Comstock Mining Inc. (“Comstock” or the “Company”) (NYSE American:
LODE) today announced the closing of the sale of the Lucerne mine
to Tonogold Resources Inc. (“Tonogold.”)
Comstock Mining LLC and Tonogold
Closing
Comstock and Tonogold have closed the sale of the
controlling interests of the entity that owns the Lucerne mine by
consummating a transaction, originally agreed upon earlier this
year, that values Lucerne at over $25 million ($11.5 million in
cash, $5.8 million in stock and over $7.4 million in assumed
liabilities), since Comstock also retains a 1.5% NSR royalty on
Lucerne’s future production plus more than $2.2 million in
subsidized, annualized savings.
The Company received $1.7 million in cash today
plus $300k in convertible preferred stock (“CPS”), bringing total
2019, cash and stock payments to $11.725 million. Tonogold now has
a 50% membership interest in Comstock Mining LLC, the entity that
owns the Lucerne mine assets. The remaining $5.575 million in cash
owed represents a secured obligation of Tonogold with monthly
payments starting in November 2019, through June 2020. Once paid,
Tonogold will own 100% of Comstock Mining LLC, the owner and
operator of the permitted Lucerne mine.
Comstock and Tonogold also executed a Lease-Option
agreement to use the Company’s American Flat processing facilities
for processing mineralized materials from the Lucerne mine. To
maintain the option, Tonogold will reimburse the Company for all
expenses related to owning and maintaining the facility. Once
exercised, Tonogold will pay $1 million per year and $1 per ton for
processing mineralized material, in addition to paying all
operating and processing expenses. As announced on September 23rd
2019, Tonogold has also been granted a renewable 10-year lease with
rights to explore, develop and mine the Company’s mineral claims in
Storey County.
Mr. Corrado De Gasperis, Executive Chairman and CEO
stated, “Closing on the sale of Lucerne is a major milestone
representing years of meaningful diligence and development, and now
allows Tonogold to focus on the drilling and development of the
Lucerne mine and Storey County mineral claims while Comstock turns
its attention to developing our expansive, 100% owned mineral
claims, specifically, the Dayton and Spring Valley exploration and
development targets. Our debt is now down to $4.7 million, and
declining every month.”
The Dayton resource area is the Company’s top
wholly-owned exploration and development target. The Company is
developing a new geological interpretation for an updated resource
estimate. The new geological interpretation also drives a phased
drilling program with higher potential for additional mineral
resources that will be reported in a new, stand-alone technical
report with a preliminary economic assessment (PEA) in the fourth
quarter 2020.
Mr. De Gasperis, concluded, “The Lucerne sale has
more than halved our debt and annual operating expenses. We are
progressing the Dayton exploration and development plans,
permitting our mercury remediation efforts and facilitating the
sale of our non-mining assets in a manner that eliminates our debt
and funds our growth.”
About Comstock Mining Inc.
Comstock Mining Inc. is a Nevada-based, gold and
silver mining company with extensive, contiguous property in the
Comstock District and is an emerging leader in sustainable,
responsible mining that is currently commercializing
environment-enhancing, precious-metal-based technologies, products
and processes for precious metal recovery. The Company began
acquiring properties in the Comstock District in 2003. Since then,
the Company has consolidated a significant portion of the Comstock
District, amassed the single largest known repository of historical
and current geological data on the Comstock region, secured
permits, built an infrastructure and completed its first phase of
production. The Company continues evaluating and acquiring
properties inside and outside the district expanding its footprint
and exploring all of our existing and prospective opportunities for
further exploration, development and mining. The Company’s goal is
to grow per-share value by commercializing environment-enhancing,
precious-metal-based products and processes that generate
predictable cash flow (throughput) and increase the long-term
enterprise value of our northern Nevada based platform.
Forward-Looking Statements
This press release and any related calls or
discussions may include forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements, other than statements of historical facts, are
forward-looking statements. The words “believe,” “expect,”
“anticipate,” “estimate,” “project,” “plan,” “should,” “intend,”
“may,” “will,” “would,” “potential” and similar expressions
identify forward-looking statements, but are not the exclusive
means of doing so. Forward-looking statements include statements
about matters such as: future industry market conditions; future
explorations, acquisitions, investments and asset sales; future
performance of and closings under various agreements; future
changes in our exploration activities; future prices and sales of,
and demand for, our products; future impacts of land entitlements
and uses; future permitting activities and needs therefor; future
production capacity and operations; future operating and overhead
costs; future capital expenditures and their impact on us; future
impacts of operational and management changes (including changes in
the board of directors); future changes in business strategies,
planning and tactics and impacts of recent or future changes;
future employment and contributions of personnel, including
consultants; future land sales, investments, acquisitions, joint
ventures, strategic alliances, business combinations, operational,
tax, financial and restructuring initiatives; the nature and timing
of and accounting for restructuring charges and derivative
liabilities and the impact thereof; contingencies; future
environmental compliance and changes in the regulatory environment;
future offerings of equity or debt securities; the possible
redemption of debentures and associated costs; future working
capital, costs, revenues, business opportunities, debt levels, cash
flows, margins, earnings and growth.
These statements are based on assumptions and
assessments made by our management in light of their experience and
their perception of historical and current trends, current
conditions, possible future developments and other factors they
believe to be appropriate. Forward-looking statements are not
guarantees, representations or warranties and are subject to risks
and uncertainties, many of which are unforeseeable and beyond our
control and could cause actual results, developments and business
decisions to differ materially from those contemplated by such
forward-looking statements. Some of those risks and uncertainties
include the risk factors set forth in our filings with the SEC and
the following: adverse effects of climate changes or natural
disasters; global economic and capital market uncertainties; the
speculative nature of gold or mineral exploration, including risks
of diminishing quantities or grades of qualified resources;
operational or technical difficulties in connection with
exploration or mining activities; contests over title to
properties; potential dilution to our stockholders from our stock
issuances and recapitalization and balance sheet restructuring
activities; potential inability to comply with applicable
government regulations or law; adoption of or changes in
legislation or regulations adversely affecting businesses;
permitting constraints or delays; decisions regarding business
opportunities that may be presented to, or pursued by, us or
others; the impact of, or the non-performance by parties under
agreements relating to, acquisitions, joint ventures, strategic
alliances, business combinations, asset sales, and investments to
which we may be party; changes in the United States or other
monetary or fiscal policies or regulations; interruptions in
production capabilities due to capital constraints; equipment
failures; fluctuation of prices for gold or certain other
commodities (such as silver, zinc, cyanide, water, diesel fuel and
electricity); changes in generally accepted accounting principles;
adverse effects of terrorism and geopolitical events; potential
inability to implement business strategies; potential inability to
grow revenues; potential inability to attract and retain key
personnel; interruptions in delivery of critical supplies,
equipment and raw materials due to credit or other limitations
imposed by vendors or others; assertion of claims, lawsuits and
proceedings; potential inability to satisfy debt and lease
obligations; potential inability to maintain an effective system of
internal controls over financial reporting; potential inability or
failure to timely file periodic reports with the SEC; potential
inability to list our securities on any securities exchange or
market; inability to maintain the listing of our securities; and
work stoppages or other labor difficulties. Occurrence of such
events or circumstances could have a material adverse effect on our
business, financial condition, results of operations or cash flows
or the market price of our securities. All subsequent written and
oral forward-looking statements by or attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
these factors. Except as may be required by securities or other
law, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Neither this press release nor any related calls or
discussions constitutes an offer to sell, the solicitation of an
offer to buy or a recommendation with respect to any securities of
the Company, the fund or any other issuer.
Contact information:
Comstock Mining Inc. P.O. Box 1118 Virginia City,
NV 89440 ComstockMining.com
Corrado De GasperisExecutive Chairman & CEOTel
(775) 847-4755degasperis@comstockmining.com
Zach Spencer Director of External Relations Tel
(775) 847-5272 ext.151questions@comstockmining.com
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