Virginia City, NV (January 18, 2011) — Comstock Mining Inc. (“Comstock Mining” or “the Company”)(OTCBB: LODE) announced today the results of the successful first phase of its drilling program. The drilling program, as announced in a November 8, 2010 press release, was designed to advance the Company’s strategic plan towards commencing commercial mining and processing operations and increasing the Company’s validated gold and silver resources. The overall drilling program has a planned duration of about seven months, including development drilling in the Lucerne and Dayton Resource Areas, exploration drilling on high priority targets including targets in Dayton, Spring Valley and the East-side, and condemnation drilling in areas designated for possible heap leach pad expansion. The primary objective of the Fall 2010 drilling was completion of development and condemnation drilling supporting the Lucerne starter mine planning and the planned expansion of heap leaching capacity in American Flat.
The drill program began October 25, 2010, and completed 108 reverse circulation (RC) drill holes, totaling 26,490 feet, through the end of 2010. Drilling began with a single track-mounted RC drilling rig, and accelerated with the addition of a truck-mounted RC drilling rig and a second track-mounted rig. All three rigs are scheduled to continue drilling through the end of the program.
The first holes were drilled in the Lucerne Resource Area, focusing on the Hartford patented mining claim. Previous drilling identified this area as a possible, primary starter pit location. The Hartford infill drilling was designed to provide sufficient information for a detailed mine design, with 98 RC holes completed in 2010, totaling 19,865 feet. The holes were located within a mineralized area that measures approximately 825 feet by 500 feet. Chief Geologist Larry Martin commented, “The Hartford infill drilling represents one of our most productive drilling programs in terms of efficiency of drilling. The exceptional productivity was a result of a well-coordinated team effort, with drill planning and activities led by Project Geologist Steve Russell and supported by a drill rig and crew from DeLong Construction.”
2010 Hartford Infill Drilling
The drilling results confirmed the importance of the quartz porphyry that provides a host for mineralization with enhanced grades. Intervals of significant mineralization (gold grades greater than 0.010 ounces per ton (opt) and length of at least 10 feet) were encountered in 85 of the 98 holes. Thirteen of the holes had significant mineralized intervals of at least 50 feet. Some of the most-significant intercepts are listed below:
|Inc 25’ .094/1.395|
|Inc 15’ .084/.779|
|Missing 10’ void|
Typical Hartford Cross Section
“The information from the Hartford infill drilling program confirms the extent of the mineralized zone we expected and provides the information needed to finalize a detailed mine plan for a possible starter pit located entirely on private land,” stated Michael Norred, Comstock Mining’s Director of Strategic Resource Planning.
Development Drill Results For Heap Leach Expansion and Water Availability
Three RC holes, totaling 2,695 feet, were drilled to the north and west of the Company’s existing heap leach facility in American Flat. The holes had two purposes: first, to test for near-surface mineralization in areas designated for possible heap leach expansion; and second, to assess water availability to meet the needs of an expanded heap leach operation. The holes were successful on both counts. No significant mineralization was encountered, and all three holes encountered water inflows during drilling operations.
Mr. Corrado De Gasperis, Comstock Mining Chief Executive Officer, stated, “The development drilling in the Lucerne Area and American Flat represented critical prerequisites for commencing commercial mining and processing. Our team completed an efficient execution of these immediate objectives.”
Development and Exploration Drilling for the Dayton Resource Area
The Dayton Resource Area was acquired by the Company through two transactions in July, 2010. The results from 252 previously-drilled holes were used to model a mineral resource that was validated by the August, 2010 technical report authored by Behre Dolbear. Substantially all of that resource was within 230 feet of the surface, due to the shallow depths of the previous drilling. The new development drilling program for the Dayton Resource Area is designed in two phases. The first phase includes three east-west drill fences (rows of holes), with maximum depths of 1,200 feet, which will test the continuity of the mineralization to these greater depths, and will also validate the exploration model in the Dayton area.”
The first phase of Dayton drilling began with one hole completed before the end of 2010. Results from this first RC hole, D10-01, on the first exploration fence, showed immediate and significantly better than expected results. The 825-foot vertical hole encountered 590 feet of significant mineralization with four intervals, totaling 305 feet, with elevated gold grades, and three deeper intervals, totaling 285 feet, with elevated silver grades.
“Our detailed review of the previous Dayton drilling indicated an extension of the successful geologic model developed in the Lucerne Resource Area,” stated Larry Martin, Comstock Mining Chief Geologist. “This first hole not only corroborated, at more significant depths, our conceptual model but also discovered multiple, previously unknown anomalous silver zones that will be further explored.”
Drilling Continues into 2011
Comstock Mining’s drilling program is continuing into 2011 with the focus on the Dayton Resource Area. After completing the drill fences from the first phase, Comstock Mining’s geologic team will design the second phase, adding infill holes for detailed mine planning. As mine planning for the Lucerne and Dayton Resource Areas continues, condemnation holes will be drilled to evaluate locations for both potential waste storage and for expanded or alternate processing locations. Exploration drilling will follow in other priority areas, including the East-side target and the Spring Valley target.
Mr. De Gasperis stated, “We were pleasantly surprised by the depth of the previously unknown mineralization coming from the Dayton Resource Area’s initial drill results. In addition to supporting the future development of a second mine plan, our initial drill hole provides strong evidence for a meaningful expansion of the known, existing near surface resource. We are very much looking forward to continued, focused drilling in this area.”
About Comstock Mining Inc.
Comstock Mining Inc. is a well-capitalized, Nevada-based gold and silver mining company with extensive, contiguous property in the Comstock District. 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 brought the exploration project into test mining production. The Company continues acquiring additional properties in the district, expanding its footprint and creating opportunities for exploration and mining. The goal of its strategic plan is to deliver stockholder value by validating qualified resources (at least measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations in 2011, with annual production rates of 20,000 gold equivalent ounces. At December 31, 2010, the company had cash, cash equivalents and investments of $30 million.
Cautionary Note to U.S. Investors
This press release uses the terms resources in the context of “measured resources,” “indicated resources,” “inferred resources,” and “historical resources” which are calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification system. The United States Securities and Exchange Commission (the “SEC”) does not recognize these terms and the SEC guidelines (Industry Guide 7) provide that such terms shall not be included in a registrant’s filings with the SEC (unless required to be disclosed by foreign or state law). The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists or is economically or legally mineable. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC’s website at http://www.sec.gov.
This press release and any related calls or discussions may contain forward-looking statements. 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, timing and accounting for restructuring charges, gains or loses on debt extinguishment, derivative liabilities and the impact thereof; productivity, business process, rationalization, restructuring, investment, acquisition, 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; 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 set forth in our SEC filings and the following: the current global economic and capital market uncertainties; the speculative nature of gold or mineral exploration, including risks of diminishing quantities or grades of qualified resources and reserves; operational or technical difficulties in connection with exploration or mining activities; contests over our title to properties; potential dilution to our stockholders from our recapitalization and balance sheet restructuring activities; potential inability to continue to comply with government regulations; adoption of or changes in legislation or regulations adversely affecting our businesses; business opportunities that may be presented to or pursued by us; changes in the United States or other monetary or fiscal policies or regulations; interruptions in our production capabilities due to unexpected equipment failures; fluctuation of prices for gold or certain other commodities (such as silver, copper, diesel fuel, and electricity); changes in generally accepted accounting principles; geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues organically; potential inability to attract and retain key personnel; interruptions in delivery of critical supplies and equipment raw materials due to credit or other limitations imposed by vendors; assertion of claims, lawsuits and proceedings against us; 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; 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. 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 any securities.
Contact information for Comstock Mining Inc.:
P.O. Box 1118
Virginia City, NV 89440
Tel (775) 847-4755
Fax (800) 750-5740