GenMat investment. Comstock Mining has agreed to purchase an additional 5% of its 45%-owned technology development partner, Quantum Generative Materials LLC (GenMat), for $50 million. Comstock has been working with GenMat for roughly 6 months and executed a transaction in June that provided founders equity for its work and committed it to funding the first phase of a two-year plan. Comstock will provide an initial $15 million in the form $5 million in cash and 3 million shares over the next six months, and an additional $35 million upon GenMat achieving key development milestones. Mr. Corrado De Gasperis, Executive Chairman and CEO of Comstock Mining, is expected to chair GenMat’s board of directors that will include GenMat’s three founders and three Comstock representatives.Application across business lines. GenMat is developing a proprietary quantum operating system for use in various applications. Comstock is focused on applications that accelerate development of new clean technologies. Comstock has secured exclusive rights to use GenMat’s quantum technologies and, for example, intends to use GenMat’s platform to enhance its extraction and refining of lithium and other electrification metals and in the design of improved battery components.Focusing on the strategic value. While a $50 million investment for a 5% stake implies a GenMat valuation of $1 billion, we think it represents Comstock's aggregate capital commitment for a 50% interest and GenMat remains in stealth mode making it difficult to establish a comparable peer group for purposes of establishing a relative valuation. Moreover, the market could assign more weight to a valuation once it is validated upon another investor deploying capital at similar terms. For now, we think investors should focus on the potential strategic value to Comstock’s growth.Rating is Outperform. GenMat’s technology could be helpful in providing a competitive advantage across Comstock's existing and planned businesses, including mining, battery recycling, strategic metals recovery, cathode production, and carbon capture and utilization. Comstock Mining's recent addition to the Russell Microcap Index could enhance Comstock's capital markets visibility and broaden its investor base. Read More >>