Comstock Inc (LODE)

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Comstock Announces Solid Progress on Lucerne Transaction; Tonogold Commits Additional $1 million in Non-Refundable Deposits



May 06, 2019 06:45 ET | Source: Comstock Mining Inc.
VIRGINIA CITY, Nev., May 06, 2019 (GLOBE NEWSWIRE) -- Comstock Mining Inc. (“Comstock” or “the Company”) (NYSE American: LODE) today announced significant progress toward the completion of the sale of its Lucerne properties (“Lucerne”).

The Company understands that Tonogold Resources, Inc. (“Tonogold”) has secured significant interest for funding the Lucerne purchase and is finalizing negotiations of optimal terms and allocations. Tonogold also recently executed a Term Sheet with Nebari Holdings, LLC (“Nebari”) for a $5 million, debt financing with the option for drawing an additional $25 million for development, production start-up and working capital, subject to customary due diligence and closing conditions. Nebari is Comstock’s current lender.

Mr. Mark Ashley, President and CEO of Tonogold stated, “Our diligence is paying off with the assembly of an outstanding group of strategic resource investors who understand the significance of the gold and silver resource at Lucerne and the greater exploration potential of the whole northern portion of the Comstock District. We look forward to accelerating and consummating the transaction announced with Comstock in January 2019, in the next few months.”

Tonogold has also committed and partially funded another $1 million in non-refundable deposits. For the year-to-date, Comstock has received $2,350,000 in cash as non-refundable payments, including $350,000 recently, toward the aggregate purchase price, with an additional $450,000 and $200,000 due on or prior to May 17, and May 24, 2019, respectively. These payments extend the deadline for closing the transaction to June 21, 2019. Comstock has received $350,000 and will use seventy-percent of the entire $1 million in payments to pay down its outstanding debenture, bringing the outstanding principal down to approximately $6.7 million.

Accordingly, both parties have reached an agreement to provide additional extension opportunities for closing on Lucerne, primarily to allow for a more thorough and efficient financing and closing process. Comstock agreed to provide Tonogold with the flexibility to close on Lucerne on or prior to August 30, 2019, subject to making additional $1 million monthly non-refundable deposits in late June 2019 and late July 2019, if needed. If the closing occurs after the original deadline of May 31, 2019, Tonogold will also reimburse Comstock for all incremental interest costs and substantially all property carrying costs, as previously agreed.

Comstock now anticipates, and the amendment allows for, Tonogold to deliver $11.5 million in cash at closing, less the amounts of the cumulative non-refundable payments made by Tonogold at that time, and a one-year maturing, interest bearing note converting into shares in Tonogold if not repaid previously, to Comstock with a principal amount of $3,500,000. The conversion price will be the lowest of (1) the 20-day volume weighted closing price of Tonogold shares prior to conversion, (2) Tonogold’s most recent private placement or (3) Tonogold’s initial public offering price.

Mr. Corrado De Gasperis, Executive Chairman and CEO, stated, “Tonogold has made consistent progress toward acquiring the Lucerne mine and has worked effectively to secure sufficient strategic investment capital for closing this transaction and funding Lucerne development. The effort and results are both outstanding and we look forward to closing the Lucerne transaction in the next few months.”

http://www.globenewswire.com/news-release/2019/05/06/1817285/0/en/Comstock-Announces-Solid-Progress-on-Lucerne-Transaction-Tonogold-Commits-Additional-1-million-in-Non-Refundable-Deposits.html