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Hey- we were mentioned as a "Survivor":
http://www.marketwatch.com/story/gold-miners-drop-over-50-with-no-bottom-in-sight-2013-12-06?pagenumber=2
Not that you can take that to the bank, but good to know that we're seen as a good prospect for the near future.
Interview with CEO just came across my screen- I like the focus on increased production and improved efficiency.
http://www.theaureport.com/pub/na/15707
Don't know what is going to break the share price loose- it seems stuck in a rut.
But profitability will be a big step in the right direction, as are lower cash costs to produce.
standintall, I'm really sorry, but I think you are misinformed.
Corrado was issued 2,750,000 RESTRICTED shares that have been reported via Form 4 as follows:
1. On December 21, 2011, Comstock Mining Inc. (the "Company") granted 2,750,000 shares of restricted stock to the reporting person subject to vesting in accordance with the Restricted Stock Agreement entered into under the Comstock Mining Inc. 2011 Equity Incentive Plan.
2. Includes 2,750,000 shares of restricted stock, which vest as follows: (i) 20% upon the certification by the compensation committee of the board of directors of the Company of the attainment of both the validation of qualified resources (at least measured and indicated) and reserves (probable and proven) aggregating to at least 1,000,000 ounces of gold equivalent and completion of the first metal pour from the mining operations; (ii) 20% upon the certification by the Committee of the attainment of both the validation of qualified resources (at least measured and indicated) and reserves (probable and proven) aggregating to at least 1,500,000 ounces of gold equivalent and the completion of three months of consecutive mining operations at an annual production rate of 15,000 ounces of gold equivalent;
3. [footnote 2 continued] (iii) 20% upon the certification by the Committee of the attainment of both the validation of qualified resources (at least measured and indicated) and reserves (probable and proven) aggregating to at least 2,000,000 ounces of gold equivalent and the completion of three months of consecutive mining operations at an annual production rate of 17,500 ounces of gold equivalent; and
4. [footnote 3 continued] (iv) the remaining 40% upon the certification by the Committee of the attainment of both the validation of qualified resources (at least measured and indicated) and reserves (probable and proven) aggregating to at least 3,250,000 ounces of gold equivalent and the completion of three months of consecutive mining operations at an annual production rate of 20,000 ounces of gold equivalent. If a change in control of the Company occurs, all unvested restricted stock vests immediately. A portion of the shares may vest following termination of Mr. DeGasperis' employment by the Company if certain conditions are met. Any portion of the restricted stock that does not vest by the fifth anniversary of the date of grant will be forfeited.
On 11/2/2012, an 8K was filed amending the agreement to state: “The Amendment extended the vesting schedule for equity awards contemplated by the Employment Agreement, so that initial vesting for such awards will not occur prior to January 1, 2014, except under limited circumstances such as a termination without cause, upon death or disability, or in connection with a change of control of the Company.”
When the proxy statement was filed in 2012 the following footnote was attached in reference to Corrado’s shares: “(g) Includes 2,750,000 shares of the Company’s restricted common stock issuable upon vesting.”
The latest proxy statement has the following footnote: “ (b) Applicable percentage of ownership is based on 57,236,264 shares of common stock outstanding as of April 17, 2013 together with all applicable options, warrants and other securities convertible into shares of our common stock for such stockholder. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting and investment power with respect to shares. Shares of our common stock subject to options, warrants or other convertible securities exercisable within 60 days after April 17, 2013 are deemed outstanding for computing the percentage ownership of the person holding such options, warrants or other convertible securities, but are not deemed outstanding for computing the percentage of any other person. Except otherwise noted, the named beneficial owner has the sole voting and investment power with respect to the shares of common stock shown.”
Corrado’s shares have NOT vested (and will not begin vesting until January 2014); therefore, they are not included in the percentage of ownership.
One cannot sell what one does not own.... so the notion that he sold 100% of his holdings is RIDICULOUS!
Judging by your last few posts, if sure seems that you have an ax to grind with this company. Care to share what your beef is? Your negativity seems to go beyond the normal range of doubt or disappointment from an investor....
I don't know how strong an indicator this is, but if it is meaningful, then the sector as a whole could see a boost. Heaven knows it's about time....
http://www.theglobeandmail.com/globe-investor/inside-the-market/junior-mining-stocks-see-record-insider-buying/article11638717/
Thought I would share some of the recent press that Comstock Mining has gotten- several interviews with Corrado.
A two part video interview with Tobin Smith, and the transcript of another interview...
http://www.nbtequitiesresearch.com/video/nbt-comstock-mining-inc-1
http://www.nbtequitiesresearch.com/video/nbt-comstock-mining-inc-2
http://comstockmining.com/files/investor-library/WallStreetTranscript-Comstock.pdf
I'll also mention that LODE has held in this trading range while just about everything else has been hit hard with the slide in gold and silver prices.... so while others are recovering, LODE didn't have a drop to recover from. Would have been nice to catch a little upside momentum and outperform those that got whacked, but it is what it is.
Good story in the regional paper about progress, getting haul trucks off the road, and the Chute Zone discovery....
http://www.rgj.com/article/20130307/NEWS/303070007/-Bonanza-discovered-Comstock-mine-Northern-Nevada
Good article about the progress that Comstock Mining has made-
http://www.northernminer.com/news/getting-it-right-at-comstock/1002058110/
I believe that it's a total of 3.2M gold equivalent ounces- which takes into account the silver.
I find your assessment to be sound. I'm really skiddish about grades and revenue numbers, given the recent history of predictions/information and actual results. And by that I mean that EA was trumpeting .25 opt au in the waste dumps, and up to 6 opt on the surface... and everybody got out their calculators and started crunching massive profit numbers.... which we haven't seen yet. I mean, they posted video of the ball mill running/producing back in July. If EA's numbers were correct (meaning MINIMUM head grades at .25 ranging up to 6 opt, which I am really skeptical about in any substantial tonnage), then why aren't we seeing substantial revenue numbers?
And for heaven's sake, I wish the company would start releasing substantial information through appropriate channels- like an IR person, and not back-channel through a shareholder. It makes the whole thing look really dodgy, especially when the quarterlies are not particularly "content-rich" or well-organized.
And I'm long here- I want them to succeed, but really... decent communication would make a huge difference. And a well laid out communication plan is NOT putting the cart before the horse... which is the reason given for not doing so (that PT doesn't want to get people's hopes up about something before it's reality). Clearly there is quite a bit of catching up to do in the communicating basic info department that can happen before any sort of speculation or forward looking statements.
I guess my point is- I like the developments, but I want to see that they can handle them, and so far, they haven't "handled" much of anything. And by that I mean supposedly the original project was amazing, and yet it isn't producing substantial revenue yet. So why are we jumping into other projects if the amazing Caborca property isn't fully operational? Especially with a skeleton crew....
And I know that you've explained some of the rationale before, TM... the benefits and resources that come along with this JV. But you hit the nail on the head- companies that don't do proper planning, testing and engineering often get blind-sided and don't last long. Mining is not an easy business.....
I'm very cautious... and hoping that they prove all my fears unfounded.
Thanks Belgie. Been busy- family (3rd kid just arrived a month ago), work, community..... been keeping my head down and observing, trying to understand why the market is valuing this differently than I would, and why clearly positive developments aren't really reflected with corresponding share price increases.
I've concluded that it's likely that the market perceives risks that I don't- I don't know if they are founded or not, but since I spend a fair amount of time on the Comstock, I feel that I have a pretty good grasp on the situation on the ground.
And that being said, I don't perceive the risks that face this company as insurmountable- "deal-killers". I look at this company in relation to other junior miners, and see them exhibiting strength that is missing elsewhere. They are in production, they are in a mining-friendly jurisdiction, they are mitigating risks left and right (like removing vast swaths of their property from the Carson River Superfund designation through soil sampling)... what is left?
And if the first pour and production numbers around $2.4M per month in revenue don't push the price up, what will?
Do people believe that the local protesters actually have the ability to stop mining? Or that they represent the community at large? Neither of those are really the case, but maybe that is the perception.
Or maybe it's the visible nature of the project- being close to civilization, instead of being out in the middle of nowhere. Maybe investors believe that this will bring increased scrutiny... could be.
Anyway, company needs to keep their head down as well and just keep meeting or exceeding expectations, mitigating risk and moving the football. Lean on the BLM to clear up this silly road issue, which will help the bottom line and make the legal maneuverings moot. The BLM is sitting on it, and have been for months. It is totally inappropriate for them not to process the issue and make a decision- that kind of delay and failure to act is a great disservice to property owners in the area who have been thrown into limbo by seeming arbitrary confiscatory action by the BLM based on their faulty records.
Could be. THat being said, I really don't care about them increasing resources- while it's nice, it has not (in the past) had any substantial positive effect on share price. I think that the market understands that there is a bunch of gold and silver left on the Comstock.
More important, in my mind, is quarter over quarter results of production and operational costs. It's going to be important to see that the metal can be profitably extracted, and that they are producing quantities in line with projections.
mkendra-
The company has an ongoing contract with a gold buyer who will buy as much gold and silver as they can produce. This buyer is preferable to dealing with Johnson Matthey (refiner) in that they can ship in the quantities that they have.... whereas big refiners have large minimums, which can impinge cash flow.
They ARE "manufacturing" their own dore- here is the video of the first pour-
http://www.comstockmining.com/files/video/20120929_firstpour.mp4
And they have been pouring consistently since. From their 3rd quarter financial reporting:
"Commenced processing and poured dore, including shipping, through October 31, 2012, 1,258 ounces of gold and 14,802 ounces of silver. "
The dore is then sold and shipped to their purchaser, and they get paid.
If they are going to retain dore for other purposes, such as the commemorative bars, they just need to get an exception from the contract buyer.
That represents about the first month of production. If that is representative of ongoing production (I don't know if it is- could be high, could be low), but that is $30M annual revenue... which is right about what they forecast.
This CRA spokes-suit is spinning like a top! The dismissal of the motion to dismiss is not a validation of public health concerns. It is simply a decision by the judge that the County did not meet it's burden of proof that the legal question does not have merit. The question at hand it whether the County can be compelled to regulate traffic on a state highway, or if they can follow the legal counsel of their own counsel and not impede street-legal vehicles from using a public roadway.
Ironically, the "news" article got several material facts wrong- such as claiming that the trucks run through Virginia City itself.
If the CRA continues with this hyperbole (using terms like "terrific danger", which is the biggest malarky), they will continue to marginalize themselves.
The trucks operate safely- they usually drive at about 25 miles per hour in a stretch that has a 45 mph speed limit. They have safety lights on them, and it is rare for more than 1 or 2 cars to be following any truck. CMI has a dispatcher (who has radio contact as well as GPS locators on each truck), security guards, flaggers and spotters to ensure that the trucks operate safely on that mile of rural highway outside of town.
CMI also has several street sweepers that sweep the highway of residual dirt or rock morning and night, and during the day as needed.
The "health concerns" are overblown. The EPA themselves came out in the 1990's and conducted sampling- they concluded that the only risk to humans was children under 6 ingesting dirt- and that there was virtually no airborne contamination risk.
These guys are grasping at straws.... and the community is starting to see them for the anti-progress obstructionists that they are. My patience with them is wearing thin- especially when they present themselves as if they represent the entire community, which is nowhere near true.
GoldSpectator-
Forgive the skepticism of some of the posters here- this company has often been subject to attacks by those masquerading as objective observers who actually had some sort of axe to grind. So it's hard to take anyone seriously who comes out over-negative on the company without much context or history.
I'm surprised at how negative your outlook on the area and the company... I spend about half my time on the Comstock, and I get a very different read. While you are welcome to draw whatever conclusions you want to guide your investment decisions, I question the extent of your negativity.
I Do have the privilege of watching Mr. De Gasperis speak in public on a regular basis. I frankly don't have any idea what you are talking about. In my view, he has always shown incredible patience and is always forthright and straightforward, often in the face of rude and accusatory confrontation by opponents.
Your take on the BLM issue is really off in my opinion. As TMLonggun stated, this is not an issue of CMI not following federal law- first and foremost they never hauled ore across "federal land", with or without permission. The BLM issue arose prior to them starting to haul ore, and they have been more than conciliatory and have bent over backwards to comply with whatever is asked of them.
Lot 51 is private land, and chain of title can be shown back to the late 1860's. The BLM has an incorrect map in regards to what lots are privately owned, and which lots are public land. An activist functionary who is in the pocket of the CRA way over-stepped his bounds by kicking CMI off a parcel of land that they own and depriving them of quiet enjoyment of their own property while they verify if CMI actually owns the land.
In the process, they have taken a position that harms economic stability and property rights of an entire community, According to the BLM's faulty map, nearly half of the townsite lots in Gold Hill are not privately owned... including some lots that were created from the original Comstock patents. Clearly, there are issues with the BLM map, and the fact that they have chosen to selectively enforce the law against just CMI (instead of kicking everyone who is living or using "public" lots in Gold Hill off their land) is a joke. For example, at least part of the lot that David Toll and Robbin Cobbey (two leaders of the CRA) live on and have constructed a driveway across is public land, according to the BLM. So where is equal treatment under the law?
CMI provided everything requested by the BLM within weeks of the BLM giving notice that they disagree about ownership- that was over the summer. We are near the end of the given time frame, not at the beginning of the 6 months claimed. That being said, I'm not holding my breath that the feds will process this issue in a timely fashion- call me a doubting Thomas, but the track record is a bit spotty.
I find your accusations of dishonesty from the company disturbing- it causes me to question your motives. CMI issues PRs and filings for material events, and provides substantial additional information not required. Would you care to clarify your allegation, and what evidence you see that have led you to that conclusion?
I'm not thrilled about the share price- I just don't share your assessment of the company's role in it's current level.
"Seems" being the operative word.
Did you notice that that is not a news article, but a submitted story by the CRA? In other words, it's propaganda- no fact checking, no journalistic standards, no objectivity. It's a press release.
Important to understand exactly what the situation is here:
1. CRA sued Storey County, and mentioned CMI. Storey County is the primary defendant, and so the legal action taken (motion to dismiss) is their response, not the companies.
2. This lawsuit really means very little, other than making work for lawyers. The lawsuit does not ask for an injunction to stop hauling on the highway- it simply asks that the county be ordered to enforce the CRA's interpretation of CMI's mining special use permit. What does this mean?
3. If the CRA prevails with this lawsuit, then the county simply has to grant a modification to the SUP to remove the language that mentions on-road/off-road trucks and the issue is moot. In the meantime, CMI will continue to operate in compliance with their permits as issued by the proper authorities.
4. The CRA continues to marginalize themselves. If you believe their narrative, there is some vast right-wing conspiracy to destroy their property values and poison their children. In the meantime, they are grasping at straws to obstruct the biggest job creation project in southern Storey County in years- I guess they don't really care about the 100 or so of their neighbors who would lose their jobs if the CRA was successful in shutting down this project. Their rhetoric is becoming increasingly shrill, and they have allied themselves with a coalition of extreme left-wing groups (not the way to build support in a community that is +22 R).
The other thing to realize is that at any point, the logjam with clearing up the BLM issue could break and the highway usage would be a moot point.
While a different decision on this issue would have removed an annoyance, I wouldn't call this a setback.
Good analysis... I'm looking forward to seeing those revenue numbers....
Good info, TM.
Though let me play devils advocate a bit (and it is just that (I've got a position here, so I want to see it be wildly successful).
Are they really bringing cash to the table? They are buying an interest, but they are the operating partner, which seems to mean that the $1.5M is not operating capital- that they (Mexus) would have to provide more liquidity for operating capital needs.
And as you listed, their operations have grown exponentially in complexity over the last few weeks.
I mean, I heard Paul saying 20 ton a day out of the underground, but there is no way that they are anywhere near that. I mean, in actuality, what is their production rate at present? I guess we'll have some inkling when their quarterlies come out. I was not under the impression that their previous projects were "on autopilot" or close. They had started some limited production, but were still in the development stages on their current projects.... and I'd like to see them maximizing those before shifting their focus to restarting a dormant mine.
I really hope that they can manage all this- I'm just extremely wary of people that seem to jump from one project to the next before the first one has matured. I would much rather see steady moderate cash flow from stable operations than pie in the sky from the next big thing.
Now if they can manage to do both..... we'll all be very happy.
So it looks like a nice project- here is a video update from back in 2007 when they were producing.
http://www.infomine.com/library/videos/1192c0/minerales_la_negra_gold_&_silver_property,_mexico.aspx
My understanding is that the San Felix Mine was shut down fairly recently (don't know exactly when) due to underperformance.
So my big question is- what is Mexus bringing to the table to make it viable? What will they do differently? Cause generally a profitable mine does not shut down- a profitable mine is sustained by the revenue generated from it's operations. So why was San Felix shut down, and how will Mexus be able to be successful with it when Minerales La Negra was not?
Cause if it can't be operated profitably, then it isn't really an asset, is it?
Further, does Mexus have the capacity (human resources) to develop their existing project(s) AND turn this one around? Are they splitting their attention at a time when they should be more focused on a core project?
The price seems very reasonable.... and I'm hoping that the SEC filings will have more detailed (and better organized) info than they have contained in the past.
I am going to venture a guess that the run up to 57 cents was in anticipation of this announcement- with EA sharing all the details (as cryptic as they are coming from him), many people already know what is going to happen before it is announced publicly.
Their run rate is being measured in "gold equivalent ounces"- so that 20K annual includes silver revenues, converted to the equivalent of gold ounces sold.
So taking the reported production for the last month:
1,259.2 oz au and 14,732.3 oz ag produced this last month.
1259.2 X 12 months = 15,110.4
14732.3 X 12 months = 176,787.6
If we use $34 per ounce for silver, and $1750 for gold (fairly average for October), the silver equals another 3,434.7 gold equivalent ounces, which puts current annual run rate at 18,545 gold equivalent ounces.
They are extremely close to their forecast annual run rate from day one. I see it increasing quickly and easily beyond the initial. In fact, in a presentation in London last week, Corrado mentioned that they will probably stabilize operations at the current (meaning 20k annual) run rate for around 6-8 months, and then increase throughput.
Steady progress..... meeting expectations.
I'm not- I couldn't free up my schedule. I was up there earlier in the week, and believe that they had a pour earlier this week on the order of magnitude of their first pour in September.
If they are pouring $700K in metals each week, they are on track for the $35M annual revenue that they have forecast. So far, so good.
I imagine that there will be others that are there and can report- I believe that they said that close to 150 people were slated to attend today.
I'm not sure that a PR is a good thing. It seems like more often than not, the share price drops on seemingly good news. ;)
Anyone have a guess (or might he have mentioned in the video) what the capacity of that skip is? 1 ton? 2 tons? More?
I'm just trying to calculate if 20 tons per day (their underground mining goal) is feasible. For example, if it has a one ton capacity, then it would have to be loaded and hoisted 20 times per day to make 20 tons- one round trip every half hour for a 10 hour day. Is that reasonable? I don't really know, but it seems kind of doubtful, especially if they are hand-mucking the stopes.
If it's got a two ton capacity or more, then it seems more reasonable. Once an hour, 10 hours a day.
I don't think that you generally value companies at 1:1 to gold in the ground. In fact, for resources (which these can't even be considered yet), the market usually only gives $40-$100 per ounce of gold in the ground, plus maybe a kicker for speculative upside. When they are producing and reporting revenue, then the valuation model can change substantially.
Further, these are not results that comply with a normally accepted standard (IG 7 or 43-101), so the calculations of overall value of mineralized material are incredibly speculative.
What IS impressive are the grades here- especially if a good portion of this material can be recovered through surface mining techniques. Usually underground mining costs 3-4 times what surface mining costs, so the profit margins aren't as pretty. Plus, underground takes quite a bit of time and infrastructure for a relatively small tonnage, so you better be cherry-picking the really hot stuff, and not wasting your time on 2 grams per ton.
What I'd like to see from the company is a more comprehensive discussion of the layout of the property, maybe accompanied by a map, to explain the basic geology and exploration and development targets on the property. This will help investors and potential investors start to understand the actual potential of the mining property and the company.
They could then overlay the map with the sample results, to help people understand where the high grade deposits are, and their proximity to each other and to their processing facilities.
To me, this kind of an organized presentation of relevant data would carry a lot more weight than leaked rumors and details coming through shareholders, and would go far in further establishing the legitimacy of the company as a going concern with excellent prospects, and not just another junior mining shell with a property or two and an idea....
"This thing trades so weird."
Amen to that. I can't figure it out, so I quite trying years ago. I just hold a modest position and watch the madness.
For example- I was stoked for the first pour. For them to pour and sell $700K worth of metals after just 2 weeks of leaching? That's quick.
Yet apparently a bunch of investors were disappointed... I think that they don't understand the mechanics of how the heap leach process works... that unlike a mill, which has a retention time measured in days, a heap leach system takes a 2-3 month cycle to get decent recovery ratios... and usually it will be leached for 18 months or more in total (while fresh ore is being stacked on top). This is the reason that heap leaching is so much cheaper than milling- high tonnage, lower grades, and recovery over a longer period.
And the share price drops on the news, and continues down the next day? The company is operating at their stated goal (1 million tons per annum), quickly starts producing revenue, and the share price drops?
I just don't get it.... maybe it's just a case of unrealistic expectations from investors who don't quite understand the realities of the mining business.
Ant-
Sorry for the delay in responding.... I didn't see your comment until today. I don't think that you're wrong- many (if not most) mines produce a dore and sell to refiners.
But it is extremely rare for them to sell that dore direct to the public. I can't find another company that is doing so... granted, I haven't done an exhaustive search, but I poked around and couldn't find anything similar.
And it's extremely rare to be able to track the provenance of the gold and silver that you buy, since most refineries mix up all the gold/silver that they receive. This is certified, genuine Comstock metal.
From a collectible standpoint, that has some value. How much? I have no clue.
What info specifically are you looking for in regards to silver potential?
We know that where they are mining they are finding around 15 to 1 silver to gold by weight, but accounting for recovery rates, they are recovering about 10 times as much silver as gold. They've identified (for reporting purposes) over 20m ounces of silver.
Silver to gold ratios are pretty constant on the south end of the Comstock Lode, but as you move up into Virginia City (of which they only control about half the mining claims), the silver ratios can go through the roof.
I find the mix to be a nice compliment- they have good solid gold grades, and plenty of silver to back it up. Around 2/3 of the value is coming from gold in their ore, which creates a nice balance.
man alive-
Do you have a link to something that supports your belief in the heap metals content? While I would be pleasantly surprised, my understanding is that the ratio was closer to TM's 1:10.
I could be wrong, but I don't think that these are being sold as "bullion" investments. I think that it is being sold as a rarity, and an opportunity that likely won't ever come around again.
Are any of you aware of another company that sells or has sold dore from their production direct to the public?
Further, my understanding of the refining process is that most refiners don't keep dore segregated based on it's source, and that it all gets mixed up together in the refining process. In other words, if CMI were sending this stuff to a refiner, even if they got back gold and silver to make coins or bars, it would be almost impossible to certify that it came from the Comstock.
So it has some intrinsic value (in the metals), but also some historical and collecting value (because nobody else is selling Comstock gold and silver, and they will only ever have one "first pour").
Even the Marshall Mint in VC, who has minted Comstock-themed medallions, does not claim that their gold and silver originated on the Comstock.
I think the question is this: will people place value on the provenance of the metal, the limited quantity and the uniqueness of owning actual dore that came directly from the Comstock? Time will tell, but I'm probably going to buy one, just because it is so unique. Plus, if gold and silver prices continue to rise (as I'm convinced they will over the next several years), the metal value alone will at some point eclipse the sales price. But that's not why I would be buying it.
Looks like Comstock Mining has launched Social Media channels recently:
Facebook: https://www.facebook.com/ComstockMiningInc
Twitter: https://twitter.com/comstockmining
Youtube:
The SEC's definition of "Penny stock" is anything under $5. I kind of doubt that is what you're using as your definition, cause in 2009, Ford would have been considered a penny stock.
If you're asking do I think this company is exceptional, the answer is yes- I think they are applying production management theory, quality control and organizational philosophy to the junior mining sector, which is pretty rare.
I think they have a solid project, and have really put together a solid company with a good project.
I guess I'm not following the chain of logic from the post I responded to, to mine, to yours.
So they issued stock to GET $30M in cash- how else do you expect an exploration miner to get the capital they need to move into production?
They issued the stock because they needed the cash.
You make it sound like they were sitting on $30M cash and then decided to issue shares.... not so.
Are you talking about in February? Or back when the reverse split was done?
It was the issuance OF the preferred stock that wiped out the debt and gave them $30M in cash.
In February, when they raised another $15M, they did NOT have $30M.... todays quarterly data repeated what we already knew... $9.2 million at December 31, 2011, with a cash burn around $1.5M-$2M per month.
Could you please clarify what you're referring to?
Don't forget that LODE has a hedge for their metals that mitigates spot price down side. They have the Comstock brand, which, if developed and marketed correctly, gives them the ability to sell value added products like proofs, which can command a premium.
The spot price is just the beginning of the value of their product.
Yeah... unfortunately there were lawsuits around the same time, and they never got back into production.
Until this year....
Here are a few links:
http://www.chron.com/news/article/PZ-GoldSpring-Announces-First-Quarter-Net-1890639.php
http://www.faqs.org/sec-filings/120330/GOLDSPRING-INC_10-K/#b
(Second paragraph on Page 3)
http://www.redorbit.com/news/science/196068/goldspring_inc_completes_relocation_july_update/
From the above: "Furthermore, the Company announced a ten percent increase in gold production to 1,250 ounces for the month of July compared to 1,126 ounces for the month of June. Scott Jolcover, the Company’s general manager at the Plum Mine, stated that, “The production increases are in line with our internal projections and represent a 137% increase over May’s gold production.”
Source: redOrbit (http://s.tt/16vOv)
Don't get me wrong- I'm not claiming that they were highly profitable when they were producing before. Heck- I don't know if they even turned a profit on the operations.
But in terms of mineralized material, there was plenty, they HAVE produced substantially in the past (though they are calling that "test mining" at this point), and they still have plenty of material that can be produced at a very reasonable rate.
Clown-
The implication of your argument is that a company can't profitably mine (or create substantial shareholder value for that matter) without having "proven reserves". It is a flawed argument, as I showed here when someone else made the same argument:
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_C/threadview?bn=128163&tid=15361&mid=15438
While extensive feasibility studies (which convert resources to reserves) provide an added measure of certainty, it is not a pre-requisite for profitable mining.
And let me remind you that there is a category of reserves that is NOT "proven"- do probable reserves have the same magical powers you ascribe to proven reserves?
Are probable reserves more or less certain than measured resources?
And while I agree that exploration juniors have substantial speculative potential, producers have stability and sustainable value based on more solid metrics.
I will also point out that the markets have shifted (especially the Canadian markets, which are dominated by resource companies). Several years ago, institutional investors in the junior space only wanted straight exploration juniors. In the last 6-9 months, the interest has shifted to juniors that are near or in production. If this is a sea change, then the markets will have determined that the better potential is in production... which magnifies the upside on producers.
And you are mistaken about this company- with the exception of a few mortgages on acquired property, and some pending equipment financing, this company has NO debt. None. If you will recall, it was all converted to equity several years ago. Further, the company's covenants will shareholders prohibit them from taking on debt (with the exception of a small revolving account for working capital and equipment financing, which is very attractive right now).
Additionally, you don't need "continuous massive veinage" to mine profitably... there is plenty of ore much closer to the surface, including some substantial quarter ounce ore tonnage. And we are not talking about flat land... which means that if a drill was sitting on the top of Hartford Hill, and hit ore at 200 or 300 feet, it could be easily accessible laterally from within the pit.
In fact, the starter "pit" (which is more of a cut into a hillside) has no more than a 1:1 stripping ration- which helps profitability.
And we can extrapolate cost to mine quite easily through their cut off grade. Anything above the cut off grade is considered profitable- last I heard, they were using a .007 opt cut off, and using a $1600/oz valuation. Using those figures, we get $11.20 per ton to mine and process, including mine administration (but not corporate costs).
By all accounts, that is VERY reasonable cost-wise- especially when your average gold grade is .029 and silver is .28 on their measured and indicated resources. That's roughly a $20 per ton profit, given their expected recovery rates. At 1 million tons per year (their initial production rate), that's a good profitable company.
I wasn't around, but unless they poured 750 pounds of gold in one dore pour, then no, it was actual production over a period of time.
The ore that is on cells 1, 2 and 3 is there from previous mining from the Billy The Kid mine. The production total from 2004 through 2006 was over 12,000 ounces of gold and 53,000 ounces of silver.
How is it that you don't remember that they were in production until their facility got flooded out by unseasonably heavy rains?
mkendra-
You've really been waiting for production for 10 years? Did you miss the production in 2005 and 2006?
I don't mean to be rude, but that sounds like an exaggeration for dramatic effect.
And what delays are you talking about? There have most certainly been delays in years past, but they are proceeding on schedule, and I'm not aware of any substantial delays since the final permit came through in February.
I've spent a substantial amount of time around the new management, and I assure you that it is incredibly different. They are moving quite quickly. Prepping 2 new leach pads, a new preg solution pond, a million gallon freshwater reservoir, installing a new met lab, expanding the Merrill-Crowe from 1200 sq ft to around 5000 sq ft., engineering the pit, assembling/installing the crushing circuit, constructing the St. Louis ramp, preliminary ore stockpile..... they have not been sitting still, and it's far more activity than in the past.
When we took the mine tour on Monday, we watched a shovel constructing a 50 foot protective bench at the base of the mine. It's job is to protect the road from any falling rock.... and these guys are constructing it in ore. So as they construct the bench, they are stockpiling ore in the pit... that will be stacked on the heap within a matter of weeks.
Are the videos they are posting not sufficiently instructive about the amount of work being done?
I understand skepticism after the history of Goldspring, but I don't understand disbelieving what is in clear plain view....
If you haven't yet, read CMI's response. It's pretty solid, and was accompanied by 100 pages of supporting documents. There is a link here:
http://www.comstockmining.com/corporate/ceo-blog
No, I think that the BLM is out on a limb- they took somebody's word for it, and issued the notice without proper substantiation, and to avoid more egg on their face, they'll need to reign it in a bit.
I'm fairly confident that this particular issue won't be drawn out- it's a non-issue.