Comstock becomes fully fledged recycler, clean energy company after selling mine assets to Mackay
NYSE-listed specialised metals recycler Comstock has closed the sale of all its mining assets in the historic Comstock Lode district of Nevada to TSX-V-listed Mackay Gold & Silver Corporation subsidiary Mackay Precious Metals for $45-million.
Comstock has received $20-million of the consideration in cash and two-million common shares in Mackay Gold & Silver, valued at about $4.5-million, to which Comstock expects to record a gain in a range of about $10-million to $12-million. Another $7-million payment is due within 18 months.
The transaction includes the sale of four of Comstock's mining subsidiaries - Comstock Mining, Comstock Processing, Comstock Exploration and Development, and Comstock Real Estate - including all mining claims, town lots, processing facilities, operating permits and water rights.
Mackay Gold & Silver has assumed all of the reclamation obligations and other liabilities associated with the sold entities.
Comstock retains a 1.5% net smelter return royalty from the sales of silver, gold and all other valuable minerals and products extracted from the sold properties. Mackay Gold & Silver does have the option to buy out the royalty for $3.5-million in cash.
The transaction completes a critical objective for Comstock as it transforms from a hard rock junior mining company to a global renewable metals and materials company.
The deal has enhanced the company's balance sheet liquidity and reduces companywide operating costs, while realising accretive value for shareholders.
"Closing this transaction simplifies our business, focuses our capacity and reduces costs while retaining upside through both equity in Mackay Gold & Silver and future gold and silver net smelter return royalties," says Comstock CEO Corrado de Gasperis.
