Comstock Mining Reaches Positive Agreement to Favourably Amend JV

Comstock Mining Inc. (NYSEMKT:LODE) a producing, Nevada-based, gold and silver mining company, announced that it has reached an agreement with John V. Winfield to amend the terms of the operating agreement for its Northern Comstock LLC JV. This agreement will reduce the Company’s remaining capital contributions from $31.05 million down to $9.75 million.
Comstock Mining also reported updated on its Dayton and Lucerne properties. At Dayton, the rig is set to complete an additional 155 holes to fill in gaps that still exist in the near-surface environment. At Lucerne, extensive geological development and modeling has been completed and a definitive underground development target has emerged.
The Company reported that it was cash positive from operations for the first six months of 2015, and expects to be cash positive from operations throughout 2015. To discuss this, as well as goals for 2015, a conference call is set today, July 21, 2015, at 8:00AM Pacific Time:
North American Toll Free: 1-866-253-4737
International: 1-416-849-4292
The audio will be available, usually within 24 hours of the call, on the Company website:
https://www.comstockmining.com/investors/investor-library
As quoted in the press release:

Comstock Mining Inc. (the “Company”) (NYSE MKT: LODE) today announced that it has reached a definitive agreement with John V. Winfield to amend the terms of the operating agreement for its Northern Comstock LLC joint venture, that will reduce the Company’s remaining capital contributions from $31.05 million down to $9.75 million and permit such capital contributions to be made in the form of cash, or in certain circumstances, the Company’s common stock, par value $0.000666 per share (“Common Stock”) and defer certain payments to a more suitable schedule. In addition, any prior or future royalty commitments for the Northern Comstock properties and Mr. Winfield will be eliminated. There are no provisions for any issuances of preferred stock, in any form.
A majority of the holders of the Shares, including the Winfield Group (which includes Mr. John V. Winfield, the Company’s Chairman of our Board of Directors, and entities that he controls) have indicated their intention to authorize the amendments to the Charters.
Dayton Drill Program Update
… The program to date has yielded 303 intercepts of 10 feet or greater in length with Au concentrations exceeding or equal to 0.015 opt Au, including a group of 17 intercepts of 10 feet or greater in length with Au concentrations exceeding or equal to 0.100 opt Au. Surface sampling and geologic mapping were also conducted as part of the program to further augment the data. Collectively, these results could have a significant impact on the overall project economics.
The rig is scheduled to complete an additional 155 holes in the Dayton project area, mainly to fill in gaps that still exist in the near-surface environment along several of the major structures.
Lucerne Exploration and Underground Development
The Company completed extensive geological development and modeling, utilizing its previously collected drill hole data, historic underground mine maps and current mining data, among other geological information. Out of this extensive geologic work, a definitive underground development target has emerged, specifically that part of the lode occupied by the mineralized mass of PQ, as well as the neighboring wall rocks. This conclusion is based on surface drill hole results, metallurgy, and proximity to the current Lucerne Mine floor, as well as past mining data.
Outlook
The Company has been cash positive from operations for the first six months of 2015, and expects to be cash positive from operations throughout 2015, while expanding the exploration and development during the third quarter and completing the road realignment during the third and fourth quarters. This expansion is primarily the exploration and development of high-grade underground targets north and east of the current Lucerne mine operations and the exploration and development of the resource target at the Dayton Resource Area.
During the first half of 2015, the Company continued reducing costs applicable to mining revenue. The Company has increased its expectation of savings from costs applicable to mining to $7 million (from a previous target of $5 million), when comparing 2015 to 2014. The Company has also doubled its expectation of savings from all other non-mining activities, including general, administrative, hospitality, mine claims and costs and environmental and other areas, to $3 million (from a previous target of $1.5 million), when comparing 2015 to 2014. These increases raise our total costs savings targets to $10 million, from $6.5 million, when comparing 2015 to 2014. The Company expects cash costs of mining revenue, will remain below $650 per ounce of gold through the third quarter.
The Company will commence the underground drift-mining and drilling, associated with the PQ target, and expects to complete drift-sampling, drilling, ongoing metallurgical test work of the PQ target by December 2015, with the second major phase of drift-mining and drilling, with respect to the Woodville bonanza target, to be completed by March 2016.
Mr. De Gasperis concluded, “Our goals for this year are focused on the final steps for minimizing operating costs, completion of the SR-342 realignment project, expansion of the Lucerne underground exploration and development activities, and commencing the final development phase of the Dayton Resource Area, positioning us well for future growth.”
The Company will host a conference call today, July 21, 2015, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time. The live call will include a Q&A with accredited institutions, investors and analysts immediately following the prepared remarks. The dial-in telephone numbers for the live audio are as follows:
North American Toll Free: 1-866-253-4737
International: 1-416-849-4292
The audio will be available, usually within 24 hours of the call, on the Company website:
https://www.comstockmining.com/investors/investor-library

Comstock Mining President & CEO, Corrado De Gasperis, said:

“This is a watershed moment in the Company’s evolution that reflects our investors confidence in our progress and forward plans and our boards ability to take steps necessary to maximize value to all of our shareholders. It immediately strengthens our balance sheet by significantly reducing liabilities on some of our richest properties, improves our liquidity and dramatically lowers our future capital and mining costs.”

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