling of the gold price.

Notable Quotes:

• Rick Van Newanisa: “Gold is money.”
• Sean Kungkun: “Something like the zinc market which was in deficit for 2 years before the price moved… what that would imply for silver is a $20 price having the potential to go as high as $3 if we saw that same type of demand come in.”
• Rick Van Newanisa: “Politicians don’t get reelected by reducing somebody’s access to whatever it is we promised them.”

Conclusion:

The merger of Dolly Varden Silver and Contango Ore represents a strategic move to create a well-capitalized, diversified, and growth-oriented precious metals company. Driven by increasing industrial demand for silver, a shifting investment landscape favoring gold, and a focus on operational efficiency, the combined entity is poised to capitalize on the favorable macroeconomic environment and deliver value to shareholders. The emphasis on high-grade deposits, strategic infrastructure utilization, and a robust exploration pipeline positions Contango Silver and Gold as a compelling investment opportunity in the North American precious metals sector.