Comstock Mining shares climb on sale of Lucerne properties to Tonogold

Shares of Comstock Mining Inc (NYSEAMERICAN:LODE) gathered pace Monday after the Nevada mining company unveiled a definitive agreement to offload its Lucerne properties in Storey County, Nevada, to Tonogold Resources Inc (OTCMKTS:TNGL) Inc for $15 million in cash and $8 million in future lease and reclamation obligations as well as a retained 1.5% net smelter return royalty.

The transaction is expected to close between March and May of this year.

Investors were optimistic about the deal, sending Comstock shares up by 15.9% to $0.16 and Tonogold up by 47.5% to $0.15.

READ: Comstock Mining Inc announces asset sale; reports lower costs in 3Q results report

For its part, Tonogold is now seeking a listing on the Toronto Venture Exchange by way of an initial public offering to coincide with a capital raising to provide the funding to complete this acquisition and to fund the advancement of the project over the next 12 months.

The new agreement replaces a pact between the two companies entered into in October 2017 under which Tonogold had a right to earn a 51% interest in the Lucerne gold project by investing $20 million into the project over 42 months.

“These transactions position Lucerne and our partner, Tonogold, with a tremendous platform for developing and delivering mine production,” said Comstock CEO Corrado De Gasperis in a statement. 

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As part of the deal, Comstock, which is based in Virginia City, Nevada, will also enter into a new option agreement to lease its permitted American Flat property, plant and equipment to Tonogold for crushing, leaching and processing material from the Lucerne mine.

Comstock Mining is a Nevada-based gold and silver mining company with extensive property in the Comstock district. The discovery of gold and silver deposits near Virginia City in 1859 identified a valuable concentration of precious metals in an area that is now known as the Comstock Lode.

Headquartered in La Jolla, California, Tonogold is a mining company that is focused on advanced exploration of properties in Nevada and Mexico. 

Contact Ellen Kelleher at [email protected]

Story by ProactiveInvestors