Comstock - Corrado DeGasperis

Comstock Mining CEO Corrado De Gasperis in 2014

MINING QUARTERLY, file

Comstock Mining, the Nevada- based company that owns the property in the historic Comstock District near Reno, reported record-low costs and hinted at upcoming strategic ventures in third quarter results released Aug. 1.

The news comes in the wake of the company’s refinancing in January, followed by a year of activities designed to “enhance liquidity, accelerate mining activities and strengthen and grow land position and reduce costs,” said Corrado De Gasperis, executive chairman and CEO of Comstock Mining, in a news release.

With general and admi- nistrative costs down to $1.6 million, a cash balance of $1 million and long-term debt at $11.4 million, the company is proceeding cautiously.

“We really want to make sure we have the wherewithal to accomplish everything we are setting out to do,” De Gasperis said during a results and business update conference call with investors. “We are working extremely hard to have the lowest possible cost platform to be in that position and not waste a dollar.”

During the call, De Gasperis focused on updating investors on three major projects then took questions from investors, who inquired about issues such as real estate, communications and what happened that led to the need to refinance.

At the Lucerne Resource Area, the company is assessing economic feasibility, and establishing proven and probable reserves and production plans. De Gasperis said the company is on the verge of a joint venture that could accelerate development at that site. He said Comstock Mining hopes to make an announcement of an agreement later this year.

Comstock Mining also entered a partnership to begin metallurgical testing on mineralized materials to assess the potential for additional silver extraction from leach pads at the Lucerne Resource Area, where 40 percent of the product remains.

“This project is really designed to see if we can get a meaningful amount of that silver out,” De Gasperis said. “If it is successful, it means we’d be extracting silver again in the reasonably near future, but it’s still being tested with our ores.”

For processing on gold and silver yields, Comstock Mining has entered a joint collaboration agreement to test an alternative extraction technology. Material from the Lucerne Resource Area and Dayton Resource Area, in Lyon County, has been provided for this project.

In a collaboration with Cycladex, technical staff conducted column tests using cyanide and noncyanide solutions to advance the feasibility study for reserves at the Dayton Resource Area. Grants from the U.S. National Science Foundation funded the simulations.

Other efforts discussed included two additional joint venture prospects, which must remain confidential until signed; efforts to put the Dayton Resource Area into production in the next two years; and the economic development of Northern Nevada, leading to favorable conditions for the sale of Comstock Mining’s nonmining lands.

The state’s completion of transportation infrastructure and area growth surrounding Tesla Inc., Google Inc. and Apple Inc. could lead to sales of Comstock Mining property. “It would be impossible for me to exaggerate the amount of activity,” De Gasperis said. “We couldn’t be more pleased with the economic activity around us, so we are looking forward to getting some sales done. We are looking forward to being debt free.”

On the call, one investor asked how Comstock Mining is sharing information to garner interests in stocks and perhaps improve market performance. De Gasperis said the company is working to get the message out in a constructive way. “The Comstock fame is for massive history,” he said, “but we want people to understand there is some real current, real modern, stuff happening right now and it’s positive.”

Another caller, a self-proclaimed longtime investor with ingots from Lucerne’s first gold pour, said he was embarrassed to ask why Lucerne was no longer producing. But he did ask: “What happened?”

De Gasperis said Comstock Mining tried to transition the mine from surface to underground. “That got more complex and more difficult than we expected it would be. It also built two major underground tunnels that positioned us remarkably well for the next round of drilling and development. But we pushed ourselves hard to make that transition and strained our capital resources to do it,” he said. “It’s there. It’s just how. I think it’s a question of how you do it.”

In summary, De Gasperis conveyed determination to keep going. “We are marching toward gaining feasibility come hell or high water,” he said. “I really appreciate the patience, but it is now happening.”

Near the end of the conference call, one investor offered this encouragement: “Keep it going. Keep slugging. Have fun.”

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