VIRGINIA CITY, Nev., May 22, 2013 /PRNewswire/ -- Comstock Mining Inc. (the "Company", "Comstock", or "we") (NYSE MKT: LODE) announced today that it has paid down, in full, the balance of its $5 million secured revolving facility (the "Revolving Facility") held with the Resource Income Fund ("RIF"), through Auramet Trading, LLC ("Auramet") acting as gold agent. The full pay down of the RIF Revolving Facility was completed on May 17, 2013, well ahead of schedule. The Company has now delivered 3,720 ounces of gold, originally scheduled in 12 semi-monthly deliveries of 310 ounces each beginning February 2013 and extending until December 2013, if any amounts were redrawn and outstanding under the agreement. The initial loan of $5 million was drawn July 30, 2012 and the Company has not drawn any additional amounts.
"Our recent increases in production allowed us to repay the ounces ahead of schedule and at a substantial discount to the original forward sale price," stated Corrado De Gasperis, President and CEO of Comstock Mining. "In the past month we have poured an average weekly rate exceeding the 425 gold equivalent ounces recently announced, with two weeks exceeding 500 gold equivalent ounces. This accelerated pay down strengthens our cash flow and liquidity."
Repayment of the loan was made in physical gold based upon a forward sale price of $1,600 per ounces. Due to the recent decline in gold prices, the Company prioritized repayment of the Revolving Facility, opportunistically delivering ounces below the forward sales price and exploiting the hedge. As a result, the payments occurring below $1,600 per ounce resulted in a gain of approximately $325,000, significantly reducing the cost of capital for this loan.
The Company continues ramping up its production and exceeded its targeted production rate of 400 ounces per week (initially targeted for the end of April) in March, and averaged over 425 gold equivalent ounces for the six weeks through the end of April 27, 2013. The Company is continuously adjusting its operations to improve grade, maximize yields and increase tons crushed and stacked, and currently anticipates production rates to stay above the 400 gold equivalent ounces per week in the second half of the year, cumulatively producing 20,000 gold equivalent ounces in 2013.
Mr. De Gasperis concluded, "Our team has worked diligently over the past six months to stabilize our mining and processing operations, increase throughput and reduce operating costs. We remain on track to achieve our first full year production goal of 20,000 gold equivalent ounces, and to meet or exceed our cost objectives, positioning us well for further production growth."
About Comstock Mining Inc.
Comstock Mining Inc. is a producing, Nevada-based, gold and silver 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 commenced production in 2012. The Company continues acquiring additional properties in the district, expanding its footprint and creating opportunities for further exploration and mining. The near term goal of our business plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (proven and probable) of at least 3,250,000 gold equivalent ounces from our first two resource areas, Lucerne and Dayton, achieve initial commercial mining and processing operations in the Lucerne Mine with annual production rates of approximately 20,000 gold equivalent ounces and significantly grow production through the commercial development and expansions of both the Lucerne and Dayton Mine plans.
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, timing and accounting for restructuring charges, gains or losses on debt extinguishment, derivative liabilities and the impact thereof; productivity, business process, rationalization, restructuring, investment, acquisition, consulting, operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory environment; offerings, sales and other actions regarding debt or equity securities; 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: the 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.
SOURCE Comstock Mining Inc.