Movers and SHAKERS
Comstock Mining (LODE)
Pelen Purchase Option Could Enhance LODE's Growing Royalty Portfolio
Comstock Mining Inc is a mining company with a focus on gold and silver deposits in the Comstock and Silver City mining districts in Nevada. Its operations are divided into two segments, namely mining and real estate. Its mining projects include The Lucerne Resource area, the Dayton Resource area, the Spring Valley exploration target, the Northern Extension, Northern Targets and Occidental areas. The Real Estate segment involves land, real estate rental properties and a hotel, restaurant & bar provided by the Gold Hill Hotel located in Gold Hill, Nevada just south of Virginia City and the Daney Ranch, located just south of Silver City. The majority revenues are generated from the real estate segment.
Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Lease extension and purchase option. LODE executed an assignable lease agreement with the Sutro Tunnel Company that includes patented mining claims and exploration rights in the Gold Hill and Virginia City Mining District in Storey County, NV and includes properties that are part of the Lucerne mining properties and a portion of the mineral exploration lease with Tonogold Resources (OTC: TNGL, Not Rated). The lease has an initial term of 5 years but is renewable for 15 years or longer and includes a 4% net smelter royalty payable to Sutro, along with minimum monthly payments. Recall that Sutro is owned by Pelen LLC, of which Comstock owns 25% and now has a three-year option to acquire the remaining 75% interest for $3.75 million if exercised within one year, with an increasing purchase price in the second and third years, with 50% of the option payments cumulatively applied to the purchase price. Assuming LODE exercises its purchase option, which we think is likely, it would be entitled to a 5.5% net smelter royalty on the associated properties.
Tonogold commences initial drilling program. Tonogold's initial drilling program commenced this month and will test the 3-kilometer strike length of the main Comstock Lode. The program will have a two-tier focus, including drilling above and below the Sutro Tunnel and targeting areas where historic records indicate the potential for high-grade intercepts. The initial program is expected to take ...
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.