Comstock Inc. has completed the sale of its four legacy mining subsidiaries and associated real estate in Virginia City, Nevada, to Mackay Precious Metals Inc., a wholly owned subsidiary of Mackay Gold & Silver Corp., for an aggregate transaction value exceeding $45 million.

Under the completed transaction, Comstock has received $20 million in cash and 2 million common shares of Mackay Gold & Silver Corp. valued at approximately $4.5 million. The company expects to record a gain ranging from $10 million to $12 million, which is not expected to result in any cash taxes. In addition, a secured, second-tranche payment of $7 million is due from Mackay within 18 months of closing.

The divestiture transfers all mining claims, town lots, processing facilities, operating permits, and water rights held through subsidiaries Comstock Mining LLC, Comstock Processing LLC, Comstock Exploration and Development LLC, and Comstock Real Estate Inc. Mackay has assumed all associated reclamation obligations, liabilities, and surety bond deposits.

To maintain exposure to future asset upside, Comstock retains a 1.5% net smelter return royalty on minerals extracted from the properties. Mackay holds a buyout option for the royalty at any time for $3.5 million in cash, which doubles to $7 million after seven years if no contingent payment is triggered. Comstock is also eligible for a contingent payment of $10 million if Mackay proceeds with mine construction or a change-of-control transaction of at least $500 million within seven years.

The transaction advances a corporate transformation initiated in 2021 to transition from a traditional hard rock junior mining company into a renewable metals and materials enterprise focused on solar panel recycling and critical minerals extraction. The asset sale removes ongoing payroll, permitting, and compliance expenses, delivering an estimated $1.5 million in annual operational savings.

“This transaction completes another critical objective in our transformation from a hard rock junior mining company into a growing, global, renewable metals and materials company. The transaction enhances balance sheet liquidity, reduces company-wide operating costs and realizes accretive value for our shareholders,” stated Corrado De Gasperis, Comstock’s CEO.

— CEO

Read the full announcement: Comstock Receives $20 Million and Closes Sale of Legacy Mining Assets to Mackay Precious Metals Inc.