Comstock Inc. (NYSE: LODE) has closed the sale of its legacy mining assets to Mackay Precious Metals Inc., a wholly owned subsidiary of Mackay Gold & Silver Corp., in a transaction valued at more than $45 million, according to a company statement.

Comstock received $20 million in cash and 2 million common shares of Mackay Gold & Silver Corp., currently valued at approximately $4.5 million. The company expects to record a gain of approximately $10 million to $12 million on the sale, with no cash taxes anticipated.

The transaction included all four of Comstock's mining subsidiaries — Comstock Mining LLC, Comstock Processing LLC, Comstock Exploration and Development LLC, and Comstock Real Estate Inc. — along with all mining claims, town lots, processing facilities, operating permits, and water rights. Mackay assumed all reclamation obligations and associated liabilities.

A secured second-tranche payment of $7 million is due within 18 months. Comstock retains a 1.5% net smelter return royalty on silver, gold, and other minerals extracted from the sold properties. Mackay holds an option to buy out the royalty at any time for $3.5 million in cash, rising to $7 million after seven years if not exercised.

A contingent payment of $10 million is owed to Comstock if, within seven years of closing, Mackay decides to construct a mine on any of the properties or undergoes a change-of-control transaction with aggregate consideration of at least $500 million.

Comstock said the divestiture is expected to generate approximately $1.5 million in annual operational savings by reducing payroll, permitting, environmental compliance, and related costs.

CEO Corrado De Gasperis said the transaction "simplifies our business, focuses our capacity, and reduces costs while retaining upside through both equity in Mackay Gold & Silver Corp. and future gold and silver NSR royalties."