Form 10-Q Comstock Mining Inc. For: Mar 31

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 6/12/2026

1. ADBE
2. RH
3. NVDA
4. USO
5. SPCX

6. MH
7. RKLB
8. NDAQ
9. CRM
10. ADAM

Top News Most Read Special Reports

April 16, 2015 6:08 AM EDT

E-mail

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



	x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2015



	¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File No. 001-35200

COMSTOCK MINING INC.

(Exact name of registrant as specified in its charter)



NEVADA (State or other jurisdiction of incorporation or organization)	1040 (Primary Standard Industrial Classification Code Number)	65-0955118 (I.R.S. Employer Identification No.)

P.O. Box 1118

Virginia City, NV 89440

(Address of principal executive offices)

(775) 847-5272

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer x

Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The number of shares of Common Stock, $0.000666 par value, of the registrant outstanding at April 14, 2015 was 89,800,513.

TABLE OF CONTENTS



PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.	3
CONDENSED CONSOLIDATED BALANCE SHEETS	3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	24
Item 4. Controls and Procedures.	25
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.	26
Item 1A. Risk Factors.	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	26
Item 3. Defaults Upon Senior Securities.	26
Item 4. Mine Safety Disclosures.	26
Item 5. Other Information.	26
Item 6. Exhibits.	26
Signatures	29

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in this report on Form 10-Q are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. All statements, other than statements of historical facts, are forward-looking statements. 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. Forward-looking statements include statements about matters such as: future prices and sales of, and demand for, our products; future industry and market conditions; future changes in our exploration activities, production capacity and operations; future exploration, production, operating and overhead costs; future employment and contributions of personnel; and management; tax and interest rates; capital expenditures; nature and timing of restructuring charges and the impact thereof; productivity, business processes, rationalization and other, operational initiatives; investments, acquisition, consulting, operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory environment; and future working capital, costs, revenues, business opportunities, debt levels, cash flows, margins, earnings and growth.

These statements are based on assumptions and assessments made by our management 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 guarantees, 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 set forth in this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and the following: current global economic and capital market uncertainties; the speculative nature of gold or mineral exploration, including risks of diminishing quantities or grades of qualified resources and reserves; operational or technical difficulties in connection with exploration or mining activities; contests over our title to properties; potential dilution to our stockholders from the conversion of securities that are convertible into or exercisable for shares of our common stock; potential inability to continue to comply with government regulations; adoption of or changes in legislation or regulations adversely affecting our businesses; permitting rejections, constraints or delays; business opportunities that may be presented to, or pursued by, us; changes in the United States or other monetary or fiscal policies or regulations; interruptions in our production capabilities; unexpected equipment failures; fluctuation of prices for gold or certain other commodities (such as silver, zinc, cyanide, water, diesel fuel, and electricity); changes in generally accepted accounting principles; geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues organically; potential inability to attract and retain key personnel; interruptions in delivery of critical supplies, equipment, and raw materials; assertion of claims, lawsuits and proceedings against us; potential inability to maintain an effective system of internal controls over financial reporting; potential inability or failure to timely file periodic reports with the SEC; potential inability to maintain the listing of our securities on any securities exchange or market; and work stoppages or other labor difficulties. Occurrence of such events or circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows or the market price of our securities. All subsequent written and oral forward-looking statements by or attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. We undertake no obligation to publicly update or revise any forward-looking statement.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

COMSTOCK MINING INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



	March 31, 2015			December 31, 2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,179,264		$	5,308,804
Accounts receivable	41,102			322,406
Inventories	500,561			428,235
Stockpiles and mineralized material on leach pads	1,820,046			1,743,053
Prepaid expenses	1,684,452			833,360
Total current assets	8,225,425			8,635,858
MINERAL RIGHTS AND PROPERTIES, Net	7,274,375			7,318,175
PROPERTIES, PLANT AND EQUIPMENT, Net	28,075,140			26,207,062
RECLAMATION BOND DEPOSIT	2,642,804			2,642,804
RETIREMENT OBLIGATION ASSET	1,999,313			1,619,101
OTHER ASSETS	26,401			32,872
TOTAL ASSETS	$	48,243,458		$	46,455,872
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	2,538,850		$	2,265,723
Accrued expenses	1,313,304			4,408,568
Long-term debt and capital lease obligations – current portion	8,531,720			5,897,219
Derivative liabilities	47,353			33,298
Total current liabilities	12,431,227			12,604,808
LONG-TERM LIABILITIES:
Long-term debt and capital lease obligations	5,589,614			5,701,264
Long-term reclamation liability	6,631,954			5,908,700
Total long-term liabilities	12,221,568			11,609,964
Total liabilities	24,652,795			24,214,772
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, $.000666 par value, 3,950,000,000 shares authorized, 85,173,255 and 82,480,600 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	56,725			54,932
Convertible Preferred Stock; 50,000,000 shares authorized
7.5% Series A-1 convertible preferred stock; $.000666 par value, 1,500,000 shares authorized; 24,362 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	16			16
7.5% Series A-2 convertible preferred stock, $.000666 par value, 250,000 shares authorized; 1,610 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	1			1
7.5% Series B convertible preferred stock, $.000666 par value, 600,000 shares authorized; 22,626 and 22,676 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	15			15
Additional paid-in capital	210,853,900			210,795,244
Accumulated deficit	(187,319,994		)	(188,609,108		)
Total stockholders’ equity	23,590,663			22,241,100
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	48,243,458		$	46,455,872

See accompanying notes to condensed consolidated financial statements.

COMSTOCK MINING INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



	Three Months Ended March 31,
	2015			2014
REVENUES
Revenue - Mining	$	5,927,174		$	5,606,064
Revenue - Hospitality	110,243			157,397
Total revenues	6,037,417			5,763,461

COST AND EXPENSES
Costs applicable to mining revenue	3,717,911			4,762,901
Hospitality operating costs	200,027			286,299
Exploration and mine development	603,194			801,218
Mine claims and costs	764,107			952,522
Environmental and reclamation	280,112			172,215
General and administrative	2,145,234			2,191,970
Total cost and expenses	7,710,585			9,167,125

LOSS FROM OPERATIONS	(1,673,168		)	(3,403,664		)

OTHER INCOME (EXPENSE)
Change in fair value of derivatives	—			(235,207		)
Interest expense	(223,673		)	(186,330		)
Other income (expense), net	3,185,955			222
Total other income (expense), net	2,962,282			(421,315		)

NET INCOME (LOSS)	1,289,114			(3,824,979		)

INCOME TAXES	—			—

NET INCOME (LOSS)	1,289,114			(3,824,979		)

DIVIDENDS ON CONVERTIBLE PREFERRED STOCK	(898,832		)	(1,061,609		)

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	390,282		$	(4,886,588	)

Net income (loss) per common share – basic	$	0.01		$	(0.07	)

Net income (loss) per common share – diluted	$	0.01		$	(0.07	)

Weighted average common shares outstanding — basic	82,492,914			71,808,908

Weighted average common shares outstanding — diluted	136,101,769			71,808,908

See accompanying notes to condensed consolidated financial statements.

COMSTOCK MINING INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
	2015			2014
OPERATING ACTIVITIES:
Net income (loss)	$	1,289,114		$	(3,824,979	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, amortization and depletion	1,913,505			1,640,309
Stock payments and stock-based compensation	44,400			615,491
Accretion of reclamation liability	63,959			85,972
(Gain) loss on sale of properties, plant, and equipment	(12,723		)	45,499
Amortization of debt discounts and issuance costs	86,973			92,638
Net change in fair values of derivatives	14,055			403,638
Changes in operating assets and liabilities:
Accounts receivable	281,304			(219,836		)
Inventories	(72,326		)	(779,033		)
Stockpiles and mineralized material on leach pads	(76,993		)	(70,890		)
Prepaid expenses	(357,457		)	(191,724		)
Other assets	6,471			6,470
Accounts payable	24,480			75,230
Accrued expenses	(2,995,264		)	(263,859		)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	209,498			(2,385,074		)
INVESTING ACTIVITIES:
Proceeds from sale of properties, plant and equipment	77,035			159,310
Purchase of mineral rights and properties, plant and equipment	(3,083,301		)	(1,142,784		)
Increase in reclamation bond deposit	(100,000		)	(300,000		)
NET CASH USED IN INVESTING ACTIVITIES	(3,106,266		)	(1,283,474		)
FINANCING ACTIVITIES:
Principal payments on long-term debt and capital lease obligations	(2,652,164		)	(764,243		)
Proceeds from long-term debt obligations	4,419,392			4,626,289
NET CASH PROVIDED BY FINANCING ACTIVITIES	1,767,228			3,862,046
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,129,540		)	193,498
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	5,308,804			2,409,446
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	4,179,264		$	2,602,944
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	177,141		$	179,475
				(Continued)

COMSTOCK MINING INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
	2015		2014
Supplemental disclosure of non-cash investing and financing activities:
Conversion of convertible preferred stock to common stock (par value)	$	—	$	1
Reclamation bond deposit included in accrued expenses and other liabilities	—		700,000
Additions to reclamation liability and retirement obligation asset	659,295		—
Issuance of common stock for properties, plant and equipment	16,049		—
Dividends paid in common stock (par value)	1,723		767
Issuance of long-term debt obligations for purchase of mineral rights and properties, plant and equipment	175,015		1,314,644
Vested restricted common stock (par value)	40		67
Properties, plant and equipment purchases in accounts payable	588,890		420,676

See notes to condensed consolidated financial statements.

COMSTOCK MINING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 2015 (UNAUDITED)

1. Interim Financial Statements

Basis of Presentation

The interim condensed consolidated financial statements of Comstock Mining Inc. ("Comstock", "Company", "we", "our" or "us") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. For further information, refer to the financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

During the three months ended March 31, 2015, the Company shipped 4,695 ounces of gold, resulting in recognized revenue of approximately $5.9 million. During the three months ended March 31, 2015, the Company shipped 56,482 ounces of silver for approximately $1 million. Silver is accounted for as a by-product credit in costs applicable to mining revenue for financial reporting purposes.

Liquidity and Management Plans

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern which considers the realization of assets and discharge of liabilities in the normal course of business and does not include any adjustments that might result from the outcome of uncertainties noted below.

The Company has recurring net losses from operations and an accumulated deficit of $187.3 million at March 31, 2015. For the three month period ended March 31, 2015, the Company generated net income of $1.3 million and a positive $0.2 million of cash provided by operations. As of March 31, 2015, the Company had cash and cash equivalents of $4.2 million, current assets of $8.2 million and current liabilities of $12.4 million, resulting in current liabilities in excess of current assets of $4.2 million.

The Company’s current capital resources include cash and cash equivalents and other working capital resources, cash generated through operations, and existing financing arrangements, including a revolving credit facility (the “Revolving Credit Facility”) with Auramet International, LLC ("Auramet"), pursuant to which the Company may have borrowings up to $8 million outstanding at any given time. The Revolving Credit Facility has a maturity of February 6, 2017 and allows for re-advances on the facility up to the $8 million availability. The Company has financed its exploration, development, and start up activities principally from the sale of equity securities and, to a lesser extent, debt financing. While the Company has been successful in the past in obtaining the necessary capital to support its operations, including registered equity financings from its existing shelf registration, borrowings, or other means, there is no assurance that the Company will be able to obtain additional equity capital or other financing, if needed. The Company believes it will have sufficient funds to sustain its operations during the next 12 months as a result of the sources of funding detailed above.

Future production rates and gold prices below management’s expectations would adversely affect the Company’s results of operations, financial condition and cash flows. If the Company were unable to obtain any necessary additional funds, this could have an immediate material adverse effect on liquidity and could raise substantial doubt about the Company’s ability to continue as a going concern. In such case, the Company could be required to limit or discontinue certain business plans, activities or operations, reduce or delay certain capital expenditures or sell certain assets or businesses. There can be no assurance that the Company would be able to take any of such actions on favorable terms, in a timely manner or at all.

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenditures during the reported periods. Actual results could differ materially from those estimates. Estimates may include those pertaining to valuation of inventories, stockpiles and mineralized material on leach pads, the estimated useful lives and valuation of plant and equipment, mineral rights, deferred tax assets, convertible preferred stock, derivative assets and liabilities, reclamation liabilities, stock-based compensation and payments, and contingent liabilities.

Derivative Liabilities

Derivative liabilities are recorded at fair value when issued and the subsequent change in fair value each period is recorded in the condensed consolidated statements of operations. We do not hold or issue any derivative financial instruments for speculative trading purposes.

The Company manages its exposure to changes in gold market prices by entering into various derivative contracts including gold forward contracts, gold call option contracts, and gold put option contracts. Depending on the specific nature of each of the derivative contracts, the changes in the fair value are recognized as either a component of revenue or other income (expense) in the condensed consolidated statements of operations.

HOPE Coins

On March 31, 2015, the Company received 300,000 (“HOPE Coins”) issued by the HOPE Gold Coin Charitable Trust (the “Trust”). HOPE Coins are considered a cryptographic currency. The HOPE Coins are payments and partial pre-payments on the Mineral Rights License Agreement entered into by the Company with the Trust on October 9, 2014. The HOPE coins are being sold by the Trust for $10 per coin. However, the Company did not recognize a gain or revenue on its financial statements for the HOPE Coins received as of March 31, 2015, as no market value has yet been established.

Under the Mineral Rights License Agreement, the Company has agreed to license an initial five metric tons of gold (or gold-equivalent) of validated, measured, and indicated resources for a period up to 12 years to support the value of the initial 50 million HOPE Coins being sold.

Reclassifications

Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. We believe these changes provide increased transparency and improved comparability of our cost classifications.

Exploration and Mine Development, Mine Claims and Costs, and Environmental and Reclamation Presentation

The Company separated its exploration and mine development, mine claims and costs and environmental and reclamation line items from its previously reported reclamation and exploration costs line item in the consolidated statements of operations. Reclamation and exploration costs previously recorded in the first quarter of 2014 were $1,925,955.

Comprehensive Income

The only component of comprehensive income for the three months ended March 31, 2015 was net income. The only component of comprehensive loss for the three months ended March 31, 2014, was net loss.

Income Taxes

We recognize deferred tax assets and liabilities based on differences between the consolidated financial statement carrying amounts and tax bases of certain recorded assets and liabilities and for tax loss carry forwards. Realization of deferred tax assets is dependent upon our ability to generate sufficient future taxable earnings. Where it is more likely than not that some portion or all of the deferred tax asset will not be realized, we have provided a valuation allowance. The Company has provided a full valuation allowance at March 31, 2015, and December 31, 2014, for its net deferred tax assets as it cannot conclude it is more likely than not that they will be realized. During the three months ended March 31, 2015, the Company fully adjusted its estimate of the final portion of $3.2 million tax indemnification because the indemnity fully lapsed. This adjustment did not give rise to any net taxable income.

Recently Issued Accounting Pronouncements

There have been no recently issued accounting pronouncements through the date of this report that we believe will have a material impact on our financial position, results of operations or cash flows.

2. Inventories, Stockpiles and Mineralized Material on Leach Pads

Inventories, stockpiles and mineralized materials on leach pads consisted of the following:



	March 31, 2015		December 31, 2014
In-process	$	500,561	$	428,235
Finished goods	—		—
Total inventories	$	500,561	$	428,235

Stockpiles	$	561,979	$	326,126
Mineralized material on leach pads	1,258,067		1,416,927
Total stockpiles and mineralized material on leach pads	$	1,820,046	$	1,743,053
Total	$	2,320,607	$	2,171,288

3. Properties, Plant and Equipment

The Company made capital expenditures totaling approximately $3.5 million during the three months ended March 31, 2015. Approximately $1.8 million was primarily for the design and construction of the heap leach expansion and related infrastructure. Approximately $1.7 million was used to purchase properties located in Storey County including 7.5 acres of various properties adjacent to the mining and processing operation.

During the three months ended March 31, 2015 and 2014, the company recognized depreciation expense of $1.6 million and $1.4 million, respectively.

4. Derivative Financial Instruments

Derivative financial instruments consisted of the following:



	March 31, 2015			December 31, 2014
Derivative Type
Derivative liabilities
Gold call and put options	$	93,353		$	32,698
Gold forwards	(46,000		)	600
Total derivative liabilities	$	47,353		$	33,298

Gold Call and Put Option and Forward Derivatives - During the three months ended March 31, 2015, the Company entered into separate gold forward and call and put option derivative contracts related to future gold sales with its primary customer. Premiums received at the inception of written gold call and put options are recorded as a liability. During the three month period ended March 31, 2015, the Company recognized a gain of $46,600 on the change in fair value of the gold forward derivatives. During the three month period ended March 31, 2015, the Company recognized a loss of $60,655 on the change in fair value of the call option derivatives. The recognized gains and losses were included as a component of mining revenues as the contracts relate to gold sales. The gold forward and call and put option derivative contracts outstanding at March 31, 2015 covered a total of 13,150 gold ounces with an average price of $1,206 and 45,000 silver ounces with an average price of $18.44 per ounce. The outstanding gold forward and call and put option derivative contracts are expected to settle or expire within ten months.

5. Long-Term Reclamation Liability and Retirement Obligation Asset

Following is a reconciliation of the aggregate reclamation liability associated with our reclamation plan for our mining projects:



	March 31, 2015		December 31, 2014
Long-term reclamation liability — beginning of period	$	5,908,700	$	5,424,410
Additional obligations incurred	659,295		140,573
Accretion of reclamation liability	63,959		343,717
Long-term reclamation liability — end of period	$	6,631,954	$	5,908,700

Following is a reconciliation of the aggregate retirement obligation asset associated with our reclamation plan for our mining projects:



	March 31, 2015			December 31, 2014
Retirement obligation asset — beginning of period	$	1,619,101		$	2,491,956
Additional obligations incurred	659,295			140,573
Amortization of retirement obligation asset	(279,083		)	(1,013,428		)
Retirement obligation asset — end of period	$	1,999,313		$	1,619,101

6. Long-Term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations consisted of the following:



Note Description	March 31, 2015			December 31, 2014
Note Payable (Auramet Facility)	$	5,000,000		$	1,071,427
Note Payable (Caterpillar Equipment)	3,383,397			3,968,019
Note Payable (Dayton Resource Area)	1,221,181			1,953,784
Note Payable (Donovan Property)	564,350			574,141
Note Payable (Gold Hill Hotel)	273,564			278,254
Note Payable (White House)	285,254			286,595
Note Payable (Railroad & Gold Property)	205,100			208,274
Notes Payable - Other	291,203			341,192
Capital Lease Obligations	2,897,285			2,916,797
Subtotal	14,121,334			11,598,483
Less current portion	(8,531,720		)	(5,897,219		)
Long-term portion of long-term debt and capital lease obligations	$	5,589,614		$	5,701,264

Long-Term Debt Obligations

On January 27, 2015, the Company entered into an amended and restated $8 million revolving credit facility (the “Revolving Credit Facility”) with Auramet International, LLC (“Auramet”), pursuant to which the Company may borrow up to $8 million. The Revolving Credit Facility expires on February 6, 2017. On March 6, 2015, the Company drew $5 million (The "Note"), representing cash proceeds of approximately $4.4 million, net of prepaid interest and fees of approximately $0.6 million recognized as a component of prepaid assets in the condensed consolidated balance sheets and amortized over the life of the payment terms using the effective interest rate method. The Note will be repaid through 25 semi-monthly cash payments of $200,000 beginning April 30, 2015, and ending April 30, 2016, with total principal and interest obligations not exceeding $5 million. Interest is payable at 9.5% per annum, and was paid in advance on the closing date of the Note. The indebtedness under the Revolving Credit Facility is secured by a security interest in certain real estate owned by the Company within the Company’s starter mine and a first priority security interest in all personal property of the Company and its wholly-owned subsidiary Comstock Mining LLC, subject to any existing or future Permitted Liens (as defined under the Revolving Credit Facility). The proceeds from the Note will primarily be used for an accelerated construction schedule for rerouting State Route 342, located in the Company’s Lucerne Resource Area, the first phase of which is scheduled for completion in early June 2015, and the second phase before 2015 year end. The Note contains a covenant that requires the Company to maintain a minimum liquidity balance of $1 million (including cash and cash equivalents, plus 90% of the value of any doré that has been picked up by a secured carrier but not yet paid for, as of any date of determination). The Note additionally contains customary representations, warranties, affirmative covenants, negative covenants, and events of default, as well as conditions to borrowings. The Company and Auramet agreed to re-advance under the Revolving Credit Facility evidenced by the Note and extend up to $8 million of availability thereunder for the period from and after June 30, 2015 to April 29, 2016.

Capital Lease Obligations

On March 10, 2015, the Company entered into a new capital lease agreement totaling $175,015 with Kimball Equipment for the purchase of mining equipment.

At March 31, 2015 the long-term and current capital lease obligations were approximately $2.9 million.

7. Stockholders’ Equity

During the three months ended March 31, 2015, the Company issued 30,303 shares of common stock from the conversion of 50 shares of Series B Convertible Preferred Stock. There were no conversions of A-1 or A-2 Preferred Shares during the three months ended March 31, 2015. The Company also declared and issued 2,587,352 shares of common stock at par value as dividends on outstanding shares of convertible preferred stock. In addition, for the three months ended March 31, 2015, the Company issued 60,000 shares of restricted stock vested under the 2011 Equity Incentive Plan.

During the three months ended March 31, 2015, the Company entered into an agreement to purchase patented mining claims referred to as "Vulcan". The total purchase price was comprised of $20,500 cash payment and 36,145 shares of Company restricted common stock. No transfer of deed will take place prior to sellers receiving the proceeds from the sale of shares. As of March 31, 2015, no transfer of deed has occurred under the agreement. Accordingly, the related property and equity issued were not given accounting consideration in the Company's condensed consolidated financial statements.

On January 29, 2015, the Company closed escrow on the purchase of additional land lots. The purchase included the issuance of 15,000 shares of common stock with a fair value of $16,040.

8. Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table presents our liabilities measured at fair value on a recurring basis:



				Fair Value Measurements at March 31, 2015
	Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Liabilities:
Gold call and put options	$	93,353		$	—	$	93,353		$	—
Gold forwards	(46,000		)	—		(46,000		)	—
Total Liabilities	$	47,353		$	—	$	47,353		$	—

The following table presents our liabilities measured at fair value on a recurring basis:



			Fair Value Measurements at December 31, 2014
	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Gold call options	$	32,698	$	—	$	32,698	$	—
Gold forwards	600		—		600		—
Total Liabilities	$	33,298	$	—	$	33,298	$	—

We had no assets measured at fair value on a non-recurring basis at March 31, 2015 and December 31, 2014. During the three months ended March 31, 2015 and twelve months ended December 31, 2014, there were no transfers of assets or liabilities between Level 1, Level 2, or Level 3.

Following is a description of the valuation methodologies used for the Company’s financial instruments measured at fair value on a recurring basis as well as the general classification of such instruments pursuant to the valuation hierarchy.

Gold call and put option, forward, and collar options - The Company’s gold forward, call options, and put option derivatives are valued based on a Black-Scholes model with various observable inputs. These inputs include contractual terms, gold market prices, volatility of gold prices, and risk free interest rates. Because the inputs are all observable market-based inputs, these derivatives are classified within Level 2 of the valuation hierarchy.

9. Net Income (Loss) Per Common Share

Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted (loss) per share reflects the potential dilution that could occur if stock options, warrants, and convertible securities were exercised or converted into common stock.

The following is a reconciliation of the numerator and denominator used in the basic and diluted computation of net income (loss) per share:



	Three Months Ended March 31,
	2015			2014
Numerator:
Net income (loss)	$	1,289,114		$	(3,824,979	)
Preferred stock dividends	(898,832		)	(1,061,609		)
Net income (loss) available to common shareholders	$	390,282		$	(4,886,588	)

Denominator:
Basic weighted average shares outstanding	82,492,914			71,808,908
Effect of dilutive securities	53,608,855			—
Diluted weighted average shares outstanding	136,101,769			71,808,908

Net income (loss) per common share:
Basic	$	0.01		$	(0.07	)
Diluted	$	0.01		$	(0.07	)

The following table includes the number of common stock equivalent shares that are not included in the computation of diluted income and (loss) per share, because the inclusion of such shares would be anti-dilutive or certain performance conditions have not been achieved.



	March 31,
	2015	2014
Convertible preferred stock	—	53,947,036
Stock Options and Warrants	50,000	783,500
Restricted stock	1,796,600	3,485,600
	1,846,600	58,216,136

10. Commitments and Contingencies

The Company has minimum royalty obligations with certain of its mineral properties and leases. Minimum royalty payments payable are $57,400 per year in 2015, increasing by approximately $5,000 per year through 2017 and $2,000 thereafter. For most of the mineral properties and leases, the Company is subject to a range of royalty obligations once production commences. These royalties range from 0.5% to 6% of net smelter revenues (NSR) from minerals produced on the properties. Some of the factors that will influence the amount of the royalties include ounces extracted and the price of gold.

The Company has an operating agreement with Northern Comstock LLC, a related party and an entity controlled by a member of the Board of Directors. As part of the operating agreement, the Company obtained the exclusive rights of production and exploration on certain parcels in Storey County, Nevada. The terms of this agreement provide that the Company will make annual contributions in the amount of $862,500, in the form of Series A-1 convertible preferred stock or cash. The operating agreement requires these payments, at least annually, through October 2049. At March 31, 2015, $30.2 million remained due and may be prepaid without penalty. The above disclosure assumes cash payments are made, although the actual fair value of the payment amount may differ if preferred stock is issued in lieu of cash.

On October 20, 2010, the Company exchanged all of its senior secured convertible and senior indebtedness owed to members of the Winfield Group, shareholders of the Company, for newly created Series A-1 preferred stock. As part of the exchange, the Company agreed to indemnify the Winfield Group for any amounts as part of the exchange that were determined to be taxable as ordinary income to each member of the Winfield Group. As a result of this transaction, the Company recorded an accrual loss contingency provision in 2010. In September 2014, a portion of the indemnity lapsed. In March 2015, the remaining portion of the indemnity has lapsed, and accordingly, the Company recognized a reduction in the loss contingency accrual of approximately $3.2 million, which is included in other income in the condensed consolidated statements of operations.

The Company’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect the public health and environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.

In early February, the Nevada Department of Transportation, (NDOT), closed an approximate two-mile section of SR-342, south of Gold Hill, as a safety precaution following roadway cracking and area specific sinking during a weekend of heavy rains. The area of sinking is above a historic mine-shaft dating back to the early 1900's, and that portion of the road sits on old mine dumps and looser fill that has a history of instability and, in some cases, failure. The Company owns the land, with NDOT granted prescriptive rights to operate the state roadbed over that private land. Storey County, NDOT, the Company, and other applicable regulatory agencies evaluated several remedies for the realignment of SR-342. The route will be realigned to the east of the historic shaft, enabling safe travel and continued mining, while positioning the area for future mining and development.

The realignment will occur over two phases, with Phase 1 completion taking approximately 10-12 weeks and Phase 2 requiring an additional six months. Phase 1 begins with the Company removing the unconsolidated fill that now exists above the base bedrock level and beneath the existing road, followed by construction of a bypass road upon the base bedrock. In connection with this project, the historic Silver Hill Shaft will be capped permanently.

During the construction of Phase 1, SR-342 remains closed. Through traffic continues to detour through nearby State Route 341, commonly known as the truck route. The truck route provides direct access between Virginia City and U.S. 50 in the Dayton area, with about 1.5 miles of additional travel.

Once Phase 1 is complete in June, the road will be reopened during construction of the second phase. Phase 2 includes removal of additional material on the east side of the canyon and will conclude with a tie in of the south end of the newly constructed alignment. A short closure will be necessary toward the end of Phase 2 for the tie in and completion of the realignment. The project is estimated to last through December of 2015. The estimated cost for the project is $3 million. The project will be managed and funded by Comstock Mining, with NDOT and Storey County oversight, resulting ultimately in completing all phases of the realignment, plus achieving and advancing additional reclamation and mining objectives.

Upon completion of the bypass, NDOT’s prescriptive rights to operate the road would be transferred from the existing closed section of State Route 342 to the new roadway alignment.

From time to time, we are involved in lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. There are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

11. Segment Reporting

As of March 31, 2015 the Company operates two segments, mining and hospitality. The mining segment consists of all activities and expenditures associated with mining. The hospitality segment consists of hotel rooms, cottages, restaurant, bar and other services provided by Gold Hill Hotel. We evaluate the performance of our operating segments based on operating income (loss). All intercompany transactions have been eliminated, and intersegment revenues are not significant. Financial information relating to our reportable operating segments and reconciliation to the consolidated totals is as follows:



	Three Months Ended March 31,
	2015			2014
Revenue
Mining	$	5,927,174		$	5,606,064
Hospitality	110,243			157,397
Total revenue	6,037,417			5,763,461

Cost and Expenses
Mining	(7,510,558		)	(8,880,826		)
Hospitality	(200,027		)	(286,299		)
Total cost and expenses	(7,710,585		)	(9,167,125		)

Operating Income (Loss)
Mining	(1,583,384		)	(3,274,762		)
Hospitality	(89,784		)	(128,902		)
Total loss from operations	(1,673,168		)	(3,403,664		)

Other income (expense), net	2,962,282			(421,315		)
Net income (loss)	$	1,289,114		$	(3,824,979	)

Depreciation, Depletion and Amortization
Mining	$	1,890,108		$	1,604,648
Hospitality	23,397			35,661
Total depreciation, amortization and depletion	$	1,913,505		$	1,640,309

Capital Expenditures
Mining	$	3,508,351		$	1,859,842
Hospitality	14,663			83,477
Total capital expenditures	$	3,523,014		$	1,943,319



	As of March 31,		As of December 31,
	2015		2014
Assets
Mining	$	46,833,337	$	45,029,258
Hospitality	1,410,121		1,426,614
Total assets	$	48,243,458	$	46,455,872

On March 20, 2015, the Company entered into an agreement to lease the Gold Hill Hotel. The lease is effective April 1, 2015. The Company retains ownership to the land and Gold Hill Hotel properties while leasing the facilities to independent operators. The initial term of the lease agreement begins on April 1, 2015, and ends in March 2020. The tenant may renew the lease for two extended terms of five years each. Lease payments are due in monthly installments. The Company does not expect to have hospitality revenue or expenses after April 1, 2015.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides information that we believe is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. It should be read in conjunction with the condensed consolidated financial statements and accompanying notes also included in this Form 10-Q and our Annual Report on Form

10-K as of, and for the fiscal year ended December 31, 2014.

The following discussion addresses matters we consider important for an understanding of our financial condition and results of operations as of and for the three month period ended March 31, 2015, as well as our future results.

Overview

The Company is a producing, Nevada-based, gold and silver mining company with extensive, contiguous property in the historic Comstock and Silver City mining districts (collectively, the “Comstock District”). The Comstock District is located within the western portion of the Basin and Range Province of Nevada, between Reno and Carson City. The Company began acquiring properties and developing projects in the Comstock District in 2003. Since then, the Company has consolidated a substantial portion of the Comstock District, secured and expanded permits, built an infrastructure and brought the exploration project into production.

Because of the Comstock District’s historical significance, the geology is well known and has been extensively studied by the Company, our advisors and many independent researchers. We have expanded our understanding of the geology of the project area through vigorous surface mapping, geophysical analysis, exploration drilling, drill hole logging and extensive geological cross-sectional analysis and mine planning. The volume of geologic data is immense, and thus far the reliability has been excellent, particularly in the various Lucerne Mine areas. We have amassed a large library of historic data and detailed surface mapping of Comstock District properties and continue to obtain historic information from private and public sources. We use such data in conjunction with information obtained from our current mining operations, to target geologically prospective exploration areas and plan exploratory programs, including drilling.

Our Lucerne Resource area is located in Storey County, Nevada, approximately three miles south of Virginia City and 30 miles southeast of Reno. Our Dayton Resource area is located in Lyon County, Nevada, approximately six miles south of Virginia City. Access to the properties is by State Route 342, a paved highway.

Our business plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (proven and probable) of at least 3,250,000 gold equivalent ounces from our first two resource areas, Lucerne and Dayton; and significantly grow the commercial development of our operations through coordinated district wide plans that are economically feasible and socially responsible. The Company has already met the first three intermediate resource objectives by validating measured and indicated resources containing more than 2,000,000 gold equivalent ounces. The Company achieved initial production and held its first pour of gold and silver on September 29, 2012. The Company produced approximately 20,815 and 22,925 gold equivalent ounces in 2013 and 2014, respectively. That is, the Company produced 17,739 ounces of gold and 186,482 ounces of silver in 2013, and 19,601 ounces of gold and 222,416 ounces of silver in 2014. The Company increased production every quarter during 2014, exiting the year at an annualized weekly rate of approximately 36,000 gold equivalent ounces per year, with December 2014, totaling 3,176 gold equivalent ounces, the highest month since production started.

We continue acquiring additional properties in the Comstock District, expanding our footprint and creating opportunities for exploration and mining. The Company now owns or controls approximately 8,332 acres of mining claims and parcels in the Comstock and Silver City Districts. The acreage is comprised of approximately 2,213 acres of patented claims (private lands) and surface parcels (private lands) and approximately 6,119 acres of unpatented mining claims, which the Bureau of Land Management (“BLM”) administers.

Current Projects

The Company’s headquarters, mine operations and heap leach processing facility are in Storey County, Nevada, at 1200 American Flat Road, approximately three miles south of Virginia City, Nevada and 30 miles southeast of Reno, Nevada. The Company has focused development to date on the Lucerne Resource Area (including both surface and underground east-side targets within this area), the Dayton Resource Area and the Spring Valley exploration target. We also plan on focusing future exploration on the Northern Extension, Northern Targets, and Occidental Target Areas subsequent to the exploration and development of Lucerne, Dayton and Spring Valley. Production is ongoing in the Lucerne Mine.

In early February, the Nevada Department of Transportation, (NDOT), closed an approximate two-mile section of SR-342, south of Gold Hill, as a safety precaution following roadway cracking and area specific sinking during a weekend of heavy rains. The area of sinking is above a historic mine-shaft dating back to the early 1900's, and that portion of the road sits on old mine dumps and looser fill that has a history of instability and, in some cases, failure. The Company owns the land, with NDOT granted prescriptive rights to operate the state roadbed over that private land. Storey County, NDOT, the Company, and other applicable regulatory agencies evaluated several remedies for the realignment of SR-342. The route will be realigned to the east of the historic shaft, enabling safe travel, continuing operations and important reclamations, while positioning the area for future mining and development.

During the construction of Phase 1, SR-342 remains closed. Through traffic continues detouring through nearby State Route 341, commonly known as the truck route. The truck route provides direct access between Virginia City and U.S. 50 in the Dayton area, with about 1.5 miles of additional travel.

Upon completion of the bypass, NDOT’s prescriptive rights to operate the road would be transferred from the existing closed section of State Route 342 to the new roadway alignment.

Exploration and Development (including Underground)

In December 2014, the Company launched the 2014-2015 exploration and development drilling program (the “Program”) with four major objectives, 1) expanding the Lucerne East-side gold and silver resources, mine plan and current surface mining into the Company’s newly permitted area; 2) accelerating underground feasibility studies and developing high-grade, underground mine plans for that same newly permitted area; 3) expanding the Dayton gold and silver resources and developing a mine plan for potential future production; and 4) establishing a third major resource in the Spring Valley target area.

The drill program designed to determine the near-surface mineralized zones on the Succor and Holman mineral patents has been completed. Since reporting the initial high-grade intercepts in February 2015, based on 30 additional drill holes, the Company has further defined a zone of high-grade mineralization on these patents. The drill holes targeted near-surface vein outcrops, their down-dip extensions and certain infill objectives. All data to date suggest the Succor and Holman claims have excellent potential for economic mining and metal recovery. The next phase consists of core and reverse circulation drilling, both on the surface and underground, expanded resource estimation and extended mine plans.

The current drill program resulted in the following summary of intercepts:

Table 1: Summary of Drill Program



	Succor	Holman
No. Holes Drilled	80	39
Strike Length Drilled (ft)	700	575
No. 10’ intervals with intercepts >.015 Au opt.	166	55
No. 10’ interval with intercepts >.100 Au opt.	22	3
No. drill holes with intercepts >.100 Au opt.	20	2

Table 2: Average Grades for Drill Intercepts Greater than .015 Au opt.



	Succor	Holman
Avg Au opt.	0.056	0.047
Avg Ag opt.	0.259	0.333

The Company commenced production in 2012, from a surface mining operation along a half-mile long segment of the Silver City branch of the lode and, in 2014, began shifting to the exploration and development of near-surface parts of the mineralized system lying within a short distance of current Lucerne operations (the Eastside operations). The Company’s current resource estimate does not include any of the results of the 2014 and 2015 drill holes.

Lucerne’s eastern exploration commenced in December 2014, with the completion of 119 drill holes in an area encompassed by the historic Succor and Holman mines. In the case of both mines, mineralization takes the form of moderately dipping quartz-calcite stock-work veining within the Miocene Alta Andesite. The primary objective of the Eastside drilling program was to accurately define the near-surface mineralization in the Succor and Holman areas because surface outcrops are limited. Drill hole spacing was also tightened, where practical, to 50 feet or less. The drilled strike lengths along the Succor and Holman zones totaled approximately 700 feet and 575 feet, respectively. The average depth of drilling was approximately 100 feet.

Due to the shallow nature of the program, the Company utilized a standard blast-hole rig. All samples were analyzed for gold and silver at the Company’s existing, on-site production assay lab utilizing standard fire assay techniques. This drill program was intended to complement previous work from 2011 and 2012 which generated significant drill intercepts up to 300 feet down-dip on a portion of the Succor mineralized system.

Additional drilling on both the Succor and the Holman is required to define the extent and continuity of mineralization below depths of 100 feet. That drilling, utilizing primarily core drilling standards, is planned for the spring of 2015. Preliminary geological and engineering evaluation, including the development of grade shells and a block model, will be conducted concurrently with the drill program. Preliminary metallurgical work has also been initiated on representative drill samples from the Succor and Holman drill program. This work includes standard bottle-roll procedures to test the mineralized materials’ amenability to existing heap-leach processes.

The Company has recently expanded its near-surface drilling and development program to include the Dayton Resource Area, south of Lucerne, in Lyon County. The first phase of Dayton drilling will mirror the sample procedures of the Succor and Holman area using an efficient blast-hole rig to define near-surface mineralization. Preliminary results are pending; however, the drilling has clearly outlined a southerly extension to one of the principle Dayton structures that hosts an expanded deposit. Once complete, further core and reverse circulation definition and infill drilling, including third-party laboratory sample analysis, will commence later this spring, followed by resource estimation and final mine planning.

Underground Development

The Company recently completed extensive geological development and modeling, incorporating all available data, including existing drill holes and historic underground mine maps, amongst other geological information and is preparing to develop the underground portion of the drill program.

The sectional compilation resulted in several important findings. The work confirmed that the lode is comprised of a group of northwest trending, sub-parallel mineralized structures, rather than a simple vein system confined to a single fault zone. These structural groups coalesce into a single zone in the central part of the East-side area and diverge to the north and south to create zones up to 600-feet wide. The Company also discovered dike-like masses of quartz porphyry that have intruded into the main lode and have a direct relationship to the known mineralization.

Out of this extensive geologic work a definitive underground target has emerged, specifically that part of the lode occupied by the above described mineralized mass of quartz porphyry, as well as the neighboring wall rocks. This conclusion is based on surface drill hole results, metallurgy, and proximity to the current Lucerne Mine floor, as well as past mining knowledge.

The results from the underground program will be incorporated into existing sectional data and, along with newly derived grade shells and grade models, an initial, phased internal reserve model will be created for this area. Developing a new underground access to the quartz porphyry structures and the almost adjacent Woodville Bonanza structures represents a significant opportunity for an accelerated, efficient underground mine plan in the Lucerne Area.

Evaluation of Existing Mine Dumps

During late summer through autumn of 2014, the geological and environmental teams undertook a systematic evaluation of historic mine dumps throughout most of the central part of the District. Quantifying and understanding the nature of legacy contaminants and identifying the extent of mineralization with potential to increase mineable resources were the two primary objectives. Overall, significant tonnages of mineralized dump materials were quantified. Most tonnages are directly to the east of the Lucerne mine and average around 0.025-0.035 opt Au. Dumps sampled for this evaluation are located within Gold Canyon, Storey County, on the east side of SR 342, and west of Silver City in Lyon County. Dumps sampled include the Silver Hills-Donovan (Eastside), Woodville, Lady Washington, Keystone, New York, and Oest. Total tonnages inventoried total over 640,000 tons.

Production

During 2014, the Company completed its second full year of production and transitioned from Billie the Kid and Hartford patented claims in the Lucerne West-side Mine to the higher-grade Justice and Lucerne patents, also in the Lucerne West-side Mine. The Company completed the planned mining for the Billie the Kid, Hartford and Justice patents during 2014, while continuing to mine the Lucerne patent through 2014 and 2015. The Company also expanded its activities to certain historic mine dumps in March 2015. The Company operates a heap leach based, gold and silver production system, including a zinc-precipitate based Merrill-Crowe processing plant. The Company, under the existing water pollution control permit with the State of Nevada, has the crushing and processing capacity to operate at a rate of up to 4.0 million tons of material crushed and stacked, per annum. The Merrill Crowe system facilitates that capacity with an operating fluid processing rate of over 1,000 gallons per minute. In March 2015, the Company completed construction of a ninth heap leach pad cell. The Company's nine cells continue under solution until the target gold and silver recovery rates have been achieved.

The following table presents mining operations and production for the first quarter of 2015 and 2014:



	1Q 2015	1Q 2014
Mining Operations
Tons Mined	316,199	947,852

Processing
Tons Crushed	157,612	205,686

Weighted Average Grade Per Ton Au	0.039	0.024
Weighted Average Grade Per Ton Ag	0.734	0.345

Estimated Au Ounces Stacked	6,083	5,016
Estimated Ag Ounces Stacked	115,689	70,989
Estimated Au Equivalent* Ounces Stacked	7,669	6,140

Au Ounces Poured and Sold	4,695	4,507
Ag Ounces Poured and Sold	56,482	49,358
Au Equivalent* Ounces Poured	5,470	5,290

* Au Equivalent ounces = Au ounces (actual) + (Ag ounces (actual) ÷ the ratio of average gold to silver prices)	72.91	63.14

The following table presents weighted average grades of gold and silver by quarter:



	Weighted Average per ton Gold	Weighted Average per ton Silver
Q1, 2014	0.024	0.345
Q2, 2014	0.034	0.546
Q3, 2014	0.026	0.564
Q4, 2014	0.039	0.680
2014 YTD	0.030	0.527

Q1, 2015	0.039	0.734

During the first quarter of 2015, the Company poured 4,695 ounces of gold and 56,482 ounces of silver, representing a 4.2% and 14.4% increase, for gold and silver, respectively, over the first quarter of 2014. The Company mined approximately 316 thousand tons of material (mineralized material and waste). Total mineralized material delivered to the leach pad was 157,612 tons.

Gold and silver grades continued improving as compared to 2014, and the weighted average for the first quarter of 2015, was 0.039 ounces per ton gold and 0.734 ounces per ton silver as compared to a weighted average for the first quarter of 2014, of 0.024 ounces per ton gold and 0.345 ounces per ton silver, representing a 63% and 113% increase, respectively.

Throughout the first three months of 2015, the Company realized an average price of $1,280.25 price per ounce of gold and a $15.94 average sales price per ounce of silver. In comparison, commodity market prices in the first three months of 2015 averaged $1,219.22 per ounce of gold and $16.72 per ounce of silver.

Our Comstock exploration activities include open pit gold and silver test mining. As defined by the Securities Exchange Commission (“SEC”) Industry Guide 7, we have not yet established any proven or probable reserves at our Comstock Lode Project.

Operating Costs

During the first three months of 2015, actual costs applicable to mining revenue were approximately $4.6 million, $3.7 million net of silver credits as compared to $5.8 million, $4.8 million net of silver credits during the first three months of 2014. Costs applicable to mining revenue include mining and processing labor, maintenance, drilling and blasting and assaying costs, among others. Costs applicable to mining revenue for the first three months of 2015 and 2014 also include depreciation of $1.5 million and $1.3 million, respectively.

During the first quarter, the Company continued reducing costs applicable to mining revenue, targeting over $5 million in reductions this year, as compared to 2014. The Company has already realized $1.0 million of savings from reduced labor, drilling and blasting and fuel in the first quarter of 2015, as compared to the first quarter of 2014. The Company has also identified $1.5 million of potential cost reductions in all other non-mining activities, including general, administrative, land and environmental areas and has already realized $0.3 million in the first quarter of 2015, as compared to the first quarter of 2014. The Company incurred $0.4 million in severance costs during the first quarter, in mining and general and administrative expenses, associated with streamlining the organization and cost reduction activities.

2015 Outlook

The Company expects positive net income and positive cash flow from all operating and investing activities throughout 2015, while expanding mining activities during the third quarter, including exploration and development of an underground Lucerne mine, a second Dayton mine plan and commencing the Dayton permitting.

Through the end of 2014, the Company continued transitioning into production at higher rates and grades with lower sustainable costs. Under our current mine plan, the Company anticipates expanding operations to the east side of the Lucerne pit accessing material at lower stripping ratios and consistent and higher grades. The Company continues to focus on increasing production and expects to realize additional cost savings into 2015 by synchronizing operations, lowering strip ratios and realizing additional savings in non-mining operating expenses.

During fiscal year 2014, actual Lucerne Mine costs applicable to mining revenue were $23.3 million, or $19.1 million net of silver by-product credits as compared to $30.6 million, or $26.5 million net of silver by-product credits in 2013, a 24% reduction. The Company anticipates additional cost reductions of $5 million in 2015, expecting to reduce the $23.3 million to $18.3 million, before silver credits. The Company has also identified $1.5 million of potential cost reductions in all other non-mining activities, including general, administrative, land and environmental areas.

Recent Developments

On March 20, 2015, the Company entered into an agreement to lease the Gold Hill Hotel. The lease is effective April 1, 2015. The Company retains ownership to the land and Gold Hill Hotel properties while leasing the facilities to independent operators. Historically, the hospitality segment operated at a net loss but based on the current lease agreement, the Company does not expect any future net losses and more likely, prospective net lease and rental income.

Land and Mineral Right Purchases

The Company continues to increase its footprint in the Comstock District through strategic acquisitions. The Company considers the historic Comstock District central to its growth strategy. The following acquisitions described below were completed in the first quarter of 2015.

During the first quarter, the Company completed various purchases of land and buildings totaling over 11 acres of land in Gold Hill, Nevada, including properties adjacent to the mining and processing operation, with purchase prices totaling approximately $1.7 million, including the issuance of 15,000 restricted shares of common stock as part of the purchase of one of the properties.

Comparative Financial Information

The Company had two operating segments as of March 31, 2015; mining and hospitality. As we continue to focus on the increased productivity of our mining operations, our hospitality segment has become immaterial to our consolidated financial position, results of operation, and cash flows for the three months ended March 31, 2015.

The comparative financial information is reflected in the following table:

Three Months Ended:



	March 31, 2015			March 31, 2014			Change
Revenue - Mining	$	5,927,174		$	5,606,064		$	321,110
Revenue - Hospitality	110,243			157,397			(47,154		)

Costs applicable to mining revenue	3,717,911			4,762,901			(1,044,990		)
Hospitality operating costs	200,027			286,299			(86,272		)
Exploration and mine development	603,194			801,218			(198,024		)
Mine claims and costs	764,107			952,522			(188,415		)
Environmental and reclamation	280,112			172,215			107,897
General and administrative	2,145,234			2,191,970			(46,736		)
Loss from operations	(1,673,168		)	(3,403,664		)	1,730,496
OTHER INCOME (EXPENSE)
Change in fair value of derivatives	—			(235,207		)	235,207
Interest expense	(223,673		)	(186,330		)	(37,343		)
Other income (expense)	3,185,955			222			3,185,733

NET INCOME (LOSS)	$	1,289,114		$	(3,824,979	)	$	5,114,093

Mining revenue in the first quarter of 2015 was $5.9 million. The increase of $0.3 million, or 5.7%, from the first quarter of 2014, as compared to 2015, resulted from 4.2% more gold ounces sold, or about 188 ounces and a higher average price of $1,280.25 per ounce in the first quarter of 2015, versus an average price of $1,251.39 per ounce from the first quarter of 2014, an increase of $28.86 per ounce, or a 2.3% improvement.

Throughout the three months ended March 31, 2015, the Company realized an average price of $1,280.25 per ounce of gold and a $15.94 average sales price per ounce of silver. In comparison, commodity market prices in the first quarter of 2015 averaged $1,219.22 per ounce of gold and $16.72 per ounce of silver.

Costs applicable to mining revenue reflect a decrease of approximately $1.0 million from the first quarter of 2014 to the first quarter of 2015. The Company lowered labor, equipment and drill and blast costs, and fuel consumption, primarily due to a lower strip ratio and lower fuel prices, when compared to the first quarter of 2014. The Company also reduced its mine and support labor force by 29 employees during the first quarter of 2015.

General and administrative expenses, inclusive of professional and consulting fees, decreased by $0.1 million compared to the period ended March 31, 2014. The change is primarily the result of lower labor costs of $0.5 million, offset by severance costs of approximately $0.4 million during the quarter.

Change in fair value of derivatives decreased by $235,207 in the first quarter of 2015 as compared to the first quarter of 2014. This change is primarily the result of the release of debt derivative obligation related to a make whole provision in the agreement with The Golden Goose Mine for the purchase of the properties in the Dayton Resource Area.

Other income (expense) increased approximately $3.2 million in the first quarter of 2015 as compared to the first quarter of 2014. On October 20, 2010, the Company exchanged all of its senior secured convertible and senior indebtedness owed to members of the Winfield Group, shareholders of the Company, for newly created Series A-1 preferred stock. As part of the exchange, the Company agreed to indemnify the Winfield Group for any amounts as part of the exchange that were determined to be taxable as ordinary income to each member of the Winfield Group. As a result of this transaction, the Company recorded an accrual loss contingency provision in 2010. In September 2014, a portion of the indemnity lapsed. In March 2015, the remaining portion of the indemnity has lapsed, and accordingly, the Company recognized a reduction in the loss contingency accrual of approximately $3.2 million, which is included in other income in the condensed consolidated statements of operations.

Net income was $1.3 million for the three months ended March 31, 2015, and net loss was $3.8 million for the three months ended March 31, 2014. The change of $5.1 million is primarily the result of the elimination of the tax contingencies and additional, focused activities on costs reductions, primarily in labor, drill and blast, equipment and fuel driven by a lower strip ratio.

Liquidity and Capital Resources

Total current assets were $8.2 million at March 31, 2015. Cash and cash equivalents on hand at March 31, 2015 totaled $4.2 million. Inventories, stockpiles, and mineralized material on leach pad totaled $2.3 million.

On March 5, 2015, the Company reached an agreement to draw on a restated $8 million revolving credit facility (the “Revolving Credit Facility”) with Auramet International, LLC (“Auramet”), pursuant to which the Company may borrow up to $8 million. The proceeds from the Revolving Credit Facility will primarily be used for an accelerated construction schedule for rerouting State Route 342, located in the Company’s Lucerne Resource Area, the first phase of which is scheduled for completion in early June 2015, and the second phase before 2015 year end. On March 6, 2015, the Company drew $5 million representing cash proceeds of approximately $4.4 million, net of prepaid interest of approximately $0.4 million, and other fees of approximately $0.2 million. The Company and Auramet agreed to re-advance under the Revolving Credit Facility evidenced by the Note and extend up to $8 million of availability thereunder for the period from and after June 30, 2015 to April 29, 2016.

Net cash generated by operating activities was a positive $0.2 million for the three months ended March 31, 2015, as compared to a use of cash of $2.4 million for the three months ended March 31, 2014. Our positive cash flow from operating activities in the first three months of 2015, was primarily from operating income associated with lower labor, blasting, fuel and equipment rental costs relative to production of mineralized material during the first quarter of 2015. Our use of cash in the first three months of 2014, was primarily from operating losses associated with higher mining costs relative to revenue due to a relatively higher ratio of waste to ore.

Net cash used in investing activities was $3.1 million for the three months ended March 31, 2015, primarily from $1.7 million for strategic land purchases and $1.1 million for the expansion of the processing facility, and approximately $0.3 million for other capital expenditures and bonding. Net cash used in investing activities for the three months ended March 31, 2014, was $1.3 million, primarily from $1.1 million for the purchase of mining vehicles, $0.3 million for increased bonding, offset by $0.2 million from proceeds from the sale of certain mining equipment.

Net cash provided by financing activities for the three months ended March 31, 2015, was $1.8 million, comprised of proceeds of $4.4 million from the revolving credit facility (the “Revolving Credit Facility”) with Auramet International, LLC, partially off-set by the pay-down of other long-term debt obligations of approximately $2.7 million. Net cash provided by financing activities for the three months ended March 31, 2014 was $3.9 million, comprised of proceeds of $4.6 million from the revolving credit facility (the “Revolving Credit Facility”) with Auramet International, LLC, partially off-set by the pay-down of other long-term debt obligations of approximately $0.8 million.

The Company was an exploration company for most of its existence and transitioned into production in the Lucerne Mine late in 2012, and accordingly, has incurred net operating losses and negative cash flows from operations in 2012, 2013 and 2014 and net operating income in the first quarter of 2015. The Company continues reducing costs applicable to mining and related costs. The Company realized annual mining, mine development and related savings of approximately $8.4 million from reduced staffing in crushing, related maintenance, mining, drilling and blasting, logistics and additional $3.3 million in administration cost reductions, totaling approximately $11.7 million, year over year savings in 2014. This positive cost savings trend continues in 2015. The Company has realized an additional $1.4 million of savings from reduced drilling and blasting, fuel, equipment rental, labor and reduced strip ratio in the first quarter of 2015, as compared to the first quarter of 2014.

The Company had net losses from operations in 2012, 2013 and 2014 and a net income from operations for the period ended March 31, 2015 and an accumulated deficit of $187.3 million at March 31, 2015. For the three month period ended March 31, 2015, the Company realized net income of $1.3 million and $0.2 million of cash provided by operations. As of March 31, 2015, the Company had cash and cash equivalents of $4.2 million, current assets of $8.2 million and current liabilities of $12.4 million, resulting in current liabilities in excess of current assets of $4.2 million.

The Company’s current capital resources include cash and cash equivalents and other working capital resources, cash generated through operations, and existing financing arrangements, including revolving credit facility (the “Revolving Credit Facility”) with Auramet International, LLC ("Auramet"), pursuant to which the Company may have borrowings up to $8 million outstanding at any given time. The Revolving Credit Facility has a maturity of February 6, 2017 and allows for re-advances on the facility up to the $8 million availability. The Company has financed its exploration, development, and start up activities principally from the sale of equity securities and, to a lesser extent, debt financing. While the Company has been successful in the past in obtaining the necessary capital to support its operations, including registered equity financings from its existing shelf registration, borrowings, or other means, there is no assurance that the Company will be able to obtain additional equity capital or other financing, if needed. The Company believes it will have sufficient funds to sustain its operations during the next 12 months as a result of the sources of funding detailed above.

Future production rates and gold prices below management’s expectations would adversely affect the Company’s results of operations, financial condition and cash flows. If the Company was unable to obtain any necessary additional funds, this could have an immediate material adverse effect on liquidity and could raise substantial doubt about the Company’s ability to continue as a going concern. In such case, the Company could be required to limit or discontinue certain business plans, activities or operations, reduce or delay certain capital expenditures or sell certain assets or businesses. There can be no assurance that the Company would be able to take any of such actions on favorable terms, in a timely manner or at all.

The Revolving Credit Facility with Auramet International, LLC, contains a covenant that requires the Company to maintain a minimum liquidity balance of $1 million (including cash and cash equivalents, plus 90% of the value of any doré that has been picked up by a secured carrier but not yet paid for, as of any date of determination). The Revolving Credit Facility additionally contains customary representations, warranties, affirmative covenants, negative covenants, and events of default, as well as conditions to borrowings. The Company is in compliance with all required covenants.

For the remainder of 2015, the Company plans on spending approximately $3.5 million in capital expenditures, primarily the road realignment project and some infrastructural development. The Company also plans to pay down an additional $6.6 million in debt obligations, including $3.4 million on the Revolving Credit Facility.

Critical Accounting Policies And Estimates

There have not been any material changes to the critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Metal Price – Changes in the market price of gold may significantly affect our profitability and cash flow. Gold prices fluctuate widely due to factors such as; demand, global mine production levels, investor sentiment, central bank reserves, and the value of the U.S. dollar.

In the first quarter of 2015, Gold Bullion prices averaged approximately $1,219.22 per ounce, up from a quarterly low close of $1,147.25 on March 18, 2015. Gold has fluctuated from that low to a high of $1,295.75 during the quarter. Silver prices averaged $16.72 per ounce, also gaining from quarterly lows of $15.47 on March 18, 2015 to a high of over $18.23 per ounce during the first quarter. The outlook for these markets remains mixed, driven primarily by uncertainty over U.S. fiscal and monetary policy.

With the exception of the above, there have been no material changes in the market risks discussed in Item 7A of our Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES.

A. Disclosure

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, management performed, with the participation of our Principal Executive Officer and our Principal Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (“Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Exchange Act and SEC’s rules, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Each of our Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 2015, our disclosure controls and procedures were effective.

Design and Evaluation of Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2015. In making this assessment, management used the criteria for effective internal control over financial reporting described in the “Internal Control-Integrated Framework” (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment, management concluded that, as of March 31, 2015, our internal control over financial reporting was effective based on those criteria.

B. Internal Control over Financial Reporting

No change in our internal control over financial reporting, as such term is defined in Exchange Act Rule 13(a)-15 occurred during the fiscal quarter ended March 31, 2015, that materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are involved in lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. There are no matters pending or threatened that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

Item 1A. Risk Factors.

There have not been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2015, the Company issued 36,145 shares of Company restricted common stock towards the purchase of patented mining claims referred to as "Vulcan".

No underwriters were involved in the foregoing issuances of securities. The offers, sales and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act. The issuance of stock that was exempt under Section 4(a)(2) was a private offering to an accredited investor within the meaning of Rule 501 of Regulation D of the Securities Act. The recipient of securities in these transactions had adequate access, through business or other relationships, to information about us.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 104 of Regulation S-K, we are required to disclose items believed to be violations of the Federal Mine Safety and Health Act of 1977 (the “Mine Act”), any health and safety standard, or any regulation, as administered by the Federal Mine Safety and Health Administration (“MSHA”). The required information is included in Exhibit 95 to this report.

Item 5. Other Information.

None.

Item 6. Exhibits.

(a) The following documents are filed as part of this Report:

(1) Financial statements filed as part of this Report:



Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 (Unaudited)	3

Condensed Consolidated Statements of Operations for the three month period ended March 31, 2015 and 2014 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows for the three month period ended March 31, 2015 and 2014 (Unaudited)	5

Notes to Condensed Consolidated Financial Statements (Unaudited)	7

(2) Exhibits filed as part of this Report:



Exhibit Number		Exhibit

10.1		Amended and Restated Master Purchase Contract and Bill of Sale dated as of March 6, 2015, between the Company and Auramet International, LLC.

10.2		Secured Promissory Note and Guaranty dated as of March 6, 2015, between the Company and Auramet International, LLC.

10.3		General Security Agreement (Comstock Mining, Inc.) dated as of March 6, 2015, between the Company and Auramet International, LLC.

10.4		General Security Agreement (Comstock Mining LLC) dated as of March 6, 2015, between the Company and Auramet International, LLC.

10.5		Pledge Agreement dated as of March 6, 2015, between the Company and Auramet International, LLC.

31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95		Mine Safety Disclosures.

101		Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2014, furnished in XBRL (eXtensible Business Reporting Language)).

		Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Condensed Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, (ii) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, (iii) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 and (iv) the Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	COMSTOCK MINING, INC.
	(Registrant)

Date: April 16, 2015	By:	/s/ Corrado De Gasperis
		Name: Corrado De Gasperis
		Title: President and Chief Executive Officer (Principal Executive Officer)

AURAMET INTERNATIONAL LLC

259 Calle del Recinto Sur, Suite 2A San Juan, Puerto Rico 00901 Phone: 787-330-0085

Fax: 787-705-9909

AMENDED AND RESTATED MASTER PURCHASE CONTRACT

BILL OF SALE

March 11, 2015

Comstock Mining Inc. Mr. Corrado De Gasperis President and CEO

1200 American Flat Road PO Box 1118

Virginia City, NV 89440


RE:	PRECIOUS METALS (“PM”) PURCHASE CONTRACT AND BILL OF SALE (THE “AGREEMENT”) BETWEEN AURAMET INTERNATIONAL LLC AND COMSTOCK MINING INC. AND ITS OPERATING SUBSIDIARY COMSTOCK MINING LLC

Dear Mr. De Gasperis:

This Amended and Restated Master Purchase Contract & Bill of Sale amends and restates that certain Master Purchase Contract and Bill of Sale dated July 24, 2012 wherein AURAMET INTERNATIONAL LLC (“Buyer”) hereby agrees to purchase and COMSTOCK MINING INC. (“Comstock Mining”) together with its operating subsidiary COMSTOCK MINING LLC (“Subsidiary”, jointly and severally, “Seller”) hereby agrees to sell, transfer, assign, set over and convey to Buyer the PM described below on the following terms and conditions.

1.0 Material

Seller may, in its sole discretion, sell, transfer, assign, set over and convey to Buyer up to a maximum of 100% of the gold and silver production (the “Material”) for a period of one year from the date hereof, however, as long as there are any outstanding obligations of the Seller under the Secured Promissory Note and Guaranty dated March 6, 2015 (the “Note”) (the “Obligations”), Seller will sell, transfer, assign, set over and convey to

Buyer 100% of the gold and silver production. This Agreement may not be terminated while the Obligations are outstanding. Upon full satisfaction of the Obligations, this Agreement may be terminated by either party upon 30 days prior written notice to the other party hereto. No termination of this Agreement shall relieve either party of any accrued and unpaid obligations due hereunder on date of such termination.


2.1	Pricing Mechanisms

Buyer will provide the Seller with a flexible and comprehensive pricing and payment facility pursuant to the following terms and conditions:


2.2	Spot Pricing

Buyer will price the Material based upon the estimated gold and silver content contained in dore or concentrate, as per Seller’s assays, on Buyer’s current spot market bid price during New York trading hours (8:30 a.m. to 4:30 p.m. Eastern Time) on any business day (defined as “any business day that the COMEX division of the New York Mercantile Exchange (“COMEX”) is open for business”). The spot value date is generally 2 business days from the date of such pricing.

Unless priced on a spot or other basis as outlined herein, Buyer will work Seller’s firm orders 24 hours a day on a good until cancelled basis.


2.3	Forward Pricing

Buyer will price the Material for periods up 15 months (or such longer periods as the parties may agree) forward based on the spot price as outlined above and adjusted to reflect the then current forward rates in effect at the time of pricing. The forward contract value date is the date (within the maximum tenor of 15 months) of the forward contract maturity.


2.4	Option Pricing

The Seller may, at its discretion, be either the seller or the buyer of European Style Gold or Silver Options (for Loco London delivery). Any option premium due will be payable on the premium value date (the option premium value date is generally two business days after the date of buying or selling the option).

In the event that an option is exercised, the delivery and value date shall be two business days after the exercise date (unless otherwise agreed by Buyer and Seller).

The terms and conditions set forth in that certain Master Trading Agreement dated as of March 6, 2015, between Buyer and Seller shall apply to any transaction outlined above.


2.5	Payment

In all cases outlined above, the payment shall be payable by wire transfer:


2.5.1	If to Seller

Seller’s designated account shall be provided in writing prior to the first payment date herein.


2.5.2	If to Buyer:

Buyer’s designated account shall be provided in writing prior to the first payment date herein.


3.1	Purchase and Settlement Mechanisms – Spot; Forward; and In-Process Facility

Seller may sell the Material on the basis of any of the following three methods:

(a) on a Spot Basis, i.e. payment for and delivery of the Material generally made contemporaneously two (2) business days after pricing as set forth in Section 2.1.

(b) on a Forward Basis, i.e. payment for and delivery of the Material generally made contemporaneously on a date set up to 15 months following pricing in accordance with Section 2.2 above; or

(c) on a In Process Basis, i.e. the Material is priced and paid for while the Material is in process or in transit to or at Metalor, Attleboro, Massachusetts (“Refinery”) or any other refinery acceptable to the Buyer or while pending refining and located at warehouse acceptable to the Buyer (“Warehouse”) pursuant to the following terms and conditions:


3.C.1	Form

Dore or concentrate containing unrefined PM (the “Unrefined PM”). The Buyer shall be satisfied through final delivery at the Refinery of refined PM (“Refined PM”) in gold ingot or other form having a minimum purity of .9999 or silver ingot or other form having a minimum purity of .999+.


3.C.2	Delivery Schedule

Seller may make shipments on a weekly basis from the mine sites to the Refinery. Seller shall notify Buyer telephonically or by telecopy of all PM shipped pursuant to this Agreement. Outturn shall be to Buyer’s London pool account with JP Morgan Chase unless otherwise agreed by the parties on the agreed upon outturn date (the “Outturn Date”).


3.C.3	Purchase Price

The purchase price for Material sold on an In-Process Basis shall equal the agreed upon amount per troy ounce of Refined PM as set forth in the applicable trade confirmation sent by Buyer to Seller (the “Purchase Price”), multiplied by the agreed upon estimated quantity of PM as set forth in the applicable trade confirmation sent by Buyer to Seller (the “Estimated Quantity”). The Purchase Price shall be based on the pricing established pursuant to Section 2.1 above and adjusted to reflect the agreed upon cost of financing and any market contango or backwardation for the period from the date of payment to the Outturn Date.


3.C.4	Late Delivery

Subject to Buyer’s other rights hereunder, including the right of termination, if the Estimated Quantity is not credited to the account designated by Buyer in writing to Seller (“Buyer’s Metal Account”) on the Outturn Date, the Purchase Price shall be adjusted to reflect the additional financing cost of such delay. Such adjustment shall be calculated using an amount equal to the then applicable PM lending rates (as reasonably determined in good faith by Buyer) for the period of time from the original Outturn Date to the date the Estimated Quantity is finally credited to Buyer’s Metal Account released to Buyer.


3.C.5	Shortfall/Surplus

Notwithstanding any of the foregoing, in the event, for any reason, that there is a shortfall at Outturn, Seller shall immediately, through pool transfer, market transaction, or other manner acceptable to Buyer, transfer to Buyer the subject PM shortfall.

In the event that there is a surplus at Outturn, then Seller may elect to immediately sell the surplus amount to Buyer at Buyer’s then current spot market price, sell such surplus to any other party at Seller’s sole and absolute discretion, or maintain the surplus balance of ounces in its account with Buyer until sold on a date specified by Seller in the future.


3.C.6	Shortfall/Surplus Account

For practical purposes, Seller and Buyer may mutually agree to keep an ongoing over/under account which is to be settled whenever the over/under quantity exceeds 100 ounces of refined gold and silver.

Buyer will provide Seller with a shipment by shipment settlement report which shall include the details of all pricings, outturns, payments, and adjustments. This shall be a perpetual electronic file which will be used by Seller and Buyer to monitor movements in the over/under account.


3.C.7	Payment

The Purchase Price shall be paid by wire transfer to Seller’s designated account in US Dollars against Buyer’s receipt of the following documents:


A.	If Payment is to be made while the Material is at the Refinery:

(a)Seller’s letter of instruction to the Refinery in substantially the form attached hereto as Exhibit A; and

(b)An executed Refiner’s Holding Certificate in substantially the form attached hereto as Exhibit B.


B.	If Payment is to be made while the Material is at the Warehouse:

(a)An independent, third party’s report on sampling and assaying of the Material, from Inspectorate or other assay firm reasonably acceptable to Buyer;

(b)A warehouse receipt from the Warehouse, satisfactory to Buyer in all material respects; and

(c)A certificate of insurance naming Buyer as an additional loss payee as its interests may appear, satisfactory to Buyer in all material respects.


3.C.8	Title/Ownership of PM Shipment

Ownership of the PM shall become vested in Buyer upon pick-up of the PM by Brinks Armored Security Service or such other mutually agreeable armored carrier. All shipping and other records and documents prepared by or which come into the possession of Seller with respect thereto shall be retained and maintained, in trust, for Buyer by Seller in a custodial capacity and delivered to Buyer upon request.


3.C.9	Inspection

Buyer shall have the right to have an agent or representative inspect and/or take samples of the Unrefined PM during business hours upon reasonable notice and to witness the loading/sealing of the containers in which the Refined PM is to be shipped from the Refinery.


4.1	Representations and Warranties, Covenants

Seller represents and warrants to Buyer that:

(a) the PM conforms to or will conform to the description of such goods contained in this Agreement; the material containing the PM contains no hazardous materials.

(b) Seller has conveyed or will convey good title to such PM free from any security interest, lien or encumbrance;

(c) Seller has all requisite power, authority, licenses and approvals necessary to enter into and perform its obligations under this Agreement;

(d) Seller or any person designated by Seller (including any signatory hereto) has due authorization to act in all respects relating to this Agreement;

(e) this Agreement and the transaction relating thereto are valid and legally binding obligations of the Seller enforceable against it in accordance with their terms;

(f) Seller is not insolvent, has not declared bankruptcy and has no intention or plans for doing so;

(g) Seller covenants and agrees to provide Buyer with prompt telephonic notice, promptly followed by electronic mail and telecopy, of the occurrence of any of the following events:


(1)	any material discrepancy in the assays of Seller and Refiner;


(2)	any loss or delay or other material event with respect to any PM purchased hereunder; and


(3)	any material adverse change in the affairs or prospects of Seller.

5.0 Authorized Officers

The individuals identified herein shall be authorized to enter the transactions contemplated herein on behalf of Seller; provided that Seller may add or remove individuals from this Section

5.0 from time to time in a written notice to Buyer.



Name	Title
Corrado De Gasperis	President and CEO
Scott H. Jolcover	Director of Business Development
Judd Merrill	CFO

6.0 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

This Agreement shall be governed by and interpreted under the laws of the State of New York.

Each party waives the posting of any bond otherwise required in connection with any judicial process or proceeding to enforce any judgment or other court order entered in favor of such party, or to enforce this Agreement or any other agreement or document between Seller and Buyer. In addition, each party waives any right that they may have to a jury trial.


7.1	Notices


7.2	If to Buyer:

Auramet International LLC 259 Calle Recinto Sur

San Juan, Puerto Rico 00901 Tel: 787-330-0086

Fax: 787-330-0085


7.3	If to Seller, as appropriate:

Comstock Mining Inc.

Mr. Corrado de Gasperis, President and CEO 1200 American Flat Road

PO Box 1118

Virginia City, NV 89440 Tel: 775-847-4755

Fax: 800-750-5740

To signify your acceptance of these terms, please sign this Agreement in the space provided below and return it by fax to 201-905-5001.

Yours truly,

Auramet International LLC

Signed: By:

Accepted and Agreed: Comstock Mining Inc.

Signed: /s/ Corrado De Gasperis

By: Corrado De Gasperis

President & CEO Comstock Mining Inc.

Exhibit A

[Letterhead] [INSTRUCTIONS TO THE REFINER]

[ ] [ ], 2015

Customer Service Manager

VIA FAX:

Dear Sirs:

RE:

Number [ ].

(“Seller”) Sale to Auramet International LLC(“Buyer”), Shipment

This letter is to confirm that Seller has sold [dore, concentrate, carbon material] containing [ ] troy ounces of gold or silver (the “PM”) to Buyer pursuant to a Purchase Contract and Bill of Sale dated [] [], 2014. The PM is currently in transit in unrefined form to [ ] (the “Refinery”) pursuant to bill of lading number [ ]. Seller agrees to be responsible for and pay all refining costs.

This transfer and conveyance cannot be withdrawn or amended without the prior written consent and explicit agreement of Buyer. All further instructions concerning this PM shall come exclusively from Buyer.

Upon the receipt of this fax, please complete the following form indicating your understanding and acceptance of these instructions and fax the completed form separately to Auramet, Precious Metals Operations, 201-905-5001.

Thank you in advance for your assistance. Regards,

[ ]

[ Title ]

Exhibit B [Refiner/Processor’s Holding Certificate]

From:

To:

Auramet International LLC 259 Calle Recinto Sur

San Juan, Puerto Rico 00901 Tel: 787-330-0086

Fax: 787-330-0085

Re: PM Shipment, Bill of Lading #[ ] from [ ] (“Seller”).

We hereby confirm receipt of Seller’s notice dated [ ] [ ], 2014 and acknowledge that the above- captioned PM shipment has been sold to Auramet International LLC (“Buyer”) and that title to such goods has been transferred to Buyer.

We hereby irrevocably undertake that upon receipt of such goods we shall hold them to the order of Buyer without set-off, deduction or counterclaim. We agree that Seller shall be the sole party responsible for the payment of any and all refining costs associated with this PM shipment. Such goods and any documents relating thereto shall not be released to anyone other than Buyer without the prior written agreement of Buyer.

We undertake to keep the same free from any mortgage, charge, pledge, lien or other encumbrance and all other third party rights.

We undertake to promptly inform you in the event and to the extent that the weights or assays produced by us materially differ from those received from your Seller with respect to the captioned Shipment.

Such goods are insured under our existing all risk (including casualty and theft) policy. We hereby undertake to keep the goods insured while they are in our possession.

Sincerely,

By:

SECURED PROMISSORY NOTE AND GUARANTY

USD $5,000,000.00 March 6, 2015

FOR VALUE RECEIVED, the undersigned COMSTOCK MINING INC., a corporation organized and existing under the laws of Nevada , as borrower ("Comstock" or the "Borrower") together with its wholly owned subsidiary COMSTOCK MINING LLC, a limited liability company organized and existing under the laws of Nevada ("Subsidiary" or the "Guarantor," and together with the Borrower, the "Obligors"), promises to pay to the order of AURAMET INTERNATIONAL LLC, a limited liability company organized under the laws of Puerto Rico ("Holder"), the principal sum of USD$5,000,000.00 (the "Advance"). The Advance shall be paid in 25 equal semi-monthly installments (each a "Repayment") in the amounts and on each of the dates (each a "Repayment Date") set forth in Appendix I. Each Repayment shall be in immediately available funds and paid to an account of Auramet Trading, LLC ("Auramet"), as agent for the Holder (the "Agent"). Interest shall be payable at 9.5% per annum, earned and payable in advance on the funding date of the Advance (for the avoidance of doubt, such amount shall equal $314,608.33 on the Closing Date). Notwithstanding the foregoing, upon the occurrence and during the continuance of a Default (defined below), the principal balance then outstanding shall, at the option of the Holder upon written notice to Borrower accrue interest at the lower of (i) 15% per annum or (ii) the highest rate allowable by applicable law. Interest shall be calculated on the basis of a year of 360 days and actual days elapsed. Default interest shall be payable on demand.

Upon repayment of the facility in full, the Borrower and Holder may consider renewing the facility provided upon mutually acceptable terms, but neither party shall have any commitment or obligation to do so.

This Promissory Note (the "Note") is being issued to Holder in connection with an Advance provided to the Borrower by Holder in the amount of USD$5,000,000.00. This Note is secured by (i) a first priority security interest in all personal property of the Borrower and the Guarantor, subject to any existing or future Permitted Liens (as defined below); (ii) a Pledge Agreement (the "Stock Pledge") between Borrower and Holder covering 100% of the equity membership interests of the Guarantor, (iii) the General Security Agreement between the Borrower and the Holder (the "Comstock Security Agreement "), (iv) the General Security Agreement between the Guarantor and the Holder (the "Subsidiary Security Agreement" and, together with the Comstock Security Agreement, the "Security Agreements"), (v) the Gold Purchase and Sale Agreement between Comstock and the Agent with respect to all gold sales of the Borrower and Guarantor while this Note is outstanding (the "Purchase Agreement"), (vi) that certain first priority "DEED OF TRUST WITH POWER OF SALE, ASSIGNMENT OF PRODUCTION , SECURITY AGREEMENT, FINANCING STATEMENT, AND FIXTURES FILING" dated

The11^th day of February, 2014 and recorded electronically in Storey County Nevada, ID no

119932 (the "Mortgage"), (vii) the Borrower's entry into a mutually acceptable alternative risk mitigation strategy including the sale of "floor" and purchase of a "cap" or other "zero cost option collars" such as the purchase of a put option and the sale of a call option with a lower strike price (the "Price Protection Program"), (viii) the Guaranty contained in Section 12

hereof (the "Guaranty"), and (ix) a Consent, Acknowledgement and Standstill Agreement (the "Consent, Acknowledgement and Standstill Agreement") from the Borrower's principal shareholder and the holder of its Series A-1 Preferred Stock on form and content acceptable to the Holder. The Note, the General Security Agreements, the Purchase Agreement, the Starter Pit Mortgage Agreement, the Price Protection Program, the Guaranty, the Stock Pledge, the Consent, Acknowledgement and Standstill Agreement, the fee letter (the "Fee Letter") all dated the date hereof, as well as each and every other document executed in connection therewith by the Borrower and the Guarantor are hereinafter referred to as the "Loan Documents. "

The proceeds of the Advance shall be used by the Borrower to (i) pay all fees owing under the Loan Documents, (ii) for capital expenditures at the Comstock Mine, and (iii) for general working capital purposes.

For the purposes hereof, the following terms shall have the following meanings:

"Business Day" means any day that is not a Saturday, Sunday, or other day on which banks in the State of New York or Nevada are authorized or required to close.

"Change of Control" means the occurrence after the date hereof of any of (a) an acquisition by any Person (other than a Person who holds such voting power today or his affiliates or related parties) of a majority of the aggregate voting power of the voting securities of the Borrower whose holders are generally entitled to vote for the election of directors of the Borrower, (b) the merger or consolidation of the Borrower with any other Person where, after giving effect to such transaction, the stockholders of the Borrower immediately prior to such transaction do not own a majority of the aggregate voting power of the voting securities of the successor Person of such transaction whose holders are generally entitled to vote for the election of directors of the successor Person of such transaction (excluding any holding company restructuring of the Borrower), or (c) the sale or transfer of all or substantially all of the Borrower's consolidated assets to another Person where, after giving effect to such transaction, the stockholders of the Borrower immediately prior to such transaction do not own a majority of the aggregate voting power of the of the voting securities of the Person whose holders are generally entitled to vote for the election of directors of the acquiring Person immediately after the transaction.

"Indebtedness " means (a) any liabilities for borrowed money (other than trade accounts payable and operating expenses incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (c) the present value of any lease payments under leases required to be capitalized in accordance with U.S. generally accepted accounting principles.

"Permitted Liens" means, collectively, (a) Liens existing on the date of this Note and disclosed to Holder in Appendix II and Liens arising pursuant to this Note and the other Loan Documents; (b) Liens for taxes, assessments, fees, levies, duties or other governmental charges of any kind, either not yet due or being contested in good faith and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with generally accepted accounting principles , provided the same have no priority over any of Holder's security interests; (c) Liens for landlords, common carriers, warehousemen , mechanics, materialmen, repairmen, service provider, laborers, employees, suppliers or similar Liens arising by operation of law for amounts that are owed but not yet delinquent, provided such Liens do not, in the aggregate, materially detract from the value of the assets of the Borrower and its subsidiaries or materially impair the use thereof in the operation of the Borrower's or its subsidiaries' business, in each case, taken as a whole, (d) purchase money security interests in real property, improvements thereto or equipment thereafter acquired or Liens not to exceed

$500,000 in the aggregate in any fiscal year incurred solely for the purpose of financing the acquisition of goods or equipment acquired by the Borrower or Subsidiary in the ordinary course of business, (e) in the case of real property, any matters, restrictions, covenants, conditions, limitations, rights, rights of way, encumbrances, encroachments, reservations, easements, agreements and other matters of record, such state of facts of which an accurate survey of the property would reveal, which in the aggregate, are not material in amount, and which do not, in the aggregate, materially detract from the value of any such real property or materially interfere with the ordinary conduct of the Borrower's and the Subsidiary's businesses (Appendix II sets forth such matters of which the Borrower is currently aware), (t) attachments, appeal bonds, judgments and other similar Liens for the payment of money not exceeding $100,000 arising in connection with court proceedings; provided that the execution of such Liens is effectively stayed, (g) deposits to secure the performance of bids, trade contracts and leases, statutory obligations (including worker's compensation, unemployment insurance and other social security laws or regulations or in respect of health, disability, retirement or other employee benefits), surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business, (h) any other Lien created or incurred in connection with Indebtedness permitted in accordance with Section 1.2 of Schedule 2, (i) Liens securing the reimbursement obligations in respect of trade-related letters of credit, G) any Lien existing on any property or asset of any Person prior to the acquisition of such asset by the Borrower, provided, that such Lien is not created in contemplation of or in connection with such acquisition and such Lien does not apply to any other property or asset of the Borrower or Subsidiary or (k) any Lien created in favor of Holder, Auramet Trading, LLC or any of their respective affiliates.

"Person" means any individual, corporation, partnership, limited liability company, trust, unincorporated association, business, or other legal entity, and any government or any governmental authority.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which Holder, by acceptance of this Note, agrees:

1.Maturity Date. The unpaid principal balances of the Advance and accrued but unpaid interest thereon, if any, shall be due and payable as provided for herein.

2.Loss of Note. Upon receipt by the Borrower of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Note, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Note, if mutilated, the Borrower will execute and deliver a new Note of like tenor and date.


3.	Default.

hereunder:

(a)
The occurrence of any of the following events shall be a "Default"


(1)	the Borrower shall fail to make any Repayment due hereunder on any Repayment Date, and such failure continues for five (5) Business Days thereafter;


(2)	any representation or warranty made by any Obligor to Holder herein or in any other Loan Document shall fail to be true and correct in any material respect (provided that the Obligors shall have a period of ten (10) Business Days from the date they receive notice thereof from the Holder within which to cure such Default(s)) ;

(3)

the Obligors shall fail to observe or perform any of the covenants, agreements or obligations (excluding the Borrower's obligation to repay the Advance) contained in the Note or any other Loan Document or any other agreement with Holder in any material respect (provided that the Obligors shall have a period of twenty (20) Business Days from the date they receive written notice thereof from the Holder within which to cure such Default(s));

(4)

any Obligor shall institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it under any applicable federal or state insolvency law, or consent to, or acquiescence in, the filing of any such petition or in the appointment of a receiver, liquidator, assignee, trustee, or other similar official of any Obligor, or of any substantial part of its property, or the making by any Obligor of an assignment for the benefit of creditors, or the admission by any Obligor in writing of its inability to pay its debts generally as they become due;


(5)	within sixty (60) days after the commencement of proceedings against any Obligor seeking any bankruptcy, insolvency, liquidation, dissolution or

similar relief under any present or future statute, law or regulation, such action shall not have been dismissed or all orders or proceedings thereunder affecting the operations or the business of such Obligor stayed, or the stay of any such order or proceedings shall thereafter be set aside, or, within sixty (60) days after the appointment without the consent or acquiescence of such Obligor of any trustee, receiver or liquidator of such Obligor over of all or any substantial part of the properties of such Obligor, such appointment shall have not been vacated;


(6)	any Obligor shall dissolve or take corporate action toward dissolution;


(7)	final judgments which exceed an aggregate of $250,000 (except to the extent covered by insurance) shall be rendered against any Obligor and shall not have been paid, discharged, stayed or vacated within forty-five

(45) days after entry or filing of such judgments;


(8)	any event of default (as such term is defined under any applicable underlying agreement) under any Obligor's indebtedness for borrowed money in excess of $250,000 in the aggregate shall occur and such event of default shall continue beyond any applicable grace or cure period or any failure of such Obligor to pay any such indebtedness when due shall occur;


(9)	the occurrence of any event that has or would reasonably be expected to have a material adverse effect on (a) the Obligors' business, operations or financial condition, (b) the Obligors' ability to perform its obligations under the Loan Documents, or (c) the rights and remedies of the Holder under the Loan Documents; or


(10)	any material provision of any material provision of any Loan Document shall cease to be in full force and effect or it shall become illegal for any party to a Loan Document to perform its obligations thereunder.

(b)Remedies upon Default. If a Default shall occur and be continuing, Holder, upon notice in writing to the Borrower, may declare all unpaid principal of the Note (which means the unpaid balance of the Advance) and the interest thereon to be immediately due and payable and the same shall become immediately due and payable upon such declaration and Holder may pursue any remedy available to Holder at law or in equity; provided , however, that in the event of any Default under clauses (4) or (5) above with respect to any Obligor, all such unpaid principal and interest shall automatically become immediately due and payable, without the need for declaration, presentment, demand, protest, or other notice of any kind; and, provided further, that Holder shall not liquidate its collateral position

in the stock of Guarantor or in the assets thereof, but shall hold the same for redemption by the Borrower upon payment of all amounts owing hereunder for a period of 60 (sixty) days following such Default.

(c) Notwithstanding anything to the contrary herein, the Borrower shall not be deemed to be in Default under the terms of this Note by reason of mining operations or other required activities having been suspended or prevented by scarcity or inability to obtain equipment, material, power or fuel, by strike, lockout or industrial disturbance, by failure of carriers to transport or furnish facilities for transportation , by operation of any acts of God (including, without limitation, lightning, earthquake, fire, storm, flood, washout), by breakage or accident to machinery or facilities, or by any cause beyond the Borrower's control, other than market conditions or the price of gold or raw materials generally; provided , that the Borrower shall exercise reasonable best efforts to resume mining operations.


4.	Prepayment.

(a)Optional Prepayment. The Borrower may, upon five (5) days prior written notice to Holder, prepay this Note in whole or in part.

(b)Mandatory Prepayment. This Note shall be subject to mandatory prepayment, at the option of the Holder, in the event of the termination of the Chief Executive Officer of the Borrower or a Change of Control.

5.Default Notices to Holder. So long as this Note shall be outstanding, the Borrower shall promptly deliver a notice to Holder describing any Default of which it has become aware.

6.Gross Up. All Repayments under this Note by Borrower will be made without any deduction or withholding for or on account of any tax or other withholding or deduction unless such tax, deduction or withholding is required by any applicable law then in effect (a "Required Tax, Deduction or Withholding"). Any such Required Tax, Deduction or Withholding (other than income or franchise taxes of Holder or withholding imposed by the Foreign Account Tax Compliance Act) shall be for Borrower's account and promptly reimbursed to Lender.

7.Costs. The Borrower agrees to reimburse Holder for any reasonably documented legal fees or other costs associated with the enforcement or administration of this Note or any of the other Loan Documents; provided that such costs in connection with the preparation and execution of the Loan Documents shall be provided for in the Fee Letter.

8.Representations and Warranties. Each Obligor hereby makes each of the representations and warranties set forth on Schedule 1 hereto, as of the date of this Agreement.

9.Covenants. Each Obligor hereby agrees to observe and fully perform each of the covenants set forth on Schedule 2 hereto.

10.Conditions Precedent. Prior to the extension of the funds contemplated to be advanced herein, unless waived in writing in advance by Holder, the Borrower shall have delivered to Holder the following documents, in form and substance satisfactory to Holder, and performed the following undertakings to the satisfaction of Holder:


(a)	This Note;


(b)	This Guaranty;


(c)	The Pledge Agreement;


(d)	The Security Agreements;


(e)	The Mortgage;

(f) The Purchase Agreement;

(g)Payment of the fees under the Fee Letter;

(h)A secretary's certificate of Borrower and Guarantor with respect to incumbency and resolutions authorizing the execution and delivery of the Note and the other Loan Documents to which they are a party;

(i) Entry into the Price Protection Program;

(j) Such other documents or certificates, and completion of such other matters, as the parties may mutually deem necessary or appropriate in good faith;


(k)	The Consent, Acknowledgement and Standstill Agreement; and


(I)	Completion of satisfactory review of mine ownership and leases.


11.	Miscellaneous.

(a) Waiver and Amendment. Any provision of this Note may be waived, amended or modified only upon the written consent of the Borrower, the Guarantor and Holder.

(b) Assignment; Participations . Prior to the occurrence and continuance of a Default, the Holder may not assign this Note without the prior written consent of the Borrower, not to be unreasonably withheld. The Borrower may not transfer or assign all or any part of this Note without the prior written consent of Holder.

The Holder may sell participations in all or a portion of the Holder's rights and obligations under this Note; provided that the Borrower shall continue to deal solely and directly with the Holder in connection with the Holder's rights and obligations under this Note and all rights and remedies with respect to the Loan Documents may only be exercised by the Holder (other than the right to payment under such participation).

New York.


(c)	Governing Law. This Note shall be governed by the laws of the State of

(d) Severability. If any of the provisions of this Note is held invalid, such invalidity shall not affect the other provisions hereof that can be given effect without the invalid provision, and to this end the provisions of this Note are intended to be and shall be deemed severable.

(e) Indemnification. The Obligors agree to hold harmless, defend and indemnify Holder, its officers, employees, agents and representatives (each, an "Indemnified Party") from and against any liability, loss, cost, expense, damage claim or cause of action due to or arising out of or in connection with this Note or any other Loan Document in any way, directly or indirectly. The indemnification provided for in the immediately preceding sentence shall not apply to liabilities, losses, costs, expenses, damage, claims or causes of action which may arise as the result of the willful misconduct or negligence of the Indemnified Party.

(f) Notices. All notices and other communications given to or made upon any party hereto in connection with this Note shall, except as otherwise expressly herein provided, be in writing (including telecopy, telefaxed, telegraphic or electronic communication) and mailed via certified or electronic mail, telefaxed, telegraphed or delivered to the respective parties, as follows:

To the Borrower or the Guarantor, as appropriate: Comstock Mining Inc.

1200 American Flat Road

PO Box 1118

Virginia City, NV 89440

Attn: Mr. Corrado de Gasperis, President and CEO Email: degasperis@comstockmining. com

To Holder:

Auramet International LLC

259 Calle Recinto Sur, Suite 2A San Juan, PR 00901

Attn: Justin Sullivan Tel. /Fax: 787.724.6173

With a copy to: Auramet Trading, LLC

300 Frank W. Burr Blvd 5th Floor, Suite 24 Teaneck, NJ 07666 Attn: James Verraster

Telecopy: 201-905-5001

Or in accordance with any subsequent written direction from the recipient party to the sending party delivered in accordance with this Section 11(f). All such notices and other communications shall, except as otherwise expressly herein provided, be effective upon (i) delivery if delivered by hand or international courier with return receipt; or (ii) acknowledgement of receipt by the receiving party by telephone or in writing, in the case of facsimile or email.

12.Guaranty. In order to induce the Holder to extend credit to the Borrower hereunder and under the other Loan Documents, the Guarantor hereby irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the payment when and as due of the obligations of the Borrower hereunder and under each of the other Loan Documents (collectively, the "Obligations"). The Guarantor further agrees that the due and punctual payment of such Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any such extension or renewal of any such Obligation.

The Guarantor waives presentment to, demand of payment from and protest to the Borrower of any of the Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment. The obligations of the Guarantor hereunder are absolute and unconditional until all the Obligations shall have been indefeasibly paid in full, irrespective of

(a)the failure of the Holder to assert any claim or demand or to enforce any right or remedy against the Borrower under the provisions of any Loan Document or otherwise hereunder,

(b)any extension or renewal of any of the Obligations, (c) any rescission, waiver, amendment or modification of, or release from, any of the terms or provisions of this Note, or any other Loan Document or agreement, (d) any default, failure or delay, willful or otherwise, in the performance of any of the Obligations or (e) any other act, omission or delay to do any other act which may or might in any manner or to any extent vary the risk of the Guarantor or otherwise operate as a discharge of the Guarantor as a matter of law or equity or which would impair or eliminate any right of the Guarantor to subrogation.

The Guarantor further agrees that its agreement hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of the Obligations or operated as a discharge thereof) and not merely of collection, and waives any right to require that any resort be had by the Holder to any balance of any deposit account or credit on the books of the Holder in favor of the Borrower or any other Person.

The obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full of all the Obligations) and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the Obligations, any impossibility in the performance of any of the Obligations or otherwise (other than for the indefeasible payment in full of all the Obligations).

The Guarantor further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment , or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Holder upon the bankruptcy or reorganization of the Borrower or otherwise.

In furtherance of the foregoing and not in limitation of any other right which the Holder may have at law or in equity against the Guarantor by virtue hereof, upon the failure of the Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Guarantor hereby promises to and will, upon receipt of written demand by the Holder, forthwith pay, or cause to be paid, to the Holder in cash an amount equal to the unpaid principal amount of such Obligations then due, together with accrued and unpaid interest thereon.

Upon payment by the Guarantor of any sums as provided above, all rights of the Guarantor against the Borrower arising as a result thereof by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior indefeasible payment in full of all the Obligations owed by the Borrower to the Holder.

This Guaranty shall terminate upon the indefeasible payment of all the Obligations.

IN WITNESS WHEREOF, the Borrower and the Guarantor have caused this Note to be duly executed by its officer, thereunto duly authorized as of this 6^th day of March, 2015.

BORROWER:

COMSTOCK MINING INC.

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: President + CEO

GUARANTOR:

Acknowledged and Agreed:

HOLDER:

COMSTOCK MINING LLC

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: Managing Member

AURAMET INTERNATIONAL LLC

By: /s/ James Verraster, III

Name: James Verraster
Title: Director

Schedule 1

The Obligors hereby represent and warrant to Holder, as of the date of this Note, the following:

(a)Organization. Each of them is duly organized, validly existing, and in good standing under the laws of its jurisdiction, with full corporate or limited liability company power and authority, as the case may be, and all necessary consents, authorizations, approvals, orders, licenses, certificates, and permits of and from, and declarations and filings with all federal, provincial, state, local, foreign, and other governmental authorities and all courts and other tribunals, to own, lease, license and use its properties and assets, and to carry on its business or proposed business as required except where the failure to have such consents, authorizations, approvals, orders, licenses, certifications and permits could not reasonably be expected to have a material adverse effect on its businesses or operations. Each is duly licensed and qualified to do business and be in good standing in every jurisdiction in which the ownership, leasing, licensing or use of property and assets or the conduct of its business makes such qualification necessary except where the failure to have such licenses and qualifications could not reasonably be expected to have a material adverse effect on its business or operations. The corporate organization chart attached hereto is true and accurate in all material respects.

(b)Financial Statements. The audited balance sheet of the Borrower and its consolidated subsidiaries for the 12 month period ending December 31, 2014, the related audited statements of operations and statements of cash flow for the year ended December 31, 2014 (collectively and including the notes thereto, the "Financial Statements"), present fairly in all material respects the financial position and cash flows of the Borrower and its consolidated subsidiaries at the indicated dates and for the indicated periods subject, in the case of the Financial Statements as of and for the twelve months ended on the Balance Sheet Date.

(c)Absence of Undisclosed Liabilities. The Borrower and its consolidated subsidiaries have no material outstanding claims, liabilities, obligations or indebtedness, contingent or otherwise, whether asserted or unasserted except as reflected in the Financial Statements. All material liabilities of the Borrower and its consolidated subsidiaries incurred subsequent to the Balance Sheet Date have been incurred in the ordinary course of business.

(d)Absence of Changes. Since the Balance Sheet Date, the Borrower and its consolidated subsidiaries have operated in the ordinary course of business consistent with past practice. Since the Balance Sheet Date, there has not occurred any change in the financial condition, results of operations, assets, liabilities or business of the Borrower which, in the aggregate, has had a material adverse effect on the Borrower's business.

(e)Title to Properties; Encumbrances; Priority. Except for matters disclosed in Appendix II or disclosed in the Borrower's securities law filings, the Obligors have good, valid and marketable title to (i) all of their respective material properties and assets (real, personal, tangible and intangible), and (ii) all the material properties and assets purchased or otherwise acquired since the Balance Sheet Date (except as may be disposed of as permitted hereunder); in each case clear of all encumbrances, liens, claims,

charges or other restrictions of whatever kind or character, except for Permitted Liens and other minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such property and assets for their intended purposes. Each Security Agreement is effective to create in favor of Holder a legal, valid and enforceable security interest in the Collateral (as defined in each Security Agreement) and when the actions contemplated by such Security Agreement are taken, including filing financing statements that comply with the requirements of the Uniform Commercial Code of Nevada (the "UCC") and achieving control over certain Collateral and subject to Section 9-315 of the UCC, the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to Permitted Liens.

(t) Material Agreements. The Obligors are not in material violation or breach of or in material default with respect to, complying with any provision of any material contract, agreement, instrument, lease, license, arrangement or understanding to which it is a party, including without limitation, each such material contract, agreement, instrument, lease, license, arrangement and understanding is in full force and effect and is a legal, valid and binding obligation enforceable in accordance with its terms (subject to applicable bankruptcy, insolvency and other laws affecting the enforceability of creditors' rights generally and to general equitable principles). To the knowledge of the Obligors, no third party is in default under any agreement, contract or other instrument, document or agreement to which an Obligor is a party, which default would or could have a material adverse effect on their respective properties or assets or their respective businesses as presently conducted or proposed to be conducted.

(g)Litigation. Except for matters disclosed in Appendix II or disclosed in the Borrower's securities law filings, there is no material action, suit, investigation , customer complaint, claim or proceeding at law or in equity by or before any arbitrator, governmental instrumentality or other agency now pending or threatened against or affecting an Obligor that has had or would reasonably be expected to have a material adverse effect on its business or operations, nor, to the knowledge of the Obligors, does there exist any basis therefor. Neither Obligor is subject to any judgment, order, writ, injunction or decree of any federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that has had or would reasonably be expected to have a material adverse effect on its businesses or operations. None of the Obligors' officers or directors is a party to, or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or governmental agency or instrumentality that has had or would reasonably be expected to have a material adverse effect on its businesses or operations.

(h)Non-Defaults. Except for matters disclosed in Appendix II or disclosed in the Borrower's securities law filings, neither Obligor is in material default in the performance or observance of any obligation with respect to any order, writ, injunction or

decree of any court of any federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign and there exists no condition, event or act which constitutes, nor which after notice, the lapse of time or both, would constitute, a material default under any of the foregoing, in each case that would reasonably be expected to have a material adverse effect on their businesses or operations. Upon the execution of the Note, the Borrower will not be in material breach of any term of any of the Loan Documents nor will any Default be presently occurring, which, in either event, if not cured pursuant to the terms of the Note, would materially and adversely impair the Borrower's ability to perform its obligations under the Note.

(i)Taxes. The Obligors have filed all federal, state and material local or foreign tax returns which are required to be filed by it and all such returns are true and correct in all material respects and have paid all taxes pursuant to such returns or pursuant to any assessments received by it (other than any amounts which they are disputing in good faith) and has withheld all amounts which it is obligated to withhold from amounts owing to any employee, creditor or third party. No material deficiency assessment with respect to or proposed adjustment of the Obligors' federal, state, county or local taxes is pending or, to their knowledge, threatened. There is no tax lien, whether imposed by any federal, provincial, state, county or local taxing authority, outstanding against the assets, properties or business of either Obligor.

G) Compliance with Laws; Environmental Matters, Licenses, Etc. Except for matters disclosed in Appendix II or disclosed in the Borrower's securities law filings, the Obligors have not received any notice of any violation of, or noncompliance with, any federal, provincial, state, local or foreign laws, ordinances, regulations or orders (including, without limitation, those relating to all applicable federal, provincial, state and local insurance laws, rules and regulations, environmental protection, occupational safety and health ("Notice of Violation") applicable to their businesses, the violation of, or noncompliance with which, would have a material adverse effect on such business or operations. The Obligors have all licenses and permits and other governmental certificates, authorizations and permits and approvals (collectively, "Governmental Licenses") required for the operation of its businesses and the use of its properties where the failure to obtain or possess such license or permit would have a material adverse effect on such businesses.

(k)Authorization. The execution and delivery of the Note and the other Loan Documents to which each Obligor is a party have been duly authorized by all requisite corporate action or limited liability company action, as the case may be, and when so executed and delivered, the Note and the other Loan Documents will constitute the valid and binding obligations of such Obligor, enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,

reorganization , moratorium and similar laws affecting creditors' rights and remedies generally and general principles of equity.

(l)Non-Contravention Etc. The execution, delivery and performance of the terms of the Note and the other Loan Documents will not (i) violate any provision of law or statute or any order of any court or other agency of government binding on the Obligors, in each case, which would cause a material adverse effect on the Obligors; or

(ii) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with due notice or lapse of time or both) a default under any material agreement, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Obligors.

(m)Insurance. All insurable assets and properties of the Obligors are insured against all risks usually insured against by persons owning or operating similar properties and assets in the localities where such properties or assets are located, through insurance policies all of which are in full force and effect. Each of the insurance policies referred to in this section is issued by an insurer of recognized responsibility, and the Obligors have not received any notice or threat of the cancellation or nonrenewal of any such policy.

(n)No Consent. No permit, consent, approval, authorization, order or filing with any court or governmental authority is required in connection with the issuance of the Note, except for (i) recordations or filings necessary to perfect any security interests granted pursuant to the Loan Documents, (ii) any application required to be submitted to complete the transactions contemplated by the Fee Letter; and (iii) and filings required to be submitted to the U.S. Securities and Exchange Commission with respect to the transactions contemplated by this Note.

(o)Employee Relations. The Obligors are in material compliance with all applicable federal, provincial, state, local and foreign laws and regulations respecting employment and employment practices, terms and conditions of employment and wages and hours and there are no pending investigations involving any of them. No collective bargaining agreement or modification thereof is currently being negotiated by the Borrower and no labor dispute with the employees of the Borrower exists, or is imminent.

(p)Coverage of Mortgage. Exhibit A to the Mortgage completely and accurately describes those certain patented claims located in the starter pit (the "Comstock Mine") and all real property and assets constituting the area where the Borrower intends to actively mine pursuant to its current and expected mine plan, including all recent additions and any parcels containing Lucerne Pit reserves and resources (under and across the road) plus any property that encompasses the operating areas of the mine, crusher, leach pad, etc., and any recently acquired land in and around

the operation of the Comstock Mine (not including the Northern Comstock JV or Dayton), which property, assets and areas together with the Comstock Mine.

Schedule 2

The Obligors covenant and agree that for so long as the Note is outstanding or any amounts remain due and payable to Holder hereunder, it shall observe and abide by each of the covenants and agreements contained in this Schedule 2, unless consented to in writing in advance by Holder or otherwise permitted hereunder.

1.1. Merger, Consolidation and Disposition of Assets.

1.1.1. Mergers and Acquisitions. Except for any holding company restructuring, without Holder's prior written consent, which consent may not be unreasonably withheld, conditioned or delayed, the Obligors will not effect any merger or consolidation except that a subsidiary may merge or consolidate into another subsidiary and either subsidiary may merge or consolidate into the Borrower so long as the Borrower is the surviving entity.

1.1.2. Disposition of Property. Without Holder's prior written consent, which consent may not be unreasonably withheld, neither the Borrower nor the Subsidiary will sell, lease or otherwise dispose of any of the property, including any disposition of the property as part of a sale and leaseback transaction, to or in favor of any person, except for (i) sales of inventory made in the ordinary course (including, without limitation, pursuant to any installment, output requirement, offtake or similar agreement with respect to the sale of future production in the ordinary course), (ii) property valued at less than $50,000, (iii) arm's length dispositions of equipment for cash and fair value that are no longer used or useful in the business of the Borrower or Subsidiary and (iv) sales by Borrower of its equity securities.

1.2. Indebtedness. Other than the Indebtedness described on Appendix II or disclosed in the Borrower 's securities law filings, neither the Borrower nor the Subsidiary will create, incur, assume, or suffer to exist, any Indebtedness, except: (a) this Note (as the same may be extended, increased, renewed or refunded from time to time by mutual agreement of the parties); (b) Indebtedness and other obligations arising in the ordinary course of operations or business such as those in respect of business expense reimbursements, workers' compensation claims, bid or performance bonds, reclamation or appeal bonds, surety bonds or letters of credit, leases or deferred purchase price of equipment, trade credit, endorsement of checks, and completion guarantees; (c) Indebtedness incurred or assumed for the purpose of financing the acquisition, construction or improvement of any business, property, equipment or assets (including capital leases) so long as recourse with respect to such Indebtedness is limited solely to such acquired, constructed or improved business, property , equipment or asset; (d) Indebtedness that is subordinated in favor of the Holder; (e) intercompany indebtedness between the Borrower and its subsidiaries; (f) and obligations, contingent or otherwise, existing or arising under any hedging or swap agreement, provided that such obligations are (or were) entered into with Holder, Auramet Trading or their respective affiliates in the ordinary course of business and not for speculative purposes and (g) Indebtedness incurred with Caterpillar Financial Services Corporation or its affiliates.

1.3. Liens. Without the prior written consent of Holder, other than Permitted Liens, neither the Borrower nor Subsidiary will (i) create or incur or suffer to be created or

incurred or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other security interest of any kind (each of the foregoing, a "Lien") upon any of its property, or upon the income or profits therefrom, except as otherwise permitted herein; transfer any of such property or the income or profits therefrom for the performance of any other obligation in priority to payment of its general creditors; or (ii) except with respect to Permitted Liens, acquire, or agree or have an option to acquire, any property upon conditional sale or other title retention or purchase money security agreement, device or arrangement. This provision shall not be read to prohibit a holding company restructuring, the sale or disposition of obsolete equipment or property, or other property not material to the operation and development of the Comstock Mine, so long as the same is done at arm's length and in the ordinary course of the Obligors' business.

1.4. Restrictions on Investments. Without Holder's prior written consent, the Borrower will not, and will not permit Subsidiary to make or permit to exist or to remain outstanding any Investment (as defined below) except Investments in: (a) cash equivalents; (b) short term indebtedness guaranteed by the United States government with a maturity not exceeding 6 months; (c) inventory purchased in the ordinary course of business ; (d) Investments made in exchange solely for equity or (e) or Investments in real property adjacent to Borrower's operation or reasonably close thereto to further the development of its mining business. For purposes of this Note, "Investment" means with respect to any Person, directly or indirectly, (a) the ownership, purchase or other acquisition of capital stock of any other Person or (b) the purchase or other acquisition, whether in one transaction or in a series of transactions, of all or a significant part of the property of any other Person or a business conducted by any other Person or all or substantially all of the assets constituting the business of a division, branch, brand or other unit operation of any other Person or (c) to guarantee Indebtedness of any other Person, to assume the Indebtedness of any other Person or to make, hold, purchase or otherwise acquire, in each case (excluding Indebtedness permitted to be incurred under Section 1.2) directly or indirectly, any deposit, loan, advance, commitment to lend or advance, or other extension of credit, excluding deposits with financial institutions available for withdrawal on demand and prepaid expenses, accounts receivable and similar items created in the ordinary course of business.

1.5. Distributions; Restricted Payments. Except for semiannual dividends payable with respect to the Borrower's preferred stock, which shall not be made in cash when a Default has occurred and is continuing hereunder, the Borrower will not declare, pay or make any distribution on shares of its capital stock or apply any of its funds or property to the purchase, redemption or other retirement of any shares of its capital stock, or of any options to purchase or acquire any capital stock of the Borrower, without

. Holder's prior written consent.

1.6. Compliance with Environmental Laws. The Obligors will act at all times in compliance with environmental laws, except where the failure of such compliance would not be reasonably likely to have a material adverse effect on the Borrower's business or operations.

1.7. Business Activities. Without the prior written consent of Holder, which consent may be given or denied at Holder's sole discretion, neither the Borrower nor the Subsidiary will engage directly or indirectly (whether through subsidiaries or otherwise) in any type of business other than the businesses presently or currently planned to be conducted by them and in related lines of businesses .

1.8. Transactions with Affiliates. Excluding any relationships, arrangements or agreements existing on the date hereof and disclosed in the Borrower's securities law filings, the Borrower will not (without the prior written consent of Holder, which consent may be given or denied at Holder's sole discretion), other than in the Borrower's ordinary course of business, engage in any transaction with any Affiliate (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Affiliate or, to the knowledge of the Borrower, any person in which any such Affiliate has a substantial interest or is an officer, director, partner, member or trustee on terms more favorable to such Person than would have been obtainable on an arm's-length basis in the ordinary course of business. As used herein, the term "Affiliate" means any person that is controlled by or is under common control with such controlling person. As used in the prior sentence, the term "control" means the power to vote 50% or more of any class of voting securities of such person or to direct or cause the direction of the management or policies of such Person.

1.9. Conflicting Agreements. Without the prior written consent of Holder, which consent may be given or denied at Holder's sole discretion, neither of the Obligors will enter into any amendment or other modification of material agreements that could reasonably be expected to adversely affect Holder; in addition, neither of the Obligors will enter into any amendment or other modification to any other currently existing contractual obligation, which by its terms materially impairs the ability of the Borrower to (a) repay the Advance, or (b) fully satisfy all of its obligations hereunder, without the prior written consent of Holder, which consent may be given or denied at Holder's sole discretion.

1.10. Financial Statements. Not later than 45 days following the end of each fiscal quarter (excluding the last fiscal quarter of each fiscal year) and 60 days following the end of each fiscal year, while this Note is outstanding, the Obligors shall deliver to Holder quarterly or annual financial statements (including statements of cash flow), as the case may be, of the Borrower and its consolidated subsidiaries substantially prepared in accordance with generally accepted accounting practices, except for normal recurring year-end adjustments provided that so long as such documentation is publicly available at such times it shall be deemed to be delivered for purposes of this covenant; provided , that for purposes of this Note, the posting of such financial statements on the website of the Securities and Exchange Commission shall constitute delivery.

1.11. Monthly Financial Statements and Operating Reports. Within thirty (30) days following the end of each month while this Note is outstanding, the Obligors shall deliver to Holder: internally prepared, unaudited monthly financial statements of the

Obligors, so long as Holder shall agree to maintain such financial statement confidentially pursuant to a non-disclosure agreement acceptable to Comstock; and an operating report describing the status of operations for the Comstock Mine.

1.12. Minimum Liquidity Balance. The Borrower shall, at all times maintain a minimum Liquidity Balance (as defined below) of $1,000,000. "Liquidity Balance" means the Borrower's balance of cash and cash equivalents, including short term certificates of deposits and US Treasury bills and notes, plus 90% of the value of any gold/silver <lore that has been picked up by a secured carrier but not yet paid for, as of any date of determination. If at any time the Borrower fails to maintain a minimum Liquidity Balance of $1,000,000 (a "Liquidity Failure"), the Borrower shall immediately notify Holder of such Liquidity Failure and shall cure such Liquidity Failure within 7 days from the date that the Holder is provided notification of such Liquidity Failure.

1.13 Notification as to Certain Events. The Obligors shall notify Holder if the Obligors become aware of any event that has or would reasonably be expected to have a material adverse effect on the Obligors' business or operations with respect to their property or the Obligors' ability to perform its obligations under the Note. The Obligors shall notify Holder immediately of all correspondence relating to a material event, or material problem or alleging an event of default or an event which would become a Default if not corrected.

1.14 Maintenance of Required Approvals and Consents; Compliance with Laws. The Obligors will take all action necessary to maintain all approvals and consents necessary with respect to the operation of their respective businesses, except where the failure to maintain such approvals and consents could not reasonably be expected to have a material adverse effect on such businesses or operations. The Obligors shall comply in all material respects with all applicable laws with respect to the operation of their businesses.

1.15 Inspection of Assets and Operations. Permit representatives of the Holder to inspect the Borrower's operations and for that purpose to enter on Borrower's property during reasonable business hours and upon reasonable notice; provided, however, if a Default has occurred and is continuing, the foregoing limitation with respect to reasonable business hours and reasonable notice shall not apply.

Appendix I



Repayment Date	Principal Amount of Repayment
April 30, 2015	USD$200,000.00
May 16, 2015	USD$200,000.00
May 31, 2015	USD$200,000.00
June 15, 2015	USD$200,000.00
June 30, 2015	USD$200,000.00
July 15, 2015	USD$200,000.00
July 31, 2015	USD$200,000.00
August 15, 2015	USD$200,000.00
August 31, 2015	USD$200,000.00
September 15, 2015	USD$200,000.00
September 30, 2015	USD$200,000.00
October 15, 2015	USD$200,000.00
October 31, 2015	USD$200,000.00
November 15, 2015	USD$200,000.00
November 30, 2015	USD$200,000.00
December 15, 2015	USD$200,000.00
December 31, 2015	USD$200,000.00
January 15, 2016	USD$200,000.00
January 31, 2016	USD$200,000.00
February 15, 2016	USD$200,000.00
February 29, 2016	USD$200,000.00
March 15, 2016	USD$200,000.00
March 31, 2016	USD$200,000.00
April 15, 2016	USD$200,000.00
April 30, 2016	USD$200,000.00

Appendix II

Existing Indebtedness [To come]

Existing Liens [To come]

Existing Real Property Restrictions [To come]

Organizational Chart

Comstock Mining Inc.

Northern Comstock LLC*

Comstock Mining LLC

F/K/A The Plum Mining Co, LLC

Gold Hill Hotel, Inc.

* On October 20, 20 I0, the Company entered into an operating agreement (the "Operating Agreement") to form Northern Comstock LLC ("Northern Comstock") with Mr. Winfield, our Chairman and largest shareholder, and an entity controlled by Mr. Winfield, OWC Resources, Inc. ("OWC"). As part of the Operating Agreement, the Company obtained rights relating to certain property formerly owned by OWC in Storey County, Nevada (the "OWC Property") and two groups of properties leased by Mr. Winfield in Storey County, Nevada from the Sutro Tunnel Company (the "Sutro Property") and Virginia City Ventures (the "VCV Property").

Pursuant to the terms of the Operating Agreement for Northern Comstock, OWC contributed the OWC Property to Northern Comstock and John Winfield contributed his rights under the Sutro Property and the VCV Property to Northern Comstock. The Company contributed 862.5 shares of Series A- 1 Preferred Stock in each annual period from 20 I 0 to 20 13, and contributes its services in the area of mine exploration, development and production to Northern Comstock. The terms of the Operating Agreement provide that on each anniversary of the Operating Agreement, up to and including the thirty-ninth (39th) anniversary, the Company will make additional capital contributions in the amount of $862,500, in the form of Series A-1 Preferred Stock or cash (upon request of Northern Comstock , which request for cash can be denied by the Company in certain circumstances). In addition the Operating Agreement provides that each time more than 200,000 gold equivalent ounces of measured and indicated resources are validated, the capital contributions for such year will be accelerated to $5 million or 5,000 shares of Series A- 1 preferred stock.

The Operating Agreement provides the Company with the exclusive rights of development, production , mining and exploration on the respective properties and requires the Company to make certain expenditures toward that end.

Under the terms of the Operating Agreement, all cash flows from the bullion or other minerals recovered from the ore mined out of the ground but untreated and minerals produced from the milling or reduction of ore to a higher grade produced from the DWC Property, Sutro Property or VCV Property, as applicable, or finished products produced from any such property, will be distributed to the Company after the payment of royalties associated with such properties.

GENERAL SECURITY AGREEMENT


1.	SECURITY INTEREST

(a)For value received, Comstock Mining Inc. (the "Debtor"), hereby grants to Auramet International LLC ("Secured Party") a security interest (the "Security Interest") in the undertaking of Debtor and in all of Debtor's present and after acquired personal property including, without limitation, in all Goods (including all parts, accessories, attachments, special tools, additions and accessions thereto), Chattel Paper, Documents of Title (whether negotiable or not), Instruments, Intangibles, Money and Securities and all other Investment Property now owned or hereafter owned or acquired by or on behalf of Debtor (including such as may be returned to or repossessed by Debtor) and in all proceeds and renewals thereof, accretions thereto and substitutions therefor (hereinafter collectively called "Collateral") and including, without limitation, all of the following now owned or hereafter owned or acquired by or on behalf of Debtor:


(i)	all Inventory of whatever kind and wherever situated;


(ii)	all equipment (other than Inventory) of whatever kind and wherever situated, including, without limitation, all machinery, tools, apparatus, plant, furniture, fixtures and vehicles of whatsoever nature or kind;


(iii)	all Accounts and book debts and generally all debts, dues, claims, causes in action and demands of every nature and kind howsoever arising or secured including letters of credit and advices of credit, which are now due, owing or accruing or growing due to or owned by or which may hereafter become due, owing or accruing or growing due to or owned by Debtor ("Debts");


(iv)	all lists, records and files relating to Debtor's customers;


(v)	all deeds, documents, writings, papers, books of account and other books relating to or being records of Debts, Chattel Paper or Documents of Title or by which such are or may hereafter be secured, evidenced, acknowledged or made payable;


(vi)	all contractual rights and insurance claims; and

(vii)

all patents, industrial designs, trade marks, trade secrets and know how, including, without limitation, environmental technology and biotechnology, confidential information, trade names, goodwill, copyrights, and software and all other forms of intellectual and industrial property, and any registrations and applications for registration of any of the foregoing (collectively "Intellectual Property") ; and

(viii) any and all future material contracts, including any mining exploration or development contracts, and refining and milling contracts, and all proceeds related thereto, and any renewals and amendments thereof.

Notwithstanding anything to the contrary in this Security Agreement, the Note (as defined below) or the Loan Documents (as defined in the Note), this Security Agreement shall not constitute a grant of a security interest in (and the Collateral shall not include) the Excluded Property (as defined below).

(b)The Security Interest granted hereby shall not extend or apply to and Collateral shall not include the last day of the term of any lease or agreement therefore, but, upon the enforcement of the Security Interest, Debtor shall stand possessed of such last day in trust to assign the same to any person acquiring such term.

(c)The terms "Goods", "Chattel Paper", "Document of Title", "Instrument", "Intangible", "Security", "Investment Property", "proceed", "Inventory", "accession", "Money", "Account", "financing statement" and "financing change statement" whenever used herein shall be interpreted pursuant to their respective meanings when used in "UCC'', the Uniform Commercial Code, as enacted in the State of New York, as amended from time to time, which Code, including amendments thereto and any Code substituted therefor and amendments thereto is herein referred to as the "UCC," provided always that the term "Goods" when used herein shall not include "consumer goods" of Debtor as that term is defined in the "UCC." Any reference herein to "Collateral" shall, unless the context otherwise requires, be deemed a reference to "Collateral or any part thereof '.

(d)The term "Excluded Property" means, (i) pledges and security interests prohibited by applicable law, rule or regulation, (ii) any lease, license or other agreement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or create a right of termination in favor of any other party thereto, (iii) those assets as to which the Secured Party and the Debtor reasonably agree that the cost or other consequence of obtaining such a security interest are excessive in relation to the value afforded thereby, and (iv) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted thereby.


2.	INDEBTEDNESS SECURED

The Security Interest granted hereby secures the Obligations of the Debtor under and as defined in the Secured Promissory Note and Guaranty dated March 6, 2015 (the "Note"), among the Debtor, Secured Party and Comstock Mining LLC.


3.	REPRESENTATIONS AND WARRANTIES OF DEBTOR

Debtor represents and warrants and so long as this Security Agreement remains in effect shall be deemed to continuously represent and warrant that:

(a)

the Collateral is owned by Debtor free of all security interests, mortgages, liens, claims, charges, licenses, leases, encumbrances or other adverse claims or interests (hereinafter collectively called "Encumbrances"), save for the Permitted Liens, the Security Interest and those Encumbrances shown on Schedule "A" or hereafter approved in writing by Secured Party, prior to their creation or assumption;


(b)	all Intellectual Property applications and registrations are valid and m good standing and Debtor is the owner of the applications and registrations;

(c)

each Debt, Chattel Paper and Instrument constituting Collateral is enforceable in all material respects in accordance with its terms against the party obligated to pay the same (the "Account Debtor"), and the amount represented by Debtor to Secured Party from time to time as owing by each Account Debtor or by all Account Debtors will be the correct amount actually owing by such Account Debtors, except for normal discounts and ordinary course accommodations and adjustments; and

(d)

the locations specified in Schedule "B" as to business operations and records are accurate and constitute all locations where any material business operations and records are kept and, with respect to material Goods (including Inventory) constituting Collateral, the locations specified in Schedule "B" are accurate save for Goods in transit to such locations and Inventory on lease or consignment; and all fixtures or Goods about to become fixtures and all minerals to be extracted which forms part of the Collateral will be situated at one of such locations.


(e)	the execution, delivery and performance of the obligations under this Security Agreement and the creation of any security interest in or assignment hereunder of Debtor's rights in the Collateral to Secured Party will not result in a breach of any agreement to which Debtor is a party.


4.	COVENANTS OF THE DEBTOR

So long as this Security Agreement remains in effect, Debtor covenants and agrees:

(a) to defend Collateral against the claims and demands of all other parties claiming the same or an interest therein in a commercially reasonable and prudent manner; to diligently initiate and prosecute legal action against all infringers of Debtor's rights in Intellectual Property; to take all reasonable action to keep the Collateral free from all Encumbrances, except for the Security Interest, licenses which are compulsory under federal or provincial legislation, the Permitted Liens and those shown on Schedule "A" or hereafter approved in writing by Secured Party, prior to their creation or assumption, and not to sell, exchange, transfer, assign, lease, license or otherwise dispose of Collateral or any interest therein without the prior written consent of Secured Party not to be unreasonably withheld, delayed or conditioned; provided that, so long as a default is not continuing, Debtor may, in the ordinary course of Debtor's business, sell or lease Inventory, equipment or other assets;


(b)	to notify Secured Party promptly of:


(i)	any change in the information contained herein or in the Schedules hereto relating to Debtor, Debtor's business or Collateral ,


(ii)	the details of any significant acquisition of Collateral,


(iii)	the details of any claims or litigation affecting Debtor or Collateral in which the maximum amount claimed or in controversy exceeds $10,000,


(iv)	any material loss or damage to Collateral in excess of $10,000 and not covered by insurance,


(v)	any default by any Account Debtor in payment or other performance of its obligations with respect to Collateral, and


(vi)	the return to or repossession by Debtor of Collateral;

(c) to keep Collateral in good order, condition and repair, normal wear and tear excepted, and not to use Collateral in violation of the provisions of this Security Agreement or any other agreement relating to Collateral or any policy insuring Collateral or any applicable statute, law, by-law, rule, regulation or ordinance; to renew all agreements and registrations as may be necessary or desirable to protect Intellectual Property, unless otherwise agreed in writing by Secured Party; to apply to register all existing and future copyrights, trade-marks, patents, integrated circuit topographies and industrial designs whenever Debtor in its sole discretion determines it is commercially reasonable to do so;

(d) to do, execute, acknowledge and deliver such financing statements, financing change statements and further assignments, transfers, documents, acts, matters and things (including further schedules hereto) as may be reasonably requested by Secured Party of or with respect to Collateral in order to give effect to these presents and to pay all costs for searches and filings in connection therewith;

(e) to pay all taxes, rates, levies, assessments and other charges of every nature which may be lawfully levied, assessed or imposed against or in respect of Debtor or Collateral as and when the same become due and payable, except for those whose amount or validity is being contested in good faith by proper proceedings diligently conducted;

(f) to insure collateral in such amounts and against such risks as would customarily be insured by a prudent owner of similar Collateral, with loss payable to Secured Party and Debtor, as insureds, as their respective interests may appear, and to pay all premiums therfor and deliver copies of policies and evidence of renewal to Secured Party on request, and carry on and conduct the business of Debtor in a proper manner and so as to protect and preserve Collateral as may be commercially reasonable and to keep, in accordance with generally accepted accounting principles, consistently applied, proper books of account for Debtor's business as well as accurate and complete records concerning Collateral, and mark any and material Collateral at Secured Party's request so as to indicate the Security Interest;

(g)to prevent Collateral, save Inventory sold or leased as permitted hereby, from being or becoming an accession to other property not covered by this Security Agreement;


(h)	to deliver to Secured Party from time to time promptly upon request:


(i)	any Documents of Title, Instruments, Securities and Chattel Paper constituting, representing or relating to Collateral , to the extent necessary to perfect a security interest therein, except to the extent there is a Permitted Lien with priority to such security interest,


(ii)	copies of all policies and certificates of insurance relating to Collateral, and


(iii)	such information concerning Collateral, the Debtor and Debtor's business and affairs as Secured Party may reasonably request.


5.	USE AND VERIFICATION OF COLLATERAL

Subject to compliance with Debtor's covenants contained herein and Clause 7 hereof, Debtor may, until a default (as defined herein), possess, operate, collect, use and enjoy and deal with Collateral in the ordinary course of Debtor's business in any manner not inconsistent with the provisions hereof; provided always that Secured Party shall have the right at any time and from time to time upon reasonable notice and during normal business hours and subject to reasonable safety procedures and requirements of Debtor, to verify the existence and state of the Collateral in any reasonable manner and Debtor agrees to furnish all reasonable assistance and information and to perform all such acts as Secured Party may reasonably request in connection therewith and for such purpose to grant to Secured Party or its agents access to all places where Collateral may be located and to all premises occupied by Debtor.


6.	SECURITIES, INVESTMENT PROPERTY

If Collateral at any time includes Securities and a Default (as defined in the Note) shall have occurred and is continuing, Debtor authorizes Secured Party to transfer the same or any part thereof into its own name or that of its nominee(s) so that Secured Party or its nominee(s) may appear of record as the sole owner thereof.

Where any Investment Property is held in or credited to an account that has been established with a securities intermediary, Secured Party may, at any time after Default shall have occurred and is continuing, give a notice of exclusive control to any such securities intermediary with respect to such Investment Property.


7.	COLLECTION OF DEBTS

After a default under this Security Agreement, Secured Party may notify all or any Account Debtors of the Security Interest and may also direct such Account Debtors to make all payments on Collateral to Secured Party.


8.	DISPOSITION OF MONEY

Subject to any applicable requirements of the UCC, all Money collected or received by Secured Party pursuant to or in exercise of any right it possesses with respect to Collateral shall

be applied against the Obligations of Debtor under the Note in such manner as Secured Party deems best or, at the option of Secured Party, may be held unappropriated in a collateral account or released to Debtor, all without prejudice to the liability of Debtor or the rights of Secured Party hereunder, and any surplus shall be accounted for as required by law.


9.	EVENTS OF DEFAULT

The happening of any Default (as defined in the Note) shall constitute a default hereunder and is herein referenced to as "default."


10.	ACCELERATION

Secured Party, in its sole discretion, may declare all or any part of the Note to be immediately due and payable, without demand or notice of any kind, if a default shall have occurred and be continuing.


11.	REMEDIES

At any time that a default has occurred and is continuing, Debtor acknowledges and agrees that Secured Party shall have the right to:

(a) subject to any applicable law, including the UCC, take possession of, collect, demand, sue on, enforce, recover and receive Collateral and give valid and binding receipts and discharges therefor and in respect thereof;

(b) sell, license, lease or otherwise dispose of Collateral in such manner, at such time or times and place or places, for such consideration and upon such terms and conditions as to Secured Party may seem reasonable;

(c) have all rights and remedies of a secured party under the UCC in addition to those rights granted herein and in any other agreement now or hereafter in effect between Debtor and Secured Party and in addition to any other rights Secured Party may have at law or in equity; provided, that Secured Party shall not be liable or accountable for any failure to exercise its remedies, take possession of, collect, enforce, realize, sell, lease, license or otherwise dispose of Collateral or to institute any proceedings for such purposes; provided, further that Secured Party shall have no obligation to take any steps to preserve rights against prior parties to any Instrument or Chattel Paper whether Collateral or proceeds and whether or not in Secured Party's possession and shall not be liable or accountable for failure to do so;

(d) take possession of Collateral under this clause (d) wherever it may be located and by any method permitted by law and Debtor agrees upon request from Secured Party to assemble and deliver possession of Collateral at such place or places as directed;

(e) reimbursement for or payment of all costs, charges and expenses reasonably incurred by Secured Party, whether directly or for services rendered (including reasonable attorney fees), in operating Debtor's accounts, in preparing or enforcing this Security Agreement, in taking and maintaining custody of, preserving, repairing, processing, preparing for disposition and disposing of Collateral and in enforcing or collecting the Obligations of the Debtor under the

Note and all such costs, charges and expenses, together with any amounts owing as a result of any borrowing by Secured Party, as permitted hereby, shall be a first charge on the proceeds of realization , collection or disposition of Collateral and shall be secured hereby;

(f) dispose of Collateral as provided hereunder in the manner required by the UCC after giving Debtor notice of the date, time and place of any public or private sale; and

(g) after delivering written demand to Debtor and subject to any applicable law, including the UCC, require Debtor to take such further action as may be necessary to evidence and effect an assignment or licensing of Intellectual Property to whomever Secured Party directs (including to Secured Party) or appoint an officer, director or branch manager of Secured Party to be Debtor's attorney in accordance with applicable legislation with full power of substitution and to do on Debtor's behalf anything that is required to assign, license or transfer, and to record any assignment , license or transfer of the Collateral (this power of attorney, which is coupled with an interest, is irrevocable until the release or discharge of the Security Interest).


12.	MISCELLANEOUS

(a) Debtor hereby acknowledges that Secured Party shall be entitled to file such financing statements, financing change statements and other documents and do such acts, matters and things (including completing and adding schedules hereto identifying Collateral or any permitted Encumbrances affecting Collateral or identifying the locations at which Debtor's business is carried on and Collateral and records relating thereto are situated) as Secured Party may deem appropriate to perfect on an ongoing basis and continue the Security Interest.

(b) Without limiting any other right of Secured Party, at any time that a default has occurred and is continuing, Secured Party may, in its sole discretion, set off against the Note any and all amounts then owed to Debtor by Secured Party in any capacity, whether or not due, and Secured Party shall be deemed to have exercised such right to set off immediately at the time of making its decision to do so even though any charge therefor is made or entered on Secured Party's records subsequent thereto.

(c) Upon Debtor's failure to perform any of its duties hereunder in any material respect, Secured Party may, but shall not be obligated to, perform any or all of such duties, and Debtor shall pay to Secured Party, forthwith upon written demand therefor, an amount equal to the expense incurred by Secured Party in so doing plus interest thereon from the date such expense is incurred until it is paid at a rate that is the lower of (i) 15% per annum or (ii) the highest rate allowable by applicable law.

(d) Secured Party may grant extensions of time and other indulgences, take and give up security, accept compositions, compound, compromise, settle, grant releases and discharges and otherwise deal with Debtor, debtors of Debtor, sureties and others and with Collateral and other security as Secured Party may see fit without prejudice to the liability of Debtor or Secured Party's right to hold and realize the Security Interest. Furthermore, Secured Party may demand, collect and sue on Collateral in either Debtor's or Secured Party's name, at Secured Party's option, and may endorse Debtor's name on any and all cheques, commercial paper, and any other Instruments pertaining to or constituting Collateral.

(e) No delay or omission by Secured Party in exercising any right or remedy hereunder or with respect to the Note shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. Furthermore, Secured Party may remedy any default by Debtor hereunder or with respect to the Note in any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by Debtor. All rights and remedies of Secured Party granted or recognized herein are cumulative and may be exercised at any time and from time to time independently or in combination.

(f)Debtor waives protest of any Instrument constituting Collateral at any time held by Secured Party on which Debtor is in any way liable and, subject to Clause 11(g) hereof, notice of any other action taken by Secured Party.

(g)This Security Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. If more than one Debtor executes this Security Agreement the obligations of such Debtors hereunder shall be joint and several. This Security Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and those counterparts will together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Security Agreement by facsimile or by email, in pdf format, shall be effective as delivery of a manually executed counterpart of this Security Agreement.

(h)Provided that Secured Party executes and delivers a non-disclosure agreement that is acceptable to Debtor and subject to such agreement, Secured Party may provide any financial and other information it has about Debtor, the Security Interest and the Collateral to anyone acquiring or may acquire an interest in the Security Interest or the Collateral from Secured Party or anyone acting on behalf of Secured Party.

(i)Save for any schedules which may be added hereto pursuant to the provisions hereof, no modification , variation or amendment of any provision of this Security Agreement shall be made except by a written agreement, executed by the parties hereto and no waiver of any provision hereof shall be effective unless in writing.

G) Subject to the requirements of Clause 11(g) hereof, whenever either party hereto is required or entitled to notify or direct the other or to make a demand or request upon the other, such notice, direction, demand or request shall be in writing and shall be sufficiently given, in the case of Secured Party, if delivered to it or sent by prepaid registered mail addressed to it at its address set forth in the Note or as changed pursuant thereto, and, in the case of Debtor, if delivered to it or if sent by prepaid registered mail addressed to it at its address set forth in the Note or as changed pursuant thereto. Either party may notify the other pursuant hereto of any change in such party's principal address to be used for the purposes hereof.

(k)The headings used in this Security Agreement are for convenience only and are not be considered a part of this Security Agreement and do not in any way limit or amplify the terms and provisions of this Security Agreement.

(1)When the context so requires, the singular number shall be read as if the plural were expressed and the provisions hereof shall be read with all grammatical changes necessary dependent upon the person referred to being a male, female, firm or corporation.

(m)In the event any provisions of this Security Agreement, as amended from time to time, shall be deemed invalid or void, in whole or in part, by any Court of competent jurisdiction, the remaining terms and provisions of this Security Agreement shall remain in full force and effect.

(n)Nothing herein contained shall in any way obligate Secured Party to grant, continue, renew, extend time for payment of or accept anything which constitutes or would constitute indebtedness.

(o)The Security Interest created hereby is intended to attach when this Security Agreement is signed by Debtor and delivered to Secured Party and the Note is executed, delivered and funded.

(p)This Security Agreement and the transactions evidenced hereby shall be governed by and construed in accordance with the laws of the State of New York.

(q)The Security Interest created hereunder shall terminate when the Obligations of the Debtor under the Note have been fully satisfied, at which time Secured Party shall execute and deliver to Debtor, or to such person or persons as Debtor shall reasonably designate, all UCC termination statements and similar documents prepared by Debtor at its expense which Debtor shall reasonably request to evidence such termination. If any of the Collateral shall be sold, transferred or otherwise disposed of by any Debtor in a transaction permitted by the Note, then Secured Party, at the request and sole expense of such Debtor, shall execute and deliver to Debtor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral.


(r)	Debtor represents and warrants that the following information is accurate:

BUSINESS DEBTOR



NAME OF BUSINESS DEBTOR Comstock Mining Inc.
ADDRESS OF BUSINESS DEBTOR 1200 American Flat Road, PO Box 1 1 18	CITY Virginia City	STATE Nevada	POSTAL CODE 89440

[Signature Page Follows]

IN WITNESS WHEREOF each of the parties hereto has executed this agreement on the 6th day of March, 2015.

AURAMET INTERNATIONAL LLC

By: /s/ James Verraster, III

Name: James Verraster
Title: Director

COMSTOCK MINING INC.

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: President and CEO

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: President and CEO

SCHEDULE "A"

(ENCUMBRANCES AFFECTING COLLATERAL)

1. Permitted Liens

SCHEDULE "B"

I. Locations of Debtor's Business Operations

N75920822.3

GENERAL SECURITY AGREEMENT


1.	SECURITY INTEREST

(a)For value received , Comstock Mining LLC (the "Debtor"), hereby grants to Auramet International LLC ("Secured Party") a security interest (the "Security Interest") in the undertaking of Debtor and in all of Debtor's present and after acquired personal property including, without limitation, in all Goods (including all parts, accessories, attachments, special tools, additions and accessions thereto), Chattel Paper, Documents of Title (whether negotiable or not), Instruments, Intangibles, Money and Securities and all other Investment Property now owned or hereafter owned or acquired by or on behalf of Debtor (including such as may be returned to or repossessed by Debtor) and in all proceeds and renewals thereof, accretions thereto and substitutions therefor (hereinafter collectively called "Collateral") and including, without limitation, all of the following now owned or hereafter owned or acquired by or on behalf of Debtor:


(i)	all Inventory of whatever kind and wherever situated;


(ii)	all equipment (other than Inventory) of whatever kind and wherever situated, including, without limitation, all machinery, tools, apparatus, plant, furniture, fixtures and vehicles of whatsoever nature or kind;


(iii)	all Accounts and book debts and generally all debts, dues, claims, causes in action and demands of every nature and kind howsoever arising or secured including letters of credit and advices of credit, which are now due, owing or accruing or growing due to or owned by or which may hereafter become due, owing or accruing or growing due to or owned by Debtor ("Debts");


(iv)	all lists, records and files relating to Debtor's customers;


(v)	all deeds, documents, writings, papers, books of account and other books relating to or being records of Debts, Chattel Paper or Documents of Title or by which such are or may hereafter be secured, evidenced, acknowledged or made payable;


(vi)	all contractual rights and insurance claims; and

(vii)

all patents, industrial designs, trade marks, trade secrets and know how, including, without limitation, environmental technology and biotechnology , confidential information, trade names, goodwill, copyrights, and software and all other forms of intellectual and industrial property, and any registrations and applications for registration of any of the foregoing (collectively "Intellectual Property"); and


(viii)	any and all future material contracts, including any mining exploration or development contracts, and refining and milling contracts, and all proceeds related thereto, and any renewals and amendments thereof.

Notwithstanding anything to the contrary in this Security Agreement , the Note (as defined below) or the Loan Documents (as defined in the Note), this Security Agreement shall not constitute a grant of a security interest in (and the Collateral shall not include) the Excluded Property (as defined below).

(c)The terms "Goods", "Chattel Paper", "Document of Title", "Instrument", "Intangible", "Security", "Investment Property", "proceed", "Inventory", "accession", "Money", "Account", "financing statement" and "financing change statement" whenever used herein shall be interpreted pursuant to their respective meanings when used in "UCC", the Uniform Commercial Code, as enacted in the State of New York, as amended from time to time, which Code, including amendments thereto and any Code substituted therefor and amendments thereto is herein referred to as the "UCC," provided always that the term "Goods" when used herein shall not include "consumer goods" of Debtor as that term is defined in the "UCC." Any reference herein to "Collateral" shall, unless the context otherwise requires, be deemed a reference to "Collateral or any part thereof '.


2.	INDEBTEDNESS SECURED

The Security Interest granted hereby secures the Obligations of Comstock Mining Inc. under and as defined in the Secured Promissory Note and Guaranty dated March 6, 2015 (the "Note"), among the Debtor, Secured Party and Comstock Mining Inc.


3.	REPRESENTATIONS AND WARRANTIES OF DEBTOR

Debtor represents and warrants and so long as this Security Agreement remains in effect shall be deemed to continuously represent and warrant that:

(a)


(b)	all Intellectual Property applications and registrations are valid and in good standing and Debtor is the owner of the applications and registrations ;

(c)

(d)

the locations specified in Schedule "B" as to business operations and records are accurate and constitute all locations where any material business operations and records are kept and, with respect to material Goods (including Inventory) constituting Collateral, the locations specified in Schedule "B" are accurate save for Goods in transit to such locations and Inventory on lease or consignment ; and all fixtures or Goods about to become fixtures and all minerals to be extracted which forms part of the Collateral will be situated at one of such locations.


(e)	the execution, delivery and performance of the obligations under this Security Agreement and the creation of any security interest in or assignment hereunder of Debtor's rights in the Collateral to Secured Party will not result in a breach of any agreement to which Debtor is a party.


4.	COVENANTS OF THE DEBTOR

So long as this Security Agreement remains in effect, Debtor covenants and agrees:


(b)	to notify Secured Party promptly of:


(i)	any change in the information contained herein or in the Schedules hereto relating to Debtor, Debtor's business or Collateral,


(ii)	the details of any significant acquisition of Collateral ,


(iii)	the details of any claims or litigation affecting Debtor or Collateral in which the maximum amount claimed or in controversy exceeds $10,000,


(iv)	any material loss or damage to Collateral in excess of $10,000 and not covered by insurance,


(v)	any default by any Account Debtor in payment or other performance of its obligations with respect to Collateral, and


(vi)	the return to or repossession by Debtor of Collateral;

(c)to keep Collateral in good order, condition and repair, normal wear and tear excepted, and not to use Collateral in violation of the provisions of this Security Agreement or any other agreement relating to Collateral or any policy insuring Collateral or any applicable statute, law, by-law, rule, regulation or ordinance; to renew all agreements and registrations as may be necessary or desirable to protect Intellectual Property, unless otherwise agreed in writing by Secured Party; to apply to register all existing and future copyrights, trade-marks, patents, integrated circuit topographies and industrial designs whenever Debtor in its sole discretion determines it is commercially reasonable to do so;

(d)to do, execute, acknowledge and deliver such financing statements, financing change statements and further assignments, transfers, documents, acts, matters and things (including further schedules hereto) as may be reasonably requested by Secured Party of or with respect to Collateral in order to give effect to these presents and to pay all costs for searches and filings in connection therewith;

(e)to pay all taxes, rates, levies, assessments and other charges of every nature which may be lawfully levied, assessed or imposed against or in respect of Debtor or Collateral as and when the same become due and payable, except for those whose amount or validity is being contested in good faith by proper proceedings diligently conducted;

(f)to insure collateral in such amounts and against such risks as would customarily be insured by a prudent owner of similar Collateral, with loss payable to Secured Party and Debtor, as insureds, as their respective interests may appear, and to pay all premiums therfor and deliver copies of policies and evidence of renewal to Secured Party on request, and carry on and conduct the business of Debtor in a proper manner and so as to protect and preserve Collateral as may be commercially reasonable and to keep, in accordance with generally accepted accounting principles, consistently applied, proper books of account for Debtor's business as well as accurate and complete records concerning Collateral, and mark any and material Collateral at Secured Party's request so as to indicate the Security Interest;

(g)to prevent Collateral, save Inventory sold or leased as permitted hereby, from being or becoming an accession to other property not covered by this Security Agreement;


(h)	to deliver to Secured Party from time to time promptly upon request:


(i)	any Documents of Title, Instruments, Securities and Chattel Paper constituting, representing or relating to Collateral, to the extent necessary to perfect a security interest therein, except to the extent there is a Permitted Lien with priority to such security interest,


(ii)	copies of all policies and certificates of insurance relating to Collateral, and


(iii)	such information concerning Collateral, the Debtor and Debtor's business and affairs as Secured Party may reasonably request.


5.	USE AND VERIFICATION OF COLLATERAL


6.	SECURITIES, INVESTMENT PROPERTY


7.	COLLECTION OF DEBTS


8.	DISPOSITION OF MONEY

Subject to any applicable requirements of the UCC, all Money collected or received by Secured Party pursuant to or in exercise of any right it possesses with respect to Collateral shall

be applied against the Obligations of Comstock Mining Inc. under the Note in such manner as Secured Party deems best or, at the option of Secured Party, may be held unappropriated in a collateral account or released to Debtor, all without prejudice to the liability of Debtor or the rights of Secured Party hereunder, and any surplus shall be accounted for as required by law.


9.	EVENTS OF DEFAULT

The happening of any Default (as defined in the Note) shall constitute a default hereunder and is herein referenced to as "default."


10.	ACCELERATION


11.	REMEDIES

At any time that a default has occurred and is continuing, Debtor acknowledges and agrees that Secured Party shall have the right to:

(e) reimbursement for or payment of all costs, charges and expenses reasonably incurred by Secured Party, whether directly or for services rendered (including reasonable attorney fees), in operating Debtor's accounts, in preparing or enforcing this Security Agreement , in taking and maintaining custody of, preserving, repairing, processing , preparing for disposition and disposing of Collateral and in enforcing or collecting the Obligations of the Debtor under the

Note and all such costs, charges and expenses, together with any amounts owing as a result of any borrowing by Secured Party, as permitted hereby, shall be a first charge on the proceeds of realization, collection or disposition of Collateral and shall be secured hereby;

(f)dispose of Collateral as provided hereunder in the manner required by the UCC after giving Debtor notice of the date, time and place of any public or private sale; and

(g)after delivering written demand to Debtor and subject to any applicable law, including the UCC, require Debtor to take such further action as may be necessary to evidence and effect an assignment or licensing of Intellectual Property to whomever Secured Party directs (including to Secured Party) or appoint an officer, director or branch manager of Secured Party to be Debtor's attorney in accordance with applicable legislation with full power of substitution and to do on Debtor's behalf anything that is required to assign, license or transfer, and to record any assignment, license or transfer of the Collateral (this power of attorney, which is coupled with an interest, is irrevocable until the release or discharge of the Security Interest).


12.	MISCELLANEOUS

(f) Debtor waives protest of any Instrument constituting Collateral at any time held by Secured Party on which Debtor is in any way liable and, subject to Clause 11(g) hereof, notice of any other action taken by Secured Party.

(j)Subject to the requirements of Clause 11(g) hereof, whenever either party hereto is required or entitled to notify or direct the other or to make a demand or request upon the other, such notice, direction, demand or request shall be in writing and shall be sufficiently given, in the case of Secured Party, if delivered to it or sent by prepaid registered mail addressed to it at its address set forth in the Note or as changed pursuant thereto, and, in the case of Debtor, if delivered to Comstock Mining Inc. or if sent by prepaid registered mail addressed to Comstock Mining Inc. at its address set forth in the Note or as changed pursuant thereto. Either party may notify the other pursuant hereto of any change in such party's principal address to be used for the purposes hereof.

(l)When the context so requires, the singular number shall be read as if the plural were expressed and the provisions hereof shall be read with all grammatical changes necessary dependent upon the person referred to being a male, female, firm or corporation.

(n)Nothing herein contained shall in any way obligate Secured Party to grant, continue, renew, extend time for payment of or accept anything which constitutes or would constitute indebtedness.

(o)The Security Interest created hereby is intended to attach when this Security Agreement is signed by Debtor and delivered to Secured Party and the Note is executed, delivered and funded.

(p) This Security Agreement and the transactions evidenced hereby shall be governed by and construed in accordance with the laws of the State of New York.


(r)	Debtor represents and warrants that the following information is accurate:

BUSINESS DEBTOR

NAME OF BUSINESS DEBTOR

Comstock Mining LLC



ADDRESS OF BUSINESS DEBTOR 1200 American Flat Road, PO Box l 1 18	CITY Virginia City	STATE Nevada	POSTAL CODE 89440

[Signature Page Follows]

IN WITNESS WHEREOF each of the parties hereto has executed this

agreement on the 6^th day of March, 2015.

AURAMET INTERNATIONAL LLC

By: /s/ James Verraster, III

Name: James Verraster
Title: Director

COMSTOCK MINING LLC

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: Managing Member

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: Managing Member

SCHEDULE "A"

(ENCUMBRANCES AFFECTING COLLATERAL)

1. Permitted Liens

SCHEDULE "B"

1. Locations of Debtor's Business Operations

N75920823J

PLEDGE AGREEMENT

This PLEDGE AGREEMENT (this "Pledge Agreement") is made as of March 6, 2015, by and between COMSTOCK MINING INC., a corporation organized and existing under the laws of Nevada (the "Pledgor"), and AURAMET INTERNATIONAL LLC, a limited partnership organized under the laws of the State of Delaware ("Holder").

RECITALS

WHEREAS, the Pledgor owns 100% of the outstanding Shares (as defined below) of the Issuer (defined below);

WHEREAS, it is a condition precedent to the Holder making any loans to the Pledgor under that certain Secured Promissory Note and Guaranty, dated on or about the date hereof (the "Note"), that the Pledgor execute and deliver to the Holder this Pledge Agreement ;

WHEREAS, the Pledgor wishes to pledge and grant a security interests in favor of the Holder as herein provided.

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENTS

1.Definitions. All capitalized terms used herein without definition shall have the respective meanings provided therefor in the Note. Terms used herein and not defined in the Note or otherwise defined herein that are defined in the UCC have such defined meanings therein (with terms used in Article 9 controlling over terms used in another Article), unless the context otherwise indicated or requires, and the following terms shall have the following meanings:

"Issuer" means Comstock Mining LLC, a limited liability company organized and existing under the laws of Nevada.

"Pledged Collateral" is defined in Section 2.1.

"Pledged Shares" means all Shares of the Issuer now owned or after acquired by Pledgor. "Shares" means shares of limited liability company membership units.

"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided , if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the security interests of the Holder in any collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.


2.	Pledge of Shares, etc.

2.1. Pledge of Shares. As security for the full, prompt and complete payment and performance when due (whether by stated maturity, by acceleration or otherwise) of all the

Obligations, the Pledgor hereby pledges, assigns, grants a security interest in all of the following (collectively, the "Pledged Collateral"):

(a)all of the Shares of the Issuer of every class owned or held by Pledgor;

(b)(i) all payments or distributions whether in cash, property or otherwise, at any time owing or payable to the Pledgor on account of its interest as a member in the Issuer; (ii) all of such Pledgor's rights and interests under the operating agreement, including all voting and management rights and all rights to grant or withhold consents or approvals; (iii) all of Pledgor's rights of access and inspection to and use of all books and records of the Issuer; (iv) all other rights, interests, property or claims to which the Pledgor may be entitled in its capacity as a member of the Issuer; and (v) all proceeds of any of the foregoing;

(c)all additional Shares of the Issuer from time to time acquired by Pledgor, and any certificates, if applicable, representing such additional Shares; and

(d)all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Pledged Shares.

2.2. Waiver of Certain Operating Agreement Provisions. The Pledgor irrevocably waives any and all of its rights under those provisions of the operating agreement of the Issuer and the laws under which the Issuer has been organized, that (a) prohibit, restrict, condition or otherwise affect the grant hereunder of any security interest or lien on any of the Pledged Collateral or any enforcement action which may be taken in respect of any such security interest or lien or (b) otherwise conflict with the terms of this Pledge Agreement. To the extent that this provision is inconsistent with the terms of the operating agreement, such operating agreement shall be deemed to be amended so as to be consistent with the terms of this Section 2.2. The Pledgor irrevocably consents to the grant of the security interest provided for herein and to the Holder or its nominee becoming a member in such limited liability company (including succeeding to any management rights appurtenant thereto), pursuant to a disposition thereof in connection with (or in lieu of) an exercise of remedies pursuant to Section 8 hereof; provided that such successor member then agrees in writing to be bound by, and a party to, the operating agreement.

3.Security for Obligations. This Pledge Agreement and the security interest in and pledge of the Pledged Collateral hereunder are made with and granted to the Holder as security for the payment and performance in full of all the Obligations.

4.Distributions Paid to Holder. Any sums or other property paid or distributed upon or with respect to any of the Pledged Shares, whether by dividend or redemption or upon the liquidation or dissolution of the Issuer thereof or otherwise, shall, except to the limited extent provided in Section 7, be paid over and delivered to the Holder to be held by the Holder as security for the payment and performance in full of all of the Obligations. Pursuant to the recapitalization or reclassification of the capital of the Issuer thereof or pursuant to the reorganization thereof, in the event that any distribution of capital shall be made on or in respect of any of the Pledged Shares or any property shall, except to the limited extent provided in Section 7, be distributed upon or with respect to any of the Pledged Shares, the property so distributed shall be delivered to the Holder to be held by the Holder as security for the Obligations. Except to the limited extent provided in Section 7 all sums of money and property paid or distributed in respect of the Pledged Shares, whether as a dividend or upon such a liquidation, dissolution,

recapitalization or reclassification or otherwise, that are received by a Pledgor shall, until paid or delivered to the Holder, be held in trust for the Holder as security for the payment and performance in full of all of the Obligations.


5.	Representations and Warranties. The Pledgor hereby represents and warrants that:

(a)Pledgor has good and marketable title to, and is the sole record and beneficial owner of, the Pledged Shares, subject to no pledges, Liens, security interests, charges, options, restrictions or other encumbrances except the pledge and security interest created by this Pledge Agreement ;

(b)each Pledged Share is validly issued, fully paid and non-assessable (or the equivalent thereof, as applicable);

(c)no Pledged Shares are evidenced by any certificate unless such certificate, together with a duly executed transfer power or other instrument of transfer (each in form and substance satisfactory to the Holder) duly executed in blank, has been delivered to the Holder;

(d)as of the Closing Date, no Shares of the Issuer held and owned by Pledgor are represented by certificates; and

(e)the pledge, grant of a security interest in, and delivery of the Pledged Collateral owned by such Pledgor pursuant to this Pledge Agreement will create a valid first priority Lien on and in the Pledged Collateral owned by such Pledgor, and the proceeds thereof, securing the payment and performance of the Obligations.

6.Covenants. So long as the Holder has any comm itment under the Note or any Obligations under and as defined in the Note, the Pledgor covenants and agrees that such Pledgor:

(a)will not (i) sell, transfer or otherwise dispose of, or grant any option or warrant with respect to, any of the Pledged Collateral (or any part thereof or interest therein) except with the prior written consent of the Holder, (ii) create or permit to exist any Lien or encumbrance upon or with respect to any of the Pledged Collateral other than the Lien in favor of the Holder hereto or (iii) amend or permit to be amended in any respect the articles of organization and the operating agreement of the Issuer in which such Pledgor holds Shares in the event such change would be adverse to the Holder. Ifany Pledged Collateral, or any part thereof, is sold, transferred or otherwise disposed of in violation of this Section 6, the security interest of the Holder shall continue in the Pledged Collateral notwithstanding such sale, transfer or other disposition, and such Pledgor will deliver any proceeds thereof to the Holder to be held as Pledged Collateral hereunder (it is acknowledged and agreed that the delivery of any such proceeds shall not be deemed a waiver of any Default arising as a result of the sale, transfer or other disposal of the Pledged Collateral in violation of this Section 6).

(b)shall, at the Pledgor's own expense, promptly execute, acknowledge, and deliver all such instruments and take all such actions as the Holder from time to time may reasonably req uest in order to ensure to Holder the benefits of the Lien in and to the Pledged Collateral intended to be created by th is Pledge Agreement.

(c)shall maintain, preserve and defend the title to the Pledged Collateral and the Lien of the Holder thereon against the claim of any other Person.

(d)will not permit Article 8 of the UCC of any applicable jurisd iction to govern the Pledged Shares of such Issuer and shall not permit the Pledged Shares of such Issuer to be certificated or otherwise evidenced by a "security certificate"(as that term is used in Article 8 of the UCC) unless in each case such Pledgor delivers such security certificate, together with a duly executed transfer power or other instrument of transfer (in form and substance satisfactory to the Holder) executed in blank, promptly (but in any event within one Business Day after receipt thereof) to the Holder or otherwise causes the Holder's security interest therein to be perfected by "control" under the UCC.

(e)will not permit or authorize the issuance of additional Shares unless upon the issuance of such Shares, such Shares shall be pledged pursuant to the terms of this Agreement and the Pledgor shall immediately (i) deliver to the Holder a duly executed Pledge Agreement Supplement, in form and substance satisfactory to the Holder, identifying such add itional Shares, and (ii) deliver or otherwise cause the transfer of such additional Shares (including any certificates and duly executed transfer powers or other instruments of transfer executed in blank and in form and substance satisfactory to the Holder) to the Holder.

7.Dividends, Voting, etc., Prior to Maturity. So long as no Default shall have occurred and be continuing, the Pledgor shall be entitled to receive all cash dividends paid in respect of the Pledged Shares, to vote the Pledged Shares and to give consents, waivers and ratifications in respect of the Pledged Shares; provided, however, that no vote shall be cast or consent, waiver or ratification given by the Pledgor if the effect thereof would impair any of the Pledged Collateral or be inconsistent with or result in any violation of any of the provisions of the Note or any of the other Loan Documents. All such rights of the Pledgor to receive cash dividends shall cease in case a Default shall have occurred and be continuing. All such rights of the Pledgor to vote and give consents, waivers and ratifications with respect to the Pledged Shares shall, at the Holder's option, as evidenced by the Holder's notifying the Pledgor of such election, cease in case a Default shall have occurred and be continuing.


8.	Remedies.

8.1. In General. If a Default shall have occurred and be continu ing, the Holder shall thereafter have the following rights and remedies (to the extent permitted by applicable law) in add ition to the rights and remed ies of a secured party under the UCC, all such rights and remedies being cumulative, not exclusive, and enforceable alternatively, successively or concurrently, at such time or times as the Holder deems expedient:

(a)if the Holder so elects and gives notice of such election to the Pledgor, the Holder may vote any or all shares of the Pledged Shares (whether or not the same shall have been transferred into its name or the name of its nominee or nominees) for any lawful purpose, including, without limitation, if the Holder so elects, for the liquidation of the assets of the Issuer thereof, and give all consents, waivers and ratifications in respect of the Pledged Shares and otherwise act with respect thereto as though it were the outright owner thereof (the Pledgor hereby irrevocably constituting and appointing the Holder the proxy and attorney-in-fact of such Pledgor, with full power of substitution, to do so);

(b)the Holder may demand, sue for, collect or make any compromise or settlement the Holder deems suitable in respect of any Pledged Collateral;

(c)the Holder may sell, resell, assign and deliver, or otherwise dispose of any or all of the Pledged Collateral, for cash or credit or both and upon such terms at such place or places,

at such time or times and to such entities or other persons as the Holder thinks expedient, all without demand for performance by the Pledgor or any notice or advertisement whatsoever except as expressly provided herein or as may otherwise be required by law;

(d)the Holder may cause all or any part of the Pledged Shares to be transferred into its name or the name of its nominee or nominees;

(e)if the Holder so elects and gives notice of such election to the Pledgor, the Holder may exercise all membership rights, powers and privileges to the same extent as the Pledgor is entitled to exercise such rights, powers and privileges; and

(f) the Holder may set off or otherwi se apply or cred it against the Obligations any and all sums deposited with it or held by it.

8.2. Sale of Pledged Collateral. In the event of any sale or other disposition of the Pledged Collateral as provided in clause (c) of Section 8.1 and to the extent that any notice thereof is required to be given by law, the Holder shall give to the Pledgor at least ten ( I 0) Business Days ' prior authenticated notice of the time and place of any public sale or other disposition of the Pledged Collateral or of the time after which any private sale or any other intended disposition is to be made. The Pledgor hereby acknowledges that ten ( I 0) Business Days' prior authenticated notice of such sale or other disposition or sales or other dispositions shall be reasonable notice. The Holder may enforce its rights hereunder without any other notice and without compliance with any other condition precedent now or hereunder imposed by statute, rule of law or otherwise (all of which are hereby expressly waived by the Pledgor, to the fullest extent permitted by law). The Holder may buy or otherwise acquire any part or all of the Pledged Collateral at any public sale or other disposition and if any part or all of the Pledged Collateral is of a type customarily sold or otherwise disposed of in a recognized market or is of the type which is the subject of widely-distributed standard price quotations, the Holder may buy or otherwise acquire at private sale or other disposition and may make payments thereof by any means. The Holder may apply the cash proceeds actually received from any sale or other disposition to the reasonabl e expenses of retaki ng, holding, preparing for sale, selling and the like, to reasonable attorneys' fees, travel and all other expenses which may be incurred by the Holder in attempting to collect the Obligations or to enforce this Pledge Agreement or in the prosecution or defense of any action or proceeding related to the subject matter of this Pledge Agreement, and then to the Obligations in such order or preference as the Holder may determine after proper allowance for Obligations not then due. Only after such applications, and after payment by the Holder of any amount required by Section 9-608(a)(l )(C) or Section 9-6 l 5(a)(3) of the UCC, need the Holder account to the Pledgor for any surplus.

8.3. Private Sales. The Pledgor recognizes that the Holder may be unable to effect a public sale or other disposition of the Pledged Shares by reason of certain prohibitions contained in the Securities Act of 1933 (the "Securities Act"), federal banking laws, and other applicable laws, but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers. The Pledgor agrees that any such private sales may be at prices and other terms less favorable to the seller than if sold at public sales and that such private sales shall not by reason thereof be deemed not to have been made in a commercially reasonable manner. The Holder shall be under no obligation to delay a sale of any of the Pledged Shares for the period of time necessary to permit the Issuer of such securities to register such securities for public sale under the Securities Act, or such other federal banking or other appl icable laws, even if the Issuer would agree to do so. Subject to the foregoing, the Holder agrees that any sale of the Pledged Shares

shall be made i n a commercially reasonable manner, and the Pledgor agrees to use its best efforts to cause the Issuer of the Pledged Shares contemplated to be sold, to execute and deliver, and cause the directors and officers of the Issuer to execute and deliver, all at such Pledgor's expense, all such instruments and documents, and to do or cause to be done all such other acts and things as may be necessary or, in the reasonable opinion of the Holder, advisable to exempt such Pledged Shares from registration under the provisions of the Securities Act, and to make all amendments to such instruments and documents which, in the opinion of the Holder, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. The Pledgor further agrees to use its best efforts to cause the Issuer to comply with the provisions of the securities or "Blue Sky" laws of any jurisdiction which the Holder shall designate and, if required, to cause the Issuer to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

8.4. Pledgor's Agreements, etc. The Pledgor further agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make any sales of any portion or all of the Pledged Shares pursuant to this Section 8 valid and binding and in compliance with any and all applicable laws (including, without limitation, the Securities Act, the Securities Exchange Act of 1934, as amended, the rules and regu lations of the Securities and Exchange Commission applicable thereto and all applicable state securities or "Blue Sky" laws), regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Pledgor's expense; provided however Pledgor is not required to register the sale of Pledged Shares with the Securities and Exchange Commission under the Securities Act. The Pledgor further agrees that a breach of any of the covenants contained in this Section 8 will cause irreparable injury to the Holder that the Holder has no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 8 shall be specifically enforceable against such Pledgor by the Holder and the Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants.

9.Pledgor's Obligations Not Affected; Waiver of Suretyship Defenses. The obligations of the Pledgor hereunder shall remain in full force and effect without regard to, and shall not be impaired by (a) any exercise or nonexercise, or any waiver, by the Holder of any right, remedy, power or privilege under or in respect of any of the Obligations or any security thereof (including this Pledge Agreement);

(b)any amendment to or modification of the Note, the other Loan Documents or any of the Obligations ;

(c)any amendment to or modification of any instrument (other than this Pledge Agreement) securing any of the Obligations, including, without limitation, any of the Security Agreements; or (d) the taking of additional security for, or any other assurances of payment of, any of the Obligations or the release or discharge or termination of any security or other assurances of payment or performance for any of the Obligations; whether or not the Pledgor shall have notice or knowledge of any of the foregoing, the Pledgor hereby generally waiving all suretyship defenses to the extent applicable.

10.Further Assurances. The Pledgor will do all such acts, and will furnish to the Holder all such financing statements, certificates, legal opinions and other documents and will obtain all such governmental consents and corporate approvals and will do or cause to be done all such other things as the Holder may reasonably request from time to time in order to give full effect to this Pledge Agreement and to secure the rights of the Holder hereunder, all without any cost or expense to the Holder. The Pledgor hereby irrevocably authorizes the Holder at any time and from time to time to file in any filing

office in any UCC jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral as the Pledged Collateral or words of similar effect, or as being of equal or lesser scope or in greater detail, and (b) contain any other information required by part 5 of Article 9 of the UCC of the jurisdiction of the filing office for the sufficiency or filing office acceptance of any financing statement or amendment, including whether the Pledgor is an organization, the type of organization and any organization identification number issued to such Pledgor. The Pledgor agrees to furnish any such information to the Holder promptly upon request.

11.No Waiver, etc. Neither this Pledge Agreement nor any term hereof may be changed, waived, discharged or terminated except by a written instrument expressly referring to this Pledge Agreement and to the provisions so modified or limited, and executed by the Holder and the Pledgor. No act, failure or delay by the Holder shall constitute a waiver of its rights and remedies hereunder or otherwise. No single or partial waiver by the Holder of any default or right or remedy that it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion. The Pledgor hereby waives presentment, notice of dishonor and protest of all instruments, included in or evidencing any of the Obligations or the Pledged Collateral, and any and all other notices and demands whatsoever (except as expressly provided herein or in the Note).

12.Notice, etc. All notices, requests and other communications hereunder shall be made in the manner set forth in Section 11(f) of the Note.

13.Termination. The security interest created hereunder shall terminate when the Obligations of the Pledgor under the Note have been fully satisfied, at which time the Holder shall execute and deliver to Pledgor, or to such person or persons as Pledgor shall reasonably designate, all UCC termination statements and similar documents prepared by Pledgor at its expense which Pledgor shall reasonably request to evidence such termination. If any of the Pledged Collateral shall be sold, transferred or otherwise disposed of by the Pledgor in a transaction permitted by the Note, then the Holder, at the request and sole expense of the Pledgor, shall execute and deliver to Pledgor all releases or other documents reasonably necessary or desirable for the release of the liens created hereby on the Pledged Collateral.

14.Overdue Amounts. Until paid, all amounts due and payable by the Pledgors hereunder shall be a debt secured by the Pledged Collateral and shall bear, whether before or after judgment, interest at the rate of interest for overdue principal set forth in the Note.

15.Governing Law. This Pledge Agreement shall be governed by the laws of the State of New York.

16.Miscellaneous. The headings of each section of this Pledge Agreement are for convenience only and shall not define or limit the provisions thereof. This Pledge Agreement and all rights and obligations hereunder shall be binding upon the Pledgor and its respective successors and assigns, and shall inure to the benefit of the Holder and its respective successors and assigns. If any term of this Pledge Agreement shall be held to be invalid, illegal or unenforceable , the validity of all other terms hereof shall be in no way affected thereby, and this Pledge Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not been included herein. The Pledgor acknowledges receipt of a copy of this Pledge Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the Pledgor and the Holder have caused this Pledge Agreement to be executed as of the date first above written .

PLEDGOR:

HOLDER :

COMSTOCK MINING INC.

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: President + CEO

AURAMET INTERANATIONAL LLC

By: /s/ James Verraster, III

Name: James Verraster
Title: Director

The undersigned Issuer hereby jo ins in the above Pledge Agreement for the sole purpose of consenting to and being bound by the provisions of Section 4.1, Section 7 and Section 8 thereof, the undersigned hereby agreeing to cooperate fully and in good faith with the Holder and the Pledgor in carrying out such provisions .

ISSUER:

COMSTOCK MINING LLC

By: /s/ Corrado De Gasperis

Name: Corrado De Gasperis

Title: Managing Member

EXHIBIT 31.1

CERTIFICATION

I, Corrado De Gasperis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Comstock Mining Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 16, 2015



/s/ Corrado De Gasperis
Corrado De Gasperis
President and Chief Executive Officer (Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION

I, Judd Merrill, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Comstock Mining Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 16, 2015



/s/ Judd Merrill
Judd Merrill
Principal Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Section 1350 Certification

In connection with the Quarterly Report of Comstock Mining Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Corrado De Gasperis, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m(a) or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: April 16, 2015



/s/ Corrado De Gasperis
Corrado De Gasperis
President and Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Section 1350 Certification

In connection with the Quarterly Report of Comstock Mining Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Judd Merrill, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m(a) or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: April 16, 2015



/s/ Judd Merrill
Judd Merrill
Principal Financial Officer

Exhibit 95

The following disclosures are provided pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).

Whenever the Federal Mine Safety and Health Administration (“MSHA”) believes that a violation of the Mine Act, any health or safety standard, or any regulation has occurred, it may issue a citation or order which describes the violation and fixes a time within which the operator must abate the violation. In some situations, such as when the MSHA believes that conditions pose a hazard to persons, MSHA may issue an order requiring removal of persons from the area of the mine affected by the condition until the hazards are correction. Whenever MSHA issues a citation or order, it has authority to propose a civil penalty or fine, as a result of the violation.

The table below reflects citations and orders issued by MSHA during the three months ended March 31, 2015.

Mining

Operating

Name

MSHA

Identification

Number

Section

104S&S

Citations

Section

104(b)

Orders

Section

104(d)

Citations

and

Orders

Section

110(b)(2)

Violations

Section

107(a)

Orders

Total Dollar

Value of

MSHA

Assessments

Proposed

Total

Number

Of Mining

Fatalities

Received

Notice of

Pattern of

Violations

Under

104(3)

Received

Notice of

Potential

to Have

Pattern of

Violations

Under

Sections

104(3)

Legal

Actions

Pending

as of

Last

Day of

Period

Legal

Actions

Initiated

During

Period

Legal

Actions

Resolved

During

Period

26-01871

—

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

Create E-mail Alert Related Categories

SEC Filings

Sign up for StreetInsider Free!

Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!

Form 10-Q Comstock Mining Inc. For: Mar 31

You May Also Be Interested In

Create E-mail Alert Related Categories

Sign up for StreetInsider Free!

Free News Feed