Comstock Mining Receives Preferred Stock Payment
Virginia City, NV (June 6, 2019) Comstock Mining Inc. (the “Company” or “Comstock”) (NYSE American: LODE) announced that it received the 3,920 in Series D Convertible Preferred Stock Shares (“Series D CPS”), from Tonogold Resources Inc. (“Tonogold”), as agreed last month.
On January 28, 2019, the Company entered into an agreement with Tonogold for the sale of its Lucerne properties for $15 million (representing $11.5 million in cash and $3.5 million in stock). On April 30, 2019, Tonogold agreed to, among other things, accelerate the stock-based component of the purchase price. This payment simply reflects the receipt of the $3.5 million Series D CPS Certificate for the purchase plus the additional fee of $420,000 also paid in Series D CPS. The Series D CPS will have a post-closing, common share conversion price representing the lowest of, (1) the 20-day volume weighted average common share closing price prior to conversion, (2) Tonogold’s most recent private placement common share price, or (3) Tonogold’s initial public offering common share price.
Mr. Corrado De Gasperis, Executive Chairman and CEO, stated, “The receipt of this payment represents a meaningful step towards closing the Lucerne transaction. We have now received almost $6 million in non-refundable cash and stock toward the $15 million closing component of the purchase price, plus the commitment fee. We remain on track for closing this transaction this summer, eliminating our debenture and accelerating the deployment of our strategic growth plans.”
Effective June 1, 2019, Tonogold will now reimburse the Company for its monthly interest expense on its Senior Secured Debenture, and the more than $1 million in annual operating expenses associated with the American Flat platform, regardless of when the sale closes. Tonogold also retains the option to extend the closing for two additional months (that is, extending from June 21, to July 26, and then extending again from July 26, to August 30), upon the payment of two additional $1 million non-refundable deposits, one for each monthly extension.
Comstock anticipates Tonogold to deliver $9.15 million in cash at closing (that is, the $11.5 million less $2.35 million of cumulative non-refundable cash payments made to date).
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.
Thursday, June 6, 2019