Comstock Mining Inc. (the “Company”) (NYSE American: LODE)
announced selected strategic and financial updates (unaudited) for
the second quarter and year to date:
Selected Strategic Highlights
- Investment in Tonogold Resources Inc. (“Tonogold”) valued at
$10.4 million at June 30, 2020;
- Investment in Mercury Clean Up LLC (“MCU”) increased to $1.75
million (in cash and stock) at June 30, 2020, with the Comstock
mercury remediation system completed (pictures below) and shipping
this week;
- Formed MCU Philippines Inc. (“MCU-P”), after MCU agreed to a
definitive joint venture agreement with Clean Ore Solutions OPC, to
partner in a landmark mercury remediation project in the
Philippines;
- Committed up to $3 million in debt and equity investments, for
62.5% of the newly created MCU-P, with the new mercury remediation
system scheduled for shipment in the next few weeks (pictures
below);
- Extended agreements for the sale of Comstock’s two non-mining
properties in Silver Springs, NV, for total expected proceeds of
$10.1 million sale, with the closings expected this quarter;
and
- Consummated the April acquisition of 25% of PELEN LLC, owner of
the historic Sutro Tunnel Company.
Unaudited Second Quarter 2020 Selected Financial
Highlights
- Total costs and expenses improved approximately 16% over Q2
2019;
- Interest expense improved approximately 50% over Q2 2019;
- Net income was positive for Q2 2020, as compared to net loss of
$2.1 million, or ($0.13) loss per share for Q2 2019, driven by
lower costs and total gains of $1.7 million from our equity
investment in Tonogold;
- Net cash used in operations was $0.4 million in Q2 2020, as
compared to a net use of $1.6 million in Q2 2019, with improvements
resulting from lower operating expenses and higher Tonogold
reimbursements;
- Net cash provided by investing activities was $0.4 million in
Q2 2020, from non-refundable deposits and proceeds from the sale of
certain properties, offset by investments made in Mercury Clean Up;
and
- Cash and cash equivalents at June 30, 2020, were $1.0
million.
Mr. Corrado DeGasperis, Executive Chairman and CEO stated, “We
are on track to land the MCU - Comstock system this week, equipment
started to arrive yesterday, and to commence testing within the
boundaries of the Carson River Mercury Superfund Site
(“CRMSS”). We are finalizing the requirements for shipping
the first international unit to the Philippines and have scheduled
deployment to the Davao D’Oro Province. We are accelerating the
pace of deployment as we continue to invest in clean,
precious-metal based growth.”
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 repositions the Company for clean, sustainable
growth, and we are now growing.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/2d731562-6328-4929-9d9f-ec68de58ec9c
Mr. DeGasperis continued, “The realignment enables partnerships
and transactions that increase value-creating opportunities and
accelerates our precious-metal based growth. Since the realignment,
we have expanded our partnership with both MCU and Tonogold.
The MCU investments provide broad opportunities for higher, faster
returns and long-lived cash flows. We are working closely
with all our partners to grow value.”
Comstock Mercury Remediation System and the American
Flat Processing Platform
Our American Flat processing platform is fully permitted, and
the infrastructure has been prepared, including pads, power, water
and retaining walls, for the delivery of the brand new MCU mercury
remediation system. The system is scheduled to ship this week and
peripheral equipment has already begun arriving. The Company
is collaborating directly with U.S. and Nevada regulators and
policy makers for maximum social and environmental impact.
MCU’s State-of-the-Art Mercury Remediation System
Shipping to the Comstock
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/6b3008ec-fc4d-48ab-a6ba-af7b11a7ad18
The Company and MCU have prepared the site for delivery of this
impressive aggregation of state-of-the-art alluvial mining
technologies, operating as one, fully integrated mercury
remediation system. The system, which is mobile, stands almost
twenty feet high and comes with an additional, specialized, mobile
metallurgic laboratory and an integrated Dissolved Air Flotation
(DAF) system, one of the most effective, mobile
wastewater reuse operations.
MCU’s Mercury Remediation System - for the
PhilippinesOro Industries has manufactured this second,
state-of-the-art mercury remediation system for our newly created
MCU Philippines Inc. (“MCU-P”) entity, in partnership with our
partner Clean Ore Solutions (“COS”), with whom we have a Joint
Venture to establish Clean Mineral Recovery Technologies (“CMRT”)
for remediation and rehabilitation of the mercury-contaminated
Naboc River on Mt. Diwata, in Davao D’Oro, Philippines.CMRT will
work directly with the Philippine Department of Environment and
Natural Resources (DENR) and the provincial government of Davao
D’Oro for the rehabilitation of this mine-waste contaminated
river.MCU’s State-of-the-Art Mercury Remediation System for
Shipping to the Philippines
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7539d95c-acf5-4611-bd95-5d567eb1bb77
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 in September 2020.
These proceeds will be used to extinguish approximately $5 million
in debt obligations (including our $4.1 million Debenture). Our
$6.1 investment in Tonogold Convertible Preferred Stock (CPS) is
now valued at $10.4 million based on the $1.1 million in CPS shares
that we have already converted into 6.111,111 common shares at
Tonogold’s current share price. We are also owed
approximately $4.9 million from Tonogold through a 12%, cash
interest paying forward instrument, with principal payments of $0.4
million due this October 2020, and $4.475 million due September
2021.
Corporate
The Company received a $0.5 million early payment in June 2020,
on obligations owed from Tonogold and reduced our Senior Debt
principal down to $4.1 million in mid-July, down from $4.5 million
at June 30, 2020. Cash and cash equivalents at June 30, 2020,
were $1.0 million, and the Company raised an additional $1.25
million on July 22, 2020, primarily for growth investments in MCU
Philippines Inc., bringing total common shares outstanding at July
28, 2020, to 31,981,105 shares, as compared to 28,815,000 shares,
at June 30, 2020.
Outlook
During the third quarter of 2020, the Company expects to close
on the sale of certain non-mining assets located in Silver Springs,
NV, to Sierra Springs Enterprises Inc., for total proceeds of
approximately $10 million. The agreements, as amended, included
$0.4 million of non-refundable deposits made and released to the
Company from escrow. The Company will use the remaining proceeds to
extinguish the entirety of its outstanding Senior Secured Debenture
principal and make-whole, of approximately $4.3 million, plus
accrued interest of less than $0.1 million.
Tonogold is currently permitting a drilling program for the
Storey County exploration targets, including the leased mineral
claims, just north of the Lucerne area, and expects to begin
drilling in the third quarter of 2020. As of June 30, 2020,
Tonogold has earned 54.57% of the membership interest after making
payments of over $6.5 million in cash and $6.1 million in CPS. The
Company expects to monetize approximately $0.5 million worth of
common shares in the second half of 2020, depending on price and
liquidity, under an existing 10b5-1 plan.
The Company’s second half 2020 plans also include obtaining the
local permits for Dayton, expanding Dayton’s current resource and
continuing southerly into Spring Valley with incremental
exploration programs that include exploration and definition
drilling of targets identified by geophysical surveys, surface
mapping, prior drilling and deeper geological interpretations that
all lead to publishing a new, SK-1300 compliant, mineral resource
estimate.
For 2020, the Company’s plans include advancing the investment
in and the commercialization of MCU’s mercury remediation
processing technologies. The Company expects to close on the MCU
transactions during the fourth quarter of 2020, meaning, at that
time, it will own 25% of MCU and 50% of its first joint venture in
the Philippines. Oro has completed the manufacture of the
25-ton-per-hour mercury recovery plant and is shipping the system
to the Comstock, including a 200 gallon-per-minute dissolved air
flotation water treatment plant, this week.
MCU has commenced trial operations that will continue throughout
the second half of 2020, at the Company's American Flat processing
facility, to validate and fine-tune the mercury extraction and
remediation process, with the objective of reclaiming and
remediating the Company's existing properties within the Carson
River Mercury Superfund Site ("CRMSS"), enhancing the values of,
and evaluating the potential economic feasibilities for, these
properties and creating new global growth opportunities in mercury
remediation by demonstrating MCU’s technological and operational
effectiveness, efficiency, and feasibility.
MCU-P has agreed and plans to commence reclamation operations
during the third quarter 2020, in the Philippines. MCU-P will
operate under a joint venture agreement with Clean Ore Solutions, a
Philippine Company, for mercury extraction and remediation of Mt.
Diwata and the Naboc River, one of the most mercury polluted, gold
mining regions in the world. This represents the first real
international opportunity for large-scale mercury remediation and
environmental reclamations, using MCU’s systems, with the objective
of establishing MCU a leader in mercury remediation projects, and
in particular, contaminations caused by Artisanal and Small-Scale
Miners (ASM).
Our annual operating expenditures, including other cash income
and expenditures and excluding depreciation, are planned at
approximately $5.5 million, with approximately $2.5 million of that
amount currently being reimbursed under the Tonogold Purchase
Agreement, Lease-Option Agreement, and Mineral Exploration and
Mining Lease Agreement, resulting in net operating expenses for
2020, excluding exploration spending, of $3 million. During the
first six months of 2020, the Company received
approximately $1.25 million in expense reimbursements and $1.0
million in cash for prepaid reimbursements required under the
Tonogold agreements and expects to receive another $0.2 million
during the fourth quarter of 2020.
Conference Call The Company will host a
conference call today, July 28, 2020, 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. Please join the event 5-10 minutes prior to
scheduled start time. When prompted, provide the confirmation code.
The dial-in telephone numbers for the live audio are as
follows:
Toll Free: 800-367-2403Direct:
1-334-777-6978Confirmation Code: 6733226The audio will be
available, usually within 24 hours of the call, on the Company’s
new
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 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 |
Comstock (AMEX:LODE)
Historical Stock Chart
From Apr 2024 to May 2024
Comstock (AMEX:LODE)
Historical Stock Chart
From May 2023 to May 2024