Comstock Inc (LODE)

[phx85]

Saildone,

No, they will not have the cash to go into production on the 16th, nor is it their plan. Their focus has shifted to the lease agreement they entered into for the northern targets.

Tonogold finally got around to issuing a PR. Hopefully at some point they will get around to filing their qtrly reports. But, I digress.

http://tonogold.com/en/tonogold-significantly-advances-comstock-acquisition/

As a result of constructive negotiations over the past few weeks, Comstock and Tonogold have agreed to separate these two components and the parties have entered into a modification agreement whereby effective September 16th 2019, Comstock unconditionally granted Tonogold 100% rights to explore, develop and mine over the Storey Exploration Claims, which cover some 3,200 acres (319 separate claims).

Here is how Comstock presented it:

Mr. Corrado De Gasperis, Executive Chairman and CEO, stated, “Tonogold has completed some extraordinary analysis of the northern District, innovatively correlating historical data with modern geological assessments, and creating a larger exploration opportunity while recently assembling an impressive list of resource investors that has enhanced their liquidity and capital base. We look forward to this closing and accelerating our growth.”

Effective September 16, 2019, the Company also entered into a ten-year, renewable Mineral Lease for its other Storey County mineral properties, granting Tonogold the right to explore, develop and mine these properties. This arrangement was part of the original agreement entered into in January, 2019, but has been accelerated as Tonogold has committed to exploration expenditures of at least $5 million in the first, ten-year term, with the right to extend for a second, ten-year term if they commit to another $5 million and delivering a feasibility report. The lease requires quarterly lease payments with a 3% royalty that adjusts to 1.5% after the first year of mining.

Notice that $5mil figure? Sounds about the same as the amount that was talked about months ago as having been secured for "development".

Here's my WAG:

Tonogold is going to spend the next several months attempting to demonstrate that the Northern targets have economic resources and will use that as a basis to raise capital to purchase the remaining 49.7% of the Lucerne. Should the analysis not turn out the way they expect, deal is done. They won't be able to raise the capital to further their program in either area.

As a Comstock Mining (LODE) shareholder, I don't care either way. I never believed that they would be able to raise the capital to close this thing the way it was laid out from the get go. For every dollar (CASH) they paid was a dollar that shareholders didn't get stuck with via dilution. Comstock will not spend a dime in exploration costs for the northern targets. If it is wonderful, great. Comstock gets a nice royalty with no cap-ex costs. Plus the value of TNGL - meaning all that stock that Comstock is holding will be worth more than it is now. PLUS - if it is economical they would have to have some place to process it. That kicks in the American Flat arrangement - $1mil per year usage fee + whatever amt per ton. If it is not wonderful - well, we will be glad we (LODE shareholders) didn't throw money at a project that didn't pan out and the Lucerne will fall back to CMI as they would be unable to make their required payments next year.

Folks need to STOP looking to TNGL as the driver behind Comstock's success or failure. They never have been and never will be. I may not live to see it - and it may not be Comstock that does it - but I'd bet that the REAL $$ (as far as PMs go) is sitting, not in Dayton, but in Spring Valley.

Comstock's success or failure is dependent on Corrado monetizing those non-mining assets in Silver Springs, killing off that wicked debenture, and stopping the dilution bleed. A bonus would be off-loading the Daney Ranch. I personally hope they keep the hotel.

A debt free Company - now wouldn't that be something.