Virginia City, NV (July 7, 2020) Comstock Mining Inc. (the “Company”) (NYSE American: LODE) announced selected strategic and financial highlights (unaudited) for the second fiscal quarter ended June 30, 2020.

Second Quarter 2020 Selected Strategic Highlights
•Investments in Mercury Clean Up LLC (“MCU”) increased to $1.75 million in cash and stock with the Comstock mercury remediation system completed (with pictures included below) and ready for shipment;
•Committed to Investment in MCU Philippines after MCU signed a definitive joint venture agreement with Clean Ore Solutions OPC, to partner and lead in a major mercury remediation project in the Philippines;
•Advanced permitting of Tonogold Resources Inc. (“Tonogold”) exploration drill plans for July, 2020; and
•Consummated the April acquisition of 25% of Pelen LLC, the owner of the historic Sutro Tunnel Company.

Second Quarter 2020 Selected Financial Highlights (Unaudited)
•Received a $0.5 million early payment from Tonogold against obligations due October 15, 2020, with the remaining payments due to us totaling $4.9 million at June 30, 2020;
•Valued our equity investment in Tonogold at over $10.4 million at June 30, 2020;
•Reduced our Senior Debt principal to $4.5 million at June 30, 2020;
•Cash and cash equivalents at June 30, 2020, were approximately $1.0 million; and
•Common shares outstanding at June 30, 2020, were 28,815,000 shares.

Comstock Mining’s Corporate Growth

The Company has enacted its Board-approved transformational strategic plan, focused on high-value, cash-generating, precious metal-based activities, (the “Strategic Focus”) including, but not limited to, environmentally friendly, and economically enhancing mining technologies, like mercury remediation. Our goal is to deliver over $500 million of value from our existing assets and the commercialization of these environmental mining technologies, partnerships and ventures. Comstock Mining Inc. is the parent company that wholly owns the realigned subsidiaries and is expanding its mercury and royalty portfolios. We believe that our resource-based technology, properties, plant and equipment and existing gold and silver resources are deeply undervalued.

Our realignment was driven by our determination to reposition the Company for sustainable growth.



Figure 1 – Comstock’s Precious-Metal Based Growth Organization (dotted lines indicate activities in progress)

Comstock Processing LLC owns the American Flat processing facility and represents the main platform for commercializing environmentally friendly, and economically enhancing mining technologies. Comstock Northern Exploration LLC owns or controls the remaining Storey County exploration targets, primarily located north of the Lucerne properties, that have been leased to Tonogold and their recently announced drill programs, with initial focus on the Occidental Lode claims. Comstock Exploration & Development LLC owns or controls the Lyon County mining claims and exploration targets, including the Dayton and Spring Valley development targets. We are also reorganizing our growing portfolio of precious metal royalties into Comstock Royalty Holdings LLC.

Mr. Corrado DeGasperis, Executive Chairman and CEO stated, “We are driving our strategic initiatives forward with a precise focus on the value we are first unlocking and then creating, with MCU now poised to deploy two mercury remediation operating systems this quarter and Tonogold preparing the launch of a major, well-designed drill program on the Occidental lode, all while we plan for exploration and development drilling of our Dayton resource and work toward expanding its economic feasibility. We look forward to landing the MCU – Comstock system (and we have included photos below) with MCU also shipping the first Philippine unit later this month.”

Mercury Remediation Systems and the American Flat Processing Platform

Our processing platform includes the Company’s fully permitted processing platform, and the infrastructure has now been prepared for the delivery of the brand new MCU mercury remediation system. The system is scheduled to arrive this month, after a recent trip to Oro Industries’ manufacturing facility for inspection and safety preparation.

Lucerne

Tonogold owns a 54% membership interest in the entity that owns Lucerne. Comstock retains management control over the entity until Tonogold has made all of the $4.9 million in remaining payments in full. We are partnered with Tonogold and expect to fully realize almost $30 million from the sale of the Lucerne, plus the potential for over $35 million (totaling approximately $65 million) of additional value from leasing, processing and royalty agreements.

In late June 2020, Tonogold paid $0.5 million early toward the $1 million due in October 2020, and reimbursed an additional $0.5 million in expenditures during the second quarter. Tonogold also pays a monthly cash interest representing 12% of the remaining principal amount of approximately $4.9 million, or approximately $50,000 per month. To date, the Company has received over $6.5 million in cash and $6.1 million in total stock consideration, initially in the form of Tonogold Convertible Preferred Stock (“CPS”), effectively convertible on May 22, 2020.

The conversion price for the CPS will be the lower of (1) 85% of the 20-day volume weighted closing price or (2) 0.18. Tonogold can redeem the CPS prior to conversion, at a redemption price 120% of the face value of the CPS.

On May 22, 2020, the Company noticed the conversion of $1.1 million of Tonogold CPS and received 6,111,111 of freely tradable Tonogold common shares. The Tonogold common shares are valued at about $2.5 million and the remaining CPS was independently valued at over $7.9 million, totaling $10.4 million in securities at June 30, 2020.

Tonogold has made remarkable progress in their exploration and development plans and is working on securing Storey County permits and has secured multiple sources of funding to start a major drilling program anticipated during July, 2020. Tonogold has also significantly enhanced the technical strength of their board and announced plans to achieve full external reporting status with audited financial statements this summer, as they prepare for a national stock listing, likely in the fall of 2020.

Dayton

We are expanding Dayton’s economic resource, but just based on current gold and silver prices, before any resource updates, we now show a low-end value of over $75 million based on our existing economic shell (using an $800 gold equivalent cut off) and a $1600 gold revenue assumption. We have not yet engineered an expanded pit shell (even though higher gold prices allows for lower grade cut-offs and significantly higher, economically-feasible ounces) but we are progressing with that work toward an updated, Dayton stand-alone, NI 43-101 technical report.

Non-mining assets

Our non-mining assets are now valued at over $25 million, net of debt. We have agreements to sell the Industrial and Commercial lands plus the senior water rights in Silver Springs, for over $10 million, and now expect those sales to close this summer. These proceeds will extinguish the remaining $5.0 million in obligations (including our $4.6 million bond). Our $6.1 investment in Tonogold Convertible Preferred Stock (CPS) is now valued at $10.4 million based on shares that we have already converted and Tonogold’s current share price. We are also owed approximately $4.9 million from Tonogold through a 12%, cash interest paying debt instrument, with principal payments of $0.4 million still due this October 2020, and $4.475 million due September 2021.

Mr. DeGasperis concluded, “We expect that our efforts in monetizing the non-strategic assets, eliminating the debt, developing our natural resources in the ground, and commercializing the mercury remediation system, with our outstanding industry partners, will move us first toward the $125 million valuation throughout the remainder of this year and position us to grow those businesses and valuations toward our $500+ million target over the next 2-3 years and beyond. Over the next 60 days we will see mercury systems deployed, Tonogold exploration activities launched and the sale of our non-mining assets in Silver Springs consummated. We look forward to an active and productive third quarter and for the remainder of this year. The potential is truly extraordinary.”

asee & read more on
https://www.comstockmining.com/press-releases/comstock-mining-announces-second-quarter-2020-update-goal-drives-strategic-value-targets/