Comstock Mining (LODE) Stock: Gaining On Agreement With Tongold Resources (TNGL)

Comstock Mining Inc (NYSEAMERICAN:LODE) is having an incredibly strong start to the trading session this morning, and for good reason. The company has entered into a binding agreement with Tonogold Resources that seems to be causing excitement among investors. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (9:50), LODE is trading at $0.16 per share after a gain of $0.01 per share or 9.99% thus far today.

LODE Gains On Agreement With TNGL

As mentioned above, Comstock Mining is having an incredibly strong start to the trading session this morning after it was announced that the company has entered into a binding agreement with Tonogold Resources. Under the agreement, Tonogold will receive an exclusive right to earn a 51% controlling interest in 1,162 acres of mining claims in Virginia City, Nevada. A key claim in this area is the Lucerne Deposit, located in the Storey and Lyon Counties.

Under the terms of the agreement, Tonogold has paid LODE $200,000 for an initial 6-month option. This option can be extended if TNGL so chooses to do so. The extension will require a further payment of $2 million prior to the expiry of the initial option period. However, that’s not all. In fact, if Tonogold would like to earn the 51% controlling interest mentioned above, the company will need to invest $20 million over a period of 42 months. The investments will be made to fund work programs that are developed and managed by TNGL on Lucerne Properties. In a statement, Corrado de Gasperis, CEO at LODE, had the following to offer:

We have been impressed by the commitment, diligence and frankly, passion, exhibited by Mark and the Tonogold team. We believe the success of Lucerne depends on this type of technical dilligence, development and competencies that Mark and his team have demonstrated over the past year-plus. We have the right to partner with the right captial support to maximize the value of the Lucerne operation.”

The above quote was followed up by Mark Ashley, TNGL President and CEO. Here’s what he had to say:

We commenced our negotiations with Comstock over 15-months ago. The positive, constructive and open dialogue that has been nurtured by both companies over this period has ensured that the resultant agreement provides a structure that’s not only workable but importantly provides a strong foundation for a successful strategic partnership for the benefit of both companies. Tonogold has also gained a significant and detailed understanding of the opportunities and potential that the Lucerne Properties provide over this period.”

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on LODE. In particular, we’re excited to follow the project at the Lucerne Properties and watch as this drives revenue for the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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