Comstock Mining Inc. (the “Company”) (NYSE American: LODE) today
announced selected unaudited financial results for the fiscal
quarter ended March 31, 2021.
First Quarter 2021 Selected Strategic
Highlights
- Launched the
first MCU commercial mercury remediation and extraction system in
the Philippines;
- Acquired direct
majority equity stake rights in LINICO Corporation, a lithium-ion
battery recycling company;
- Secured a
State-of-the-Art battery recycling facility and commenced
permitting;
- Selected Renewal
Process Solutions (“RPS”) as manufacturer of our “Crushing to Black
Mass” system;
- Strengthened our
technical, mercury, hazardous waste, environmental and engineering
organization; and
- Participated in the
Adelaide Capital Battery Metals Charity Pitch Battle with fifteen
other battery metals companies and was voted by investors and
participants as the number one (winner!) presentation.
Unaudited First Quarter 2021 Selected Financial
Highlights
- Total operating costs were a $0.3
million credit in Q1 2021, a $1.6 million, or 127%, decrease from
the prior year quarter, due to lower mining and mine claim costs
driven by a $0.8 million reduction in our reclamation liability
estimate of and an accelerated $0.8 million Tonogold reimbursement
benefit;
- Other income was $7.8 million in Q1
2021, a $6.8 million, or 676%, increase from the prior year
quarter, principally resulting from a new derivative asset related
to the investment in LINICO;
- Net income was $8.2 million, or
$0.22 per common share, for the quarter ended March 31, 2021, as
compared to a net loss of $0.3 million, or $(0.01) per common
share, for the quarter ended March 31, 2020;
- Total assets increased to $70.0
million in Q1 2021, a 63% increase from year end 2020, driven by
$17.0 million in equity raises, new investments in LINICO, and
increases in notes receivable and advances;
- Total debt decreased to $0, a 100%
decrease from year end 2020, as all debt obligations were
extinguished;
- Cash and cash equivalents at
March 31, 2021, were $10.3 million; and
- Common shares outstanding at March
31, 2021, were 42,455,515.
Mr. De Gasperis stated, “We have completed a remarkable
transformation of our balance sheet, begun increasing our
engineering and technical competencies, completely repositioned
into growth assets, with more to come, and aligned compensation
organizationally with our shareholders. If we do not deliver, we do
not vest, it’s that simple.”
Climate Smart Mining and Valorization to Clean Energy
Transition
Comstock Secures Majority Stake in LiNiCo; Indirect
Stake in Green Li-ion
During the quarter, Comstock announced transactions securing
majority equity stake rights in LINICO Corporation (“LiNiCo”), a
lithium-ion battery (“LIB”) recycling company that recently
acquired a state-of-the-art battery metal recycling facility
located in the Tahoe Reno Industrial (“TRI”) Center in Storey
County, Nevada. The Company will pay up to $4,500,000 in cash and
delivered 3,000,000 restricted common shares during Q1 2021,
representing up to $10,750,000 in consideration and other non-cash
commitments for up to 64% ownership of LiNiCo.
LiNiCo has used a portion of these proceeds to increase its
direct strategic investment in Green Li-ion Pte, Ltd. (“Green
Li-ion”) to more than 20%, secure a state-of-the-art battery metal
recycling facility, and purchase proprietary process equipment
enabling the production of black mass and ultimately metal-based
solutions, including but not limited to, lithium carbonate and
cathodes in the U.S. The new facility was designed and well
situated to, receive, crush, and separate battery materials into
black mass. LiNiCo plans to convert black mass into rejuvenated,
high purity, battery grade metals and ultimately pure cathodes
faster than conventional solutions.
LiNiCo has commenced securing permits, feedstock arrangements
and engineering the crushing, separation and metal and cathode
processing systems, with proprietary processes for producing
battery grade metals and ultimately cathode materials. LiNiCo plans
on commencing production early next year.
Mercury Clean Up, LLC (“MCU”) and the Launch of MCU
Philippines, Inc. (“MCU-P”) Operations
During 2019, the Company entered into a Mercury Remediation
Pilot, Investment and Joint Venture Agreement (the “MCU Agreement”)
with MCU. Pursuant to the MCU Agreement, the Company paid $2
million of capital contributions in exchange for 15% of the
fully-diluted membership interests of MCU. The Company also has 50%
fully-diluted share holdings in MCU-P, the first international
mercury remediation joint venture in the Philippines that
officially commenced processing during the first quarter of 2021,
in the province of Davao D’ Oro, Philippines, with full political
and regulatory support of the eco-system-wide mercury clean up.
The Company has exercised its rights to coordinate up to $3
million in secured financing for MCU-P, and recently completed the
first $2 million of secured loans to MCU-P, simultaneously earning
another 10% of MCU (for a total of 25%), resulting in the Company
securing its rights to 62.5% of the economics for all projects. Mr.
De Gasperis continued, “We are facing the inevitabilities of the
‘perfect storm’ of demand from the world-wide transition to clean
energy and increasing demand on these increasingly scarce natural
resources. We are currently evaluating several very exciting ESG
and nature-based, highly accretive, valorization projects and
investments.”
Gold and Silver Developments
Dayton and Spring Valley Gold and Silver Mineral Property
Development
During the first quarter, the Company received the results from
the Geotech Ltd. ("Geotech") airborne geophysical survey of the
Dayton resource area, Spring Valley exploration targets, and the
rest of the Comstock properties. The survey included both magnetic
and Geotech's proprietary Versatile Time-Domain Electromagnetic
("VTEM") surveys. The results have already greatly increased the
Company’s understanding of the Dayton and Spring Valley resource
expansion potential, along with the Company’s other exploration
targets in Lyon and Storey Counties.The Dayton is the Company’s top
exploration and development target. Our geology team has now
completed the updates of the interpretive model of the entire
Dayton area. Our technical team has now commenced updating and
generating a new gold and silver resource estimate based on a
standalone, S-K 1300, technical report summary. This technical
report will include additional drilling recommendations and
technical development plans and will deliver an updated resource
estimate which represents a critical prerequisite step toward an
economic feasibility report. The Company will profile its specific
exploration drill programs for the Dayton-Spring Valley complex.
Occidental Lode Mineral Property Development
The Company has a growing portfolio of NSR Royalties on the
northern Comstock mineral properties, including the Lucerne and
Occidental claims. Tonogold Resources, Inc. (“Tonogold”) is
preparing a technical report with resource estimates for the
Lucerne and ongoing developments for the Occidental. On May 4,
2021, Tonogold announced the results of three, near surface,
reverse circulation (RC) holes completed on the southern portion of
the Occidental Lode trend, as summarized below:
Hole No. |
From (m) |
To (m) |
Length (m) |
Au (g/t) |
Ag (g/t) |
TC-006 |
35.05 |
38.10 |
3.05 |
0.485 |
1.0 |
and |
65.53 |
80.77 |
15.24 |
1.596 |
14.0 |
including |
73.15 |
77.72 |
4.57 |
3.012 |
25.9 |
and |
92.97 |
96.01 |
3.05 |
1.009 |
7.6 |
TC-007 |
25.91 |
47.24 |
21.34 |
3.226 |
15.7 |
including |
25.91 |
33.53 |
7.62 |
7.238 |
26.9 |
and |
59.44 |
64.01 |
4.57 |
0.472 |
1.9 |
TC-008 |
0.00 |
18.29 |
18.29 |
1.458 |
4.4 |
including |
3.05 |
7.62 |
4.57 |
2.770 |
3.5 |
Tonogold has publicly reported that it has completed five holes
in the Occidental, two core and three RC holes.
Tonogold has also announced its intention to mobilize an
additional RC drill rig to the southern Occidental target area and
plans to have the RC drill in operation by mid-May 2021. The rig
will support its proposed drill program for the target area that
envisions an additional 23 holes, totaling approximately 2,400
meters. Six of the 23 holes will test the down dip extension of
known mineralization below prior drilling levels.
Tonogold plans on using the results of the Occidental drill
program to generate another preliminary resource estimate. In
conjunction with the development of a resource estimate,
exploration is planned to the north along the Occidental Lode,
where Tonogold controls and the Company retains royalties on more
than three uninterrupted kilometers of the Lode's strike.
Outlook Moving Forward
The Company’s strategic plan is designed to deliver significant
shareholder value during the next three years. The plan objectives
include operating and growing existing and new Environmental,
Social and Corporate Governance (“ESG”) driven projects, including
MCU and LiNiCo, while monetizing more than $20 million in
additional non-strategic assets, and funding this new growth. The
specific objectives are shown below.Specific Performance
Objectives for Existing Projects
Commercialize a global, ESG-compliant,
profitable, mercury remediation and other critical mineral
systems:
• Establish the technical efficacy of MCU’s
Comstock Mercury System, and protect the intellectual property;
• Deploy and operate the first international
mercury remediation project by deploying MCU’s first, second and at
least third mercury remediation systems into the Philippines;
• Identify, evaluate and prioritize a pipeline
of potential mercury remediation projects; then deploy the third
and fourth mercury remediation projects, producing extended,
superior cash flow returns; and,
• Assess and acquire accretive, ESG-based,
strategic expansion opportunities.
Establish and grow the value of our mineral
properties:
• Establish the Dayton Resource area’s maiden,
stand-alone mineral resource estimate;
• Expand the Dayton-Spring Valley Complex
through exploration drilling and geophysical modelling;
• Develop the expanded Dayton-SV Complex toward
full economic feasibility, supporting a decision to mine;
• Entitle the Dayton-SV Complex with
geotechnical, metallurgical, environmental studies and permitting;
and,
• Validate the Comstock NSR Royalty portfolio
(e.g., Lucerne Mine, Occidental Lode, Comstock Lode).
Monetize non-strategic assets and build a
quality organization:
• Monetize our third-party, junior mining
securities responsibly, for $12.5 million or more;
• Monetize our non-mining assets for $12.5
million, excluding the Gold Hill Hotel;
• Grow the value of our Opportunity Zone
investments to over $30 million; and,
• Deploy a systemic organization, capable of
accelerating growth and handling complexity.
Mr. De Gasperis emphasized, “We have directly linked these
strategic performance objectives with our goal of delivering $500
million in shareholder value (or at least $12 per share), and then
aligned all of our people with 100% performance-based, stock-based
compensation based on both delivering these objectives and
achieving at least that amount of value to our shareholders. Again,
when our shareholders are rewarded, so are we. We continue building
the organizational competencies, especially in chemical
engineering, in lithium-ion battery recycling, mercury remediation,
and other solvent extraction and processing technologies for our
valorization objectives.”
Systemic organization, capable of accelerating growth and
handling complexity
“We have expanded our team to build stakeholder value with
transformative, high value, high impact, climate smart mining and
valorization projects, in large part to meet rapidly escalating
demand for the increasingly scarce metals and other raw materials
needed to fuel the global transition to clean energy,” stated
Corrado De Gasperis, Executive Chairman and CEO. “We have seasoned
professionals, chemists, material scientists and engineers engaged
and focused on one singular aligned goal, that is, growing per
share value by commercializing environment-enhancing,
natural-resource based processes and products that generate
predictable cash flows (“Throughput”) that delivers $500 million of
equity value (that is, at least $12 per share) from our
Nevada-based platform. This system and our professionals will all
be on hand at the 2021 Annual General Meeting (AGM) on June 3,
2021. Please be there.”
On March 4, 2021, the Company closed on a $16 million registered
direct sale of 4 million common shares at a price of $4.00 per
share. Net proceeds were approximately $15 million, after
commissions and expenses. On March 5, 2021, the Company
extinguished all of its debt obligations totaling $3.6 million,
immediately saving more than $0.3 million in annual interest
expense. The Company now has 42,455,515 common shares outstanding,
including the 4 million shares sold in the offering, and the 3
million restricted shares issued in the LiNiCo acquisition.
On April 1, 2021, the Company made a loan to Plain Sight
Innovations LLC ("PSI") pursuant to a secured promissory note with
a face value of $750,000 (the "PSI Note"). The PSI Note principal,
together with interest at the rate of 12% per annum, is due and
payable on September 30, 2021, and is secured by substantially all
of the assets of PSI. The Company is currently collaborating with
PSI and RPS on a number of material science advancements associated
with lithium-ion battery storing, crushing, and black mass
processing, among others.
Conference CallThe Company will host a
conference call today, May 12, 2021, at 8:00 a.m. Pacific
Time/11:00 a.m. Eastern Time. The live call will include a
moderated Q&A, after the prepared comments by the
Company. The Webinar will include a moderated Q&A, after
the prepared remarks. Please join the event 10 to 15 minutes
prior to the scheduled start time. The link and/or dial-in
telephone numbers for the live Webcast are as follows:
Join Our Zoom WebinarWhen: May 12, 2021 08:00 AM
Pacific Time (US and Canada)Topic: Comstock Mining First Quarter
2021 Results
Please click the link below to join the
webinar:https://us02web.zoom.us/j/84038612204Or One tap mobile:US:
+12532158782,,84038612204#Or Telephone:US: +1 669 900 9128 or +1
646 558 8656
Webinar ID: 840 3861 2204International numbers
available: https://us02web.zoom.us/u/kQGUDK9ZgThe recording of the
Webinar will be available, within 48 hours of the call, on the
Company
website:http://www.comstockmining.com/investors/investor-library
About Comstock Mining Inc.
Comstock Mining Inc. (NYSE: LODE) (the
“Company”) is an emerging leader in the sustainable extraction,
valorization, and production of innovation-based, clean, renewable
natural resources, with a focus on high-value, cash-generating,
strategic materials that are essential to meeting the rapidly
increasing global demand for clean energy, carbon-neutrality, and
natural products. To learn more, please visit
www.comstockmining.com.
Forward-Looking StatementsThis
press release and any related calls or discussions may include
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, are forward-looking
statements. 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. Forward-looking statements include statements about
matters such as: consummation of all pending transactions; project,
asset or Company valuations; future industry market conditions;
future explorations, acquisitions, investments and asset sales;
future performance of and closings under various agreements; future
changes in our exploration activities; future estimated mineral
resources; future prices and sales of, and demand for, our
products; future impacts of land entitlements and uses; future
permitting activities and needs therefor; future production
capacity and operations; future operating and overhead costs;
future capital expenditures and their impact on us; future impacts
of operational and management changes (including changes in the
board of directors); future changes in business strategies,
planning and tactics and impacts of recent or future changes;
future employment and contributions of personnel, including
consultants; future land sales, investments, acquisitions, joint
ventures, strategic alliances, business combinations, operational,
tax, financial and restructuring initiatives; the nature and timing
of and accounting for restructuring charges and derivative
liabilities and the impact thereof; contingencies; future
environmental compliance and changes in the regulatory environment;
future offerings of equity or debt securities; asset sales and
associated costs; future working capital, costs, revenues, business
opportunities, debt levels, cash flows, margins, earnings and
growth. 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 our filings with the SEC and
the following: counterparty risks; capital markets’ valuation and
pricing risks; 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 title to
properties; potential dilution to our stockholders from our stock
issuances and 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 businesses;
permitting constraints or delays; decisions regarding business
opportunities that may be presented to, or pursued by, us or
others; the impact of, or the non-performance by parties under
agreements relating to, acquisitions, joint ventures, strategic
alliances, business combinations, asset sales, leases, options and
investments to which we may be party; changes in the United States
or other monetary or fiscal policies or regulations; interruptions
in 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 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 or others; assertion of claims, lawsuits and
proceedings; 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.
Neither this press release nor any related calls
or discussions constitutes an offer to sell, the solicitation of an
offer to buy or a recommendation with respect to any securities of
the Company, the fund or any other issuer.
Contact information: |
|
|
Comstock Mining Inc.P.O. Box
1118 Virginia City, NV 89440ComstockMining.com |
Corrado De GasperisExecutive
Chairman & CEOTel (775)
847-4755degasperis@comstockmining.com |
Zach SpencerDirector of
External RelationsTel (775) 847-5272
Ext.151questions@comstockmining.com |
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