Note 9 - Related Party Transactions

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

     

9.

Related Party Transactions

Mr. Brad Juneau, the Company’s Chairman, President and Chief Executive Officer, is also the sole manager of JEX, a private company involved in the exploration and production of oil and natural gas. JEX was responsible for securing and negotiating the Tetlin Lease and assisting in obtaining other properties and initially engaged Avalon Development Corporation (“Avalon”) to conduct mineral exploration activities on the Tetlin Lease. In agreeing to transfer its interests in such properties to Contango Mining, a predecessor of the Company, JEX retained a

3.0%

overriding royalty interest in the properties transferred.

In

September 2012,

the Company and JEX entered into an Advisory Agreement in which JEX provided assistance in acquiring additional properties in Alaska in exchange for an overriding royalty of

2.0%

on properties acquired after

July 1, 2012.

On

September 29, 2014,

pursuant to a Royalty Purchase Agreement between JEX and Royal Gold (the “Royalty Purchase Agreement”), JEX sold its entire overriding royalty interest in the Peak Gold Joint Venture Property to Royal Gold. On the same date, the Company terminated its Advisory Agreement with JEX.

In

September 2016,

the Company and JEX entered into a Management Services Agreement effective

October

 

1,

2016.

Under the Management Services Agreement, JEX will manage the business and affairs of the Company and its interest in the Joint Venture Company, subject to the direction of the Board, including corporate finance, accounting, budget, SEC reporting, risk management, operations and stockholder relation functions of the Company for an initial term of

one

year, and thereafter on a monthly basis, for a monthly fee of

$32,000

which includes an allocation of approximately

$6,900

for office space and equipment.

No

part of the fee will be allocated for compensation of Brad Juneau who will be compensated separately as determined by the independent Directors of the Company. JEX will also be reimbursed for its reasonable and necessary costs and expenses of

third

parties incurred for the Company. In addition, executives of JEX

may

be granted restricted stock, stock options or other forms of compensation by the independent Directors of the Company. The Company has adopted this management and compensation program because employees of JEX have historically spent significant time and effort in managing and administering the affairs of the Company. While the Company remains a small exploratory stage entity whose shares are publicly traded, the successful drilling program of the Joint Venture Company has required a significant additional allocation of time and effort to the business and affairs of the Company by the

three

part time executives,

two

of whom are officers of the Company. The amount of time and expertise required to effectively manage and administer the business and affairs of the Company will continue to be monitored by the Board for necessary adjustments or modifications depending upon the amount of time required to be spent on the business and affairs of the Company by the executives and the progress of the Joint Venture Company in its exploratory programs in Alaska.

On

October 23, 2017,

the Company completed the issuance and sale of an aggregate of

553,672

shares of common stock, par value

$0.01

per share, of the Company at a purchase price of

$19.00

per share of Common Sto

ck, in the Private Placement to Purchasers pursuant to the Stock Purchase Agreement dated as of

October 23, 2017 (

the “Purchase Agreement”), by and among the Company and each Purchaser. The Private Placement resulted in approximately

$10.5

million of gross proceeds and approximately

$10.0

million of net proceeds. The Company is using the net proceeds from the Private Placement for working capital purposes and for funding future obligations to the Joint Venture Company.  Petrie Partners Securities, LLC (“Petrie”) acted as sole placement agent in connection with the Private Placement and received a placement agent fee equal to

6.50%,

which was reduced to

3.25%

 for existing stockholders and other Purchasers referred by those existing stockholders, or a total of

$0.5

million in placement agent fees.  JEX, which is controlled by 

Brad Juneau, the Company

’s President and Chief Executive Officer, purchased

13,200

shares of Common Stock, in the Private Placement for a price of

$250,800

and on the same terms and conditions as all other Purchasers. 

      On

April 16, 2018, Royal Gold filed 

a Schedule

13D

 with the Securities and Exchange Commission to reflect Royal Gold’s acquisition from an existing stockholder of

13.6%

 of the Company’s outstanding common stock at a price of

$26

per share, subject to certain adjustments. Royal Gold also filed amendments to its Schedule

13D

on June

29,

2018,

October

4,

2018,

and January

22,

2018.

  As of January

22,

2018

Royal Gold reported beneficial ownership of approximately 

12.7%

of the Company's outstanding common stock.  Royal Gold is the parent company of Royal Alaska LLC, CORE’s joint venture partner in the Joint Venture Company. 

The Company has retained Petrie Partners, LLC and Cantor Fitzgerald and Co. to advise on its strategic options, including in connection with a joint sale process with its joint venture partner, Royal Gold. Royal Gold has retained Scotia Capital Inc. to conduct a joint process for the sale directly or indirectly of the Peak Gold Project’s properties in Alaska. The Company’s

60%

interest in the Joint Venture Company plus cash on hand constitute substantially all of the Company’s assets. The Company has

no

borrowings.