Comstock Mining to Sell Non-Mining Assets to OZ Fund, Announces Comstock OZ Fund Plans
Comstock Mining Inc. (NYSE: LODE), a Nevada-based, gold and silver mining company, has agreed to sell the company’s non-mining assets in Silver Springs, Nevada to an opportunity zone fund.
Comstock Mining Inc. (NYSE: LODE), a Nevada-based, gold and silver mining company, has agreed to sell the company’s non-mining assets in Silver Springs, Nevada to an opportunity zone fund. The Comstock board also approved the company’s plans to form an opportunity zone fund focused on mining activities.
Comstock received board approval to sell one non-mining asset, a 98-acre certified industrial site and related water rights, along with the purchase agreements and options on 160 acres of land with water and sewer rights, all located in Silver Springs for $9.75 million.
The buyer is Silver Springs Capital Partners LLC, an opportunity zone fund. As part of the agreements, the Comstock retains a 3 percent future profit sharing interest on the resale of the assets. The sales are expected to close between March and September 2019, and Comstock noted that it expects to record a gain of approximately $5 million that will not be subject to federal taxes.
The company also announced plans to form a mining-focused opportunity zone fund in the near future.
“Consistent with our strategic focus, the board has approved the formation of a precious metal and mining focused, Comstock-based opportunity zone fund, creating an investment vehicle to tax-efficiently partner with the company for the exploitation of precious-metal based opportunities in Nevada or other qualified opportunity zones,” said executive chairman and CEO Corrado De Gasperis.
The opportunity zones program was established by Congress to stimulate economic development in distressed communities across the country by offering potentially significant tax benefits to investors that make long-term investments in areas of the country designated as qualified opportunity zones.
In August 2018, Comstock was notified by the New York Stock Exchange that its securities had been selling at or below $0.20 per share, and the company would have six months to cure the minimum price compliance requirement. The NYSE requires the average closing price of a listed company’s common stock to be at least $1.00 per share over a consecutive 30 trading-day period.
Comstock was recently granted an extension to May 31, 2019 to regain compliance with the NYSE continued listing standards.
The Comstock board has also determined that it is in the best interests of the company and its shareholders to implement a strategy that is focused on cash-generating, precious metal-based activities, including metals and mining supply chain ventures and acquisitions, mineral exploration, engineering, resource development, economic mineral production, metal refining and environmentally-friendly, conservation-based mining technologies and related processes.
Comstock Mining shares closed at $0.16 each on Wednesday.
Comstock Mining Inc. started acquiring properties in Nevada’s Comstock District in 2003. As of December 31, 2018, the company had total assets of $28.6 million, total current assets of $8.6 million, current liabilities of $2.4 million and net current assets of $6.2 million, including cash and cash equivalents of $0.5 million.
