Attached files
| file | filename |
|---|---|
| EX-4.2 - Comstock Mining Inc. | v199560_ex4-2.htm |
| EX-4.1 - Comstock Mining Inc. | v199560_ex4-1.htm |
| EX-4.3 - Comstock Mining Inc. | v199560_ex4-3.htm |
| EX-10.3 - Comstock Mining Inc. | v199560_ex10-3.htm |
| EX-10.2 - Comstock Mining Inc. | v199560_ex10-2.htm |
| EX-10.1 - Comstock Mining Inc. | v199560_ex10-1.htm |
| EX-10.4 - Comstock Mining Inc. | v199560_ex10-4.htm |
| EX-10.5 - Comstock Mining Inc. | v199560_ex10-5.htm |
| 8-K - Comstock Mining Inc. | v199560_8k.htm |
EXHIBIT
99.1
Comstock
Mining Raises $35.75 million in New Equity
Comstock
Exchanges All Senior Debt for Equity, Secures Land
Virginia
City, NV (October 21, 2010) - Comstock Mining Inc. (the
“Company”) (OTCBB: LODE) announced today the successful completion of the
remaining three principal features of its previously announced restructuring and
recapitalization plan. The completed features of the plan include raising $35.75
million of new equity, exchanging all of the Company’s previously defaulted
senior secured debt and related obligations for new equity and securing integral
land mineral rights. The Company will use the net proceeds to meet its capital
and operating needs for production and the remaining parts of its three-year
strategic plan, including exploration, mine development, and land
acquisition.
“The new
capital, successful debt restructuring and land consolidation represent a
watershed event for the Company. This builds on the success of our
recent NI 43-101 technical report, that validated total measured, indicated,
inferred, and historic resources of over 1.6 million gold equivalent ounces and
mapped a path for near-term production,” stated Mr. Corrado De Gasperis,
Comstock Mining Chief Executive Officer.
“The
recapitalization was a prerequisite for the Company’s April 2010 strategic plan.
The goal of that plan includes enhancing stockholder value by commencing
commercial mining and processing operations in 2011, and validating qualified
resources of at least 3,250,000 gold equivalent ounces by 2013,” stated Mr.
William Nance, Comstock’s Chairman of the Board.
The
following are key highlights from the transactions:
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Raised
$35.75 million in gross proceeds ($32.75 million, net of commissions and
transaction related expenses) by issuing shares of a newly created Series
B Preferred Convertible Stock (“Series B Preferred Stock”) to fund the
Company’s business plan to accelerate mine development and production and
enhance exploration.
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Exchanged
all $29.4 million of its defaulted senior secured convertible notes and
related obligations for shares of a newly created Series A-1 Convertible
Preferred Stock and Series A-2 Convertible Preferred Stock (collectively,
the “Series A Preferred Stock”). This transaction also clears all defaults
under the terms of the notes being
converted.
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Acquired
exclusive rights of production and exploration with respect to extensive
mining properties, integral to the Company’s nearly 6,000-acre land
position, through an operating venture agreement, named Northern Comstock
LLC.
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Mr. De
Gasperis, continued, “Securing these exploration target-rich land and mineral
rights in a long-term and safely capitalized manner, completes the consolidation
of the Comstock Lode District and enables tremendous exploration
potential. These properties include the historically bonanza-rich
Gould and Curry, Woodville, Savage, Hale-Norcross, Yellow Jacket, Justice and
Keystone properties, among many others. The land consolidation,
together with our successful recapitalization of our balance sheet, ushers in a
new era for the Company, enabling our commitment to maximize the value of our
Comstock Lode land holdings for all of our shareholders.”
The net
proceeds the Company received from the sale of the Series B Preferred Stock was
approximately $32.75 million after deducting commissions and the estimated
expenses of the offering payable by the Company. The Company intends to use the
net proceeds to meet its capital and operating needs for the first three years
of its strategic plan to accelerate mine development and production and continue
exploration. The common stock underlying the Series B Preferred Stock is
issuable at a fixed conversion rate equal to 21.7 million shares of common
stock. The Company also exchanged all of its senior secured convertible and
senior indebtedness for shares of its newly created Series A Preferred
Convertible Stock. The common stock underlying the Series A is issuable at a
fixed conversion rate equal to 45.1 million shares of common stock. The Company
has approximately 20.5 million shares of common stock outstanding.
Mr. De
Gasperis added, “We couldn’t be more pleased with the tremendous quality and
breadth of our new investors. The strength of this capital raise coupled with
the continued support of our existing stakeholders has positioned the Company
with a strong balance sheet for accelerated growth. We appreciate the patience
of our stakeholders and the persistence of our management team.” Mr. De Gasperis
concluded, “Our fall drilling program is on target for commencement next week
and we look forward to the results of our ongoing metallurgical testing by
February, both representing key prerequisites for commencing production in
2011.”
Each
share of Series A Preferred Stock has an initial stated value of $1,000, is
entitled to receive dividends at a rate of 7.5% per annum on the stated value
commencing January 1, 2011 and is convertible into 1,536 shares of common stock.
Dividends on the Series A Preferred Stock are payable in cash or stock or a
combination of cash and stock.
Each
share of Series B Preferred Stock has an initial stated value of $1,000, is
entitled to receive dividends at a rate of 7.5% per annum on the stated value
commencing January 1, 2011 and is convertible into 606.0606 shares of common
stock. Dividends on the Series B Preferred Stock are payable in cash, stock or a
combination of cash and stock.
The
Series A Preferred Stock and the Series B Preferred Stock were issued in
reliance upon exemptions from registration pursuant to Sections 3(a)(9) and 4(2)
of the Securities Act of 1933, as amended, and Regulation D thereunder. The
Company has agreed to file a registration statement with the Securities and
Exchange Commission covering the resale of the shares of common stock underlying
the Series A Preferred Stock and the Series B Preferred Stock. The Company is
also pursuing a listing of its Common Stock on both the TSX Venture Exchange and
the NYSE AMEX.
Moelis
& Company acted as exclusive financial advisor to the Company. Moelis &
Company also acted as lead placement agent and Global Hunter Securities, LLC,
Rodman & Renshaw, LLC, Merriman Capital Inc., Legend Merchant Group Inc.,
and Anderson & Strudwick, Inc., acted as placement agents in connection with
the private placement.
This
press release does not constitute an offer to sell or the solicitation of an
offer to buy nor will there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such state or
jurisdiction. This press release is also an Exhibit to the Company’s Current
Report on Form 8-K filed today with the U.S. Securities and Exchange
Commission.
About
Comstock Mining Inc.
Comstock
Mining Inc. is a Nevada-based precious metals mining company with extensive,
contiguous property in the Comstock District. The Company began acquiring
properties in the Comstock District in 2003. Since then, the Company has
consolidated a significant portion of the Comstock District, amassed the single
largest known repository of historical and current geological data on the
Comstock region, secured permits, built an infrastructure and brought the
exploration project into test mining production. We continue acquiring
additional properties in the district, expanding our footprint and creating
opportunities for exploration and mining. The goal of our strategic plan is to
deliver stockholder value by validating qualified resources (at least measured
and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent
ounces by 2013, and commencing commercial mining and processing operations in
2011, with annual production rates of 20,000 gold equivalent
ounces.
Important
Note to U.S. Investors
This
press release uses the terms “measured resources,” “indicated resources,”
“inferred resources,” and “historical resources” which are calculated in
accordance with the Canadian National Instrument 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum Classification system. The United
States Securities and Exchange Commission (the “SEC”) does not recognize these
terms and the SEC guidelines (Industry Guide 7) provide that such terms shall
not be included in a registrant’s filings with the SEC (unless required to be
disclosed by foreign or state law). The SEC permits U.S. mining companies, in
their filings with the SEC, to disclose only those mineral deposits that a
company can economically and legally extract or produce. “Inferred resources”
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed that all or any
part of an “inferred mineral resource” will ever be upgraded to a higher
category. U.S. investors are cautioned not to assume that any part or all of a
measured, indicated or inferred resource exists or is economically or legally
mineable. U.S. investors are urged to consider closely the disclosure in our
Form 10-K which may be secured from us, or from the SEC's website at
http://www.sec.gov.
Forward-Looking
Statements
This
press release and any related calls or discussions may contain forward-looking
statements. All statements, other than statements of historical facts, are
forward-looking statements. Forward-looking statements include statements about
matters such as: future prices and sales of and demand for our products; future
industry market conditions; future changes in our exploration activities,
production capacity and operations; future exploration, production, operating
and overhead costs; operational and management restructuring activities
(including implementation of methodologies and changes in the board of
directors); future employment and contributions of personnel; tax and interest
rates; capital expenditures and their impact on us; nature and timing of
restructuring charges and the impact thereof; productivity, business process,
rationalization, investment, acquisition, consulting, operational, tax,
financial and capital projects and initiatives; contingencies; environmental
compliance and changes in the regulatory environment; and future working
capital, costs, revenues, business opportunities, debt levels, cash flows,
margins, earnings and growth.
The words
"believe," "expect," "anticipate," "estimate," "project," "plan," "should,"
"intend," "may," "will," "would," "potential" and similar expressions identify
forward-looking statements, but are not the exclusive means of doing so. These
statements are based on assumptions and assessments made by our management in
light of their experience and their perception of historical and current trends,
current conditions, possible future developments and other factors they believe
to be appropriate. Forward-looking statements are not guarantees,
representations or warranties and are subject to risks and uncertainties that
could cause actual results, developments and business decisions to differ
materially from those contemplated by such forward-looking statements. Some of
those risks and uncertainties include the risk factors set forth in our SEC
filings and the following: current global economic and capital market
uncertainties; the speculative nature of gold or mineral exploration, including
risks of diminishing quantities or grades of qualified resources and reserves;
operational or technical difficulties in connection with exploration or mining
activities; contests over our title to properties; potential dilution to our
stockholders from our recapitalization and balance sheet restructuring
activities; potential inability to continue to comply with government
regulations; adoption of or changes in legislation or regulations adversely
affecting our businesses; business opportunities that may be presented to or
pursued by us; changes in the United States or other monetary or fiscal policies
or regulations; interruptions in our production capabilities due to unexpected
equipment failures; fluctuation of prices for gold or certain other commodities
(such as silver, copper, diesel fuel, and electricity); changes in generally
accepted accounting principles; geopolitical events; potential inability to
implement our business strategies; potential inability to grow revenues
organically; potential inability to attract and retain key personnel;
interruptions in delivery of critical supplies and equipment raw materials due
to credit or other limitations imposed by vendors; assertion of claims, lawsuits
and proceedings against us; potential inability to maintain an effective system
of internal controls over financial reporting; potential inability or failure to
timely file periodic reports with the SEC; potential inability to list our
securities on any securities exchange or market; and work stoppages or other
labor difficulties. Occurrence of such events or circumstances could have a
material adverse effect on our business, financial condition, results of
operations or cash flows or the market price of our securities. All subsequent
written and oral forward-looking statements by or attributable to us or persons
acting on our behalf are expressly qualified in their entirety by these factors.
We undertake no obligation to publicly update or revise any forward-looking
statement.
Neither
this press release nor any related calls or discussions constitutes an offer to
sell or the solicitation of an offer to buy any securities.
Contact information for Comstock Mining
Inc.:
P.O. Box
1118
Virginia
City, NV 89440
Tel
775.847.4755
Fax
800-750-5740
info@comstockmining.com
www.comstockmining.com