Comstock Mining Advances Realignment; Approves Joint Venture
Virginia City, NV (June 20, 2019) Comstock Mining Inc. (the “Company”) (NYSE American: LODE) today announced progress on a number of strategic initiatives and corporate activities.
The Company has now completed the realignment such that all of the Lucerne properties are now wholly owned or controlled by Comstock Mining LLC, the entity that Tonogold Resources Inc. (“Tonogold”) will acquire in purchasing the Lucerne properties.
Figure 1—Comstock Corporate Realignment
Comstock Mining Inc. is the parent company that wholly owns the realigned subsidiaries. Comstock Mining LLC owns or controls Lucerne properties, including those contained in Northern Comstock Joint Venture. Comstock Northern Exploration LLC owns or controls the remaining Storey County mining claims and exploration targets, primarily located north of Lucerne, including the Gold Hill targets and the Occidental Lode. Comstock Exploration & Development LLC owns or controls the Lyon County mining claims and exploration targets, including the Dayton and Spring Valley resource areas. Comstock Processing LLC owns the American Flat processing facility and additional lands for multiple, potential expansions. Comstock Industrial LLC owns the Silver Springs properties and water rights. Comstock Real Estate Inc. owns the Gold Hill Hotel and the Daney Ranch. Comstock Mercury Remediation LLC is the newly agreed upon 50-50 joint venture.
Figure 2—Comstock Realignment Land Position 2019
Comstock Processing LLC, a new wholly owned subsidiary of the Company that includes all of the assets at the American Flat campus, including crushing, leaching, Merrill-Crowe metallurgical processing and the Company’s various metallurgical laboratories, has pursued, and the Board has approved, the formation of a Joint Venture with Mercury Clean Up LLC (“MCU”), with proprietary technology for placer mining gold and silver bearing materials containing mercury. The Company expects to finalize the terms of the Joint Venture this month and announce the details. The Company will form another entity called Comstock Mercury Remediation LLC, or a similar name, that will represent the actual 50-50 Joint Venture, with final proof of concept, mining and remediation occurring on the Comstock. The Company will also own a direct stake in MCU.
Mr. Corrado De Gasperis, Executive Chairman and CEO stated, “Our strategic initiatives are all moving forward on plan, with Tonogold expecting to close on or before August 30, eliminating our debenture and accelerating the deployment of our strategic growth plans, including partnering with MCU in a new mining and remediation business. We look forward to announcing the specifics of this opportunity, both here in the U.S. and globally, for commercializing the only U.S. government-approved, feasible, mercury-remediating and recovery system.”
Recent Favorable Court Rulings
In addition, on May 21, 2019, the First Judicial District Court of the State of Nevada, in and for Storey County, favorably granted us our Motion for the Plaintiff to file a “more definite statement.” Precious refiled their complaint on June 5, 2019. The Company believes that the Precious claims are completely without merit.
Mr. De Gasperis stated, “This restoration work was performed concurrently with mining from 2013 through 2015, and our reclamations were innovative, timely, efficient and especially effective for the regrading and revegetation efforts. The current reclamation obligation has been reduced down to $6.75 million from over $7.10 million.”
In 2015 and 2017, the Company received Nevada Excellence in Mine Reclamation Awards from a committee comprised of NDEP’s BMRR, Nevada Division of Minerals, Nevada Department of Wildlife, Bureau of Land Management (BLM) Nevada, and the U.S. Forest Service. In 2018, the Company also received the U.S. Department of the Interior BLM’s Reclamation and Sustainable Mineral Development Award.
The Company’s second half 2019 plans include advancing the commercialization of certain mining and processing technologies that the Company has been collaborating on, with new partners such as MCU and Oro Industries Inc., and others, and includes reclamation and enhanced mineral recoveries that present nearer term revenue opportunities for us and potentially enhance the economic feasibilities of our existing properties.
The Company expects to close on the sale of the Silver Springs properties this summer, likely on or before September, 2019, for total net proceeds of over $10 million, in addition to the over $9 million in total remaining net cash proceeds from the sale of Lucerne remaining, expected on or before August 30, 2019.
The Dayton resource area, south of Virginia City in Lyon County, Nevada, ranks as the Company’s top exploration and mine development target. The Company is developing a completely new geological interpretation that will be used for a new resource estimate. The new geological interpretation is also being used to design phased drilling programs in with high-potential for additional mineral resources. Multiple layout plans for the mine and corresponding processing facilities have been conceptually developed and located on lands 100% privately held by the Company, thus simplifying and shortening the critical permitting chain. The Company plans to issue a new, stand-alone Dayton resource technical report, followed by a preliminary economic assessment.
The Company also expects to announce additional ventures and alliances, all designed for profitable revenue growth, during the third and fourth quarters of 2019. The ventures and our strategic partners will be showcased during our annual meeting, planned for September 2019, at the Gold Hill Hotel in Gold Hill, Nevada.
Mr. De Gasperis concluded, “We are pleased to report that we are filing our first quarter financial statements on Form 10-Q with the SEC today. It contains all of the recent Tonogold transactions and the updates from our favorable court rulings. There were no changes in any of the financial statements as compared to what was released on May 15, 2019. We truly appreciate everyone’s patience as we completed an exhaustive financial accounting and reporting analysis, the realignment for Lucerne and our Strategic Focus and updates to the events and transactions that are all included in this filing. We certainly do not expect any delayed filings in the future.”
About Comstock Mining Inc.
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 this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and the following: 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 our title to properties; potential dilution to our stockholders from our stock issuances, 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 our businesses; permitting constraints or delays; business opportunities that may be presented to, or pursued by, us; acquisitions, joint ventures, strategic alliances, business combinations, asset sales, and investments that we may be party to in the future; changes in the United States or other monetary or fiscal policies or regulations; interruptions in our 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 our 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; assertion of claims, lawsuits and proceedings against us; 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.
Thursday, June 20, 2019