##### Table of Contents

##### Index to Financial Statements





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended June 30, 2011

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
                     to

Commission file number 000-54136





CONTANGO ORE, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 27-3431051                       
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification No.)

3700 BUFFALO SPEEDWAY, SUITE 960

HOUSTON, TEXAS 77098

(Address of principal executive offices)

(713) 960-1901

(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

|                                        |  |      
|--------------------------------------- |  | -----
|Common Stock, Par Value $0.01 per share |  | OTCBB





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

At December 31, 2010, the aggregate market value of the registrants common stock held by non-affiliates (based upon the
closing sale price of shares of such common stock as reported on the OTCBB was $13,998,579. As of September 16, 2011, there were 1,566,467 shares of the registrants common stock outstanding.





Documents Incorporated by Reference

Items 10, 11, 12, 13 and 14 of Part III have been omitted from this report since registrant will file with the Securities and Exchange Commission, not later than 120 days after the close of its fiscal
year, a definitive proxy statement, pursuant to Regulation 14A. The information required by Items 10, 11, 12, 13 and 14 of this report, which will appear in the definitive proxy statement, is incorporated by reference into this Form 10-K.









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##### Index to Financial Statements

CONTANGO ORE, INC.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2011

TABLE OF
CONTENTS

Page



|         |  |                                                                                                              |  |  |    | 
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  |  | -- | 
|Item 1.  |  | BUSINESS                                                                                                     |  |  | 1  | 
|         |  |                                                                                                             
|Item 1A. |  | RISK FACTORS                                                                                                 |  |  | 12 | 
|         |  |                                                                                                             
|Item 1B. |  | UNRESOLVED STAFF COMMENTS                                                                                    |  |  | 19 | 
|         |  |                                                                                                             
|Item 2.  |  | PROPERTIES                                                                                                   |  |  | 19 | 
|         |  |                                                                                                             
|Item 3.  |  | LEGAL PROCEEDINGS                                                                                            |  |  | 22 | 
|         |  |                                                                                                             
|Item 4.  |  | RESERVED                                                                                                     |  |  | 22 | 
|         |  |                                                                                                             
|Item 5.  |  | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |  |  | 22 | 
|         |  |                                                                                                             
|Item 6.  |  | NOT REQUIRED AS A SMALLER REPORTING COMPANY                                                                  |  |  | 23 | 
|         |  |                                                                                                             
|Item 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        |  |  | 23 | 
|         |  |                                                                                                             
|Item 7A. |  | NOT REQUIRED AS A SMALLER REPORTING COMPANY                                                                  |  |  | 26 | 
|         |  |                                                                                                             
|Item 8.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  |  |  | 26 | 
|         |  |                                                                                                             
|Item 9.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         |  |  | 26 | 
|         |  |                                                                                                             
|Item 9A. |  | CONTROLS AND PROCEDURES                                                                                      |  |  | 26 | 
|         |  |                                                                                                             
|Item 10. |  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                       |  |  | 27 | 
|         |  |                                                                                                             
|Item 11. |  | EXECUTIVE COMPENSATION                                                                                       |  |  | 27 | 
|         |  |                                                                                                             
|Item 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS               |  |  | 27 | 
|         |  |                                                                                                             
|Item 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                    |  |  | 27 | 
|         |  |                                                                                                             
|Item 14. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                       |  |  | 27 | 
|         |  |                                                                                                             
|Item 15. |  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                   |  |  | 28 | 

All references to the Company, CORE, we, our and
us used in this Annual Report on Form 10-K (10-K) are to Contango ORE, Inc.

CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements made in this report may contain
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. The words and phrases should be, will be,
believe, expect, anticipate, estimate, forecast, goal and similar expressions identify forward-looking statements and express our expectations about future events. These include
such matters as:



| |  |  | Our financial position
| | - |  | ----------------------



| |  |  | Business strategy, including outsourcing
| | - |  | ----------------------------------------



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| |  |  | Meeting our forecasts and budgets
| | - |  | ---------------------------------



| |  |  | Anticipated capital expenditures
| | - |  | --------------------------------



| |  |  | Prices of gold and rare earth elements
| | - |  | --------------------------------------



| |  |  | Timing and amount of future discoveries (if any) and production of natural resources
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Operating costs and other expenses
| | - |  | ----------------------------------



| |  |  | Cash flow and anticipated liquidity
| | - |  | -----------------------------------



| |  |  | Prospect development
| | - |  | --------------------



| |  |  | New governmental laws and regulations
| | - |  | -------------------------------------

Although we believe the expectations reflected in such forward-looking statements are reasonable, such expectations may not occur. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results expressed or implied by the forward-looking statements. These factors include among others:



| |  |  | Low and/or declining prices for gold and rare earth elements
| | - |  | ------------------------------------------------------------



| |  |  | Price volatility for natural resources
| | - |  | --------------------------------------



| |  |  | Operational constraints and delays
| | - |  | ----------------------------------



| |  |  | The risks associated with exploring in the mining industry
| | - |  | ----------------------------------------------------------



| |  |  | The timing and successful discovery (if any) of natural resources
| | - |  | -----------------------------------------------------------------



| |  |  | Availability of capital and the ability to repay indebtedness when due
| | - |  | ----------------------------------------------------------------------



| |  |  | Government subsidies to our competitors
| | - |  | ---------------------------------------



| |  |  | Availability of operating equipment
| | - |  | -----------------------------------



| |  |  | Ability to raise capital to fund capital expenditures
| | - |  | -----------------------------------------------------



| |  |  | Timely and full receipt of sale proceeds from the sale of any of our mined products (if any)
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Interest rate volatility
| | - |  | ------------------------



| |  |  | Operating hazards attendant to the mining industry
| | - |  | --------------------------------------------------



| |  |  | Potential mechanical failure or under-performance of facilities and equipment
| | - |  | -----------------------------------------------------------------------------



| |  |  | Weather
| | - |  | -------



| |  |  | Availability and cost of material and equipment
| | - |  | -----------------------------------------------



| |  |  | Actions or inactions of third-parties
| | - |  | -------------------------------------



| |  |  | The ability to find and retain skilled personnel
| | - |  | ------------------------------------------------



| |  |  | Strength and financial resources of competitors
| | - |  | -----------------------------------------------



| |  |  | Federal and state regulatory developments and approvals
| | - |  | -------------------------------------------------------



| |  |  | Environmental risks
| | - |  | -------------------



| |  |  | Worldwide economic conditions
| | - |  | -----------------------------



| |  |  | Restrictions on mining activities
| | - |  | ---------------------------------



| |  |  | Expanded rigorous monitoring and testing requirements
| | - |  | -----------------------------------------------------



| |  |  | Legislation that may regulate mining activities
| | - |  | -----------------------------------------------



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| |  |  | Ability to obtain insurance coverage on commercially reasonable terms
| | - |  | ---------------------------------------------------------------------



| |  |  | Impact of new and potential legislative and regulatory changes on mining operating and safety standards
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | Uncertainties of any estimates and projections relating to any future production, costs and expenses.
| | - |  | -----------------------------------------------------------------------------------------------------

You should not unduly rely on these forward-looking statements in this report, as they speak only as of the date of this report. Except
as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this report or to reflect the occurrence of unanticipated events. See
the information under the heading Risk Factors in this Form 10-K for some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in forward-looking
statements.



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PART I



|Item 1. | BUSINESS
|------- | --------

Overview

The Company was formed on September 1, 2010 as a Delaware corporation. We are a Houston-based company, whose primary business is to
explore in the State of Alaska for (i) gold ore and associated minerals and (ii) rare earth elements. We have leased or have control over 766,280 acres of Alaskan Native, Federal and State of Alaska properties for the exploration of gold
and associated minerals and rare earth elements. It is possible that our 2011 summer field work program will not identify any commercially exploitable minerals. Should this occur, or if we determine that recovery of any minerals may not be
economically profitable, we may be required to cease operations, dissolve and wind up the business of the Company.

Background

Contango Mining Company (Contango Mining), a wholly owned subsidiary of Contango Oil & Gas Company
(Contango), was formed on October 15, 2009 as a Delaware corporation for the purpose of engaging in exploration in the State of Alaska for (i) gold ore and associated minerals and (ii) rare earth elements. Contango Mining
initially acquired a 50% interest in the Properties (defined below) from Juneau Exploration, L.P., (JEX) in exchange for $1 million and a 1% overriding royalty interest in the Properties under a Joint Exploration Agreement (the
Joint Exploration Agreement). On September 15, 2010, Contango Mining acquired the remaining 50% interest in the Properties by increasing the overriding royalty interest in the Properties granted to JEX to 3% pursuant to an Amended
and Restated Conveyance of Overriding Royalty Interest (the Amended ORRI Agreement), and JEX and Contango Mining terminated the Joint Exploration Agreement. We believe JEX expended approximately $1 million on exploratory activities and
related work on the Properties prior to selling the initial 50% interest to Contango Mining.

On November 29, 2010,
Contango Mining assigned the Properties and certain other assets and liabilities to Contango. Contango contributed the Properties and $3.5 million of cash to the Company, pursuant to the terms of a Contribution Agreement (the Contribution
Agreement), in exchange for approximately 1.6 million shares of the Companys common stock. The transactions above took place between companies under common control.

Contango distributed all of the Companys common stock to Contangos stockholders of record as of October 15, 2010,
promptly after the effective date of the Companys Registration Statement Form 10 on the basis of one share of common stock for each ten (10) shares of Contangos common stock then outstanding.

The Company had no operating history prior to the contribution of Contango Minings assets and liabilities. The financial statements
of the Company include the financial position, results of operations, and cash flows of Contango Mining since its inception on October 15, 2009 (the Inception). The equity structure was retroactively adjusted to reflect the capital
structure of the Company. References that describe the operations of the Company include the operations of Contango Mining for the periods prior to November 29, 2010.

Properties

The Company holds leasehold interests in 647,000 acres from the
Tetlin Village Council, the council formed by the governing body for the Native Village of Tetlin, an Alaska Native Tribe (Tetlin Lease) and holds 18,560 acres in unpatented mining claims from the State of Alaska for the exploration of
gold and associated minerals (together with the Tetlin Lease, the Gold Properties). The Company also holds interests in and to 3,440 acres in unpatented Federal mining claims and 97,280 acres in unpatented mining claims from the State of
Alaska for the exploration of rare earth elements (the REE Properties, and together with the Gold Properties, the Properties). If the Tetlin Lease is placed into commercial production of precious or non-precious metals, the
Company would be obligated to pay a production royalty to the Native Village of Tetlin, ranging from 2.0 % to 5.0%, depending on the type of metal produced and the year of production. In addition, if any of the Properties are placed into
commercial production, the Company would be obligated to pay a 3% production royalty on such Properties to JEX.



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The following table summarizes our property holdings as of September 16, 2011:



|                    |  |                     |  |                |     |               |     |  |         |  |         | 
|------------------- |  | ------------------- |  | -------------- | --- | ------------- | --- |  | ------- |  | ------- | 
|                    |  | Jurisdiction        |  | Project Name   |     | No. of Claims |     |  | Acreage | 
|Gold                |  |                     |  |                |     |               |     |  |         |  |         | 
|                    |  | Tetlin Indian Tribe |  | Tetlin         |     |               | n/a |  |         |  | 647,000 | 
|                    |  |                     |  |               
|                    |  | State of Alaska     |  | TOK / Tetlin   |     |               | 122 |  |         |  | 11,360  | 
|                    |  |                     |  | LAD / Triple Z |     |               | 45  |  |         |  | 7,200   | 
|                    |  |                     |  |                |     |               |     |  |         |  |         | 
|                    |  |                     |  |                |     |               | 167 |  |         |  | 665,560 | 
|Rare Earth Elements |  |                     |  |                |     |               |     |  |         | 
|                    |  | Federal             |  | Salmon Bay     |     |               | 123 |  |         |  | 2,460   | 
|                    |  |                     |  | Stone Rock     |     |               | 49  |  |         |  | 980     | 
|                    |  |                     |  |               
|                    |  | State of Alaska     |  | Alatna         |     |               | 127 |  |         |  | 20,320  | 
|                    |  |                     |  | Spooky         |     |               | 166 |  |         |  | 26,560  | 
|                    |  |                     |  | Wolf           |     |               | 202 |  |         |  | 32,320  | 
|                    |  |                     |  | Swift          |     |               | 113 |  |         |  | 18,080  | 
|                    |  |                     |  |                |     |               |     |  |         |  |         | 
|                    |  |                     |  |                |     |               | 780 |  |         |  | 100,720 | 
|                    |  |                     |  |                |     |               |     |  |         |  |         | 
|Grand Total         |  |                     |  |                | 947 |               |     |  | 766,280 | 
|                    |  |                     |  |                |     |               |     |  |         |  |         | 

Our Properties consist of mineral leases and unpatented mining claims. We believe that we hold good title
to our Properties in accordance with standards generally accepted in the minerals industry. As is customary in both the gold and rare earths industry, we conduct only a perfunctory title examination at the time we acquire a property. Before we begin
any mining activities, however, we will conduct a full title examination and perform curative work on any defects that we deem significant. Included in the table above are 41 Triple Z claims covering 6,560 acres which we staked in May 2011. We
previously only had four Triple Z claims covering 640 acres.

We are an exploration stage company, and none of the Properties
that we own or control contain any known reserves or mineralized material. The Properties are at an early stage of exploration, and even if mineral reserves are discovered, they may not be commercially viable. A significant amount of additional work
is likely required in the exploration of our Properties before a confirmation as to the economic feasibility of a mining venture could be made. On the other hand, lack of success in our 2011 exploration program could cause us to discontinue our
efforts and shut down the Company. Due to the shortened hours of daylight and the harsh climate in Alaska, our work months are restricted to May through October.

Production Royalty

If the Tetlin Lease is placed into commercial
production of precious or non-precious metals, the Company is obligated to pay a production royalty to the Native Village of Tetlin, ranging from 2.0 % to 5.0%, depending on the type of metal produced and the year of production. In June 2011,
the Company paid the Tetlin Village Council $75,000 in exchange for reducing the production royalty payable to them by 0.25%. In July 2011, the Company paid the Tetlin Village Council $150,000 in exchange for reducing the production royalty by
0.50%. These payments lower the production royalty to 1.25% to 4.25%, depending on the type of metal produced and the year of production. On or before July 15, 2020, the Tetlin Village Council has the option to increase their production royalty
by (i) 0.25% by payment to CORE of $150,000 in cash, or (ii) 0.50% by payment to CORE of $300,000 in cash, or (iii) 0.75% by payment to CORE of $450,000 in cash.

Strategy

Our exploration strategy is predicated upon two core beliefs:
(1) that the only competitive advantage in a commodity-based business is to be among the lowest cost producers and (2) that virtually all the mining industrys value creation occurs through the discovery of mineral deposits that can
be developed to the state of a



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##### Index to Financial Statements

commercially viable producing ore body. While we do not have previous experience in the gold or rare earth element industries, we plan to focus our business strategy on the following elements:

Using our limited capital availability to increase our reward/risk potential on selective prospects. We will
concentrate our risk investment capital on our prospects in Alaska. Exploration prospects are inherently risky as they require large amounts of upfront capital with the overwhelming probability of no success. Should the Properties prove to have
deposits of mineral ore, we will be required to develop mining operations or contract with third parties to mine our mineral ore. We may only become a low cost producer if the mineral ore is of sufficiently high quality and the cost of the
infrastructure to mine the mineral ore is sufficiently low relative to other producers. This is particularly true with respect to competing companies in China which have significant cost advantages over U.S. based companies.

Given the Companys limited capital, our strategic initiatives are focused on discovering mineral reserves to enhance the value of
the Company. If we are successful in our exploration activities, we may consider a joint venture or the sale of our Properties to qualified mining companies.

Maximize Value Creation per Share. We believe that the primary objective of a business is to maximize value creation per share. As a result, we intend to keep our G&A and interest costs to a
minimum.

Structuring Incentives to Drive Behavior. We believe that equity ownership aligns the interests of our
consultants, executives and directors with those of our stockholders. The Companys directors and officers do not receive cash compensation for their work for the Company. The Companys directors and executive officers beneficially own or
have voting control over approximately 16% of our common stock, which includes the beneficial ownership of 50,000 options granted in September 2011. The options will vest over two years, beginning in September 2011, the date of the grant. In
addition, the Companys directors, executive officers and our major Avalon consultant for geological and exploration activities, own an aggregate of 93,906 shares of restricted stock. The restricted stock will vest over three years, beginning
in December 2011, the one-year anniversary of the date the shares were granted. Upon full vesting of the restricted stock and options, the Companys directors and officers will own approximately 20% of the Company.

Alliance with JEX. JEX is a private company formed primarily for the purpose of assembling natural gas and oil prospects. JEX was
responsible for securing and negotiating the Tetlin Lease and assisting in obtaining the Properties and initially engaged Avalon Development Corporation, an Alaska domiciled domestic corporation (Avalon) to conduct mineral exploration
activities on the Tetlin Lease. JEX plans to continue to assist us in acquiring additional acreage in Alaska and provide other consulting services to the Company. We do not have a written agreement with JEX which contractually obligates them to
provide us with their services. We will provide JEX with a 3% overriding royalty interest on any production from our existing Properties and any future properties they help us secure.

Exploration and Mining Property

Exploration and mining rights in Alaska
may be acquired in the following manner: public lands, private fee lands, unpatented Federal or State of Alaska mining claims, patented mining claims, and tribal lands. The primary sources for acquisition of these lands are the United States
government, through the Bureau of Land Management and the United States Forest Service, the Alaskan state government, tribal governments, and individuals or entities who currently hold title to or lease government and private lands.

Tribal lands are those lands that are under control by sovereign Native American tribes or Alaska Native corporations established by the
Alaska Native Claims Settlement Act of 1971 (ANSCA). Areas that show promise for exploration and mining can be leased or joint ventured with the tribe controlling the land.

The Federal government owns public lands that are administered by the Bureau of Land Management or the United States Forest Service. Ownership of the subsurface mineral estate can be acquired by staking a
twenty



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##### Index to Financial Statements

(20) acre mining claim granted under the General Mining Law of 1872, as amended (the General Mining Law). The Federal government continues to own the surface estate even though
the subsurface can be controlled with a right to extract through claim staking. Private fee lands are lands that are controlled in fee-simple title by private individuals or corporations. These lands can be controlled for mining and exploration
activities by either leasing or purchasing the surface and subsurface rights from the private owner. Patented mining claims are claims that were staked under the General Mining Law, and through application and approval the owners were granted full
private ownership of the surface and subsurface estate by the Federal government. These lands can be acquired for exploration and mining through lease or purchase from the owners. In order to acquire a patent, an applicant must, among other things,
prove that improvements have been made on the land of not less than $500, pay a fee of five dollars ($5) per acre, and identify and describe the mineral deposit located in the land. Unpatented mining claims located on public land owned by another
entity can be controlled by leasing or purchasing the claims outright from the owners.

With respect to unpatented mining
claims, the Federal or applicable state government continues to own the fee interest in real property while allowing private parties to stake claims for exploration, development and commercial extraction of minerals with rights of ingress and egress
on the real property. Unpatented claims give the claimant the exclusive right to explore for and to develop the underlying minerals and use the surface for such purpose. However, the claimant does not own title to either the minerals or the surface,
and the claim is subject to annual assessment work requirements and the payment of annual rental fees which are established by the governing authority of the land on which the claim is located. Unpatented mining claims are generally considered to be
subject to greater title risk than other real property interests because the validity of unpatented mining claims is often uncertain, due to the complex Federal and state laws and regulations that supplement the General Mining Law. Unpatented mining
claims and related rights, including rights to use the surface, are also subject to challenges by third parties or contests by the Federal or applicable state government. In addition, there are few public records that definitively determine the
issues of validity and ownership of unpatented state mining claims. Our mining claims on land belonging to the State of Alaska have no opportunity to be patented. Rights to deposits of minerals on Alaska state land that is open to claim staking may
be acquired by discovery, location and recording as prescribed in Alaska state statutes (AS 38.05.185  38.05.280). The State of Alaska requires holders of unpatented mining claims to perform annual assessment work and pay an annual fee on the
claims in order to maintain the claimants title to the mining rights in good standing. State of Alaska unpatented mining claims are subject to a title reservation of 3% net profits royalty for all mineral production on net mining income of
$100,000 or more. Mining claims located on State of Alaska lands cannot be deeded to the claimant.

Gold Exploration

Gold is used for jewelry, coinage and bullion as well as various industrial and electronic applications. Gold can be readily sold on
numerous markets throughout the world. Benchmark prices are generally based on the average London Bullion Market Association price for a specified month near the month of shipment.

We began exploration activities on our Gold Properties in 2009. In our 2009 exploration program, we collected a total of 1,096 rock,
soil, pan concentrate and stream silt samples from our Tetlin Lease. Of this total, 348 samples showed measurable amounts of gold with 30 samples showing measured gold of 500 parts per billion (ppb) or higher. In our 2010 exploration
program, we collected a total of 1,884 rock, soil, pan concentrate and stream silt samples from our Tetlin Lease. Of this total, 910 samples showed measurable amounts of gold with 54 samples showing gold concentrations greater than 500 ppb. We also
ran ground geophysical surveys with induced polarization (IP) which measures the conductivity/resistivity of underlying sub-surface rocks, which indicates the presence of metals.

Our 2011 exploration program began in early summer by flying 3,600 line-kilometers of airborne magnetics and resistivity over our Gold
Properties at a cost of approximately $550,000. This process involves flying north-south flight lines at spacings of 100 and 200 meters to measure the magnetic and electromagnetic response of bedrock at various depths. These data provide additional
structural, lithologic and alteration information to improve drill hole targeting planned for August  October 2011.



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##### Index to Financial Statements

Based on the results of this airborne operation, we collected an additional 1,218 auger soil
samples on 100 meter centers on five prospects within the Tetlin Lease (Chief Danny, Saddle, MM, Chisana and Copper Mountain) at a cost of approximately $350,000. Of this total, 610 soil samples showed measurable amounts of gold with 2 samples
showing gold concentrations greater than 500 ppb with a high of 994 ppb. These soil samples also contained several areas with anomalous copper, arsenic, lead and other trace metals that helped clarify previously completed soil sampling.

Using the combined airborne geophysical data, ground geophysics, geologic mapping and geochemical sampling, we have drilled 3,777 feet in
five core holes at the Chief Danny prospect at a cost of approximately $275,000. These core holes were targeted as geochemical anomalies, geophysical anomalies and combined geochemic/geophysical anomalies. Four of the five core holes have been
logged, split and sent to assay. The remaining core hole is being logged and split. We currently plan to drill another four to six core holes prior to the end of October 2011. The geochemical analysis from this drilling is pending upon completion of
the program, with results expected prior to December 2011. The final results of our 2011 exploration program will form the basis for our 2012 program, if we determine additional field work is warranted and can be funded.

The following table summarizes our gold sample results on the Tetlin Lease over the past three years:



|     |  |              |       |  |                          |  |      |  
|---- |  | ------------ | ----- |  | ------------------------ |  | ---- | -
|Year |  | SamplesTaken |       |  | % of SamplesOver 500 ppb | 
|2009 |  |              | 1,096 |  |                          |  | 2.70 | %
|2010 |  |              | 1,884 |  |                          |  | 4.90 | %
|2011 |  |              | 1,218 |  |                          |  | 0.16 | %

Rare Earth Elements

The Companys interest in rare earth elements arose from our belief that the increasing demand for products using rare earth elements will continue. Based upon the preliminary surveys conducted by
the United States Geological Survey (the USGS) and subsequently reviewed and analyzed by Avalon, the Company has staked Federal and State of Alaska mining claims and has engaged Avalon to conduct preliminary exploratory activities for
rare earth elements in Alaska.

The term rare earth is actually a misnomer. Rare earth elements are not in fact
rare, as they are found in low concentrations throughout the earths crust. There are relatively few locations, however, where rare earth elements (REEs) are currently being economically mined and processed outside of China. Our
decision to explore for REEs is based on our belief that REEs will become increasingly valuable as the world moves to embrace alternative green forms of energy such as wind turbines and advanced batteries which currently require REEs for
component parts.

REEs have unique properties that have applications in several technologies, including:



| |  |  | Clean-Energy Technologies: hybrid and electric vehicles, and wind turbines
| | - |  | --------------------------------------------------------------------------



| |  |  | Defense and Homeland Security Applications: aircraft control, lasers, global positioning systems, radar, sonar, guided missiles and smart bombs
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | High-Technology Applications: microwaves, MRI testing, color televisions, motion picture studio lighting and projection
| | - |  | -----------------------------------------------------------------------------------------------------------------------

Demand for REEs is expected to increase due to increased demand for existing products that utilize rare
earth elements as well as continued development of additional technologies that require application of REEs. Currently, China accounts for over 90% of the global supply of REEs and the oxides produced from REEs, and the Chinese government has begun
to restrict exports of REEs and require that manufacturing of rare earth metals take place within China.



5



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##### Table of Contents

##### Index to Financial Statements

Our decision to focus our rare earth element exploration efforts in Alaska is based, in
part, upon several surveys performed by the USGS in the 1970s and 1980s. The two primary sources of public-sector geochemical data which we and Avalon used to identify potential mineral prospects are the Alaska Mineral Resource Appraisal Program
(AMRAP) and the National Uranium Resource Evaluation program (NURE), both of which were conducted in Alaska in the 1970s and 1980s. The AMRAP included geologic mapping, airborne geophysics and geochemical sampling. The
program did not analyze for gold during the initial study, although analyses for important gold pathfinder elements such as arsenic, bismuth and tungsten were completed. These programs were run on a quadrangle by quadrangle basis resulting in
multiple folios published by the USGS over multiple years. Geochemical data from the AMRAP and other USGS programs has been compiled in a digital database referred to as the RASS database (Rock Analysis Storage System, Open File Report 99-433),
available from the USGS at http://pubs.usgs.gov/of/1999/of99-433/. The NURE program was funded by the United States Department of Energy primarily as a geochemical study to define new uranium sources in the United States. The original NURE samples
were collected and analyzed in the 1970s but were re-analyzed in the late 1990s using more modern analytical techniques. These digital data are available in Open File Report 97-492 from the USGS at http://pubs.usgs.gov/of/1997/ofr-97-0492/. The
surveys we and Avalon examined indicated anomalous uranium samples as well as anomalous zirconium, beryllium, tantalum, and niobium, which are commonly found near deposits of rare earth elements.

We began exploratory work for rare earth elements on our Salmon Bay and Stone Rock projects in the summer of 2011. Our exploration
activities included the following at a cost of approximately $250,000: geological prospecting and geochemical sampling, in order to determine the extent and nature of rare earth element mineralization on the REE Properties. Final results are pending
on the 2011 work, however geochemical data indicates that rare earth element concentrations greater than 1,000 ppm exist on both lands. We will explore on our Alatna, Spooky, Wolf and Swift claims in 2012, subject to available funding. We believe
that there has been limited exploration targeted specifically at REEs in Alaska historically, with the exception of Bokan Mountain, located on the Prince of Wales Island in Southeast Alaska.

REEs consist of the 15 elements with atomic numbers 57 to 71 (the Lanthanide Series), plus the elements Scandium (atomic
number 21) and Yttrium (atomic number 39). REEs are separated into two categories, light rare earths (LREEs, consisting of atomic numbers 57-62), and heavy rare earths (HREEs, consisting of atomic numbers 63-71, plus Yttrium
(atomic number 39)).

The following table ranks the REEs in the order of their relative abundance in the earths crust:



|                           |  |                              |      |  |              |  |    | 
|-------------------------- |  | ---------------------------- | ---- |  | ------------ |  | -- | 
|Rare-Earth Element, Symbol |  | Abundance(parts per million) |      |  | AtomicNumber | 
|Cerium, Ce                 |  |                              | 46.0 |  |              |  | 58 | 
|Yttrium, Y                 |  |                              | 28.0 |  |              |  | 39 | 
|Neodymium, Nd              |  |                              | 24.0 |  |              |  | 60 | 
|Lanthanum, La              |  |                              | 18.0 |  |              |  | 57 | 
|Samarium, Sm               |  |                              | 6.5  |  |              |  | 62 | 
|Gadolinium, Gd             |  |                              | 6.4  |  |              |  | 64 | 
|Praseodymium, Pr           |  |                              | 5.5  |  |              |  | 59 | 
|Scandium, Sc               |  |                              | 5.0  |  |              |  | 21 | 
|Dysprosium, Dy             |  |                              | 4.5  |  |              |  | 66 | 
|Ytterbium, Yb              |  |                              | 2.7  |  |              |  | 70 | 
|Erbium, Er                 |  |                              | 2.5  |  |              |  | 68 | 
|Holmium, Ho                |  |                              | 1.2  |  |              |  | 67 | 
|Europium, Eu               |  |                              | 1.1  |  |              |  | 63 | 
|Terbium, Tb                |  |                              | 0.9  |  |              |  | 65 | 
|Lutetium, Lu               |  |                              | 0.8  |  |              |  | 71 | 
|Thulium, Tm                |  |                              | 0.2  |  |              |  | 69 | 
|Promethium, Pm             |  |                              | 0.0  |  |              |  | 61 | 



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##### Index to Financial Statements

Consulting Services provided by Avalon Development Corporation

The Company is a party to a Professional Services Agreement (PSA) with Avalon to provide certain geological consulting
services and exploration activities with respect to the Properties. The Company pays Avalon on a per diem basis and reimburses Avalon for its expenses pursuant to the PSA. As additional compensation, the owner of Avalon received 23,477 restricted
shares of common stock in December 2010 and stock options to purchase 10,000 shares of common stock of the Company in September 2011. The restricted shares vest over three years beginning in December 2011, the one-year anniversary of the date the
shares were granted and the stock options vest over two years beginning in September 2011, the date the options were granted.

Avalon is a Fairbanks, Alaska based mineral exploration consulting firm, which has conducted mineral exploration in Alaska since 1985.
Its team of engineers and geoscientists combined with its geographic information systems (GIS) database allows Avalon to synthesize existing geological, geochemical and geophysical data and identify specific target areas for ground evaluation and/or
acquisition. Avalons exploration team has identified or conducted discovery drilling on several gold deposits in Alaska and has completed digital GIS compilations of the Tintina Gold Belt, a regional-scale mineral province stretching from
southwest Alaska to the southern Yukon Territory. Avalon also has experience exploring for copper, nickel and platinum group elements (Cu-Ni-PGE) deposits and also created a comprehensive GIS compilation of PGE prospects in Alaska, an
internally-owned database that contains data on over 200 PGE occurrences in Alaska. In 2002, Avalon expanded its digital database to the identification and acquisition of rare earth element prospects in Alaska.

Avalon has assigned approximately five engineers and geologists to conduct exploration activities on the Properties. Work schedules vary
widely from a 7 day per week, 30-day minimum schedule for field related geologists and geological engineers to 40-hours per week schedules for geographic information system and management staff. Because the Company does not have experience exploring
or evaluating gold or rare earth element prospects in Alaska, we rely on Avalons experience in the State of Alaska to determine whether our exploration activities will be likely to develop commercially viable deposits. Avalons mineral
exploration services include pre-field planning, in-progress evaluation/modification and post-field critical review. Avalon will continue to work in conjunction with the Company to identify new properties and will conduct the initial exploration for
such properties. If the exploratory work on the Properties should prove successful, the Company could develop a wholly-owned mining operation entity to conduct mining operations, contract with mining companies to extract mineral ore from our
Properties or enter into a joint venture with or sale of our Properties to an established mining company.

Consulting Services provided by
Tetlin Village Council

On October 15, 2010, the Company entered into a consulting agreement (the
Consulting Agreement) with the Chief of the Tetlin Indian Tribe (the Consultant). The Consultant has special knowledge and experience with governmental affairs and tribal affairs issues and operates an independent consulting
practice. Under the terms of the Consulting Agreement, the Consultant assists the Company in negotiations with other native tribes to lease additional properties and assists the Company with State of Alaska and Federal governmental affairs issues.
The Company pays the Consultant $5,000 per month in exchange for his services, and can pay discretionary bonuses for successful negotiations.

Marketing and Pricing

Should our exploratory drilling activities prove to
be successful, the Company expects to mine ore and derive its revenue principally from the sale of gold and associated minerals or rare earth elements. We may also enter into joint ventures or sell some or all of our Properties to qualified mining
companies. We do not currently have a market for any minerals that may be derived from our Properties. As a result, the Companys revenues are expected to be determined, to a large degree, by the success of our exploration and any subsequent
mining activities and by prevailing prices for gold and rare earth elements. Market prices are dictated by supply and demand, and the Company cannot predict or control the price it will receive for gold ore and rare earth elements.



7



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##### Table of Contents

##### Index to Financial Statements

Adverse Climate Conditions

Climate conditions will affect the Companys ability to conduct exploration activities and mine any ore from its Properties in Alaska. While exploratory drilling and related activities may only be
conducted from May to October on certain of our Properties, the Company believes development work and any subsequent mining would be conducted year-round.

Competition

We currently face strong competition for the acquisition of
exploration-stage properties as well as extraction of any minerals in Alaska. Numerous larger mining companies actively seek out and bid for mining prospects as well as for the services of third party providers and supplies, such as mining equipment
and transportation equipment. Our competitors in the exploration, development, acquisition and mining business will include major integrated mining companies as well as numerous smaller mining companies, almost all of which have significantly
greater financial resources and in-house technical expertise. In addition, we will compete with others in efforts to obtain financing to explore our mineral properties.

While there are few rare earth mining companies in the United States, the global rare earth mining and processing markets are competitive. China currently accounts for over 90% of rare earth mineral
production and manufacturing, and should our rare earth mining efforts prove to be successful, we may not be able to implement the processing technologies and capabilities that our Chinese counterparts have already established. Our Chinese
competitors have greater financial resources, as well as other strategic advantages to maintain, improve and expand their mining programs. In addition, Chinese domestic economic policies may allow domestic companies to produce at relatively lower
costs.

Competitive conditions may be substantially affected by various forms of legislation and regulation considered from
time to time by the government of the United States and the State of Alaska, as well as factors that we cannot control, including international political conditions, overall levels of supply and demand for minerals, and currency fluctuations.

Government Regulation

Our mineral exploration activities are generally affected by various laws and regulations, including environmental, conservation, tax and other laws and regulations relating to the exploration of
minerals. Various Federal and Alaskan laws and regulations often require permits for exploration activities and also cover extraction of minerals. In addition, our Tetlin Lease is located on land leased from the Tetlin Village Council. Federally
recognized Native American tribes are independent governments, with sovereign powers, except as those powers may have been limited by treaty or by the United States Congress. Such tribes maintain their own governmental systems and often their own
judicial systems and have the right to tax, and to require licenses and to impose other forms of regulation and regulatory fees, on persons and businesses operating on their lands. As sovereign nations, federally recognized Native American tribes
are generally subject only to federal regulation. States do not have the authority to regulate them, unless such authority has been specifically granted by Congress, and state laws generally do not directly apply to them and to activities taking
place on their lands, unless they have a specific agreement or compact with the state or federal government allowing for the application of state law. We will continue to use our best efforts to ensure that the Company is in compliance with all
applicable laws and regulations but the denial of permits required to explore for or mine ore may prevent us from realizing revenues arising from the presence of minerals on our properties.

Environmental Regulation

Mining operations are subject to local, state and
federal regulation governing environmental quality and pollution control, including air quality standards, greenhouse gas, waste management, reclamation and restoration of properties, plant and wildlife protection, handling and disposal of
radioactive substances, and



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##### Table of Contents

##### Index to Financial Statements

employee health and safety. Extraction of mineral ore is subject to stringent environmental regulation by state and federal authorities, including the Environmental Protection Agency. Such
regulation can increase the cost of planning, designing, installing and operating mining facilities or otherwise delay, limit or prohibit planned operations.

Significant fines and penalties may be imposed for failure to comply with environmental laws. Some environmental laws provide for joint and several strict liability for remediation of releases of
hazardous substances. In addition, we may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances.

Some REE deposits contain naturally occurring radioactive substances, such as thorium and uranium. The mining of REEs that contain such radioactive substances involves the handling and disposal of such
substances, and accordingly we may be subject to extensive safety, health and environmental laws, regulations and permits regarding radioactive substances. Significant costs, obligations or liabilities may be incurred with respect to such
requirements, and any future changes in such requirements (or the interpretation or enforcement thereof) may have a material adverse effect on our business or results of operations. Furthermore, our drilling programs may also use hazardous materials
and generate hazardous and naturally occurring radioactive wastes. These and similar unforeseen impacts that our operations may have on the environment, as well as human exposure to hazardous or radioactive materials or wastes associated with our
operations, could have a material adverse effect on our business, reputation, results of operation and financial condition.

The Federal Mine Safety and Health Act of 1977 and regulations promulgated thereunder as well as the State of Alaska Department of Labor
and Workforce Development impose a variety of health and safety standards on numerous aspects of employee working conditions related to mineral extraction and processing operations, including the training of personnel, operating procedures and
operating equipment. In addition, the Company may be subject to additional state and local mining standards. The Company believes that it currently is in compliance with applicable mining standards; however, we cannot predict whether changes in
standards or the interpretation or enforcement thereof will have a material adverse effect on our business, financial condition or otherwise impose restrictions on our ability to conduct mining operations.

Federal legislation and regulations adopted and administered by the U.S. Environmental Protection Agency, Forest Service, Bureau of Land
Management, Fish and Wildlife Service, Mine Safety and Health Administration, and other federal agencies, legislation such as the Federal Clean Water Act, Clean Air Act, National Environmental Policy Act, Endangered Species Act, and Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) and various laws and regulations administered by the State of Alaska, have a direct bearing on exploration and mining operations conducted in Alaska. These regulations will
make the process for preparing and obtaining approval of a plan of operations much more time-consuming, expensive, and uncertain. Plans of operation will be required to include detailed baseline environmental information and address how detailed
reclamation performance standards will be met. In addition, all activities for which plans of operation are required will be subject to a new standard of review by the U.S. Bureau of Land Management, which must make a finding that the conditions,
practices or activities do not cause substantial irreparable harm to significant scientific, cultural, or environmental resource values that cannot be effectively mitigated.

CERCLA generally imposes joint and several strict liability for costs of investigation and remediation and for natural resource damages, with respect to the release of hazardous substances (as designated
under CERCLA) into the environment. CERCLA also authorizes the EPA, and in some cases, third parties, to take action in response to threats to the public health or the environment and to seek to recover from the potentially responsible parties the
costs of such action. Our mining operations may generate wastes that fall within CERCLAs definition of Hazardous Substances.



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##### Index to Financial Statements

Employees

The Company has three part-time employees. Kenneth R. Peak is the Chairman, Chief Executive Officer and President of the Company and is responsible for the management of the Company. Sergio Castro is the
Vice President, Chief Financial Officer, Treasurer and Secretary of the Company and is responsible for the financial affairs of the Company. Yaroslava Makalskaya is the Vice President, Controller and Chief Accounting Officer of the Company and is
responsible for the Companys accounting. Mr. Peak devotes approximately 15% of his time to the Companys business and Mr. Castro and Ms. Makalskaya each devote approximately 10% of their time to the Companys business.
The Company also uses the services of independent consultants and contractors, including JEX, to perform various professional services, including land acquisition, legal, environmental and tax services. JEX has two employees who are a land man and
an engineer, respectively, and each devotes less than 1% of his time to the Companys business. In addition, the Company utilizes the services of Avalon to perform geological, exploration and drilling operation services and independent third
party engineering firms to evaluate any reserves.

Directors and Executive Officers

The following table sets forth the names, ages and positions of our directors and executive officers:



|                     |  |     |  |                                                                 
|-------------------- |  | --- |  | ----------------------------------------------------------------
|Name                 |  | Age |  | Position                                                        
|Kenneth R. Peak      |  | 66  |  | Chairman, Chief Executive Officer and Director                  
|Sergio Castro        |  | 42  |  | Vice President, Chief Financial Officer, Treasurer and Secretary
|Yaroslava Makalskaya |  | 42  |  | Vice President, Controller and Chief Accounting Officer         
|Joseph Compofelice   |  | 62  |  | Director                                                        
|Joseph G. Greenberg  |  | 50  |  | Director                                                        

Kenneth R. Peak. Mr. Peak has been Chairman of the Board, Chief Executive Officer and a
director of the Company since its inception as a wholly-owned subsidiary of Contango. Mr. Peak founded Contango in 1999 and is currently the Chairman and Chief Executive Officer of Contango. Mr. Peak entered the energy industry in 1973 as
a commercial banker and held a variety of financial and executive positions in the oil and gas industry prior to founding Contango in 1999. Mr. Peak served as an officer in the U.S. Navy from 1968 to 1971. Mr. Peak received a BS in physics
from Ohio University in 1967, and a MBA from Columbia University in 1972. He currently serves as a director of Patterson-UTI Energy, Inc., a provider of onshore contract drilling services to exploration and production companies in North America.

Sergio Castro. Mr. Castro has been Vice President, Chief Financial Officer, Treasurer and Secretary of the
Company since its inception. Mr. Castro joined Contango in March 2006 as Treasurer, was appointed Vice President, Treasurer and Secretary in April 2006 and Chief Financial Officer in June 2010. Prior to joining Contango, Mr. Castro was a
Consultant for UHY Advisors TX, LP from 2004 to 2006. From 2001 to 2004, Mr. Castro was a lead credit analyst for Dynegy Inc. From 1997 to 2001, Mr. Castro worked as an auditor for Arthur Andersen LLP, where he specialized in energy
companies. Mr. Castro was honorably discharged from the U.S. Navy in 1993 as an E-6, where he served onboard a nuclear powered submarine. Mr. Castro received a BBA in Accounting in 1997 from the University of Houston, graduating summa cum
laude. Mr. Castro is a Certified Public Accountant and Certified Fraud Examiner.

Yaroslava Makalskaya.
Ms. Makalskaya has been Vice President, Controller and Chief Accounting Officer of the Company since its inception. Ms. Makalskaya has been Vice President, Controller and Chief Accounting Officer of Contango since June 2010. Prior to
joining Contango, Ms. Makalskaya was a director of the Transaction Services practice at PricewaterhouseCoopers, where she assisted clients with M&A transactions as well as advised clients with complex accounting and financial reporting
issues. Prior to July 2008 Ms. Makalskaya was a Senior Manager in the audit practice of PricewaterhouseCoopers and Arthur Andersen, where her clients included many US and international companies in energy, utilities, mining and other sectors.
Ms. Makalskaya holds a MS degree in Economics from Novosibirsk State University in Russia. Ms. Makalskaya is a CPA and has approximately 19 years of experience in accounting and finance, including 13 years in public
accounting.



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##### Index to Financial Statements

Joseph Compofelice. Mr. Compofelice has been a director of the Company since its
inception. Mr. Compofelice has served as Managing Director of Houston Capital Advisors, a boutique financial advisory, mergers and acquisitions investment service since January 2004. Mr. Compofelice served as Chairman of the Board of Trico
Marine Service, a provider of marine support vessels serving the international natural gas and oil industry, from 2004 to 2010 and as its Chief Executive Officer from 2007 to 2010. Mr. Compofelice was President and Chief Executive Officer of
Aquilex Services Corp., a service and equipment provider to the power generation industry, from October 2001 to October 2003. From February 1998 to October 2000 he was Chairman and CEO of CompX International Inc., a provider of components to the
office furniture, computer and transportation industries. From March 1994 to May 1998 he was Chief Financial Officer of NL Industries, a chemical producer, Titanium Metals Corporation, a metal producer and Tremont Corp. Mr. Compofelice received
his BS at California State University at Los Angeles and his MBA at Pepperdine University.

Joseph G. Greenberg.
Mr. Greenberg has been a director of the Company since its inception. Mr. Greenberg is founder and President of Alta Resources, L.L.C., an oil and natural gas exploration company. Prior to founding Alta Resources in 1999,
Mr. Greenberg worked as an exploration geologist for Shell Oil Company and Edge Petroleum Company. Mr. Greenberg received a BS in Geology and Geophysics from Yale University in 1983, and a Masters in Geological Sciences from the University
of Texas at Austin in 1986. He has over twenty-three years of diversified experience in domestic oil and gas exploration.

The
Board of Directors is responsible for managing the Company in accordance with the provisions of the Companys Bylaws and Certificate of Incorporation and applicable law. The number of directors which constitutes the Board of Directors is
established by the Board, subject to a minimum of three and a maximum of seven directors. Except as otherwise provided by the Bylaws for filling vacancies on the Companys Board of Directors, the Companys directors are elected at the
Companys annual meeting of stockholders and hold office until their respective successors are elected, or until their earlier resignation or removal. Our executive officers are elected annually by the Board and serve until their successors are
duly elected and qualified or until their earlier resignation or removal. There are no family relationships between our directors or executive officers.

The Board of Directors elected Mr. Peak as both Chairman and Chief Executive Officer for a number of reasons. Mr. Peak is the founder of the Company and owns approximately 15% of the
Companys common stock, making him the largest shareholder. Mr. Peak has been an active entrepreneur who founded Contango and built the business into a large successful oil and gas company with a market capitalization of approximately $900
million. However, by combining the position of Chairman and Chief Executive Officer, the Company may lose advantages in having a strong independent Board that is less influenced by the management of the Company.

Corporate Offices

The
Company does not lease office space, but rather uses the corporate offices leased by Contango. Contangos 60 month lease agreement at 3700 Buffalo Speedway, Ste 960, Houston, TX 77098 expires on December 31, 2015.

Code of Ethics

We
adopted a Code of Ethics for senior management in September 2010. A copy of our Code of Ethics is filed as an Exhibit to this Form 10-K and is also available on our website at www.contangoore.com.

Available Information

You may read and copy all or any portion of this annual report on Form 10-K, our quarterly reports on Form 10-Q and current reports on
Form 8-K, as well as any amendments and exhibits to those reports, without charge at the office of the Securities and Exchange Commission (the SEC) in Public Reference Room, 100 F Street NE, Washington, DC, 20549. Information regarding
the operation of the public reference rooms may be obtained



11



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##### Table of Contents

##### Index to Financial Statements

by calling the SEC at 1-800-SEC-0330. In addition, filings made with the SEC electronically are publicly available through the SECs website at http://www.sec.gov, and at our website at
http://www.contangoore.com. This annual report on Form 10-K, including all exhibits and amendments, has been filed electronically with the SEC.



|Item 1A. | RISK FACTORS
|-------- | ------------

In
addition to other information set forth elsewhere in this Form 10-K, you should carefully consider the following factors when evaluating the Company. An investment in the Company is subject to risks inherent in our business as an exploration stage
company. The value of an investment in the Company may decrease, resulting in a complete loss of your investment. The risk factors below are not all inclusive.

The probability of an individual prospect ever having reserves is extremely remote.

The probability of finding economic mineral reserves on any of our Properties is extremely small. It is common to spend millions of dollars on an exploration prospect and complete many phases of
exploration and still not obtain mineral reserves that can be economically exploited. Therefore, the chances of our Properties ever having mineral reserves and recovering any funds spent on exploration are extremely remote.

We may not have sufficient capital to operate our business following the completion of our 2011 exploration program and may be required to cease
operations.

The Company will have a limited amount of cash to fund its operations following the 2011 exploration program.
Without additional funds to support the Companys exploratory drilling activities, we may be required to cease operations and you may lose your entire investment in the Company.

Our ability to successfully execute our business plan is dependent on our ability to obtain adequate financing.

Our business plan, which includes the drilling of exploration prospects, will require substantial capital expenditures. We will require financing to fund our planned explorations and will soon be required
to raise additional capital. Our ability to raise capital will depend on many factors, including the success, if any, of our 2011 exploration program and the status of various capital and industry markets at the time we seek such capital.
Accordingly, we cannot be certain that financing will be available to us on acceptable terms, if at all. In the event additional capital resources are unavailable, we may be required to cease our exploration and development activities or be forced
to sell all or some portion of our Properties in an untimely fashion or on less than favorable terms.

We have no revenue to date from our
Properties, which may negatively impact our ability to achieve our business objectives.

Since the acquisition of the
Properties, we and our predecessors have conducted only very limited exploration activities and to date have not, discovered any commercially viable mineral deposits. Our ability to become profitable will be dependent on the receipt of revenues from
the extraction of minerals greater than our operational expenses. We and our predecessors have carried on our business of exploring our Properties at a loss since our inception and expect to continue to incur losses unless and until such time as one
of our Properties enters into commercial production and generates sufficient revenues to fund our continuing operations. The amounts and timing of expenditures will depend on the progress of ongoing exploration, the results of consultants
analysis and recommendations, the rate at which operating losses are incurred, and other factors, many of which are beyond our control. Whether any mineral deposits we discover would be commercially viable depends on a number of factors, which
include, without limitation, the particular attributes of the deposit, market prices for the minerals, and governmental regulations. If we cannot discover commercially viable deposits or commence actual mining operations, we may never generate
revenues and will never become profitable.



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##### Index to Financial Statements

The Properties in which we have an interest do not have any proven or probable reserves and we may never
identify any commercially exploitable mineralization.

None of our Properties have any proven or probable reserves. To
date, we have engaged in only limited preliminary exploration activities on the Properties, and our exploration activities of our REE Properties are based upon prior preliminary surveys conducted by the Federal government. Accordingly, we do not
have sufficient information upon which to assess the ultimate success of our exploration efforts. There is no assurance that we may ever locate any mineral resources on our Properties or if we find mineral resources, they may not be in economic
quantities. Additionally, even if we find minerals in sufficient quantities to warrant recovery, such recovery may not be economically profitable. Mineral exploration is highly speculative in nature, involves many risks and is frequently
non-productive. Unusual or unexpected geologic formations and the inability to obtain suitable or adequate machinery, equipment or labor are risks involved in the conduct of exploration programs. If we do not establish reserves, we will be required
to curtail or suspend our operations, in which case the market value of our common stock will decline, and you may lose all of your investment.

Our Properties are located in the remote regions of Alaska and exploration activities may be limited by climate and limited access and existing
infrastructure.

Our focus is on the exploration of our Properties in the State of Alaska. The arctic climate limits
exploration activities to the period from May to October. In addition, the remote location of our Gold Properties as well as our REE Properties may limit access and increase exploration expenses. Higher costs associated with exploration activities
and limitation on the annual periods in which we can carry on exploration activities will increase the costs and time associated with our planned exploration activities and could negatively affect the value of our Properties and securities.

We are highly dependent on the technical services provided by our consultant, Avalon, including the exploration of the Properties and
exploratory drilling activities, and could be seriously harmed if Avalon terminated the services with us or became otherwise unavailable.

Because we have only three part-time employees, none of whom are mineral geoscientists or have experience in the mining industry, we depend upon our consultant, Avalon, for the success of our exploration
projects and expect to remain so for the foreseeable future. Our ability to continue conducting exploration activities is in large part dependent upon the efforts of our consultant. As a result, we have little control over the exploratory operations
on the Properties. In addition, highly qualified explorationists and engineers are difficult to attract and retain. We are dependent upon Avalon for assistance in acquiring acreage for our exploration projects in Alaska, planning work programs,
conducting field work and interpreting assay results, and expect to remain so for the foreseeable future. As a result, the loss of the services of our consultant could have a material adverse effect on us and could prevent us from pursuing our
business plan.

We are dependent on the services provided by the Chief of the Tetlin Indian Tribe, and could be seriously harmed if the
Chief terminated his services or became otherwise unavailable.

We are dependent upon the knowledge and experience provided
by the Chief of the Tetlin Indian Tribe regarding governmental affairs and tribal affairs issues. The loss of the services of the Chief could have a material adverse effect on us and could prevent us from pursuing our business plan.

Concentrating our capital investment in the State of Alaska increases our exposure to risk.

We expect to focus our capital investments in gold and rare earth mineral prospects in the State of Alaska. However, our exploration
prospects in Alaska may not lead to any revenues or we may not be able to drill for mineral deposits at anticipated finding and development costs due to financing, environmental or operating uncertainties. Should we be able to make an economic
discovery on our Properties, we would then be solely dependent upon a single mining operation for our revenue and profits.



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##### Index to Financial Statements

We will rely on the accuracy of the estimates in reports provided to the Company by outside consultants
and engineers.

We have no in-house mineral engineering capability, and therefore will rely on the accuracy of reserve
reports provided to us by our independent third party consultants. If those reports prove to be inaccurate, our financial reports could have material misstatements. Further, we will use the reports of our independent consultants in our financial
planning. If the reports prove to be inaccurate, we may also make misjudgments in our financial planning.

Exploration activities involve a
high degree of risk, and our participation in exploratory drilling activities may not be successful.

Our future success
will largely depend on the success of our exploration drilling program. Participation in exploration drilling activities involves numerous risks, including the significant risk that no commercially marketable minerals will be discovered. The mining
of minerals and the manufacture of mineral products involves numerous hazards, including:



| |  |  | Ground or slope failures;
| | - |  | -------------------------



| |  |  | Pressure or irregularities in formations affecting ore or wall rock characteristics;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Equipment failures or accidents;
| | - |  | --------------------------------



| |  |  | Adverse climate conditions;
| | - |  | ---------------------------



| |  |  | Compliance with governmental requirements and laws, present and future;
| | - |  | -----------------------------------------------------------------------



| |  |  | Shortages or delays in the availability and delivery of equipment; and
| | - |  | ----------------------------------------------------------------------



| |  |  | Lack of adequate infrastructure, including access to roads, electricity and available housing.
| | - |  | ----------------------------------------------------------------------------------------------

Poor results from our drilling activities would materially and adversely affect our future cash flows and results of operations.

We have no assurance of title to our Properties.

We hold 115,840 acres in the form of State of Alaska unpatented mining claims, for both gold and REE exploration. We also hold approximately 3,440 acres in unpatented U.S. Federal mining claims.
Unpatented mining claims are unique property interests, in that they are subject to the paramount title of, the State of Alaska or the U.S. Federal government, as applicable, and rights of third parties to uses of the surface within their
boundaries, and are generally considered to be subject to greater title risk than other real property interests. The rights to deposits of minerals lying within the boundaries of the unpatented state claims are subject to Alaska Statues 38.05.185
 38.05.280, and are governed by Alaska Administrative Code 11 AAC 86.100  86.600. The validity of all State of Alaska unpatented mining claims is dependent upon inherent uncertainties and conditions. These uncertainties relate to matters
such as:



| |  |  | The existence and sufficiency of a discovery of valuable minerals;
| | - |  | ------------------------------------------------------------------



| |  |  | Proper posting and marking of boundaries in accordance with state statutes;
| | - |  | ---------------------------------------------------------------------------



| |  |  | Making timely payments of annual rentals for the right to continue to hold the mining claims in accordance with state statutes;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | Whether sufficient annual assessment work has been timely and properly performed; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Possible conflicts with other claims not determinable from descriptions of records.
| | - |  | -----------------------------------------------------------------------------------



14



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##### Table of Contents

##### Index to Financial Statements

The validity of an unpatented mining claim also depends on (1) the claim having been
located on Alaska state land open to appropriation by mineral location, which is the act of physically entering the land and making a claim by putting stakes in the ground, (2) compliance with all applicable state statutes in terms of the
contents of claim location notices or certificates and the timely filing and recording of such notices or certificates, (3) timely payment of annual claim rental fees, and (4) the timely filing and recording of proof of annual assessment
work. In the absence of a discovery of valuable minerals, the ground covered by an unpatented mining claim is open to location by others unless the owner is in actual possession of and diligently working the claim. The unpatented state mining claims
we own or control may be invalid, or the title to those claims may not be free from defects. In addition, the validity of our claims may be contested by the Alaska state government or challenged by third parties.

With respect to our Tetlin Lease, we retained title lawyers to conduct a general examination of title to the mineral interest prior to
executing the lease. Prior to conducting any mining activity, however, we will obtain a full title review of the applicable lease to identify more fully any deficiencies in title to the lease and, if there are deficiencies, to identify measures
necessary to cure those defects to the extent reasonably possible. However, such deficiencies may not be cured by us. It does happen, from time to time, that the examination made by title lawyers reveals that the title to properties is defective,
having been obtained in error from a person who is not the rightful owner of the mineral interest desired. In these circumstances, we may not be able to proceed with our exploration and development of the lease site or may incur costs to remedy a
defect. It may also happen, from time to time, that we may elect to proceed with mining work despite defects to the title identified in a title opinion.

We have entered into the Tetlin Lease with a Native American tribe for the exploration of gold and associated minerals. The enforcement of contractual rights against Native American tribes with
sovereign powers may be difficult.

Federally recognized Native American tribes are independent governments with sovereign
powers, except as those powers may have been limited by treaty or the United States Congress. Such tribes maintain their own governmental systems and often their own judicial systems and have the right to tax, and to require licenses and to impose
other forms of regulation and regulatory fees, on persons and businesses operating on their lands. As sovereign nations, federally recognized Native American tribes are generally subject only to federal regulation. States do not have the authority
to regulate them, unless such authority has been specifically granted by Congress, and state laws generally do not directly apply to them and to activities taking place on their lands, unless they have a specific agreement or compact with the state
or Federal government allowing for the application of state law. Our Tetlin Lease provides that it will be governed by applicable federal law and the law of the State of Alaska. We cannot assure you, however, that this choice of law clause would be
enforceable, leading to uncertain interpretation of our rights and remedies under the Tetlin Lease.

Federally recognized
Native American tribes also generally enjoy sovereign immunity from lawsuit similar to that of the states and the United States federal government. In order to sue a Native American tribe (or an agency or instrumentality of a Native American tribe),
the Native American tribe must have effectively waived its sovereign immunity with respect to the matter in dispute. Moreover, even if a Native American tribe effectively waives its sovereign immunity, there exists an issue as to the forum in which
a lawsuit can be brought against the tribe. Federal courts are courts of limited jurisdiction and generally do not have jurisdiction to hear civil cases relating to matters concerning Native American lands or the internal affairs of Native American
governments. Federal courts may have jurisdiction if a federal question is raised by the lawsuit, which is unlikely in a typical contract dispute. Diversity of citizenship, another common basis for federal court jurisdiction, is not generally
present in a suit against a tribe because a Native American tribe is not considered a citizen of any state. Accordingly, in most commercial disputes with tribes, the jurisdiction of the federal courts, may be difficult or impossible to obtain. Our
Tetlin Lease contains a provision in which the Tetlin Village Council expressly waives its sovereign immunity to the limited extent necessary to permit judicial review in the courts in Alaska of certain issues affecting the Tetlin Lease.



15



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##### Table of Contents

##### Index to Financial Statements

Competition in the mineral exploration industry is intense, and the Company is smaller and has a much
more limited operating history than most of its competitors.

We will compete with a broad range of mining companies with
far greater resources in our exploration activities. Several mining companies concentrate drilling efforts on one type of mineral and thus may enjoy economies of scale and other efficiencies. However, our drilling strategies include both mining of
gold ore and rare earth elements. As a result, we may not be able to compete effectively with such companies. We will also compete for the equipment and labor required to operate and to develop our Properties if our exploration activities are
successful. Most of our competitors have substantially greater financial resources than we do. These competitors may be able to evaluate, bid for and purchase a greater number of properties and prospects than we can. In addition, most of our
competitors have been operating for a much longer time than we have and have substantially larger staffs. Gold and rare earth minerals processing requires complex and sophisticated processing technologies. We have no experience in the minerals
processing industry.

We have only owned mining properties since the acquisition by our predecessors of the Properties in 2009
and 2010. Furthermore, no member of our management has any technical training or experience in minerals exploration or mining. Because of our limited operating history, we have limited insight into trends that may emerge and affect our business. We
may make errors in predicting and reacting to relevant business trends and will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets such as ours. We may not be able to compete
effectively with more experienced companies or in such a highly competitive environment.

With respect to our rare earth
mining activities, our Chinese competitors have been exploring for, mining and producing rare earth minerals long before our entry into the industry, and have far greater financial capabilities, as well as other processing technologies and resources
to improve and expand their facilities. Additionally, the Chinese have enjoyed economies of scale and favorable domestic policies. We may not be able to overcome any strategic advantages our Chinese competitors may have over us.

The mining industry is historically a cyclical industry and market fluctuations in the prices of minerals could adversely affect our business.

Prices for minerals tend to fluctuate significantly in response to factors beyond our control. These factors include:



| |  |  | Global economic conditions;
| | - |  | ---------------------------



| |  |  | Domestic and foreign tax policy;
| | - |  | --------------------------------



| |  |  | The price of foreign imports of gold and rare earth elements, and products derived from the foregoing;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | The cost of exploring for, producing and processing mineral ore;
| | - |  | ----------------------------------------------------------------



| |  |  | Available transportation capacity; and
| | - |  | --------------------------------------



| |  |  | The overall supply and demand for minerals.
| | - |  | -------------------------------------------

Changes in commodity prices would directly affect revenues and may reduce the amount of funds available to reinvest in exploration and development activities. Reductions in mineral prices not only reduce
revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Declining metal prices may also impact our operations by requiring a reassessment of the commercial feasibility of any of our mining work.

Because our sole source of revenue will be the sale of gold and rare earth minerals if our exploration efforts are
successful, changes in demand for, and the market price of, gold and rare earth minerals could significantly affect our profitability. The value and price of our common stock may be significantly affected by declines in the prices of gold and rare
earth minerals and products.



16



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##### Table of Contents

##### Index to Financial Statements

Gold prices fluctuate widely and are affected by numerous factors beyond our control such as
interest rates, exchange rates, inflation or deflation, fluctuation in the relative value of the United States dollar against foreign currencies on the world market, global and regional supply and demand for gold, and the political and economic
conditions of gold producing countries throughout the world.

Demand for rare earth minerals may also be impacted by
fluctuations in demand for downstream products incorporating rare earth minerals, including wind power technology and hybrid and electric vehicles. Lack of growth in the clean technology or automotive industries may adversely affect the demand for
rare earth minerals. The success of our business also depends on the creation of new products that may incorporate rare earth minerals. A prolonged or significant economic contraction in the United States or worldwide could also put downward
pressure on market prices of rare earth minerals and products.

An increase in the global supply of minerals may adversely affect our
business.

The pricing and demand for gold and rare earth minerals is affected by a number of factors beyond our control,
including global economic conditions and the global supply and demand for gold and rare earth minerals and products. Increases in the amount of gold and rare earth minerals sold by our competitors may result in price reductions, reduced margins and
we may not be able to compete effectively against current and future competitors.

We depend upon our management team and our consultant,
Avalon.

The successful implementation of our business strategy and handling of other issues integral to the fulfillment of
our business strategy depends, in part, on our management team, as well as our consultant, Avalon, and its geoscientists, geologists, engineers and other professionals engaged by Avalon. The loss of key members of our management team or the
professional staff at Avalon could have a material adverse effect on our business, financial condition and operating results.

We are
subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.

Our exploratory mining operations are subject to numerous laws and regulations governing our operations and the discharge of materials into the environment, including the Federal Clean Water Act, Clean
Air Act, Endangered Species Act, and the Comprehensive Environmental Response, Compensation, and Liability Act. Federal initiatives are often also administered and enforced through state agencies operating under parallel state statutes and
regulations. Failure to comply with such rules and regulations could result in substantial penalties and have an adverse effect on us. These laws and regulations may:



| |  |  | Require that we obtain permits before commencing mining work;
| | - |  | -------------------------------------------------------------



| |  |  | Restrict the substances that can be released into the environment in connection with mining work; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Limit or prohibit mining work on protected areas.
| | - |  | -------------------------------------------------

Under these laws and regulations, we could be liable for personal injury and clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. We
maintain only limited insurance coverage for sudden and accidental environmental damages. Accordingly, we may be subject to liability, or we may be required to cease production from properties in the event of environmental damages. These laws and
regulations have been changed frequently in the past. In general, these changes have imposed more stringent requirements that increase operating costs or require capital expenditures in order to remain in compliance. Any such changes could have an
adverse effect on our business, financial condition and results of operations.



17



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##### Table of Contents

##### Index to Financial Statements

We are subject to the Federal Mine Safety and Health Act of 1977 and regulations promulgated thereto,
which impose stringent health and safety standards on numerous aspects of our operations.

Our exploration and mining work
in Alaska is subject to the Federal Mine Safety and Health Act of 1977, which impose stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating
procedures, operating equipment and other matters. Our failure to comply with these standards could have a material adverse effect on our business, financial condition or otherwise impose significant restrictions on our ability to conduct mining
work.

We may be unable to obtain, maintain or renew permits necessary for the exploration, development or operation of any mining
activities, which could have a material adverse effect on our business, financial condition or results of operation.

We must obtain a number of permits that impose strict conditions, requirements and obligations relating to various environmental and
health and safety matters in connection with our current and future operations. To obtain certain permits, we may be required to conduct environmental studies, collect and present data to governmental authorities and the general public pertaining to
the potential impact of our current and future operations upon the environment and take steps to avoid or mitigate the impact. The permitting rules are complex and have tended to become more stringent over time. Accordingly, permits required for our
mining work may not be issued, maintained or renewed in a timely fashion or at all, or may be conditioned upon restrictions which may impede our ability to operate efficiently. The failure to obtain certain permits or the adoption of more stringent
permitting requirements could have a material adverse effect on our business, our plans of operation, and properties in that we may not be able to proceed with our exploration, development or mining programs.

Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law could adversely affect potential acquisition by third parties.

Our certificate of incorporation, bylaws and the Delaware General Corporation Law contain provisions that may discourage
unsolicited takeover proposals. These provisions could have the effect of inhibiting fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts, preventing changes in our management or limiting
the price that investors may be willing to pay for shares of common stock. Among other things, these provisions:



| |  |  | Limit the personal liability of directors;
| | - |  | ------------------------------------------



| |  |  | Limit the persons who may call special meetings of stockholders;
| | - |  | ----------------------------------------------------------------



| |  |  | Prohibit stockholder action by written consent;
| | - |  | -----------------------------------------------



| |  |  | Establish advance notice requirements for nominations for election of the board of directors and for proposing matters to be acted on by stockholders
at stockholder meetings;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Require us to indemnify directors and officers to the fullest extent permitted by applicable law; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Impose restrictions on business combinations with some interested parties.
| | - |  | --------------------------------------------------------------------------

Our common stock is thinly traded.

There are approximately
1.6 million shares of our common stock outstanding with directors and officers owning or have voting control over approximately 16% of our common stock. Since our common stock is thinly traded, the purchase or sale of relatively small common
stock positions may result in disproportionately large increases or decreases in the price of our common stock.



18



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##### Table of Contents

##### Index to Financial Statements

We do not intend to pay dividends in the foreseeable future.

For the foreseeable future, we intend to retain any earnings to finance the development of our business, and we do not anticipate paying
any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of our Board of Directors and will be dependent upon then-existing conditions, including our operating results and financial condition,
capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors considers relevant. Accordingly, investors must rely on sales of their common stock after any price appreciation, which may never occur,
as the only way to realize a return on their investment.



|Item 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

None



|Item 2. | PROPERTIES
|------- | ----------

Our
Properties are located in the State of Alaska, and principally consist of mineral leases and unpatented mining claims.

We
believe that we hold good title to our Properties in accordance with standards generally accepted in the minerals industry. As is customary in both the gold and rare earths industry, we conduct only a perfunctory title examination at the time we
acquire a property. Before we begin any mining activities, however, we will conduct a full title examination and perform curative work on any defects that we deem significant.

Lease with Tetlin Village Council

JEX entered into the Tetlin Lease with
the Tetlin Village Council, effective as of July 15, 2008. An undivided 50% leasehold interest was sold to Contango Mining pursuant to the Joint Exploration Agreement dated as of September 29, 2009 in exchange for $1 million and a 1%
overriding royalty interest. JEX transferred its remaining 50% leasehold interest to Contango Mining as of September 15, 2010 in exchange for an increased overriding royalty aggregating 3% pursuant to the Amended ORRI Agreement. The Tetlin
Lease covers approximately 647,000 acres of land, provides for an initial term of ten (10) years, and so long after such initial term as we continue conducting exploration or mining operations on the Tetlin Lease. While the Company is required
to spend $350,000 per year annually until July 15, 2018 in exploration costs pursuant to the Tetlin Lease, the Company anticipates that exploration expenditures through the 2011 exploration program will satisfy this requirement because
exploration funds spent in any year in excess of $350,000 are credited toward future years exploration cost requirements.

If the Tetlin Lease is placed into commercial production of precious or non-precious metals, we will be obligated to pay a production
royalty to the Native Village of Tetlin, ranging from 2.0% to 5.0%. Until such time as production royalties begin, the Company pays the Tetlin Village Council an advance minimum royalty of $50,000 per year. On July 15, 2012, the advance minimum
royalty increases to $75,000 per year, and subsequent years are escalated by an inflation adjustment.

Gold Mining Claims

A listing of our State of Alaska unpatented mining claims as of September 16, 2011 for gold and associated minerals are listed in
Exhibit 99.1.

REE Mining Claims

A listing of our State of Alaska and Federal mining claims as of September 16, 2011 for rare earth elements are listed in Exhibit 99.2. In addition to this list, the Company is negotiating access to
additional REE lands to conduct geological and geochemical surveys. The Company has paid $70,000 to date in pursuit of these additional leases.



19



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##### Table of Contents

##### Index to Financial Statements

Location and Access of our Properties

Our Gold Properties are located in the eastern interior region of Alaska. Access to the Tetlin Project claims is available by road and
access to public power is available. The Triple Z Project claims are accessible via an ATV trail from the public road. There is no commercial power available.

Our REE Properties are located throughout the State of Alaska. The Salmon Bay and Stone Rock Bay Project claims are located in the southeastern region of the state. Salmon Bay and Stone Rock are
accessible only by aircraft or sea. No commercial sources of power are available. The Altana, Spooky and Wolf Project claims are located in the interior region and the Swift Project claims are located in western region of Alaska. The Alatna, Spooky,
Wolf and Swift claims are accessible by aircraft only and no commercial sources of power are available.

In general, water
rights are acquired on an as-needed basis from the State of Alaska Department of Natural Resources, Division of Mining, Land and Water. Potential water sources include both surface and subsurface waters. Water right applications can be either
temporary (seasonal rights) or permanent, such as an operating mine would require. We will obtain water rights as necessary to carry out our exploration programs on our Properties. Such rights normally take approximately one month to acquire via
permit.

Prior to JEXs acquisition of the Properties, to the Companys knowledge, the Properties had not been
previously explored for minerals.



20



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##### Table of Contents

##### Index to Financial Statements

LOGO

Fees

The following tables set forth the annual State of Alaska and Federal mining claim rental holding costs for the Companys Alaska projects. Federal
mining claim rents are due and payable in full by August 31 of each year and State of Alaska mining claim rents are due and payable by November 30 of each year.



|                           |  |          |       |  |        |   |        |        |  |   |        | 
|-------------------------- |  | -------- | ----- |  | ------ | - | ------ | ------ |  | - | ------ | 
|Gold Claims:               |  | Triple Z |       |  | Tetlin |   |        | Totals | 
|# 160 Acre Claims          |  |          | 45    |  |        |   | 54     |        |  |   | 99     | 
|# 40 Acre Claims           |  |          | 0     |  |        |   | 68     |        |  |   | 68     | 
|# 20 Acre Fed claims       |  |          | 0     |  |        |   | 0      |        |  |   | 0      | 
|Total Acres                |  |          | 7,200 |  |        |   | 11,360 |        |  |   | 18,560 | 
|State Claim Rents160-acre |  | $        | 2,200 |  |        | $ | 7,560  |        |  | $ | 9,760  | 
|State Claim Rents40-acre  |  | $        | 0     |  |        | $ | 2,380  |        |  | $ | 2,380  | 
|Fed Claim Rents20-acre    |  | $        | 0     |  |        | $ | 0      |        |  | $ | 0      | 
|                           |  |          |       |  |        |   |        |        |  |   |        | 
|Totals                     |  | $        | 2,200 |  |        | $ | 9,940  |        |  | $ | 12,140 | 
|                           |  |          |       |  |        |   |        |        |  |   |        | 



21



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##### Index to Financial Statements

|                           |  |            |       |  |           |   |        |        |  |   |        |     |  |        |        |  |            |   |        |        |  |   |        |  |  |   |         | 
|-------------------------- |  | ---------- | ----- |  | --------- | - | ------ | ------ |  | - | ------ | --- |  | ------ | ------ |  | ---------- | - | ------ | ------ |  | - | ------ |  |  | - | ------- | 
|REE Claims:                |  | Stone Rock |       |  | SalmonBay |   |        | Spooky |  |   | Wolf   |     |  | Alatna |        |  | SwiftRiver |   |        | Totals | 
|# 160 Acre Claims          |  |            | 0     |  |           |   | 0      |        |  |   | 166    |     |  |        | 202    |  |            |   | 127    |        |  |   | 113    |  |  |   | 608     | 
|# 40 Acre Claims           |  |            | 0     |  |           |   | 0      |        |  |   | 0      |     |  |        | 0      |  |            |   | 0      |        |  |   | 0      |  |  |   | 0       | 
|# 20 Acre Fed claims       |  |            | 49    |  |           |   | 123    |        |  |   | 0      |     |  |        | 0      |  |            |   | 0      |        |  |   | 0      |  |  |   | 172     | 
|Total Acres                |  |            | 980   |  |           |   | 2,460  |        |  |   | 26,560 |     |  |        | 32,320 |  |            |   | 20,320 |        |  |   | 18,080 |  |  |   | 100,720 | 
|State Claim Rents160-acre |  | $          | 0     |  |           | $ | 0      |        |  | $ | 23,240 |     |  | $      | 28,280 |  |            | $ | 17,780 |        |  | $ | 15,820 |  |  | $ | 85,120  | 
|State Claim Rents40-acre  |  | $          | 0     |  |           | $ | 0      |        |  | $ | 0      |     |  | $      | 0      |  |            | $ | 0      |        |  | $ | 0      |  |  | $ | 0       | 
|Fed Claim Rents20-acre    |  | $          | 6,860 |  |           | $ | 17,220 |        |  | $ | 0      |     |  | $      | 0      |  |            | $ | 0      |        |  | $ | 0      |  |  | $ | 24,080  | 
|                           |  |            |       |  |           |   |        |        |  |   |        |     |  |        |        |  |            |   |        |        |  |   |        |  |  |   |         | 
|Totals                     |  | $          | 6,860 |  |           | $ | 17,220 |        |  | $ | 23,240 | (1) |  | $      | 28,280 |  |            | $ | 17,780 |        |  | $ | 15,820 |  |  | $ | 109,200 | 
|                           |  |            |       |  |           |   |        |        |  |   |        |     |  |        |        |  |            |   |        |        |  |   |        |  |  |   |         | 



|(1) | Rental not due until land is patented to the State of Alaska.
|--- | -------------------------------------------------------------

Acquisition of Other Properties

The Company anticipates from time to time
acquiring additional properties in Alaska for exploration, subject to the availability of funds. The acquisitions may include leases or similar rights from Alaska Native corporations or may include filing Federal or State of Alaska mining claims by
staking claims for exploration and development. Acquiring additional properties will likely result in additional expense to the Company for minimum royalties, minimum rents and annual exploratory work requirements.

Overriding Royalty Interest

Pursuant to the Amended ORRI Agreement, in consideration of JEXs assignment of its 50% interest in the Properties to Contango Mining, the Company conveyed an overriding royalty interest to JEX which
provides that JEX will receive a 3% of 8/8ths overriding royalty interest on all minerals mined from the Properties held by the Company as of the date of the Amended ORRI Agreement. In addition, we will pay the Tetlin Village Council a production
royalty ranging from 2.0% to 5.0% should we deliver to a purchaser on a commercial basis, precious or non-precious metals derived from the Tetlin Lease.



|Item 3. | LEGAL PROCEEDINGS
|------- | -----------------

As of
the date of this Form 10-K, we are not a party to any legal proceedings and we are not aware of any proceeding contemplated against us.



|Item 4. | RESERVED
|------- | --------

PART II



|Item 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | ------------------------------------------------------------------------------------------------------------

Our common stock began trading on the Over-The-Counter Bulleting Board (OTCBB) on December 20, 2010 under the symbol
CTGO. The table below shows the high and low closing prices of our common stock for the periods indicated.



|                                 |  |      |       |  |     |   |       | 
|-------------------------------- |  | ---- | ----- |  | --- | - | ----- | 
|                                 |  | High |       |  | Low |  
|Fiscal Year 2011:                |  |      |       |  |     |   |       | 
|Quarter ended September 30, 2010 |  |      | n/a   |  |     |   | n/a   | 
|Quarter ended December 31, 2010  |  | $    | 12.50 |  |     | $ | 6.00  | 
|Quarter ended March 31, 2011     |  | $    | 19.50 |  |     | $ | 7.50  | 
|Quarter ended June 30, 2011      |  | $    | 18.50 |  |     | $ | 13.00 | 

On September 15, 2011, the closing price of our common stock on the OTCBB was $12.75 per share, and
there were 1,566,467 shares of Contango ORE, Inc. common stock outstanding held by approximately 42 registered shareholders.



22



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##### Table of Contents

##### Index to Financial Statements

The Company does not intend to declare or pay any dividends and currently intends to retain
any available funds generated by its operations for the development and growth of its business. It does not currently anticipate paying any cash dividends on its outstanding shares of common stock in the foreseeable future. Any future decision to
pay dividends on its common stock will be at the discretion of its Board and will depend on its financial condition, results of operations, capital requirements, and other factors the Board may deem relevant.

The following table sets forth information about our equity compensation plans at September 16, 2011:



|                                                           |  |                                                                      |   |  |                                                      |  |   |                                                                                                                                        |  |  |         | 
|---------------------------------------------------------- |  | -------------------------------------------------------------------- | - |  | ---------------------------------------------------- |  | - | -------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------- | 
|Plan Category                                              |  | Number of securitiesto be issued upon exerciseof outstanding
options |   |  | Weighted-averageexercise price ofoutstanding options |  |   | Number of securitiesremaining available for futureissuance under
equitycompensation plans (excludingsecuritiesreflected in column (b)) | 
|Equity compensation plans approved by security holders     |  |                                                                      |  |  |                                                      |  |  |                                                                                                                                        |  |  |        | 
|Equity compensation plans not approved by security holders |  |                                                                      |  |  |                                                      |  |  |                                                                                                                                        |  |  | 856,094 | 

On September 15, 2010, the Companys Board of Directors (the Board) adopted the
Contango ORE, Inc. Equity Compensation Plan (the 2010 Plan), which will be voted upon by the Companys shareholders at its next scheduled annual meeting. Under the 2010 Plan, the Board may grant restricted stock and option awards to
officers, directors, employees or consultants of the Company. Awards made under the 2010 Plan are subject to such restrictions, terms and conditions, including forfeitures, if any, as may be determined by the Board. As of September 16, 2011,
there were 93,906 restricted shares outstanding and 50,000 options outstanding issued under the 2010 Plan, subject to shareholder approval.



|Item 6. | NOT REQUIRED AS A SMALLER REPORTING COMPANY
|------- | -------------------------------------------



|Item 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the
financial statements and the related notes and other information included elsewhere in this report.

Overview

The Company was formed on September 1, 2010 as a Delaware corporation. We are a Houston-based company, whose primary business is to
explore in the State of Alaska for (i) gold ore and associated minerals and (ii) rare earth elements. We have leased or have control over 766,280 acres of Alaskan Native, Federal and State of Alaska properties for the exploration of gold
and associated minerals and rare earth elements.

Insolvency of Company

It is possible that our 2011 summer field work program will not identify any commercially exploitable minerals. Should this occur, or if
we determine that recovery of any minerals may not be economically profitable, we may be required to cease operations, dissolve and wind up the business of the Company.

Results of Operations

The Company is a newly-formed company that has not
commenced mining or producing commercially marketable minerals. To date, we have not generated any revenue from mineral sales or operations. We have no recurring source of revenue and our ability to continue as a going concern is dependent on our
ability to raise



23



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##### Index to Financial Statements

capital to fund our future exploration and working capital requirements. In the future, we may generate revenue from a combination of mineral sales and other payments resulting from any
commercially recoverable minerals from the Properties. We do not expect to generate revenue from mineral sales in the foreseeable future. If our Properties fail to contain any proven reserves, our ability to generate future revenue, and our results
of operations and financial position, would be materially adversely affected. Other potential sources of cash, or relief of demand for cash, include external debt, the sale of shares of our stock, joint ventures, or alternative methods such as
mergers or sale of our assets. No assurances can be given, however, that we will be able to obtain any of these potential sources of cash. We will need to generate significant revenues to achieve profitability and we may never do so.

Delay Rentals and Minimum Royalties. Delay rentals and minimum royalties consist of Federal and State of Alaska rental payments,
annual labor payments, and minimum royalty payments payable to the Native Village of Tetlin. We recognized delay rental expenses of $281,418 for the fiscal year ended June 30, 2011, compared to $192,712 for the fiscal year ended June 30,
2010. The higher level of rentals is due to the additional lands acquired, slightly offset by the fact that once the initial rental is paid, yearly rentals are reduced by 50% for the next five years.

Exploration Expenses. We incurred approximately $2.3 million of exploration expense for the fiscal year ended June 30, 2011,
compared to $0.9 million for the fiscal year ended June 30, 2010. This increase is principally attributable to the majority of our exploration activities occurring during the current period. Components of exploration expense include permits,
field rentals and field supplies as well as staking, mapping, logging, surveying and plotting expenses.

Other Operating
Expenses.Other operating expenses for the fiscal year ended June 30, 2011 were $87,167, compared to $30,485 for the fiscal year ended June 30, 2010. This increase is principally attributable to our conducting more exploration
activities during the current period.

Stock-based Compensation Expenses.We recognized $63,681 of stock-based
compensation expense for the fiscal year ended June 30, 2011, related to restricted stock granted to officers and directors and an additional $21,227 of stock-based compensation recorded under exploration expenses, related to restricted stock
granted to the owner of Avalon pursuant to the Companys 2010 Equity Compensation Plan.

General and Administrative
Expenses. General and administrative expenses for the fiscal year ended June 30, 2011 and 2010 were $150,810 and $1,677, respectively. This increase is mainly attributable to the legal and accounting expenses required to file the
Companys Registration Statement on Form 10 and other SEC forms, issuance of the Companys common shares to stockholders of Contango Oil & Gas Company, and other costs associated with being a public entity.

Liquidity and Capital Resources

The Company is in the initial stage of conducting exploration activities on its Properties, and our longer term liquidity will be impaired to the extent our exploration efforts are not successful in
generating commercially viable mineral deposits on the Properties.

Liquidity Outlook.Our initial source of funding is
the $3.5 million in cash contributed by Contango and as of September 16, 2011, we had approximately $1.1 million of cash and cash equivalents. Depending on the results of this summers exploration program, should the Company conclude that
further exploration would be beneficial, the Company will require additional funding from other funding sources, including possible additional equity offerings which could cause substantial dilution of our common stock, possible borrowings from
financial institutions and possible offerings of debt securities. Any such debt financing would, however, increase our leverage and add to our need for cash to service such debt. Our ability to raise additional capital will depend on the results of
our exploration program this summer and the status of various capital and industry markets at the



24



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##### Index to Financial Statements

time such additional capital is sought. Accordingly, there can be no assurances that capital will be available to us from any source or that, if available, it will be on terms acceptable to us.
If we are not able to obtain additional funding to conduct exploratory work in 2012, the Company will be able to fund G&A costs and other ordinary expenses for the next twelve months, but will not be able to continue its exploration program. If
the Company is unable to obtain additional funding during the next twelve month period, the Company may be required to cease operations, dissolve and wind up the business of the Company.

Capital Budget.For the remainder of 2011, we expect to invest approximately $800,000 in exploration costs to complete paying for
this summers exploration program and current assay analysis. Our future capital expenditure budget is largely dependent on the results of our exploration work, which we expect to know by December 2011. If additional exploration is warranted,
we will be required to raise additional capital to conduct any further significant exploration. We will also incur general and administrative expenses, which may include legal fees, audit fees, consultant fees, insurance, and other operating
expenses.

Off-Balance Sheet Arrangements

None

Contractual Obligations

The Tetlin Lease provides for an initial term of ten (10) years and so long after such initial term as we continue conducting
exploration or mining operations on the Tetlin Lease. The Company is required to spend $350,000 per year annually until July 15, 2018 in exploration costs pursuant to the Tetlin Lease, and the Company anticipates that exploration expenditures
through the 2011 exploration program will satisfy this requirement because exploration funds spent in any year in excess of $350,000 are credited toward future years exploration cost requirements. The Tetlin Lease also provides that we will
pay the Tetlin Village Council a production royalty ranging from 2.0% to 5.0% should we deliver to a purchaser on a commercial basis precious or non-precious metals derived from the Tetlin Lease. Until such time as production royalties begin, the
Company pays the Tetlin Village Council an advance minimum royalty of approximately $75,000 per year. Additionally, we will pay JEX a production royalty of 3% should we deliver to a purchaser on a commercial basis precious metals, non-precious
metals or hydrocarbons derived from the Properties.

The Company also pays delay rentals of $98,100 per year on Federal and
State of Alaska acreage, as well as minimum labor payments of $176,800 per year on certain State of Alaska acreage.

Application of
Critical Accounting Policies and Managements Estimates

The discussion and analysis of the Companys financial
condition and results of operations is based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company
to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified below the policies that are of particular importance to the portrayal of our financial position and results of
operations and which require the application of significant judgment by management. The Company analyzes its estimates, including those related to its mineral reserve estimates, on a periodic basis and bases its estimates on historical experience,
independent third party engineers and various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the
following critical accounting policies affect its more significant judgments and estimates used in the preparation of the Companys financial statements:

Mineral Property Interests, Exploration and Development Costs:Mineral property interests include interests in the exploration stage mineral properties acquired. The amount capitalized includes
costs paid to acquire mineral property interest as well as the costs paid to the State of Alaska to obtain the lease rights. Exploration



25



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##### Index to Financial Statements

costs are expensed as incurred. Development costs are expensed as incurred until the Company obtains proven and probable reserves within its commercially minable properties. Costs of abandoned
projects are charged to earnings upon abandonment. Properties determined to be impaired are written-down to the estimated fair value. The Company periodically evaluates whether events or changes in circumstances indicate that the carrying value of
mineral property interests and related property, plant and equipment may not be recoverable.

Stock-Based Compensation.The Company applies the fair value based method to account for stock-based compensation. Under this method, we will measure and recognize compensation expense for all stock-based payments at fair value. Management is required to make assumptions
including stock price volatility and expected life of the option, that are utilized to measure compensation expense.



|Item 7A. | NOT REQUIRED AS A SMALLER REPORTING COMPANY
|-------- | -------------------------------------------



|Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

The financial statements and supplemental information required to be filed under Item 8 of Form 10-K are presented on pages F-1 through F- 13 of this Form 10-K.



|Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

None.



|Item 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Evaluation of
Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the
Companys senior management of the effectiveness of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)) as of June 30, 2011, the end
of the period covered by this report. Based on that evaluation, the Companys management, including the Chairman and Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, concluded that the Companys disclosure
controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that the Company files under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms, and (ii) accumulated and communicated to the Companys management, including the Chairman, Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, as appropriate, to allow
timely decisions regarding required disclosures.

Managements Report on Internal Control Over Financial Reporting

This annual report does not include a report of managements assessment regarding internal control over financial reporting or an
attestation report of the Companys registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.



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PART III



|Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|-------- | ------------------------------------------------------

The information regarding directors, executive officers, promoters and control persons required under Item 10 of Form 10-K will be contained in our Definitive Proxy Statement for our 2011 Annual
Meeting of Stockholders (the Proxy Statement) under the headings Election of Directors, Executive Compensation, Section 16(a) Beneficial Ownership Reporting Compliance and Corporate
Governance and is incorporated herein by reference. The Proxy Statement will be filed with the SEC pursuant to Regulation 14A of the Exchange Act, not later than 120 days after June 30, 2011.



|Item 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The information required under Item 11 of Form 10-K will be contained in the Proxy Statement under the heading Executive
Compensation and is incorporated herein by reference.



|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------

The information required under Item 12 of Form 10-K will be contained in the Proxy Statement under the heading Security
Ownership of Certain Other Beneficial Owners and Management and is incorporated herein by reference.



|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|-------- | -------------------------------------------------------------------------

The information required under Item 13 of Form 10-K will be contained in the Proxy Statement under the heading Certain Relationships and Related Transactions, and Director Independence
and Executive Compensation and is incorporated herein by reference.



|Item 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

The information required under Item 14 of Form 10-K will be contained in the Proxy Statement under the heading Principal Accountant Fees and Services and is incorporated herein by
reference.



27



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PART IV



|Item 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------



|(a) | Financial Statements and Schedules:
|--- | -----------------------------------

The financial statements are set forth in pages F-1 to F-13 of this Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is
otherwise included.



|(b) | Exhibits:
|--- | ---------

The following
is a list of exhibits filed as part of this Form 10-K. Where so indicated by a footnote, exhibits, which were previously filed, are incorporated herein by reference.



|              |  |                                                                                                                                                                                                                                     
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                         
|              | 
|3.1           |  | Certificate of Incorporation of Contango ORE, Inc. (1)                                                                                                                                                                              
|              | 
|3.2           |  | Bylaws of Contango ORE, Inc. (1)                                                                                                                                                                                                    
|              | 
|4.1           |  | Form of Certificate of Contango ORE, Inc. Common Stock (1)                                                                                                                                                                          
|              | 
|10.1          |  | Mineral Lease, effective as of July 15, 2008, between the Native Village of Tetlin and Juneau Exploration Company, d/b/a Juneau Mining Company, as amended by Amendment No. 1 to
Mineral Lease, effective as of October 1, 2009. (1)
|              | 
|10.2          |  | Amendment No. 2 to Mineral Lease, effective as of June 1, 2011                                                                                                                                                                     
|              | 
|10.3          |  | Amendment No. 3 to Mineral Lease, effective as of July 1, 2011                                                                                                                                                                     
|              | 
|10.4          |  | Chairman Agreement dated as of November 1, 2010, between Contango ORE, Inc. and Kenneth R. Peak (1)                                                                                                                                 
|              | 
|10.5          |  | Form of 2010 Equity Compensation Plan (1)                                                                                                                                                                                           
|              | 
|10.6          |  | Contribution Agreement, dated as of November 1, 2010, between Contango Oil & Gas Company and Contango ORE, Inc. (1)                                                                                                                 
|              | 
|10.7          |  | Amended and Restated Professional Services Agreement, dated as of November 1, 2010, between Avalon Development Corporation and Contango ORE, Inc. (1)                                                                               
|              | 
|10.8          |  | Consulting Agreement, dated as of October 15, 2010, between Mr. Donald Adams and Contango ORE, Inc.                                                                                                                                
|              | 
|31.1          |  | Section 302 CEO Certification                                                                                                                                                                                                      
|              | 
|31.2          |  | Section 302 CFO Certification                                                                                                                                                                                                      
|              | 
|32.1          |  | Section 906 CEO Certification                                                                                                                                                                                                      
|              | 
|32.2          |  | Section 906 CFO Certification                                                                                                                                                                                                      
|              | 
|99.1          |  | Schedule of Gold Properties (Excluding Tetlin Lease)                                                                                                                                                                               
|              | 
|99.2          |  | Schedule of REE Properties                                                                                                                                                                                                         



| | Filed herewith
|- | --------------

|1. | Filed as an exhibit to the Companys report on Amendment No. 2 to Registration Statement on Form 10, as filed with the Securities and Exchange Commission on
November 26, 2010 (File no. 000-54136).
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



28



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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                                                                      |  |                                                                     |  |                                                                             
|--------------------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ----------------------------------------------------------------------------
|CONTANGO ORE, INC.                                                    |  |                                                                     |  |                                                                             
|                                                                      |  |                                                                    
|/s/    KENNETH R.
PEAK                                                |  | /s/    SERGIO CASTRO                                                |  | /s/    YAROSLAVA MAKALSKAYA                                                 
|Kenneth R. Peak Chief Executive Officer (principal executive officer) |  | Sergio Castro Chief Financial Officer (principal financial officer) |  | Yaroslava Makalskaya Chief Accounting Officer (principal accounting
officer)

Pursuant to the requirements of the Exchange Act, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.



|                                             |  |                       |  |                   
|-------------------------------------------- |  | --------------------- |  | ------------------
|Name                                         |  | Title                 |  | Date              
|                                             |  |                      
|/s/    KENNETH R.
PEAK Kenneth R. Peak       |  | Chairman of the Board |  | September 19, 2011
|                                             |  |                      
|/s/    JOSEPH
COMPOFELICE Joseph Compofelice |  | Director              |  | September 19, 2011
|                                             |  |                      
|/s/    JOSEPH
GREENBERG Joseph Greenberg     |  | Director              |  | September 19, 2011



29



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CONTANGO ORE, INC.

INDEX TO FINANCIAL STATEMENTS



|                                                                                                                                     |  |      |      | 
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | 
|                                                                                                                                     |  | Page |     
|                                                                                                                                     | 
|Report of Independent Registered Public Accounting Firm                                                                              |  |      | F-2  | 
|                                                                                                                                     | 
|Balance Sheets as of June 30, 2011 and 2010                                                                                          |  |      | F-3  | 
|                                                                                                                                     | 
|Statements of Operations for the Years Ended June 30, 2011 and 2010 and from October 
15, 2009 (Inception) to June 30, 2011          |  |      | F-4  | 
|                                                                                                                                     | 
|Statements of Cash Flows for the Years Ended June 30, 2011 and 2010 and from October 
15, 2009 (Inception) to June 30, 2011          |  |      | F-5  | 
|                                                                                                                                     | 
|Statement of Shareholders Equity for the Years Ended June 
30, 2011 and 2010 and from October 15, 2009 (Inception) to June 30, 2011 |  |      | F-6  | 
|                                                                                                                                     | 
|Notes to Financial Statements                                                                                                        |  |      | F-7  | 
|                                                                                                                                     | 
|Quarterly Results of Operations (Unaudited)                                                                                          |  |      | F-13 | 



F-1



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##### Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Contango ORE, Inc.

We have audited the accompanying balance sheets of Contango
ORE, Inc. (an exploration stage company) (the Company) as of June 30, 2011 and 2010, and the related statements of operations, shareholders equity and cash flows for each of the two years in the period ended June 30, 2011
and from October 15, 2009 (Inception) to June 30, 2011. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above presents fairly, in all material respects, the
financial position of Contango ORE, Inc. as of June 30, 2011 and 2010, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2011 and from October 15, 2009 (Inception) to
June 30, 2011 in conformity with accounting principles generally accepted in the United States of America.

/s/ UHY LLP

Houston, Texas

September 19, 2011



F-2



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CONTANGO ORE, INC.

(An Exploration Stage Company)

BALANCE SHEETS



|                                                                                                                                                      |  |          |            |   |      |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                                                                      |  | June 30, |           
|                                                                                                                                                      |  | 2011     |            |   | 2010 |  
|ASSETS                                                                                                                                                |  |          |            |   |      |   |            |  
|CURRENT ASSETS:                                                                                                                                       |  |          |            |   |      |   |            |  
|Cash                                                                                                                                                  |  | $        | 2,395,100  |   |      | $ |           |  
|Prepaid expenses                                                                                                                                      |  |          | 78,158     |   |      |   | 233,268    |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|Total current assets                                                                                                                                  |  |          | 2,473,258  |   |      |   | 233,268    |  
|                                                                                                                                                      |  |         
|PROPERTY AND EQUIPMENT:                                                                                                                               |  |          |            |   |      |   |            |  
|Mineral properties                                                                                                                                    |  |          | 1,008,886  |   |      |   | 1,008,886  |  
|Accumulated depreciation, depletion and amortization                                                                                                  |  |          |           |   |      |   |           |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|Total property, plant and equipment, net                                                                                                              |  |          | 1,008,886  |   |      |   | 1,008,886  |  
|                                                                                                                                                      |  |         
|OTHER ASSETS:                                                                                                                                         |  |          |            |   |      |   |            |  
|Other                                                                                                                                                 |  |          | 75,000     |   |      |   |           |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|Total other assets                                                                                                                                    |  |          | 75,000     |   |      |   |           |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|TOTAL ASSETS                                                                                                                                          |  | $        | 3,557,144  |   |      | $ | 1,242,154  |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|                                                                                                                                                      |  |         
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                  |  |          |            |   |      |   |            |  
|CURRENT LIABILITIES:                                                                                                                                  |  |          |            |   |      |   |            |  
|Accounts payable                                                                                                                                      |  | $        | 488,356    |   |      | $ |           |  
|Accrued liabilities                                                                                                                                   |  |          | 156,408    |   |      |   | 511,156    |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|Total current liabilities                                                                                                                             |  |          | 644,764    |   |      |   | 511,156    |  
|                                                                                                                                                      |  |         
|COMMITMENTS AND CONTINGENCIES (NOTE 12)                                                                                                               |  |          |            |   |      |   |            |  
|                                                                                                                                                      |  |         
|SHAREHOLDERS EQUITY:                                                                                                                                 |  |          |            |   |      |   |            |  
|Common Stock, $0.01 par value, 30,000,000 shares authorized, 1,566,467 shares issued and outstanding at June 30, 2011 and
June 30, 2010, respectively |  |          | 15,665     |   |      |   | 15,665     |  
|Additional paid-in capital                                                                                                                            |  |          | 6,853,515  |   |      |   | 1,817,969  |  
|Accumulated deficit during exploration stage                                                                                                          |  |          | (3,956,800 | ) |      |   | (1,102,636 | )
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|SHAREHOLDERS EQUITY                                                                                                                                  |  |          | 2,912,380  |   |      |   | 730,998    |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                            |  | $        | 3,557,144  |   |      | $ | 1,242,154  |  
|                                                                                                                                                      |  |          |            |   |      |   |            |  

The accompanying notes are an integral part of these financial statements.



F-3



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##### Index to Financial Statements

CONTANGO ORE, INC.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS



|                                           |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|------------------------------------------ |  | ------------------- | --------- |  | ---- | - | --------- | ------------------------------------------------------- |  | - | --------- | 
|                                           |  |                     |           |  |      |   |           | Period
fromInception(October 15, 
2009)to June 30, 2011 | 
|                                           |  |                     |           |  |      |   |          
|                                           |  | Year Ended June 30, |           | 
|                                           |  | 2011                |           |  | 2010 |   |          
|EXPENSES:                                  |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|Delay rentals and minimum royalties        |  | $                   | 281,418   |  |      | $ | 192,712   |                                                         |  | $ | 474,130   | 
|Exploration expenses                       |  |                     | 2,271,088 |  |      |   | 877,762   |                                                         |  |   | 3,148,850 | 
|Other operating expenses                   |  |                     | 87,167    |  |      |   | 30,485    |                                                         |  |   | 117,652   | 
|Stock-based compensation expense           |  |                     | 63,681    |  |      |   |          |                                                         |  |   | 63,681    | 
|General and administrative expenses        |  |                     | 150,810   |  |      |   | 1,677     |                                                         |  |   | 152,487   | 
|                                           |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|Total expenses                             |  |                     | 2,854,164 |  |      |   | 1,102,636 |                                                         |  |   | 3,956,800 | 
|                                           |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|NET LOSS                                   |  | $                   | 2,854,164 |  |      | $ | 1,102,636 |                                                         |  | $ | 3,956,800 | 
|                                           |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|LOSS PER SHARE                             |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|Basic and diluted                          |  | $                   | 1.82      |  |      | $ | 0.70      |                                                         |  | $ | 2.53      | 
|                                           |  |                     |          
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |  |                     |           |  |      |   |           |                                                         |  |   |           | 
|Basic and diluted                          |  |                     | 1,566,467 |  |      |   | 1,566,467 |                                                         |  |   | 1,566,467 | 

The accompanying notes are an integral part of these financial statements.



F-4



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##### Index to Financial Statements

CONTANGO ORE, INC.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS



|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|--------------------------------------------------------------------------- |  | ------------------- | ---------- | - | ---- | - | ---------- | ------------------------------------------------------ |  | - | ---------- | -
|                                                                            |  |                     |            |   |      |   |            | Period
fromInception(October 15, 2009)to June 30, 2011 | 
|                                                                            |  | Year Ended June 30, |            |  
|                                                                            |  | 2011                |            |   | 2010 |   |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Net loss                                                                    |  | $                   | (2,854,164 | ) |      | $ | (1,102,636 | )                                                      |  | $ | (3,956,800 | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Stock-based compensation                                                    |  |                     | 63,681     |   |      |   |           |                                                        |  |   | 63,681     |  
|Changes in operating assets and liabilities:                                |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Decrease (increase) in prepaid expenses                                     |  |                     | 155,110    |   |      |   | (233,268   | )                                                      |  |   | (78,158    | )
|Increase (decrease) in accounts payable and other accrued liabilities       |  |                     | 133,608    |   |      |   | 511,156    |                                                        |  |   | 644,764    |  
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Net cash used for operating activities                                      |  | $                   | (2,501,765 | ) |      | $ | (824,748   | )                                                      |  | $ | (3,326,513 | )
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Acquisition of other assets                                                 |  |                     | (75,000    | ) |      |   |           |                                                        |  |   | (75,000    | )
|Acquisition of properties                                                   |  |                     |           |   |      |   | (1,008,886 | )                                                      |  |   | (1,008,886 | )
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Net cash used in investing activities                                       |  | $                   | (75,000    | ) |      | $ | (1,008,886 | )                                                      |  | $ | (1,083,886 | )
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Shareholders contributions                                                 |  |                     | 4,971,865  |   |      |   | 1,833,634  |                                                        |  |   | 6,805,499  |  
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|Net cash provided by financing activities                                   |  | $                   | 4,971,865  |   |      | $ | 1,833,634  |                                                        |  | $ | 6,805,499  |  
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                   |  |                     | 2,395,100  |   |      |   |           |                                                        |  |   | 2,395,100  |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              |  |                     |           |   |      |   |           |                                                        |  |   |           |  
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                    |  | $                   | 2,395,100  |   |      | $ |           |                                                        |  | $ | 2,395,100  |  
|                                                                            |  |                     |            |   |      |   |            |                                                        |  |   |            |  

The accompanying notes are an integral part of these financial statements.



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##### Table of Contents

##### Index to Financial Statements

CONTANGO ORE, INC.

(An Exploration Stage Company)

STATEMENT OF SHAREHOLDERS EQUITY



|                                        |  |              |           |  |                   |   |        |                               |  |   |                    |  |  |        |            |   |  |   |            |  
|--------------------------------------- |  | ------------ | --------- |  | ----------------- | - | ------ | ----------------------------- |  | - | ------------------ |  |  | ------ | ---------- | - |  | - | ---------- | -
|                                        |  | Common Stock |           |  | Additionalpaid-in |   |        | AccumulatedDeficitExploration |  |   | TotalShareholders | 
|                                        |  | Shares       |           |  | Amount            |   |        | Capital                       |  |   | Stage              |  |  | Equity |           
|Balance at Inception (October 15, 2009) |  |              |          |  |                   | $ |       |                               |  | $ |                   |  |  | $      |           |   |  | $ |           |  
|Shareholders contribution              |  |              | 1,566,467 |  |                   |   | 15,665 |                               |  |   | 1,817,969          |  |  |        |           |   |  |   | 1,833,634  |  
|Net loss for the period                 |  |              |          |  |                   |   |       |                               |  |   |                   |  |  |        | (1,102,636 | ) |  |   | (1,102,636 | )
|                                        |  |              |           |  |                   |   |        |                               |  |   |                    |  |  |        |            |   |  |   |            |  
|Balance at June 30, 2010                |  |              | 1,566,467 |  |                   | $ | 15,665 |                               |  | $ | 1,817,969          |  |  | $      | (1,102,636 | ) |  | $ | 730,998    |  
|                                        |  |              |           |  |                   |   |        |                               |  |   |                    |  |  |        |            |   |  |   |            |  
|Shareholders contribution              |  |              |          |  |                   |   |       |                               |  |   | 4,950,638          |  |  |        |           |   |  |   | 4,950,638  |  
|Stock-based compensation                |  |              |          |  |                   |   |       |                               |  |   | 84,908             |  |  |        |           |   |  |   | 84,908     |  
|Net loss for the period                 |  |              |          |  |                   |   |       |                               |  |   |                   |  |  |        | (2,854,164 | ) |  |   | (2,854,164 | )
|                                        |  |              |           |  |                   |   |        |                               |  |   |                    |  |  |        |            |   |  |   |            |  
|Balance at June 30, 2011                |  |              | 1,566,467 |  |                   | $ | 15,665 |                               |  | $ | 6,853,515          |  |  | $      | (3,956,800 | ) |  | $ | 2,912,380  |  
|                                        |  |              |           |  |                   |   |        |                               |  |   |                    |  |  |        |            |   |  |   |            |  

The accompanying notes are an integral part of these financial statements.



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##### Table of Contents

##### Index to Financial Statements

CONTANGO ORE, INC.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

1. Organization and Business

Contango ORE, Inc. (CORE or the Company) is a Houston-based, exploration stage company. The Company was formed on
September 1, 2010 as a Delaware corporation for the purpose of engaging in the exploration for (i) gold and associated minerals and (ii) rare earth elements in the State of Alaska.

On November 29, 2010, Contango Mining Company (Contango Mining), a wholly owned subsidiary of Contango Oil &
Gas Company (Contango), assigned the Properties (defined below) and certain other assets and liabilities to Contango. Contango contributed the Properties and $3.5 million of cash to the Company, in exchange for approximately
1.6 million shares of the Companys common stock. The above transactions occurred between companies under common control. Contango subsequently distributed the Companys common stock to Contangos stockholders. The Company had no
operating history prior to the contribution of assets and liabilities by Contango. The financial statements of the Company include the financial position, results of operations, and cash flows of Contango Mining since Contango Minings
inception on October 15, 2009 (the Inception). The equity structure (i.e. the number and type of equity interests issued), however, was retroactively adjusted to reflect the capital structure of the Company.

The Company is an exploration stage company as defined by Accounting Standards Codification (ASC) 915, Development
Stage Entities. An investment in the Company involves a high degree of risk. The Companys fiscal year end is June 30.

As of June 30, 2011, the Company held a 100% leasehold interest in 647,000 acres from the Tetlin Village Council, the council formed by the governing body for the Native Village of Tetlin, an Alaska
Native Tribe (Tetlin Lease) and held 18,560 acres in unpatented mining claims from the State of Alaska for the exploration of gold and associated minerals (together with the Tetlin Lease, the Gold Properties). The Company
also held interests in and to 3,440 acres in unpatented Federal mining claims and 97,280 acres in unpatented mining claims from the State of Alaska for the exploration of rare earth elements (the REE Properties, and together with the
Gold Properties, the Properties). If the Tetlin Lease is placed into commercial production, the Company would be obligated to pay a production royalty on precious and non-precious metals to the Native Village of Tetlin, which varies from
2.0% to 5.0%, depending on the type of metal produced and the year of production. In addition, if any of the Properties are placed into commercial production, the Company would be obligated to pay a 3% production royalty to Juneau Exploration LLC
(JEX).

2. Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, these
financial statements include all adjustments considered necessary for a fair presentation of the financial statements. All such adjustments are of a normal recurring nature.

Financial statements for the periods from October 15, 2009 to November 29, 2010 represent financial statements of Contango Mining. The Company used a carryover historical cost basis for all
assets and liabilities contributed from Contango Mining on November 29, 2010. All assets and liabilities contributed to the Company from Contango Mining on November 29, 2010 were recorded at the carryover historical cost basis.

3. Summary of Significant Accounting Policies

The Companys significant accounting policies are described below.

Management Estimates.The preparation of financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the



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##### Table of Contents

##### Index to Financial Statements

reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash Equivalents. Cash equivalents are considered
to be highly liquid securities having an original maturity of 90 days or less at the date of acquisition.

Revenue
Recognition.CORE has yet to realize any revenues. Expenses are presented on the accrual basis of accounting.

Common
Stock.The Companys certificate of incorporation authorizes us to issue 30,000,000 shares of common stock, $0.01, par value. As of June 30, 2011, approximately 1.6 million shares of common stock were issued and outstanding, all
of which were fully paid and non-assessable. Holders of common stock are entitled to one vote for each share held of record on all matters to be voted on by stockholders and are not entitled to cumulative voting for the election of directors. Upon
the liquidation, dissolution or winding up of our business, after payment of all liabilities and payment of preferential amounts to the holders of preferred stock, if any, the shares of common stock are entitled to share equally in our remaining
assets. Pursuant to our certificate of incorporation, no stockholder has any preemptive rights to subscribe for our securities. The common stock is not subject to redemption. The Companys equity structure for all periods prior to
November 29, 2010 was retroactively adjusted to reflect the equity structure of the Company.

Stock-Based
Compensation. The Company applies the fair value based method to account for stock-based compensation. Under this method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award
vesting period. The fair value of each award is estimated as of the date of grant using the Black-Scholes option-pricing model.

Income Taxes. The Company follows the liability method of accounting for income taxes under which deferred tax assets and
liabilities are recognized for the future tax consequences of (i) temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements and (ii) operating loss and tax credit
carry-forwards for tax purposes. Deferred tax assets are reduced by a valuation allowance when, based upon managements estimates, it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. The
Company recognized a full valuation allowance as of June 30, 2011 and 2010 and has not recognized any tax provision or benefit for the applicable period. The Company reviews its tax positions quarterly for tax uncertainties. The Company did not
have any uncertain tax positions as of June 30, 2011 or 2010.

The Company files income tax returns in the United States
and certain state jurisdictions. The Companys tax returns through fiscal year 2011 remain open for examination by taxing authorities in the respective jurisdictions where those returns are filed.

Recently Issued Accounting Pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe that the future adoption of any such pronouncements will cause a material impact on our financial
condition or the results of our operations.



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##### Table of Contents

##### Index to Financial Statements

4. Property and Equipment

The amount capitalized includes costs paid to acquire mineral property interests as well as the costs paid for Federal and State of Alaska unpatented mining claims. Exploration costs are expensed as
incurred. Development costs will be expensed as incurred until the Company obtains proven and probable reserves within its commercially minable properties. Costs of abandoned projects are charged to earnings upon abandonment. Properties determined
to be impaired are written-down to their estimated fair value. The Company periodically evaluates whether events or changes in circumstances indicate that the carrying value of mineral property interests and any related property and equipment may
not be recoverable.

5. Costs Incurred

Costs to acquire and explore the Properties were as follows:



|                                    |  |                     |           |  |      |   |           |                                                        |  |   |           | 
|----------------------------------- |  | ------------------- | --------- |  | ---- | - | --------- | ------------------------------------------------------ |  | - | --------- | 
|                                    |  |                     |           |  |      |   |           | Period
fromInception(October 15, 2009)to June 30, 2011 | 
|                                    |  | Year Ended June 30, |           | 
|                                    |  | 2011                |           |  | 2010 |   |          
|Acquisition of mineral interests    |  | $                   |          |  |      | $ | 1,008,886 |                                                        |  | $ | 1,008,886 | 
|Exploration costs and delay rentals |  |                     | 2,552,506 |  |      |   | 1,070,474 |                                                        |  |   | 3,622,980 | 
|                                    |  |                     |           |  |      |   |           |                                                        |  |   |           | 
|Total costs incurred                |  | $                   | 2,552,506 |  |      | $ | 2,079,360 |                                                        |  | $ | 4,631,866 | 
|                                    |  |                     |           |  |      |   |           |                                                        |  |   |           | 

6. Prepaid Expenses

The Companys prepaid expenses of $78,158 and $233,268 as of June 30, 2011 and 2010, respectively, relate to delay rentals and certain geological consulting services and exploration activities
conducted by Avalon.

7. Other Assets

In June 2011, the Company paid the Tetlin Village Council $75,000 in exchange for reducing the production royalty payable to them by 0.25%. In July 2011, the Company paid the Tetlin Village Council
$150,000 in exchange for reducing the production royalty by 0.50%. These payments lower the production royalty payable to the Tetlin Village Council from 2.0%  5.0% down to 1.25%  4.25%, depending on the type of metal produced and the
year of production. On or before July 15, 2020, the Tetlin Village Council has the option to increase their production royalty by (i) 0.25% by payment to CORE of $150,000 in cash, or (ii) 0.50% by payment to CORE of $300,000 in cash,
or (iii) 0.75% by payment to CORE of $450,000 in cash.

8. Loss Per Share

A reconciliation of the components of basic and diluted net loss per share of common stock is presented in the tables below.



|                                      |  |                          |            |   |                       |  |           |          |  |   |       |  
|------------------------------------- |  | ------------------------ | ---------- | - | --------------------- |  | --------- | -------- |  | - | ----- | -
|                                      |  | Year Ended June 30, 2011 |           
|                                      |  | Loss                     |            |   | WeightedAverageShares |  |           | PerShare | 
|Basic Loss per Share:                 |  |                          |            |   |                       |  |           |          |  |   |       |  
|Net loss attributable to common stock |  | $                        | (2,854,164 | ) |                       |  | 1,566,467 |          |  | $ | (1.82 | )
|                                      |  |                          |            |   |                       |  |           |          |  |   |       |  
|                                      |  |                          |           
|Diluted Loss per Share:               |  |                          |            |   |                       |  |           |          |  |   |       |  
|Net loss attributable to common stock |  | $                        | (2,854,164 | ) |                       |  | 1,566,467 |          |  | $ | (1.82 | )
|                                      |  |                          |            |   |                       |  |           |          |  |   |       |  



|                                      |  |                          |            |   |                       |  |           |          |  |   |       |  
|------------------------------------- |  | ------------------------ | ---------- | - | --------------------- |  | --------- | -------- |  | - | ----- | -
|                                      |  | Year Ended June 30, 2010 |           
|                                      |  | Loss                     |            |   | WeightedAverageShares |  |           | PerShare | 
|Basic Loss per Share:                 |  |                          |            |   |                       |  |           |          |  |   |       |  
|Net loss attributable to common stock |  | $                        | (1,102,636 | ) |                       |  | 1,566,467 |          |  | $ | (0.70 | )
|                                      |  |                          |            |   |                       |  |           |          |  |   |       |  
|                                      |  |                          |           
|Diluted Loss per Share:               |  |                          |            |   |                       |  |           |          |  |   |       |  
|Net loss attributable to common stock |  | $                        | (1,102,636 | ) |                       |  | 1,566,467 |          |  | $ | (0.70 | )
|                                      |  |                          |            |   |                       |  |           |          |  |   |       |  



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##### Table of Contents

##### Index to Financial Statements

|                                      |  |                                                          |            |   |                       |  |           |          |  |   |       |  
|------------------------------------- |  | -------------------------------------------------------- | ---------- | - | --------------------- |  | --------- | -------- |  | - | ----- | -
|                                      |  | Period from Inception (October 15, 2009)to June 30, 2011 |           
|                                      |  | Loss                                                     |            |   | WeightedAverageShares |  |           | PerShare | 
|Basic Loss per Share:                 |  |                                                          |            |   |                       |  |           |          |  |   |       |  
|Net loss attributable to common stock |  | $                                                        | (3,956,800 | ) |                       |  | 1,566,467 |          |  | $ | (2.53 | )
|                                      |  |                                                          |            |   |                       |  |           |          |  |   |       |  
|                                      |  |                                                          |           
|Diluted Loss per Share:               |  |                                                          |            |   |                       |  |           |          |  |   |       |  
|Net loss attributable to common stock |  | $                                                        | (3,956,800 | ) |                       |  | 1,566,467 |          |  | $ | (2.53 | )
|                                      |  |                                                          |            |   |                       |  |           |          |  |   |       |  

9. Shareholders Equity

On November 29, 2010, the Company issued approximately 1.6 million shares of common stock to Contango for distribution to Contangos stockholders of record as of October 15, 2010 on
the basis of one share of common stock for each ten (10) shares of Contangos common stock then outstanding in exchange for the assignment by Contango Mining of all of its assets and liabilities, together with $3.5 million in cash to the
Company pursuant to the terms of a Contribution Agreement between Contango and the Company (the Contribution Agreement). The Companys equity structure for the periods prior to November 29, 2010 was retroactively adjusted to
reflect the equity structure of the Company as of November 29, 2010.

10. Stock Based Compensation

On September 15, 2010, the Companys Board of Directors (the Board) adopted the Contango ORE, Inc. Equity
Compensation Plan (the 2010 Plan), which will be voted upon by the Companys shareholders at its next scheduled annual meeting. Under the 2010 Plan, the Board may issue up to 1,000,000 shares of common stock and options to officers,
directors, employees or consultants of the Company. Awards made under the 2010 Plan are subject to such restrictions, terms and conditions, including forfeitures, if any, as may be determined by the Board. As of September 16, 2011, there were
93,906 restricted shares outstanding and 50,000 options outstanding issued under the 2010 Plan, subject to shareholder approval. For the fiscal year ended June 30, 2011, the Company recorded stock-based compensation expense of $63,681 related
to restricted stock awards granted to officers and directors, and an additional $21,227 of stock-based compensation recorded under exploration expenses, related to restricted stock granted to the owner of Avalon. The amount of compensation expense
recognized does not reflect compensation actually received by the individuals, but rather represents the amount recognized in accordance with GAAP.

Restricted Stock

In December 2010, the Company granted 70,429 restricted
shares of common stock to its officers and directors and an additional 23,477 restricted shares to its technical consultant, the owner of Avalon Development Corporation, an Alaska-domiciled domestic corporation (Avalon). All shares of
restricted stock vest over a three year period, beginning in December 2011, the one-year anniversary of when the restricted stock was issued. Compensation expense related to these shares will be recognized over the vesting period. A summary of the
Companys restricted stock as of June 30, 2011, is as follows:



|                                   |  |                 |        |  |                                    |   |      | 
|---------------------------------- |  | --------------- | ------ |  | ---------------------------------- | - | ---- | 
|                                   |  | Number ofShares |        |  | WeightedAverageFair ValuePer Share |  
|Nonvested balance at June 30, 2010 |  |                 |       |  |                                    | $ |     | 
|Granted                            |  |                 | 93,906 |  |                                    | $ | 4.65 | 
|Vested                             |  |                 |       |  |                                    | $ |     | 
|Forfeited                          |  |                 |       |  |                                    | $ |     | 
|                                   |  |                 |        |  |                                    |   |      | 
|Nonvested balance at June 30, 2011 |  |                 | 93,906 |  |                                    | $ | 4.65 | 

As of June 30, 2011, the total compensation cost related to nonvested awards not yet recognized was
$351,756. It is expected to be recognized over the next 2.5 years.



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##### Table of Contents

##### Index to Financial Statements

Stock Options

In September 2011, the Company granted an aggregate of 50,000 options to its officers, directors and the owner of Avalon at a
weighted-average exercise price of $13.13 per option, to be expensed over the vesting period which is one-third immediately; one-third in September 2012; and one-third in September 2013. The option awards are for services performed during the fiscal
year ended June 30, 2011. Under the 2010 Plan, options granted must have an exercise price equal to or greater than the market price of the Companys common stock on the date of grant. The Company may grant key employees both incentive
stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, and stock options that are not qualified as incentive stock options. Stock option grants to non-employees, such as directors and consultants,
may only be stock options that are not qualified as incentive stock options. Options generally expire after five years.

The
Company applies the fair value method to account for stock option expense. Under this method, cash flows from the exercise of stock options resulting from tax benefits in excess of recognized cumulative compensation cost (excess tax benefits) are
classified as financing cash flows. See Note 2Summary of Significant Accounting Policies. All employee stock option grants are expensed over the stock options vesting period based on the fair value at the date the options are
granted. The fair value of each option is estimated as of the date of grant using the Black-Scholes options-pricing model.

11. Related
Parties

Contango and the Company share the same executive management team. Pursuant to the Contribution Agreement between
Contango and the Company, effective as of November 29, 2010, Contango contributed the Properties and $3.5 million in cash to the Company in exchange for shares of common stock of the Company in an amount equal to one share of common stock for
each ten (10) shares of Contangos common stock outstanding as of October 15, 2010.

12. Commitments and Contingencies

Tetlin Lease. The Company is required to spend $350,000 per year annually until July 15, 2018 in
exploration costs. However, the Company anticipates that exploration expenditures through the 2011 exploration program will satisfy this requirement because exploration funds spent in any year in excess of $350,000 are credited toward future
years exploration cost requirements. The Company is also required to pay the Tetlin Village Council a production royalty on precious and non-precious metals ranging from 2.0% to 5.0% should we derive revenues from the Tetlin Lease. Until such
time as production royalties begin, the Company pays the Tetlin Village Council an advance minimum royalty of $50,000 per year. On July 15, 2012, the advance minimum royalty increases to $75,000 per year, and subsequent years are escalated by
an inflation adjustment.

Gold Properties.The Companys LAD/Triple Z and TOK/Tetlin projects are both located on
State of Alaska lands. The delay rentals on these two projects total $12,140 per year, and are due and payable in full by November 30 of each year.

REE Properties. The Companys Stone Rock and Salmon Bay projects are both located on Federal land. The delay rentals on these two projects total $24,080 per year, and are due and payable in
full by August 31 of each year. The Companys Swift River, Wolf, and Alatna projects are all located on State of Alaska lands. The delay rentals on these three projects total $61,880 per year, and are due and payable in full by
November 30 of each year. Additionally, these three claims also have an annual labor payment totaling $176,800 payable by November 30 of each year. The Companys Spooky project is located on State of Alaska lands, but annual claim
rental not required until land is patented to the State of Alaska.

We will also pay JEX a production royalty of 3% should we
derive revenues from any of the existing Properties.



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##### Table of Contents

##### Index to Financial Statements

In connection with acquiring all the assets and liabilities of Contango Mining, the Company
has assumed any claims, litigation or disputes pending as of the effective date on any matters arising in connection with ownership of the Properties prior to the effective date. The Company is not aware of any legal, environmental or other
commitments or contingencies that would have a material effect on the Companys financial position or results of operations.

13. Income Taxes



|                                          |  |                     |          |   |                                                         |   |          |   |  |   |            |  
|----------------------------------------- |  | ------------------- | -------- | - | ------------------------------------------------------- | - | -------- | - |  | - | ---------- | -
|                                          |  | Year Ended June 30, |          |   | Period from Inception(October 15, 2009)to June 30, 2011 |  
|                                          |  | 2011                |          |   | 2010                                                    |   |         
|Provision (benefit) at statutory tax rate |  | $                   | (998,957 | ) |                                                         | $ | (385,923 | ) |  | $ | (1,384,880 | )
|Permanent differences                     |  |                     | 48,826   |   |                                                         |   | 11,296   |   |  |   | 60,122     |  
|Valuation allowance                       |  |                     | 950,131  |   |                                                         |   | 374,627  |   |  |   | 1,324,758  |  
|                                          |  |                     |          |   |                                                         |   |          |   |  |   |            |  
|Income tax provision                      |  | $                   |         |   |                                                         | $ |         |   |  | $ |           |  
|                                          |  |                     |          |   |                                                         |   |          |   |  |   |            |  

The benefit for income taxes for the periods indicated below are comprised of the following:



|          |  |                     |   |  |                                                        |   |   |  |  |   |   | 
|--------- |  | ------------------- | - |  | ------------------------------------------------------ | - | - |  |  | - | - | 
|          |  | Year Ended June 30, |   |  | Period fromInception(October 15, 2009)to June 30, 2011 |  
|          |  | 2011                |   |  | 2010                                                   |   |  
|Current:  |  |                     |   |  |                                                        |   |   |  |  |   |   | 
|Federal   |  | $                   |  |  |                                                        | $ |  |  |  | $ |  | 
|          |  |                     |  
|Deferred: |  |                     |   |  |                                                        |   |   |  |  |   |   | 
|Federal   |  | $                   |  |  |                                                        | $ |  |  |  | $ |  | 

The net deferred tax asset is comprised of the following:



|                                 |  |                     |            |   |      |   |          |  
|-------------------------------- |  | ------------------- | ---------- | - | ---- | - | -------- | -
|                                 |  | Year Ended June 30, |           
|                                 |  | 2011                |            |   | 2010 |  
|Deferred tax asset:              |  |                     |            |   |      |   |          |  
|Net operating losses             |  | $                   | 56,754     |   |      | $ |         |  
|Capitalized exploration expenses |  |                     | 1,268,004  |   |      |   | 374,627  |  
|Valuation allowance              |  |                     | (1,324,758 | ) |      |   | (374,627 | )
|                                 |  |                     |            |   |      |   |          |  
|Net deferred tax asset           |  | $                   |           |   |      | $ |         |  
|                                 |  |                     |            |   |      |   |          |  



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##### Table of Contents

##### Index to Financial Statements

CONTANGO ORE, INC.

QUARTERLY RESULTS OF OPERATIONS (Unaudited)

Quarterly Results of Operations. The following table sets forth the results of operations by quarter for the years ended June 30, 2011 and 2010:



|                                 |  |               |         |  |          |   |         |          |  |   |          |  |  |   |           | 
|-------------------------------- |  | ------------- | ------- |  | -------- | - | ------- | -------- |  | - | -------- |  |  | - | --------- | 
|                                 |  | Quarter Ended |        
|                                 |  | Sept. 30,     |         |  | Dec. 31, |   |         | Mar. 31, |  |   | June 30, | 
|Fiscal Year 2011:                |  |               |         |  |          |   |         |          |  |   |          |  |  |   |           | 
|Net loss                         |  | $             | 862,128 |  |          | $ | 296,237 |          |  | $ | 140,394  |  |  | $ | 1,555,405 | 
|                                 |  |               |         | 
|Basic and diluted loss per share |  | $             | 0.55    |  |          | $ | 0.19    |          |  | $ | 0.09     |  |  | $ | 0.99      | 
|                                 |  |               |         | 
|Fiscal Year 2010:                |  |               |         |  |          |   |         |          |  |   |          |  |  |   |           | 
|Net loss                         |  |               | n/a     |  |          | $ | 267,435 |          |  | $ | 306,134  |  |  | $ | 529,067   | 
|                                 |  |               |         | 
|Basic and diluted loss per share |  |               | n/a     |  |          | $ | 0.17    |          |  | $ | 0.20     |  |  | $ | 0.34      | 



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