Virginia City, Nevada – (Our-Street 6/9/2011) – Opponents of Comstock Mining’s (AMEX: LODE) plan to initiate open pit mining activities throughout the historic Comstock Mining areas near Virginia City, Silver City and Gold Hill scored a minor victory as their objection that the permitting process was being “unnecessarily rushed” given the size and scope of the requested Special Use Permit (SUP), caused the County Planning Commission to delay the hearing until at least the July meeting.
In a letter dated May 27, 2011, submitted by attorney John L Marshall on behalf of the Comstock Residents Association, it was claimed that “the SUP application is for an unlimited and unspecified amount of exploratory drilling and trenching over 5,000 plus acres over a five year period of time. As described in the attachment, the application is devoid of meaningful detail describing the location, intensity, timing and affect of proposed activity.”
In response, the Storey County Planning Department tabled the application, which was originally scheduled for consideration on June 2, and tentatively rescheduled for hearing the matter on July 5th.
Following the tabling of the application, Comstock Mining, Inc amended its SUP application along with a new map showing a greatly reduced affected area approximately half the size of the original application. Removed were areas covering the Gold Hill area and the company’s mining claims approaching and into the Southern end of Virginia City itself. Comstock Mining also amended the application to include the proposed hours of operation between 7:00 AM and 7:00 PM for any areas within 1,000 feet of any residence.
It’s difficult to determine how or if this reduced area map will affect the company’s overall plans. If they are granted the SUP and keep their noses clean, it would seem likely that the momentum would be on their side when they apply to expand the permit areas down the road.
Speaking of keeping their noses clean, we have received two unconfirmed reports that the company has already been required to move their drill rigs 1,000 feet away from residences in order to comply with their prior SUP’s. Additionally, we’ve learned that the company has been cited by the Nevada Department of Environmental Protection for a waterway violation.
These developing events, however, highlight two more significant realities which should concern or at least be considered by shareholders and potential shareholders. We have heard conflicting reports as to the size and power of the Comstock Residents Association and the rest of the opposition to Comstock Mining in general. Depending upon the source, one can get the impression that the entire region is up in arms with pitchforks and torches ready to do battle or that the opposition is actually just a few disgruntled residents and that the majority of the folks in Virginia City and Silver City and Gold Hill are squarely behind Comstock Mining’s attempt to dig those open pit mines.
One could presume the truth lies somewhere in between but one thing cannot be denied; the opposition’s success in getting this matter tabled and forcing Comstock to significantly reduce their permit request suggests that, regardless of size, the opposition is dead serious at limiting or stopping Comstock Mining’s attempt to initiate open pit mining near their homes and, more importantly, they’ve got some traction. My conclusion is that, while the odds still favor Comstock Mining, this is by no means a slam dunk and, given the elevated risk, one would be wise to guide their investment in LODE stock accordingly.
As important is the fact that, despite Comstock Mining’s attentiveness to issuing press releases promoting their shareholder meeting and barbecue and their attendance at the World Resource Investment Conference in Vancouver, they didn’t find these material developments worthy of disclosure. Their lack of transparency means Our-Street.com and others have to pick up the slack so that the market can be fully informed and that is never a good sign.
Disclosure: I have no equity interest, either long or short in LODE nor do I know anyone who does. Neither have I been compensated in any way to write this article. As always, consult an investment professional before investing in any stock.