Tonogold Resources Inc. Progress Update Announcement October 2020
Tonogold Resources Inc. (OTC PINK:TNGL) announced key developments regarding its financial and drilling activities. The company redeemed $2.18 million of convertible preference shares issued to Comstock Mining Inc. through a $2.5 million common share subscription from investors. This redemption reduces potential dilution by approximately 5 million shares. Concurrently, Tonogold commenced a $7 million drilling program on the historic Comstock Lode, with the first hole intersecting significant geological structures. Assay results are pending, indicating a cautious yet optimistic outlook.
- Redemption of $2.18 million in convertible preference shares reduces dilution impact by ~5 million shares.
- Commencement of a $7 million drilling program at Comstock Lode signals strong exploration commitment.
- Assay results pending, which may affect investor confidence until confirmed.
LA JOLLA, CA / ACCESSWIRE / October 7, 2020 / TONOGOLD RESOURCES, INC. (OTC PINK:TNGL) ("Tonogold" or the "Company") advises of the following.
Preference Share redemption
As part of the consideration of Tonogold's acquisition of Comstock Mining Inc.'s mining and exploration assets in Storey County, Nevada, Tonogold issued CMI
The terms of the Pref Shares provided CMI the right to convert some or all of the Pref Share into Common Shares in Tonogold at a conversion price of 18 cents per share and provided Tonogold the right to redeem the Pref Shares (not previously converted) at a
In May 2020 and September 2020, CMI elected to convert a total of
A group of Australian investors recently agreed to subscribe for up to
This transaction has eliminated the Pref Shares with around 5 million fewer shares being issued than previously expected - a favorable dilution impact for all shareholders.
The 7 million new shares issued will have the requisition 12-month trading restriction imposed pursuant to Rule 144 of the Securities Act. No warrants or similar instrument is required to be issued as part of this 35-cent share placement.
As a result of the conversions and new shares issues discussed above, Tonogold currently has 309 million Common Shares on issue.
Drilling Update
On Sept. 8, 2020, Tonogold advised that it had commenced a
The first hole of the program ("TC001D") has been completed at the South Overman site using a core rig. Assays for the hole are currently pending. The hole was drilled vertically (-90 degrees) and encountered the Comstock structure (host of mineralization in the area) from approximately 149 meters (489 feet) to 206 meters (675 feet) down the hole. This represents a true-thickness of approximately 42 meters (138 feet). Within this structure, two zones of moderate to strong quartz veining were identified with a true thickness estimated to be 9 and 2 meters respectively.
Significant brecciation and fracturing was encountered in the core hole, both within the quartz vein zones and in the surrounding rock. Although this is encouraging as historic reports commonly document a direct correlation between mineralization and strong fracturing, these zones of quartz veining may not contain precious metal mineralization and caution is recommended until assay results are received.
An illustrated cross section is provided below.
Importantly, in terms of "Proof of Concept," the first hole intersected Comstock Lode within 1-foot of that anticipated by the geological model developed and at 42-meter true width, was ~5 meters wider.
The core rig has commenced the second hole which is targeting the deeper East Yellow Jacket area of the Comstock Lode. The hole is currently at approximately 275 meters (900 feet) with the target zone projected at 562 meters (1,845 feet) down hole.
An RC rig arrived on site yesterday and is being prepared to commence drilling today.
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; 2 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 guaranteeing, 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. 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 undertake any obligation to publicly update or revise any forward-looking statement.
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 or Tonogold.
Contact Information for Tonogold:
Mark Ashley
President and CEO
M: +1 310 409 6504
E: mjashley3@gmail.com
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