|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
NEVADA
(State or other jurisdiction of
incorporation or organization)
|
|
1040
(Primary Standard Industrial
Classification Code Number)
|
|
65-0955118
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,483,490
|
|
|
$
|
5,308,804
|
|
Accounts receivable
|
—
|
|
|
322,406
|
|
||
Inventories
|
308,993
|
|
|
428,235
|
|
||
Stockpiles and mineralized material on leach pads
|
705,069
|
|
|
1,743,053
|
|
||
Prepaid expenses
|
1,604,301
|
|
|
833,360
|
|
||
Total current assets
|
5,101,853
|
|
|
8,635,858
|
|
||
MINERAL RIGHTS AND PROPERTIES, Net
|
7,208,171
|
|
|
7,318,175
|
|
||
PROPERTIES, PLANT AND EQUIPMENT, Net
|
28,702,288
|
|
|
26,207,062
|
|
||
RECLAMATION BOND DEPOSIT
|
2,642,804
|
|
|
2,642,804
|
|
||
RETIREMENT OBLIGATION ASSET
|
1,404,517
|
|
|
1,619,101
|
|
||
OTHER ASSETS
|
13,461
|
|
|
32,872
|
|
||
TOTAL ASSETS
|
$
|
45,073,094
|
|
|
$
|
46,455,872
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
1,299,673
|
|
|
$
|
2,265,723
|
|
Accrued expenses
|
1,654,366
|
|
|
4,408,568
|
|
||
Long-term debt and capital lease obligations – current portion
|
9,792,093
|
|
|
5,897,219
|
|
||
Derivative liabilities
|
27,847
|
|
|
33,298
|
|
||
Total current liabilities
|
12,773,979
|
|
|
12,604,808
|
|
||
LONG-TERM LIABILITIES:
|
|
|
|
||||
Long-term debt and capital lease obligations
|
6,024,475
|
|
|
5,701,264
|
|
||
Long-term reclamation liability
|
6,760,875
|
|
|
5,908,700
|
|
||
Other liabilities
|
745,104
|
|
|
—
|
|
||
Total long-term liabilities
|
13,530,454
|
|
|
11,609,964
|
|
||
Total liabilities
|
26,304,433
|
|
|
24,214,772
|
|
||
COMMITMENTS AND CONTINGENCIES [NOTE 10]
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Common stock, $.000666 par value, 3,950,000,000 shares authorized, 149,748,219 and 82,480,600 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively
|
99,732
|
|
|
54,932
|
|
||
Convertible Preferred Stock; 50,000,000 shares authorized
|
|
|
|
||||
7.5% Series A-1 convertible preferred stock; $.000666 par value, 1,500,000 shares authorized; 0 and 24,362 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively
|
—
|
|
|
16
|
|
||
7.5% Series A-2 convertible preferred stock, $.000666 par value, 250,000 shares authorized; 0 and 1,610 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively
|
—
|
|
|
1
|
|
||
7.5% Series B convertible preferred stock, $.000666 par value, 600,000 shares authorized; 0 and 22,676 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively
|
—
|
|
|
15
|
|
||
Additional paid-in capital
|
211,805,727
|
|
|
210,795,244
|
|
||
Accumulated deficit
|
(193,136,798
|
)
|
|
(188,609,108
|
)
|
||
Total stockholders’ equity
|
18,768,661
|
|
|
22,241,100
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
45,073,094
|
|
|
$
|
46,455,872
|
|
|
Three Months Ended
September 30, |
||||||
|
2015
|
|
2014
|
||||
REVENUES
|
|
|
|
||||
Revenue - Mining
|
$
|
4,301,169
|
|
|
$
|
6,513,348
|
|
Revenue - Hospitality and lease
|
43,904
|
|
|
274,201
|
|
||
Total revenues
|
4,345,073
|
|
|
6,787,549
|
|
||
|
|
|
|
||||
COST AND EXPENSES
|
|
|
|
||||
Costs applicable to mining revenue
|
3,450,311
|
|
|
4,377,791
|
|
||
Hospitality and lease operating costs
|
42,549
|
|
|
331,613
|
|
||
Exploration and mine development
|
1,505,492
|
|
|
767,552
|
|
||
Mine claims and costs
|
691,444
|
|
|
1,064,519
|
|
||
Environmental and reclamation
|
169,148
|
|
|
167,194
|
|
||
Land and road development
|
818,474
|
|
|
—
|
|
||
General and administrative
|
1,637,313
|
|
|
1,509,494
|
|
||
Total cost and expenses
|
8,314,731
|
|
|
8,218,163
|
|
||
|
|
|
|
||||
LOSS FROM OPERATIONS
|
(3,969,658
|
)
|
|
(1,430,614
|
)
|
||
|
|
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
||||
Change in fair value of derivatives
|
—
|
|
|
(366,011
|
)
|
||
Interest expense
|
(337,700
|
)
|
|
(264,323
|
)
|
||
Other income (expense), net
|
—
|
|
|
1,012,190
|
|
||
Total other income (expense), net
|
(337,700
|
)
|
|
381,856
|
|
||
|
|
|
|
||||
NET INCOME (LOSS) BEFORE INCOME TAXES
|
(4,307,358
|
)
|
|
(1,048,758
|
)
|
||
|
|
|
|
||||
INCOME TAXES
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
NET INCOME (LOSS)
|
(4,307,358
|
)
|
|
(1,048,758
|
)
|
||
|
|
|
|
||||
DIVIDENDS ON CONVERTIBLE PREFERRED STOCK
|
(3,644,888
|
)
|
|
(931,680
|
)
|
||
|
|
|
|
||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(7,952,246
|
)
|
|
$
|
(1,980,438
|
)
|
|
|
|
|
||||
Net income (loss) per common share – basic
|
$
|
(0.07
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
||||
Net income (loss) per common share – diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
||||
Weighted average common shares outstanding — basic
|
112,133,768
|
|
|
82,912,805
|
|
||
|
|
|
|
||||
Weighted average common shares outstanding — diluted
|
112,133,768
|
|
|
82,912,805
|
|
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
REVENUES
|
|
|
|
||||
Revenue - Mining
|
$
|
15,670,371
|
|
|
$
|
18,098,395
|
|
Revenue - Hospitality and lease
|
200,411
|
|
|
668,530
|
|
||
Total revenues
|
15,870,782
|
|
|
18,766,925
|
|
||
|
|
|
|
||||
COST AND EXPENSES
|
|
|
|
||||
Costs applicable to mining revenue
|
10,388,054
|
|
|
14,607,454
|
|
||
Hospitality and lease operating costs
|
303,843
|
|
|
922,758
|
|
||
Exploration and mine development
|
2,639,346
|
|
|
2,262,329
|
|
||
Mine claims and costs
|
2,112,806
|
|
|
2,981,441
|
|
||
Environmental and reclamation
|
473,958
|
|
|
750,190
|
|
||
Land and road development
|
1,680,720
|
|
|
—
|
|
||
General and administrative
|
5,095,306
|
|
|
5,177,802
|
|
||
Total cost and expenses
|
22,694,033
|
|
|
26,701,974
|
|
||
|
|
|
|
||||
LOSS FROM OPERATIONS
|
(6,823,251
|
)
|
|
(7,935,049
|
)
|
||
|
|
|
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
||||
Change in fair value of derivatives
|
—
|
|
|
(582,845
|
)
|
||
Interest expense
|
(891,824
|
)
|
|
(757,857
|
)
|
||
Other income (expense), net
|
3,187,385
|
|
|
1,013,426
|
|
||
Total other income (expense), net
|
2,295,561
|
|
|
(327,276
|
)
|
||
|
|
|
|
||||
NET INCOME (LOSS) BEFORE INCOME TAXES
|
(4,527,690
|
)
|
|
(8,262,325
|
)
|
||
|
|
|
|
||||
INCOME TAXES
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
NET INCOME (LOSS)
|
(4,527,690
|
)
|
|
(8,262,325
|
)
|
||
|
|
|
|
||||
DIVIDENDS ON CONVERTIBLE PREFERRED STOCK
|
(5,452,445
|
)
|
|
(2,802,769
|
)
|
||
|
|
|
|
||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$
|
(9,980,135
|
)
|
|
$
|
(11,065,094
|
)
|
|
|
|
|
||||
Net income (loss) per common share – basic
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
|
|
|
|
||||
Net income (loss) per common share – diluted
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
|
|
|
|
||||
Weighted average common shares outstanding — basic
|
94,036,959
|
|
|
77,065,692
|
|
||
|
|
|
|
||||
Weighted average common shares outstanding — diluted
|
94,036,959
|
|
|
77,065,692
|
|
COMSTOCK MINING INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|||||||
|
Nine Months Ended
September 30, |
||||||
|
2015
|
|
2014
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
(4,527,690
|
)
|
|
$
|
(8,262,325
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation, amortization and depletion
|
5,789,517
|
|
|
5,058,532
|
|
||
Stock payments and stock-based compensation
|
152,431
|
|
|
1,705,160
|
|
||
Accretion of reclamation liability
|
192,880
|
|
|
257,915
|
|
||
(Gain) loss on sale of properties, plant, and equipment
|
77,579
|
|
|
45,499
|
|
||
Amortization of debt discounts and issuance costs
|
464,391
|
|
|
474,297
|
|
||
Net change in fair values of derivatives
|
(5,451
|
)
|
|
635,355
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
322,406
|
|
|
436
|
|
||
Inventories
|
119,242
|
|
|
(196,766
|
)
|
||
Stockpiles and mineralized material on leach pads
|
1,037,984
|
|
|
(183,350
|
)
|
||
Prepaid expenses
|
(654,724
|
)
|
|
(116,132
|
)
|
||
Other assets
|
19,411
|
|
|
19,411
|
|
||
Accounts payable
|
(650,075
|
)
|
|
(441,281
|
)
|
||
Accrued expenses and other liabilities
|
(1,909,098
|
)
|
|
(1,591,031
|
)
|
||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
428,803
|
|
|
(2,594,280
|
)
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Proceeds from sale of properties, plant and equipment
|
117,065
|
|
|
150,415
|
|
||
Purchase of mineral rights and properties, plant and equipment
|
(4,861,914
|
)
|
|
(1,856,628
|
)
|
||
Increase in reclamation bond deposit
|
(100,000
|
)
|
|
(750,000
|
)
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
(4,844,849
|
)
|
|
(2,456,213
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Principal payments on long-term debt and capital lease obligations
|
(7,828,660
|
)
|
|
(3,684,252
|
)
|
||
Proceeds from long-term debt obligations
|
9,419,392
|
|
|
4,626,289
|
|
||
Proceeds from the issuance of common stock
|
—
|
|
|
10,993,283
|
|
||
Common stock issuance costs
|
—
|
|
|
(32,019
|
)
|
||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
1,590,732
|
|
|
11,903,301
|
|
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(2,825,314
|
)
|
|
6,852,808
|
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
5,308,804
|
|
|
2,409,446
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
2,483,490
|
|
|
$
|
9,262,254
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for interest
|
$
|
995,292
|
|
|
$
|
567,824
|
|
|
|
|
(Continued)
|
|
COMSTOCK MINING INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|||||||
|
Nine Months Ended
September 30, |
||||||
|
2015
|
|
2014
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Conversion of convertible preferred stock to common stock (par value)
|
$
|
35,723
|
|
|
$
|
1
|
|
Reclamation bond deposit included in accrued expenses and other liabilities
|
—
|
|
|
150,000
|
|
||
Additions to reclamation liability and retirement obligation asset
|
659,295
|
|
|
—
|
|
||
Issuance of common stock for properties, plant and equipment
|
966,819
|
|
|
814,956
|
|
||
Dividends paid in common stock (par value)
|
7,887
|
|
|
1,502
|
|
||
Issuance of long-term debt obligations for purchase of mineral rights and properties, plant and equipment
|
2,046,745
|
|
|
3,006,094
|
|
||
Vested restricted common stock (par value)
|
40
|
|
|
1,183
|
|
||
Properties, plant and equipment purchases in accounts payable
|
24,268
|
|
|
135,020
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
In-process
|
$
|
308,993
|
|
|
$
|
428,235
|
|
Finished goods
|
—
|
|
|
—
|
|
||
Total inventories
|
$
|
308,993
|
|
|
$
|
428,235
|
|
|
|
|
|
||||
Stockpiles
|
$
|
90,999
|
|
|
$
|
326,126
|
|
Mineralized material on leach pads
|
614,070
|
|
|
1,416,927
|
|
||
Total stockpiles and mineralized material on leach pads
|
$
|
705,069
|
|
|
$
|
1,743,053
|
|
Total
|
$
|
1,014,062
|
|
|
$
|
2,171,288
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Derivative Type
|
|
|
|
||||
Derivative liabilities
|
|
|
|
||||
Gold call and put options
|
$
|
37,249
|
|
|
$
|
32,698
|
|
Gold forwards
|
(9,402
|
)
|
|
600
|
|
||
Total derivative liabilities
|
$
|
27,847
|
|
|
$
|
33,298
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Long-term reclamation liability — beginning of period
|
$
|
5,908,700
|
|
|
$
|
5,424,410
|
|
Additional obligations incurred
|
659,295
|
|
|
140,573
|
|
||
Accretion of reclamation liability
|
192,880
|
|
|
343,717
|
|
||
Long-term reclamation liability — end of period
|
$
|
6,760,875
|
|
|
$
|
5,908,700
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Retirement obligation asset — beginning of period
|
$
|
1,619,101
|
|
|
$
|
2,491,956
|
|
Additional obligations incurred
|
659,295
|
|
|
140,573
|
|
||
Amortization of retirement obligation asset
|
(873,879
|
)
|
|
(1,013,428
|
)
|
||
Retirement obligation asset — end of period
|
$
|
1,404,517
|
|
|
$
|
1,619,101
|
|
Note Description
|
September 30, 2015
|
|
December 31, 2014
|
||||
Note Payable (Auramet Facility)
|
$
|
2,800,000
|
|
|
$
|
1,071,427
|
|
Note Payable (Caterpillar Equipment)
|
2,889,894
|
|
|
3,968,019
|
|
||
Note Payable (V&T)
|
1,000,000
|
|
|
—
|
|
||
Note Payable (Daney Ranch Property)
|
849,230
|
|
|
—
|
|
||
Note Payable (Dayton Resource Area)
|
494,795
|
|
|
1,953,784
|
|
||
Note Payable (Donovan Property)
|
442,450
|
|
|
574,141
|
|
||
Note Payable (Gold Hill Hotel)
|
264,024
|
|
|
278,254
|
|
||
Note Payable (White House)
|
282,526
|
|
|
286,595
|
|
||
Notes Payable - Other
|
394,848
|
|
|
549,466
|
|
||
Lease Obligation (Varilease)
|
3,925,167
|
|
|
—
|
|
||
Capital Lease Obligations
|
2,473,634
|
|
|
2,916,797
|
|
||
Subtotal
|
15,816,568
|
|
|
11,598,483
|
|
||
Less current portion
|
(9,792,093
|
)
|
|
(5,897,219
|
)
|
||
Long-term portion of long-term debt and capital lease obligations
|
$
|
6,024,475
|
|
|
$
|
5,701,264
|
|
|
|
|
Fair Value Measurements at September 30, 2015
|
||||||||||||
|
Total
|
|
Quoted
Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Gold call and put options
|
$
|
37,249
|
|
|
$
|
—
|
|
|
$
|
37,249
|
|
|
$
|
—
|
|
Gold forwards
|
(9,402
|
)
|
|
—
|
|
|
(9,402
|
)
|
|
—
|
|
||||
Note payable (Daney Ranch Property)
|
$
|
849,230
|
|
|
$
|
—
|
|
|
$
|
849,230
|
|
|
$
|
—
|
|
Total Liabilities
|
$
|
877,077
|
|
|
$
|
—
|
|
|
$
|
877,077
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at December 31, 2014
|
||||||||||||
|
Total
|
|
Quoted
Prices
in Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Gold call options
|
$
|
32,698
|
|
|
$
|
—
|
|
|
$
|
32,698
|
|
|
$
|
—
|
|
Gold forwards
|
600
|
|
|
—
|
|
|
600
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
33,298
|
|
|
$
|
—
|
|
|
$
|
33,298
|
|
|
$
|
—
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(4,307,358
|
)
|
|
$
|
(1,048,758
|
)
|
|
$
|
(4,527,690
|
)
|
|
$
|
(8,262,325
|
)
|
Preferred stock dividends
|
(3,644,888
|
)
|
|
(931,680
|
)
|
|
(5,452,445
|
)
|
|
(2,802,769
|
)
|
||||
Net loss available to common shareholders
|
$
|
(7,952,246
|
)
|
|
$
|
(1,980,438
|
)
|
|
$
|
(9,980,135
|
)
|
|
$
|
(11,065,094
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
112,133,768
|
|
|
82,912,805
|
|
|
94,036,959
|
|
|
77,065,692
|
|
||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average shares outstanding
|
112,133,768
|
|
|
82,912,805
|
|
|
94,036,959
|
|
|
77,065,692
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.07
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
Diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
|
September 30,
|
||||
|
2015
|
|
2014
|
||
Convertible preferred stock
|
—
|
|
|
53,653,703
|
|
Stock options and warrants
|
50,000
|
|
|
583,500
|
|
Restricted stock
|
1,688,000
|
|
|
1,796,600
|
|
|
1,738,000
|
|
|
56,033,803
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Mining
|
$
|
4,301,169
|
|
|
$
|
6,513,348
|
|
|
$
|
15,670,371
|
|
|
$
|
18,098,395
|
|
Hospitality and lease
|
43,904
|
|
|
274,201
|
|
|
200,411
|
|
|
668,530
|
|
||||
Total revenue
|
4,345,073
|
|
|
6,787,549
|
|
|
15,870,782
|
|
|
18,766,925
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost and Expenses
|
|
|
|
|
|
|
|
||||||||
Mining
|
(8,272,182
|
)
|
|
(7,886,550
|
)
|
|
(22,390,190
|
)
|
|
(25,779,216
|
)
|
||||
Hospitality and lease
|
(42,549
|
)
|
|
(331,613
|
)
|
|
(303,843
|
)
|
|
(922,758
|
)
|
||||
Total cost and expenses
|
(8,314,731
|
)
|
|
(8,218,163
|
)
|
|
(22,694,033
|
)
|
|
(26,701,974
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Mining
|
(3,971,013
|
)
|
|
(1,373,202
|
)
|
|
(6,719,819
|
)
|
|
(7,680,821
|
)
|
||||
Hospitality and lease
|
1,355
|
|
|
(57,412
|
)
|
|
(103,432
|
)
|
|
(254,228
|
)
|
||||
Total loss from operations
|
(3,969,658
|
)
|
|
(1,430,614
|
)
|
|
(6,823,251
|
)
|
|
(7,935,049
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense), net
|
(337,700
|
)
|
|
381,856
|
|
|
2,295,561
|
|
|
(327,276
|
)
|
||||
Net loss
|
$
|
(4,307,358
|
)
|
|
$
|
(1,048,758
|
)
|
|
$
|
(4,527,690
|
)
|
|
$
|
(8,262,325
|
)
|
|
|
|
|
|
|
|
|
||||||||
Depreciation, Depletion and Amortization
|
|
|
|
|
|
|
|
||||||||
Mining
|
$
|
1,921,305
|
|
|
$
|
1,735,195
|
|
|
$
|
5,701,880
|
|
|
$
|
4,969,374
|
|
Hospitality and lease
|
32,120
|
|
|
24,204
|
|
|
87,637
|
|
|
89,158
|
|
||||
Total depreciation, amortization and depletion
|
$
|
1,953,425
|
|
|
$
|
1,759,399
|
|
|
$
|
5,789,517
|
|
|
$
|
5,058,532
|
|
|
|
|
|
|
|
|
|
||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
||||||||
Mining
|
$
|
3,893,218
|
|
|
$
|
2,815,573
|
|
|
$
|
7,544,841
|
|
|
$
|
4,906,700
|
|
Hospitality and lease
|
—
|
|
|
—
|
|
|
14,663
|
|
|
83,477
|
|
||||
Total capital expenditures
|
$
|
3,893,218
|
|
|
$
|
2,815,573
|
|
|
$
|
7,559,504
|
|
|
$
|
4,990,177
|
|
|
As of September 30,
|
|
As of December 31,
|
||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Mining
|
$
|
43,733,951
|
|
|
$
|
45,029,258
|
|
Hospitality and lease
|
1,339,143
|
|
|
1,426,614
|
|
||
Total assets
|
$
|
45,073,094
|
|
|
$
|
46,455,872
|
|
Hole ID
|
|
Interval Depth
|
|
Intercept Length
|
|
Au grade (opt).
|
|
Ag grade (opt.)
|
DA-037
|
|
20-30’
|
|
10 feet
|
|
0.183
|
|
0.533
|
DA-099
|
|
60-70’
|
|
10 feet
|
|
0.129
|
|
0.566
|
DA-100
|
|
60-70’
|
|
10 feet
|
|
0.237
|
|
0.790
|
DA-117
|
|
20-30’
|
|
10 feet
|
|
0.100
|
|
0.557
|
DA-119
|
|
10-30’
|
|
20 feet
|
|
0.139
|
|
0.626
|
DA-127
|
|
10-20’
|
|
10 feet
|
|
0.112
|
|
1.898
|
DA-188
|
|
70-82’
|
|
12 feet
|
|
0.128
|
|
0.186
|
DA-193
|
|
60-70’
|
|
10 feet
|
|
0.164
|
|
0.700
|
DA-197
|
|
10-20’
|
|
10 feet
|
|
0.180
|
|
1.090
|
DA-199
|
|
40-54’
|
|
14 feet
|
|
0.113
|
|
1.063
|
DA-200
|
|
70-82’
|
|
12 feet
|
|
0.252
|
|
1.266
|
DA-208
|
|
0-10’
|
|
10 feet
|
|
0.143
|
|
0.899
|
DA-209
|
|
30-36’
|
|
6 feet
|
|
0.114
|
|
1.550
|
DA-212
|
|
10-20’
|
|
10 feet
|
|
0.167
|
|
0.279
|
DA-215
|
|
0-10’
|
|
10 feet
|
|
0.105
|
|
0.909
|
DA-228
|
|
50-60’
|
|
10 feet
|
|
0.219
|
|
0.485
|
DA-237
|
|
10-20’
|
|
10 feet
|
|
0.131
|
|
1.440
|
DA-260
|
|
30-35’
|
|
5 feet
|
|
0.256
|
|
1.274
|
DA-273
|
|
50-60’
|
|
10 feet
|
|
0.161
|
|
0.071
|
DA-279
|
|
0-10’
|
|
10 feet
|
|
0.143
|
|
0.538
|
DA-289
|
|
10-20’
|
|
10 feet
|
|
0.142
|
|
0.148
|
DA-290
|
|
20-30’
|
|
10 feet
|
|
0.100
|
|
0.246
|
DA-294
|
|
50-60’
|
|
10 feet
|
|
0.122
|
|
0.397
|
DA-295
|
|
10-20’
|
|
10 feet
|
|
0.107
|
|
0.603
|
DA-316
|
|
30-40’
|
|
10 feet
|
|
0.184
|
|
0.238
|
DA-318
|
|
0-10’
|
|
10 feet
|
|
0.123
|
|
0.232
|
DA-333
|
|
50-60’
|
|
10 feet
|
|
0.292
|
|
0.731
|
DA-344
|
|
0-10’
|
|
10 feet
|
|
0.161
|
|
2.155
|
DA-367
|
|
70-82’
|
|
12 feet
|
|
0.266
|
|
0.437
|
DA-369
|
|
10-20’
|
|
10 feet
|
|
0.115
|
|
0.116
|
DA-395
|
|
40-60’
|
|
20 feet
|
|
0.160
|
|
0.678
|
DA-397
|
|
40-50’
|
|
10 feet
|
|
0.108
|
|
1.158
|
DA-403
|
|
20-30’
|
|
10 feet
|
|
0.100
|
|
1.050
|
DA-404
|
|
60-70’
|
|
10 feet
|
|
0.108
|
|
1.103
|
|
|
Weighted Average per ton Gold
|
|
Weighted Average per ton Silver
|
||
Q1, 2014
|
|
0.024
|
|
|
0.345
|
|
Q2, 2014
|
|
0.034
|
|
|
0.546
|
|
Q3, 2014
|
|
0.026
|
|
|
0.564
|
|
Q4, 2014
|
|
0.039
|
|
|
0.680
|
|
2014 YTD
|
|
0.030
|
|
|
0.527
|
|
|
|
|
|
|
||
Q1, 2015
|
|
0.039
|
|
|
0.734
|
|
Q2, 2015
|
|
0.030
|
|
|
0.654
|
|
Q3, 2015
|
|
0.021
|
|
|
0.573
|
|
2015 YTD
|
|
0.031
|
|
|
0.663
|
|
|
September 30, 2015
|
|
September 30, 2014
|
|
Change
|
||||||
Revenue - Mining
|
$
|
4,301,169
|
|
|
$
|
6,513,348
|
|
|
$
|
(2,212,179
|
)
|
Revenue - Hospitality and lease
|
43,904
|
|
|
274,201
|
|
|
(230,297
|
)
|
|||
|
|
|
|
|
|
|
|||||
Costs applicable to mining revenue
|
3,450,311
|
|
|
4,377,791
|
|
|
(927,480
|
)
|
|||
Hospitality and lease operating costs
|
42,549
|
|
|
331,613
|
|
|
(289,064
|
)
|
|||
Exploration and mine development
|
1,505,492
|
|
|
767,552
|
|
|
737,940
|
|
|||
Mine claims and costs
|
691,444
|
|
|
1,064,519
|
|
|
(373,075
|
)
|
|||
Environmental and reclamation
|
169,148
|
|
|
167,194
|
|
|
1,954
|
|
|||
Land and Road Development
|
818,474
|
|
|
—
|
|
|
818,474
|
|
|||
General and administrative
|
1,637,313
|
|
|
1,509,494
|
|
|
127,819
|
|
|||
Loss from operations
|
(3,969,658
|
)
|
|
(1,430,614
|
)
|
|
(2,539,044
|
)
|
|||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
||||||
Change in fair value of derivatives
|
—
|
|
|
(366,011
|
)
|
|
366,011
|
|
|||
Interest expense
|
(337,700
|
)
|
|
(264,323
|
)
|
|
(73,377
|
)
|
|||
Interest and other income
|
—
|
|
|
1,012,190
|
|
|
(1,012,190
|
)
|
|||
|
|
|
|
|
|
||||||
NET INCOME (LOSS)
|
$
|
(4,307,358
|
)
|
|
$
|
(1,048,758
|
)
|
|
$
|
(3,258,600
|
)
|
|
September 30, 2015
|
|
September 30, 2014
|
|
Change
|
||||||
Revenue - Mining
|
$
|
15,670,371
|
|
|
$
|
18,098,395
|
|
|
$
|
(2,428,024
|
)
|
Revenue - Hospitality and lease
|
200,411
|
|
|
668,530
|
|
|
(468,119
|
)
|
|||
|
|
|
|
|
|
||||||
Costs applicable to mining revenue
|
10,388,054
|
|
|
14,607,454
|
|
|
(4,219,400
|
)
|
|||
Hospitality and lease operating costs
|
303,843
|
|
|
922,758
|
|
|
(618,915
|
)
|
|||
Exploration and mine development
|
2,639,346
|
|
|
2,262,329
|
|
|
377,017
|
|
|||
Mine claims and costs
|
2,112,806
|
|
|
2,981,441
|
|
|
(868,635
|
)
|
|||
Environmental and reclamation
|
473,958
|
|
|
750,190
|
|
|
(276,232
|
)
|
|||
Land and Road Development
|
1,680,720
|
|
|
—
|
|
|
1,680,720
|
|
|||
General and administrative
|
5,095,306
|
|
|
5,177,802
|
|
|
(82,496
|
)
|
|||
Loss from operations
|
(6,823,251
|
)
|
|
(7,935,049
|
)
|
|
1,111,798
|
|
|||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
||||||
Change in fair value of derivatives
|
—
|
|
|
(582,845
|
)
|
|
582,845
|
|
|||
Interest expense
|
(891,824
|
)
|
|
(757,857
|
)
|
|
(133,967
|
)
|
|||
Interest and other income
|
3,187,385
|
|
|
1,013,426
|
|
|
2,173,959
|
|
|||
|
|
|
|
|
|
||||||
NET INCOME (LOSS)
|
$
|
(4,527,690
|
)
|
|
$
|
(8,262,325
|
)
|
|
$
|
3,734,635
|
|
Issuer Purchases of Equity Securities
|
||||||||||
Period
|
|
(a)Total number of shares (or units) purchased
|
|
(b)Average price paid per share (or unit)
|
|
(c)Total number of shares (or units) purchased as part of publicly announced plans or programs
|
|
(d)Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
|
||
July 1-July 31, 2015
|
|
—
|
|
|
—
|
|
|
Not applicable
|
|
Not applicable
|
August 1-August 31, 2015
|
|
650,000
|
|
|
—
|
|
|
Not applicable
|
|
Not applicable
|
September 1-September 30, 2015
|
|
—
|
|
|
—
|
|
|
Not applicable
|
|
Not applicable
|
Total
|
|
650,000
|
|
|
—
|
|
|
Not applicable
|
|
Not applicable
|
|
|
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
|
|
|
10.1
|
|
Restructuring Agreement [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35200) filed on July 29, 2015, and incorporated herein by reference]
|
|
|
|
10.2
|
|
Stockholders' Agreement [filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-35200) filed on July 29, 2015, and incorporated herein by reference]
|
|
|
|
4.1
|
|
Certificate of Amendment for the Series A-1 Certificate of Designations [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-35200) filed on August 27, 2015, and incorporated herein by reference]
|
|
|
|
4.2
|
|
Certificate of Amendment for the Series A-2 Certificate of Designations [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-35200) filed on August 27, 2015, and incorporated herein by reference]
|
|
|
|
4.3
|
|
Certificate of Amendment for the Series B Certificate of Designations [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-35200) filed on August 27, 2015, and incorporated herein by reference]
|
|
|
|
10.3
|
|
First Amendment to the Limited Liability Operating Agreement of Northern Comstock LLC [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35200) filed on August 27, 2015, and incorporated herein by reference]
|
|
|
|
10.4*
|
|
Second Amendment to the Limited Liability Operating Agreement of Northern Comstock LLC
|
|
|
|
31.1*
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2*
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1*
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
95*
|
|
Mine Safety Disclosures.
|
|
|
|
101*
|
|
Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2015, furnished in XBRL (eXtensible Business Reporting Language)).
|
|
|
|
|
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Condensed Consolidated Balance Sheets at September 30, 2015 and December 31, 2014, (ii) the Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2015 and 2014, (iii) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 and (iv) the Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
|
COMSTOCK MINING, INC.
|
|
|
(Registrant)
|
|
|
|
|
Date: October 23, 2015
|
By:
|
/s/ Corrado De Gasperis
|
|
|
Name: Corrado De Gasperis
|
|
|
Title: President and Chief Executive Officer (Principal Executive Officer)
|
(a)
|
Subject to Section 3.2(b), Comstock Mining shall make cash Capital Contributions to the Company of: (i) Thirty Thousand Dollars ($30,000) on the 15
th
day of each month (other than August) commencing on October 15, 2015 and ending on September 15, 2027; and (ii) Four Hundred Eighty Two Thousand Five Hundred Dollars ($482,500) on August 28
th
of each year commencing on August 28, 2016 and ending on August 28, 2027.
|
(b)
|
Notwithstanding Section 3.2(a), at any time that Comstock Mining’s cash and cash equivalents are less than Ten Million Five Hundred Thousand Dollars ($10,500,000) (such occurrence, a “Liquidity Threshold Event”), then Comstock Mining shall promptly notify the Company that a Liquidity Threshold Event has occurred and at any time that a Liquidity Threshold Event has occurred and is occurring, Comstock Mining shall have the option in its discretion to make the next scheduled Capital Contribution of Four Hundred Eighty-Two Thousand Five
|
(c)
|
Notwithstanding Section 3.2(a), at the initial time that Comstock Mining’s cash and cash equivalents exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) (such occurrence, a “Two Payment Liquidity Surplus Event”), then Comstock Mining shall notify the Company that a Two Payment Liquidity Surplus Event has occurred and within five (5) business days of delivering such notice, Comstock Mining agrees to make a one-time Capital Contribution of One Million Six Hundred Twenty Five Thousand ($1,625,000) less the amount of any Capital Contributions made pursuant to the last sentence of this Section, with such Capital Contribution being applied against the scheduled Capital Contributions in reverse order. For the sake of clarity, the right to such Capital Contribution is a one-time right. If a Liquidity Surplus Event does not occur during the term of this Agreement and Comstock Mining receives net cash proceeds from sources other than operations that exceed Six Million Two Hundred Fifty Thousand Dollars ($6,250,000) (such occurrence, a “One Payment Liquidity Surplus Event”), then Comstock Mining shall notify the Company that a One Payment Liquidity Surplus Event has occurred and within five (5) business days of delivering such notice, Comstock Mining agrees to make a one-time Capital Contribution of Eight Hundred Twelve Thousand Five Hundred ($812,500),
with such Capital Contributions being applied against the scheduled Capital Contributions in reverse order.
|
(d)
|
Notwithstanding Section 3.2(a), Comstock Mining shall have the option to prepay such Capital Contributions from time to time or at any time without any penalty.
|
(e)
|
Notwithstanding Section 3.2(a), to the extent production has commenced on DWC Property or Leased Property, then Comstock Mining agrees to accelerate Capital Contributions by making accelerated payments (the amount of the accelerated payment is determined as equal to 3% of Net Smelter Returns with respect to the ore producing Property, with such Capital Contributions being applied against the scheduled Capital Contributions in reverse order. For purposes of clarity, this is not an additional payment nor a royalty payment, but a mechanism to accelerate and prepay the existing capital obligation without interest or penalty.
|
(f)
|
Except as provided in this Section 3.2, no Member shall be permitted to make any additional Capital Contributions to the Company without the prior written consent of all Members."
|
|
|
COMSTOCK MINING INC.
By:__
/s/ Corrado DeGasperis
_______________
Name: Corrado De Gasperis
Title: Chief Executive Officer
|
|
|
DWC RESOURCES, INC.
By:_
/s/ John V. Winfield
___________________
Name: John V. Winfield
Title: Chairman
|
|
|
_
/s/ John V. Winfield
_____________________
JOHN V. WINFIELD
|
/s/ Corrado De Gasperis
|
|
Corrado De Gasperis
|
|
President and Chief Executive Officer (Principal Executive Officer)
|
/s/ Judd Merrill
|
|
Judd Merrill
|
|
Principal Financial Officer
|
/s/ Corrado De Gasperis
|
|
Corrado De Gasperis
|
|
President and Chief Executive Officer (Principal Executive Officer)
|
/s/ Judd Merrill
|
|
Judd Merrill
|
|
Principal Financial Officer
|
Mining
Operating
Name
MSHA
Identification
Number
|
Section
104S&S
Citations
|
Section
104(b)
Orders
|
Section
104(d)
Citations
and
Orders
|
Section
110(b)(2)
Violations
|
Section
107(a)
Orders
|
Total Dollar
Value of
MSHA
Assessments
Proposed
|
Total
Number
Of Mining
Related
Fatalities
|
Received
Notice of
Pattern of
Violations
Under
104(3)
|
Received
Notice of
Potential
to Have
Pattern of
Violations
Under
Sections
104(3)
|
Legal
Actions
Pending
as of
Last
Day of
Period
|
Legal
Actions
Initiated
During
Period
|
Legal
Actions
Resolved
During
Period
|
||||||||||
26-01871
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
804
|
|
—
|
|
No
|
No
|
No
|
—
|
|
—
|
|
26-02771
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
—
|
|
—
|
|
No
|
No
|
No
|
—
|
|
—
|
|