Comstock Mining Inc. (“Comstock” and the “Company”) (NYSE American:
LODE), a diversified natural resource production and processing
company, announced its full year 2020 results and its plans for
meeting the rapidly escalating demand for natural resources and
increasingly scarce metals for clean energy technologies.
Select Strategic Highlights
- Acquired majority stake rights in LiNiCo, a lithium-ion battery
recycling company;
- Acquired an indirect strategic stake in Green Li-Ion, innovator
of 99.9% pure cathode recycling technology.
- Launched Philippine-based mercury remediation and gold
reclamation ("MCU-P") joint venture.
- Launched MCU’s Nevada-based mercury remediation pilot and gold
reclamation project.
- Secured exploration lease with historic Sutro Tunnel Company,
targeting gold and silver resources.
- Acquired option to purchase all properties, rights, and
royalties associated with Sutro’s properties.
- Completed full scale geophysical surveys and initial
interpretations for the entire Comstock Lode District.
- Executed agreements to sell two non-mining properties in Silver
Springs for $10.1 million in 2021.
- Executed a lease with the option to sell the Daney Ranch
property for $2.7 million.
- Completed a mine sale to Tonogold Resources, Inc., recording a
gain of $18.3 million.
- Launched a three-year strategic plan and aligned 100%
performance incentives with the Company’s goal.
- Raised $15 million in net equity proceeds in 2021,
extinguishing all debt obligations and funding new growth
initiatives.
Select Financial Results
- Net income was $14.9 million, or
$0.49 per common share, due to an $18.3 million gain on Tonogold
sale.
- Debt obligations were $3.6 million
at December 31, 2020, all of which was extinguished in
2021.
- Cash and
equivalents was $2.4 million on December 31, 2020, and $12.1
million on March 5, 2021.
On March 4, 2021, the Company closed on a $16
million registered direct sale of 4 million common shares at a
price of $4.00 per share. Net proceeds were approximately $15
million, after commissions and expenses. The Company now has
42,455,515 common shares outstanding, including the 4 million
registered shares sold in the March 2021 offering, and 3 million
restricted shares issued as consideration to LiNiCo in connection
with the LiNiCo share acquisition. On March 5, 2021, the Company
extinguished all of its debt obligations totaling $3.6 million,
saving over $0.3 million in interest expense over the next 6
months.
“We have successfully restructured our business
over the past three years by eliminating debt and dramatically
reducing costs, while repositioning our assets to build stakeholder
value with transformative, high value, high impact, climate smart
mining and valorization projects, in large part to meet rapidly
escalating demand for the increasingly scarce metals and other raw
materials needed to fuel the global transition to clean energy,”
stated Corrado DeGasperis, Executive Chairman and CEO. “Our first
valorization project launched in 2020 with the MCU global mercury
remediation system. Our second valorization project recently
closed, with our entry into lithium-ion battery recycling through
our large stake in LiNiCo, and we are only just beginning, as we
are currently evaluating several very exciting, strategically
aligned, high-growth, high-impact, valorization projects.”
Outlook Moving Forward
The Company’s strategic plan is designed to
deliver significant shareholder value over the next three years.
The plan objectives include operating and growing existing and new
Environmental, Social and Corporate Governance (“ESG”) driven
projects, including MCU and LiNiCo, while monetizing over $20
million more in non-strategic assets, and funding this new
growth.
Mr. De Gasperis continued: “We have directly
linked employee compensation incentives with performance objectives
designed to increase shareholder value. If we do not perform, then
our shareholders are not rewarded, and neither are we. The
objectives are designed to deliver $500+ million in equity value by
2023, or more than $12 per share, while positioning the Company for
accelerated growth and cash flows thereafter. We will provide
updates regarding our progress in the coming weeks and months.”
Additional Disclosure on the Company’s
Valorization Projects
Comstock Secures Majority Stake in
LiNiCo; Indirect Stake in Green Li-Ion
On February 17, 2021, the Comstock announced
transactions securing a large equity stake in LINICO Corporation
(“LiNiCo”), a lithium-ion battery (“LIB”) recycling company who
recently acquired a state-of-the-art battery metal recycling
facility from Aqua Metals, Inc. (“Aqua Metals”) located in the
Tahoe Reno Industrial (“TRI”) Center in Storey County, Nevada. The
Company will pay up to $4,500,000 in cash and delivered 3,000,000
restricted common shares, representing up to $10,750,000 in
consideration for up to a 64% stake in LiNiCo while Aqua Metals is
investing $2,000,000 for a 10% stake.
LiNiCo has used a portion of those proceeds to
increase its direct strategic investment in Green Li-ion Pte, Ltd.
(“Green Li-ion”) to just over 20%, acquire the state-of-the-art
battery metal recycling facility from Aqua Metals, and purchase
Green Li-ion’s patented process equipment enabling the production
of 99.9% pure lithium-ion cathodes in the U.S. LiNiCo’s new
facility was designed for, and well situated to, receive, crush,
and separate battery materials into black mass. Green Li-ion’s
technology has been proven to convert black mass into rejuvenated,
high purity, battery grade metals and essentially pure cathodes for
a fraction of the cost and time of conventional solutions.
LiNiCo has commenced securing permits, feedstock
arrangements and 99.9% pure sample cathode materials and plans on
commencing production late this year, building toward cathode
production capacity of about 10,000 tons per year. At just 33% of
that rate and 60% of applicable commodity prices, the LiNiCo
facility should generate more than $100 million in sales with
pre-tax operating income margins exceeding 30%, adding 40 good
paying Nevada jobs and making a landmark contribution to Comstock’s
ESG-based Product and Process Stewardship and Climate Smart Mining
objectives.
Mercury Clean Up LLC (“MCU”) and the
Launch of MCU Philippines Inc. (“MCU-P”) Operations
During 2019, the Company entered into a Mercury
Remediation Pilot, Investment and Joint Venture Agreement (the “MCU
Agreement”) with MCU. Pursuant to the MCU Agreement, the Company
paid $2 million of capital contributions in exchange for 15% of the
fully-diluted membership interest of MCU. The Company also has a
50% in MCU Philippines Inc., the first international mercury
remediation joint venture in the Philippines (MCU-P) that
officially commenced processing this week in the province of Davao
D’ Oro, Philippines, with a full political and regulatory support
of the eco-system-wide mercury clean up.
The Company has exercised it rights to
coordinate up to an additional $3 million in secured financing for
MCU-P, and recently completed the first $2 million of loans to
MCU-P, earning another 10% of MCU (for a total of 25%), resulting
in the Company securing the rights to 62.5% of the economics for
all of the mercury remediation projects.
Gold and Silver
Developments
Dayton and Spring Valley Gold and Silver Mineral
Property Development
The Dayton resource area ranks as the Company’s top exploration
and potential mine development target. Our geology team has been
completely updating the interpretive model of the Dayton resource
area, continuing into Spring Valley. The Company plans to generate
a resource estimate based on a standalone, S-K 1300 technical
report summary, and then follow up with additional drilling and
technical work leading to an economic feasibility report.
During the third 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 survey was flown from September 19 through
October 3, 2020, with 1,161 line-kilometers. The interpreted,
three-dimensional results are scheduled to be delivered in early
2021. The results will greatly increase the Company’s understanding
of the Dayton resource area and Spring Valley resource expansion
potential, along with the Company’s other exploration targets in
Lyon and Storey Counties.
Lucerne Gold and Silver Mineral Properties –
Revenue and Royalties
On September 8, 2020, the sale of Comstock
Mining LLC, the entity that owed the Lucerne properties was closed,
and Tonogold acquired 100% of the membership interests. The Company
recorded a gain on the sale of the transaction of $18.3 million,
agreed to receive reimbursements of approximately $2 million per
annum from a lease option agreement for future processing of
Lucerne mine ores, and also retained a 1.5% Net Smelter Return
(“NSR”) royalty on all of the Lucerne mineral properties. Tonogold
plans on publishing an initial NI 43-101 resource report for the
Lucerne properties during 2021.
Occidental and Gold Hill Gold and Silver Mineral
Properties – Exploration and Mining Lease
The Occidental and Gold Hill group of
exploration targets represent longer-term exploration target areas
that contain many historic mining operations, including the
Overman, Con Imperial, Caledonia, and Yellow Jacket mines. The
Company entered into a renewable mineral lease with Tonogold for
these mineral properties owned or controlled by the Company in
Storey County, Nevada (the "Exploration Lease"). The Exploration
Lease grants the right to use these properties for mineral
exploration and development, and ultimately the production, removal
and sale of minerals and certain other materials. The lease
requires exploration spending, permitting, and engineering
commitments for a minimum of $1.0 million per year and a cumulative
total of $20.0 million over 20 years. Tonogold has committed to
specific milestones for issuing technical and feasibility reports
on their results. Tonogold pays a quarterly lease fee of $10
thousand, in advance. The lease fee escalates by 10% each year plus
reimbursing the Company for all costs associated with owning the
properties. The lease also provides for royalty payments after
mining operations commence starting at the rate of 3% of NSR for
the first year following the commencement of mining and 1.5% of NSR
thereafter for all of the properties.
Mr. DeGasperis continued: “While we have
historically focused on metals, our philosophy has always been
about extracting and processing precious and strategic natural
resources, where the words “precious” and “strategic” were defined
to include high value metals based on market drivers and prevailing
commodity prices. Today, however, as we think through the
inevitabilities of the “perfect storm” of demand from the
world-wide transition to clean energy, increasing population, and
increasing natural resource scarcity, our targets are expanding to
encompass additional and emerging high value commodities. We are
currently evaluating several very exciting ESG-based, nature-based,
highly accretive, valorization projects and investments.”
Specific Moving Forward Objectives for
Existing Projects
Specific performance objectives for the
Company’s existing operations include:
Commercialize a global, ESG-compliant,
profitable, mercury remediation and other critical mineral
systems:
- Establish the technical efficacy of MCU’s Comstock Mercury
System, and protect the intellectual property;
- Deploy and operate the first
international mercury remediation project by deploying MCU’s first,
second and at least third mercury remediation systems into the
Philippines;
- Identify, evaluate and prioritize a
pipeline of potential mercury remediation projects; then deploy the
third and fourth mercury remediation projects, producing extended,
superior cash flow returns; and,
- Assess and acquire accretive, ESG-based, strategic 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 exploration
drilling and geophysical modelling;
- Develop the expanded Dayton-SV Complex toward full economic
feasibility, supporting a decision to mine;
- Entitle the Dayton-SV Complex with geotechnical, metallurgical,
environmental studies and permitting; and,
- Validate the Comstock NSR Royalty portfolio, i.e., Comstock and
Occidental Lodes, Lucerne, etc.
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.
Mr. De Gasperis concluded, “We have directly linked our
strategic performance objectives with our goal of delivering $500
million in shareholder value (or at least $12 per share) and then
aligned all of our people with 100% performance-based, stock-based
compensation based on both delivering these objectives, funding
them and delivering at least that value to our shareholders. Again,
if our shareholders are not rewarded, then neither are we.”
See press release with images at
https://www.comstockmining.com/press-releases/comstock-mining-…nergy-transition/
Conference Call
The Company will host a conference call today,
March 11, 2021, 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 Webcast will include a moderated
Q&A, after the prepared remarks. Please join the event 5-10
minutes prior to the scheduled start time. The link and/or dial-in
telephone numbers for the live Webcast are as follows:
Join Zoom
Meetinghttps://us02web.zoom.us/j/7437013377Meeting ID: 743 701
3377One tap mobile+12532158782,,7437013377# US
(Tacoma)+13462487799,,7437013377# US (Houston)Dial by your location
+1 253 215 8782 US (Tacoma) +1 346 248 7799 US (Houston) +1 669 900
9128 US (San Jose) +1 301 715 8592 US (Washington DC) +1 312 626
6799 US (Chicago) +1 646 558 8656 US (New York)Meeting ID: 743 701
3377
Find your local number:
https://us02web.zoom.us/u/kGBcBXcOw
The recording of the Webcast will be available,
within 24 hours of the call, on the Company website:
http://www.comstockmining.com/investors/investor-library
About Comstock Mining Inc.
Comstock Mining Inc. (NYSE: LODE) (the
“Company”) is an emerging leader in climate-smart, sustainable
mineral development and production of environment-enhancing,
increasingly scarce strategic and precious metals. The Company is
focused on conservation-based, high-value, cash-generating
valorization of mineral and metals essential to meeting the rapidly
increasing demand for clean energy technologies. The Company has
extensive, contiguous property in the historic, world-class
Comstock and Silver City mining districts (collectively, the
“Comstock District”) with fully permitted, metallurgical labs and
an operational, mineral processing and beneficiation platform that
includes a growing portfolio of mercury remediation, gold, silver,
lithium, nickel, and cobalt processing capabilities. To learn more,
please visit www.comstockmining.com.
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 operating margins; available resources;
environmental conservation outcomes; 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.
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Contact information: |
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Comstock Mining Inc.P.O. Box
1118 Virginia City, NV 89440ComstockMining.com |
Corrado De GasperisExecutive
Chairman & CEOTel (775)
847-4755degasperis@comstockmining.com |
Zach SpencerDirector of
External RelationsTel (775) 847-5272
Ext.151questions@comstockmining.com |
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