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They will commence construction on private property when the final pending permit is approved. Most of the equipment is pre-tested and assembled so construction time should be minimal, but freezing temperatures will potentially block the construction of the pad lining, which will delay production until spring. I live in Northern Alberta and we are still trenching and digging with ease, so I cant imagine Nevada is frozen yet, and this winter so far is mild. So there is potential for a pleasant surprise, but realistically it seems a bit remote for this winter.
Many mines are in construction for years. Here it is hopefully just a few weeks, but could easily be a lot longer, a couple months, who knows? Then after all of that you get to the actual mining process: the blasting, hauling, grinding, stacking, and finally leaching. The leach process takes a month for the preg solution to accumulate iirc.
The permit is still probably least 30 days out, as no notice has been posted. So it looks to me like the pour will be at the end of Q1 Q2 start.
The reaping time for this stock is still at least a couple years in the future. Sometimes I feel like patience is an incredibly rare trait. People will probably be disappointed at the dore pour price as well, it is a milestone and very important but who knows the markets immediate reaction? The real gains will be from producing profitably and sustainably for years, with expanding low cost production, opening multiple mines, paying out a dividend, by accumulating a truly massive resource package with bonanza highlights, and not selling out until gold and silver smash all inflation adjusted highs to bits.
They were mining in 2005-06 and not a peep. But now the gold price is significantly higher, they have money raised, and they went from 0 oz of gold drilled to almost 3 million in that time frame. If you believe that the investment from Comstock's significant and very generous royalty pledged will not help improve the community that is your call, but most of us believe otherwise. How could cleaning the place up and investing in tourism actually hurt tourism? A perfect tourism scene contrasting the old methods and the new is ready to be capitalized on. I know there are plans in the works for more museums and tourist draws. It is not like it is a mining vs tourism debate either as both will provide benefit and wealth to the community. Property values are likely to continue to increase as the mine draws labour to the area and as development increases demand for land and mining claims. I cite the last 50 years in Alberta as an example.
A couple of years ago they put a LRT line right next to my house. I didn't want it of course, NIMBY. But one voice or a dozen voices doesn't stop what many would call "progress". It was almost a year of nearly constant construction noise and once completed a train now goes by about every 5-10 minutes depending on the hour and shakes my house. There is no way a drill rig 1000 feet away with screens up could be more annoying. I honestly have gotten so used to it I do not even notice it at all anymore, even though it seemed impossible at first. Overall it did provide a big benefit to my community and everyone not living directly adjacent loves the convenience. While not a direct comparison it is food for thought.
P.S Imagine the cacophony erupting day and night over the Comstock in in its boom days. There will soon be some more mining noises echoing over the Comstock paying ghostly homage to old miners past, and all they hear is music.
Not LODE's call to release a report that they do not have yet. Patience is required for successful investment in mining equities as we know all too well. What is another couple days for a million oz increase or another 6 months for activities that could multiply our market cap many times? Six months is an eye-blink. Give it 6 years and we shall get a more accurate picture of what our little silver mine is really worth.
"The Fed anticipates that they will keep rates near zero until at least mid-2013. This is not a 100% commitment but as good as. Concerns about downside risks to economic growth and stable inflation expectations mean that the focus for the U.S. for the foreseeable future remains growth and growth alone… This statement is a firm attempt by the Fed to make their policy plans crystal clear, although the question now would appear to be when not if we get more QE"
http://blogs.wsj.com/economics/2011/08/09/economists-react-fed-bunts-with-timeframe-for-low-rates/
Gold is already up a fair bit (up $26.80) to $1,684.80 and the premiums on many bullion types raised significantly over the weekend.
http://www.apmex.com/Category/502/Gold.aspx
This may very well be an exciting week.
P.S. I also think it is interesting how dealers of physical metal keep adding higher premiums and people still gladly pay; demand stays strong even though the price is so far divorced from the paper/spot price. Two different worlds in my opinion.
I still have lots of dry powder and have been buying all day. Watch this float disappear as institutions take greater positions over the coming months. Already 41% (iirc) has been purchased since the refinancing. When I consider my own holdings and those of several other longs I know of...there aren't very many shares out there left to buy and I would advise making a purchase before the leaching process begins. Add in the extra market participants brought in by the amex and the elimination of the ridiculous spread (I see 1-2 cent between bid and ask) all is well in lode land.
Congrats longs we are entering the sweet spot I think. Low risk high reward year ahead of us here. Now who are the patient ones?
LODE GPL Comparison and AMEX Listing Effect
Great Panther is another decent comparison, currently operating at P/e in the 90s and under 10 M oz silver equivalent 43-101 across all categories, so we are way ahead just on silver alone not even counting our gold resource wise.
Please look at the chart below noting how similar the two silver miners perform in the august to January period and the late January low for both stocks coinciding with a modest metals correction. Here the the Lode/GPL charts diverge.
http://imageshack.us/photo/my-images/713/compiw.jpg/ (old chart in OP no longer works)
What gets more interesting is what happens to GPL after its late January low is reached. They have an imminent amex listing about a week later. Much like lode gpl had low volume in the summer 2010 and earlier then as silver rocketed more money flowed into silver plays. The volume from the low period was much higher than say a year earlier but nothing special compared to its last six months average volume supported by a silver bull. There was no surge in volume leading up to the listing. The price still appreciated 52% from Jan 25 ($1.84) to $2.8 on Feb 8th when they actually listed, the listing day providing a massive surge in volume, the highest in the stock's history. What would follow is truly massive volume and successive company volume records being smashed with huge price appreciation. The volume doesn't even just double or triple the amount of increased interest is truly night and day. One month after its listing it was at nearly $5 a gain of almost 170% in just over a month from its January pre-listing price.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_c/threadview?bn=32059&tid=331023&mid=331042
The Alaskan Gold rush show was pure comedy. They didn't get anything approaching 20k ounces, I think they mined around 10 (ten) oz and spent almost half a million dollars. This is $50k an oz and they lost a lot of money. Honestly a massive train-wreck. Did you even watch the show?
If Comstock mines 20k oz a year with low cash costs it will be very positive for this company. Instead of losing $45,000+ for every ounce they mine they will probably make at least $1000, a very different game.
Re: My deleted post
Let me restate it in a nicer way. Our-Street's idea that it is impossible to produce for less than $56/t is ridiculous. The entire gold industry produces at an average of about $19/t.
Comstock's production costs will likely be low because:
-Very low stripping ratios 1:1
-Low cost oxide ore
-Sheer amount of geoligical/past production data
-Very good ore starting at or near surface. The 200 foot section just 25 feet below the surface of .11 oz/t au and .57 ag/t for example, near surface $200 ore is very valuable and the odds of it being profitably produced are near certain.
-The average production grades are likely to be higher than their average resource grade as they mine the higher value resource blocks first where feasible, and start mining at areas like the example above that are basically at surface, a rarity in this industry these days.
-Open pit cost structure $56/t ore is pay-dirt to the entire mining industry.
This was still well known by all investors here and these developments still occurred before you published the first article... I think your DD is incomplete and as you gradually start filling in the big picture you are going to have to continually raise your silly rating to reflect what has been known to many investors here for years.
While you are on your further review of John Winfield how about you further review the resources the company has outlined and the relationship of mid to high grade ore starting just feet from the surface to profitability of operation.
Another silly drive by analysis. I give your analysis 4/10 do to all the errors and misrepresentations.
First paragraph you got the capital raise and debt info wrong. They raised $35.75 Million not 25 M.
You also claim management has no experience but yet ignore the recent appointments days before your article was even written.
[VIRGINIA CITY, Nev., April 18, 2011 /PRNewswire/ -- Comstock Mining Inc. ("Comstock Mining" or "the Company") (OTCBB: LODE) announced the appointment of two senior operating managers, Mr. Clifford D. Nelson, Jr., as Vice President, Operations, and Dr. Edouard K. Zoutomou, as Metallurgical Process Manager, both effective April 18, 2011.
A Focus on Production
Mr. Nelson joins the Company with over 30 years of operations management and metallurgical experience, most recently with Golden Predator Corp. as its Vice President of Operations. Mr. Nelson's extensive experience includes metallurgy, operations management and multiple start-up successes managing open pit, underground and offshore production mine facilities. He has worked with Inspiration Resources (including West Gold), BHP, Magma Copper and St. Andrew Goldfields. A notable rehabilitation and start up success includes his experience as General Manager for Golden Predator Springer Complex Mines where he oversaw the construction and rehabilitation of the company's tungsten project near Winnemucca, NV. He previously managed the rehabilitation, operation and optimization of world's largest offshore gold dredge, Bima, in the Bering Sea off the coast of Alaska. He also rehabilitated the lode gold mill at the Nixon Fork Operation outside of McGrath, Alaska, and started up production in the underground Nixon Fork Gold Mine. Mr. Nelson received his B.S. in Metallurgical Engineering and Materials Science from Michigan Technological University.
Comstock Mining’s CEO, Corrado De Gasperis stated, "Cliff brings instant alignment with our immediate goals of production. His passion for maximizing throughput and diverse background of starting up and managing complex systems fit right into our management methodology."
Metallurgical Process
Comstock Mining also announced the appointment of Edouard K. Zoutomou as Metallurgical Process Manager. Dr. Zoutomou has over 30 years of a unique blend of project and operations management and metallurgical process engineering experience, with 17 of those years in various technical and operational capacities with Alligator Ridge Mine, Greens Creek Mine and Kennecott Utah Copper. Ed's extensive experience includes metallurgical and operations management, with full ownership of a three-stage crushing operation, a 10 million-sq. ft. heap leach pad and adjacent Merrill-Crowe processing and refinery facilities, the supporting assay and metallurgical laboratories while with Kennecott Rawhide Mining Company. Since 2006, Ed served as Project Manager at Kappes, Cassiday & Associates before joining Geovic Mining Corporation as Process Manager. Most recently, Ed served as Principal Process Engineer with Roberts & Schaffer, a KBR Company.
Ed received his B.S. in Mining Engineering from Polytechnic Institute, Universite de Conakry, his M.S. in Metallurgical Engineering from the New Mexico Institute of Mining Technology, and his Ph.D. in Mining-Metallurgy with a thesis on "Supercritical Water Generation of Particulate Metal Oxide" from the University of Idaho.
Mr. De Gasperis stated, "We are delighted to add such strong operations and production experience to our Comstock team as we near our critical production objectives. Our search placed a disproportional emphasis on a demonstrated record of strong project management, extensive, successful start up experience and very strong technical engineering and metallurgy expertise. We have achieved all that and more with the additions of Cliff and Ed to the Comstock."
Both gentlemen will join Comstock Mining's management team on April 18, 2011.]
Then you go off on the "no reserves" rant commonly employed by inexperienced mining equity investors.
"So, despite a long series of promising sounding press releases hailing drilling and exploration successes, the company has yet to identify any proven or even probable reserves in any of their 424 mining claims, a sad state of affairs for a company that has been focused on acquisition and exploration for the past 4 years." As a "due diligence expert" you should know this claim is quite disingenuous. Almost all juniors have no reserves, and the idea is to work towards that end and this takes decades in many cases. Just a few years ago Comstock had 0 oz of gold mineralized inventory. They drilled until they had 100k oz of gold roughly equivalent (but not to standard) to 43-101 inferred resource category. They kept drilling and now have 1.6 M au equiv oz in measured, indicated, and historical resources to NI 43-101 standards. This may not be good enough for you, but is for most of us. The idea that only reserves are worth anything and that resources that correlate to reserves about 90% of the time have no value is a fallacy, it is actually perhaps an opportunity for intelligent speculation.
"Still, until I can see some material developments in the way of proven reserves in EDGAR filings or profitable mining operations, I can’t justify a rating of the business strategy above an 8 out of 20." Most investors would agree with you but they are going to pay a lot more for their shares down the line. That is like saying "I only invest in companies with very low risk" this will handicap your gains and block opportunities that may have real but small risk with hugely disproportionate rewards in comparison.
A couple notes on previous production.
"A look...at the historic filings of Comstock Mining shows that the company actually was producing mining revenues from 2004 through 2007 but had to discontinue mining operations due to lack of cash, the result of ongoing multi-million dollar losses every year, despite the revenues. Over the course of the next few years, the company kept projecting the eminent restart of mining operations, only to keep moving the goal posts further away in each subsequent quarter."
They generated a profit for a small period, and were overwhelmed with legal battles, a depleted ore base, and flooding that stopped operations.
They got through that rough patch and have been enormously successful in their drill program based on grades and depth. The goal posts were moved because of a lack of critical funding. This time around it is in the bank and they will have over 10 M in cash once they start rolling here in late August / September when their last permit comes through.
I also think it is kind of comical you said "I think the near term risk of downside today outweighs the potential of any possible short term upside." Again because you are a "due diligence expert" you should know the behavior of any recent silver miners listings on the amex many with way smaller resource packages. Lode will be on there within a month or two, and this likely to be a huge short term catalyst which you ignore.
http://stockcharts.com/h-sc/ui?s=LODE&p=D&b=5&g=0&id=p57844156578
Glad I got most of what I wanted in the $1.25 area. Just wait until we can add another 3/4 of a year onto this chart! We should be transitioning into a producer right during the September to December period where precious metals normally make most of their yearly gains lining up with festival and holiday demand that consumes a horde of physical supply and no paper.
I think Martha Ray's response to my comment at the bottom of the page is a tad dramatic (posted as Tyler). Is it really so bad to be excited by a gold mining and its history? Especially in an area like the Comstock I am sure I could lecture on the area and its history for many many hours. It is not useless knowledge either. This is one example where some education and history can make the beacon of opportunity burn bright and perhaps change many lives and shape history as the Comstock did once before.
As soon as I posted that other comment I regretted using the word "whine" as I am sure it made a couple locals rage.
Plum Mining is wholly owned by Comstock. They are basically the same entity and all of the permits are under this name as far as I know. It was the original operation acquired many years ago and the reason why half their equipment is purple. My guess on the name would be something to do with bonanzas distributed like "plums in a plum pudding".
Reread the top paragraph. I have no hard number for what the price will be in one year, it depends on too many unknown factors that will not be apparent until more time passes and then of course in hindsight. The reason I am here obviously is because I expect higher prices.
When I was buying the hell out of TCK for about 3 bucks a share I never said "this is going to 40 dollars in a year", although it did. My thoughts were those of an investor: "Stocks in general are being sold off with no regard for their fundamentals. Great companies are on sale for great prices 2/2 for low risk - high profit value investing, Graham and Buffet style. My analysis is that this company is sound, their resources too valuable and that it is severely undervalued. Even if it were to continue to decline in price it is only allowing my dollars to buy me more of a company with a value I believe is intrinsically much higher than it is now. I will give this stock at least five years to perform and unlock the potential I think it has, unless I see the fundamentals change and reason to reevaluate."
Someone last week asked me for a one year price target. I don't normally do these as I still consider it very short term, and the accuracy of short term predictions tends to be low. Normally I try for conservative five year targets, and if they are met in two or three, great.
As I said earlier I think LODE has ANV potential, a huge multibagger my family made a good chunk of change off of.
The important things to keep in mind are the share structure, effective market cap/ ounces, and this year a P/E factor.
*Speculation, estimates, rough numbers*
We have almost the exact same share count as ANV and similar grades, this makes for a rare apples to apples comparison.
$3.45 pps X 89 M = 307M market cap, approximately 307/1.6 M oz = $192 an oz... cheap for a company this close to production, not to even mention the likely increases from fresh drilling.
The amount the market prices per oz in the ground will rise and fall based on the project's progress towards actual mining, amongst many other factors.
ANV has a P/E of 84 (!) earnings of about 36 M (Comstock estimate 20-30) and a market cap of 3.08 B ($35 ish a share) so close and comparable, as are their resources (more or less).
I think the company easily hits its oz target by 2013. I would estimate shorter term that LODE turns the 500k (iirc) historical resources into at least measured and indicated resources and perhaps adds 900k oz to their reports by late summer 2012, (2.5M oz). This time should give them about a year of production, earnings of perhaps 25 M.
We will go with a p/e 1/3rd of ANVs, 28, 28 x 25 = 700m market cap, more than a double on earnings alone.
If they have 2.5 M oz of gold and the market still prices it as it does now, that is 2.5M x $192, 480M market cap, more than a 50% gain. Personally I think it is patently ridiculous that the reserves of a producing goldmine in Comstock's position would be priced at less than $200. More likely the transition to a producer at least doubles that number, 2.5x 400 gives us a billion market cap, over a 200% gain.
I would like to stress how many of these numbers are just speculation, done for entertainment, and that they can change very quickly. I have tried to be conservative in my numbers. I believe the gold and silver bull will smash all these to bits, and that there will be nothing "conservative" about the irrational exuberance and ridiculous P/es and valuations that will take over this sector.
Bobby you should put a silver spot chart next to the gold, the Comstock is famous for it and it represents the bulk of our resource, ounce wise. I heard a while back the pre-feasibility numbers included $18 silver... It appears to be slightly higher. Price increases in the metals go right to the profit margins and should outpace the inflation raising production costs.
http://www.comstockresidents.org/
Taking donations for a crusade against Comstock, apparently they have about 100/200 people in the community as membership. They have let their "historical" town rust and decay away but God forbid someone actually mines in their mining district on their own land.
I wish there were a common sense group in opposition.
I know this is wrong since this company itself did it before. This project is light-years ahead of where it was in 2006.
GOLD HILL, Nev., May 10, 2006 (PRIMEZONE via COMTEX) -- Today, GoldSpring, Inc. (OTCBB:GSPG) reports results from the Plum Mine operation for the quarter ended March 31, 2006. The Plum Mine realized a first time ever net profit of $52,030 for the first quarter 2006, compared to a loss of $817,630 for the first quarter 2005. The Company sold 992 ounces of gold at an average price of $542 per ounce during the first quarter of 2006, generating revenue of $537,806. During the same period in 2005, the Company sold 1,192 ounces of gold at an average price of $429 per ounce, generating revenue of $512,091. The Company's ability to achieve profit success is largely due to the efforts of its management to implement its operational improvement plan, as further detailed in this press release. The Company's consolidated first quarter 2006 financials are scheduled to be released on or before May 15, 2006, as part of its filing on Form 10-QSB.
This first ever profit from first quarter 2006 gold production at the Plum Mine is especially significant as production was hampered by unusually heavy precipitation in northern Nevada from mid-December 2005 through February 2006. The Plum Mine received fourteen inches of rain between mid-December and the end of February, filling the leach ponds, including the one hundred year storm pond, nearly to capacity. The high levels of effluents in the ponds prevented the Company from adding additional reagents to the leach pads. Because the Company was unable to add new material to the pad and put it under leach, they made the decision to cease mining operations in early-January but continued processing already mined ore. GoldSpring President and CEO, Rob Faber, said, "Our team at the mine did an excellent job, in a challenging situation, to insure the environmental integrity of our operation." The Company hopes to resume normal mining operations by the end of May 2006. The Plum Mine's reclamation, exploration and test mining expenses for the first quarter of 2006 were $843,945 less than for the same period of 2005.
Jim Golden, Goldspring's mining executive, said, "We are starting to experience the benefits of the operational improvement program that we initiated in 2005. Most recently, we have made the decision to take over our mining operations, which were previously performed by an outside contractor. We plan to have our mining operation in place by the end of May 2006. Based on our mine plan and internal calculations, we anticipate that taking over the mining operations will reduce our gold production costs by $40 per ounce, resulting in a production cost of less than $350 per ounce." Over the next two months, the Company will be ramping up gold production and expects monthly production to reach 1,200 ounces of gold by mid-summer 2006. Jim Golden stated, "As a result of the ongoing development of the mine plan, the average grade of our ore has increased, further benefiting our results."
GoldSpring, Inc. is a North American precious metals mining company with an operating gold and silver mine in northern Nevada. The Company was formed in mid-2003 and acquired the Plum Mine property in November 2003. In the Company's three years in existence, it has accomplished the following: secured permits, built an infrastructure and brought the Plum Mine project into production. During 2005, the Company sought to expand its business even further by acquiring additional properties around the Plum project in northern Nevada, expanding its footprint and creating additional opportunities for exploration. GoldSpring is an emerging company, looking to continue to expand upon its foundation and success through the acquisition of other mineral properties in North America which have reserves and exploration potential that can be efficiently put into near-term production. The Company's objectives are to increase production and reserves through exploration and acquisitions and expand its footprint at the Plum mine, thereby maximizing Company cash flow and shareholder value.
It is more than just a measure of much many ounces they outline. A huge factor is their cash costs, how much it costs to produce an ounce of gold equivalent. I believe they will be very good and come in below $500, just roughly guessing based on grades and depth. But we do of course require a feasibility study to get an accurate picture of the project economics. This also holds back their measured and indicated resources from becoming reserves and from them getting a more "fair" value for their resources, especially since they are likely to be good. Companies like Exeter have discovered ridiculous amounts of gold...microscopic gold with high cash costs. Gold is gold...except when it isn't created equally. As you know hundreds of factors may be relevant in valuing these kind of companies.
If they complete their stated objectives and obtain 3.25M oz with good reserve numbers, good grades, and demonstrate good profitability and project economics with production I believe it has potential to be worth about what Allied Nevada is worth now (3~ B give or take) with variation for whatever the prevailing metals prices are.
I believe Winfield wants at least a billion for himself because it seems a great payoff with minor risk for him. Just get the fully funded operations rolling and hold for five years. Blink of an eye it's gone and he is mega wealthy.
The truth is that suitors you are referring to prefer to wait. They will pay a lot more for their ounces but the ounce count will be much higher with the risk substantially reduced. The kinds of companies that would buyout LODE with what I consider to be a fair market price are not interested in speculative bargains. They need large oz reserves to replace their rapidly declining base. Lode may indeed one day be acquired but it isn't going to be for anything approaching its current market cap. A few months of profitable production and a few more 43-101s and she'll suddenly be out of the price range of many. If the commodity bull market continues with a fraction of its current intensity metal prices will skyrocket. We will mine, we will grow and show that much gold and silver remain in the Comstock. Give it a few years. Have vision friends, and patience it will earn you much wealth and knowledge over the years.
-TM
Yes and that is normally a prudent course of action, playing the odds. Every reverse split I have been involved in ended up making me a lot of money, so I am oddly biased the other way. (Coeur d'Alene Mines, Gulf Resources Corp, and Comstock Mining) I realize this is not typical, but I often take a contrary position.
If your are referring to the reverse split and reorganization the answer depends on when people purchased. Anyone that bought in the high of 08s without averaging down is still down on their investments. Anyone that dollar cost averaged in over the past couple years would have a position averaged in the mid $1 range like myself, and has done very well. The debt conversion and capital raise was a huge positive for the company and will give this venture tremendous value as we finally start to realize part of this lands potential.
Bobby is a quick-draw. Faster than I.
It is the same general area although their claims have expanded significantly. The strikes from today's release are in a recently acquired property to the south of their initial claims. This lies in a different county (Lyon) but is very close by. Their other resource area is an expanded Lucerne pit and area where they were drilling when you were last a shareholder. Lots of info on the company website.
Clear breakout in the chart. Gold and silver to new heights and producing juniors to follow when earnings are passed down from the high metal prices. This is where things start getting very exciting. If a company produces at cash costs of say $400 an oz this represents a doubling of margins for every equivalent increase in the PMs. If things turn out a fraction of the way I expect these mines will be remembered as one of the most undervalued investment opportunities in history. Becoming low P/e value investing picks backed by a horde of real metal underground in a debt destruction inflationary wealth transfer scenario.
Opportunity knocks and experience has taught me the greatest reward and lowest risk junior speculations are made right before they engage in production.
I am heavily invested here and I do not often lose.
http://caps.fool.com/player/TMLonggun.aspx
Good luck in your investing everyone.
Lode no longer controls the Big Mike copper project, it was given to Jim Golden when he left Goldspring as part of his severance. Lode's claims are only likely to contain gold and silver in economic amounts unless they acquire land in another district.
Hey Darby how about some updated LODE charts? Drill results within a few days too. Always love the Black Swan wild-card events that can be lucrative to your bottom line eh? I am holding a massive position averaged in the low $1s and think this is finally going to be the year some dore is poured and the company gets something approaching a fair market value. Could be a GORO sized year.
All the best.
-TM