Contango Silver And Gold Inc's Business Segments

The Company is a Houston-based company, whose primary business is the participation in a joint venture to explore in the State of Alaska for gold ore and associated minerals. On January 8, 2015, the Company and Royal Gold, Inc. (“Royal Gold”), through their wholly-owned subsidiaries, consummated the transactions (the “Transactions”) contemplated under the Master Agreement, dated as of September 29, 2014 (the “Master Agreement”), including the formation of a joint venture, Peak Gold, LLC (the “Joint Venture Company”), to advance exploration of the Companys Tetlin Property, which is prospective for gold and associated minerals. As of June 30, 2016, the Joint Venture Company had leased or had control over an estimated 775,000 acres for the exploration of gold ore and associated minerals.

The Company operates through two reportable segments: Peak Gold JV and Exploration. The Peak Gold JV segment comprises business activities generating operating income or loss, with the Chief Operating Decision Maker (CODM) reviewing quarterly financial information, including income from equity investment in Peak Gold JV, to assess performance and allocate resources. The Exploration segment encompasses the Company's exploration projects, with expenditures monitored quarterly by the CODM according to the regions of the Company's mineral claims. General corporate administration costs are reported under "Corporate and other reconciling items" to reconcile segment results to the consolidated financial statements. Segment information is prepared based on the CODM's management approach, financial evaluation, and decision-making processes. The CODM conducts quarterly comparisons of budget to actual and forecast to actual exploration expenditures and income from equity investment in Peak Gold JV to guide operating and capital resource allocation.