Comstock Mining Inc. (the “Company”) (NYSE American: LODE)
announced selected strategic and financial highlights (unaudited)
for the second fiscal quarter ended June 30, 2020.
Second Quarter 2020 Selected Strategic
Highlights
- Investments in Mercury Clean Up LLC (“MCU”) increased to $1.75
million in cash and stock with the Comstock mercury remediation
system completed (with pictures included below) and ready for
shipment;
- Committed to Investment in MCU Philippines after MCU signed a
definitive joint venture agreement with Clean Ore Solutions OPC, to
partner and lead in a major mercury remediation project in the
Philippines;
- Advanced permitting of Tonogold Resources Inc. (“Tonogold”)
exploration drill plans for July, 2020; and
- Consummated the April acquisition of 25% of Pelen LLC, the
owner of the historic Sutro Tunnel Company.
Second Quarter 2020 Selected Financial
Highlights (Unaudited)
- Received a $0.5 million early payment from Tonogold against
obligations due October 15, 2020, with the remaining payments due
to us totaling $4.9 million at June 30, 2020;
- Valued our equity investment in Tonogold at over $10.4 million
at June 30, 2020;
- Reduced our Senior Debt principal to $4.5 million at June 30,
2020;
- Cash and cash equivalents at June 30, 2020, were
approximately $1.0 million; and
- Common shares outstanding at June 30, 2020, were 28,815,000
shares.
Comstock Mining’s Corporate Growth
The Company has enacted its Board-approved transformational
strategic plan, focused on high-value, cash-generating, precious
metal-based activities, (the “Strategic Focus”) including, but not
limited to, environmentally friendly, and economically enhancing
mining technologies, like mercury remediation. Our goal is to
deliver over $500 million of value from our existing assets and the
commercialization of these environmental mining technologies,
partnerships and ventures. Comstock Mining Inc. is the parent
company that wholly owns the realigned subsidiaries and is
expanding its mercury and royalty portfolios. We believe that our
resource-based technology, properties, plant and equipment and
existing gold and silver resources are deeply undervalued.
Our realignment was driven by our determination to reposition
the Company for sustainable growth.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/cb0fba7b-94b2-4a25-9870-5d0a3c9fbb5f
Comstock Processing LLC owns the American Flat processing
facility and represents the main platform for commercializing
environmentally friendly, and economically enhancing mining
technologies. Comstock Northern Exploration LLC owns or controls
the remaining Storey County exploration targets, primarily located
north of the Lucerne properties, that have been leased to Tonogold
and their recently announced drill programs, with initial focus on
the Occidental Lode claims. Comstock Exploration & Development
LLC owns or controls the Lyon County mining claims and exploration
targets, including the Dayton and Spring Valley development
targets. We are also reorganizing our growing portfolio of precious
metal royalties into Comstock Royalty Holdings LLC.
Mr. Corrado DeGasperis, Executive Chairman and CEO stated, “We
are driving our strategic initiatives forward with a precise focus
on the value we are first unlocking and then creating, with MCU now
poised to deploy two mercury remediation operating systems this
quarter and Tonogold preparing the launch of a major, well-designed
drill program on the Occidental lode, all while we plan for
exploration and development drilling of our Dayton resource and
work toward expanding its economic feasibility. We look
forward to landing the MCU – Comstock system (and we have included
photos below) with MCU also shipping the first Philippine unit
later this month.”
Mercury Remediation Systems and the American Flat
Processing Platform
Our processing platform includes the Company’s fully permitted
processing platform, and the infrastructure has now been prepared
for the delivery of the brand new MCU mercury remediation system.
The system is scheduled to arrive this month, after a recent trip
to Oro Industries’ manufacturing facility for inspection and safety
preparation.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/676e2a0e-8933-45ce-9d97-d881b099188c
Lucerne
Tonogold owns a 54% membership interest in the entity that owns
Lucerne. Comstock retains management control over the entity until
Tonogold has made all of the $4.9 million in remaining payments in
full. We are partnered with Tonogold and expect to fully realize
almost $30 million from the sale of the Lucerne, plus the potential
for over $35 million (totaling approximately $65 million) of
additional value from leasing, processing and royalty
agreements.
In late June 2020, Tonogold paid $0.5 million early toward the
$1 million due in October 2020, and reimbursed an additional $0.5
million in expenditures during the second quarter. Tonogold
also pays a monthly cash interest representing 12% of the remaining
principal amount of approximately $4.9 million, or approximately
$50,000 per month. To date, the Company has received over $6.5
million in cash and $6.1 million in total stock consideration,
initially in the form of Tonogold Convertible Preferred Stock
(“CPS”), effectively convertible on May 22, 2020.
The conversion price for the CPS will be the lower of (1) 85% of
the 20-day volume weighted closing price or (2) 0.18. Tonogold can
redeem the CPS prior to conversion, at a redemption price 120% of
the face value of the CPS.
On May 22, 2020, the Company noticed the conversion of $1.1
million of Tonogold CPS and received 6,111,111 of freely tradable
Tonogold common shares. The Tonogold common shares are valued
at about $2.5 million and the remaining CPS was independently
valued at over $7.9 million, totaling $10.4 million in securities
at June 30, 2020.
Tonogold has made remarkable progress in their exploration and
development plans and is working on securing Storey County permits
and has secured multiple sources of funding to start a major
drilling program anticipated during July, 2020. Tonogold has also
significantly enhanced the technical strength of their board and
announced plans to achieve full external reporting status with
audited financial statements this summer, as they prepare for a
national stock listing, likely in the fall of 2020.
Dayton
We are expanding Dayton’s economic resource, but just based on
current gold and silver prices, before any resource updates, we now
show a low-end value of over $75 million based on our existing
economic shell (using an $800 gold equivalent cut off) and a $1600
gold revenue assumption. We have not yet engineered an
expanded pit shell (even though higher gold prices allows for lower
grade cut-offs and significantly higher, economically-feasible
ounces) but we are progressing with that work toward an updated,
Dayton stand-alone, NI 43-101 technical report.
Non-mining assets
Our non-mining assets are now valued at over $25 million, net of
debt. We have agreements to sell the Industrial and Commercial
lands plus the senior water rights in Silver Springs, for over $10
million, and now expect those sales to close this summer. These
proceeds will extinguish the remaining $5.0 million in obligations
(including our $4.6 million bond). Our $6.1 investment in Tonogold
Convertible Preferred Stock (CPS) is now valued at $10.4 million
based on shares that we have already converted and Tonogold’s
current share price. We are also owed approximately $4.9
million from Tonogold through a 12%, cash interest paying debt
instrument, with principal payments of $0.4 million still due this
October 2020, and $4.475 million due September 2021.
Mr. DeGasperis concluded, “We expect that our efforts in
monetizing the non-strategic assets, eliminating the debt,
developing our natural resources in the ground, and commercializing
the mercury remediation system, with our outstanding industry
partners, will move us first toward the $125 million valuation
throughout the remainder of this year and position us to grow those
businesses and valuations toward our $500+ million target over the
next 2-3 years and beyond. Over the next 60 days we will see
mercury systems deployed, Tonogold exploration activities launched
and the sale of our non-mining assets in Silver Springs
consummated. We look forward to an active and productive third
quarter and for the remainder of this year. The potential is
truly extraordinary.”
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: consummation of all pending transactions; project,
asset or Company valuations; 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 estimated mineral
resources; 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: counterparty risks; capital
markets’ valuation and pricing risks; 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, leases, options 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 DeGasperis 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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