Comstock Mining (NYSE: LODE) reported Q2 EPS of ($0.03), which may not compare with the analyst estimate of ($0.01). Revenue for the quarter came in at $5.49 million versus the consensus estimate of $7.85 million.

Dayton Drill Program Update

The Dayton property includes the Dayton (Marble), Alhambra, Kossuth, Metropolitan, and Gennessee patents. Surface drilling on the Company's Dayton property, located in the southern part of the Comstock district, commenced late in the first quarter of 2015 and is ongoing. In conjunction with the current drill program, the Company has re-opened some of the historic mine workings in the immediate area of current drilling for the purposes of sampling and mapping. These workings are in the form of horizontal development, and include a group of tunnels and drifts that are adding significantly to our understanding of the structural setting and the extent of mineralization.

To date, 241 holes have been completed on the southern end of the property with a goal of defining near-surface mineralization along a complex system of geologic structures (faults). The Dayton property is defined by a structurally controlled mineralized system that is in many respects similar to the Company's Lucerne property in terms of the overall geologic setting. The properties are separated by about one mile along the Silver City branch of the Comstock Lode. The total footage drilled to date in the current program is approximately 19,000 feet, utilizing a percussion drill rig (similar to those used for blast hole drilling in the mining operation).

The program to date has yielded 303 intercepts of 10 feet or greater in length with Au concentrations exceeding or equal to 0.015 opt Au, including a group of 17 intercepts of 10 feet or greater in length with Au concentrations exceeding or equal to 0.100 opt Au. Surface sampling and geologic mapping were also conducted as part of the program to further augment the data. Collectively, these results could have a significant impact on the overall project economics.

The rig is scheduled to complete an additional 155 holes in the Dayton project area, mainly to fill in gaps that still exist in the near-surface environment along several of the major structures.

Lucerne Exploration and Underground Development

The Company completed extensive geological development and modeling, utilizing its previously collected drill hole data, historic underground mine maps and current mining data, among other geological information. Out of this extensive geologic work, a definitive underground development target has emerged, specifically that part of the lode occupied by the mineralized mass of PQ, 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 data.

In addition to the mineralized mass of PQ, we developed and defined the nearby Woodville Bonanza structures with the same diligent level plan and cross sectional development. These geologic definitions include the same detail and historical mappings plus over 116 intercepts of at least 10 feet grading over 0.22 ounces per ton gold and 1.59 ounces of silver per ton. This represents the most significant opportunity for immediately exploring and progressing the development of an accelerated underground mine plan in the Lucerne Area.

http://www.comstockmining.com/files/flipbooks/PQTarget/

Mr. De Gasperis commented, "We are partnering with AMT to combine our strong geological footprint with AMT's Nevada-based underground mining and drilling competency to deliver a faster and more efficient underground exploration and development process. This partnership adds tremendous flexibility to our system as we expand into the initial drift and tunneling to explore and develop the high-grade Lucerne structures and the Dayton Resource area."

Outlook

The Company has been cash positive from operations for the first six months of 2015, and expects to be cash positive from operations throughout 2015, while expanding the exploration and development during the third quarter and completing the road realignment during the third and fourth quarters. This expansion is primarily the exploration and development of high-grade underground targets north and east of the current Lucerne mine operations and the exploration and development of the resource target at the Dayton Resource Area.

During the first half of 2015, the Company continued reducing costs applicable to mining revenue. The Company has increased its expectation of savings from costs applicable to mining to $7 million (from a previous target of $5 million), when comparing 2015 to 2014. The Company has also doubled its expectation of savings from all other non-mining activities, including general, administrative, hospitality, mine claims and costs and environmental and other areas, to $3 million (from a previous target of $1.5 million), when comparing 2015 to 2014. These increases raise our total costs savings targets to $10 million, from $6.5 million, when comparing 2015 to 2014. The Company expects cash costs of mining revenue, will remain below $650 per ounce of gold through the third quarter.

The Company will commence the underground drift-mining and drilling, associated with the PQ target, and expects to complete drift-sampling, drilling, ongoing metallurgical test work of the PQ target by December 2015, with the second major phase of drift-mining and drilling, with respect to the Woodville bonanza target, to be completed by March 2016.

Mr. De Gasperis concluded, "Our goals for this year are focused on the final steps for minimizing operating costs, completion of the SR-342 realignment project, expansion of the Lucerne underground exploration and development activities, and commencing the final development phase of the Dayton Resource Area, positioning us well for future growth."

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