Comstock Mining Announces Accelerated Payment on Lucerne Transaction; Tonogold Accelerates $3.5 million Stock-based Down Paym...
May 23 2019 - 6:45AM
Comstock Mining Inc. (“Comstock” or “the Company”) (NYSE American:
LODE) today announced a further update and progress toward the
completion of the sale of its Lucerne properties (“Lucerne”).
Tonogold Resources, Inc. (“Tonogold”) has accelerated paying the
non-refundable, $3.5 million stock-based component of the purchase
price, representing 3500 Shares of Convertible Preferred Stock with
a stated value of $1,000 per share plus a commitment fee of an
additional 420 Shares of Convertible Preferred Stock with identical
terms, in lieu of the $650,000 cash payment due this month.
This payment maintains the deadline for closing the transaction
until June 21, 2019.
On January 24, 2019, the Company entered into the Tonogold
Agreement for the sale of its Lucerne properties to Tonogold for
$15 million (representing $11.5 million in cash and $3.5 million in
stock). This Amendment simply reflects the acceleration of the $3.5
million stock-based component of the purchase price, previously
agreed upon, in lieu of the $650,000 cash payment due this
month. The $3.5 million will be paid in a Convertible
Preferred Stock with the post-closing conversion price being the
lowest of (1) the 20-day volume weighted closing price of Tonogold
shares prior to conversion, (2) Tonogold’s most recent private
placement or (3) Tonogold’s initial public offering price. If the
closing does not occur within the amended timelines, the stock is
automatically convertible at 85% of the then current volume
weighted average price.
Mr. Corrado De Gasperis, Executive Chairman and CEO, stated,
“The early receipt of this payment from Tonogold demonstrates the
good, ongoing progress towards finalizing the Lucerne transaction.
We have now received almost $6 million in cash and stock out of the
$15 million closing component of the purchase price, plus the
additional commitment fee. We look forward to closing this
transaction in June, eliminating our debenture and accelerating the
deployment of our strategic growth plans.”
The Amendment does not change the requirement that Tonogold
reimburses the Company for the monthly interest expense on the
Company’s Senior Secured Debenture, and the more than $1 million in
annual operating expenses associated with the American Flat
platform, both effective and beginning on June 1, 2019, regardless
of when the sale closes. Tonogold also retains the option to extend
the closing for two additional months, upon the payment of two
additional, $1 million non-refundable deposits.
Comstock anticipates Tonogold to deliver $11.5 million in cash
at closing, less the total amounts of the cumulative non-refundable
cash payments made by Tonogold at that time, currently totaling
$2.35 million.
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 Statements
This 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 and
Tonogold. 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: capital
raising activities and negotiations; market conditions; future
changes in exploration activities, production capacity and
operations; future exploration, production, operating and overhead
costs; production of feasibility studies, technical reports or
other findings related to estimated mineralization; operational and
management restructuring activities; capital expenditures (by
Comstock, Tonogold or other parties) and their impact; 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, equity dilution, 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 the management of Comstock and
Tonogold 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 the annual report
on Form 10-K of Comstock. Occurrence of such events or
circumstances could have a material adverse effect on the business,
financial condition, results of operations or cash flows or the
market price of Comstock and Tonogold’s securities. All subsequent
written and oral forward-looking statements by or attributable to
Comstock, Tonogold or persons acting on their behalf are expressly
qualified in their entirety by these factors. Neither Comstock nor
Tonogold undertake any 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 any other securities of Comstock or
Tonogold.
Contact information: Comstock Mining, Inc. P.O. Box 1118
Virginia City, NV 89440 ComstockMining.com
Corrado De Gasperis Executive Chairman & CEO Tel (775)
847-4755 degasperis@comstockmining.com
Zach Spencer Director of External Relations Tel (775) 847-5272
ext.151 questions@comstockmining.com
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