Comstock Mining Inc. (the “Company”) (NYSE American: LODE) today
announced selected unaudited financial results for the fiscal
quarter ended September 30, 2019.
Third Quarter 2019 Selected Strategic
Highlights
- Amended the Lucerne sale agreement with Tonogold, with closing
scheduled on November 10;
- Values Lucerne over $24 million ($11.5 million cash; $5.5
million stock, $7 million liabilities);
- Reduces operating expenses by over $2 million per annum;
- Retains a 1.5% NSR Royalty.
- Agreed to sell Silver Springs non-mining assets for $10.1
million;
- Leased the Occidental Lode and other mineral claim targets with
near-term exploration plans;
- Advanced Mercury Clean Up LLC, a mercury remediation, clean
technology growth venture; and
- Facilitated the launch of an independent, qualified opportunity
zone fund, Sierra Springs Opportunity Fund Inc., whose wholly-owned
qualified opportunity zone business, Sierra Springs Enterprises
Inc., has:
- Secured Lyon County approval for acquiring the Silver Springs
Regional Airport;
- Secured and escrowed new agreements for acquiring Comstock’s
non-mining Property;
- Secured and escrowed 150,000 square foot, state-of-the-art
manufacturing and processing facility;
- Secured an option on approximately 2,000 acres of land and
1,500 acre-feet of water rights;
- Secured high quality water rights from a Tahoe-sourced water
spring; and
- Consolidated the aforementioned properties and water rights in
a qualified opportunity zone.
- Hired Juan Carlos (“JC”) Giron, Jr., as President & CFO,
accelerating Comstock’s strategic plans.
Selected Financial Highlights for
the three-months ended September 30, 2019
- Total costs and expenses were $0.8 million for three-months
ended September 30, 2019, compared to $1.6 million for the
comparable 2018 period, a savings of 46%, from reductions in
every expense category;
- Net income was $0.4 million, or $0.00 income per share for
three-months ended September 30, 2019, as compared to net loss of
$2.0 million, or ($0.03) loss per share for the comparable 2018
period, primarily from the lower costs and expenses and other
income (expense), net, of $1.4 million, that includes $2.2 million
of income from the cancellation of the prior Tonogold share option
agreement;
- Investments in Tonogold Preferred Shares were valued at $5.65
million and cash and cash equivalents were $0.3 million, both at
September 30, 2019, with an additional $0.8 million in cash
received through October 28, 2019, from non-refundable deposits and
reimbursement payments made by Tonogold; and
- Senior Secured Debenture was $6.4 million at September 30,
2019, a reduction of 28% as compared to $8.9 million at December
31, 2018. The Debenture was further reduced to $5.9 million at
October 28, 2019.
- Common shares outstanding at September 30, 2019, and October
28, 2019, were 116,230,203 and 126,970,215 shares,
respectively.
Selected Financial Highlights for
the nine-months ended September 30, 2019
- Total costs and expenses were $3.9 million for nine-months
ended September 30, 2019, compared to $5.4 million for the
comparable 2018 period, a savings of 28%, with improvement in
most expense categories;
- Net loss was $3.5 million, or ($0.04) loss per share for
nine-months ended September 30, 2019, as compared to net loss of
$6.9 million, or ($0.13) loss per share for the comparable 2018
period, primarily from the lower costs and expenses and other
income, net, of $1.1 million, that includes $2.2 million of income
from the cancellation of the prior Tonogold share option
agreement;
- Net cash used in operating activities was $2.3 million for the
nine months ended September 30, 2019, as compared to net cash
used in operating activities of $3.5 million for the nine months
ended September 30, 2018, a decrease of $1.2 million,
resulting primarily from decreases in net costs from
reimbursements;
- Net cash provided by investing activities for the nine months
ended September 30, 2019, was $1.7 million, primarily relating
to $3.9 million of deposits on the sale of the Lucerne mine
properties to Tonogold, partially offset by $1.1 million for the
purchase of DTSS and related land deposits, $0.4 for the
investments in Mercury Clean Up LLC and, $0.2 for the investments
in the Sierra Springs Opportunity Fund.
- Net cash provided by financing activities for the nine months
ended September 30, 2019, was $0.4 million, comprised of net
proceeds of $3.6 million from the sale of common shares offset by
the pay-down of $3.2 million in long-term debt.
Mr. Corrado De Gasperis, Executive Chairman and CEO stated, “Our
focus on realigning and transforming the Company and its balance
sheet is finally coming to fruition. We have now received over
$4.25 million in non-refundable cash deposits and $5 million in
stated stock for the Lucerne sale, signed new agreements to sell
our Silver Springs properties for over $10 million and launched a
globally-focused mercury remediation business with world-class
technology and experience all while continuing to lower our net
operating costs.”
Corporate Realignment
During the first quarter of 2019, the Company’s Board of
Directors approved a transformational strategy focused on
high-value, cash-generating, precious metal-based activities, (the
“Strategic Focus”) including, but not limited to, metals
exploration, engineering, resource development, economic
feasibility assessments, mineral production, metal processing and
related ventures of environmentally-friendly, and economically
enhancing mining technologies.
The Company advanced the Strategic Focus by facilitating the
formation of a qualified opportunity zone fund named Sierra Springs
Opportunity Fund Inc. and Sierra Springs Enterprises Inc., its
qualified opportunity zone business. Sierra Springs
Enterprises, Inc. has formally agreed to acquire Comstock’s
non-mining assets and has also secured over a dozen independent
projects, including the development of the Silver Springs Airport,
a centrally located regional airport, the acquisition of certain
exceptionally well located and adjacent lands and water rights, and
the rights to a number of conservation-based, non-mining
businesses. These businesses include a Tahoe-based, high pH spring
water, an agricultural-ready manufacturing and processing facility
and a business to manufacture and sell a totally compostable green
bottle and caps, designed to displace single-use petroleum-based
plastics.
Mr. Corrado De Gasperis, Executive Chairman and CEO stated, “Our
focus on realigning and transforming the Company is accelerating,
especially with the addition of JC to our team. Our 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 platform.”
Comstock Processing LLC and Mercury Clean Up
LLC
During 2019, Comstock and Comstock Processing LLC, the
wholly-owned subsidiary that owns all of the property, plant,
equipment and permits for the Crushing, Agglomerating, Leaching,
Merrill Crowe Processing, Mercury Retort, Refining and
Metallurgical operations located at 1200 American Flat, Virginia
City, NV, entered into a definitive agreement with Mercury Clean Up
LLC (“MCU”), in collaboration with Oro Industries Inc. (“Oro”), for
the manufacture and global deployment of mercury remediation
systems with proprietary mechanical, hydro, electro-chemical and
oxidation processes to reclaim, treat and remediate mercury from
soils, waste and tailings.
MCU has the exclusive, world-wide rights to four patentable
technologies and equipment that we believe will demonstrate
feasible, economic mercury remediation. Comstock provides the
platform for testing the mercury remediation system, and MCU will
conduct the trials that prove scalable feasibility. MCU plans to
deploy the solution globally and is working on at least one major,
international remediation project. Comstock’s award-winning
mercury reclamation experience coupled with MCU’s technology and
processing know-how positions a new, global growth opportunity
consistent with the Company’s Strategic Focus and cash-generating
growth plans.
Comstock Exploration & Development (100% owner of
Dayton Resource and Spring Valley Exploration Areas)
For the Dayton resource, Comstock previously discovered a newly
recognized, mineralized, cross-cutting shear zone. An assay sample
of the material identified three feet of 0.246 ounces per ton (OPT)
gold and 3.553 OPT silver. Sampling was expanded and exposed
another 90.8 feet of mineralized shear zone, beginning deep inside
the Dayton adit. This overall sampling program identified precious
metals averaging 0.043 OPT gold and 0.404 OPT silver for the entire
zone, including 7.5 feet averaging 0.121 OPT gold and 0.753 OPT
silver. The Company is proceeding to publish a separate NI 43-101
compliant, updated technical report for the Dayton resource that
supports the subsequent scope of publishing a Preliminary Economic
Assessment (“PEA”) for the Dayton project.
The Company is also continuing its exploration activities
southerly into Spring Valley with plans for incremental exploration
programs that include exploration and definition drilling of
targets identified by geophysical surveys, surface mapping, prior
drilling and deeper geological interpretations that together are
expected to lead to publishing an updated, NI 43-101 compliant,
mineral resource estimate for the Dayton Project and the expanded
opportunities. Comstock Northern Exploration LLC
(Occidental Lode and Other Northern Target Mineral Claims)
Tonogold has commenced further analysis of our northern targets
that we believe is extraordinary, correlating historical data with
modern geological assessments and creating a larger exploration
opportunity. Accordingly, the Company signed a new mineral
lease with Tonogold that commits Tonogold to a minimum of $5
million towards the exploration of Comstock’s northern mineral
claims and an additional minimum of $5 million for exploration and
economic feasibility development, while eliminating the Company’s
related maintenance costs and retaining the Company’s rights to a
1.5-3.0% NSR royalty. The Company believes this will accelerate the
development of its northern targets and enhance the value of its
mineral property portfolio and royalty package.
Comstock Mining LLC (100% owner of the Lucerne Resource
Area)
Comstock’s collaborative efforts with Tonogold have evolved
extensively during 2019, resulting in an enhanced sales agreement
that immediately values Lucerne at more than $24 million ($11.5
million in cash, $5.5 million in stock and over $7 million in
assumed liabilities) plus a 1.5% NSR royalty on Lucerne’s future
production while already delivering over $2 million in annualized
savings. The Company has received non-refundable cash
deposits of $4.25 million through October 28, 2019. The
Company’s recent agreement requires additional cash payments at
closing of $3.325 million, bringing total cash payments to over
$7.5 million, providing Tonogold a majority membership interest of
50.3% in Comstock Mining LLC. The remaining $3.95 million in cash
owed represents a secured obligation of Tonogold with scheduled
monthly payments of at least $650 thousand each due starting in
January 2020, through June 2020. Once fully paid, Tonogold will own
100% of Comstock Mining LLC. Comstock also terminated the previous
option agreement, resulting in prior option payments of $2.2
million being recorded as income for the third quarter ending
September 30, 2019.
Sierra Springs Opportunity Zone Fund Inc. and Sierra
Springs Enterprises Inc.
Last year, the U.S. Treasury confirmed that all of Storey
County, NV, and significant parts of Silver Springs, NV, had been
certified as Qualified Opportunity Zones. We are actively engaged
in plans to enhance our mining and non-mining assets and core
competencies in these locations, including an expanded land, water
and technology portfolio, to maximize the value of our platform,
first and foremost by selling our non-mining assets. Sierra
Springs Opportunity Fund Inc. was formed to capitalize on the
extraordinary, explosive growth of high-tech industries in northern
Nevada and its qualified zones and has already secured the rights
to thousands of developable acres of land and more, including an
agreement to purchase Comstock’s Silver Springs properties and
water rights, all within the immediate proximity of the Tahoe Reno
Industrial (TRI) Center and its over 100 businesses.
Comstock will passively own approximately 9.5% of the Sierra
Springs Opportunity Fund Inc. Mr. De Gasperis and a diverse
team of qualified financial, capital markets, real estate and
operational professionals will govern, lead and manage the fund,
its investments and operations. The fund owns 100% of Sierra
Springs Enterprises Inc., a qualified opportunity zone business
(the “QOZ-B”), that has secured and consolidated the rights
mentioned above, all located in northern Nevada.
Outlook
The Company’s 2020 gross operating expenses are planned at
approximately $4.0 million, excluding depreciation and
discretionary exploration expenses. As of June 1, 2019, the Company
has been and expects to continue receiving monthly reimbursements
from Tonogold totaling approximately $2.2 million for the full year
2020, resulting in net operating expenses of approximately $2.8
million. The Company plans on eliminating its debt through
announced asset sales, and does not expect any interest expense for
the full year 2020.
During 2019, total gross operating expenses are expected at
approximately $5.0 million, with Tonogold reimbursements expected
at $1.6 million for the full year, plus $0.3 million in interest
reimbursements for 2019.
For the remainder of 2019, Comstock’s plans include
advancing the commercialization of MCU’s mercury remediation
processing technologies. Oro has commenced manufacturing the
2-to-25 ton per hour mercury recovery plant and recently completed
the critical “reverse-helix spiral concentrator” component of the
system. The entire system will be mounted on three separate
trailers and will be set up on the Company’s fully contained,
double-lined processing area during the fourth quarter with an
expected start date in January 2020. MCU will also identify
sample locations within the Carson River Mercury Superfund Site
(“CRMSS”) that will be sampled per an EPA-approved and updated
Sampling and Analysis Plan (“SAP”). Once suitable sites have been
identified, bulk samples will be extracted and transported to the
MCU mercury remediation system located at the Company’s American
Flat processing facility. MCU has also ordered the 200
gallon-per-minute dissolved air flotation (“DAF”) water treatment
plant, also scheduled for delivery in December 2019.
The Company plans on commencing trial operations in January
2020, to validate and fine-tune MCU’s process, which has the
potential for reclamation and remediation of its existing
properties, enhance the values of, and potential economic
feasibilities for, these properties and present new global growth
opportunities in mercury remediation by demonstrating MCU’s
technological effectiveness and efficiency.
During the fourth quarter of 2019, the Company expects to close
on the agreed upon sale of certain non-mining assets located in
Silver Springs, NV, to Sierra Springs Enterprises Inc., for total
net proceeds of $10.1 million. The agreements were signed in
September 2019, with deposits currently in escrow. The Company also
expects to close on the sale of 50.3% of the membership interest in
Comstock Mining LLC, owner of the Lucerne properties, after
receiving an additional $3.625 million in cash from Tonogold in
October 2019. The agreement allows them to earn up to 100% of
Comstock Mining LLC, after receiving an additional $3.95 million in
installment payments in 2020.
The Dayton resource area is the Company’s top wholly-owned
exploration and mine development target. The Company is developing
a completely new geological interpretation for an updated resource
estimate. The new geological interpretation is also being used to
design phased drilling programs with higher potential for
additional mineral resources. The Company plans to issue a new,
stand-alone Dayton resource technical report, followed by a
preliminary economic assessment in the fourth quarter 2020.
Mr. Corrado De Gasperis, concluded, “The benefits and value
being positioned with MCU, Dayton, Spring Valley, Tonogold and the
Sierra Springs Opportunity Fund and all of our strategic ventures
will be showcased during our annual meeting, scheduled for November
12, 2019, at the Gold Hill Hotel in Gold Hill, Nevada. We look
forward to overviewing our strategy, execution plans and
introducing our shareholders to our partners and other
stakeholders.” Conference Call
The Company will host a conference call today, October 29, 2019,
at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time. The live
call will include a moderated Q&A, after the prepared comments
by the Company. The dial-in telephone number for the live
audio is as follows:
Toll Free: 1-800-367-2403
Conference ID: 2091975
The audio will be available, usually within 24
hours of the call, on the Company website:
ComstockMining.com/investors/investor-library
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 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
COMSTOCK MINING INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
|
|
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
276,649 |
|
|
$ |
488,657 |
|
Assets held for sale, Net (Note 2) |
6,902,600 |
|
|
5,363,403 |
|
Prepaid expenses and other current assets (Note 3) |
5,232,119 |
|
|
2,712,202 |
|
Total current assets |
12,411,368 |
|
|
8,564,262 |
|
|
|
|
|
MINERAL RIGHTS AND PROPERTIES,
Net |
5,690,885 |
|
|
7,205,081 |
|
PROPERTIES, PLANT AND
EQUIPMENT, Net (Note 4) |
8,197,249 |
|
|
9,742,120 |
|
RECLAMATION BOND DEPOSIT |
2,680,347 |
|
|
2,622,544 |
|
RETIREMENT OBLIGATION ASSET
(Note 5) |
152,456 |
|
|
203,274 |
|
INVESTMENT IN PREFERRED SHARES
(Note 16) |
5,650,000 |
|
|
— |
|
OTHER ASSETS |
625,149 |
|
|
274,444 |
|
|
|
|
|
TOTAL ASSETS |
$ |
35,407,454 |
|
|
$ |
28,611,725 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
806,215 |
|
|
$ |
405,146 |
|
Accrued expenses and other liabilities (Note 6) |
1,274,839 |
|
|
1,674,733 |
|
Deferred liabilities (Note 16) |
9,915,596 |
|
|
— |
|
Long-term debt– current portion (Note 7) |
323,415 |
|
|
309,843 |
|
Total current liabilities |
12,320,065 |
|
|
2,389,722 |
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
Long-term debt (Note 7) |
6,618,823 |
|
|
8,857,870 |
|
Long-term reclamation liability (Note 8) |
7,048,203 |
|
|
7,441,091 |
|
Other liabilities |
531,416 |
|
|
538,140 |
|
Total long-term liabilities |
14,198,442 |
|
|
16,837,101 |
|
|
|
|
|
Total liabilities |
26,518,507 |
|
|
19,226,823 |
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
(Note 10) |
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
Preferred Stock, $.000666 par value, 50,000,000 shares
authorized; no shares issued and/or outstanding at September
30, 2019, and December 31, 2018 |
— |
|
|
— |
|
Common stock, $.000666 par value, 790,000,000 shares authorized,
116,230,203 and 75,338,273 shares issued and outstanding at
September 30, 2019, and December 31, 2018, respectively |
77,409 |
|
|
50,175 |
|
Additional paid-in capital |
244,422,620 |
|
|
241,419,897 |
|
Accumulated deficit |
(235,611,082 |
) |
|
(232,085,170 |
) |
|
|
|
|
Total stockholders’
equity |
8,888,947 |
|
|
9,384,902 |
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
35,407,454 |
|
|
$ |
28,611,725 |
|
COMSTOCK MINING INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(UNAUDITED) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
REVENUES |
|
|
|
|
|
|
|
Revenue - mining |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Revenue - real estate |
48,350 |
|
|
32,281 |
|
|
130,132 |
|
|
83,946 |
|
Total revenues |
48,350 |
|
|
32,281 |
|
|
130,132 |
|
|
83,946 |
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES |
|
|
|
|
|
|
|
Costs applicable to mining
revenue |
318,537 |
|
|
717,155 |
|
|
1,329,322 |
|
|
2,174,618 |
|
Real estate operating
costs |
8,651 |
|
|
12,887 |
|
|
31,362 |
|
|
29,858 |
|
Exploration and mine
development |
109,189 |
|
|
241,902 |
|
|
576,594 |
|
|
700,088 |
|
Mine claims and costs |
(324,027 |
) |
|
(291,602 |
) |
|
(36,172 |
) |
|
(20,346 |
) |
Environmental and
reclamation |
30,590 |
|
|
88,612 |
|
|
(278,784 |
) |
|
208,866 |
|
General and
administrative |
697,793 |
|
|
801,157 |
|
|
2,322,428 |
|
|
2,355,320 |
|
Total costs and expenses |
840,733 |
|
|
1,570,111 |
|
|
3,944,750 |
|
|
5,448,404 |
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
(792,383 |
) |
|
(1,537,830 |
) |
|
(3,814,618 |
) |
|
(5,364,458 |
) |
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
Interest expense |
(179,588 |
) |
|
(340,548 |
) |
|
(822,632 |
) |
|
(1,054,775 |
) |
Other income (expense) |
1,358,868 |
|
|
(166,732 |
) |
|
1,111,338 |
|
|
(526,113 |
) |
Total other income (expense), net |
1,179,280 |
|
|
(507,280 |
) |
|
288,706 |
|
|
(1,580,888 |
) |
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
386,897 |
|
|
(2,045,110 |
) |
|
(3,525,912 |
) |
|
(6,945,346 |
) |
|
|
|
|
|
|
|
|
INCOME TAXES |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
$ |
386,897 |
|
|
$ |
(2,045,110 |
) |
|
$ |
(3,525,912 |
) |
|
$ |
(6,945,346 |
) |
|
|
|
|
|
|
|
|
Net loss per common share –
basic and diluted |
$ |
0.00 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding — basic and diluted |
100,062,905 |
|
|
58,531,058 |
|
|
87,482,183 |
|
|
54,755,753 |
|
COMSTOCK MINING INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
|
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
OPERATING
ACTIVITIES: |
|
|
|
Net loss |
$ |
(3,525,912 |
) |
|
$ |
(6,945,346 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
Depreciation, amortization,
and depletion |
1,573,236 |
|
|
2,468,817 |
|
(Reduction) accretion of
reclamation liability |
(392,888 |
) |
|
17,233 |
|
Gain on sale of properties,
plant, and equipment |
(3,125 |
) |
|
(26,000 |
) |
Amortization of debt discounts
and issuance costs |
174,254 |
|
|
282,708 |
|
Net loss on early retirement
of long-term debt |
284,647 |
|
|
164,751 |
|
Payment-in-kind interest
expense |
470,246 |
|
|
437,852 |
|
Cancellation of Tonogold share
option |
(2,200,000 |
) |
|
— |
|
Change in make-whole liability
with Pelen, LLC |
46,591 |
|
|
369,000 |
|
Change on make-whole liability
- MCU |
370,750 |
|
|
— |
|
Mark to market Tonogold
preferred shares |
332,263 |
|
|
— |
|
Preferred shares issuance
expense |
432,000 |
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
Prepaid expenses and other assets |
(72,515 |
) |
|
(775,311 |
) |
Accounts payable |
401,069 |
|
|
24,633 |
|
Accrued expenses and other liabilities |
(173,127 |
) |
|
484,443 |
|
NET CASH USED IN OPERATING
ACTIVITIES |
(2,282,511 |
) |
|
(3,497,220 |
) |
INVESTING
ACTIVITIES: |
|
|
|
Proceeds from principal
payment on note receivable |
396 |
|
|
376 |
|
Proceeds from sale of mineral
rights and properties, plant, and equipment |
3,125 |
|
|
26,000 |
|
Proceeds from deposits on
Membership Interest Purchase Agreement |
3,925,000 |
|
|
— |
|
Purchase of mineral rights and
properties, plant and equipment |
(1,635,000 |
) |
|
(1,055,631 |
) |
Investment in Sierra Springs
Opportunity Fund |
(225,000 |
) |
|
— |
|
Investment in Mercury Clean Up
LLC |
(350,000 |
) |
|
— |
|
Change in reclamation bond
deposit |
(57,803 |
) |
|
— |
|
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES |
1,660,718 |
|
|
(1,029,255 |
) |
FINANCING
ACTIVITIES: |
|
|
|
Principal payments on
long-term debt |
(3,154,622 |
) |
|
(2,000,631 |
) |
Proceeds from the issuance of
share option with Tonogold |
— |
|
|
2,000,000 |
|
Proceeds from the issuance of
common stock |
3,835,867 |
|
|
3,783,442 |
|
Common stock issuance
costs |
(271,460 |
) |
|
(84,276 |
) |
NET CASH PROVIDED BY FINANCING
ACTIVITIES |
409,785 |
|
|
3,698,535 |
|
DECREASE IN CASH AND CASH
EQUIVALENTS |
(212,008 |
) |
|
(827,940 |
) |
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD |
488,657 |
|
|
2,066,718 |
|
CASH AND CASH EQUIVALENTS, END
OF PERIOD |
$ |
276,649 |
|
|
$ |
1,238,778 |
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
Cash paid for interest |
$ |
66,854 |
|
|
$ |
99,092 |
|
|
|
|
(Continued) |
COMSTOCK MINING INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
|
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
Supplemental
disclosure of non-cash operating, investing and financing
activities: |
|
|
|
Receipt of preferred shares of Tonogold |
$ |
5,650,000 |
|
|
$ |
— |
|
Advance payment received on
Membership Interest Purchase Agreement (Note 16) |
$ |
5,982,263 |
|
|
$ |
— |
|
Issuance of common stock for
mineral lease |
$ |
482,500 |
|
|
$ |
— |
|
Issuance of common stock to
pay for common stock issuance costs |
$ |
— |
|
|
$ |
245,000 |
|
Issuance of common stock (in
advance) to purchase Pelen membership interest |
$ |
— |
|
|
$ |
585,000 |
|
Issuance of common stock (in
advance) to purchase MCU membership interest |
$ |
751,050 |
|
|
|
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c0a24a08-173c-40ca-bd3d-e80b9f2994e5
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