Comstock Mining Inc (NYSEMKT:LODE)
Comstock Mining Inc (NYSEMKT:LODE) shares were up almost 15% on heavy volumes today. LODE shares closed yesterday sitting on their 52-week lows of $0.13 per share. Today the mining shares rose to $0.16 before closing at $0.15. Comstock Mining Inc (NYSEMKT:LODE) shares has a 30-day, daily average volume figure of 358,500 shares traded per day. Today LODE shares exchanged hands over 3.5 million times – over ten times the average.
Comstock Mining Inc (NYSEMKT:LODE) considers themselves a sector leader in environmentally responsible mining. Their land holdings are located in Northern Nevada – close to Lake Tahoe. This location figures prominently in the company’s valuation. Somewhat uniquely, the lands that Comstock has mining interests in also have a value outside of mineral exploitation. In a moment that certainly raised some eyebrows, Comstock’s CEO, Corrado De Gasperis, explained in the company’s Q1 conference call that their 8,000+ acres of land interests were in the same locale as recent, multi-million dollar land purchases by Google, Apple, and Tesla.
Comstock Mining Inc (NYSEMKT:LODE) believes the mineral assets to be worth around $450 million. They believe, based on recent transactions, their non-mining lands to be worth $50 million. Comstock Mining Inc (NYSEMKT:LODE) produced 15,451 ounces of gold and 221,723 ounces of silver in 2015, and 4,086 ounces of gold and 75,657 ounces of silver in 2016. Grade remained at 0.025 ounces of gold per ton and 0.436 ounces of silver per ton. For FY2016, operating cost applicable to mining revenue was $5.7 million, $4.5 million net of silver by-product credits as compared to $14.2 million, $10.7 million net of silver by-product credits in 2015. This 60% cost reduction is primarily a result of lower labor and processing costs due to the transition from surface mining to underground exploration and development and higher experienced metallurgical yields.
LODE shareholders have experienced an EPS loss every year. In 2012 the loss was (-$0.87) per share. That loss continued, but shrank, every year since and was (-$0.07) per share in 2016. Unfortunately, dilution has been a nemesis for LODE shareholders as the company raised cash to fund exploration and operations. In 2012 there were 40.5 million shares outstanding and that number grew to 176.63 million shares by the end of 2016.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.