Good day, ladies and gentlemen. Welcome to the Comstock Mining’s Third Quarter 2015 Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Corrado De Gasperis. Please go ahead, sir.

Thank you, Angel, and good morning, everyone. It’s Corrado on the line, President and CEO of Comstock Mining and welcome to our 2015 third quarter conference call. I also have Judd Merrill, our CFO on the line with me today and we have a significant number of positive updates for you. Before that let me remind you that we may make and most certainly we’ll make forward-looking statements today on this call. Any statement relating to matters that are non-historical facts may constitute forward-looking statements. The statements are based on current expectations and are subject to the same risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the reports filed by the company and the SEC and in this morning's release, and all the forward-looking statements made during this call are subject to those same and other risks that we can’t identify. We were also very successful last quarter in keeping the call to an hour including questions, if your question does not clear the queue, I will repeat that we will be available post call to ensure that all questions are answered directly and throughout the course of the week. If you don’t have a copy of today’s release, you’ll find a copy on our website at www.comstockmining.com under news/press-releases. And in an overall effort to be more concise I’ve organized my comments into five specific topics. Number one, I want to talk about the strength of our balance sheet resulting from both a tremendously positive restructuring that we completed a few months ago and the cleanup of the capital structure that resulted from that, as well as recent capital raise funding to very outstanding phases of mine development. Number two, the tremendous progress in cost reductions in production flexibility…

[Operator Instructions] We will start with our first question from Barry Kitt of Pinnacle Fund. Please go ahead.

Good morning, Corrado. How are you doing?

I’m doing great, thank you.

Good. So I have to apologize, I missed the first few minutes of the call. So if you’ve already covered this, pardon me. Now that you moving more to underground or towards underground do you have excess equipment, trucks and equipment et cetera that you might be able to sell that will reduce some of the debt?

Thank you for that question. Yeah, so that’s a very good question. We have – most of our equipment financing is tied directly to that caterpillar equipment fleet. Clearly from surface mining perspective it’s now oversized we have actually nine caterpillar haul trucks and the associated equipment around it. I think that we’ll see something like 70% to 80% reduction because of the equity that we have in the equipment and because of the nature of the equipment, it’s actually geared toward the construction industry than it is to the mining industry oddly enough, and because of all of the activity that's happening in our region, we’re very confident that in fact we’ve got a lot of increase already that some of that equipment will transition out and meaningfully reduce that debt financing, I would say at least $3 million to $4 million reduction which is a substantial percentage. So that’s some very important to us. We also with our new partnership with American Mining & Tunneling because they are involved in dozens of Nevada projects, they have on indicated an ability even the slop certain types of equipment. So that – I talked about the flexibility of our people in our system, but I didn’t talk about the flexibility that also comes from those kinds of partnerships, but it's all very constructive to that end.

Okay. And since you’ll be reducing your debt and now that you’ve raised cash and you’re positive cash flow, would you say that you’re fully funded at this point to carry out the business plan you have currently?

Yes we are.

Okay. Thank you very much. Appreciate it.

Thank you, Barry. Thank you very much.

And your next question will come from the line of Heiko Ihle of Rodman & Renshaw. Please go ahead.

Hey Heiko, how are you?

Hey Corrado, it’s Jake in for Heiko.

Oh, hey Jake how are you?

Good, good. How are you? Quick question, the 450,000 tons of high-grade ore from the road realignment is that already stacked?

So we had we had about 450,000 tons of that material in and around know the road and underneath, about 350,000 has been cleared and moved over to the heap leach pad and we have 100,000 to go.

Got you. Okay. And then you mentioned paying down some debt, can you just walk me through kind of your expectations for the balance sheet at the end of the year?

Absolutely. So two material points; the revolver today has about 2.8 million drawn, the revolver is 5 million expandable to 8 million. We have an expectation that by December it will be 1.5 million drawn. And by I think effectively the end of the March it might be the 1st week of April it will be underdrawn, okay so that’s the revolver. The rest of our debt really comes to Barry’s question in about $9 million of equipment financing of which half, more than half I’m sorry is tied to the caterpillar capital equipment. And we expect actually to see a significant reduction of that here in the fourth quarter as we transition from let’s call it the higher volume surface activity to the lower volume activity.

Got you, perfect.

Yeah, both cases very positive in terms of positioning the balance sheet.

Fantastic. Thanks Corrado.

And your next question will come from the line of James Dale [ph]. Please go ahead.

Hi Corrado, how is it going?

Going very well. How are you?

Thank you. Hey listen, could you layout a little more concisely your projected increases in production let’s say for the next half and the half beyond that and the half beyond that and so forth, so I can sort of like visualize for myself. How you are ramping up here and also to – or do you see any dips in production because you’re transitioning from one phase of mine to another?

Yeah absolutely. So let caveat first to say that you know we can only be precise with those kinds of productions.

I know, it’s just the projection that’s all.

But I'm very happy to talk openly about where we’re heading. So first and foremost, right we've been effectively on a mission right to exhaust this phase of mining literally to finish up the surface mining this year and we would include in that activity the realignment of the road and we would include in that activity the removal of all of the upgraded materials that are in and around the road and/or you know otherwise in the pit. So it was a critical part of our plan to accelerate that to that end right. We expect to see lower production and lower revenue in the fourth and first quarters. If you look at our profile, we did stack more ounces in the first quarter and the second quarter to that end, right? We really – I think we probably broke records in terms of the amount of ounces we stacked in the first and second quarter, which will continue to benefit from less in the third quarter and then similar, you know in the fourth quarter. Now to answer your question, all of that was synchronized towards affecting the development of the Lucerne drilling and drifting such that we didn't have redundancy. So the trick in the schedule was to exhaust the higher volume activities as we shifted into some of the realignment construction reclamation and mining activities that were lower tonnages as we shifted into drifting and developing. So the way that it's working American Mining & Tunneling is fully staffed you know in the things that are happening underground. So think of that as the tunnel development and the drilling development, and then our team much, much smaller, more flexible is managing all the material, as it comes out, you know and either – obviously either goes…

Yeah, I’m just sort of saying, you’re projecting the process 30,000 – 35,000 of all gold ounces this year. Where do you see yourself in production rate nine months from now, 15 months from now and at the end of the next year and so forth?

Yeah, so if we – I would say if we found everything we wanted to find in this phase of development for Lucerne you could be up to 500, by the middle of next year you completed everything in Phase 2. You could be up to 1,000 by the end of the year next year, so that gives you some good bench post for progression and then the Dayton coming on line in 2017. It’s really the only thing the company is focused on, which is something else that I like is that we've never had a narrower stronger focused and that's resulting speed, right? We’re doing things faster because it's right in front of us. I think in fairness having all the permits eliminates in Lucerne, eliminate significant complexity in scheduling right. So whereas before the schedule always had to be tweaked and deferred and recalibrated for when you get the permit really now it's just everyday executing our tasks and marching down that that task.

Okay. Is there any more – more mine dumps that you can easily access to fill those gaps in production as you transition from a Lucerne surface stuff to the underground?

There are some. And well let me say it differently, there are a lot of mined ups. I mean we've quantified maybe 1 million tons of mined ups throughout the district that are on property that we own or control. They're not always as easily accessed and that sounds counterintuitive because they’re on the surface by definition.

Properties that has no roads.

Well what it is, is we have to clear the environmental issues first which were very experienced at sort of sampling et cetera, that's a prerequisite to do. And then in some of the cases it’s on federal land versus a private land. And so we've been working with the BLM on environmental project. So it’s a plethora of sort of items, but they’re – in the longer term there's a lot, in the shorter-term there's a bit right, and we’ll do that as it makes sense for us.

Okay. Thank you very much.

Thank you.

And your next question will come from the line of Peter Epstein of Epstein Research. Please go ahead.

I think my question is, I like the 30,000 [indiscernible] 35,000, 70,000 tons, do you see a significant tonnage down all in cost.

Yeah, I mean, so I think you mean ounces in both cases and these are the notions that we’re targeting and they're very good. And there is absolutely no question, right, if we got to a level of 500, 600, 800 even the 1,000 tons the leverage would be tremendous. And that’s exactly why our engineers are focused on that kind of the target. Obviously it has also come from the ore, but when we calibrate the two is what we believe is really the significant thought for us. Having said that we could produce because of the flexibility in the cost structure at a much lower level profitably, which is the same thing, the same thing backwards right. So absolutely we want those leverages where could those costs go, I mean again we have to wait and see, but below 600, below 500, yes and yes. We just have to finish the work and get it going.

Thank you. Just one other question. So I saw somewhere that you were talking about I guess drilling for eight times a grade, tunnel to mining, is that an accurate…

Yeah. So let me be precise, so we've published, I didn’t say this, I didn’t repeat this on the call, thank you for bringing it up. We published that the drilling today, I mean I’m not talking about the 2,000 feet we just diamond core drilled over the last few weeks, I'm talking about in past years had 46 intercepts in the PQ structure alone grading higher than a tenth of an ounce, averaging something like just under a quarter of an ounce. In the Woodville those numbers are almost triple, like 118 intercepts drilled by us greater than a 10th of an ounce averaging 0.23, 0.24 kind of numbers. And the Woodville was the most southerly bonanza mined on the Comstock. We’d just add that in South continuing south from the old-timers, but the production records from the Woodville bonanza showed almost an ounce per ton mine, something like 0.9 something. So the zone is incredibly attractive, the targets are incredibly attractive. And we have a good foundational base of knowledge to start from. We just need to finish all the development and drilling work that’s ongoing as we speak.

Okay. That’s great. One last question, just conceptually, if you’re in production from Dayton and Lucerne, sometime in 2017, do you consider that two mine operation or is it too close to get one mine operation?

Technically there are two separate mines. We have to define exactly how we’re going to mine them. But I think technically there are two central lines, substantively this one centralized processing capability. I think for us they’re so close together, we think of it, we think of it certainly as one operation. I’m merely not trying to dodge the question, I think it’s a great question for people who have visited the mine, I mean it’s less than a mile and a half just in terms of the actual mineralized zones and then they’re both in close proximity to the central processing facilities. I mean, Klondex is operating a centralized mill with two mines, but there's hundreds of miles in between them and they're doing phenomenally, you know our package is much tighter in terms of geometry – geography.

Okay. I’ll turn it off to someone else. Thank you.

Thank you, Peter.

And your next question comes from [indiscernible].

Looking at the annual targets, assuming that we get up to the 100,000 ounces a year at what point do you envision doing dividends to shareholders?

We’re philosophically aligned with cash dividends from profits at a future date. The only caveat I would make to that is we've only drilled on a tiny fraction of our existing mineralized strike, so there is some real value and real excitement about deploying some of that cash flow into the Spring Valley development, south of Dayton and then also some of the deeper higher grade targets north of Lucerne. But frankly, if we get anywhere near the 100,000 we will be in a very strong position to be doing that right. So I think it's a very fair question. I personally believe the best kind of company to invest in is a hard asset company that owns its underlying land and assets in a safe jurisdiction with precious metals enhancing that asset value, producing cash and paying dividends. So to me, if I was going to define the kind of company I want to invest in that fits. So I think it's important for us to have sustained positive cash flow, strong balance sheet dividend paying. And I guess I would say and obviously this is ultimately a board decision, but I would say you know when we start approaching those levels of cash flow they are really big. We would be absolutely a key candidate to pay dividends. We need to get there first obviously, but we’re on our away.

So the validated qualified resources like 3.250 gold equivalent ounces, is that based just on the Lucerne and the Dayton, or does it include some of the other?

No, it’s just the Lucerne and the Dayton. And we always have to be more caution of the resource statement, it’s excellent, but we have only drilled –I can't even think of 30 holes that we’ve drilled outside of Lucerne and Dayton. There is about 14 in the Spring Valley, there is just handfuls sporadically in other places. So we don't have any quantified resources. Even though it's important to say that we have structural and geological extension and control for the entire 6 mile mineralized strikes off. So the structural control, the surface mapping, the geophysics all indicates mineralization. We just haven’t drilled enough outside of those two areas to quantify more. I think the Spring Valley is a natural extension of the Dayton and I think it would be absolutely the first place will go. Once we finish the Dayton drilling program think and I think we’re adding ounces for every one of our key target areas. What we’re focused on right now though is to translate those resources into mine life. What I love about our board and I love about our team is it's really evolved into a tremendous focus on mineable ounces, and now it's experienced, it's battle tested, you know and it's very technically focused on mine life, which is another way of saying proven and probable reserves. And I used Klondex as an example earlier, but I really like what Paul Huet did and he said yes we’ve got resources, but we’re going to deliver five, six years of mine life and then we’re going to continue to add to that as we mine. And from a capital deployment, capital return philosophy it's outstanding. I think that we’ll add more, but that’s – I’m not technical, and we need to wait for the drilling and the assays and the context to be done, but we are very excited about it. So I think ultimately you'll grow mine life for sure. I think ultimately you'll grow resources above and beyond Lucerne and Dayton, and I don’t think there is any question about that, I just think it's the sequence and timing of it.

So just based on Lucerne and Dayton, we’re looking at least the 30 year mine life is that correct?

Well that assumes you’re translating all of those resources in two reserves and you shouldn’t assume that. But even small percentages will give you tremendous rate, and the higher the grade the better. I think the trend – there is a remarkable trend happening in the industry where globally grades are being dilutive. I mean 20%, 25% dilution in grades in just the last ten years, what does that mean, while people are mining the easier stuff, they’re mining the higher grades, it's becoming increasingly more difficult to discover a new mineable deposits, economic deposits, it’s actually stunning that from 11 to 20 years ago the industry was discovering seven, eight, nine new deposits every year there were at least 3 million ounces. And in the last 10 years that average has dipped below 1 million ounces and in the last two or three years none. And there's two reasons for that, one is, obviously a lot of good stuff has been mined, but also there has been hardly any investment in drilling in the last two or three years as the industry has rationalized and reduced cost. I think cost reduction operationally is critical. I think focus on where you’re spending your investment dollars is critical, but to abandon drilling as a cost-saving measure is not smart. So I think we feel like we have a very good balance. We've been mining, but frankly what we've really been doing is developing a platform for sustainability, not just mining responsibly, not just proving metallurgy, proving grade, proving strip ratio, proving cost, but doing it in a responsible way that gives a socialite to continue responsibly. And yet we’re in a high-grade epithermal district with 150 years of production behind it. So I think going to more select, more targeted higher grades or a microcosm of what’s happening in the industry. So it's not massive open pit massive volume. It’s selected high-grade sustainable operation and that fits with the district that we’re in, but I think it's a bigger trend. So I think only good things can come from the platform that we’ve built, that’s why we will be – we’ll tend to be safer on our balance sheet, we’ll tend to be more strategic with our land position. The work that we did in eliminating liabilities and eliminating royalties, I mean the Dayton has no royalty associated with it, zero. The Lucerne had a big royalty and then two or three little ones, we eliminated the big one, so we eliminated the big in Lucerne, we eliminated the big one in the Dayton. These properties are free and clear for intelligent development, so I kind of rambled on a bit, I apologize, but I hope that's addressing your question.

It does, I appreciate it. The last question is, under the strategic highlights with American Mine & Tunneling and American Drilling, you used the term partnered, do they have an equity position now?

They don’t right, but they've invested tremendously in the lead up of all of this operation. The amount of diligence that they did for us, the amount of mine planning and engineering that they did for us, the amount of the mobilization that they did for us was incredible. They are a private company, but they have over 350 employees, I believe 99.9% of their activity is in Nevada. I think they have a huge hub in Reno, a huge hub in Elco and a huge hub in [indiscernible], so it's just really, really well positioned. And when I say partnership, we’ve developed measurement so that performance is all that matters. We don't want to be structured in a situation where you are paying a supplier with no results right. So for the first phase it's feet, for the first phase it’s feet, we need feet in terms of the tunnel, we need feet in terms of the drilling. In the second phase it’s going to be how we mine, right. And so it's a measurement system that allows us to both win, if we do we have to do and avoid a situation where one person gets paid and the company fails right. So it’s more substantively that than anything else.

Well, I want to close with congratulations on the fantastic job you've done since the annual meeting through the present time. You certainly addressed a lot of issues that – some of the smaller shareholders have had.

Well I appreciate that, we still have some wood to chop, but it's a very clear path in front of us. Thanks for your questions.

Thanks so much.

Your next question will come from the line of Carl Frankson. Please go ahead.

Corrado, you kind of touched on this a little bit with the last couple of questions, but its regarding the resource statement. I remember the good old days one of the highlights we used to look forward to was updating, I’m a little rusty here, there was a Canadian standard, I think it’s 43-101, that would be updated, and we had somebody who was independent [indiscernible] or something like that. That would come in and verify, and these were actual reported numbers and we would look forward to what the proven and probable increases were and everything. It was an actual form. Do we still, is that still a viable thing. I know there was a US standard. There was a bit difference in the 43-101. Do you still have those or did I miss something?

No, let me comment. Thank you for the questions. So the US standard is Guide 7, Canadian Standard is National Instrument 43-101. The Canadian Standard is broader than the US standard and that allows you to report both resources and reserves, that’s the primary difference in my opinion. We published our last 43-101 technical report in January of 2013 and that did coincide with our last major drilling program. We are now – we have now started – we then, in reality we then turned our attention to the first phase of mining the Lucerne with really no exploration and development drilling to speak of. We are now deep into the heart of the drilling program, which will give us updates to that information and our intention is proven and probable reserves. We’ll have a second phase of that Carl after the first quarter drilling out the Woodville, which will do the same and then we’ll have a third phase when we finish the Dayton. Now internally, the drilling that we did with the Dayton without question increased resource estimate and with the next phase of drilling we’d like to get to a mine plan and a reserve. So ironically we had three or four very fast technical updates in a two-year period from 2010 to 2012. And I think you’re going to see something similar; three or four rapid drilling progressions that will result in update. So one thing that I also was saying before was that we will be transparent because we have a lot of context already with Lucerne and Dayton. And so as we fill in certain gaps in our knowledge, we can more quickly report what those mean. So I think you could look forward to drill results in the upcoming weeks, context in the upcoming weeks and months, and then sort of – there is a possibility that you can see, I would say certainly to technical updates in 2016, and possibly three with the Dayton or that might slip into the very beginning of 2017, but they're coming. They haven't disappeared at all.

Would they still be independently verified by [indiscernible] or somebody like that?

Yes, absolutely.

Okay, so that happens in a while, but you plan…

Well yes because we haven’t – we’ve been mining instead of drilling and expanding, right. So it's logically – the time is logically now to start expecting those to come back again and they will. And it will – unless something weird happened, I don't know I wouldn’t be [indiscernible]. They’re very knowledgeable about our project and have always done good work.

Thank you.

Thank you.

And our next question will come from the line of J. Gunn of RockPort Global Advisors. Please go ahead.

Good morning, Corrado.

Hey Jay, how are you?

Good. Can you just give us a quick update on the hotel and any other activities in Virginia City?

Yes I appreciate the question. I really didn’t address the hotel at all, and the whole notion of our – call it non-mining real estate, Crown Jewel that would be the hotel is been a great transition this year. We went from acquiring these properties, somewhat opportunistically to really professionalizing the management of them, in many cases including the hotel by having someone other than us operate it. I’m not only happy to report that the properties are in remarkably good condition, certainly significantly better than when we acquired them, but that on a standalone basis they’re profitable; profitable on a cash basis and profitable on an accounting basis as of the third quarter. So not only do we have a great land properties, but they're self-sustaining themselves. And frankly, that’s the first time I can say that too. So thanks for asking that question. I appreciate it.

Thank you, ladies and gentlemen, the time allotted for questions and answers has come to a close. I would now like to turn the call back over to Mr. De Gasperis for closing remarks.

I’d just like to thank everybody for their attention. I’m thrilled that we can cover so much and keep it to an hour. I know that helps your schedules and helps you participate right till the end, so we’ll continue to do that. We are always available for direct outreach. We look forward to that, and I will be spending a meaningful amount of time updating the capital market community about our clean balance sheet, about our development projects and about all the good things we just talked about today. Thank you all.

Ladies and gentlemen, this concludes the conference call for today. We thank you for your participation. You may now disconnect your line and have a great day.