Comstock Mining Inc. (the “Company”) (NYSE
American:LODE)
, a Nevada-based, gold and
silver mining company, announced today that Tonogold Resources,
Inc. (“Tonogold”) has successfully completed the first phase of the
Option Agreement signed on October 3, 2017, having invested
approximately $1 million during the past six months toward the
evaluation and assessment of the Lucerne Mine Project’s resource
and preliminary economic feasibility and also having paid the
Company an additional $2 million for the right to extend the
option. The Option Agreement established a series of requirements,
including technical and financial analysis, along with additional
funding milestones for Tonogold to earn a share of the Company’s
Lucerne Mine Project.
The first milestone granted Tonogold six months to conduct an
initial review of the project. During this period, Tonogold
invested approximately $1 million in project costs, including a
due-diligence assessment of the Lucerne Resource. Tonogold
commissioned Mine Development Associates of Reno, NV (“MDA”), to
independently assess and begin modelling a portion of the Lucerne
resource area. This work is in preparation for the intermediate
objective of an NI 43-101 resource report and then towards a
feasibility study.
In order to maintain and progress the option to earn-in,
Tonogold will now continue investing toward a cumulative $7 million
for Lucerne by October 3, 2019, and a cumulative $20 million by
April 3, 2021, and must produce a technical and economic
feasibility assessment for mining the Lucerne resource. Under
the Agreement, when Tonogold completes the $20 million investment,
and other related prerequisites, Tonogold and Comstock would then
affect a joint venture for the future mining of the Lucerne mineral
resource. In addition to the $2.2 million already received by the
Company from Tonogold, the investments also include at least $1.2
million in annual subsidies for the Company.
Mr. Corrado De Gasperis, Executive Chairman and CEO of the
Company said, “We are pleased with the geological analysis and
advancement, to date, on the Lucerne resource and the diligence of
our mining partner and their advisors. The next phase should
accelerate the evaluation, drilling and development activities,
while continuing to lower our annual costs by approximately
one-third.”
The evaluation program is currently directed at producing a
robust resource model for Lucerne as well as assessing a series of
geological targets in the Silver City Branch of the Comstock Lode,
including the Succor vein systems, the historic Woodville Bonanza
system and the PQ target. These initial targets represent the core
of a broader geological corridor. Previous surface drilling in
the area suggests more than 1,000 feet of mineralized strike in the
Succor zone, trending east from the Lucerne Cut, with good
potential to yield high-grade gold and silver. The 1,000-foot plus
Succor Vein Target has an average true width of 15 feet and an
average dip of 65 degrees. The structure has reported historic
mining grades of approximately 0.54 ounces per ton of “recovered”
gold per ton and is open to the east and at depth, along the entire
structure. The nearby Woodville Bonanza structure includes the same
supporting historical mappings with reported historic mining grades
of 0.749 ounces of gold per ton. The Woodville has
significant current drill data including 116 intercepts of at least
10 feet, grading over 0.22 ounces per ton gold and 1.59 ounces per
ton silver.
Tonogold is a U.S.-based mining company that is focused on
advanced exploration properties in Nevada and Mexico. Tonogold’s
team of mining executives and investors are working to build a
portfolio of mineral properties that will give its investors a
leveraged exposure to gold, silver and other minerals and metals
allowing them to benefit from its exploration, mining and financial
expertise.
Mr. De Gasperis, concluded, “This venture has diligently focused
on developing a sustainably profitable mine. We feel the full
potential of Lucerne depends on this type of technical
collaboration, with the right partner and capital to enable
it. Ultimately, Tonogold plans to invest over $20 million for
51% of the Lucerne Mine. Their methodical, technically diligent and
credible advancement through the first phase, meeting all
commitments and milestones, speaks for itself.”
The Company’s debenture obligation requires that we use 70% of
these proceeds for debt reduction. The Company has now
reduced long-term debt by a total of $1.6 million in April,
lowering the debenture principal balance to $7.9 million. The
Company also had cash and cash equivalents of $2.0 million at March
31, 2018, excluding any additional net proceeds received from the
option payment that was not used to pay down debt.
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 |
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