La Jolla, CA (May 6, 2019) Tonogold Resources, Inc. (“Tonogold”) (OTC: TNGL) today announced significant progress toward the completion of the acquisition of certain mineral properties from Comstock Mining Inc. (“Comstock”) (including 100% ownership of the Lucerne deposit and the historically important and significant Gold Hill and Virginia City claims), originally announced on January 16, 2019 (“Acquisition Assets”).
Tonogold has secured significant interest for funding the Acquisition Assets and is finalizing negotiations of optimal terms and allocations. Tonogold has also executed a Terms Sheet with Nebari Holdings, LLC (“Nebari”) on May 3, 2019, for a $5 million, debt financing with the option for drawing an additional $25 million for development, production start-up and working capital, subject to customary due diligence and closing conditions. The initial $5 million facility (which is subject to customary due diligence and the execution of formal documentation over the next few weeks) will partially fund the purchase of the Acquisition Assets, minimizing dilution to our current shareholders. Nebari is Comstock’s current lender.
Tonogold has paid Comstock $2.35 million in non-refundable deposits toward the acquisition price with an additional $0.65 million scheduled for May 2019 and leaving $8.5 million due upon closing.
Mr. Mark Ashley, President & CEO of Tonogold stated; “Our diligence is paying off with the assembly of an outstanding group of strategic resource investors who understand the significance of the gold and silver resource at Lucerne and the greater exploration potential of the whole northern portion of the Comstock District. We look forward to accelerating and consummating the transaction announced with Comstock in January 2019, in the next few months.”
Accordingly, Comstock and Tonogold have reached an agreement that provides additional extension opportunities for closing on the Acquisition Assets, primarily to allow for a more thorough and efficient financing and closing process. Comstock agreed to provide Tonogold with the flexibility to close on Acquisition Assets on or prior to August 30, 2019, subject to making additional $1 million monthly nonrefundable deposits in June 2019, and July 2019. If the closing occurs after the original deadline of May 31, 2019, Tonogold will also reimburse Comstock for all incremental interest costs and substantially all property carrying costs, as previously agreed.
The amendment requires Tonogold to deliver $11.5 million in cash at closing, less the amounts of the cumulative non-refundable payments made by Tonogold at that time, and a one-year maturing, interest bearing note converting into shares in Tonogold if not repaid previously, to Comstock with a principal amount of $3,500,000. The conversion price will be the lowest of (1) the 20-day volume weighted closing price of Tonogold shares prior to conversion, (2) Tonogold’s most recent private placement or (3) Tonogold’s initial public offering price.
Mr. Corrado De Gasperis, Executive Chairman and CEO, stated, “Tonogold has made consistent progress toward closing on the January 2019 agreement and has worked effectively to secure sufficient strategic investment capital for closing this transaction and funding Lucerne development. The effort and results are both outstanding and we look forward to closing this transaction in the next few months.”
Tonogold is also in an advanced stage of negotiations with a third party over securing further significant claims in the region, with Comstock’s concurrence and support. As a consequence of the commercial sensitivities of these negotiations and the significance of the regional exploration potential that will be reflected in the 43-101 Technical Report including the Resource estimate for Lucerne (“Technical Report”), Mine Development Associates (“MDA”) of Reno, Nevada has been requested to temporarily defer issuing the Technical Report at this time.
Notwithstanding the deliberate delay in issuing the Technical Report, the project continues to advance as planned with Tonogold having recently engaged MDA to undertake and complete a 43-101 compliant Preliminary Economic Assessment (“PEA”) on the Lucerne Deposit. This is expected to be completed by July 2019.
The decision to delay the publication of the Technical Report will impact the timing of the TSXV listing, although this will not affect the acquisition timing, nor our overall project advancement objectives.
About Tonogold Resources, Inc.
Tonogold Resources, Inc. is a minerals exploration company based in California. Tonogold Resources is a leading junior mining company focused in developing advanced stage projects in the Americas. The company´s strengths are represented by two pillars; its unique capacity to identify assets with the potential to become well stablished mines, thus, its actual project portfolio and a strong platform that facilitates project development. For more information on the company visit their website www.tonogold.com.
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. Forwardlooking statements are statements that are not historical facts. All statements, other than statements of historical facts, are forward-looking 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; 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 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 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’ssecurities. 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