Comstock Metals Ltd. — Audit Report / Information 2024

Dec 19, 2024

COMSTOCK
METALS LTD.

Comstock Metals Ltd.
Financial Statements
Year Ended September 30, 2024

Expressed in Canadian Dollars

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D M C L

dmcl.ca

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Independent Auditor's Report

To the Shareholders of Comstock Metals Ltd.

Opinion

We have audited the financial statements of Comstock Metals Ltd. (the "Company"), which comprise the statements of financial position as at September 30, 2024 and 2023, and the statements of operations and comprehensive loss, changes in shareholders' equity, and cash flows for the years then ended, and notes to the financial statements, including material accounting policy information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2024 and 2023, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements, which describes events or conditions that indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters, that in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

Vancouver	Surrey	Tri-Cities	Victoria
1500 - 1140 West Pender St.
Vancouver, BC V6E 4G1
604.687.4747	200 - 1688 152 St.
Surrey, BC V4A 4N2
604.531.1154	700 - 2755 Lougheed Hwy
Port Coquitlam, BC V3B 5Y9
604.941.8266	320 - 730 View St.
Victoria, BC V8W 3Y7
250.800.4694

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Other Information

Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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• Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Barry Hartley.

DALE MATHESON CARR-HILTON LABONTE LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, BC

December 19, 2024

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Comstock Metals Ltd.
Statements of financial position
(Expressed in Canadian dollars)

	Notes	September 30, 2024	September 30, 2023
ASSETS
Current assets
Cash		$ 8,434	$ 58,978
Other receivable		89	491
Prepaid expenses		1,250	1,408
Investments	3	706,425	706,425
		716,198	767,302
Non-current assets
Exploration and evaluation assets	4	1	1
		1	1
TOTAL ASSETS		$ 716,199	$ 767,303
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	5, 8	$ 273,947	$ 269,565
Loans payable	6, 8	232,910	211,852
TOTAL LIABILITIES		506,857	481,417
SHAREHOLDERS’ EQUITY
Share capital	7	18,466,089	18,466,089
Share-based payment reserve	7	2,703,965	2,703,965
Deficit		(20,960,712)	(20,884,168)
TOTAL SHAREHOLDERS’ EQUITY		209,342	285,886
TOTAL LIABILITIES AND EQUITY		$ 716,199	$ 767,303

Nature and continuance of operations (Note 1)

Commitments (Note 11)

Subsequent event (Note 13)

Approved on behalf of the Board:

/s/ "Steven Goldman"

/s/ "Arnold Tenney"

See accompanying notes to the financial statements

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Comstock Metals Ltd.
Statements of operations and comprehensive loss
(Expressed in Canadian dollars)

		Year Ended
	Notes	September 30, 2024	September 30, 2023
Expenses
Corporate development		$ 600	$ 2,641
Interest expense	6, 8	21,065	1,852
Listing and filing fees		10,806	12,185
Management fees	8	-	15,000
Office, administrative and miscellaneous	8	13,038	22,358
Professional fees	8	31,995	44,231
Rent	8	-	3,898
Loss from operations		(77,504)	(102,165)
Other items
Foreign exchange loss		(117)	(66)
Interest income		1,077	1,157
Realized loss on sale or disposal of investments	3	-	(119,840)
Unrealized fair value loss on investments	3	-	(1,003,075)
		960	(1,121,824)
Net and comprehensive loss		$ (76,544)	$ (1,223,989)
Loss per share – basic and dilutive	7	$ (0.00)	$ (0.04)
Weighted average number of shares outstanding – basic and diluted	7	29,671,985	29,671,985

See accompanying notes to the financial statements

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Comstock Metals Ltd.
Statements of changes in shareholders' equity
(Expressed in Canadian dollars)

	Share Capital			Share-based payment reserve
	Notes	Number of shares	Amount		Deficit	Total
Balance at October 1, 2022		29,671,985	$ 18,466,089	$ 2,703,965	$ (19,660,179)	$ 1,509,875
Net and comprehensive loss		-	-	-	(1,223,989)	(1,223,989)
Balance at September 30, 2023		29,671,985	18,466,089	2,703,965	(20,884,168)	285,886
Net and comprehensive loss		-	-	-	(76,544)	(76,544)
Balance at September 30, 2024		29,671,985	$ 18,466,089	$ 2,703,965	$ (20,960,712)	$ 209,342

See accompanying notes to the financial statements

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Comstock Metals Ltd.
Statements of cash flows
(Expressed in Canadian dollars)

	Year Ended
	September 30, 2024	September 30, 2023
Operating activities
Net loss	$ (76,544)	$ (1,223,989)
Adjustments for non-cash items:
Interest expense	21,058	1,852
Realized loss on sale of investments	-	119,840
Unrealized fair value loss on investments	-	1,003,075
Changes in non-cash working capital items:
Other receivable	402	4,345
Prepaid expenses and deposits	158	11,401
Accounts payable and accrued liabilities	4,382	36,983
Net cash flows used in operating activities	(50,544)	(46,493)
Investing activities
Proceeds from sale of investments	-	45,660
Purchase of investments	-	(210,000)
Net cash flows used in investing activities	-	(164,340)
Financing activities
Loans received	-	210,000
Net cash flows provided by financing activities	-	210,000
Decrease in cash	(50,544)	(833)
Cash, beginning	58,978	59,811
Cash, ending	$ 8,434	$ 58,978

See accompanying notes to the financial statements

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Comstock Metals Ltd.

Notes to the Financial Statements

(Expressed in Canadian dollars unless otherwise noted)

For the year ended September 30, 2024

1. Nature and continuance of operations

Comstock Metals Ltd. (the "Company" or "Comstock") was incorporated on December 13, 2007 under the laws of the province of British Columbia, Canada. The Company's shares are traded on the TSX Venture Exchange's NEX Board (the "Exchange") under the symbol "CSL-H". The head office, registered office, principal address and records office of the Company are located at P.O. Box 30072, RPO Parkgate Vlg, North Vancouver, British Columbia, Canada, V7H 2Y8.

Comstock is currently considering its various options including the acquisition and exploration of new projects.

These financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at September 30, 2024, the Company does not have an active business. The Company's continuation as a going concern is dependent upon its ability to acquire a new business or mineral property and attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Management intends to finance operating costs over the next twelve months with cash on hand, loans from directors and companies controlled by directors, the sale of investments and or private placement of common shares. These financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. Such adjustments could be material.

1. Material accounting policy information and basis of preparation

These financial statements were authorized for issue on December 19, 2024 by the directors of the Company.

Statement of compliance to International Financial Reporting Standards

These financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The financial statements are presented in Canadian dollars unless otherwise noted.

Significant estimates and assumptions

The preparation of the Company's financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amount of net assets, liabilities, and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reported period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

2. Material accounting policy information and basis of preparation (cont.)

Estimates and assumptions where there are significant risk of material adjustments to assets and liabilities in future accounting periods include the recoverability of the carrying value of exploration and evaluation assets, fair value measurements for financial instruments and stock-based compensation and other equity-based payments, and the recoverability of deferred tax assets and liabilities. Actual results may differ from those estimates and judgments.

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments applied in preparing the Company's financial statements include:

• The assessment of the Company's ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty;
• The classification / allocation of expenditures as exploration and evaluation expenditures or operating expenses; and
• The determination of whether or not to impair exploration and evaluation assets.

Foreign currency translation

The functional currency is determined using the currency of the primary economic environment in which that entity operates. The financial statements are presented in Canadian dollars which is the Company's functional and presentation currency.

Transactions and balances:

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement of operations and comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exploration and evaluation expenditures

Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit or loss.

Government tax credits received are recorded as a reduction to the cumulative costs incurred and capitalized on the related property.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant, and equipment.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

1. Material accounting policy information and basis of preparation (cont.)

Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Share-based payments

Share-based payments to employees are measured at the fair value of the instruments and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined that the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share-based payment reserve. The fair value of the options is determined using the Black-Scholes Option Pricing Model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Financial instruments

Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

Financial assets/liabilities	Classification
Cash	FVTPL
Other receivable	Amortized cost
Investments	FVTPL
Accounts payable	Amortized cost
Loans payable	Amortized cost

Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of operations and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of operations and comprehensive loss in the period in which they arise.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

1. Material accounting policy information and basis of preparation (cont.)

Financial instruments (cont.)

Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the statements of operations and comprehensive loss.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and/or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. Gains and losses on derecognition are generally recognized in profit or loss.

Impairment of assets

The carrying amount of the Company's assets (which includes exploration and evaluation assets) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of operations and comprehensive loss.

The recoverable amount of assets is the greater of an asset's fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

Cash

Cash include cash on hand, deposits held at call with banks, and bank overdrafts.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

2. Material accounting policy information and basis of preparation (cont.)

Income taxes (cont.)

Current income tax relating to items recognized directly in other comprehensive loss or equity is recognized in other comprehensive loss or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is provided using the balance sheet method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

(Loss) earnings per share

Basic (loss) earnings per share is calculated using the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted earnings per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. Under this method, the basic and diluted loss per share for the year ended September 30, 2024 were the same, as the effect of common shares issuable upon the exercise of warrants and stock options of the Company would be anti-dilutive.

For the years ended September 30, 2024 and 2023, the exercise price of the outstanding options and warrants was greater than the weighted average share price and therefore diluted loss per share equals basic loss per share.

Share capital

The Company records proceeds from the issuance of its common shares as equity. Incremental costs directly attributable to the issue of new common shares are shown in equity as a deduction, net of tax, from the proceeds. Common shares issued for consideration other than cash are valued based on their market value at the date that shares are issued.

Proceeds from unit placements are allocated between share and warrants using the residual method.

Future changes in accounting policies

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company's financial statements.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

3. Investments

September 30, 2024				September 30, 2023
Name	Type	Number	Fair Value	Number	Fair Value
MAS Gold Corp.	Common shares	47,095,000	$ 706,425	47,095,000	$ 706,425

MAS Gold Corp.

On March 31, 2022, the Company received 27,750,000 common shares of MAS Gold Corp. (TSXV: MAS, "MAS Gold") from the sale of its Preview SW Gold Project. The MAS Gold shares were received at a fair market value of $2,775,000 as of March 29, 2022.

MAS Gold Rights Offering

On June 30, 2023, the Company received 27,750,000 rights (the "MAS Gold Rights") at a fair market value of $Nil in MAS Gold. Each MAS Gold Right entitled the holder to purchase one common share in MAS Gold for $0.01 per share until September 5, 2023.

Sales of MAS Gold Shares and Rights

During the year ended September 30, 2024, the Company did not sell any MAS Gold common shares. During the year ended September 30, 2023, the Company sold 1,655,000 MAS Gold shares for net proceeds of $32,740. During the period from June 30, 2023 to September 5, 2023, the Company sold 2,706,000 MAS Gold Rights for net proceeds of $12,920. During the year ended September 30, 2023, the Company recognized a realized loss of $119,840 from the sale of MAS Gold Shares and MAS Gold Rights.

Exercise and Expiration of MAS Gold Rights

On September 5, 2023, the Company exercised 21,000,000 MAS Gold Rights paying $210,000 for 21,000,000 MAS Gold shares and 4,044,000 MAS Gold Rights expired unexercised. The MAS Gold Rights exercise was funded by loans from the Company's management and the MAS Gold shares that were purchased are subject to the conditions of loan agreements signed between the Company and its management (See Notes 6 and 8).

Using the most recently available financial information, the Company estimates it held a 12.3% ownership stake in MAS Gold as of September 30, 2024 (September 30, 2023 – 12.3%) and did not have significant influence as defined in IFRS IAS 28 Investments in Associates and Joint Ventures. During the year ended September 30, 2024, the Company recorded an unrealized fair value loss on the MAS Gold shares of $Nil (2023 - $1,003,075).

4. Exploration and evaluation assets

Corona Property, Mexico

At September 30, 2023, the Company held a 0.5% net smelter return (the "NSR") on the Corona property in Mexico with a book value of $1. On August 29, 2024, the Company entered into an agreement to sell and terminate its NSR to Golden Goliath Resources Ltd. in exchange for $5,000 on or before October 15, 2024. The Company had not received the proceeds from the sale of its NSR as of September 30, 2024 (See Note 13).

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

1. Accounts payable and accrued liabilities

	September 30, 2024	September 30, 2023
Trade payables (See Note 8)	$ 49,743	$ 50,161
Accrued liabilities (See Note 8)	224,204	219,404
	$ 273,947	$ 269,565

1. Loans payable

On August 25, 2023, the Company's CFO loaned the Company $10,000 and on August 29, 2023, the Company's CEO loaned the Company $200,000 (See Note 8). The combined proceeds of $210,000 from the two loans were used to exercise 21,000,000 MAS Gold Rights (See Note 3). Under the terms of the loan agreements between the parties, the amounts owing under the loans together with interest at 10% per annum are secured by, and the lenders have sole recourse to, the 21,000,000 MAS Gold Shares acquired with the proceeds of the loans. The loans will be repaid on a pro rata basis through the net proceeds of any sale of these 21,000,000 MAS Gold Shares. If, following the sale of these MAS Gold Shares there are funds remaining with the Company, such funds will be used to first repay $102,975 owing to the CEO's consulting company and $65,625 to the CFO's consulting company for services provided to the Company up to December 31, 2022 on a pro rata basis, and then, if additional funds are remaining, to pay other Company debts and for corporate purposes. If there are insufficient funds from the sale of the MAS Gold Shares to repay the loans, then the remaining balance on the loans will be forgiven. For the year ended September 30, 2024, the Company has recorded a total of $21,058 in interest expense (2023 – $1,852) that is included in the loans payable balance.

1. Share capital

Authorized share capital

The Company's share capital consists of an unlimited number of common shares without par value.

Issued share capital

At September 30, 2024, and September 30, 2023 there were 29,671,985 issued and fully paid common shares. No common shares were issued during the years ended September 30, 2024 and 2023.

Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the Exchange requirements, grant to directors, officers, employees and consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the Company's issued and outstanding common shares. Such options will be exercisable for a period of up to 10 years from the date of grant. In connection with the foregoing, the number of common shares reserved for issuance to any one optionee will not exceed five percent (5%) of the issued and outstanding common shares and the number of common shares reserved for issuance to all consultants will not exceed two percent (2%) of the issued and outstanding common shares. Options may be exercised no later than 30 days following cessation of the optionee's position with the Company.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

1. Share capital (cont.)

Stock options

The changes in options during the years ended September 30, 2024 and 2023 are as follows:

	September 30, 2024		September 30, 2023
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
Options outstanding, beginning	1,100,000	$ 0.10	1,478,000	$ 0.11
Expired	(300,000)	0.11	(378,000)	0.14
Options outstanding and exercisable, ending	800,000	$ 0.09	1,100,000	$ 0.10

During the years ended September 30, 2024 and 2023, the Company did not issue any stock options. At September 30, 2024, the weighted average remaining contractual life of outstanding options was 2.07 years (September 30, 2023 – 2.37 years).

The following options were outstanding and exercisable as of September 30, 2024:

Expiry date	Outstanding	Exercisable	Exercise price
October 25, 2026	800,000	800,000	$0.09
	800,000	800,000

Warrants

The changes in warrants during the years ended September 30, 2024 and 2023 are as follows:

	September 30, 2024		September 30, 2023
	Number of warrants	Weighted average exercise price	Number of warrants	Weighted average exercise price
Warrants outstanding, beginning	4,065,300	$ 0.12	4,065,300	$ 0.12
Expired	(4,065,300)	$ 0.12	-	-
Warrants outstanding, ending	-	$ -	4,065,300	$ 0.12

On October 1, 2023, 4,065,300 outstanding warrants expired unexercised. There are no warrants outstanding at September 30, 2024. The weighted average remaining contractual life of warrants outstanding as of September 30, 2024 was 0.00 years (September 30, 2023 – 0.00).

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

7. Share capital (cont.)

Basic and diluted loss per share

The calculation of basic and diluted loss per share for the year ended September 30, 2024 was based on the loss attributable to common shareholders of $76,544 (2023 – $1,223,989) and the weighted average number of common shares outstanding of 29,671,985 (2023 – 29,671,985).

Diluted loss per share for the year ended September 30, 2024 does not include the effect of 800,000 stock options (2023 – 1,110,000) and Nil share purchase warrants (2023 – 4,065,300) because the effect would be anti-dilutive.

Share-based payment reserve

The share-based payment reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital.

8. Related party transactions

The Company incurred the following transactions with respect to officers and directors of the Company or corporations controlled by them during the years ended September 30, 2024 and 2023:

Key management personnel compensation

	Year ended
	September 30, 2024	September 30, 2023
Administration, director, consulting and professional fees	$ -	$ 16,500
Management fees	-	15,000
	$ -	$ 31,500

Effective January 1, 2023, the Company's directors and officers have voluntarily agreed to suspend all fee payments to themselves or corporations controlled by them.

Related party balances included in accounts payable and accrued liabilities

	September 30, 2024	September 30, 2023
Due to officers and directors and officers for consulting fees	$ 210,980	$ 210,980
Due to officers and directors and officers for expenses	-	364
	$ 210,980	$ 211,344

The amounts are unsecured, bear no interest and are due on demand (See Note 5).

The Company paid $6,409 for shared rent and office services including office closure costs to a company with a common director and officer during the year ended September 30, 2023. Effective January 1, 2023, the Company is no longer sharing office space with another company.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

8. Related party transactions (cont.)

Related party balances included in loans payable

	September 30, 2024	September 30, 2023
Loan from CEO and accrued interest (See Note 6)	$ 221,808	$ 201,753
Loan from CFO and accrued interest (See Note 6)	11,102	10,099
	$ 232,910	$ 211,852

9. Financial instruments and risk management

The Company's financial instruments consist of cash, other receivable, investments, accounts payable and loans payable.

The fair value of the Company's financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
• Level 3 – Inputs that are not based on observable market data.

The Company's cash is measured using level 1 inputs. The fair value of the Company's investment in the shares of a public company is measured using level 1 inputs. The fair value was determined by reference to the underlying share price quoted on the open market at the reporting date.

The Company's financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and interest risk.

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to fulfill an obligation causing the other party to incur a financial loss. The Company is exposed to credit risks arising from its cash. The Company manages credit risk by placing cash with major Canadian financial institutions. Management believes that credit risk is low.

Interest Rate Risk

Interest rate risk is the risk that an investment's value will change due to a change in the level of interest rates. The Company is not exposed to interest rate risk as it has no financial instruments that bear interest at variable rates. Management believes the interest rate risk to be minimal.

Liquidity Risk

Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due. To manage liquidity risk, the Company reviews additional sources of capital to continue its operations and discharge its commitments as they become due. Management believes liquidity risk is high.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

9. Financial instruments and risk management (cont.)

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and price risk. The Company's functional currency is the Canadian dollar. The Company does not use any form of derivative or hedging instruments to reduce its foreign currency risk. The Company is exposed to price risk on its investment in MAS Gold.

10. Capital management

The Company identifies capital as cash and share capital. The Company manages its capital structure and makes adjustments to it depending on the funds available to the Company for acquisition, exploration and development of exploration and evaluation assets. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management.

The Company is dependent on external financing to fund its activities. In order to carry out its planned exploration and pay for on-going general and administrative expenses, the Company will use existing working capital and raise additional capital as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management reviews its capital management approach on an on-going basis and believes that this approach, given the small size of the Company, is reasonable. The Company is not subject to externally imposed capital requirements and there were no changes in its approach to capital management during the year ended September 30, 2024.

11. Commitments

Agreement with President and CEO

On May 15, 2022, the Company renewed its consulting agreement with a company owned and controlled by its President and CEO for a 12-month term. Under the agreement, the CEO was paid $5,000 per month. Effective January 1, 2023, the monthly compensation was reduced to $Nil. The CEO will be able to receive a bonus of 3% of the value of any merger, reverse takeover or material asset sale that occurs during his term. In the event that no such material asset sale occurs during his term, the CEO shall be eligible to earn a bonus of up to $50,000 as determined by the Company's other board members. Effective May 15, 2024 and 2023, the consulting agreement was renewed informally on a month-to-month basis, subject to the Company's right to terminate the consulting agreement on one month's notice. Under the renewed consulting agreement, the CEO's monthly fees are $Nil and in the event of a merger, reverse take over, or sale of any material assets, the CEO will be entitled to receive a bonus of 3% of the value of any such transaction.

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Comstock Metals Ltd.
Notes to the Financial Statements
(Expressed in Canadian dollars unless otherwise noted)
For the year ended September 30, 2024

12. Income taxes

A reconciliation of taxes at statutory tax rates with the reported taxes is as follows:

	Year ended
	September 30, 2024	September 30, 2023
Loss before income taxes	$ (76,544)	$ (1,223,989)
Corporate tax rate	27%	27%
Expected recovery owing at statutory tax rates	(20,667)	(330,477)
Non-deductible items	-	270,830
Other	(6,014)	95,134
Change in valuation allowance	26,681	(35,487)
	$ -	$ -

The significant components of the Company's deferred tax assets are as follows:

	September 30, 2024	September 30, 2023
Equipment	$ 5,651	$ 5,651
Exploration and evaluation assets	2,335,555	2,335,555
Share issuance costs	2,273	4,381
Non-capital loss carry-forwards	1,726,309	1,697,520
Capital losses	16,178	16,178
	4,085,966	4,059,285
Valuation allowance	(4,085,966)	(4,059,285)
Net deferred tax assets	$ -	$ -

As of September 30, 2024, the Company has non-capital losses of approximately $6,394,000 (2023 - $6,287,000) to carry forward to reduce future year's taxable income, which expire between 2030 and 2044, capital losses of $120,000 (2023 - $120,000) that have no expiry, and mineral resource pools of $8,650,000 that have no expiry. Deferred tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is not anticipated to occur, and accordingly, the Company has recorded a valuation allowance for the deferred tax asset arising from these tax loss carry-forwards.

13. Events after the reporting period

On October 10, 2024, the Company received $5,000 for the sale and termination of its NSR on the Corona Property (See Note 4).

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