Virginia City, NV (December 19, 2013) — Comstock Mining Inc. (the “Company”) (NYSE MKT: LODE) announced today a positive restructuring of four, patented mining lode claims totaling 95 acres in the Company’s overall Dayton Resource Area. These claims represent the Company’s second largest, classified gold and silver resources and include the historic Dayton, Alhambra and Kossuth mining claims. The restructured transaction eliminates $2 million of debt and cancels all future royalties payable with respect to the relevant mining claims in exchange for the issuance of one million shares of the Company’s common stock.
The Company acquired the Dayton from the Golden Goose Mine in January 2012. The purchase price for the Dayton was $3,000,000, plus a 3% net smelter royalty payable to the seller. In connection with the purchase in 2012, the Company made a $500,000 cash down payment and then issued a $2.5 million note to the seller, payable in quarterly installments of $50,000 (increasing to $125,000 in October 2013) with a balloon payment for the remaining principal due on or before August 1, 2017. In accordance with the terms of the new agreement, the seller will accept shares of common stock to satisfy the principal amount of the note payable and will also relinquish all rights to the net smelter royalty. The note was secured by a first deed of trust on the land, which will be released after a six-month holding period for the shares.
“We welcome fellow Nevadan and long time partner, Mr. Allan Fiegehen, as a strategic investor in the Company,” stated Corrado De Gasperis, the Company’s President and Chief Executive Officer. “This transaction strengthens our balance sheet by extinguishing debt, increasing our free cash flow, and significantly enhancing future shareholder value by eliminating the 3% NSR.”
The Dayton Resource Area, approximately one mile south of the Lucerne resource area, along State Routes 341 & 342, is contiguous with the Company’s Spring Valley and Oest target areas, comprising over 1,600 acres of land holdings in Lyon County alone.
About Comstock Mining Inc.
Comstock Mining Inc. is a producing, 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 commenced production in 2012. The Company continues acquiring additional properties in the district, expanding its footprint and creating opportunities for further exploration and mining. The near term goal of our business plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (proven and probable) of at least 3,250,000 gold equivalent ounces from our first two resource areas, Lucerne and Dayton, achieve initial commercial mining and processing operations in the Lucerne Mine with annual production rates of approximately 20,000 gold equivalent ounces and significantly grow production through the commercial development and expansions of both the Lucerne and Dayton Mine plans.
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
Corrado De Gasperis
President & CEO
Manager of Investor Relations
Tel (775) 847-4755
Tel (775) 847-0545