Tonogold Resources Inc. secured an exclusive right from Comstock Mining Inc. to earn a 51% interest in 1,162 acres of mining claims in Nevada, including the past-producing Lucerne gold deposit, which forms part of the company's namesake Comstock property.
Tonogold paid US$200,000 for an initial six-month option, which is extendable by paying a further US$2 million, according to an Oct. 5 release.
The company must invest US$20 million in work programs on the Lucerne properties over the next 42 months to earn the controlling stake. The investment will be used to produce a mine plan and feasibility study to enable mining operations to resume.
The two companies will form a joint venture steering committee, with majority members to be nominated by Tonogold, which will manage work programs, budgets and other day-to-day operations.
Tonogold also secured an option to acquire a 51% stake in Comstock's heap leach facilities for US$25 million, payable over 18 months. The option is conditional on the acquisition of the 51% interest in Lucerne.
The deal also includes a right of first refusal over 192 acres of mining claims which cover Comstock's Dayton gold-silver deposit, also part of the Comstock property.
Tonogold said its work programs over the next three years will target sustained annual gold output of more than 100,000 ounces, with cash costs of about US$750/oz.
The company is planning an independent review of the Lucerne resource and may also undertake infill drilling within the initial six-month period.