La Jolla, California, April 20th, 2020. TONOGOLD RESOURCES, INC. (OTC: TNGL) (“Tonogold” or the “Company”) is pleased to announce a number of initiatives aimed at enhancing and strengthening the Company in preparation for its initial exploration and evaluation program at the Comstock Lode, Nevada.
https://backend.otcmarkets.com/otcapi/company/dns/news/document/41301/content
In December 2019, Tonogold acquired 100% of the rights to explore, develop and mine certain claims located on the world-class, historic Comstock Lode, in Storey County, Nevada (see map below). Since then, Tonogold has moved to significantly strengthen its board, prepare for an upgrade of its current Pink Sheet listing status, and underpin its medium-term financial position such that funds can now be dedicated to the first phase drill testing of the Comstock Lode. The drill program is expected to commence in the next two to three months and will include 40 holes drilled to an average depth of around 250 metres.
Together with the previously acquired Lucerne mine and resource area the Company controls a large, contiguous land position in the historic Comstock district, arguably the most productive high-grade gold and silver deposit in United States history. The Comstock lode produced over 8 million ounces of gold and almost 200 million ounces of silver, mostly between 1860 and 1890.
BOARD CHANGES
Tonogold has added significant technical strength to its team this week by making two additions to its board. Tonogold appointed Mr. Alan Edwards as non-executive director and Chairman and Dr. Thomas Vehrs as a non-executive director.
Mr. Alan Edwards
Mr. Alan Edwards holds both an MBA degree and a B.S. in mining engineering from the University of Arizona and is a broadly experienced mining professional who has been working in the industry for more than 35 years.
Mr. Edwards has held many senior roles within the mining industry, including Senior Vice President of Operations for P. T. Freeport Indonesia, Vice President of Operations for Kinross Gold Corporation, Chief Operating Officer for Apex Silver Mines, CEO of Oracle Mining, President and CEO of Frontera Copper Corp., and President and CEO of Copper One, Inc.
Mr. Edwards is currently the President of AE Resources, and a non-executive director for Orvana Minerals, Entrée Resources, Ltd., and Americas Gold and Silver Corporation.
Mr. Edwards stated, “The Comstock Lode is noted for the immense wealth it generated. I’m looking forward to working with Tonogold to execute a modern exploration program on the lode. The potential to apply modern mining and extracting processes to the remaining lode is exciting.
Dr. Thomas Vehrs
Dr. Thomas Vehrs holds Ph.D. and M.A. degrees in geology from Syracuse University and a B.S. degree in geology from the University of Wisconsin at Oshkosh and is a highly regarded exploration geologist with over 40 years of experience in mineral exploration, mine development, and mine operations. Dr. Vehrs has developed and managed exploration programs in the United States, Chile, Peru, Bolivia, Colombia, Argentina, Mexico, and Central America with a strong focus on epithermal and porphyry-related mineralized systems.
Dr Vehrs served as Vice President of Exploration for Fortuna Silver Mines for ten years. In addition, Dr. Vehrs has consulted for and/or held senior positions with Gold Fields, Cyprus-Amax, Western States Minerals Corporation, and Anaconda Minerals Company, as well as being a founder, President, and COO of Aquest Minerals Corporation.
Currently, Dr. Vehrs serves as a non-executive director for Rise Gold Corporation.
Dr. Vehrs is a Founding Registered Member of The Society for Mining, Metallurgy, and Exploration, a Fellow of the Society of Economic Geologists, and a Member of The Geological Society of America.
Dr. Vehrs stated, “The potential for discovery of high-grade gold and silver mineralization at the worldrenowned Comstock district is very significant. I look forward to working with the Tonogold team to advance the exploration and development of the project. The Comstock Lode was discovered in the mid- 19th century and is well known for its high-grade bonanza deposits. Other than minor exploration and development in the near-surface portions of the lode deposit in the late 20th century, the deposit has not been systematically or thoroughly explored employing current exploration models and methods.”
Mr. Brian Zamudio
Mr. Brian Zamudio, a director of Tonogold since 2004, has stepped down as a director in order to facilitate the new appointments and to pursue other interests.
Tonogold CEO Mark Ashley stated that he and the Tonogold team are very excited about the new appointments and looked forward to working with the new members of the board. Mr. Ashley also thanked Mr. Zamudio on behalf of the board and shareholders for his tremendous efforts and support during his tenure as director of the Company.
FULLY REPORTING STATUS
Tonogold has recently decided on a USA top 20 audit firm to become the Company’s independent auditor. This appointment is expected to be formalized within the next 10-days. Until now, Tonogold’s financial statements have not been audited and the main reason Tonogold has been a “non-reporting entity.
Tonogold expects the audit of Tonogold’s 2018 and 2019 financial statements to be completed during June 2020. This will represent a major step towards accomplishing Tonogold’s goal of becoming a fully reporting entity pursuant to SEC regulations, which it embarked on earlier this year with the appointment of SEC specialist law firm. Becoming a fully reporting entity will allow Tonogold to consider a number of options to upgrade its listing status to, for example, NYSE and/or TSXV later in 2020.
RESTRUCTURE OF CMI TRANSACTION
Tonogold recently restructured and deferred $5.475 million associated with the Comstock acquisition, (previously payable by July 2019) enabling substantially all of our committed capital for use on the exploration and development program of historically known, high grade vein targets and structures on the Comstock Lode.
Under the terms of the restructured agreement, Tonogold issued CMI a 12% loan note with a principal amount of $5.475 million (the “Note,”), with $1 million payable on October 15, 2020, and the remaining $4.475 million payable on September 20, 2021. Tonogold has the right to prepay the Note at any time without penalty or premium.
At the Note’s maturity on September 20th, 2021, CMI has the right to convert the Note into common shares of Tonogold at a conversion price equal to the lower of (1) 85% of the twenty (20) consecutive trading day volume weighted average price of Tonogold common stock or (2) $0.40 per common share.
This restructuring reduces the demands on Tonogold’s treasury and allows Tonogold to focus on executing and completing a “Proof of Concept” exploration/evaluation program. The “proof of concept” program will be aimed at confirming the Company’s belief that due to the improvement in the economic climate for gold mining between the late 1800s (when most of the precious metals were mined from the region) and today, significant mineralization remains which previous generations of miners left behind as waste.
Tonogold estimates that miners in the late 1800’s required a head grade of around 50 g/t gold in order to break-even. Underground miners today require around 5 g/t gold. The following factors caused the high nineteenth century breakeven grade:
• Low relative gold price – the gold price was fixed at $20.67 per ounce.
• Lack of technology – manual mining methods resulted in low productivity and a high unit cost, around $21/tonne.
• Low metallurgical recoveries – nineteenth century miners recovered only about 65% of the precious metals contained in the processed material.
Tonogold’s Interest in Story County, Nevada, shown in blue outline.
Forward-Looking Statements
This press release and any related calls or discussions may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Comstock and Tonogold. Forward-looking statements are statements that are not historical facts. All statements, other than statements of historical facts, are forwardlooking statements. Forward-looking statements include statements about matters such as: capital raising activities and negotiations; market conditions; future changes in exploration activities, production capacity and operations; future exploration, production, operating and overhead costs; production of feasibility studies, technical reports or other findings related to estimated mineralization; operational and management restructuring activities; capital expenditures (by Comstock, Tonogold or other parties) and their impact; investments, acquisitions, joint ventures, strategic alliances, business combinations, asset sales; consulting, operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory environment; 2 offerings, sales, equity dilution, and other actions regarding debt or equity securities; including a redemption of the debenture, 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 the management of Comstock and Tonogold 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 guaranteeing, 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 discussed in Item 1A, “Risk Factors” of the annual report on Form 10-K of Comstock. Occurrence of such events or circumstances could have a material adverse effect on the business, financial condition, results of operations or cash flows or the market price of Comstock and Tonogold’s securities. All subsequent written and oral forward-looking statements by or attributable to Comstock, Tonogold or persons acting on their behalf are expressly qualified in their entirety by these factors. Neither Comstock nor Tonogold undertake any 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 other securities or Tonogold.
Contact Information for Tonogold
Mark Ashley
President and CEO
M: +1 310 409 6504
E: mjashley@tonogold.com