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Comstock Shares More than Double on Positive Q2 Earnings and Strategic Plan Execution

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Shares of Comstock Mining reached a new 52-week high after the firm reported positive Q2/20 financial and operating results highlighting debt restructuring, non-mining asset sales and a new mercury remediation venture.

Underground mine stock photo

Comstock Mining Inc. (LODE:NYSE.MKT) today announced that it filed its Form 10-Q quarterly report last week and reported selected strategic and financial results for the second quarter ended June 30, 2020. The firm highlighted that it also has received and is assembling its first mercury remediation system.

The company stated that in Q2/20 it eliminated the current senior secured debenture from a combination of $0.9 million in accelerated cash proceeds from Tonogold and new, unsecured promissory notes, with favorable, extended terms. The firm noted that as of June 30, 2020, its investments in Tonogold Resources Inc. are valued at $10.4 million, representing a $1.6 million increase in fair market value during Q2/20, which was a positive driver for net income in the quarter.

The company further noted that its investment in Mercury Clean Up LLC (MCU) increased to $1.75 million as of June 30, 2020, as commencement of the on-site installation of the Comstock mercury remediation system has begun. The firm added that extended agreements for the sale of the company's two non-mining properties in Silver Springs, Nev., are in place. Both sales are expected to close in Q3/20 and should result in proceeds of $10.1 million, the company stated.

The company reported that for Q2/20, total operating costs were $1.3 million, which showed a $0.2 million (15.9%) improvement compared to Q2/19. The firm stated that net income improved to $1.3 million, or $0.05 per share in Q2/20, compared to a net loss of $2.1 million, or $0.13 loss per share in Q2/19. Comstock advised that this was driven primarily by investment gains and lower costs.

The company's Executive Chairman and CEO Corrado DeGasperis commented, "We have grown and strengthened our balance sheet, extinguished our secured debt, and deployed and installed the first MCU – Comstock system as we prepare for material testing within the boundaries of the Carson River Mercury Superfund Site (CRMSS). We have also reserved shipping containers as we prepare to ship our first international unit to the Philippines."

The firm stated that it has enacted its transformational strategic plan that focuses on high-value, cash-generating, precious metal-based activities. These areas include environmentally friendly, and economically enhancing mining technologies such as mercury remediation and others. The company indicated that "its goal is to deliver over $500 million of value from its existing assets and the commercialization of these environmental mining technologies, partnerships and ventures."

The company provided an update on its mercury remediation activities and stated that "its American Flat processing platform is fully permitted, and the infrastructure has been prepared, including pads, power, water and retaining walls, for the delivery of the brand new MCU mercury remediation system." The firm added that the MCU's system is being assembled and getting prepped for mercury testing.

The firm stated that is also owns net non-mining assets presently valued at over $25 million. These include over $10 million in the Silver Springs assets, $10.4 million combined in its investment in Tonogold convertible preferred stock and common shares and a $4.475 million promissory note from Tonogold.

The company pointed out that MCU-P plans to commence reclamation operations in the Philippines in Q3/20. The firm stated that "this represents the first real international opportunity for large-scale mercury remediation and environmental reclamations, using MCU's systems, with the objective of establishing MCU as a leader in mercury remediation projects, and in particular, contaminations caused by Artisanal and Small-Scale Miners."

Comstock Mining started off the day with a market capitalization of around $63.8 million with approximately 80.79 million shares outstanding. LODE shares opened 72% higher today at $1.36 (+$0.57, +72.15%) over Friday's $0.79 closing price and reached a new 52-week high price today of $2.12. The stock has traded today between $1.32 and $2.12 per share and is currently trading at $1.79 (+$1.00, +126.58%).


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