Just thought I would copy my findings regarding the claims about red tags and "cease and desist" letters.... some truth to the latter, none to the former. Nothing to worry about either way:
1. Red Tag- So far, no such thing, at least in Storey County (or Lyon County either). Looks like bashers, trying to blow things out of proportion to pick up some cheap shares.
2. I just got off the phone with the Dayton region building inspector (Lyon County)- he said no legal action had been taken, but in response to a complaint, about 4 months ago, they wrote a letter/gave notice to LODE that they needed to provide adequate structural support for any buildings that they drill under. Apparently they were drilling an exploration hole (at an angle, I'm assuming) that went under an old building in the Dayton Consolidated complex- Lyon County doesn't recognize it as a "historic building" unless it is catalogued in the historic register.... but it's old. Because it was unused, there was no immediate danger, hence no "red tag", but a notice and a requirement that they provide adequate support for the structure. Just a week or two ago, the most recent letter sent was asking them to proceed with the support work, and indicating that no building permits or anything would be required.
3. Apparently Storey County had asked Comstock (CMI) to move some drilling equipment so that it was at least 1000 feet from a residence, but again, there was no formal action taken, and no "red tag". CMI has volunteered to keep their drills more like 1200-1500 feet from residences, just so they don't get close to the limit. I talked to both the building department, as well as community services (which handles non-building code enforcement), and that is the sum of it.
4. So I called NDEP about the "cease and desist" letter- the mining regulation division knew nothing about it, but mentioned that the Water Pollution Control Bureau might have had something to do with it. Turns out that they did issue a cease and desist letter on May 11, 2011, because some of the grading work related to drilling had filled in or blocked a water course/drainage beside Highway 342, about a half mile north of Silver City. CMI has been given until the 24th of June to resolve the issue... if they don't, then we can assume further enforcement action will be taken. If they do, then we can assume that they will be free to proceed. Needless to say, I completed the loop and made sure that Mining Regulation was aware of the current situation.
5. Planning Commission Meeting Cancelled- I previously listed the two reasons that I thought this meeting was cancelled. I'm now leaning towards the second one (that I previously thought was unlikely). I believe that they postponed the hearing for both reasons, with the primary being that Mr. De Gasperis is otherwise occupied in New York and elsewhere, connecting with investors and market makers and getting ready for the switch to AMEX. My guess is that he will then head straight to the investment conference that they PR'd early next week, and so his plans did not allow him to be present for the hearing, and so it was postponed. Combine that with changes to the permit scope, and it was natural to add more time into the mix.
So, long story short- yes there's a cease and desist on the drilling, no there are no red tags, but none of it is a serious or unfixable issue. And I really think we are getting close on the AMEX listing, which would explain the frantic attempts to drive the price down and discredit the company.... in the long run, I don't think it's going to work.
I'm looking forward to seeing what happens with the AMEX move- I'm expecting it to happen in the next week or two.
AI
