Mackay will acquire 100% of four Comstock subsidiaries: Comstock Mining LLC, Comstock Processing LLC, Comstock Exploration and Development LLC, and Comstock Real Estate Inc., including all patented and unpatented mining claims, town lots, processing facilities, operating permits and water rights.

"This transaction achieves a critical milestone in our transformation from a hard rock, junior mining company to our growing, global, renewable metals and materials company, that potentially unlocks high value for our shareholders, delivers and reallocates non-dilutive capital to fund that growth, simplifies our business model and reduces costs while retaining real upside through both equity in MACK and potential future NSR royalties," stated Corrado De Gasperis, Comstock’s CEO. "Mackay has now assembled a historic, world-class district with highly sophisticated capital partners, board members and management, coupled with a geological development plan that we support and remain vested in, to potentially unlock the discovery of millions of gold and silver ounces and the associated potential share value across the entirety of the historic mining district. We support all of Darwin’s and the Mackay team’s plans."

Upon closing, the Company will have received $20 million in cash, plus 2 million shares of Mackay Gold & Silver (TSXV:MACK, OTCQB:MKGSF) valued at over $3.5 million at recent prices. A secured, second-tranche cash payment of $7 million is due within 18 months. Mackay may elect to satisfy up to $2 million of the second-tranche payment through the issuance of additional Mackay Gold & Silver Corp. shares, subject to the pricing thresholds and conditions set forth in the SPA. All reclamation obligations and liabilities will be assumed by the sold entities and all associated reclamation and surety bond deposits and collateral will also be assigned and remain with the sold entities.

Comstock expects the divestiture to reduce ongoing costs associated with maintaining these mining assets, permits, environmental compliance obligations and related activities, resulting in over $1.5 million in annualized savings.

The Company will also retain a 1.5% NSR royalty from sales of silver, gold, and all other valuable minerals and products extracted from these properties, subject to the terms of the Royalty Agreement. Mackay has the option to repurchase the royalty at any time for $3.5 million in cash. Comstock will further share in the success of Mackay’s exploration and development activities through a contingent payment of $10 million if, within seven years following closing, (i) Mackay makes a decision to proceed with the construction of a mine on any of the properties, or (ii) Mackay is sold, merged, or otherwise participates in a change-of-control transaction with aggregate consideration of at least $500 million. If the contingent payment does not occur, the value of the NSR buy-out doubles to $7 million.

This transaction follows Mackay’s very successful lease of Comstock’s Northern Targets starting in June 2023, and the purchase of those properties in December 2024 for a total value of $3.85 million. Over the life of these transactions, Comstock received approximately $8 million when adding prior lease payments and reimbursed expenses to the sale.