VIRGINIA CITY — Comstock Mining Inc. announced Feb. 20 selected strategic and financial highlights for the year ended Dec. 31, 2017, including exceeding its cost-reduction targets and entering an agreement for a nonmining asset sale for $4 million.
“We spent most of 2017 dramatically reducing operating costs and liabilities across the board, enhancing liquidity and establishing strategic partnerships that reposition the company for accelerated and larger growth,” said Corrado De Gasperis, executive chairman and CEO. “We are now positioned and focused on real asset, resource and equity value growth for 2018, while concurrently eliminating our debt and expect meaningful updates in the next two months.”
2017 selected strategic highlights
- Received the 2017 Nevada Excellence in Mine Reclamation Award for Lucerne-related mine reclamation.
- Completed a strategic Joint Venture Option Agreement for advancing the assessment and development of the Lucerne resource area.
- Completed federally funded column tests on mineralized material from the Dayton resource, through Cycladex Inc., a strategic investee, for faster, safer leaching solutions, achieving gold yields of 82-85 percent.
- Reduced annual operating expense by over $6.3 million, with year on year reductions in every category.
- Projected lower operating spend rate of less than $3.6 million per annum, before the estimated annual cost benefits from the Joint Venture Option Agreement of an additional $1.25 million.
- Staked 30 unpatented lode claims with 472 contiguous acres, increasing lands to over 9,272 acres.
- Reduced long-term debt during the fourth quarter by over $1 million from nonmining asset sales, lowering debenture principal to $9.6 million.
- Agreed to sell the Daney Ranch for $4 million, expected to close in the second quarter of 2018, subject to financing and permitting.
2017 selected financial highlights
- Costs applicable to mining were $3.4 million in 2017, all representing depreciation, as compared to $4.5 million in 2016, a 24.7 percent reduction, resulting primarily from cessation of processing in 2016.
- Operating expenses were $5.6 million in 2017, as compared to $10.8 million in 2016, a 48.1 percent decrease.
- General and administrative expenses were $2.6 million in 2017, as compared to $3.5 million in 2016, a 26 percent reduction and a record low, driven by lower payroll and administrative expenses.
- Exploration and mine development expenses were $1.1 million in 2017, as compared to $4.6 million in 2016, a 75.2 percent reduction, primarily from the completion of the 2016, Lucerne underground drift.
- Mine claims and costs were $1.0 million in 2017, as compared to $1.1 million in 2016, a 10.9 percent reduction.
- Environmental and reclamation expenses were $0.8 million in 2017, as compared to $1.3 million in 2016, a 39.9 percent reduction and a record low despite higher costs associated with unusual precipitation.
- Net loss was $10.6 million for 2017, as compared to a net loss of $13.0 million for 2016.
- Net cash used in operations was $6.5 million for 2017, primarily related to general and administrative, exploration, mine claim costs, environmental expenditures and working capital.
- Net cash provided by financing activities was $7.4 million, primarily from debt and equity issuances.
- Total debt obligations at Dec. 31, 2017, were $10.3 million.
- Cash and cash equivalents at Dec. 31, 2017, were $2.1 million.
“We are lean and well positioned to grow our resources, our assets and our equity value in 2018,” De Gasperis said.
2018 operating expenses are expected to be $3.6 million. Interest expense is expected to be approximately $1.2 million for 2018. The company expects to continue operating with approximately 10 employees, including expert land, permitting, geology and engineering professionals.