Comstock Mining Inc. (“Comstock” or “Comstock Mining”) (NYSE
American: LODE) announced today that Tonogold Resources, Inc.
(“Tonogold”) has agreed to a closing date of October 15, 2019, on
the sale of Lucerne and delivered non-refundable stock-based fees
totaling $830 thousand that have been paid timely. Tonogold also
recently paid $575 thousand in non-refundable cash deposits
bringing total cash deposits to $3.925 million plus $3.50 million
in non-refundable Convertible Preferred Stock (“CPS”), for a grand
total of $7.425 million in cash and stock paid toward the purchase
price. Comstock has also received additional stock fees of $1.25
million, bringing total non-refundable payments to $8.675 million.
Comstock currently holds $4.75 million in CPS, convertible at the
lowest of Tonogold’s (1) 20-day volume-weighted closing price prior
to conversion, (2) most recent private placement or (3) public
offering price.
So far in September, Tonogold has also paid
approximately $450 thousand in reimbursements directly to Comstock
Mining, in addition to over $350 thousand from the second quarter,
primarily for permitting, development activities and interest
expense reimbursements. Tonogold is current on all payment
obligations and the non-refundable purchase price payments have
reduced Comstock’s Debenture to under $6.1 million.
Under the agreement, Comstock will sell the
membership interest in Comstock Mining LLC to Tonogold for $15
million plus the assumption of certain liabilities and a retained
1.5% NSR royalty on Lucerne. The amended purchase agreement allows
Tonogold to close by October 15, 2019, with an additional cash
payment at closing of at least $3.625 million. This results in
total cash payments at closing of $7.55 million for a 50.3%
ownership. The remaining cash purchase price of $3.95 million will
be held as a secured obligation with monthly scheduled payments of
at least $650 thousand, between January 2020, and June 2020. Once
the final payment is made, Tonogold would then own 100% of Comstock
Mining LLC, the owner of Lucerne assets and its mining permits. Mr.
Corrado De Gasperis, Executive Chairman and CEO, stated, “Tonogold
has completed some extraordinary analysis of the northern District,
innovatively correlating historical data with modern geological
assessments, and creating a larger exploration opportunity while
recently assembling an impressive list of resource investors that
has enhanced their liquidity and capital base. We look forward to
this closing and accelerating our growth.”
Effective September 16, 2019, the Company also
entered into a ten-year, renewable Mineral Lease for its other
Storey County mineral properties, granting Tonogold the right to
explore, develop and mine these properties. This arrangement was
part of the original agreement entered into in January, 2019, but
has been accelerated as Tonogold has committed to exploration
expenditures of at least $5 million in the first, ten-year term,
with the right to extend for a second, ten-year term if they commit
to another $5 million and delivering a feasibility report. The
lease requires quarterly lease payments with a 3% royalty that
adjusts to 1.5% after the first year of mining.
The previous “earn-in” agreement with Tonogold,
signed in October 2017, was terminated effective September 18,
2019, and the associated option payments of $2.2 million were
recorded as income in the third quarter. 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. 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 near-term goal of our business plan is to maximize
intrinsic stockholder value realized, per share, by continuing to
acquire mineralized and potentially mineralized properties,
exploring, developing and validating qualified resources and
reserves (proven and probable) that enable the commercial
development of our operations through extended, long-lived mine
plans that are economically feasible and socially responsible.
Forward-Looking Statements This press release and
any related calls or discussions may include forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 about Comstock and Tonogold. Forward-looking
statements are statements that are not historical facts. All
statements, other than statements of historical facts, are
forward-looking statements. Forward-looking statements include
statements about matters such as: capital raising activities and
negotiations; market conditions; future changes in exploration
activities, production capacity and operations; future exploration,
production, operating and overhead costs; production of feasibility
studies, technical reports or other findings related to estimated
mineralization; operational and management restructuring
activities; capital expenditures (by Comstock, Tonogold or other
parties) and their impact; investments, acquisitions, joint
ventures, strategic alliances, business combinations, asset sales;
consulting, operational, tax, financial and capital projects and
initiatives; contingencies; environmental compliance and changes in
the regulatory environment; offerings, sales, equity dilution, and
other actions regarding debt or equity securities; including a
redemption of the debenture, and future working capital, costs,
revenues, business opportunities, debt levels, cash flows, margins,
earnings and growth. 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. These statements are based on assumptions and assessments
made by the management of Comstock and Tonogold 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 that 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 discussed in Item 1A, “Risk
Factors” of the annual report on Form 10-K of Comstock. The
occurrence of such events or circumstances could have a material
adverse effect on the business, financial condition, results of
operations or cash flows, or the market price of Comstock and
Tonogold’s securities. All subsequent written and oral
forward-looking statements by or attributable to Comstock, Tonogold
or persons acting on their behalf are expressly qualified in their
entirety by these factors. Neither Comstock nor Tonogold undertakes
any obligation to update or revise any forward-looking statement
publicly. Neither this press release nor any related calls or
discussions constitutes an offer to sell or the solicitation of an
offer to buy any other securities of Comstock or Tonogold.
Contact information: Comstock Mining, Inc. P.O. Box
1118 Virginia City, NV 89440www.comstockmining.com
Corrado De Gasperis Executive Chairman & CEO
Tel (775) 847-4755 degasperis@comstockmining.com Zach Spencer
Director of External Relations Tel (775) 847-5272
ext.151questions@comstockmining.com
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