May 22, 2022

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COMSTOCK MINING : Management’s Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

The following discussion provides information that we believe is relevant to an
assessment and understanding of our condensed consolidated results of operations
and financial condition as of and for the six months ended June 30, 2021 and
2020. It should be read in conjunction with the condensed consolidated financial
statements and accompanying notes included in this Form 10-Q and our Annual
Report on Form 10-K as of and for the fiscal year ended December 31, 2020.

Overview

Comstock Mining Inc. is an emerging leader in the sustainable extraction,
valorization, and production of innovation-based, clean, renewable natural
resources, with a focus on high-value, cash-generating, strategic materials that
are essential to meeting the rapidly increasing global demand for clean energy,
carbon-neutrality, and natural products. The Company has extensive, contiguous
property in the historic Comstock and Silver City mining districts
(collectively, the “Comstock District“), is an emerging leader in sustainable,
responsible mining and renewable material processing, and is currently
commercializing environment-enhancing, material science-based technologies,
products, and processes for environment-enhancing natural resource recovery,
including mercury remediation and lithium-ion battery materials recycling.
Unless the context otherwise indicates, the terms “Comstock,” the “Company,”
“we,” “us,” or “our” mean Comstock Mining Inc. and its consolidated
subsidiaries.

The Company’s goal is to grow per-share value by commercializing
environment-enhancing, natural resource-based products and processes that
generate a rate of predictable cash flow (throughput) and increase the long-term
enterprise value of our northern Nevada based platform. The next three years are
dedicated to delivering that value by achieving the performance objectives
listed below:

Commercialize a global, environmental, social, corporate governance (“ESG”)
compliant, profitable, mercury remediation and other critical mineral systems:
•Establish the technical efficacy of the Mercury Clean Up, LLC (“MCU”) Comstock
Mercury System, and protect the intellectual property;
•Deploy and operate the first international mercury remediation project by
deploying MCU’s second and third mercury remediation systems into the
Philippines
;
•Identify, evaluate and prioritize a pipeline of potential mercury remediation
projects; then deploy the third and fourth mercury remediation projects,
producing extended, superior cash flow returns; and
•Assess and acquire accretive, ESG-based, natural resource material expansion
opportunities.

Establish and grow the value of our mineral properties:
•Establish the Dayton Resource area's maiden, stand-alone mineral resource
estimate;
•Expand the Dayton-Spring Valley Complex through exploration drilling and
geophysical modelling;
•Develop the expanded Dayton-SV Complex toward full economic feasibility,
supporting a decision to mine;
•Entitle the Dayton-SV Complex with geotechnical, metallurgical, and
environmental studies and permitting; and
•Validate the Comstock NSR Royalty portfolio (e.g., Lucerne Mine, Occidental
Lode, Comstock Lode).

Monetize non-strategic assets and build a quality organization:
•Monetize our third-party, junior mining securities responsibly, for $12.5
million or more;
•Monetize our non-mining assets for $12.5 million, excluding the Gold Hill
Hotel;
•Grow the value of our Opportunity Zone investments to over $30.0 million; and
•Deploy a systemic organization, capable of accelerating growth and handling
complexity.

The plan is designed to deliver per-share value over the next three years, while
positioning the Company for continued growth.

We began acquiring properties in the Comstock District in 2003. Since then, we
have consolidated a significant portion of the Comstock District, amassed the
single largest known repository of historical and current geological data on the
Comstock region, secured permits, built an infrastructure and completed two
phases of test production. We are currently developing four new businesses,
including our Lithium-ion battery recycling business, LINICO Corporation
(“LINICO”); our mercury remediation business, MCU; our development of disruptive
quantum computing programs with prioritized applications in all of our existing
lines of business, Quantum Generative Materials LLC (“GenMat”); and our
carbon-reducing industrial hemp processing and crude oil extraction business,
MANA Corporation (“MANA”). We continue evaluating environment-enhancing, natural
resource-based products and processes, especially in the areas of carbon capture
and utilization, that can grow the rate of our predictable future cash flow
(throughput) and increase the long-term enterprise value of our entire
asset-based platform.

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We now own, control, or retain a royalty interest in approximately 9,358 acres
of mining claims, parcels, and royalty interests in the broader Comstock
District
and surrounding area. The acreage includes approximately 2,396 acres of
patented claims and surface parcels (private lands), and approximately 6,962
acres of unpatented mining claims (public lands), which the Bureau of Land
Management
administers. Our headquarters is on American Flat Road, immediately
north of the Lucerne resource area and just south of Virginia City, Nevada.

Because of the Comstock District’s historical significance, the geology is well
known and has been extensively studied by the Company, our advisors and many
independent researchers. We have expanded our understanding of the geology
through vigorous surface mapping and drill hole logging. The volume of geologic
data is immense, particularly in the Lucerne and Dayton resource areas. We have
amassed a large library of historical data and detailed surface mapping of
Comstock District 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.

Our Dayton resource area and the adjacent Spring Valley exploration targets are
located in Lyon County, Nevada, approximately six miles south of Virginia City.
Access to the properties is by State Routes 341 and 342, both paved roads.

Our sale to Tonogold Resources, Inc. (“Tonogold”) of the membership interests in
Comstock Mining LLC, the owner of the Lucerne Mine, resource area and related
permits closed on September 8, 2020. The Lucerne resource area is located in
Storey County, Nevada, approximately three miles south of Virginia City and 30
miles southeast of Reno. The Lucerne resource area was host to our most recent
test mining operations from 2012 through 2016. Lucerne is the subject of ongoing
assessment, exploration and development plans by Tonogold. We retain a 1.5% NSR
royalty in the Lucerne properties.

We achieved initial production and first poured gold and silver on September 29,
2012
, ceased mining in 2015, and concluded processing in 2016. From 2012 through
2016, we mined and processed approximately 2.6 million tons of mineralized
material, and produced 59,515 ounces of gold and 735,252 ounces of silver.

On February 15, 2021, we entered into a Series A Preferred Stock Purchase
Agreement (“LINICO Stock Purchase Agreement”) with LINICO and purchased shares
of LINICO convertible preferred stock representing 45.45% of LINICO fully
diluted shares and 48.78% of voting shares, in exchange for 3.0 million shares
of our restricted common stock, and committed $4.5 million in cash payments
between February and September 2021. LINICO is a cleantech startup, with plans
for a state-of-the art battery materials recycling facility focused on
commercializing economically viable and environmentally sustainable technologies
for lithium-ion battery recycling. LINICO’s goal is to alleviate global reliance
on harmful mining activities that are used in the production of critical
minerals, to support the increasingly high demand and shortage of these critical
minerals, to close-the-loop on sustainable practices for end-of-life lithium-ion
batteries, and to support a clean energy economy. We have the right, through a
warrant and other investments, to purchase over 57% of LINICO’s fully diluted
voting share ownership.

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[[Image Removed: lode-20210630_g2.jpg]]
Figure 1 - Comstock Mining's Land Position in the Comstock District
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Comstock Mining’s Corporate Alignment

[[Image Removed: lode-20210630_g3.jpg]]Figure 2 – Comstock’s Corporate Alignment
as of June 30, 2021

Our corporate structure is well aligned with our strategic focus. Comstock
remains the parent company that wholly owns the realigned subsidiaries. Comstock
Processing LLC
owns the American Flat processing facility and additional land
for potential expansion. Comstock Northern Exploration LLC owns or controls the
remaining Storey County exploration targets, primarily located north of the
Lucerne properties, including the Occidental Lode. Comstock Exploration and
Development LLC
owns or controls the Lyon County mining claims and exploration
targets, including the Dayton Resource Area and the Spring Valley target.
Comstock Industrial LLC owns properties in Silver Springs and related water
rights. Downtown Silver Springs LLC (“DTSS”) owns other properties in downtown
Silver Springs. Comstock Real Estate Inc. owns the Daney Ranch and the Gold Hill
Hotel
.

Comstock Mining LLC, now 100% owned by Tonogold, controls the Lucerne
properties, including those owned by Northern Comstock LLC (“Northern
Comstock”). The Company recorded a gain of $18.3 million associated with the
sale of Comstock Mining LLC in 2020.

Current Projects – Natural Resource Renewal

LINICO Corporation Investment

On February 15, 2021, the Company, Aqua Metals, Inc. (“AQMS”) and LINICO entered
into the LINICO Stock Purchase Agreement. The investment is in line with our
focus on sustainable extraction, valorization, and production of
innovation-based, clean, renewable natural resources, concentrating on
high-value, cash-generating, strategic materials that are essential to meeting
the rapidly increasing global demand for clean energy.

Purchase of LINICO Preferred Stock

Pursuant to the LINICO Stock Purchase Agreement, we purchased 6,250 shares of
LINICO Series A 8% Convertible Preferred Stock (“Series A Preferred”) for
$6,250,000 and issued 3.0 million shares of our restricted common stock (“CMI
Stock”) in payment of the purchase price. Upon issuance, the CMI Stock had a
fair value of $6,750,000, of which $6,250,000 was allocated to the investment in
shares of LINICO and $500,000 was allocated to the derivative asset related to
LINICO on the condensed consolidated balance sheets. The Series A Preferred has
a conversion price of $1.25 per share of LINICO common stock. Following the
purchase of the Series A Preferred, we own 45.45% of LINICO fully diluted shares
and 48.78% of voting shares. Our chief executive officer is a member of the
LINICO board of directors.

The LINICO Stock Purchase Agreement provides that LINICO will use the proceeds
to fund (i) technology-based lithium-ion battery recycling and cathode
production equipment, (ii) an industrial facility lease-purchase, (iii) startup
costs and general working capital; (iv) a $1.0 million investment in Green
Li-ion Pte. Ltd.
, and (v) the repurchase of LINICO common stock with a value of
$500,000.

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Cash Commitment

Under the LINICO Stock Purchase Agreement, we also agreed to make $4.5 million
in cash payments to LINICO (“Cash Commitment”), payable in a series of
installments between February 26, 2021 and September 30, 2021. As of July 1,
2021
, $2.5 million had been paid and was recognized as an addition to the
derivative asset related to LINICO on the condensed consolidated balance sheets.

Warrant

Pursuant to the LINICO Stock Purchase Agreement, the Company and LINICO entered
into a warrant agreement (“Warrant”) wherein we have the right to purchase 2,500
additional shares of Series A Preferred for a total exercise amount of $2.5
million
. The Series A Preferred received by us pursuant to exercise of the
Warrant may be converted into shares of LINICO common stock at a conversion
price of (i) $1.25, if exercised on or before February 15, 2022, or (ii) $2.00,
if exercised after February 15, 2022.

LINICO Lease Agreement and Additional Lease Deposit

Pursuant to the terms of an industrial lease between LINICO and AQMS, entered
into on February 15, 2021 (“LINICO Lease Agreement”), if LINICO elects not to
exercise its option to purchase from AQMS land, buildings and related
improvements, initially leased by AQMS to LINICO, for (i) $14,250,000, if the
purchase is made on or before October 1, 2022 or (ii) $15,250,000, if the
purchase is made after October 1, 2022, we can assume the purchase option.

The LINICO Lease Agreement requires LINICO to make an initial deposit and, by
November 1, 2022, an additional deposit (“Additional Deposit”) in an amount
equal to $2.0 million, to be credited towards the purchase price of the
facility. The LINICO Stock Purchase Agreement grants us the option to fund the
Additional Deposit with shares of our common stock (in no event will we issue
shares to LINICO pursuant to the LINICO Stock Purchase Agreement that exceed
19.9% of our total issued and outstanding common shares as of February 15,
2021).

Obligations

In the event cash proceeds received by LINICO from the sale of the CMI Stock are
less than $6,250,000, we are obligated to provide LINICO with additional shares
of our common stock or cash to make up the shortfall. However, if cash proceeds
from the sale of CMI Stock plus Cash Commitment payments received by LINICO
(“Consideration”) exceed $10,750,000, the excess must be returned to us by
LINICO, along with any remaining shares of CMI Stock held by LINICO. The first
$4.5 million of Consideration received by LINICO in excess of $6,250,000 will be
applied to exercise our Warrant (up to $2,500,000) and, thereafter, to fund the
Additional Lease Deposit (up to $2.0 million), with additional Series A
Preferred issued to us for the amount funded.

Acquisition of Renewable Process Solutions Inc.

On June 2021, Comstock acquired 100% of the capital stock and voting shares of
Renewable Process Solutions Inc. (“RPS”), an advanced process engineering and
renewable technology development company, in exchange for 1,000,000 restricted
shares of our common stock, with a fair value of $2.4 million and the assumption
of $0.1 million in liabilities.

We identified RPS in discussions with our current and prospective investment
companies, and acquired RPS to build our critical core competencies in advanced
process engineering and renewable technology development necessary to facilitate
our participation in the development and growth of these companies.

Investment in Quantum Generative Materials LLC

On June 24, 2021, Comstock invested in the equity of GenMat, a developer of
quantum computing technologies with the goal of accelerating material science
discovery and development and partnering in the commercialization of new quantum
generated materials. GenMat is developing a proprietary quantum operating system
to harnesses emerging quantum computing technologies and develop breakthrough
new materials for use in our strategically aligned, high-impact fields of
interest, including global mining, battery recycling, and carbon capture.

Comstock’s Venture with Mercury Clean Up, LLC

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In June 2019, we entered into an agreement with MCU (as amended, the “MCU
Agreement”) to pilot test new, cleaner technologies, in collaboration with Oro
Industries Inc.
(“Oro”), for the manufacture and global deployment of mercury
remediation systems with proprietary mechanical, hydro, electro-chemical and
oxidation processes, to reclaim and remediate mercury from soils, waste and
tailings. MCU has the exclusive, worldwide rights to four patentable
technologies and equipment that we believe will demonstrate feasible, economic
mercury remediation. Comstock provides the platform for testing the mercury
remediation system and MCU will conduct the trials that prove scalable
feasibility. MCU plans to deploy the solution globally and has secured its first
major, international remediation project in the Philippines. Comstock’s
award-winning mercury reclamation experience coupled with MCU’s technology and
processing know-how positions a new, global growth opportunity consistent with
our Strategic Focus.

Worldwide unregulated activity has released thousands of tons of mercury into
the environment. The continued worldwide use of mercury in unregulated
activities, primarily outside of the United States, is polluting air, soils and
waters, and poisoning marine life and endangering lives. Ongoing, unregulated
artisanal mining outside of the U.S. represents more than 40% of ongoing mercury
contamination and represents a tremendous opportunity for cleaning up the
environment in a sustainable, profitable manner. Mercury will not go away by
itself and must be removed to stop the pollution. Mercury can’t be broken down
or destroyed, and MCU, in collaboration with Oro and the Company, is pioneering
an effective solution.

Pursuant to the MCU Agreement, the Company committed $2.0 million of capital
contributions payable in cash of $1,150,000 and stock of $850,000, in exchange
for 15% of the fully-diluted equity ownership of MCU and 50% of the equity of
any future joint ventures formed with MCU. Through June 30, 2021, we have
invested $1,150,000 in cash and $850,000 in shares of our common stock,
representing a $2.0 million commitment for MCU to demonstrate the feasibility of
the Mercury Remediation System on CPL’s permitted platform. In addition, by
providing $2.0 million of financing to MCU Philippines, Inc. (“MCU-P”), the
Philippines
joint venture company, Comstock earned an additional 10% ownership
in MCU, increasing our equity ownership in MCU to 25%.

Over the past seven years, Comstock has implemented several plans, approved by
the Nevada Division of Environmental Protection (“NDEP”), intended to address
NDEP and the U.S. Environmental Protection Agency protocols, guidance and goals
for sampling, characterizing, transporting and managing mercury within the
Carson River Mercury Superfund Site (“CRMS”) Study Area. These plans and CPL’s
existing, permitted infrastructure provide an ideal platform for validating the
efficacy of the MCU process and technology. MCU and the Company will work
closely with NDEP for any additional approvals or permits.

The Company and MCU are evaluating numerous locations containing historical,
mercury-contaminated tailings, and developing a detailed schedule for pilot
testing. MCU delivered sampling and testing equipment to the American Flat site
in February 2020, and began taking samples of tailings at locations in the CRMS
to locate suitable material to commence testing. The remaining equipment arrived
at the American Flat site during the third quarter of 2020, and MCU began
stockpiling material and initial test processing during the fourth quarter of
2020. During the first half of 2021, we led a program of detailed sampling of
several Comstock-district tailings deposits. The results will lead to the
prioritization of the tailings for pilot-scale production.

Based on successful proof of technical and economic viability, the Company and
MCU would create a new, 50-50 venture to be called Comstock Mercury Remediation
to pursue global business opportunities. We currently hold 25% of the membership
interests of MCU and, separately, the right to 50% participation in any joint
ventures, including, but not limited to, MCU-P and the Comstock mercury
remediation project, the first two mercury remediation project opportunities.

We entered into a second amendment of the MCU Agreement, on April 10, 2020,
wherein, MCU and Comstock have identified an opportunity to remediate mercury in
the Philippines, particularly in the province of Davao d’ Oro (“Philippine
Opportunity”); where Comstock and MCU formed a new joint venture to engage
profitably in the Philippine Opportunity. We have made cash investments in the
form of $2.0 million in non-interest-bearing loans, committed up to an
additional $1.0 million in equity and debt investments, and received 50%
ownership of MCU-P. Our investments in joint ventures under the MCU Agreement
reached $2.0 million in the first quarter of 2021, and we were issued an
additional 10% of the membership interests in MCU, for total membership
interests of 25%.

The first processing unit was shipped to the Philippines in the fourth quarter
of 2020. Mercury remediation testing combined with limited production of sand
and gravel commenced in the first half of 2021. A permit is pending to allow the
operation to scale to full production rates. Production rates are expected to
increase throughout the remainder of 2021.

Current Projects – Mining

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Exploration and Development

We have identified many exploration targets on our land holdings in the Comstock
District
, but have focused, to date, on the Dayton resource area and, through
our collaboration with Tonogold, the Lucerne resource area (including surface
and underground exploration). We have also leased the remaining Storey County
mineral claims, including the Occidental group and other exploration targets, to
Tonogold, which has near-term plans for exploration and ultimately development
towards economic feasibility for those assets. We are developing exploration
plans for the remaining areas, primarily the Dayton resource area and Spring
Valley
group that we view as an extension of the Dayton resource area.

Our district-wide exploration and development plans contemplate three specific,
geological areas that we have organized into our wholly-owned subsidiaries,
Comstock Exploration and Development LLC and, Comstock Northern Exploration LLC,
and Comstock Mining LLC. Comstock Exploration and Development LLC includes the
Dayton and Spring Valley areas. Comstock Northern Exploration LLC includes the
Occidental and Gold Hill exploration targets now leased to Tonogold, and
Comstock Mining LLC, acquired by Tonogold in September 2020, includes the
Lucerne properties, in which we retain a 1.5% NSR royalty. These exploration
targets represent over 7 miles of mineralized strike length, with current and
historical grades of gold and silver, and significant historical mine production
(Figure 3).

We retain royalties ranging from 1.5% to 3.0% on the Lucerne, Occidental and
other properties, and an additional royalty of 1.0% (that is 25% of 4%) on Sutro
Tunnel Company
(“Sutro”) mining patents in Storey County, Nevada, through the
Company’s 25% membership interests in Pelen Limited Liability Company (“Pelen”),
the 100% owner of Sutro.

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[[Image Removed: lode-20210630_g4.jpg]]
Figure 3 - General Overview of Priority Exploration Targets
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Comstock Processing LLC (100% owner of the American Flat Processing Facility)

The processing facility is in the American Flat area of Gold Hill, Nevada, less
than a mile west of Lucerne, and operated 24 hours per day, seven days per week,
for substantially all of late 2012 through 2016. During 2019, Comstock formed
Comstock Processing LLC (“CPL”), a newly realigned, wholly-owned subsidiary that
owns all of the properties, plant, equipment, and permits for the crushing,
agglomerating, leaching, Merrill Crowe processing, mercury retort, refining, and
metallurgical operations located at 1200 American Flat Road, Virginia City,
Nevada
. The facilities represent a fully permitted platform, best positioned for
implementing our Strategic Focus on high-value, cash-generating, precious
metal-based activities, including, but not limited to, metals exploration,
engineering, resource development, economic feasibility assessments, mineral
production, metal processing and related ventures of environmentally friendly,
and economically enhancing mining technologies. To date, CPL has entered into
two agreements that leverage its platform for nearer-term cash generation; first
with the Lease Option Agreement with Tonogold to lease and operate the
facilities and second, with MCU for the commercial pilot of the MCU mercury
remediation system.

CPL’s Lease Option with Tonogold

On November 18, 2019, we entered into the Lease Option Agreement to lease our
permitted American Flat mining properties, plant and equipment to Tonogold for
crushing, leaching and processing material from the Lucerne Mine. Under the
Lease Option Agreement, Tonogold is required to reimburse the Company
approximately $1.1 million in expenses to maintain the option. If the option is
exercised, Tonogold will then pay us a rental fee of $1.0 million per year plus
$1 per processed ton, in addition to all the costs of operating and maintaining
the facility. After the first $15.0 million in rental fees are paid, the rental
fee will step down to $1.0 million per year and $0.50 per processed ton for the
next $10.0 million paid to us.

CPL and Development of Clean Technologies

The ongoing testing of alternative technologies aligns with our Strategic Focus
on responsible development. A breakthrough with cleaner technologies could
result in higher, faster recoveries with reduced waste, shorter permitting cycle
times and lower reclamation costs.

We continue exploring other partners and ventures that can leverage our
fully-permitted platform for the development of cash-generating, precious and
strategic minerals-based activities, including, but not limited to, metals
exploration, engineering, resource development, economic feasibility
assessments, mineral production, metal and other materials processing, and
related ventures of environmentally-friendly and economically enhancing mining
and materials technologies.

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Comstock Exploration & Development (100% owner of the Dayton Resource and Spring
Valley Exploration Areas)

Our Dayton resource area and the adjacent Spring Valley exploration targets are
located in Lyon County, Nevada, approximately six miles south of Virginia City.
Access to the properties is by State Routes 341 and 342, both paved roads. The
Dayton resource area includes the historic Dayton, Kossuth and Alhambra patents,
and the Dayton Consolidated mine workings. The historic Dayton Consolidated mine
was the last meaningful underground mining operation in the Comstock District,
before being closed after the War Act in October 1942, which closed down
non-essential gold mining operations in the United States and its territories.

The Dayton resource area ranks as our top exploration and development target.
In January 2014, the Lyon County Board of Commissioners approved strategic
master plan and zoning changes on the Dayton, Kossuth and Alhambra mining
patents and other properties located in the Dayton resource area, enabling a
more practical, comprehensive feasibility study for mining. Geological studies
and development planning are currently underway utilizing data from extensive
metallurgical testing and assessment during 2017, an additional 30,818 feet of
drilling completed in 2015, geophysical analysis and interpretation completed in
2013, and extensive geological data from pre-2013 drill programs.

During the third quarter of 2020, we engaged Geotech Ltd (“Geotech”) of Aurora,
Canada
, to conduct an airborne geophysical survey of the Dayton resource area,
Spring Valley exploration targets, and the rest of our Comstock District
properties. The survey included both magnetic and Geotech’s proprietary
Versatile Time-Domain Electromagnetic surveys. The survey was flown from
September 19 through October 3, 2020, with 1,161 line-kilometers. The
interpreted, three-dimensional results were delivered in the second quarter of
2021. The results will greatly increase our understanding of the Dayton resource
area and Spring Valley resource expansion potential, along with our other
exploration targets in Lyon County.

Our technical staff is currently compiling a detailed structural interpretation
of the Dayton resource area, which will provide the framework for a completely
new resource model. The detailed interpretation is leading to a list of highly
prospective drill targets to further define and expand the mineral resource.

The plan includes expanding the current resource at the Dayton resource area
and continuing southerly into Spring Valley. The Spring Valley group of
exploration targets lies adjacent to the Dayton resource area, trending south
toward the southern-most end of the Comstock District that includes the southern
portion of the Kossuth patented claim and the Dondero and Daney claims, and all
of our placer mining claims in Spring Valley and Gold Canyon. The Spring Valley
mineralized structures lie mostly concealed beneath a veneer of sediment gravels
and the volcanic host rocks, and the structural controls of the mineralization
defined for the Dayton resource area are known to continue south into Spring
Valley
. The exploration of Spring Valley will include phased drilling programs
that will continue southerly from State Route 341 to the historic Daney mine
site (Figure 4), with a potential strike length of approximately 9,600 feet.

On May 21, 2020, we enhanced our land position in Spring Valley by exercising
our option with New Daney Company, Inc. (“New Daney”) to purchase seven
unpatented lode mining claims in Spring Valley. These claims had been leased
from New Daney since 2010. We paid a total of $100,000 for the claims. On
October 8, 2020, we closed the transaction with a payment in full of the $85,000
balance.

We are proceeding to publish a separate S-K 1300 compliant, Initial Assessment
technical report for the Dayton resource area to validate a mineral resource
estimate. The new technical report will provide not only a new resource
estimate, but also a phased drilling plan for further defining and expanding the
resource for sustainable, profitable mining. We plan to continue to advance the
Dayton resource area to full feasibility, towards a production-ready mine plan.
Mining and processing on our 100% privately held lands should simplify and
shorten the critical permitting chain.

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[[Image Removed: lode-20210630_g5.jpg]]
Figure 4 - Dayton and Spring Valley Group Targets

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Comstock Northern Exploration LLC (Occidental Lode and Other Northern Target
Mineral Claims)

Tonogold has commenced further, detailed analysis of our northern targets that
correlates historical data with modern geological assessments and reveals a
potentially much larger exploration opportunity. Accordingly, we signed a
Mineral Exploration and Mining Lease (“Exploration Lease”) with Tonogold for
certain mineral properties in Storey County, Nevada. The lease is for an initial
term of 5 years, with options to renew for an additional 15 years, as long as
specific commitments are met, including Tonogold spending of at least $1.0
million
per year on exploration and progressively validating progress through
technical reports.

The lease has a quarterly fee of $10,000 in the first year, escalating 10% per
year thereafter. Tonogold is also required to reimburse all claim maintenance
costs, third-party lease payments, and other costs associated with owning the
properties. We retain a 1.5% to 3.0% NSR royalty on future mineral production
from the properties. We also maintain an additional net royalty of 1.0% (that
is, 25% of 4%) for the historic Sutro mining patents in Storey County, Nevada,
through our 25% membership interest in Pelen, the 100% owner of Sutro. On
September 1, 2020, we paid $100,000 for a one-year option to purchase the
remaining 75% of the membership interests of Pelen for a purchase price of
$3,750,000. If the option agreement is exercised, half of the option payment
will be credited to the purchase price. See Note 2, Acquisitions, Investments
and Divestitures, to our condensed consolidated financial statements.

The Exploration Lease includes the Occidental group and Gold Hill group of
exploration targets, which contain many historic mining operations, including
the Overman, Con Imperial, and Yellow Jacket mines, as well as the historically
under-developed Occidental Lode, parallel to the main Comstock trend. We believe
this will accelerate the development of these targets and enhance the value of
our mineral property and royalty portfolio. Tonogold has permitted an
exploration drilling program for these areas, and began drilling during the
third quarter of 2020, commencing their announced $7.0 million drill program,
including both core and RC drilling, focused on the historically significant Comstock Lode. Tonogold completed four holes totaling 5,511 feet of drilling on
the leased properties during the year ended December 31, 2020, and completed
eleven holes totaling 12,232 feet of drilling during the six months ended
June 30, 2021.

Comstock Mining LLC (100% owner of the Lucerne Resource Area)

In January 2019, the Company and Tonogold entered into a Purchase Agreement, as
restated and amended in September 2020, to sell to Tonogold our interests in
Comstock Mining LLC, our wholly-owned subsidiary with sole net assets of the
Lucerne properties and related permits. The transaction was completed September
8, 2020
, with Tonogold receiving 100% of the membership interests and full
control of Comstock Mining LLC. We received consideration including $7.1 million
in cash, $6.1 million in Tonogold Series D Convertible Junior Participating
Non-Cumulative Perpetual Preferred Stock (“CPS”) with a fair value of
$7.6 million, and a convertible note receivable (“Note”) with fair value of
$6.1 million, net of a related contingent forward with a fair value of
$2.0 million, for a total of $18.8 million, resulting in an $18.3 million gain.

We retained a 1.5% NSR royalty on the Lucerne properties. Tonogold also
guaranteed the remaining payments for our membership interest in Northern
Comstock, which owns and leases certain mineral properties in the Lucerne area,
and assumed certain reclamation liabilities.

On March 3, 2021, we made a $812,500 payment to Northern Comstock pursuant to a
notice of a One Payment Surplus Event, as required by the Northern Comstock
operating agreement, as amended. The payment was triggered by our receiving net
proceeds in excess of $6,250,000 from sources other than operations in
connection with the direct sale of registered shares of common stock on March 4,
2021
. Primarily as a result of the Northern Comstock accelerated payment, the
Note was amended in March 2021, which included adding $812,500 to the principal
amount of the Note for Tonogold’s Northern Comstock accelerated payment
reimbursement obligation and an accommodation fee of $262,500, making the new
principal amount $5,550,000, and extending the maturity date to March 31, 2022.
On June 1, 2021, the Note was further amended to add $1.1 million to the
principal amount of the Note for certain Tonogold, Northern Comstock and other
reimbursement obligations and an accommodation fee of $100,000. See Note 2,
Acquisitions, Investments and Divestitures, to our condensed consolidated
financial statements.

Over the past two years, Tonogold, aided by the independent mining advisory firm
of Mine Development Associates, has evaluated and remodeled the Lucerne mineral
resource, and plans further exploration, development and economic feasibility
assessments.

                                       47

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Current Projects – Real Estate

Gold Hill Hotel

On February 1, 2021, we signed a new lease, as lessor, with Gold Hill Management
LLC
to lease the Gold Hill Hotel. The new lease term begins April 1, 2021 and
ends on March 31, 2024. The agreement includes the payment of $19,500 in
previously deferred rent from the previous month to month tenant, Crown Point
Management LLC
. The rent is $4,525 per month for the first year, inclusive of
real estate taxes, increasing to $6,050 per month for the second year, and
$7,575 per month for the third year. At the end of the three-year term, the
tenant may renew the lease for up to two additional five-year periods, at a rate
of $8,000 per month. See Note 10, Leases, to our condensed consolidated
financial statements.

Sierra Springs Opportunity Fund, Inc.

Investment in SSOF – During 2019, Comstock invested $335,000 in Sierra Springs
Opportunity Fund, Inc.
(“SSOF”), a qualified opportunity zone fund, which
wholly-owns a qualified opportunity zone business, Sierra Springs Enterprises
(“SSE”). We expect to own approximately 9% of SSOF upon issuance by SSOF of all
75.0 million authorized shares to investors. As of June 30, 2021, we own 12% of
the voting shares of SSOF and SSOF has received $12.0 million in equity from
investors, including $335,000 from the Company and $525,000 (16.4% 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.

Silver Springs Properties – On September 26, 2019, as 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 $6.5 million and 160 acres of commercial land along with
its rights in the membership interests of DTSS for $3.6 million. As of June 30,
2021
, we have received deposits in cash and escrow from SSE totaling
$0.4 million towards the purchase of the Silver Springs Properties, recorded in
deposits under current liabilities on the condensed consolidated balance sheets.
The transactions are expected to close during 2021.

Advance to SSOF – For the six months ended June 30, 2021, we advanced SSOF an
additional $2,735,000, increasing total advances to $4.4 million, to be used by
SSOF for deposits and payments on land and other facilities related to
investments in qualified businesses in the opportunity zone. The advances are
non-interest-bearing and are expected to be repaid during 2021, upon the sale of
our Silver Springs Properties to SSE.

COVID-19

For more than a year in Nevada, local governments, state health officials,
emergency managers, local health authorities and community partners have come
together in a statewide response to COVID-19. Processes continue to be in place
to support testing, contact tracing, disease investigation and vaccine rollout
in communities throughout the state.

On July 27, 2021, Nevada Governor Steve Sisolak signed Emergency Directive 047.
This directive requires people in areas with substantial or high COVID-19
transmission to wear a face covering while in public indoor locations.
Currently, 12 of Nevada’s 17 counties meet this threshold: Carson, Churchill,
Clark, Douglas, Elko, Esmeralda, Lincoln, Lyon, Mineral, Nye, Washoe and White
Pine
. This mandate went into effect on Friday, July 30, 2021.

We are operating in alignment with these guidelines for limiting the spread of
COVID-19 and continue prioritizing the health of our employees, partners and
suppliers. This includes the continuation of remote working for certain at-risk
professionals and heightened monitoring of illness indicators.

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Outlook

We have approved a three-year, strategic plan with specific performance
objectives designed to deliver per-share value over the next three years, while
positioning the Company for continued growth beyond 2023. The plan objectives
include establishing and growing the value of our existing mineral properties
and royalty stakes, commercializing and growing existing, ESG-compliant,
lithium-ion battery recycling and mercury remediation businesses and acquiring
additional, accretive, ESG-based, natural resource material expansion
opportunities, including the recently announced acquisitions and investments in
RPS, GenMat and MANA and MANA’s related joint venture in LP Biosciences LLC
(“LPB”) for industrial-scale hemp processing and extraction of winterized,
decarbonized crude oils.

The plan objectives separately include monetizing over $25 million in
non-strategic assets for funding these investments and their prospective growth.
The specific performance objectives are shown under the Overview section above.
The plan is designed to deliver significant per-share value increases over the
next three years, while positioning the Company for continued growth thereafter.

Our annual operating expenditures, excluding depreciation and amortization, are
planned at approximately $7.0 million, with approximately $2.0 million of that
amount being reimbursed under the various Tonogold agreements, resulting in
expected net operating expenses for 2021 of approximately $4.0 million.

During 2021, we expect to close the sale of the Silver Springs Properties for
total proceeds of $10.1 million. The related agreements, as amended, included
$0.4 million of non-refundable deposits released to the Company from escrow. We
will use a portion of the proceeds from the sale to fund investments in LINICO,
GenMat, MANA and LPB.

Our 2021 plans also include updating the Dayton’s current resource estimate and
continuing southerly into Spring Valley with incremental exploration programs
that include recently completed geophysical surveys, surface exploration and
definition drilling of targets identified by the geophysical surveys, surface
mapping, prior drilling and deeper geological interpretations that all lead to
publishing a new, SK-1300 compliant, mineral resource estimate.

Our remaining 2021 plans include advancing the investment in and the
commercialization of LINICO’s battery metal recycling operation, MANA and LPB
industrial-scale hemp processing and extraction of winterized, decarbonized
crude oils and MCU’s mercury remediation processing technologies.

We expect to exercise our $2.5 million Warrant and increase our investment in
our LINICO lithium-ion battery recycling venture during the third quarter,
resulting in a majority stake in LINICO and consolidating LINICO’s financial
results into our consolidated financial statements.

We expect to expand our assets to include the extraction and valorization of a
portfolio of critical and inevitably scarce materials, including the recently
announced acquisition of MANA, scheduled to be the largest U.S.-based industrial
hemp processor and extractor of winterized, decarbonized crude oils. With an
initial preference for high cash throughput generators that complement our
existing competencies and operations, we also are evaluating an additional
transaction that we hope to close during the third quarter of 2021.

Equity Raises

For the six months ended June 30, 2021, we issued 423,842 shares of common
stock through a registered equity issuance agreement (“2021 Leviston Sales
Agreement”) with Leviston Resources LLC (“Leviston”), with gross proceeds of
$2,020,000 at an average share price of $4.77, and 50,907 additional shares in
payment of related fees, and 4.0 million shares of common stock through a direct
offering to 37 investors (“Equity Purchase Agreements”), with gross proceeds of
$16.0 million at an average share price of $4.00, and net proceeds of
$15,010,000 after placement agent fees and expenses.

For the six months ended June 30, 2021, we also issued 3.0 million shares of
restricted common stock to purchase 6,250 shares of LINICO Series A Preferred,
with a stated value of $6,250,000, 1.0 million shares of restricted common stock
in exchange for the 100% of RPS capital stock, and 3.0 million restricted common
shares as part of the consideration for our investment in GenMat. See Note 2,
Acquisitions, Investments and Divestitures, to our condensed consolidated
financial statements.

                                       49

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Comparative Financial Information

Our comparative financial information is reflected in the following table:

Three Months Ended:
                                           June 30, 2021      June 30, 2020          Change
Revenue - mining                          $           -      $            -      $          -
Revenue - real estate                            54,625              48,375             6,250
Total revenue                                    54,625              48,375             6,250

Mining                                           22,514              47,332           (24,818)
Real estate                                      49,410              15,320            34,090
Exploration and pre-development                 278,597             151,666           126,931
Mine claims                                     156,703             122,069            34,634
Environmental and reclamation (Note 12)         257,792              30,972           226,820
General and administrative                      999,326             891,953           107,373
Total costs and expenses                      1,764,342           1,259,312           505,030

Income (loss) from operations                (1,709,717)         (1,210,937)         (498,780)

OTHER INCOME (EXPENSE)
Interest expense                                    253             (91,656)           91,909
Interest income                                 231,496             180,230            51,266
Other income (expense)                       (4,843,024)          2,398,349        (7,241,373)
Other income (expense), net                  (4,611,275)          2,486,923        (7,098,198)

NET INCOME (LOSS)                         $  (6,320,992)     $    1,275,986      $ (7,596,978)


We ceased processing material from our leach pad in December 2016, resulting in
no mining revenues for the three months ended June 30, 2021 and 2020,
respectively.

Real estate revenue for the three months ended June 30, 2021 increased $6,250 as
compared to the same period in 2020, primarily related to an increase from the
Daney Ranch lease signed September 1, 2020, partially offset by a decrease in
rentals associated with our metallurgical labs and Gold Hill Hotel.

Real estate costs and expenses for the three months ended June 30, 2021
increased $34,090 as compared to the same period in 2020, substantially due to
higher depreciation expense associated with the Gold Hill Hotel and Daney Ranch
properties, which were classified as assets held for sale prior to September
2020
.

Mining costs and expenses decreased by $24,818 for the three months ended
June 30, 2021, as compared to the same period in 2020, as a result of certain
assets becoming fully depreciated. These costs consist of depreciation expense
on temporarily idled mining equipment, processing facilities and heap leach
pads.

Exploration and pre-development costs and expenses increased by $126,931 during
the three months ended June 30, 2021, as compared to the same period in 2020,
primarily due to higher labor costs and consultative cost, somewhat offset by
higher Tonogold reimbursements.

Mine claims costs and expenses increased by $34,634 during the three months
ended June 30, 2021, as compared to the same period in 2020, primarily due to
the accelerated Northern Comstock monthly payment.

                                       50

——————————————————————————–

Environmental and reclamation costs and expenses increased by $226,820 during
the three months ended June 30, 2021, as compared to the same period in 2020,
primarily due to an increase in the accretion expense related to the revised
asset retirement obligation as well as higher environmental and labor costs
offset by decreases in depreciation and insurance costs.

General and administrative expenses increased by $107,373 during the three
months ended June 30, 2021, as compared to the same period in 2020, primarily
due to higher professional service and performance-based stock compensation
expense, partially offset by lower directors’ fees.

Interest expense decreased by $91,909 during the three months ended June 30,
2021
, as compared to the same period in 2020, as a result of the early repayment
of our unsecured promissory notes (“Promissory Notes”) in March 2021, and the
related reduced interest expenses, partially offset by the accelerated
recognition of original issue discounts and lower Tonogold reimbursements for
interest expense.

Interest income increased by $51,266 during the three months ended June 30,
2021
, as compared to the same period in 2020, as a result of higher income from
Tonogold principal amounts due and higher accretion on the notes receivable from
MCU-P.

Other expense of $4,843,024 for the three months ended June 30, 2021, primarily
resulted from the net $2.5 million decrease in estimated fair value of the
derivative assets related to LINICO, MCU and GenMat, the decrease in fair value
of the Tonogold Note of $1.2 million, realized losses on sales of common shares
of $0.09 million and, unrealized losses on the value of Tonogold common shares
of $1.0 million.

Other income of $2,398,349 for the three months ended June 30, 2020, resulted
from an increase in value of Tonogold CPS of $1.6 million, an increase in the
estimated fair value of the Tonogold contingent forward asset of $0.4 million, a
reduction in the make whole liability of $0.2 million, and a gain on sale of
mining claims of $0.2 million.

Net loss was $6,320,992 for the three months ended June 30, 2021, as compared to
a net income of $1,275,986 for the same period in 2020. The $7,596,978 increase
in net loss primarily resulted from a decrease in estimated fair value of the
derivative assets related to LINICO MCU and GenMat of $2.5 million, the decrease
in estimated fair value of the Note of $1.2 million, unrealized losses on the
value of Tonogold common shares of $2.7 million, a decrease of $0.2 million in
the make whole liability, change in estimated fair value of the Tonogold
contingent forward asset of $0.4 million, realized losses on sales of Tonogold
common shares of $0.1 million, and a decrease of $0.2 million in gains on sale
of mining claims.

                                       51

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Six Months Ended:
                                           June 30, 2021       June 30, 2020          Change
Revenue - mining                          $            -      $            -      $          -
Revenue - real estate                            103,125              96,800             6,325
Total revenue                                    103,125              96,800             6,325

Mining                                            45,028             173,225          (128,197)
Real estate                                       98,582              28,916            69,666
Exploration and pre-development                  350,301             288,387            61,914
Mine claims                                     (533,727)            244,139          (777,866)
Environmental and reclamation (Note 12)         (498,458)             57,770          (556,228)
General and administrative                     1,953,358           1,737,181           216,177
Total costs and expenses                       1,415,084           2,529,618        (1,114,534)

Income (loss) from operations                 (1,311,959)         (2,432,818)        1,120,859

OTHER INCOME (EXPENSE)
Interest expense                                (144,576)           (142,244)           (2,332)
Interest income                                  386,969             187,372           199,597
Other income (expense)                         2,936,805           3,400,464          (463,659)
Other income (expense), net                    3,179,198           3,445,592          (266,394)

NET INCOME (LOSS)                         $    1,867,239      $    1,012,774      $    854,465


We ceased processing material from our leach pad in December 2016, resulting in
no mining revenues for the six months ended June 30, 2021 and 2020,
respectively.

Real estate revenue for the six months ended June 30, 2021 increased $6,325 as
compared to the same period in 2020, primarily related to an increase from the
Daney Ranch lease signed September 1, 2020, partially offset by a decrease in
rentals associated with our metallurgical labs and Gold Hill Hotel.

Real estate costs and expenses for the six months ended June 30, 2021 increased
$69,666 as compared to the same period in 2020, substantially due to higher
depreciation expense associated with the Gold Hill Hotel and Daney Ranch
properties, which were classified as assets held for sale prior to September
2020
.

Mining costs and expenses decreased by $128,197 for the six months ended
June 30, 2021, as compared to the same period in 2020, from lower depreciation
expense as a result of certain assets becoming fully depreciated. These costs
consist of depreciation expense on temporarily idled mining equipment,
processing facilities and heap leach pads.

Exploration and pre-development costs and expenses increased by $61,914 during
the six months ended June 30, 2021, as compared to the same period in 2020,
primarily due to increase labor costs somewhat offset by higher Tonogold
reimbursements.

Mine claims costs and expenses decreased by $777,866 during the six months
ended June 30, 2021, as compared to the same period in 2020, primarily due to
the reimbursement of $0.8 million for the Northern Comstock accelerated payment.

Environmental and reclamation costs and expenses decreased by $556,228 during
the six months ended June 30, 2021, as compared to the same period in 2020,
primarily due to reduction in the estimated reclamation liability of $0.9
million
, partially offset by higher environmental, depreciation and labor costs.

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General and administrative expenses increased by $216,177 during the six months
ended June 30, 2021, as compared to the same period in 2020, primarily due to
higher professional service and performance-based stock compensation expense,
partially offset by lower directors’ fees and utilities costs.

Interest expense increased by $2,332 during the six months ended June 30, 2021,
as compared to the same period in 2020, as a result of higher interest expense
associated with accelerated recognition of original issue discounts from the
early repayment of the Promissory Notes in March 2021, somewhat offset by lower
Tonogold reimbursements of interest expense in 2021, and reduced interest
expense from the repayment of all debt on March 4, 2021.

Interest income increased by $199,597 during the six months ended June 30, 2021,
as compared to the same period in 2020, as a result of higher interest income on
the various notes receivables from Tonogold, MCU-P and PSI.

Other income of $2,936,805 for the six months ended June 30, 2021, primarily
resulted from the increase in estimated fair value of the derivative assets
related to LINICO and MCU of $5.0 million and $0.4 million amendment fee income,
partially offset by unrealized losses on the value of Tonogold common shares of
$1.9 million and the decrease in fair value of the Note of $0.4 million.

Other income, net was $3,400,464 for the six months ended June 30, 2020
primarily from $1.3 million in unrealized gains on Tonogold convertible
preferred and common shares, $1.4 million in unrealized gains on the change in
estimated fair value of the contingent forward, $0.2 million in interest income
on the Tonogold secured convertible note, $0.2 million from Tonogold
reimbursements and $0.2 million from recognition of Paycheck Protection Program
proceeds used for qualifying expenses.

Net income was $1,867,239 for the six months ended June 30, 2021, as compared to
net income of $1,012,774 for the same period in 2020. The $854,465 improvement
in net income primarily resulted from a net decrease total costs and expenses of
$1.1 million resulting from lower mine costs of $.05 million driven by an
accelerated reimbursement by Tonogold, lower environmental and reclamation costs
of $0.5 million driven by a reduction in the estimated reclamation liability and
lower mine costs of $0.1 million driven by lower depreciation expense.

Liquidity and Capital Resources

The condensed consolidated financial statements are prepared on the going
concern basis of accounting that assumes the realization of assets and the
satisfaction of liabilities in the ordinary course of business. Our current
capital resources include cash and cash equivalents and other net working
capital resources, planned sales of Tonogold securities, collection of the Note
due on March 31, 2022 from Tonogold, and proceeds from the planned sale of the
Silver Springs Properties.

We have had recurring net losses from operations and have an accumulated deficit
of $219.1 million as of June 30, 2021. For the six months ended June 30, 2021,
we generated net income of $1.9 million and used $3.3 million of cash in
operating activities. As of June 30, 2021, we had cash and cash equivalents of
$5.3 million including restricted cash of $0.5 million, and $27.0 million of
other net working capital. At June 30, 2021, we hold 9.5 million common shares
of Tonogold and 109,000 common shares of Northern Vertex with fair values of
$1.4 million and $28,885, respectively, in addition to the $6.7 million face
value Note from Tonogold.

We intend to fund our operations over the next twelve months from existing cash
and cash equivalents, planned sales of Tonogold common shares, the repayment of
the Note and the planned sale of the Silver Springs Properties. These expected
sources of funds are in excess of cash expected to be used in operating
activities and to fund LINICO, GenMat and MANA Cash Commitment payments. While
we have been successful in the past in obtaining the necessary capital to
support our operations, including registered equity financings from our existing
shelf registration statement, borrowings and other means, there is no assurance
we will be able to obtain additional equity capital or other financing, if
needed. Based on the funding sources described above, management believes we
will have sufficient funds to sustain our operations during the 12 months
following the date of issuance of the condensed consolidated financial
statements included herein, including payments required for the LINICO. GenMat
and MANA transactions.

On February 8, 2021, we entered into an equity purchase agreement with Leviston
to offer and sell registered shares of common stock, with an aggregate sales
price of $2.0 million through June 30, 2021. See Note 14, Equity, to our
condensed consolidated financial statements.

                                       53

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On February 15, 2021, we entered into the LINICO Stock Purchase Agreement and
related transactions, including the payment of $2.0 million of Cash Commitment
payments through June 30, 2021. See Note 2, Acquisitions, Investments and
Divestitures, to our condensed consolidated financial statements.

On March 2, 2021, we entered into the Equity Purchase Agreements. The offering
of the shares closed on March 4, 2021, resulting in net offering proceeds of
$15.0 million. See Note 14, Equity, to our condensed consolidated financial
statements.

On March 4 2021, we repaid $3.2 million, representing all amounts outstanding
under the Promissory Notes, including principal, earned original issue discount
and accrued interest expense. See Note 11, Long-Term Debt, to our condensed
consolidated financial statements.

On March 4, 2021, we made an $812,500 payment to Northern Comstock, pursuant to
the Northern Comstock operating agreement. The entire amount was reimbursed by
Tonogold through an increase in the Note, including a $262,500 related Note
amendment fee. The Note is due and payable on March 31, 2022. See Note 2,
Acquisitions, Investments and Divestitures, and Note 21, Related Party
Transactions, to our condensed consolidated financial statements.

On June 1, 2021, the Note was further amended to add $1.1 million to the
principal amount of the Note for certain Tonogold, Northern Comstock and other
reimbursement obligations, and a $100,000 related Note amendment fee. See Note
2, Acquisitions, Investments and Divestitures, and Note 9, Accrued Expenses and
Deposits, to our condensed consolidated financial statements.

On June 8, 2021, we paid a $0.3 million non-refundable loan advance to LP
Biosciences, LLC
(” LPB”). See Note 2, Acquisitions, Investments and
Divestitures, to our condensed consolidated financial statements.

On June 11, 2021, we placed $0.5 million in escrow which was recorded as
restricted cash in our condensed consolidated financial statements. The
restricted cash is related to an expected loan to MANA. See Note 2,
Acquisitions, Investments and Divestitures, to our condensed consolidated
financial statements.

On June 18, 2021, we acquired 100% of the capital stock of RPS and assumed $0.1
million
of RPS liabilities. See Note 2, Acquisitions, Investments and
Divestitures, to our condensed consolidated financial statements.

On June 24, 2021, we entered into a Membership Interest Purchase Agreement with
GenMat and have provided Cash Commitment payments totaling $2.0 million through
June 30, 2021. See Note 2, Acquisitions, Investments and Divestitures, to our
condensed consolidated financial statements.

Net cash used in operating activities for the six months ended June 30, 2021,
was $3.3 million as compared to $0.4 million for the comparable period in 2020.
The comparative increase in net cash used resulted from non-cash Tonogold
reimbursements and fees, and reductions in accrued expenses and other
liabilities.

Net cash used in investing activities for the six months ended June 30, 2021,
was $7.1 million, primarily for advances made to SSOF of $2.7 million, cash
payments to GenMat and LINICO of $2.0 million each, and increases in the MCU-P
note receivable of $0.8 million.

Net cash provided by investing activities for the six months ended June 30,
2020
, was $0.4 million, primarily from $0.6 million in proceeds from Tonogold
for payments toward the purchase of Comstock Mining LLC, $0.1 million in
proceeds from the sale of mineral rights and properties and $0.1 million in
deposits received related to the sale of the Sierra Springs Properties,
partially offset by $0.3 million in deposits made toward the investment in MCU
and $0.1 million of advances to SSOF.

Net cash provided by financing activities for the six months ended June 30, 2021
was $13.2 million, primarily from net proceeds from the sale of common stock of
$17.0 million, offset by repayments on long term debt of $3.5 million. Net cash
used by financing activities for the six months ended June 30, 2020 was $0.1
million
, primarily for principal payments on long-term debt of $0.3 million,
partially offset by net proceeds from the sale of common stock of $0.2 million.

Future operating expenditures above management’s expectations, including
exploration and pre-development expenditures in excess of planned proceeds from
the Note, the sale of Tonogold securities and the Silver Springs Properties, and
amounts to be raised from the issuance of equity under our existing shelf
registration statement, declines in the market value of properties held for
sale, or declines in the share price of our common stock would adversely affect
our results of operations, financial condition and cash flows. If we were unable
to obtain any necessary additional funds, this could have an immediate

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material adverse effect on liquidity and raise substantial doubt about our
ability to continue as a going concern. In such case, we could be required to
limit or discontinue certain business plans, activities or operations, reduce or
delay certain capital expenditures or investments, or sell certain assets or
businesses. There can be no assurance that we would be able to take any such
actions on favorable terms, in a timely manner, or at all.

Critical Accounting Policies and Estimates

There have been no material changes to the critical accounting policies and
estimates previously disclosed in our Annual Report on Form 10-K for the year
ended December 31, 2020.

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