Tonogold Resources Inc (TNGL)

[ComstockRoyalty]

(((((((( Iron Ore Prices up 29% Since April))))

Stay Tuned Kiddies......

Be sure to keep your NEWS ALERTS on because you never know.....

https://twitter.com/ComstockRoyalty/status/597178366698086400

Tonogold has been uncovering tons and tons of iron ore....

http://www.tonogold.com/s/NewsReleases.asp?ReportID=690478&_Type=News-Releases&_Title=Tonogold-Strategy-Update


News
News Releases
January 08, 2015
Tonogold -- Strategy Update
January 8th, 2015. Tonogold Resources Inc. (OTC: TNGL) wishes to advise the market with regard to its strategy in light of the current low iron ore price environment.

Background
Since completing the acquisition of Mil-Ler, the owner of the NevMex Iron Ore project in Mexico, Tonogold has been developing and formulating various strategies in light of the current weak environment for iron ore. The NevMex project has remained on care-and-maintenance during this period, at minimal holding cost and in doing so we are not suffering from operating losses being incurred by other producers as a result of the low iron ore price.

The NevMex iron ore project is located 40kms north of Hermosillo (the capital of Sonora, Northern Mexico). The ore is predominantly magnetite and utilizes a simple two-stage crushing and dry magnetic separation process that produced approx. 30,000 tonnes of iron ore per month containing 58% Fe. Total costs (including shipping to China) are ~$55/t.

The current price for 58% Fe is approximately $63/t1 to which an off-take discount of 18% ($11/t) was applied, mainly due to high sulfur levels (~0.7%) in the final product.

Tonogold's strategy has been reviewed and it has been decided that delaying re-commencement of production, until we see signs of a price correction and/or confirmation of our ability to produce a higher quality product with increased margins, would be in the best interests of the Company.

We strongly believe that the current low iron ore price is not sustainable in the long run and that at a long-term sustainable price the NevMex project would generate positive net margins of at least $10/t, which exclude the benefit of any project optimization initiatives that we believe, can be achieved.

Optimization strategies
We are currently assessing a number of project optimization strategies including those that could provide significant benefits from milling and wet magnetic separation. In this regard, we have recently conducted, through an independent laboratory in Hermosillo, initial test-work on the 58% Fe product previously produced from the NevMex project. This test-work highlighted that by grinding the product to around 150 microns followed by wet magnetic separation, ~96% of the iron could be successfully recovered within 82% of the mass, resulting in a high-grade product containing +68% Fe being achieved. The current price for a 68% Fe product is around $90/t1 (i.e. $30/t higher than for a 58% Fe product).

Additional test-work is now planned to include further grind size/recovery optimization work as well as sulfur reduction with the objective of eliminating the sulfur penalty previously imposed. In addition, we have identified and are assessing various commercial opportunities (both organically and externally) that would enable us to produce a high-grade premium product in the medium-term.

Site Activities
Site activities have recently re-commenced whereby we are mining approximately 250,000 cubic meters of overburden (waste), over an expected 9-month period, crushing the material and selling the product as road base under contract with a local road contractor. The net proceeds from the sale of the road base will more than cover all site costs over this period, resulting in a zero-cost waste removal program and, at the same time, expose more of the ore body in advance of a subsequent production decision.

Gold
Our strategy with regard to our gold properties in Nevada has not changed and we continue to assess and pursue various opportunities (including sale, joint venture etc.) in order to realize the value of these assets in the near-term.

Capital Raising
In light of the new strategy and the current market conditions, we no longer need to raise $10 million previously contemplated which has therefore been deferred. However a smaller raising (of between $1.0 to 1.5 million) to Accredited Investors to fund the work program pursuant to the new strategy is now planned.