Comstock Mining Inc. (the “Company”) (NYSE American: LODE)
announced 2020 business achievements, 2021-2023 strategic plan and
the Company’s outlook for 2021:
Selected 2020 Strategic Achievements
(unaudited)
- Completed corporate realignment,
positioning Comstock for precious and strategic metal-based
growth;
- Completed first phase of mercury
remediation pilot, purchasing 15% of Mercury Clean Up LLC
(“MCU”):
- Formed Philippine mercury
remediation joint venture, receiving 50% of MCU Philippines Inc.
(“MCU-P”);
- Acquired 25% of Pelen LLC, 100%
owner of the Sutro Tunnel Company mineral properties and
royalties;
- Formed Comstock Royalty LLC for
aggregating a growing portfolio of gold and silver NSR
royalties;
- Completed the sale of the Lucerne
mine, recognizing a gain of $18.3 million;
- Completed an airborne geophysical
survey over all of the Company’s Comstock District properties;
- Leased the Daney Ranch with an
option to sell for $2.7 million;
- Reduced annual operating expenses by
approximately $4 million per annum, as compared to 2017;
- Monetized $5.6 million in Tonogold
common and preferred stock;
- Repaid the remaining $4.8 million
portion of the Company’s former senior secured debenture;
- Ended 2020 with 34,980,766 shares
outstanding, including 540,000 in restricted directors’ shares;
and
- Ended 2020 with approximately $2.4
million in cash and cash equivalents.
Mr. Corrado De Gasperis, Executive Chairman and CEO stated, “We
sustained all of our scheduled cost reductions and subsidies,
repaid our senior secured debt and implemented our realignment
objectives in 2020, positioning ourselves for new, high-growth,
activities. The successful sale of Lucerne enabled the repayment of
all of our senior secured debt and, together with monetizing
non-strategic assets, funds the implementation of our strategic
plan.”
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/37ae2500-39b3-4a92-a5bd-d9575a7385cc
Strategic Performance Objectives 2021-2023
The Company’s goal is to grow our equity value by
commercializing environment-enhancing, precious and
strategic-metal-based products and processes that generate a rate
of predictable cash flow (throughput) from our metal processing
operations and royalties and increase the long-term enterprise
value of our mineral properties. The next three years are dedicated
to delivering that value by achieving the performance objectives
listed below:
Commercialize a global, ESG-compliant, profitable, mercury
remediation system:
- Establish the technical efficacy of
MCU’s mercury remediation system, and protect the intellectual
property;
- Operate the second and third
mercury remediation systems internationally, profitability, in the
Philippines;
- Identify, evaluate and prioritize a
pipeline of potential mercury remediation projects; then deploy the
fourth and fifth mercury remediation projects, with the goal of
producing significant cash flow returns; and
- Assess and capitalize on value
enhancing expansion opportunities.
Establish and grow the value of our mineral properties:
- Establish the Dayton Resource area’s maiden, stand-alone
mineral resource estimate;
- Expand the Dayton-Spring Valley Complex through geophysical
modelling and exploration drilling;
- Develop the Dayton-Spring Valley Complex toward full economic
feasibility, supporting a mine decision;
- Entitle the Dayton-Spring Complex with geotechnical,
metallurgical, and environmental permitting; and
- Exploit the Comstock smelter royalty portfolio (e.g.,
Occidental Lode, Comstock Lode, Lucerne Mine).
Monetize non-strategic assets and build a
quality organization:
- Monetize our third-party, junior mining securities responsibly,
for $12.5 million or more;
- Monetize our non-mining assets for $12.5 million, excluding the
Gold Hill Hotel;
- Grow the value of our Opportunity Zone investments to over $30
million; and
- Deploy a systemic organization, capable of accelerating growth
and handling complexity.
On January 4, 2021, the Company granted 1,260,000 performance
share units to key employees of the Company. Vesting of the awards
is 100% conditioned upon the achievement of strategic performance
objectives of the Company described in the Comstock 2020 Equity
Incentive Plan, for half of the award, and achieving a per share
price of $12 per share or greater, for the other half of the award.
If the objectives and the values are not achieved, the shares will
not vest and revert back to the Company. The Executive Chairman and
CEO of the Company was among the recipients of such performance
share units, with a grant of 500,000 of the performance share
units.
Mr. De Gasperis continued, “We have sharpened our performance
objectives, strengthened our alignment with all stakeholders, with
our board taking the substantial majority of their compensation in
stock over the next three years and all of our employees
participating in a 100% performance-based, stock-based compensation
plan. The Company’s leadership is fully aligned with shareholder
interests and focused on the goal of delivering over $500 million
of value, or at least $12 per share, from the Company’s existing
assets and the commercialization of environmentally friendly
precious and strategic metal processing technologies, partnerships
and ventures.”
Commercialize a Global, ESG-compliant, Mercury
Remediation System
On December 4, 2020, the Company’s closed on its first
investment objective, purchasing 15% of MCU and adding Mr. De
Gasperis to the MCU board, representing the Company’s 15%
membership interest. The Company also received its full 50%
interest in MCU-P, the Company’s first joint venture project for
the commercialization of MCU’s mercury remediation technologies.
The Company has committed to fund up to $3 million in secured loans
for the Philippine joint venture and receives an additional 10% of
MCU when the Company has loaned the initial $2 million to MCU-P (of
which, approximately $1.2 million was funded during 2020).
Oro Industries Inc., MCU’s exclusive manufacturing partner, has
delivered and MCU has now tested the 25-ton-per-hour mercury
recovery plant for its pilot operations on Comstock mineral
properties, including a 200 gallon-per-minute dissolved air
flotation water treatment plant. These pilot trial operations
continued into early December and achieved operating balance for
all parts of the system, generally operating at 2-3 tons per hour.
Our teams are currently sampling and validating
mercury-contaminated materials throughout the Carson River Mercury
Superfund Site, using a sampling protocol accepted by environmental
regulatory bodies, with the objective of identifying and sourcing
mercury-contaminated test materials for the continuance of the
pilot program. MCU will resume pilot processing later in the first
quarter, and continue throughout 2021, at the Company's American
Flat processing facility. The Company’s goals are to validate and
fine-tune the mercury remediation process, with the objective of
evaluating its economic feasibility on the Comstock materials and
capitalizing on the global growth opportunities.
The first of those opportunities is in the Philippines. MCU-P
has already delivered its first international system to the
Philippines and has commenced operations, led by Mr. Paul Clift,
MCU’s CEO, who is on the ground in the province of Davao D’ Oro.
MCU-P is coordinating its efforts with its joint venture partner
Clean Ore Solutions, a Philippine company, and the Department of
Environment and Natural Resources. This represents the first real
international opportunity for large-scale mercury remediation and
environmental reclamation and for establishing MCU as a leader in
mercury remediation, and in particular, contamination caused by
small-scale artisanal miners.
Establish and Grow the Value of Our Mineral
Properties
During the third and fourth quarter of 2020, the Company engaged
Geotech Ltd ("Geotech") of Aurora, Canada, to conduct an airborne
geophysical survey of the Dayton resource area, Spring Valley
exploration targets, and the rest of the Company's Comstock
District properties. The survey included both magnetic and
Geotech's proprietary Versatile Time-Domain Electromagnetic
("VTEM") surveys. The three-dimensional results have been recently
delivered to the Company and its geological team continues to
assess a deep trove of geophysical and geological data. The results
will greatly increase the Company’s understanding of the Dayton
resource area, the Spring Valley resource expansion potential, and
the rest of the Company's Comstock District properties.
During the fourth quarter, the Company’s technical staff also
completed a detailed structural interpretation of the Dayton
resource area, which provides the framework for a completely new
resource model. The detailed interpretation has resulted in a
highly prospective drill targets to further define and expand the
mineral resource.
The Company’s first performance objective includes establishing
the Dayton Resource area’s maiden, stand-alone mineral resource
estimate, with plans to initiate a stand-alone S-K 1300 compliant,
initial assessment technical report for the Dayton resource area.
We expect the new technical report to provide not only a new
resource estimate, but also a phased drilling plan for further
defining and expanding the resource for sustainable, profitable
mining. The Company’s performance objectives will then include
expanding the Dayton-Spring Valley Complex through exploration
drilling and geophysical modelling, further developing the expanded
Dayton-Spring Valley Complex toward full economic feasibility, and
ultimately supporting a decision to mine.
Monetize Non-strategic Assets and Outlook
The Company’s most near-term performance objectives includes
monetizing our third-party, junior mining securities responsibly,
for $12.5 million or more, and monetize our non-strategic assets
for $12.5 million, excluding the Gold Hill Hotel. During the third
quarter of 2020, the Company began monetizing its investments in
Tonogold. During the second half of 2020, the Company received over
$5.6 million in cash proceeds from the sale of these shares and
still holds over 13 million common shares in shares as of December
31, 2020. The Company also holds approximately $4.5 million, in
Tonogold 12% senior secured notes receivable, due on September 20,
2021.
The Company expects to monetize the remainder of these
non-strategic assets over the next three to nine months, expecting
in excess of $18 million in gross proceeds. This includes closing
on the sale of the Silver Springs properties for proceeds of over
$10 million, to Sierra Springs Enterprises, Inc., monetizing the
remainder of our Tonogold shares for total proceeds of over $4.1
million, and collecting on the Tonogold note of over $4.4 million.
The Company will use the proceeds to extinguish over $3.5 million
in debt and fund its growth initiatives.
At December 31, 2020, cash and cash equivalents were
approximately $2.5 million and total common shares outstanding were
34,980,766 shares, including 540,000 unvested, restricted shares
representing board compensation over the next three years, with
one-third of such shares vesting on January 1, 2022, 2023 and 2024,
respectively.
Mr. De Gasperis concluded, “All of our objectives are designed
and aligned toward one goal, for creating over $500 million in
value by commercializing environmentally friendly metal processing
technologies, like those of MCU, and validating and expanding our
mineral resources and royalties. Our monetization objectives allow
us to fund and accelerate accretive growth toward our initial goal
of $500 million of equity value, or at least $12 per share.”
About Comstock Mining Inc.Comstock Mining Inc.
is a Nevada-based, precious and strategic metal-based exploration,
economic resource development, mineral production and metal
processing business with a strategic focus on high-value,
cash-generating, environmentally friendly, and economically
enhancing mining and processing technologies and businesses. The
Company has extensive, contiguous property in the historic Comstock
and Silver City mining districts (collectively, the “Comstock
District”), is an emerging leader in sustainable, responsible
mining and processing, and is currently commercializing
environment-enhancing, metal-based technologies, products, and
processes for precious and strategic metals recovery.
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; asset sales 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
89440ComstockMining.com |
Corrado DeGasperisExecutive Chairman & CEOTel (775)
847-4755degasperis@comstockmining.com |
Zach SpencerDirector of External RelationsTel (775) 847-5272
Ext.151questions@comstockmining.com |
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