LODE 10-Q Filings - 5 CENT VALUATION!
Why would LODE management be selling millions of shares if a valuable JV deal were imminent? Answer: There is no JV deal that is likely going to save LODE and put upward pressure on the stock price. Look at the numbers filed by LODE. Nothing but debt and operational losses. To make matters worse, LODE has No Reserves, No Gold or Silver assets, nor do they have any plan to identify reserves and mine them AT A PROFIT.
NOW THE REALLY BAD NEWS:
On 1/13/2017 LODE management went into a loan agreement for $10,723,000. This agreement did the following: “The Debenture is collateralized by (1) a pledge to 100% of the equity of the subsidiaries of Comstock Mining Inc., and (2) substantially all of the assets of the Company.”
This means that LODE management has 100% collateralized all of the equity of Comstock Mining Inc at $10,723,000. The loan to value on this debt is 100%. That $10,723,000 is the total value that Comstock Mining Inc./LODE management and the lender have placed on 100% of the equity of Comstock Mining Inc./LODE. That $10,723,000 is what the entire market cap of Comstock Mining Inc/LODE stock should be according to this loan agreement. $10,723,000 divided by 210.3 million shares = .0509890632. The LODE stock price is valued by this loan at ~5 cents. That is why LODE management is happy to sell shares at ~$15.5 cents.
The current market cap of LODE is 39.2 million (Scottrade 8/7/2017). This loan deal places the total value of LODE at $10,723,000. According to these numbers LODE is currently overvalued by ~72.7%. Add to that the fact that LODE has liabilities of $19,426,442. Which is about double the total value of 100% of the equity of the entire company according to this loan agreement.
Maybe this is why, according to Scottrade, there are currently (8/7/2017) 2.65 million shares short on LODE stock. It looks to me like the best investment plan with LODE is to go short.
Look at the numbers yourself:
United States Securities and Exchange Commission, Form 10-Q https://www.sec.gov/Archives/edgar/data/1120970/000112097017000026/lode-20170630x10q.htm#s7E02D8A76C7D5A768A5676F8D5E3C2EC
Total liabilities 21,112,983 19,426,442
Total revenues 27,370 1,491,276 46,664 3,511,797
LOSS FROM OPERATIONS (2,551,677 ) (2,268,327 ) (4,996,336 ) (6,097,985 )
NET LOSS $ (2,932,722 ) $ (2,854,784 ) $ (5,706,903 ) $ (6,906,179 )
Long-Term Debt Obligations
GF Comstock 2 LP
On January 13, 2017, the Company issued an 11% Senior Secured Debenture (the "Debenture") due 2021 in an aggregate principal amount of $10,723,000. The use of proceeds included refinancing substantially all of the Company’s current obligations, except the amount due to Caterpillar Finance and the Lynch House note. This included paying off the Silver Springs property, Varilease and others. The Debenture was issued at a discount of approximately $568,000 and the Company incurred issuance costs of approximately $528,000 of which $26,550 was not paid as of June 30, 2017, and included in accounts payable in the accompanying condensed consolidated balance sheet. The Debenture requires a Make Whole Payment totaling approximately $688,000 if paid any time prior to or at maturity. Total principal is due on January 13, 2021. The Debenture requires acceleration of payment of accrued interest, principal, and the Make Whole Amount from all net proceeds received upon sale of any assets of the Company.
Interest is payable semi-annually. For the first two years, interest will be payable, at the option of the Company, either in cash or in the form of additional Debentures (or a combination thereof). For the third and fourth years interest will be payable only in cash. The Company paid the interest payment for the first six months, in cash, on June 23, 2017.
The Debenture is collateralized by (1) a pledge to 100% of the equity of the subsidiaries of Comstock Mining Inc., and (2) substantially all of the assets of the Company.
Loan Commitment
In March 2017 (and amended in June 2017), the Company entered into a loan commitment agreement that provides up to $7.5 million in borrowing capacity and expires in 2021 with an 11% interest rate. Principal amounts borrowed under this agreement are not due until 2021. Until January 1, 2019, interest on any borrowings will be payable in cash and/or in the form of additional indebtedness under the agreement, at the Company’s option. No amounts have been borrowed under this agreement and the Company has $7.0 million (after consideration of fees due at the time of borrowing) of available borrowing capacity as of June 30, 2017.
7. Stockholders’ Equity
At-the-Market Offering Program
Effective June 28, 2016, the Company entered into a sales agreement with IAA with respect to an ATM agreement pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $5 million. Effective April 2017, the Company also entered into the Purchase agreement with Leviston for the purchase of up to $7.25 million of shares of the Company's common stock from time to time, at the Company's option. The Company is not obligated to make any sales of shares under either the ATM or Purchase agreement, and if it elects to make any sales, the Company can set a minimum sales price for the shares. Following is a reconciliation of the transactions under the ATM and Purchase agreement for the six and twelve month periods ended June 30, 2017 and December 31, 2016 respectively:
Six Months
Ended Twelve Months
Ended
June 30, 2017 December 31, 2016
Number of shares sold 17,238,743 1,835,300
Gross proceeds $ 2,670,253 $ 522,889
Fees $ 74,821 $ 14,090
Net proceeds $ 2,595,432 $ 508,799
Average price per share $ 0.155 $ 0.280
It looks to me like LODE is borrowing from Peter to pay Paul and selling its own shares to meet its debt obligations and cover expenses from operational losses. According to these numbers Comstock mining/LODE has liabilities that are about double of 100% the companies entire value. These are the consequences of not having a 43-101 with identified Reserves, or a Preliminary Feasibility Study (Plan) in place that clearly defines how to mine those reserves AT A PROFIT. It is very clear that LODE management is valuing the entire company at $10,723,000 or ~five cents a share.
No Reserves, No PFS, No Reason to Buy! https://investorshub.advfn.com/boards/read_msg.aspx?message_id=133152623
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