Comstock Mining Inc. (“Comstock” or “the Company”) (NYSE American:
LODE) announced today that Tonogold Resources, Inc. (“Tonogold”)
has elected to extend the closing date on the sale of the Lucerne
properties until August 30, 2019, by remitting a non-refundable
cash deposit of $875,000. Under the January 2019 agreement,
Comstock is selling the membership interest in Comstock Mining LLC
to Tonogold for $15 million, plus the assumption of certain
liabilities and a retained 1.5% NSR royalty on Lucerne. The
extension brings total cash deposits through August to $4.225
million, all toward the agreed purchase price. The
Company has also received $3.5 million in convertible preferred
stock (“CPS”), for total pre-close payments of $7.725 million, all
applicable to the purchase price, plus fees totaling an additional
$1 million in stock.
The Company and Tonogold have also amended the purchase
agreement, effective August 15, 2019, allowing Tonogold to close by
August 30, 2019, with a majority membership interest of at least
50.3% in Comstock Mining LLC, and an additional cash payment at
closing of at least $3.315 million, bringing the total cash
payments for closing to $7.54 million. The remaining $4.0 million
will be held as a secured obligation with scheduled monthly
payments of not less than $500 thousand each, between November
2019, and May 2020. Once the final payment is made, Tonogold will
then own 100% of the membership interests Comstock Mining LLC,
owner of Lucerne. The prior “earn-in” option agreement between
Comstock and Tonogold, signed in October 2017, is terminated as a
result of this amendment and the prior payments of $2.2
million becomes income in August 2019.
The amendment also results in a fee of $580 thousand in Tonogold
Convertible Preferred Stock (CPS), due by August 30, 2019, in
addition to the $420 thousand fee in CPS previously paid on May 31,
2019, neither applying to the purchase price. All $4.5 million of
the CPS is convertible on May 22, 2020, at a conversion price
representing 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 public offering price.
The amendment gives Tonogold an option to extend the closing to
September 30, 2019, by paying an additional $250 thousand in
CPS.
The Company previously agreed that, upon the closing of the sale
of the Tonogold transaction, it will enter into an option to lease
the permitted American Flat property, plant and equipment to
Tonogold for crushing, leaching and processing. Upon closing, the
Company will also enter into a ten-year Mineral Lease for all
additional mineral properties in Storey County, granting Tonogold
the right to explore, develop and mine these properties.
Mr. Corrado De Gasperis, Executive Chairman and CEO, stated,
“The total cash payments at closing of $7.525 million transfers the
majority interest in the entity that owns Lucerne to Tonogold with
a clear and expedited path for acquiring the full 100%. The
closing will immediately reduce our debt to approximately $2.5
million. This deal is getting done in the very near-term and the
remaining Tonogold payments (approximately $4 million) eliminates
our debt and brings significant free cash to accelerate new revenue
growth.”
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
89440www.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.151questions@comstockmining.com
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