Comstock Inc., a pioneer in decarbonizing technologies, stated that Mackay Precious Metals Inc. has paid early payments totaling more than $2 million to Comstock Northern Exploration, LLC, its wholly-owned subsidiary. Comstock Inc. is transforming mineral exploration through the use of physics-based artificial intelligence (AI) and sensing technologies.
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Comstock and Mackay stated earlier this year that Comstock had entered into a Mineral Exploration and Mining Lease Agreement for the leasing of Comstock’s and Mackay’s northernmost patented mining claims, town lots, and mineral exploration rights (collectively, the “Northern Targets”).
The world-renowned Comstock Mining District in Storey County, Nevada, is home to the Gold Hill and northern Occidental Lode claim groups. These areas are together referred to as the Northern Targets.
Mackay made its fourth quarter payment early, as it prepares its exploration and development plan of our northern targets. These timely cash receipts cover all of our annual mining segment operating expenses and positions us for real resource growth with a technically astute, capable, and aligned mineral discovery partner, at a coincidently ideal time with rising gold and silver economics.
Corrado De Gasperis, Executive Chairman and Chief Executive Officer, Comstock Inc.,
The 20-year Mineral Lease will automatically renew when mine viability is determined and for as long as Mackay is conducting mining activities and abiding by the terms of the Mineral Lease. Mackay is required by the Mineral Lease to invest a minimum of $1 million annually in exploration and development endeavors pertaining to the Northern Targets.
The Mineral Lease payments were a $1.25 million initiation fee, which was paid in full at the time of signing, as well as $1.5 million annually for the first four years and $1 million per year after that, plus an estimated $200,000 in annual expenditure reimbursements.
Additionally, Comstock is entitled to a 1.5% net smelter return royalty on all future production of precious metals. With the June 2023 initiation fee paid, the total earnings for 2023 came to $2.125 million.
The Mineral Lease includes mutual rights of first refusal about the sale of certain mining assets for both parties, as well as non-compete restrictions that forbid Mackay from purchasing or staking property outside of a limited area of influence in Storey County and within two miles of any property owned or leased by Comstock in the District (including both Lyon County and Storey County properties).