Comstock Mining Advances Strategic Mining Joint Venture 

VIRGINIA, NV - Comstock Mining Inc. reported that Tonogold Resources, Inc. has successfully completed the first phase of the Option Agreement, having invested approximately $1 million during the past six months toward the evaluation and assessment of the Lucerne Mine Project’s resource and preliminary economic feasibility and also having paid the Company an additional $2 million for the right to extend the option. The Option Agreement established a series of requirements, including technical and financial analysis, along with additional funding milestones for Tonogold to earn a share of the Company’s Lucerne Mine Project.

The first milestone granted Tonogold six months to conduct an initial review of the project.  During this period, Tonogold invested approximately $1 million in project costs, including a due-diligence assessment of the Lucerne Resource.  Tonogold commissioned Mine Development Associates of Reno, NV (“MDA”), to independently assess and begin modeling a portion of the Lucerne resource area. This work is in preparation for the intermediate objective of an NI 43-101 resource report and then towards a feasibility study.  

In order to maintain and progress the option to earn-in, Tonogold will now continue investing toward a cumulative $7 million for Lucerne by October 3, 2019, and a cumulative $20 million by April 3, 2021, and must produce a technical and economic feasibility assessment for mining the Lucerne resource.  Under the Agreement, when Tonogold completes the $20 million investment, and other related prerequisites, Tonogold and Comstock would then affect a joint venture for the future mining of the Lucerne mineral resource. In addition to the $2.2 million already received by the Company from Tonogold, the investments also include at least $1.2 million in annual subsidies for the Company.

Corrado De Gasperis, Executive Chairman and CEO of the Company said, “We are pleased with the geological analysis and advancement, to date, on the Lucerne resource and the diligence of our mining partner and their advisors. The next phase should accelerate the evaluation, drilling and development activities, while continuing to lower our annual costs by approximately one-third.” 

The evaluation program is currently directed at producing a robust resource model for Lucerne as well as assessing a series of geological targets in the Silver City Branch of the Comstock Lode, including the Succor vein systems, the historic Woodville Bonanza system and the PQ target. These initial targets represent the core of a broader geological corridor. Previous surface drilling in the area suggests more than 1,000 feet of mineralized strike in the Succor zone, trending east from the Lucerne Cut, with good potential to yield high-grade gold and silver. The 1,000-foot plus Succor Vein Target has an average true width of 15 feet and an average dip of 65 degrees. The structure has reported historic mining grades of approximately 0.54 ounces per ton of “recovered” gold per ton and is open to the east and at depth, along the entire structure. The nearby Woodville Bonanza structure includes the same supporting historical mappings with reported historic mining grades of 0.749 ounces of gold per ton.  The Woodville has significant current drill data including 116 intercepts of at least 10 feet, grading over 0.22 ounces per ton gold and 1.59 ounces per ton silver.

Tonogold is a U.S.-based mining company that is focused on advanced exploration properties in Nevada and Mexico. Tonogold’s team of mining executives and investors are working to build a portfolio of mineral properties that will give its investors a leveraged exposure to gold, silver and other minerals and metals allowing them to benefit from its exploration, mining and financial expertise.

De Gasperis, concluded, “This venture has diligently focused on developing a sustainably profitable mine. We feel the full potential of Lucerne depends on this type of technical collaboration, with the right partner and capital to enable it.  Ultimately, Tonogold plans to invest over $20 million for 51% of the Lucerne Mine. Their methodical, technically diligent and credible advancement through the first phase, meeting all commitments and milestones, speaks for itself.”

The Company’s debenture obligation requires that we use 70% of these proceeds for debt reduction.  The Company has now reduced long-term debt by a total of $1.6 million in April, lowering the debenture principal balance to $7.9 million.  The Company also had cash and cash equivalents of $2.0 million at March 31, 2018, excluding any additional net proceeds received from the option payment that was not used to pay down debt.