Comstock Mining Inc. (the “Company”) (NYSE
American:LODE) today announced selected strategic and
financial highlights for the year ended December 31, 2017.
2017 Selected Strategic
Highlights
- Received the 2017 Nevada Excellence in Mine Reclamation Award
for Lucerne-related mine reclamation.
- Completed a strategic Joint Venture Option Agreement for
advancing the assessment and development of the Lucerne resource
area.
- Completed federally funded column tests on mineralized material
from the Dayton resource, through Cycladex Inc., a strategic
investee, for faster, safer leaching solutions, achieving gold
yields of 82-85%.
- Reduced annual operating expense by over $6.3 million, with
year on year reductions in every category.
- Projected lower operating spend rate of less than $3.6 million
per annum, before the estimated annual cost benefits from the Joint
Venture Option Agreement of an additional $1.25 million.
- Staked 30 unpatented lode claims with 472 contiguous acres,
increasing our lands to over 9,272 acres.
- Reduced long-term debt during the fourth quarter by over $1
Million from non-mining asset sales, lowering debenture principal
to $9.6 million.
- Celebrated the Nevada Department of Transportation’s USA
Parkway Grand Opening Celebration, directly benefiting Comstock’s
Certified Industrial Site and the Daney Ranch near the US 50
highway.
- Agreed to sell the Daney Ranch for $4 million, expected to
close in the second quarter of 2018, subject to financing and
permitting.
Corrado De Gasperis, Executive Chairman and CEO
of the Company said, “We spent most of 2017 dramatically reducing
operating costs and liabilities across the board, enhancing
liquidity and establishing strategic partnerships that reposition
the company for accelerated and larger growth. We are now
positioned and focused on real asset, resource and equity value
growth for 2018, while concurrently eliminating our debt and expect
meaningful updates in the next two months.”
2017 Selected Financial
Highlights
- Costs applicable to mining were $3.4 million in 2017, all
representing depreciation, as compared to $4.5 million in 2016, a
24.7% reduction, resulting primarily from cessation of processing
in 2016.
- Operating expenses were $5.6 million in 2017, as compared to
$10.8 million in 2016, a 48.1% decrease.
- General and administrative expenses were $2.6 million in 2017,
as compared to $3.5 million in 2016, a 26% reduction and a record
low, driven by lower payroll and administrative expenses.
- Real estate operating costs were less than $0.1 million in
2017, as compared to $0.2 million in 2016, a 59.6% reduction and a
record low, driven by the full year impact of favorable, targeted
cost reductions.
- Exploration and mine development expenses were $1.1 million in
2017, as compared to $4.6 million in 2016, a 75.2% reduction,
primarily from the completion of the 2016, Lucerne underground
drift.
- Mine claims and costs were $1.0 million in 2017, as compared to
$1.1 million in 2016, a 10.9% reduction.
- Environmental and reclamation expenses were $0.8 million in
2017, as compared to $1.3 million in 2016, a 39.9% reduction and a
record low despite higher costs associated with unusual
precipitation.
- Net loss was $10.6 million for 2017, as compared to a net loss
of $13.0 million for 2016.
- Net cash used in operations was $6.5 million for 2017,
primarily related to general and administrative, exploration, mine
claim costs, environmental expenditures and working capital.
- Net cash provided by financing activities, was $7.4 million,
primarily from debt and equity issuances.
- Total debt obligations at December 31, 2017, were $10.3
million.
- Cash and cash equivalents at December 31, 2017, were $2.1
million.
Corrado De Gasperis, Executive Chairman and CEO
of the Company noted, “Our streamlining in 2017, lowered operating
costs in all categories, by over $6.3 million, exceeding our
targets, while maintaining the entirety of our land package,
permitted infrastructure, and our internal engineering, geological,
metallurgical, land and financial competencies. We are lean and
well positioned to grow our resources, our assets and our equity
value in 2018. We are looking forward to updating our
shareholders on the Lucerne and Dayton resource developments and
other strategic development, in both the first and second quarters
of 2018.”
Exploration & DevelopmentDistrict-wide
The Company's long-term plans contemplate the exploration and
development of specific, identified geological target areas across
the District, that the Company has grouped into the Lucerne and
Dayton resource areas, and the Spring Valley, Occidental and Gold
Hill exploration targets. These exploration targets represent
over 7 miles of mineralized strike length, with current and
historical grades of gold and silver (see Figure 1).
Lucerne Resource Area
On October 3, 2017, the Company entered into an Option Agreement
(the “Option Agreement”) with Tonogold Resources, Inc.
(“Tonogold”). Under the terms of the Option Agreement, Tonogold
will have the right to participate in certain activities, including
but not limited to, engineering, development, drilling and
test-work, towards completing a technical and economic feasibility
assessment on properties within the Lucerne Property.
The Option Agreement calls for a Technical Committee composed of
three Tonogold participants and two Comstock participants to
oversee all of the engineering, development, drilling and test-work
activities, and others, towards completing a technical and economic
feasibility assessment. The Technical Committee reviewed the
initial phase of the proposed due diligence program during November
2017, and is scheduled for an updated review of the progress in
late February and March of 2018.
Dayton Resource Area (“Dayton”)
The Company plans to advance the Dayton Project by updating the
resource and providing preliminary economic feasibility and
technical reporting by the fourth quarter of 2018. The plan also
includes expanding the current resource at the Dayton and
continuing southerly into Spring Valley with incremental expansion
programs that include exploration and definition drilling of
targets identified by prior resistivity geophysical surveys (see
Figure 2).
Non-Mining Asset Sales
The Company is finalizing an agreement to sell
the Daney Ranch for $4 million and expects the transaction to close
before the end of the second quarter in 2018, subject to financing
and permitting. The purchase price is higher than the
original amount expected due to the continued economic expansions
and developments occurring all along the U.S. 50 Highway
corridor.
In January 2018, Blockchains, LLC announced it purchased more
than 60,000 acres at the Tahoe Reno Industrial (TRI) Center,
effectively selling out the remaining land in the TRI Center, and
joining Tesla, Google, Walmart and Switch at the world’s largest
industrial park, and Amazon and Apple in the Tahoe Reno Industrial
area. Once completed, its initial corporate campus will consists of
more than 300,000 square feet and over 1,000 employees by 2021.
This announcement, coupled with the early completion of USA Parkway
in September 2017, continues to enhance the value of the Company’s
properties along Highway 50. Interest and activity is robust for
purchasing industrial lands in Silver Springs, Nevada, where the
Company’s Industrial Site and water rights are located and
residential properties along the entire Highway 50 corridor, where
the Daney Ranch is also located.
During 2017, the Company highlights the following, land value
enhancing developments in northern Nevada:
- Nevada Announced over $125 million in Infrastructure
Investments, including the completion of the $79 million USA
Parkway and Grand Opening Celebration held on August 28, 2017,
benefiting our Certified Industrial Site in Silver
Springs;
- Apple Inc. announced an anticipated investment of an additional
$1 billion in northern Nevada, doubling the size of its existing
data center near the TRI Center.
- Tesla announced it will expand its $6 billion Giga factory
investment in the TRI Center to also include Model 3 powertrain
production with already planned battery cells and packs.
- Google announced it invested in the third largest parcel in the
TRI Center Nevada.
- Switch announced the opening of the largest, most advanced
colocation Data Center in the world, known as The Citadel Campus,
designed for up to 7.2 million square feet of data center
space.
- Scheduled for construction to begin this year at the TRI Center
on 200 acres surrounding a man-made lake is the Tahoe Reno Towne
Center, which will feature hotels, retail, restaurants and a
casino.
Corporate
During the year ended December 31, 2017,
the Company issued 9,464,764 shares of common stock through the
Company’s at-the-market and equity purchase offering programs.
Gross proceeds from the issuance of shares totaled approximately
$7.3 million at an average price per share of $0.78.
The Company reduced long-term debt during the fourth quarter
of 2017, by over $1 million from non-mining asset sales, lowering
debenture principal to $9.6 million. The Company also reduced
its current liabilities by over $1.3 million, from December 31,
2017, to December 31, 2016, and had cash and cash equivalents of
$2.1 million at December 31, 2017.
On February 12, 2018, the Company elected Leo M. Drozdoff, 52,
to its Board of Directors and also announced the retirement of
Robert A. Reseigh, after 9 years of service, from its Board of
Directors. Mr. Reseigh will remain involved with the Company as a
member of a newly established Mining Advisory Committee, to assist
in all aspects of technical mining and mine development, along with
Mr. Drozdoff and Mr. Dan Kappes.
Outlook
2018 operating expenses are expected to be $3.6
million. Interest expense is expected to be approximately
$1.2 million for 2018. The Company expects to continue operating
with approximately 10 employees, including expert land, permitting,
geology and engineering professionals.
The Company has a longer-term goal to deliver up to $500 million
of accretive share value (over $10 per share) by 2020, by
acquiring, joint venturing, exploring and developing resources and
reserves capable of sustaining production of more than 100,000
gold-equivalent ounces per annum.
Conference Call
The Company will host a conference call today,
February 20, 2018, 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
numbers for the live audio are as follows:
Toll Free: (1-888-297-8935; participant
confirmation code: 9632880)Direct: (1-647-794-1827; participant
confirmation code: 9632880)The audio will be available, usually
within 24 hours of the call, on the Company
website:http://www.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. 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 StatementsThis
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.
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: future prices and sales
of, and demand for, our products; future industry market
conditions; future changes in our exploration activities,
production capacity and operations; future exploration, production,
operating and overhead costs; operational and management
restructuring activities (including implementation of methodologies
and changes in the board of directors); future employment and
contributions of personnel; tax and interest rates; capital
expenditures and their impact on us; nature and timing and
accounting for restructuring charges, gains or losses on debt
extinguishment, derivative liabilities and the impact
thereof; productivity, production slowdowns, suspension or
termination, business process, rationalization and other
operational initiatives; 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 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 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 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 our annual report on Form 10-K. 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. We undertake no obligation to publicly update or
revise any forward-looking statement.
Neither this press release nor any related calls or discussions
constitutes an offer to sell or the solicitation of an offer to buy
the Debenture or any other securities of the Company.
Contact information for Comstock Mining Inc.: |
|
PO Box
1118 |
|
|
Virginia City, NV 89440 |
|
|
http://www.comstockmining.com |
|
|
|
|
Corrado De Gasperis |
|
Zach
Spencer |
President & CEO |
|
Director of External Relations |
Tel
(775) 847-4755 |
|
Tel
(775) 847-5272 ext. 151 |
degasperis@comstockmining.com |
|
questions@comstockmining.com |
Figures accompanying this announcement are available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/74fcaa6d-444b-4a71-93c0-f99d55d30cff
http://www.globenewswire.com/NewsRoom/AttachmentNg/48ee5faa-5497-4617-b6d2-962f9f576b56
Comstock (AMEX:LODE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Comstock (AMEX:LODE)
Historical Stock Chart
From Apr 2023 to Apr 2024