Comstock Mining Announces $10.7 million Strategic Refinancing
Retires Substantially All Prior Obligations, Funds Drilling and Appoints New Director
Virginia City, NV (January 17, 2017) Comstock Mining Inc. (the “Company”) (NYSE MKT: LODE) announces today a strategic refinancing with an affiliate of GF Capital, LLC (“GF Capital”), that retires substantially all of the Company’s obligations and resumes drilling at the Dayton resource area.
“This strategic refinancing strengthens our balance sheet, provides great liquidity and enables us to resume the drilling and development plans for the Dayton mine. This represents the second successful transaction with GF Capital and further develops our strategic, resource-based relationship with an outstanding capital partner,” stated Corrado De Gasperis, Executive Chairman and Chief Executive Officer of Comstock Mining Inc.
The Company issued an 11% Senior Secured Debenture due 2021 in the amount of $10,723,000. The Debenture is secured by the pledge of the equity interests in all of the Company’s subsidiaries and substantially all of the Company’s assets. The Company is required to prepay the Debentures with the net cash proceeds from the sale of previously disclosed non-mining properties, subject to customary reinvestment rights.
Until January 1, 2019, interest will be payable in cash and/or in the form of additional Debentures, at the Company’s option. Thereafter, interest will be payable in cash. The Company has the right to redeem the Debenture, at any time, at a redemption price equal to the outstanding principal balance, plus accrued and unpaid interest and a make-whole amount equal to seven months of interest. The Debenture also includes customary default and cure provisions and, in the event of certain defaults, a default interest rate of 13.5%.
The Company has also nominated and elected Mr. Clark Gillam to the Board of Directors effective as of the date hereof. Mr. Gillam is one of the Co-Founders of GF Capital. Prior to starting GF Capital, Mr. Gillam worked at Glencore PLC in Switzerland. He has a BSc in Economics from The Wharton School at the University of Pennsylvania.
Mr. De Gasperis concluded, “We warmly welcome Clark onto our Board. His broad natural resource, financial and capital markets experience adds an outstanding complement to our team. We are strongly aligned and focused on building a highly valuable, Nevada-based precious metals company.”
The foregoing summary of the terms of the transaction documents described above is not intended to be exhaustive and is qualified in its entirety by the full terms of each of the transaction documents, copies of which will be filed on a Form 8-K, with the U.S. Securities & Exchange Commission.
About Comstock Mining Inc.
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 discussed in Item 1A, “Risk Factors” of our annual report on Form 10-K. 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 the Debenture or any other securities of the Company.
Tuesday, January 17 , 2017