Comstock Mining Inc. (the “Company”) (NYSE American: LODE)
announced today it completely paid off, yesterday, its remaining $4
million Senior Secured Debenture from a combination of recent cash
proceeds from Tonogold and new, unsecured promissory notes, with
favorable terms.
The Company entered into three promissory notes
(the “Promissory Notes”) that refinanced its existing, secured
indebtedness, on more favorable terms, through a known group of
existing LODE investors. The Promissory Notes are unsecured and
have an aggregate principal amount of $4,475,000 (net of an
original discount of $255,000), and a maturity date of September
20, 2021, with no prepayment penalties, and a portion of which that
can be extended for an additional two years. The Promissory
Notes were designed to mirror the amount still receivable from
Tonogold, including the maturity date of September 20, 2021, and
the 12% interest rate payable monthly.
The Promissory Notes also permit other indebtedness
but contain covenants that prohibit the Company from incurring debt
that matures prior to September 20, 2021, or that is senior
in right of their payment. The Company must also prepay the
Promissory Notes, without penalty, with at least 80% of the net
cash proceeds received by the Company with respect to the sale of
the Company’s non-mining assets in Silver Springs, NV.
The Company recently received $0.9 million in two
payments from Tonogold, one in late June and one in early August,
that was otherwise maturing on October 15, 2020. These
payments reduced the remaining amounts due to Comstock from
Tonogold to $4,475,000, and when coupled with the $4,220,000 of net
proceeds from the Promissory Notes, enabled the full, early
extinguishment of the Senior Secured Debenture due later this
year.
Mr. Corrado DeGasperis, Executive Chairman and CEO
stated, “This represents a major milestone by eliminating the
overhang created by the Senior Secured Debenture, releasing all of
our assets from restrictive security encumbrances and covenants and
positions us to fully consummate the 100% sale of Lucerne, by
allowing the perfecting of the security interest on that now
unsecured asset. We are also focused on closing the sale of our $10
million plus non-mining assets in Silver Springs, NV, and funding
our growth with more flexibility and speed.”
Mr. George Melas, Concorde and Bean Trustee said,
“We are pleased to provide flexible financing to Comstock
Mining Inc. that enables and facilitates the company’s meaningful,
precious-metal based growth initiatives and accelerates the
creation and delivery of sustained value for all of its
stakeholders.”
The Company is also permitted to defer payment of
up to 34% of the principal payment due on the maturity date for an
additional two years (i.e., until September 20, 2023), solely at
its option, in exchange for two year warrants to purchase the
Company’s stock based on a 10% discount to a then VWAP of the
Company’s common stock.
Mr. DeGasperis concluded, “The debt reductions,
maturity extensions and releases of restrictive security and
covenants, coupled with the ability to accelerate and consummate
the Lucerne sale, positions us to focus on exploration,
development, mercury remediation and the sale of the remaining
non-mining assets, all of which unlock and/or create sustained
value for our shareholders. We are pleased to conclude these
transactions and advancing 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 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: |
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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 |
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