Comstock Metals Ltd. — Management Reports 2022

Aug 16, 2022

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Comstock Metals Ltd.

Form 51-102F1

Management’s Discussion and Analysis For the Nine Months Ended June 30, 2022 Expressed in Canadian Dollars Unless Otherwise Noted

This Management Discussion and Analysis (“MD&A”), dated as of August 16, 2022, should be read in conjunction with the condensed interim financial statements for nine months ended June 30, 2022 and the audited financial statements for the year ended September 30, 2021 of Comstock Metals Ltd. (also referred to as “Comstock” or the “Company”, or “we” or “our”) and other corporate filings available under Comstock’s company profile on SEDAR at www.sedar.com and the Company’s website, www.comstock-metals.com. We report our financial position, results of operations and cash flows in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

Overview and Overall Performance

Comstock is a publicly traded company traded on the TSX Venture Exchange (the “Exchange”) under the symbol “CSL” as well as on the OTC under symbol “CMMMF”. On March 31, 2022, Comstock sold its Preview SW Gold Project mineral property in the La Ronge Gold Belt in Saskatchewan (see Preview SW Gold Project) to MAS Gold Corp. on terms discussed in more detail below. Comstock is currently considering its various options including the acquisition and exploration of new projects.

For the funding of property acquisitions and operations, the Company currently depends primarily on the issuance of shares from the treasury to investors which include the possible exercise of existing warrants, options or the issuance of new shares under one or more private placements The head office, registered office, principal address and records office of the Company are located at 850 West Hastings Street, Suite 310, Vancouver, British Columbia, Canada, V6C 1E1.

In November 2020, Comstock distributed the common shares owned by it in White Gold Corp. (TSX.V: WGO) and E3 Metals Corp. (TSX-V: ETMC) (“E3 Metals”) to Comstock’s shareholders by way of a return of capital.

As of June 30, 2022, the Company has working capital of $1,829,431 (September 30, 2021 - $107,118) and cash on hand of $62,726 (September 30, 2021 - $189,961). As of the date of this report, the Company is not able to finance day to day activities through operations. The Company’s continuation as a going concern is dependent upon its ability to acquire a new business and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations or to monetize one or more of its assets. 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 may finance operating costs over the next twelve months with cash on hand, sale of assets, loans, the exercise outstanding warrants and options, and/ or private placement of common shares.

Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Preview SW Gold Project sale to MAS Gold Corp.

Project Details

The Preview SW Gold Project is located 40 km north of La Ronge, Saskatchewan and 80 km southwest of Silver Standard Resources Inc.'s Seabee gold mine. The Preview SW deposit hosts a historical Indicated Mineral Resource containing 158,300 ounces of gold (2.61 million tonnes grading 1.89 g/t Au) and a historical Inferred Mineral Resource containing 270,800 ounces of gold (5.70 million tonnes grading 1.48 g/t Au), both based on a 0.50 g/t Au cut-off grade (see Comstock news release dated December 14, 2021). During 2017 and 2018, Comstock completed diamond drilling campaigns targeting the Preview North zone and the Preview SW deposit comprising 24 holes totaling 4,700 metres. Several additional, relatively untested targets remain on the Property.

Comstock filed on SEDAR the 43-101 Technical Report, Preview SW Gold Project, La Ronge, Saskatchewan, prepared for Comstock Metals Ltd. by Ronald G. Simpson, P.Geo., Geosim Services Inc. on the effective date of September 27, 2016.

The mineral rights to the 843-ha property were 100% owned by Comstock. Private company NorthSask Ventures Ltd. holds a 2.5% NSR of which an initial 1% may be purchased for $1 million and the remaining 1.5% for $2 million at any time prior to production decision. In addition, payments totaling $147,500 of cash and shares must be made to North-Sask Ventures upon receipt of a positive feasibility study.

Sale of Preview SW to MAS Gold Corp.

On January 13, 2022, the Company and MAS Gold Corp. (TSX-V: MAS) (“MAS Gold” or “MAS”) signed a definitive agreement pursuant to which Comstock agreed to sell 100% of its interest in its Preview SW Gold Project (“Preview SW”) and property to MAS Gold in consideration of the issuance of 30,000,000 common shares in MAS Gold (the "Transaction").

The Transaction closed on March 31, 2022 after the Company received Exchange acceptance and held its special and annual general meeting and received shareholder approval. Upon closing of the Transaction, Comstock gained the right to appoint one director to MAS Gold's board for a minimum of two years, and appointed Steven Goldman, CEO of Comstock as its board representative on the MAS board. Under the Transaction terms, Comstock provided additional exploration funding in the amount of $200,000, expended in first quarter of calendar 2022, in conjunction with input from MAS Gold, advancing the Preview SW Gold Property prior to closing of the Transaction and to satisfy its flow through share commitment.

Comstock engaged Red Cloud Klondike Strike Inc. as an advisor to this transaction and paid advisory fees based on the Transaction’s value equal to 5% of the first $2,000,000 and 3.5% thereafter (the “Advisory Fee”). The Company’s CEO received a 3% bonus based on the Transaction’s value (the “Bonus”). The Advisory Fee and Bonus were paid using a portion of the MAS Gold shares received by the Company. As a result, the Company received net proceeds of 27,750,000 MAS Gold shares. The MAS Gold shares were subject to a four-month trading hold that expired on July 31, 2022.

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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As of June 30, 2022, the Company has now recorded the closing of the Transaction as follows:

Consideration received
Number of MAS Gold shares received	30,000,000
MAS Gold closing share price on March 31, 2022	$ 0.10
Total fair value of gross consideration received	$ 3,000,000
Closing costs
Red Cloud advisory fee (paid with 1,350,000 MAS Gold shares)	(135,000)
CEO Bonus (paid with 900,000 MAS Gold shares)	(90,000)
Change of control payment payable to CFO	(21,000)
Legal fees incurred on transaction	(20,234)
Total closing costs	$ (266,234)
Net proceeds (A)	$ 2,733,766
Preview SW carrying costs
Carrying amount as of September 30, 2021	$ 2,751,594
Additional exploration work conducted to March 31, 2022	$ 204,903
Saskatchewan government grant for exploration work	$ (50,000)
Net carrying costs of Preview SW at time of sale (B)	$ 2,906,497
Loss on sale of Preview SW for the nine months ended June 30, 2022
(A - B)	$(172,731)

Mexico

The Corona Gold-Silver Project (the “Corona Property”) is located in the Ocampo-Uruachic District of western Chihuahua, Mexico - a centre of gold and silver production for over 300 years. As a result of Fresnillo PLC's discovery of the Orisyvo gold deposit (Indicated & inferred resources: 2.72 million ounces of gold in oxides and 6.51 million ounces of gold in sulphides), the Uruachic district has drawn the attention of a number of gold exploration companies in addition to Comstock.

During the year ended September 30, 2013, the Company completed all option requirements and earned a 50% interest in the Corona property. During the year ended September 30, 2014, the Company wrote down the carrying value to $1. On December 7, 2015, Golden Goliath Resources Ltd. (“Golden Goliath”), which holds the other 50% interest in the Corona property, announced that it had signed an option agreement with Fresnillo PLC that includes the Corona property. During the year ended September 30, 2019, the option agreement was completed and exercised by Fresnillo PLC.

The Company retains a 0.5% NSR on the Corona property.

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Results of Operations for the nine months ended June 30, 2022

For the nine months ended June 30, 2022, the Company recognized a net and comprehensive loss of $1,281,881 (nine months ended June 30, 2021 (“2021”) – net income of $387,318). The increase in net loss of $1,669,199 from 2021 is due to several differences between the two periods and notable differences are as follows:

• Corporate development increased to $8,321 (2021 - $3,010) due to the Company making more news releases in the current period.

• Share based compensation increased to $84,000 (2021 - $Nil) due to the Company granting stock options in the current period.

• Professional fees increased to $74,637 (2021 - $42,140) due increased corporate activity including additional statutory filings regarding the Company’s AGM held in March 2022.

• The Company recognized a loss of $172,731 (2021 - $Nil) on the sale of its Preview SW Gold Project.

• The Company realized a combined realized and unrealized loss of $832,507 on the fair value of its 2,775,000 shares in MAS Gold Corp. and expiration of its warrants for White Gold Corp. in the current period compared to a combined realized and unrealized gain of $617,936 on its return of capital in 2021.

• The Company realized a gain of $60,000 (2021 - $Nil) on the reversal of its flow-through shares liability in the current period.

As at June 30, 2022, exploration and evaluation assets totaled $1 (September 30, 2021 - $2,751,595). The Company sold its Preview SW Gold Project and received net proceeds of 27,750,000 MAS Gold shares with a fair market value of $2,775,000 as of March 31, 2022 and $1,942,500 as of June 30, 2022.

Cash Flows

For the nine months ended June 30, 2022, the Company’s net cash used in operating activities was $144,218 compared to $247,905 in 2021. The decrease is consistent with the decrease in corporate activity in the current period.

Net cash used in investing activities for the nine months ended June 30, 2022 was $211,000 for its Preview SW Gold Project compared to $30,163 in 2021. As a condition of sale of the Preview SW Gold Project and in order to fulfill its flow through share commitment from 2021, the Company was required to spend $200,000 on exploration in the first quarter of 2022.

Net cash received from financing activities for the nine months ended June 30, 2022 was $227,983 compared to $88,000 in 2021. The Company closed its private placement receiving cash of $209,400 in the current period compared to $Nil in the prior period. Share issue costs were $17,417 compared to $Nil in the prior period. The Company received $36,000 from the exercise of stock options compared to $Nil in the prior period. In the 2021 period, the Company received $26,500 towards its private placement that closed in the current period on October 1, 2021. The Company received $Nil (2021 - $62,500) from the exercise of warrants in the current period and paid $Nil (2021 - $1,000 Nil) for brokerage fees for its return of capital.

The Company’s cash decreased by $127,235 during the nine months ended June 30, 2022 compared to a $190,068 decrease in 2021. The Company’s cash balance as of June 30, 2022 was $62,726 compared to $189,961 at September 30, 2021.

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Summary of Quarterly Results

This table sets forth selected quarterly financial information for each of the last eight quarters:

Three Months Ended	Jun. 30 2022 $	Mar. 31 2022 $	Dec. 31 2021 $	Sep. 30 2021 $	Jun. 30 2021 $	Mar. 31 2021 $	Dec. 31 2020 $	Sep. 30 2020 $
Net and comprehensive (loss) income	(883,625)	(31,618)	(353,638)	(93,969)	(74,072)	(90,525)	551,915	(304,330)
Net earnings (loss) per share – basic and diluted	$(0.03)	$(0.00)	$(0.01)	$(0.00)	$(0.00)	$(0.00)	$0.02	$(0.01)

The above quarterly results were prepared in accordance with International Financial Reporting Standards (“IFRS”). The June 30, 2022 loss includes an unrealized loss of $832,500 for the fair value of its investment in MAS Gold Corp. The March 31, 2022 loss is lower than recent prior periods due to the Company recognizing a $60,000 reversal of its flow-through liability. The December 31, 2021 increase in loss is mostly due to the Company recognizing a $182,119 loss on the reclassification of its Preview SW Gold Project from and exploration and evaluation asset to an asset held for sale. The December 31, 2020 increase in income is primarily due to the Company recognizing a $625,585 unrealized gain on investments. The June 30, 2020 increase in income is primarily due to unrealized gain on investments of $908,701.

Three-month period ended June 30, 2022

During the three-month period ended June 30, 2022, the Company reviewed and considered various projects for the Company’s future, but did not enter into any commitments or agreements.

Liquidity

As of June 30, 2022, the Company has working capital of $1,829,431 (September 30, 2021 - $107,118) and cash on hand of $62,726 (September 30, 2021 - $189,961). This working capital consisted primarily of its investment in MAS Gold as well as cash, other receivables, prepaid expenses less accounts payable and accrued liabilities.

Investment in MAS Gold Corp.

On March 29, 2022, the Company received net proceeds of 27,750,000 common shares (the “Shares”) of MAS Gold from the sale of its Preview SW Gold Project. The Shares were given a fair market value of $2,775,000 as of March 29 and March 31, 2022. As of June 30, 2022, the Shares were given a fair market value of $1,942,500 resulting in an unrealized loss of $832,500 for the three month period ended June 30, 2022. The Shares were subject to a four-month trading hold that expired on July 31, 2022.

Capital Resources

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

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Return of capital

At the Company’s Annual and Special General Meeting help on October 19, 2020, the Company’s shareholders approved a special resolution to distribute the Company’s investments in the 1,000,000 common shares of E3 Metals and 1,387,210 common shares of White Gold to the Company’s shareholders on a pro-rata basis by way of a return of capital (the “Investments”). On November 13, 2020 (the “Record Date”), the Company distributed the Investments to its shareholders. The closing price of White Gold was $0.84 and the closing price of E3 Metals was $1.22 on the Record Date. As a result, the Company’s capital was reduced by a total of $2,385,256. The Company recorded a realized gain of $14,418 and unrealized gain of $602,243 on the disposal of the Investments from the return of capital.

The Company retained its 350,625 warrants of White Gold to acquire one common share for 3 years at an exercise price equal to $1.50. On February 28, 2022, the warrants expired unexercised. As a result, the Company recognized a loss of $333,094 (the original fair market value of the warrants calculated using the Black-Scholes Valuation Model) and unrealized gain of $333,087 on the warrants expiration to reduce the carrying value of the warrants to $Nil.

The Company accounts for its investments at FVTPL.

Return of capital

At the Company’s Annual and Special General Meeting help on October 19, 2020, the Company’s shareholders approved a special resolution to distribute the Company’s investments in 1,000,000 common shares of E3 Metals and 1,387,210 common shares of White Gold to the Company’s shareholders on a pro-rata basis by way of a return of capital. The Company retained its 350,625 warrants in White Gold. On the Record Date, the Company distributed the Investments to its shareholders. The closing price of White Gold was $0.84 and the closing price of E3 Metals was $1.22 on the Record Date. As a result, the Company’s capital was reduced by a total of $2,385,256.

Repricing of Options

Under the Exchange rules, the Company was required to reprice its options and warrants to reflect the reduction in the Company’s capital by the fair value of the Investments in proportion to the Company’s market capitalization as determined by the Company’s closing share price of $0.17 and 25,331,985 common shares issued and outstanding on the Record Date. The Company had no warrants outstanding on the Record Date. The Company repriced its outstanding options as per the following table:

Expiry date	Options Outstanding Options Vested Original Exercise price *Exercise Price Modifier Modified Options Exercise price
17-Mar-21 7-Apr-21 15-Aug-21 1-Mar-22 30-May-23 15-Jun-23 4-Apr-24	58,000 58,000 $1.25 0.446118415 $0.56 24,000 24,000 $1.25 0.446118415 $0.56 127,000 127,000 $1.78 0.446118415 $0.79 240,000 240,000 $0.98 0.446118415 $0.43 240,000 240,000 $0.35 0.446118415 $0.16 130,000 130,000 $0.25 0.446118415 $0.11 308,000 308,000 $0.25 0.446118415 $0.11 1,127,000 1,127,000

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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* On May 26, 2020, the Company consolidated its issued and outstanding common shares on a 5 for 1 basis. All references to common shares in these financial statements have been adjusted to reflect this change.

Private Placement

On October 1, 2021, the Company closed a non-brokered private placement for aggregate gross proceeds of $388,900 comprising up to 2,225,000 units (“Units”) and up to 1,715,000 flow-through units (“FT Units”). Each Unit will be priced at $0.09 and will consist of one common share in the capital of the Company (a “Share”) and one common share purchase warrant (a “Warrant”). Each Warrant will entitle the holder thereof to purchase one additional common share of the Company (a “Share”) at an exercise price of $0.12 per Share for a period of 24 months from the closing date. Each FT Unit will be priced at $0.11 and consist of one flow-through common share in the capital of the Company (a “FT Share”) and one common share purchase warrant (a “FT Warrant”). Each FT Warrant will entitle the holder thereof to purchase one additional non flow-through common share of the Company at an exercise price of $0.12 per Share for a period of 24 months from the closing date. Using the residual method, there was no value allocated to the warrants issued as part of the units.

The expiry date of the Warrants is subject to an acceleration provision that provides that if the closing price of the Company’s common shares is equal to or greater than $0.24 for a period of 10 consecutive trading days, the Company has the right to accelerate the expiry date of the Warrants by giving written notice to the holders of the Warrants with the revised expiry date being 30 days from the date of the notice to the warrant holders. The acceleration of the Warrant expiry date may not be triggered prior to February 2, 2022.

The Company paid finder’s fees totaling $13,398 and issued 125,300 broker warrants as compensation to a finder that assisted with the offerings. Each broker warrant entitles the holder thereof to acquire one common share at a price of $0.09 per share at any time on or before October 1, 2023. The broker warrants were given a fair value of $7,000 using the Black-Scholes option pricing model and the following inputs: discount rate: 1.07%, expected volatility: 174%, annual dividend rate: Nil and expected life: 2 years.

The flow-through shares issued in this private placement were given a non-cash flow-through tax liability of $60,000 based on difference between the flow-through share issue price and the Company’s closing share price on October 1, 2021 multiplied by the number of flow-through shares issued. This liability will be reversed when the Company completes the required exploration work during 2022.

The securities issued under this private placement were subject to four-month hold period that expired on February 2, 2022.

Option Exercises

During the nine months ended June 30, 2021, the Company received total proceeds of $36,000 from the exercise of 400,000 stock options. No Stock options were exercised in the prior period.

Warrant Exercises

No warrants were exercised in the current period. During the nine months ended June 30, 2021, the Company received total proceeds of $62,500 from the exercise of 833,333 warrants.

Off-Balance Sheet Arrangements

The Company has not entered any off-balance sheet arrangements.

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Board of Directors and Officers

As of the date of this report, the Company has the following officers and directors.

Steven H. Goldman, President & CEO / Director

Steven H. Goldman was appointed as Interim CEO and President effective May 15, 2018, and then appointed as CEO and President effective May 15, 2019. He initially became a director in Comstock Metals in 2016. He was a founding partner and is now counsel to the Toronto law firm of Goldman Hine LLP. Before joining that firm, he successfully led the restructuring and turnaround of the Speedy Auto Service and Minute Muffler franchise systems as their President and CEO from December 2007 until December 2009. Mr. Goldman graduated from Carleton University in 1976 (BA, President’s Medal) and from Queen’s University in 1980 (LLB/JD). Mr. Goldman was called to the Bar in Ontario in 1982. He is a member of the Executive of the Ontario Bar Association, Franchise Section, the Law Society of Upper Canada, the American Bar Association Forum on Franchising, and the Institute of Corporate Directors. He is also a former Director of Tribute Pharmaceuticals Inc and Alegro Health Corp. He is currently a member of the board of directors of Select Sands Corp. (trading on the TSX.V as symbol SNS).

Arnold Tenney, Chairman of the Board

Mr. Tenney is the Chairman and a director of the Company. In addition, Mr. Tenney was the Chairman and a director of Tribute Pharmaceuticals Inc. from April 2004 to February 2016. Mr. Tenney was a financial consultant at Devine Entertainment Corporation (“Devine”), a children and family film production and development company from 2002 to 2011. Prior to his position at Devine, Mr. Tenney was Chief Executive Officer of ARC International Corporation from 1978 to 2000. ARC International Corporation was a developer of indoor ice arenas and tennis clubs, as well as an investment company involved in entertainment and cable television. Mr. Tenney was a director and Chairman of the Board of Cabletel Communications from 1985 to 2000, which was a leading supplier of broadband equipment to the cable television industry. Mr. Tenney was a director of Ballantyne of Omaha, Inc. from 1988 to 2000 and served as Chairman of the Board from 1992 to 2000. Ballantyne of Omaha, Inc. was a leading manufacturer of commercial motion picture projection equipment. Mr. Tenney served as a director for Phillip Services Inc., a Canadian metal recycling company, from 1998 to 2000. He served in such capacity as a representative of Mr. Carl Icahn.

Robert Luffman, Director

Robert Luffman, a Canadian CPA, CMA (certified management accountant), has close to 30 years of financial experience in a variety of businesses and charitable endeavors. Mr. Luffman currently serves as the Chief Financial Officer of Gracetree Investments, LLC, a family office in Bristol, Tennessee and as the Chief Financial Officer of Gregory Pharmaceutical Holdings, Inc. Gracetree has numerous successful investments in the pharmaceutical industry, real estate, information technology, and other private businesses. Mr. Luffman began his career as an accountant at the United Co-operatives of Ontario and served for 13 years as a Division Controller of what is now AGC Glass North America, a Japanese-owned international automotive, residential and commercial glass manufacturer. Mr. Luffman is serving or has served on a number of corporate and charitable boards.

Mr. Luffman received his designation from the Society of Management Accountants of Ontario in 1992 and is currently a member of ACAUS (Association of Chartered Accountants in the U.S.).

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Derek Knight, Director

Derek Knight is a two-decade veteran in project management with a proven track record of delivering efficiency optimization and cost benefit. Currently serving as COO at Snow Lake Lithium (Nasdaq: LITM), a significant lithium mining company in Northern Manitoba, which raised $27.6M USD during its IPO in November 2021. Prior to his current role, Derek acted in the capacity of CEO and was responsible for several funding rounds in addition to corporate restructuring and resource expansion. Derek also served as COO at Progressive Planet (PLAN), a TSXV listed entity where he was responsible for the asset management of a multi resource strategy company. During the course of his tenure, Derek managed a cost rationalization project that involved asset disposal and the execution and commissioning of a successful processing facility.

Darren Urquhart, CFO

Mr. Urquhart is a chartered professional accountant with twenty years of experience working in public practice and industry. Mr. Urquhart operates his own public practice accounting firm offering chief financial officer and accounting services to TSX Venture Exchange listed companies in Vancouver. He has also served as director for some of his corporate clients. Mr. Urquhart began his career working as an audit accountant with Grant Thornton LLP, then later worked as a senior tax accountant with Lohn Caulder Chartered Accountants. Mr. Urquhart obtained his chartered accountant designation in 2001 and is a member of the Chartered Professional Accountants of British Columbia. In 1995, Mr. Urquhart graduated from the University of British Columbia with a Bachelor degree of Applied Science in Electrical Engineering.

Transactions with Related Parties

The Company incurred the following transactions with respect to officers and directors of the Company or corporations controlled by them during the nine months ended June 30, 2022 and 2021:

Key management personnel compensation

	Nine months ended
	June 30, June 30, 2022 2021
Steven Goldman – Consulting fees Steven Goldman – Share based compensation Arnold Tenney – Consulting fees Arnold Tenney – Share based compensation Robert Luffman – Consulting fees Robert Luffman – Share based compensation Derek Knight - Consulting fees Derek Knight - Share based Compensation Darren Urquhart – Consulting fees** DarrenUrquhart–Share based compensation	$ 172,500 $ 90,000 21,000 - 17,000 18,000 14,000 - 8,500 9,000 14,000 - 11,000 - 14,000 - 52,500 31,500 14,000 -
Total cash compensation Totalshare-based compensation	$ 261,000 $ 148,500 $ 77,000 $ -
Totalcompensationofofficers and directors	$338,000 $ 148,500

Note: Share based compensation is a non-cash expense for valuing stock option grants that is computed using the Black-Scholes Option Valuation Model.

• Steven Goldman received a bonus consisting of 900,000 MAS Gold shares with a fair value of $90,000 in the current period as a result of the sale of the Preview SW Gold Property. Effective May 15, 2022, Mr. Goldman’s compensation as CEO and director has been reduced to $5,000 per month.

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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** Effective June 1, 2022, the Company’s independent directors have reduced their monthly fees by 50%.

*** Darren Urquhart is entitled to receive six months of consulting fees equal to $21,000 as a result of the change of control provision in his consulting agreement that was triggered on the sale of the Preview SW Gold Property.

Related party balances included in accounts payable and accrued liabilities

	June 30,	September 30,
	2022	2021
Due to directors and officers for consulting fees	$ 144,920	$ 37,470
Due to company with a common director and officer	5,314	5,272
	**$ 150,234 **	$ 42,742

The Company paid $15,312 for shared rent and office services (2021 - $14,124) to a company with a common director and officer during the nine-month period ended June 30, 2022.

Proposed Transactions

As is typical of a publicly traded corporation, the Company is continually reviewing potential acquisition and joint venture transactions and opportunities that could enhance shareholder value. At present, there are no transactions being contemplated by management or the board that would affect the financial condition, results of operations and cash flows, other than in the normal course of the Company's business, other than those already disclosed herein.

Critical Accounting Estimates

Mineral properties consist of exploration and mining concessions, options and contracts. Acquisition and exploration costs are capitalized and deferred until such time as the property is put into production, or the property is disposed of either through sale or abandonment. If put into production, the costs of acquisition and exploration will be written off over the life of the property, based on estimated economic reserves. Proceeds received from the sale of any interest in a property will be credited against the carrying value of the property, with any excess included in operations for the year. If a property is abandoned, the acquisition and deferred exploration costs will be written off to operations.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, in accordance with industry norms for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property may be subject to unregistered prior agreements and non-compliance with regulatory requirements. The Company is not aware of any disputed claims of title.

Recorded costs of mineral properties and deferred exploration expenditures are not intended to reflect present or future values of mineral properties. The costs are subject to measurement uncertainty, and it is reasonably possible, based on existing knowledge, that change in future conditions could require a material change in the recognized amount.

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Management reviews capitalized costs on its mineral properties on a periodic basis and will recognize impairment in value based upon current exploration results and upon management’s assessment of the future probability of profitable revenues from the property or from sale of the property.

The Company measures the cost of the service received for all stock options made to consultants, employees and directors based on an estimate of fair value at the date of grant. The Company uses the Black-Scholes option pricing model to estimate the fair value of each stock option at the date of grant. Stock options which vest immediately are recorded at the date of grant. Stock options that vest over time are recorded over the vesting period using the straight-line method. Stock options issued to outside consultants that vest over time are valued at the grant date and subsequently re-valued on each vesting date and expensed as services are rendered. Stock based compensation is recognized as expensed or, if applicable, capitalized to mineral property costs with a corresponding increase in contributed surplus. On exercise of the stock option, consideration received and the estimated fair value previously recorded in contributed surplus is recorded as share capital.

Financial Instruments and Other Instruments

The Company has not entered into any specialized financial agreements to minimize its investment risk, currency risk or commodity risk. As of the date hereof, the Company’s investment in resource properties has full exposure to commodity risk, both upside and downside. As the metal prices move so does the underlying value of the Company’s metal projects.

Commitments

New Agreement Signed 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 (the “CEO”) for a 12-month term. Under the agreement, the CEO is to be paid $5,000 per month. The CEO shall also receive a bonus of 3% of the value of any merger, reverse take over 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.

Outstanding Share Data as of the Report Date

As of the date of this report, there was an aggregate of 29,671,985 common shares issued, 3,940,000 warrants outstanding with an exercise price of $0.12 that expire October 1, 2023, 125,300 broker warrants with an exercise price of $0.09 that expire October 1, 2023 and 1,478,000 stock options outstanding at a weighted average exercise price of $0.11.

A summary of the stock options outstanding as of the date of this report follows:

Expiry date	Outstanding Vested Exercise price
May 30, 2023 June 15, 2023 April 4, 2024 October 25, 2026	240,000 240,000 $0.16 130,000 130,000 $0.11 308,000 308,000 $0.11 800,000 800,000 $0.09 1,478,000 1,478,000

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Risks and Uncertainties

The Company is subject to a number of risks and uncertainties due to the nature of its business. The Company’s exploration and development activities expose the Company to various financial and operational risks that could have a significant impact on its level of operating cash flows in the future. Readers are advised to study and consider risk factors stressed below.

The following are identified as main risk factors that could cause actual results to differ materially from those stated in any forward-looking statements made by, or on behalf of, the Company.

General Resource Exploration Risks and Competitive Conditions

The resource exploration industry is an inherently risky business with significant capital expenditures and volatile metals markets. The marketability of any minerals discovered may be affected by numerous factors that are beyond the Company’s control and which cannot be predicted, such as market fluctuations, mineral markets and processing equipment, and changes to government regulations, including those relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. This industry is intensely competitive and there is no guarantee that, even if commercial quantities are discovered, a profitable market will exist for their sale. The Company competes with other junior exploration companies for the acquisition of mineral claims as well for the engagement of qualified contractors. Metal prices have fluctuated widely in recent years, and they are determined in international markets over which the Company has no influence.

Governmental Regulation

Regulatory standards continue to change, making the review process longer, more complex and therefore more expensive. Exploration and development on the Company’s properties are affected by government regulations relating to such matters as environmental protection, health, safety and labour, mining law reform, restrictions on production, price control, tax increases, maintenance of claims, and tenure. There is no assurance that future changes in such regulations couldn’t result in additional expenses and capital expenditures, decreasing availability of capital, increased competition, reserve uncertainty, title risks, and delays in operations. The Company relies on the expertise and commitment of its management team, advisors, employees and contractors to ensure compliance with current laws.

Approval

The Board of Directors of Comstock Metals Ltd. has approved the contents of this Management Discussion and Analysis as of the date of this report.

Additional Information

Additional information concerning the Company and its operations is available on SEDAR at www.sedar.com and on the Company website at www.comstock-metals.com

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Comstock Metals Ltd. Management’s Discussion and Analysis For the nine months ended June 30, 2022

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Cautionary Note Regarding Forward Looking Statements

This MD&A includes some statements that may be considered “forward-looking statements”. All statements in this discussion that address the Company’s expectations about future exploration and development are forward-looking statements. Although the Company believes the expectations presented in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration successes, availability of capital and financing, and general economic, market, and business conditions. Readers are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements.

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