DRILLING COMMENCES ON THE COMSTOCK LODE
La Jolla, California, September 8th, 2020. TONOGOLD RESOURCES, INC. (OTC: TNGL) (“Tonogold” or the “Company”) is pleased to announce the commencement of its initial exploration and evaluation program at the Comstock Lode, Virginia City, Nevada, with the first drill hole having commenced over the weekend. This will be the first modern exploration of the historically significant Comstock Lode.
OVERVIEW.
Drilling.
Tonogold recently entered into an agreement with DrillRite LLC, a highly experienced Nevada-based drill contractor, for an initial 26,000-meter (85,000 feet) program utilizing both Reverse Circulation (“RC”) and Core rigs to test the main Comstock Lode.
This initial program is estimated to cost $7 million of which the drill contractor has elected to receive 50% in Tonogold shares at a pre-agreed price of 30 cents per share. Luke Horschel, Operations Manager of DrillRite stated: “We were motivated to negotiate the share component of the drill contract because we recognized the high caliber of Tonogold’s exploration asset”.
Details and objectives of the drill program are discussed below under the heading “Drill Program”.
Equity Raising.
The Convertible Note (Series 4) was successfully completed toward the end of August 2020 having raised a total of $9 million since mid 2019, most of which was used to fund the acquisition of the Comstock properties.
Last week, Tonogold completed a $4.25 million equity raising by placing 14.2 million new shares at 30 cents per share with a half warrant exercisable at 50 cents per share with commitments for a further $250,000 of the placement.
Comstock Acquisition funding.
Tonogold recently agreed to pay the $1 million due to Comstock Mining Inc (“CMI”) in October 2020 early and as a result received a $100,000 discount. This was paid in July 2020. The final amount of $4.45 million is due to be paid to CMI for the acquisition of the Comstock Lode assets in September 2021. At that time CMI has the option to take 11.1 million shares in Tonogold in lieu of the cash.
Treasury.
Tonogold is on a strong financial footing as it begins its initial drill program having just under $6 million in the bank. (That $6 million sum is in cash and does not include the $3.5 million credit Tonogold has with 2 the drill contractor which Tonogold made in exchange for the issue of shares at 30 cents per share as mentioned above.)
Drill Program.
Tonogold’s initial drill program will focus on the 3-kilometer strike length of the main Comstock Lode that Tonogold controls (see long-section below), where historic production (mainly in the late 1800s) recovered over 9 million ounces of gold equivalent (“AuEq”). The old-timers mined approximately 6 million tonnes at 72g/t AuEq during the lat 1800s. Most of this production came from the upper 500 meters, where favorable mining conditions prevailed thanks to the development of a massive dewatering system through the Sutro Tunnel (shown in the long-section below). An influx of water, poor ventilation, and heat coupled with inadequate 19th century mining technology hampered attempts to mine below the Sutro tunnel level in the late 1870s and early 1880s.
Plan view of Tonogold’s Interest in Story County, Nevada, shown in blue outline.
The economic conditions prevailing during the late 1800s mining era, required a minimum head grade of around 50 g/t AuEq merely to breakeven, compared to around 5 g/t AuEq today (for underground mining).
Tonogold’s historical research and economic analysis supports the contention that significant tonnes containing between 5 and 50 g/t AuEq were likely left in situ by nineteenth century miners.
Tonogold’s initial drill program on the Comstock Lode will have a two-tier focus:
1. Drilling within the upper 500 meters (above the “Sutro Tunnel” level) of the strike as a “Proof of Concept” which, due to the relatively dry ground conditions prevailing as a result of the continual drainage of ground water by the Sutro Tunnel, will allow RC drilling methods to be employed.
2. Drilling below the Sutro Tunnel (500-meter) level as further Proof of Concept, as well as targeting areas where historic reports provide indications of “high-grade” intercepts. These holes will be drilled using an RC rig down to the Sutro Tunnel level (dry) and a core rig to drill the area known to have significant water.
The initial program is expected to take 9-months with additional rigs being utilized later in the program.
The program also includes modest shallow drilling on the Occidental Lode east of the main Comstock Lode.
Samples will be sent to ALS Global in Reno for analysis with an expected turnaround period of around 4 to 5 weeks.
Tonogold will provide investors with regular updates on the progress and results of the drill program.
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: mjashley3@gmail.com
CORPORATE STRENGTHENING INITIATIVES
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
TONOGOLD SUCCESSFULLY CLOSES ON THE COMSTOCK ACQUISITION
La Jolla, CA (November 19th, 2019) Tonogold Resources, Inc. (“Tonogold”) (OTC: TNGL) announces the Closing of the Comstock acquisition with Comstock Mining Inc (“Comstock”).
Earlier this year, Tonogold and Comstock Mining Inc (“Comstock”) entered into an agreement whereby Tonogold would acquire (i) a 100% interest in the Lucerne project, (ii) an exclusive 20-year lease to use, operate and manage Comstock’s processing facilities, plant, infrastructure and mining claims (known as the American Flats Properties) and (iii) 100% rights to explore, develop and mine Comstock’s Storey County claims, including those covering the significant historic production at Gold Hill and Virginia City (“Storey Exploration Claims”) for total consideration of $15 million. The Completion of the Storey Exploration Claims occurred in September 2019.
Having met the minimum amount due at Closing of $5.925 cash plus the issue of $3.5 million Redeemable Convertible Preference Shares (“RCP Shares”), Tonogold now has a 50% interest in Comstock Mining LLC (Comstock LLC) – a Company that owns the Lucerne Deposit and exclusive rights to lease and use Comstock’s processing facilities and associated infrastructure.
The remaining amount due of $5.575 million represents the deferred consideration, with payments scheduled through to June 2020. The deferred consideration element is interest free. Each payment made under the deferred consideration will result in Tonogold’s interest increasing pro rata with Tonogold holding 100% in Comstock LLC upon the final deferred payment being made.
The RCP Shares are redeemable at Tonogold election at any time at a 20% premium over the face value and are convertible at Comstock’s election at any time after May 22nd 2020 if they hadn’t previously been redeemed by Tonogold.
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. Forward-looking 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; 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 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’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
TONOGOLD SIGNIFICANTLY ADVANCES COMSTOCK ACQUISITION
La Jolla, CA (September 23rd, 2019) Tonogold Resources, Inc. (“Tonogold”) (OTC: TNGL) announces significant advancement in respect of its Comstock Lode acquisition.
On January 24th 2019, Tonogold and Comstock Mining Inc (“Comstock”) entered into an agreement whereby Tonogold would acquire (i) a 100% interest in the Lucerne project and (ii) 100% rights over Comstock’s Storey County claims, including those covering the significant historic production at Gold Hill and Virginia City (“Storey Exploration Claims”) for total consideration of $15 million. The Completion of both were to occur simultaneously at Closing.
As a result of constructive negotiations over the past few weeks, Comstock and Tonogold have agreed to separate these two components and the parties have entered into a modification agreement whereby effective September 16th 2019, Comstock unconditionally granted Tonogold 100% rights to explore, develop and mine over the Storey Exploration Claims, which cover some 3,200 acres (319 separate claims).
In consideration, Tonogold has agreed to the early termination of the Joint Venture Agreement entered into by the parties in October 2017, which provided Tonogold with the right to earn a 51% interest in the Lucerne project. Under the January 2019 agreement, termination of the JV arrangement was to occur at Closing, when Tonogold assumes 100% ownership of Lucerne project.
Tonogold has paid Comstock $7.425 million to date toward the $15 million total consideration (including a redeemable preference share for $3.5 million) and is due to pay $3.635 million on Closing, which is now required to occur on or before October 15th 2019, with the remaining $3.95 million payable over 6-months commencing January 31st 2020.
In addition, Tonogold advises that its Convertible Loan Note (Series 3) has formally closed.
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. Forward-looking 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; 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 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’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
TONOGOLD ANNOUNCES AMENDMENT TO THE COMSTOCK ACQUISITION
A More Effective Route to Completion of the Comstock Acquisition Assets.
La Jolla, CA (August 14th, 2019) Tonogold Resources, Inc. (“Tonogold”) (OTC: TNGL) announces that it has today entered into an agreement with Comstock Mining Inc (“Comstock”) (the “New Agreement”) which provides for a more effective and efficient route to completion of the acquisition from Comstock Mining Inc (“Comstock”) of certain mining and exploration assets in Storey County (including 100% interest in the Lucerne properties (“Lucerne”) and the historically important and significant Gold Hill and Virginia City claims) (the “Acquisition Assets”) first announced on January 24th 2019.
To date, Tonogold has paid Comstock $6.9 million toward the total $15 million consideration by way of $3.4 million in cash plus $3.5 million in redeemable preference shares and will be making a further payment of $0.8 million prior to August 19th 2019, leaving $7.3 million due. Under the new agreement, Comstock has agreed to defer $4 million of the remaining consideration leaving $3.3 million due to be paid at Closing.
Closing is scheduled to occur on or prior to August 30th, 2019 but under the New Agreement Tonogold has the right to extend this date by one month to September 30th 2019 by issuing Comstock with $250,000 in redeemable preference shares.
The $4 million deferred element is interest free and is payable over 7-months (commencing in November 2019). Tonogold can accelerate the deferred consideration payments at any time without penalty or cost.
The new agreement eliminates the requirement for Tonogold to arrange any third-party debt (as previously contemplated), resulting in significant and real savings to Tonogold.
In order to comply with Comstock’s existing commitments, Tonogold will be issued with a pro-rate shareholding in Comstock’s 100% subsidiary which holds the assets being acquired by Tonogold based on the cash consideration paid, with an initial 50.28% controlling interest being transferred to Tonogold at Closing and increasing upon each payment made under the $4 million deferred consideration provisions. Once the last deferred payment has been made, Tonogold will have 100% ownership of the Acquisition Assets.
Mark Ashley, Tonogold’s President and CEO stated “This New Agreement with Comstock paves the way for a more cost effective and substantially more efficient route to Closing. The New Agreement2 further highlights the significantly strong relationship that has evolved and developed between our two companies over time”.
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. Forward-looking 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; 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. Forwardlooking 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 and3 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
TONOGOLD’S MINERAL ASSET ACQUISITIONS AND FINANCING UPDATE
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
TONOGOLD RESOURCES TO ACQUIRE 100% OF THE LUCERNE GOLD DEPOSIT AND EXPANDS ITS POSITION ON THE COMSTOCK LODE (VIRGINIA CITY, NEVADA)
La Jolla, California, January 28th 2019. TONOGOLD RESOURCES INC. (OTC: TNGL) (“Tonogold”) is pleased to announce that it has today entered into a comprehensive and binding agreement (“New Agreement”) with Comstock Mining Inc (“Comstock”) which, on completion will provide Tonogold with, amongst other matters, 100% of the Lucerne project (including the Lucerne gold/silver deposit) in Storey County, Nevada.
This New Agreement leverages off the agreement entered into in October 2017, under which Tonogold had the right to earn a 51% interest in the Lucerne gold project by investing $20 million into the project over 42-months beginning October 2017. The October 2017, agreement will be superseded by the New Agreement once completion has occurred.
Tonogold will now be seeking a listing on the Toronto Venture Exchange (TSXV) by way of an IPO to coincide with a capital raising in order to provide the funding to complete this acquisition and to fund the advancement of the project over the next 12-months. Further details in this respect (timing, IPO terms, participation rights of current Tonogold shareholders, etc) will be advised to the market in due course.
Under the New Agreement, Tonogold will pay Comstock $15 million, of which a non-refundable deposit of $1 million was paid on January 23rd 2019 (on signing the New Agreement), with the remaining $14 million payable, at Tonogold’s election, by either:
1. $9 million cash on Completion plus $5 million cash 12-months from Completion, or
2. $10.5 million cash plus $1.75 million in Tonogold shares (at the IPO price) at Completion plus $1.75 million in cash or, at Tonogold’s election, Tonogold shares 12-months from Completion at the weighted average share price at that time.
Under alternative 1 above, Comstock will be granted security in respect of the $5 million deferred payment. Under alternative 2, Comstock will not have any security interest, thus providing Tonogold the flexibility to arrange a third-party debt facility to support the TSXV equity raising.
Completion of the transaction will occur once Tonogold has formally secured the funding required. Under the New Agreement, Completion is scheduled for March 31st 2019, although Tonogold has the right to extend this date to April 30th 2019 by paying Comstock a further $1 million deposit and again to May 31st 2019 for another $1 million. In both cases the additional deposits shall be applied in full to the cash payment due on Completion.
In addition, Comstock will be granted a Net Smelter Return Royalty of 1.5% over future production from Lucerne.
EXPANDED LAND POSITION.
Under the October 2017 agreement, Tonogold’s right to acquire 51% of the Lucerne project comprised some 1,200 acres of mining claims within Storey County. The New Agreement provides Tonogold 100% control over the 1,200 acres being the Lucerne project plus 100% exploration, development and mining rights (via a lease arrangement) over Comstock’s remaining mining claims in Storey County (totaling just over 2,800 acres) (“Tonogold’s Expanded Land Position”), which cover major areas of the highly significant past Comstock Lode producers to the north of Lucerne, including the Belcher deposit which operated between 1863 and 1916 (1.9 million ounce AuE producer), Crown Point (1.8 million AuE ounces), Consolidated Imperial (1.1 million AuE ounces). A more comprehensive list is provided under the heading “The Comstock Lode – History” section below.
The provisions in respect of Tonogold’s Expanded Land Position of the New Agreement enables Tonogold to initiate and roll-out a significant new leg to its regional strategy, which will be the focus of a systematic and aggressive exploration program commencing as soon as possible. The results of this program are expected to substantially change (improve) the already significant value accretive nature of our acquiring 100% of Lucerne.
Comstock will be granted a Net Smelter Return royalty of 3% from production from the Tonogold Expanded Land Position Area, reducing to 1.5% after the first year of production.
Further details of Tonogold’s Expanded Land Position strategy are outlined below under the heading “The Comstock Lode – History”.
ACCESS TO AND USE OF THE PROCESS FACILITIES.
Under the October 2017 agreement, Tonogold had an option to acquire a 51% interest in the process facility, plant, infrastructure and 983 acres of mining claims to the west of Lucerne (known as the American Flats properties) by paying Comstock $25 million. An alternative arrangement was negotiated and agreed between Comstock and Tonogold and announced to the market in April 2018, which provided Tonogold the right to use the American Flats property for a fee of $1 per ton of material treated plus $1 million per annum.
Under the New Agreement, Comstock shall retain ownership of the American Flats Property but provides Tonogold an option for exclusive operating rights via a 20-year lease to use, operate and manage the American Flats properties, with Tonogold paying Comstock $1 per ton of material treated (variable rate) plus $1 million per annum (fixed rate) commencing once a production decision is made, but with the following adjustments:
i. The variable rate shall reduce to $0.50 per ton once the cumulative payments (both fixed and variable) made to Comstock under this arrangement have reached $15 million
ii. The variable rate shall reduce to $0.25 per ton once the cumulative payments (both fixed and variable) made to Comstock under this arrangement have reached $25 million (but with a minimum payment of $100,000 per quarter)
iii. The fixed rate of $1 million pa shall be terminated once the cumulative payments (both fixed and variable) made to Comstock under this arrangement have reached $25 million
HOLDING COSTS.
i. Tonogold shall be responsible for meeting (or continuing to meet) the carrying costs (lease costs, permits, insurance, annual claim fees, property tax, etc.) associated with the areas covered by the New Agreement, including:
a. The Lucerne Project – $1 million pa
b. The American Flats Property $1 million pa, and
c. The Expanded Storey County Claims – $0.1 million pa (new commitment)
ii. The total holding costs to be met by Tonogold pursuant to the New Agreement is estimated at $2.1 million per year, of which over $1 million per year having been Tonogold’s responsibility since the October 2017 agreement.
STRUCTURE.
The New Agreement provides for Tonogold acquiring a 100% ownership in Comstock Mining LLC (currently a wholly owned subsidiary of Comstock), which owns the mining claims as well as the various permits required to operate, including the Storey County Special Use Permit for mining and processing that was recently extended until 2034.
LUCERNE UPDATE.
Mine Development Associates (“MDA”), of Reno, Nevada are in the final stages of completing an updated 43-101 Resource Estimate for Lucerne, which follows Canadian Institute of Mining guidelines and will be reported in a Canadian NI 43-101 Technical Report. That updated report will form the foundation from which to launch Tonogold’s previously stated target of securing production of around 80,000 ounces of gold per annum generating around $50 to $60 million of operating cash flow for an initial 4 to 5 years commencing in approximately 2-years.
THE COMSTOCK LODE – HISTORY.
The discovery of major gold and silver deposits near Virginia City in 1859, resulted in the highest and most valuable concentration of precious metals ever established over a two- square mile area anywhere on the planet at that time. This area is known as the Comstock Lode.
Most of the 8 million ounces of gold and 200 million ounces of silver produced from the Comstock Lode, occurred during the 20-year period 1860 through 1880. It is reported that the best individual year was 1877 when some 740,000 ounces of gold and 20 million ounces of silver were produced.
Over 80% of the historic production came from 20 deposits (which recovered ~6.9 million ounces of gold and 173 million ounces of silver (11.3 million ounces of gold equivalent) from 7.8 million tonnes of ore (27 g/t gold plus 690 g/t silver or ~45 g/t AuE). See Table 1 below.
The table below provides details of some of the more significant production contributors from the Comstock Lode since 1859, all, with the exception of the Ophir Mine, of which are covered by Tonogold’s Expanded Land Position.
As a result of the low prices for precious metals during the mid to late 1800’s (gold ($19/oz) and silver ($0.50/oz)), profitable operations required a minimum grade of around 30 g/t of gold (or gold equivalent) to merely cover the cost of operations, estimated at that time to have been around $20 per ton.
At grades averaging up to 66 g/t AuE (1.9 ounces of AuE per ton), revenue of up to $36 per ton and costs of around $20 per ton, provided good margins during the second half of the 1800’s. However, those margins were eroded as the negative impact of inflation on costs were not compensated by a corresponding increase in the gold price (the result of the gold price being “fixed” to the US dollar (the “gold standard”) throughout this period), which would have forced the closure of many of the mines during the early 1900’s.
Only when the gold standard was abolished by President Nixon in the early 1970’s and the gold price was allowed to float, has its value improved, such that the current price ($1,250/oz) it is some 2.4 times higher today than the CPI adjusted price in 1860 ($530/oz).
In addition, significant technological advancements in mining and metal extraction have seen costs reduce by at least 200% in real terms since 1860.
The combination of macro-economic factors highlighted above, coupled with the regions proven world class endowment, and securing 100% rights over the significant and contiguous landholding that the New Agreement provides, results in an unprecedented opportunity for Tonogold to quickly and substantially increase the resource base.
In this regard, Tonogold’s initial exploration strategy at Comstock will be to:
1. Assess those deposits regarded as too low grade at that time (for example Occidental, Justice, etc.) who’s workings are regarded to have been more exploratory than productive to determine whether higher grades along the deposit and down dip would improve. These deposits offer an excellent opportunity for what is today regarded as high-grade discoveries which have been virtually untouched by historic mining activities.
2. Test the magnitude and continuity of the ore that the old timers left behind (as waste – i.e. less than ~20 g/t) that would be regarded as economic today,
3. To test the potential for both depth (down-dip) and lateral extensions of the bonanza grade structures that the old timers may not have realized existed due to lack of modern day exploration methods, equipment, techniques and geological understanding.
4. Assess and transact commercial opportunities to further consolidate our landholding in the region.
A drill program is planned to commence as soon as possible.
DURANGO.
Tonogold has determined that the exploration opportunities available from the New Agreement are significantly better than those of the three exploration projects in Durango, Mexico that Tonogold had optioned. As a result, Tonogold has decided not to exercise the option over these assets but instead to focus our resources on exploration in and around Lucerne and the Comstock Lode.
FOR FURTHER INFORMATION PLEASE CONTACT…
Mark Ashley (CEO Tonogold Resources Inc)
E: mjashley3@gmail.com
T: 858 456 1273
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 Tonogold. Forward-looking 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: 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 and timing and accounting for restructuring charges, gains or losses on debt extinguishment, derivative liabilities and the impact thereof; productivity, production slowdowns, suspension or termination, business process, rationalization and other operational initiatives; 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 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,” “target,” “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 discussed in Item 1A, “Risk Factors” of our annual report on Form 10-K. 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 other securities of the Company.
TONOGOLD RESOURCES INC. ANNUAL MEETING OF SHAREHOLDERS 2018
LA JOLLA, California, September 12th, 2018. Tonogold Resources Inc. (OTC:TNGL) (“Tonogold” or “the Company”) advises that it will be holding its Annual Meeting of Shareholders on Monday, September 24th at 11.30am at the Gold Hill Hotel, Virginia City, Nevada.
The Notice of Meeting and Proxy Statement (with details on how to vote) have been mailed to shareholders on record as at August 9th, 2018. The Notice of Meeting and Proxy Statement can be found on-line at tonogold.com/en/investors/legal-notices/
This year, we have arranged for shareholders to be able to vote on-line by going to website www.proxyvote.com. You will need your Control Number (shown in the box appearing on your Proxy Voting Card).
The purposes of the meeting are to:
- Approve and ratify the minutes of the prior meeting of the Stockholders;
- Elect the nominees to the Company’s Board of Directors to serve until the Company’s 2019 Annual Meeting of Stockholders; the nominees for election as Directors: Mark Ashley, Gustavo Mazon, Travis Miller, Jordan Moelis, Robert Kopple and Brian Zamudio;
- Approve an increase in the number of authorized shares from two hundred million (200,000,000) to seven hundred million (700,000,000) shares; and
- Any other business that may properly come before the meeting.
Following the meeting, Tonogold’s CEO will make a presentation on the Company’s short, medium and longer-term outlook and will take questions from shareholders.
Following the formal meeting and management presentation, there will be a tour of the Comstock site and infrastructure for shareholders and investors. We will attempt to accommodate all those who wish to participate in the site tour, but as numbers are restricted, it is recommended that you complete the on-line site tour request found at tonogold.com/en/2018-annual-meeting-of-shareholders/shareholders/ as soon as possible or contacting the Company by email at mjashley3@gmail.com or by telephone (+1 858 456 1273).
For those shareholders who won’t be able to attend the meeting in person, you will be able to view the presentations and follow the meeting in real time and ask questions via a Virtual Shareholder Meeting facility by going on-line to www.virtualshareholdermeeting.com/TNGL2018. In order to ask questions, you will need to sign-in using the unique Control Number appearing on you Proxy Voting Card.
Mark Ashley (President and CEO).
TONOGOLD RESOURCES EXERCISES OPTION WITH COMSTOCK LUCERNE DEPOSIT (VIRGINIA CITY, NEVADA)
La Jolla, California, April 9th 2018. TONOGOLD RESOURCES INC. (OTC:TNGL) (“Tonogold”) is pleased to announce that it has entered into the second phase of its option agreement with Comstock Mining Inc. (“Comstock”) and last week paid the scheduled $2 million to Comstock, pursuant to the agreement dated October 3rd 2017 (the “Agreement”), which was announced to the market by Tonogold on October 5th 2017.
The Agreement provides Tonogold an exclusive right to earn a 51% controlling interest in 1,162 acres of mining claims in the highly prospective Comstock Lode region in Virginia City, Nevada, which includes the Lucerne gold-silver Deposit, located in Storey and Lyon Counties, Nevada.
The decision by Tonogold, follows a detailed 6-month technical and economic assessment of the Lucerne deposit by Tonogold’s technical consultants, Mine Development Associates (“MDA”), of Reno, Nevada, which included the development of a new resource model.
At this time the resource and preliminary economic pit design work completed by MDA has provided Tonogold with confirmation that the resource at Lucerne is likely to support a technically and economically viable mining operation, although further data validation and verification will be required before MDA are able to provide Resource and Reserve estimates suitable for production planning and public reporting.
As foreshadowed in our October 5th 2017 announcement, the work over the past 6-months has confirmed that the Resource estimate for Lucerne is likely to be significantly lower than previously estimated by Comstock, mainly the result of (i) the cut-off grade of the previous estimate (at 0.007 ounces of gold per ton) being too low, (ii) high grade zones having overstated grade and tons within the overall resource grade and (iii) that a significant part of the official resource is at a depth below which economic extraction is contemplated.
Tonogold emphasizes again that it is the quality of the resource that is far more important than the quantity and is confident that the changes from the previous resource estimate should deliver an economically feasible, and ultimately profitable mine plan, with significantly enhanced performance when compared to the mining that occurred between 2012 and 2015. The new resource modeling work by MDA, through explicitly modeling each mineralized zone, ensures that the possibility for grade smearing is effectively eliminated.
The work program covering the next 12-month period will include MDA completing the validation work required to provide a Resource estimate, undertaking a Reserve estimate, and producing an economic assessment, all suitable for reporting under Canadian NI 43-101.
At this time, Tonogold is targeting future operations that would provide annual gold production (on a 100% basis) of between 75,000 to 100,000 ounces of gold per year, plus 600,000 ounces of silver with cash operating costs targeted to be under $800 per ounce.
Under the original Agreement, Tonogold has the right (option) to acquire a 51% interest in the plant, equipment and related infrastructure (“Processing Facility”) for $25 million prior to recommencing production. Tonogold and Comstock today entered into a supplementary agreement which provides Tonogold commercially attractive toll treatment terms as an alternative. In summary, if Tonogold elected the toll treatment alternative, Comstock will retain 100% ownership of and Tonogold shall rent and operate the Process Facility, paying Comstock a usage fee of $1 million per annum plus $1 per ton processed.
As set out in our October 2017 announcement, in order for Tonogold to earn a 51% interest in the Lucerne deposit, it will be required to invest a total of $20 million over a 42-month period (which commenced in October 2017) on work programs developed and managed by Tonogold, on the Lucerne Properties; the objective being to produce a commercially and technically robust mine plan and feasibility study to enable profitable mining on the properties to commence. It should be noted, that the $20 million expenditure threshold is not a commitment, but a requirement to earn the 51% interest in the Lucerne Properties. In this regard, approximately $1 million has been invested by Tonogold to date.
New Board appointment.
The Company also announces that it has appointed Mr. Robert Kopple to the Board of Directors. Mr. Kopple is an experienced investor, businessman and lawyer. He is involved in a broad range of corporate financing activities with public companies. Mr. Kopple is a senior partner in a law firm based in Los Angeles specializing in estate planning, tax law and business transactions. His investments include diverse interests in real estate and in several operating companies in mining, health care and technology. Mr. Kopple is a significant investor in Tonogold Resources, Inc.
Quotes.
Tonogold’s CEO, Mark Ashley said “Although there is still much to complete prior to having a comprehensive and robust operating plan to justify a production decision, it has been pleasing to see our early operating concepts that have been developed over the past few years for the Lucerne deposit being validated by the detailed technical assessments undertaken to date. The relationship developed between Tonogold and Comstock has strengthened over this initial 6-month period and bodes well for a positive and constructive partnership in the successful pursuit of our mutual objectives”.
He added: “The support we have received from our shareholders and the investment community generally has been outstanding and we look forward to being able to continue to build accretive shareholder value driven by fundamentally based decisions using realistic assumptions and focused on the success of medium to longer-term growth objectives”.
Mr. Corrado De Gasperis, Executive Chairman and CEO of Comstock said, “We are pleased with the geological analysis and advancement, to date, on the Lucerne resource and the diligence of our mining partner and their advisors”. He added, “This venture has diligently focused on developing a sustainably profitable mine. We feel the potential of Lucerne depends on this type of technical collaboration, with the right partner and capital to enable it. Ultimately, Tonogold plans to invest over $20 million for 51% of the Lucerne Mine. Their methodical, technically diligent and credible advancement through the first phase, meeting all commitments and milestones, speaks for itself.”
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 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: 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 and timing and accounting for restructuring charges, gains or losses on debt extinguishment, derivative liabilities and the impact thereof; productivity, production slowdowns, suspension or termination, business process, rationalization and other operational initiatives; 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 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,” “target,” “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 discussed in Item 1A, “Risk Factors” of our annual report on Form 10-K. 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 other securities of the Company.
Contact information for Tonogold Resources Inc.
Mark Ashley President & CEO.
M: +1 310 409 6504
E: mjashley3@gmail.com
TONOGOLD RESOURCES ENTERS INTO AN OPTION AGREEMENT TO ACQUIRE THE THREE GOLD/SILVER PROPERTIES IN DURANGO, MEXICO
LA JOLLA, Calif., Jan. 16, 2018 /PRNewswire/ – TONOGOLD RESOURCES INC. (OTC:TNGL) (the “Company” or “Tonogold“) is pleased to announce that it has entered into a binding agreement with a private Mexican company, which provides Tonogold an exclusive right (but not obligation) to acquire 100% interest in the Claudia, Promontorio and Montoros gold/silver properties located in Durango, Mexico (the “Projects“) for total consideration of $7.3 million in cash. All amounts stated are in U.S. dollars unless otherwise advised.
Principle Agreement Terms.
Tonogold has paid $100,000 for an initial 6-month option, which can be extended by 3 additional months at Tonogold’s election for a further payment of $1 million prior to the expiry of the initial option period. Both amounts form part of the $7.3 million purchase price in the event the option is exercised.
Highlights of an Acquisition.
- Potentially adds high quality gold-silver advanced exploration projects to our pipeline in a safe and well-known mining-friendly and cost competitive jurisdiction.
- Low cost option fee.
- Attractive acquisition value per gold equivalent ounce based on the historical resources.
Recent History.
In December 2004, Capstone Mining Corp. (“Capstone“) secured an option over various projects from Grupo Minero Bacis S.A. de C.V. including the three projects that Tonogold now has an option over. In September 2005, Capstone advised, in a news release as follows: “The following table summarizes the historic mineral resources of the projects from the records of Grupo Minero Bacis S.A. de C.V., the optionor of the projects (“Bacis”). These resource estimates have been calculated by Bacis and are reported as historical resource estimates. The Company must verify these resources before current mineral resources can be reported.”
Tonogold provides below the resource detail as it relates to the three projects, but in doing so, urges investors to use appropriate caution as Tonogold did not undertake the work necessary to verify the estimates nor their classification. Tonogold is not treating the historical resource estimates (below) as a NI 43-101 defined resource and advises that such historical estimates should not be relied upon. It is included to provide investors an “order of magnitude” potential for the Projects.
Historic Resource Estimate.
Mark Ashley, Chief Executive Officer of Tonogold Resources, stated “As was in the case of the Lucerne Mine, the identification of this opportunity and the formalization of the present agreement are the result of a number of years of diligent review of numerous opportunities that we had identified in the sector and the subsequent formation of sound commercial strategies aimed at securing control of opportunities that have the potential to become significant and financially robust projects in the near future.”
The Projects.
Claudia.
Claudia covers approximately 6,390 hectares and is located 135 kilometres NNW of Durango City, Durango State, Mexico in the El Papanton Mining District, Santiago Papasquiaro Municipality. The property covers a 10-kilometer hosting NNW trend of WSW and ENE dipping intermediate sulphidation gold-silver vein systems.
“Alteration is generally weak propylitization involving chlorite, epidote, calcite and pyrite with veins and small areas of argillization or clay development. Previous sampling (1993) from the Claudia vein reported grades of 4.7 g/t Au and 590 g/t Ag over 1.30 metres; 45 samples from the Mark Twain (N35W/85°NE) grading 5.9 g/t Au and 499 g/t Ag over 1.55 metres; 62 samples from the Guadalupana vein (N35W/65°SW) grading 5.2 g/t Au and 75 g/t Ag over 3.8 metres; 30 samples from the Mina Vieja (N40W/85°SW) grading 7.3 g/t Au and 379 g/t Ag over 1.56 metres; and 45 samples from the Providencia (N55W/80°SW). All the veins were hosted by andesite.” 1
1 Technical Report dated December 31st 2005 prepared for Capstone Gold Corp and Silverstone Resources Corp
Promontorio.
The Promontorio Property is regarded as an advanced exploration stage project with a small production history. The Property consists of 33 concessions which cover approximately 2,188 hectares in the El Oro Municipality, Promontorio district in Durango State, Mexico. The property covers several gold-silver bearing veins with the main Promontorio and Pericos veins reported to have produced ~250,000 tonnes of 3,500 g/t silver and 20 g/t gold during the 1930’s. The narrow, high-grade veins have been traced for more than 2 kilometres but previous exploration has mainly been conducted in a small area of the project.
The Promontorio mine was discovered in the late 1800’s and purchased by Negociacion Minera de Promontorio in 1887. It has been reported that:
- Until 1892, mineralization grading 7.5 kilograms per ton of silver was shipped to Fresnillo.
- In 1892 mineralization grading 3 kilogram per ton of silver was shipped to Durango and in 1900 mineralization grading 2 kilograms per ton of silver was shipped to Chinacates in Durango State.
- Production the Promontorio mine between December 1896 to 1906 yielded over 170,000 kilograms of silver and 476 kilograms of gold, which made the mine one of the significant producers of silver in Mexico.
- Production stopped in 1906 due to the Mexican Revolution.
Montoros.
The Montoros Project, consists of 17 concessions covering approximately 2,147 hectares, is situated in the Santiago Papasquiaro Municipality.
Four vein systems have been identified in the project area. Alteration consists of propylitization (chloriteepidote- calcite-pyrite) that is more common in the LVG rocks and clay alteration near the vein tops. Mineralization occurs as argentite, native gold, electrum, and base metals. The Periquitos vein contained about 10% chalcopyrite in semi-massive sulphide at the portal.
The Montoros vein systems were sampled on surface and by underground workings between 1992 to mid-1993.
Future Work.
Tonogold will be conducting a detailed evaluation program over the option period to undertake an initial but comprehensive technical and conceptual economic assessment of the Project, with priority emphasis given to Claudia, focusing on the potential for a high-grade underground mining operation, prior to deciding to exercise the Option later in the year.
Qualified Person.
The technical information contained in this news release has been reviewed and approved by Gregory B. Sparks, a registered Professional Engineer in the State of Colorado and a Qualified Person as defined by National Instrument 43-101.
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 Tonogold. Forward-looking 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: 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 and timing and accounting for restructuring charges, gains or losses on debt extinguishment, derivative liabilities and the impact thereof; productivity, production slowdowns, suspension or termination, business process, rationalization and other operational initiatives; 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 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,” “target,” “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 discussed in Item 1A, “Risk Factors” of our annual report on Form 10-K. 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 other securities of the Company.
Contact information for Tonogold Resources Inc.
Mark Ashley.
President & CEO.
Tel +1 310 409 6504
mjashley3@gmail.com