Virginia City, NV (February 28, 2012) — Comstock Mining Inc. (the “Company”) (NYSE Amex: LODE) announced today that it has defined and launched its 2012-2013, exploration drilling program. The program is the Company’s largest, most aggressive drilling program, significantly exceeding the magnitude of the successful 2011 drilling program. The program anticipates about 300,000 feet of reverse circulation and 13,000 feet of core drilling, and is scheduled to last approximately 18 months. Funding for the expanded drilling was provided by the Company’s successful $17.25 million public stock offering earlier this month.
Comstock Mining 2012 Core Drilling at Lucerne, Overlooking Gold Hill, NV
“Last year we validated 2.4 million ounces of gold and over 20 million ounces of silver,” stated Corrado De Gasperis, the Company’s Chief Executive Officer. “That was made possible by the most efficient drilling program in our history, with a discovery cost of just $6 per gold-equivalent resource ounce, a truly exceptional result. The 2012-2013 drilling will continue and accelerate that progress to meet our goal of validating Measured and Indicated resources containing over 3.25 million gold-equivalent ounces, as well as accelerate the parallel development of our next two proposed mines.”
The program began on January 24, 2012 with limited Phase 1 drilling in Spring Valley, using one Reverse Circulation (RC) and one Core drilling rig. The Spring Valley program is designed to follow-up on the Company’s successful 2009 drilling program and to verify the continuity of the Dayton geological model southward beyond State Route 341 into predominantly unexplored Spring Valley properties. The Core drilling anticipates two core holes with depths of 800 feet each. The first core hole, SVC12-01, initially twins the Company’s previously-announced Spring Valley discovery hole, SV09-05, that intersected a 45 foot interval averaging 0.163 ounce per ton gold and 0.770 ounce per ton silver, from 40 to 85 feet of depth, and then continues to substantially greater depth. The second core hole, SVC12-02, is located approximately 110 feet to the south, angled to intersect a magnetic anomaly interpreted from the Company’s 2011 ground magnetic survey in Spring Valley.
Following the initial drilling in Spring Valley, the Company will complete definition drilling in the Lucerne Starter mine area. The definition drilling in the Lucerne Starter mine area will provide required information to optimize and expand the Starter mine plan and extend its life. The Starter mine, on patented mining claims west of State Route 342, is permitted and scheduled to begin production in 2012.
The 2012-2013 drilling program will then continue with three significant objectives: 1) Step-out and infill drilling in the East-Side of the Lucerne Resource Area; 2) Infill drilling in the Dayton Resource Area; and 3) Exploration drilling on high priority targets, including Spring Valley. Additional drilling rigs are scheduled to arrive in early March to accelerate the program.
The step-out drilling phase in the East-Side of the Lucerne Resource Area will test the continuity of mineralization to the north and south, and at greater depths to the east. The infill-drilling phase will then provide the detailed information needed to develop a mine plan for an Expanded Lucerne mine. That mine plan will position the Company to complete an economic feasibility study and initiate permitting for the Expanded mine.
The infill drilling in the Dayton Resource Area will provide detailed information needed to create a preliminary mine plan for the Dayton mine, to be developed in parallel with the Lucerne mine. With that plan, the Company will complete a feasibility study and begin the permitting process for the Dayton mine.
The exploration drilling is designed as limited, phase 1 programs for each of several high-priority targets, including Spring Valley. Each of the targets has the potential to become a significant, additional resource area. The results from all of the phase 1 programs will be used to prioritize additional phases of drilling for the most promising targets.
The exploration programs will build upon the findings reported in the Company’s September 2011 43-101 Technical Report (“The 2011 Report”). The 2011 Report affirmed a mineral resource estimate for the Comstock Mine Project in Storey and Lyon Counties, Nevada, of measured and indicated resources containing 1,780,000 gold equivalent ounces1 and an estimate of an inferred resource containing an additional 990,000 gold equivalent ounces. The total measured, indicated, and inferred gold equivalent ounces increased by 94% increase over the estimate in the Company’s previous NI 43-101 technical report, published in August 2010.
About Comstock Mining Inc.
Comstock Mining Inc. is a 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 with annual production rates of 20,000 gold equivalent ounces.
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 losses 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
Director of Marketing and Public Relations
President & CEO
Tel (775) 847-7376
Tel (775) 847-4755
 Gold equivalent ounces were calculated using September 30, 2011 London PM prices of $1,620.00 per ounce of gold and $30.45 per ounce of silver, as published by kitco.com. This resulted in a ratio of 53.20 ounces of silver per equivalent ounce of gold, without taking into consideration the relative recoveries of gold and silver.