UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 2019
 
COMSTOCK MINING INC.
(Exact Name of Registrant as Specified in its Charter)
 
Nevada
(State or Other
Jurisdiction of Incorporation)
001-35200
(Commission File Number)
65-0955118
(I.R.S. Employer
Identification Number)
 
1200 American Flat Road, Virginia City, Nevada 89440
(Address of Principal Executive Offices, including Zip Code)
 
Registrant’s Telephone Number, including Area Code: (775) 847-5272
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.000666 per share
LODE
NYSE AMERICAN
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company      ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ¨





 Item 1.01 Entry into a Material Definitive Agreement.
 
On October 15, 2019, Comstock Mining Inc. (the “Company”) entered into a Fifth Purchase Agreement Amendment (the “Amendment”) of the Company’s previously announced Membership Interest Purchase Agreement with Tonogold Resources, Inc. (“Tonogold”).
 
Pursuant to the Amendment, the Company and Tonogold agreed to extend the closing deadline on the sale of Comstock Mining LLC until October 31, 2019. As a condition to the Amendment, Tonogold will make an additional non-refundable cash deposit of $300,000 and provided for an additional, non-refundable stock-based fee with a stated value of $250,000. With this extension, Tonogold will have paid non-refundable cash deposits totaling $4.225 million plus $5 million in non-refundable Convertible Preferred Stock (“CPS”). The CPS is convertible at the lowest of Tonogold’s (1) 20-day volume-weighted closing price prior to conversion, (2) most recent private placement or (3) public offering price.
 
The foregoing summaries of the terms of the Amendment is not intended to be exhaustive and is qualified in its entirety by the terms of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
 
A copy of the press release announcing the transactions contemplated by the Amendment is attached as Exhibit 99.1 to this Form 8-K.
 
Item 9.01 Financial Statements and Exhibits.
 
d) Exhibits.
 
 
 
 
 
  
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
COMSTOCK MINING INC.
 
 
Date: October 17, 2019
By:
/s/ Corrado De Gasperis
 
 
Name: Corrado De Gasperis
Title: Executive Chairman and Chief Executive Officer
 
 
 






FIFTH PURCHASE AGREEMENT AMENDMENT
This Fifth Purchase Agreement Amendment (this “Amendment”) dated as of October 14, 2019, is entered into by and between Tonogold Resources, Inc., a Delaware corporation (“Buyer”), and Comstock Mining Inc., a Nevada corporation (“Seller”).
WHEREAS, Seller and Buyer entered into that certain Membership Interest Purchase Agreement, dated as of January 24, 2019, as amended by the Purchase Agreement Amendment dated April 30, 2019, as amended by the Second Purchase Agreement Amendment dated May 22, 2019, as amended by the Third Purchase Agreement Amendment dated June 21, 2019, as amended by the Fourth Purchase Agreement Amendment dated August 15, 2019 and restated September 17, 2019 (the “Purchase Agreement”); and
WHEREAS, capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE in consideration of the mutual covenants and agreements herein and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties, the parties agree as follows:
1.Amendment to Section 1.2(a). Section 1.2(a) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“(a) In consideration of the sale of the Membership Interests and the agreements of Seller herein, Buyer shall pay Seller a total purchase price of $15,000,000 (the “Purchase Price”) of which:

(i) Buyer has made non-refundable cash deposits of $3,925,000 toward the Purchase Price prior to October 15, 2019, and Buyer has made a non-refundable deposit of $3,500,000 in the form of Series D Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock (“CP Shares”) of Buyer that was previously delivered to Seller; and

(ii) Buyer will make a payment for the invoiced September amount of $171,607.26, on or before the October 18, 2019; and

(iii) Buyer will make a payment of $3,625,000 on or before the Closing Date; and

(iv) the remainder of the Purchase Price, $3,950,000, will be deferred (the “Loan”) with terms and minimum payments as indicated in Section 1.2(c).

(v) In addition to the amounts indicated above, all cash received by Seller from Buyer shall be applied first toward the reimbursement of outstanding invoices prior to any application toward the minimum payments on the Loan. Without limiting the generality of the preceding sentence, if the Closing does not occur




prior to November 1, 2019, all amounts invoiced by the Seller to the Buyer for October shall be immediately due and applied in the same manner described in the preceding sentence.

2.Amendment to Section 4.9(a)(ii). Section 4.9(a)(ii) of the Purchase Agreement is hereby amended to include the following:
“(ii) at any time after October 15, 2019 (the “Termination Date”); provided, that Seller has agreed to extend the Termination Date to October 31, 2019, if Buyer delivers an extension fee of $250,000 in CP Shares on or before October 25th 2019 and non-refundable cash deposits of at least $300,000 applicable to the Purchase Price on or prior to October 18, 2019; and provided further that Buyer may further extend the Termination Date to November 10, 2019, if Buyer delivers an irrevocable notice prior to October 31st 2019 of its election to extend in which case it must deliver an extension fee of $500,000 in CP Shares on or before November 10th 2019 and non-refundable cash deposits of at least $1,000,000 applicable to the Purchase Price on or prior to October 25, 2019.”
3.Pre-Closing Capital Raise Proceeds; Accounting. Buyer and Seller hereby agree that Buyer shall pay the cash required to make the $3.625 million (less any amounts paid in non-refundable deposits applicable to the Purchase Price under paragraph 2 above), due on or before Closing per Section 1.2 (a)(iii) of the Purchase Agreement from the proceeds of equity raises, royalty sales and/or other third party funding agreements, whether in one transaction or a series of transactions (collectively, a “Pre-Closing Capital Raise”). Buyer hereby agrees to provide Seller with a weekly accounting of all proceeds of Pre-Closing Capital Raises since August 15, 2019, starting on October 14, 2019 and each Monday thereafter. Buyer covenants and agrees that if Buyer receives any proceeds from any Pre-Closing Capital Raise, then Buyer shall cause 100% of such proceeds to be immediately paid to Seller and used first to pay any expense reimbursement obligations, and then the $3.625 million deposit contemplated by the Purchase Agreement. Once all such payments have been made, Buyer will comply with the requirements of Section 1.2(c)(v) of the Purchase Agreement, which provides that if the proceeds from any Capital Raise exceed $6.5 million, then Buyer shall immediately pay 50% of the excess amount to prepay the Loan, until the Loan is paid in full.

4.Supersedence of Amendments Related to Deposits. All provisions related to purchase price deposits set forth in each amendment to the Purchase Agreement are hereby superseded by the provisions of Section 1.2(a) of the Purchase Agreement, as amended hereby.

5.Expense Reimbursement Obligations. Buyer hereby agrees to pay in full all existing unpaid invoices under the Option Agreement and the Purchase Agreement issued on or prior to October 3, 2019, it being agreed and understood that Buyer shall wire funds received by Buyer from any source to Seller within 24 hours of receipt.


6.Remedies Upon Default of this Amendment. If Buyer fails to comply with its obligations under this Amendment or fails to make any payment required to be made under this Amendment and fails to remedy such violation within thirty (30) days following notice from




Seller, then such failure shall constitute a default by Buyer under this Amendment and, if and so long as such default shall continue uncured or unremedied, Seller shall have and be entitled to exercise, in its sole discretion, exercise any of the remedies available to a secured lender under Nevada law and any of the remedies set forth below. In case of any such default, the Seller shall have the right to treat such amounts as debt pursuant to promissory note (the “Deemed Promissory Note”) with a principal amount equal to the sum of the amounts unpaid, bearing interest rate of twelve percent (12%) per annum, compounding on a monthly basis until paid in full. The Deemed Promissory Note shall be secured by a deed of trust and/or other security interest in the Lucerne Properties, the Membership Interests and all rights of the Company. In addition, the Seller shall have a right to terminate any of the Transaction Documents (other than the Mining Lease).

7.No Novation. Except as amended hereby, all of the terms and conditions of the Option Agreement and the Purchase Agreement shall remain in full force and effect. Except as otherwise provided herein, Buyer and Seller acknowledge and agree that this Amendment is not intended to constitute, nor does it constitute, a novation, interruption, suspension of continuity, satisfaction, discharge or termination of the obligations or liabilities under the Option Agreement or the Purchase Agreement.

8.Further Assurances. Each of Buyer and Seller shall, upon request from the other Party, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Amendment and the documents to be delivered hereunder.

9.Due Execution. The execution, delivery and performance by Buyer and Seller of this Amendment has been duly authorized by all necessary action on the part of Buyer and Seller. This Amendment has been duly executed and delivered by Buyer and Seller.

10.Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada.

11.Venue. Each Party irrevocably submits to the exclusive jurisdiction of federal courts in the State of Nevada, for the purposes of any dispute or action arising out of this Amendment. Process in any action referred to in this Section 11 may be served on any Party anywhere in the world by national courier delivery sent to the address of such served Party set forth on the signature page of this Amendment. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any action arising out of this Amendment in U.S. federal courts sitting in the State of Nevada, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON




CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

12.Beneficiaries. This Amendment is intended for the benefit of the Parties and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

13.Counterparts. This Amendment may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective against an executing Party when a counterpart has been signed and delivered by such Party to another Party. This Amendment and any amendments hereto, to the extent signed and delivered by means of portable document format (“PDF”) or a facsimile machine, shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any Party or to any such contract, each other Party hereto or thereto shall re-execute original forms thereof and deliver them to all other Parties. No Party or to any such contract shall raise the use of PDF or a facsimile machine to deliver a signature or the fact that any signature or contract was transmitted or communicated through the use of PDF or a facsimile machine as a defense to the formation of a contract and each Party forever waives any such defense.
[Signature Page To Follow]





IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first above written.
 
TONOGOLD RESOURCES, INC.
 
 
By:
 
/s/ Mark Ashley
Name:
 
 Mark Ashley
Title:
 
 Chief Executive Officer
Address: 5666 La Jolla Boulevard, #315, La Jolla, CA 92037
 
                                
COMSTOCK MINING INC.
 
 
By:
 
/s/ Corrado De Gasperis
Name:
 
 Corrado De Gasperis
Title:
 
Executive Chairman and CEO
Address: 1200 American Flat Road, Virginia City, NV 89440
 

COMSTOCK MINING LLC, by its manager Comstock Mining Inc.
 
 
By:
 
/s/ Corrado De Gasperis
Name:
 
 Corrado De Gasperis
Title:
 
Executive Chairman and CEO
Address: 1200 American Flat Road, Virginia City, NV 89440
 







A20191015LUCERNECLOSI_IMAGE1.JPG

Comstock Mining Lucerne Closing Update

Virginia City, NV (October 15, 2019) Comstock Mining Inc. (“Comstock”) (NYSE American: LODE)
announced today that it has agreed to extend the closing deadline on the sale of Lucerne to Tonogold Resources, Inc. (“Tonogold”) until October 31, 2019. Tonogold has agreed to an additional non-refundable cash deposit of $300 thousand and provided for an additional, non-refundable stock-based fee totaling $250 thousand. With this extension, Tonogold will have paid non-refundable cash deposits totaling $4.225 million plus $5 million in non-refundable Convertible Preferred Stock (“CPS”). The CPS is convertible at the lowest of Tonogold’s (1) 20-day volume-weighted closing price prior to conversion, (2) most recent private placement or (3) public offering price.

Under the agreement, Comstock will sell the membership interest in Comstock Mining LLC to Tonogold for $15 million plus the assumption of certain liabilities and a retained 1.5% NSR royalty on Lucerne. The amended purchase agreement allows Tonogold to close by October 31, 2019, with an additional cash payment due at closing of $3.625 million, less any additional cash deposits. This results in total cash payments at closing of $7.55 million for a 50.3% ownership interest in Comstock Mining LLC. The remaining cash purchase price of $3.95 million will be deferred with monthly scheduled payments of at least $650 thousand, between January 2020 and June 2020. Tonogold’s obligation to make the deferred scheduled payments will be secured by a collateral interest in the ownership interests in, and/or the assets of, Comstock Mining LLC. Once the final payment is made, Tonogold would then own 100% of Comstock Mining LLC, the owner of Lucerne assets and its mining permits.

Mr. Corrado De Gasperis, Executive Chairman and CEO, stated, “Tonogold has been working diligently toward closing and has assembled an impressive list of investors. We are excited about the exploration and development plans and look forward to closing in the next few weeks and bringing almost a full year of hard work to fruition.”

Under this extension, Tonogold also has the right to pay an additional $1 million in non-refundable cash deposits and $500 thousand in an additional stock fee, if needed, for a final extension to November 10, 2019.

About Comstock Mining, Inc.
Comstock Mining Inc. is a Nevada-based, gold, and silver mining company with extensive, contiguous property in the Comstock District and is an emerging leader in sustainable, responsible mining. The Company began acquiring properties in the Comstock District in 2003. Since then, the Company has consolidated a significant portion of the Comstock District, amassed the single largest known repository of historical and current geological data on the Comstock region, secured permits, built an infrastructure and completed its first phase of production. The Company continues evaluating and acquiring properties inside and outside the district, expanding its footprint and exploring all of our existing and prospective opportunities for further exploration, development, and mining. The near-term goal of our business plan is to maximize intrinsic stockholder value realized, per share, by continuing to acquire mineralized and potentially mineralized properties, exploring, developing and validating qualified resources and reserves (proven and probable) that enable the commercial development of our operations

    

through extended, long-lived mine plans that are economically feasible and socially responsible.


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; 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. The 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 undertakes any obligation to update or revise any forward-looking statement publicly.

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 Comstock or Tonogold.

Contact information:

Comstock Mining, Inc.
P.O. Box 1118
Virginia City, NV 89440
www.comstockmining.com

Corrado De Gasperis
Executive Chairman & CEO
Tel (775) 847-4755



degasperis@comstockmining.com

Zach Spencer
Director of External Relations
Tel (775) 847-5272 ext.151
questions@comstockmining.com