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Item 2. Properties

2024-02-27 compared with 2023-03-16 · 55 added, 56 removed, 198 unchanged (36% of the section changed)

ITEM 2 PROPERTIES

The following table summarizes our business segments that use our properties described below.

Business Segment Property

Fuels Demonstration Facility

Strategic Investments Manufacturing Facility (sold in August 2023)

Mining Haywood Property

Mining Mining Properties

Strategic Investments Silver Springs Properties

DEMONSTRATION FACILITY

Comstock Innovations, our wholly-owned technology research and development subsidiary, is subject to an asset purchase agreement with American Science and Technology Corporation (“AST”), pursuant to which Comstock Innovations agreed to purchase substantially all of the real and personal property located at 6445 Packer Drive, Wausau, Wisconsin 54401 (“Demonstration Facility”), including bench and pilot scale processing equipment used in connection with some of our cellulosic fuels and electrification metals extraction and refining processes.

The purchase agreement calls for a purchase price of $3,920,000 in installments of $35,000 per month from May 1, 2022 to April 30, 2023, $1,750,000 on April 30, 2023, and $1,750,000 on April 30, 2024.

The costs associated with the Demonstration Facility’s research and development support operations are allocated on a time and materials basis at cost to our renewable energy segment and strategic and all other segment, as applicable.

BATTERY METAL RECYCLING FACILITY

On February 15, 2021, LINICO Corporation (“LINICO”) and Aqua Metals Reno Inc.

(the “Landlord”), a subsidiary of Aqua Metals Inc.

(“AQMS”), entered into an industrial lease (the “AQMS Lease Agreement”), for the 136,750 square foot facility, land, and related improvements located at 2500 Peru Drive, McCarran, Nevada 89343 (the “Battery Recycling Facility”).

The Company committed a plan to sell certain land, buildings and related improvements under the Battery Recycling Facility.

As of December 31, 2022, the Company has assets with a net book value of $21,684,865 that met the criteria to be classified as assets held for sale.

Those criteria specify that the asset must be available for immediate sale in its present condition (subject only to terms that are usual and customary for sales of such assets), the sale of the asset must be probable, and its transfer expected to qualify for recognition as a completed sale generally within one year.

Proceeds from the sale of these assets are required to be used to satisfy obligations due under the terms of the Battery Recycling Facility in which LINICO has a finance lease, as lessee, with Aqua Metals Reno Inc., a subsidiary of AQMS.

See Note 8, Leases, to the Consolidated Financial Statements.

In March 2023, the Company sold the related building, land and equipment for $27,000,000.

See Note 20, Subsequent Events to the Consolidated Financial Statements.

HAYWOOD QUARRY

On April 7, 2022, the Company contracted to purchase Haywood quarry and industrial property (“Haywood”) from Decommissioning Services LLC (“Decommissioning Services”) for $2.1 million, payable in $50,000 of cash and 1,500,000 common shares of Comstock with a value of $2,295,000.

The Haywood property represents approximately 190 industrial acres in Lyon County, Nevada, and part of one of the larger industrial parks in Lyon County.

On April 16, 2021, the Company entered into an asset purchase agreement with American Science and Technology Corporation (“AST”), pursuant to which the Company agreed to purchase substantially all of the real and personal property located at 6445 Packer Drive, Wausau, Wisconsin 54401 (“Demonstration Facility”), including bench and pilot scale processing equipment used in connection with some of our lignocellulosic fuels and electrification metals extraction and refining processes (the “AST Asset Purchase Agreement”).

Under the AST Asset Purchase Agreement, the Company agreed to acquire substantially all of AST’s assets in exchange for $3,500,000 due on April 30, 2024, in addition to $35,000 per month from May 1, 2022 to April 30, 2024.

Beginning May 1, 2022, the AST Asset Purchase Agreement provides for full access and use of the AST assets until all payments are made and title transfers to the Company.

Of the amounts paid under the AST Asset Purchase Agreement, a portion is associated with the acquired machinery and equipment and recognized as research and development expense in the consolidated statements of operation.

The Company also entered into three license agreements with AST in connection with the AST Asset Purchase Agreement.

MANUFACTURING FACILITY

On February 15, 2021, LINICO and Aqua Metals Reno Inc.

(the “Landlord”), a subsidiary of Aqua Metals, Inc., entered into an industrial lease (the “AQMS Lease”), for the 136,750 square foot facility, land, and related improvements located at 2500 Peru Drive, McCarran, Nevada 89343 (the “Manufacturing Facility”).

As of December 31, 2022, the Manufacturing Facility and other assets associated with AQMS Lease had a net carrying value of $21,684,865 and liabilities of $12,021,566, that met the criteria to be classified as held for sale.

On August 11, 2023, the Company consummated the sale and transferred the title of the Manufacturing Facility to American Battery Technology Company (“ABTC”).

Proceeds from the sale of these assets were used to satisfy obligations due under the AQMS Lease.

See Note 9, Sale of Manufacturing Facility, to the Consolidated Financial Statements.

HAYWOOD PROPERTY

On April 7, 2022 and amended on November 7, 2022, the Company contracted to purchase Haywood quarry and industrial property (the “Haywood Property”) from Decommissioning Services LLC (“Decommissioning Services”) for $2.1 million, payable in $50,000 of cash and 1,500,000 common shares of Comstock with a total value of $2,295,000.

The Haywood Property represents approximately 190 industrial acres in Lyon County, Nevada, and is part of one of the larger industrial parks in Lyon County.

The property has power, water and direct highway access.

During the period between execution of the agreement and closing, the property is leased to us for no additional compensation, providing exclusive rights to access, use or sublease portions of the property, to obtain permits and prepare the property for its intended purpose, including improvements.

If the conditions for closing are not satisfied within 12 months of signing, the agreement will terminate and Decommissioning Services will retain a total of $200,000 in rental fees for use of the property.

We agreed to pay Decommissioning Services a 2% royalty of the sales price of any gravel, aggregate, or rock products produced and sold from Haywood, excluding the removal of materials that have been pledged to a third-party for improvements made.

If the conditions for closing are not satisfied within a period prescribed in the agreement, the agreement will terminate, and Decommissioning Services will retain a total of $400,000 in rental fees for use of the property.

We agreed to pay Decommissioning Services a 2% royalty of the sales price of any gravel, aggregate, or rock products produced and sold from the Haywood Property, excluding the removal of materials that have been pledged to a third-party for improvements made.

MINING PROPERTIES

The following description of the Company’s mining properties is qualified in its entirety by reference to the Technical Report Summary (the "TRS") for each of the properties included as exhibits to this Report and incorporated by reference into this Item 2.

The information concerning our mining properties in this this Report has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K (“S-K 1300”), which requires us to disclose our mineral resources, in addition to any mineral

reserves, as of the end of our most recently completed fiscal year, individually and in the aggregate, for each of our material mining properties.

The following description of our mining properties is qualified in its entirety by reference to the Technical Report Summary (the "TRS") for each of the properties included as exhibits to this Report and incorporated by reference into this Item 2.

The information about our mining properties in this Report has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K (“S-K 1300”), which requires us to disclose our mineral resources, in addition to any mineral reserves, as of the end of our most recently completed fiscal year, individually and in the aggregate, for each of our material mining properties.

Summary Disclosure

The Comstock Lode was discovered in 1859.

From 1860 to 1960, the district yielded more than eight million ounces of gold and 192 million ounces of silver, from workings up to 3,000 feet below the surface.

We have consolidated the most significant portions of the historic Comstock Lode mining district, conducted surface and airborne geophysical studies, drilled extensively, and recently invested in the development of quantum-probabilistic software solutions that are being designed to integrate specific, hyperspectral technology solutions that we expect will increase certainty in mineral discovery targets, eventually reduce costs of traditional drill programs with ground penetrating scans and analytics, and ultimately result in increased discernment for categorizing measured, indicated, and inferred mineral resources.

From 1860 to 1960, the district yielded more than eight million ounces of gold and 192 million ounces of silver, from workings greater than 3,000 feet below the surface.

We have consolidated the most significant portions of the historic Comstock Lode mining district, conducted surface and airborne geophysical studies, drilled extensively, and recently began investing in the development of quantum-probabilistic software solutions that are being designed to integrate specific, hyperspectral technology solutions that we expect will increase certainty in mineral discovery targets, eventually reduce costs of traditional drill programs with ground penetrating scans and analytics, and ultimately result in increased discernment for categorizing measured, indicated, and inferred mineral resources.

The Company will continue amassing what has become the single largest known repository of historical and current geological data on the Comstock region.

1 unchanged sentence

Comstock and its subsidiaries own, control, or retain interest in all of these mineral properties.

Our mineral estate consists of 9,472 acres (due to overlapping interests, the combined area is approximately 7,586 acres) located in Storey and Lyon Counties, Nevada (referred to collectively as our “Mineral Estate”), including fee ownership of real properties and claims, five mineral leases, one LLC membership interest (providing exclusive rights to exploration, development, mining and production), and royalty interests.

The Mineral Estate includes 130 patented lode mining claims totaling 1,376 acres with surface parcels increasing the total to 2,533 acres, 381 unpatented lode mining claims administered by the BLM totaling 38 unpatented placer claims, and one unpatented mill site claim, all totaling approximately 6,939 acres, and covering 6.5 miles of strike-length on the Comstock and Silver City lodes.

Our land position consists of 9,472 acres (due to overlapping interests, the combined area is approximately 7,586 acres) located in Storey and Lyon Counties, Nevada (referred to collectively as our “Mineral Estate”), including fee ownership of real properties and claims, five mineral leases, one LLC membership interest (providing exclusive rights to exploration, development, mining and production), and royalty interests.

The Mineral Estate includes 130 patented lode mining claims totaling 1,376 acres with surface parcels increasing the total to 2,533 acres, 381 unpatented lode mining claims administered by the BLM, 38 unpatented placer claims, and one unpatented mill site claim, all totaling approximately 6,939 acres, and covering 6.5 miles of strike-length on the Comstock and Silver City lodes.

Because of the Comstock Lode District’s historical significance, the geology is well known and has been extensively studied.

2 unchanged sentences

We have accumulated a large library of historical data and detailed surface mapping of Comstock Mineral Estate properties and continue to obtain historical information from public and private sources.

We integrate this data with information obtained from our mining operations to target prospective geological exploration areas and plan exploratory drilling programs, including expanded surface and underground drilling.

We integrate this data with information obtained from our mining operations to

target prospective geological exploration areas and plan exploratory drilling programs, including expanded surface and underground drilling.

We have completed extensive geological mapping, sampling and drilling on a limited portion of our Mineral Estate property, particularly the Lucerne and Dayton resource areas, in order to characterize the mineralized material.

1 unchanged sentence

We conducted extensive test mining operations from 2004 through 2006 and 2012 through 2016.

We have not established reserves that meet the requirements of SEC Regulation S-K Subpart 1300 ("S-K 1300") and therefore, we are an exploration stage issuer and our Comstock properties are all exploration stage properties.

We have identified many exploration targets in our Mineral Estates and, to date, have focused on subsets of our Mineral Estate, including the Dayton-Spring Valley and Lucerne resource areas, and the Occidental, Oest, and Gold Hill exploration targets (collectively, our “Exploration Targets”).

We have not established reserves that meet the requirements of S-K 1300 and therefore, we are an exploration stage issuer, and our Comstock properties are all exploration stage properties.

We have identified many exploration targets in our Mineral Estate and, to date, have focused on subsets of our Mineral Estate, including the Dayton and Lucerne resource areas, and the Occidental, Gold Hill, Oest and Spring Valley exploration targets (collectively, our “Exploration Targets”).

We own or control 100% of the properties in these target areas.

We published a third-party S-K 1300 technical report for our Dayton – Spring Valley properties in November 2022.

Properties in the Lucerne, Occidental, and Gold Hill resource areas and exploration targets were previously optioned or leased to Tonogold, who completed and published a third-party, S-K 1300 technical report for the Lucerne, Occidental and Gold Hill targets in March 2022.

All Tonogold agreements either expired or were terminated on December 30, 2022, Tonogold no longer has any interest, rights or claims in (or on) any of the Company's properties.

We published a third-party S-K 1300 technical report for our Dayton resources in November 2022.

Properties in the Lucerne, Occidental, and Gold Hill resource areas represent exploration and development targets were previously optioned or leased to Tonogold Resources Inc.

(“Tonogold”), who completed and published a third-party, S-K 1300 technical report for these targets in March 2022.

All Tonogold agreements either expired or were terminated on December 30, 2022, and they no longer have any interest, rights or claims in (or on) any of our properties.

A summary overview of each material property is as follows:

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Private and BLM administered land.

Required state and county permits in place for exploration and mining on private land.

Required state and county permits in place for exploration, mining, and processing on private land.

BLM granted right-of-way for haul road over federal land.

Open Pit Heap Leach

4 unchanged sentences

Fully permitted, dedicated processing facility in American Flat

The following tables summarize our estimated mineral resources as of December 31, 2022 for each of our exploration projects:

Gold Mineral Resources as of December 31, 2022 (1,2,5)

The following tables summarize our estimated mineral resources as of December 31, 2023 and 2022 for each of our exploration projects:

Gold Mineral Resources as of December 31, 2023 and 2022 (1,2,5)

Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources

3 unchanged sentences

Total 2,650 0.030 80 21,738 0.024 525 24,388 0.025 605 13,229 0.023 297

Silver Mineral Resources as of December 31, 2022 (1,2,5)

Silver Mineral Resources as of December 31, 2023 and 2022 (1,2,5)

Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources

26 unchanged sentences

The mineral property includes 68 unpatented lode claims, 38 unpatented placer claims (1,908 acres), 41 patented lode claims (612 acres), and 16 surface parcels (461 acres).

The Company fully owns these properties, except for the Haywood Quarry property, which the Company has full access to and is controlled by a purchase agreement, with the final payment due in 2024, and pays annual claim fees to the BLM for each of the unpatented claims.

The Company fully owns these properties, except for the Haywood Property, which the Company has full access to and is controlled by a purchase agreement, with the final payment due in 2024, and pays annual claim fees to the BLM for each of the unpatented claims.

Dayton - Spring Valley Project Area

11 unchanged sentences

The mineralized body resembles the volcanic geometry of an autoclastic dome and has characteristics of a cryptodome.

Economic gold and silver mineralization typically occurs within late-stage manganiferous calcite-quartz-adularia veining and silicified breccia zones with drusy quartz filling fractures and stockwork

Economic gold and silver mineralization typically occurs within late-stage manganiferous calcite-quartz-adularia veining and silicified breccia zones with drusy quartz filling fractures and stockwork veinlets.

Mineralization within the project is gold enriched, with silver to gold ratios of approximately 10:1.

3 unchanged sentences

The TRS was effective November 1, 2022 and published November 30, 2022.

The report remains current as of December 31, 2022.

The report remains current as of December 31, 2023 and 2022.

Mineral Reserves were not estimated for this project.

15 unchanged sentences

Total ($/ton) $9.50

Summary of Estimated Mineral Resources as of December 31, 2022 (1,2,3,4,5)

Summary of Estimated Mineral Resources as of December 31, 2023 and 2022 (1,2,3,4,5)

(opt) Contained

7 unchanged sentences

4 The effective date of the resource estimate is November 1, 2022.

The assumptions were current at December 31, 2022.

The assumptions were current at December 31, 2023 and 2022.

5 Rounding may result in apparent discrepancies between tons, grade, and contained metal content.

1 unchanged sentence

Comstock’s internal controls for the Dayton project are designed to provide reasonable assurance that information and processes utilized in assessing its exploration results, as well as mineral resource and reserve estimation, are reasonable and in line with industry best practices.

These internal controls include quality assurance and quality control (“QA/QC”) programs in the collection of drill hole assay information based on:

These internal controls include QA/QC programs in the collection of drill hole assay information based on:

- Third-party certified labs used for assays reported in public disclosure or resource models;

8 unchanged sentences

The property is located at 39°17ʹ north latitude and 119°39ʹ30″ west longitude, in Storey County, Nevada, midway between the towns of Virginia City and Silver City, Nevada, 30 miles southeast of Reno, Nevada.

The mineral property includes 81 unpatented lode claims, 1 unpatented mill site claim (833 acres), 34 patented lode claims (271 acres), and 39 surface parcels (101 acres), all owned by Comstock, or controlled through Comstock’s 50% membership interest in Northern Comstock LLC.

The Company pays annual claim fees to the BLM for each of the unpatented claims.

1 unchanged sentence

The Company continued leasing, optioning, and purchasing properties in the Lucerne Project area though 2012.

The properties are now owned outright by the Company, except for the Northern Comstock LLC properties, which will be transferred to the Company after the final payment, due in August 2026.

The properties are now owned outright by the Company, except for the Northern Comstock properties, which will be transferred to the Company after the final payment, due in August 2026.

The property is accessible via State Route 342 and the American Flat processing facility, which is approximately a mile and a half to the west, is accessible via a haulage road with a BLM-Leased right of way.

36 unchanged sentences

Total ($/ton) $8.18

Summary of Estimated Mineral Resources as of December 31, 2022 (1,2,3,4,5)

Summary of Estimated Mineral Resources as of December 31, 2023 and 2022 (1,2,3,4,5)

(opt) Contained

18 unchanged sentences

OTHER PROPERTY

We hold an investment in Sierra Springs Opportunity Fund, Inc.

(“SSOF”), a qualified opportunity zone fund, which wholly-owns a qualified opportunity zone business, Sierra Springs Enterprises, Inc.

We expect to own less than 8% of SSOF upon issuance by SSOF of more than 88,000,000 authorized shares to investors.

At December 31, 2022, we own 11.64% of the voting shares of SSOF and SSOF has received more than $13,800,000 in equity from investors, including $335,000 from the Company and $525,000 (15.93% of voting shares) from our officers and directors.

Our chief executive officer is president and a director of SSOF and an executive and a director of SSE.

On September 26, 2019, and as later amended, we entered into agreements with SSE to sell our two Silver Springs properties ("Silver Springs Properties").

The agreements include the sale of 98 acres of industrial land and senior water rights for $6,500,000 and 160 acres of commercial land along with its rights in the membership interests of Downtown Silver Springs LLC for $3,600,000.

At December 31, 2022, we have received deposits in cash and escrow from SSE totaling $410,100 towards the purchase of the Silver Springs Properties, recorded in deposits under current liabilities on the consolidated balance sheets.

The transactions are expected to close during the first half of 2023.

For the year ended December 31, 2022, we also advanced SSOF $55,000, increasing total advances to $4,990,000, for use by SSOF for payments on land and other related qualifying investments and activities in the opportunity zone.

The advances are non-interest-bearing and are expected to be repaid on or before the expected sale of our properties to SSE during the first half of 2023.

The Company owns industrial and commercially zoned properties in Silver Springs, Nevada (the “Silver Springs Properties”).

The former represents 98 acres of industrial land and senior water rights and the latter represents 160 acres of commercial land along with its rights in the membership interests of Downtown Silver Springs LLC.

The Company had previously entered into agreements for the sale of the Silver Spring Properties, however, those agreements expired at the end of December 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties