CEO Blog - February 13, 2012
Monday, February 13 2012 20:16
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Q: Why is Comstock Mining raising money right before going into production?

A: We recently concluded pricing an equity offering raising $15 million from an outstanding group of U.S. based institutional and retail investors. The transaction attracted some of the most reputable institutional investors in our segment and meaningfully strengthened our investor and capital base. 

Our 2010 recapitalization and capital raise was designed to fund the Starter Mine production activities, land acquisitions, working capital and exploration and we continue to use those funds for those purposes.

The capital raised from our recent offering will primarily fund our targeted and expanded exploration and development model for our Lucerne, Dayton and Spring Valley Resource Areas.  Based on the strong success of last year’s 125,000-foot plus drilling program, the recently received exploration permits that authorize exploration drilling at the Lucerne, Dayton and Spring Valley Areas and the strong probability for completing expanded mine plans for Lucerne and Dayton by the end of 2012, we felt strongly that further funding the acceleration of these projects is the most value enhancing opportunity for our Company and our shareholders.  The Lucerne and Dayton mine plans also enable us to launch the expanded permitting processes for these two, larger mine plans.  The work of our core team of geologists and mine planners have presented a more complete model for the drilling efforts in 2012, that are already starting to show exciting results.

2012 Drill Program, Spring Valley Resource Area (taken February 5, 2012)

This capital allows for the achievement of greater resource and potentially reserve expansion in 2012, securing expanded permitting and ultimately, consistent production growth, from 20,000 gold equivalent ounces per annum in the Lucerne Starter Mine, to the potential of up to 100,000 ounces per annum in each of Lucerne and Dayton. We are excited by the exploration results to date, as they validate our current modeling to expand our exploration targets for our drilling program in 2012. We believe these activities will be accretive to our shareholders. 

We are confident our capital will continue to be deployed for the best returns for all shareholders, by more rapidly expanding the resource, commencing and growing production and cash flows and building an asset base that will serve the company and provide outstanding returns for many years into the future. 

Kindest Regards,

Corrado De Gasperis

President and CEO