Comstock Inc. (NYSE:LODE) experienced a notable after-hours decline of 13.6% on Wednesday following the company’s announcement that it plans to conduct an underwritten public offering of its common stock.
The mining and clean energy technology firm said the proceeds from the offering are intended to cover a number of corporate and project-level needs. Specifically, the company indicated funds would be used to finance capital expenditure requirements tied to Comstock Metals LLC’s second industry-scale facility, to develop a refining process and solution, to accelerate site selections, and to support growth in the Metals market. Comstock added that any remaining proceeds would be allocated to general corporate purposes.
In the filing, the company identified Titan Partners, a division of American Capital Partners, as the sole bookrunner for the planned offering. Under the agreement with the underwriter, Comstock plans to grant a 30-day option to purchase additional shares equal to as much as 15% of the offered shares, a provision intended to cover potential over-allotments.
The company also cautioned that the offering is subject to market conditions and other factors. The announcement stressed that there is no assurance regarding whether or when the offering will be completed or what the final terms might be.
Comstock is focused on technologies that enable extraction and conversion of natural resources into reusable metals. The company identified silver, aluminum, gold and other critical minerals among the outputs of its processes, and said these efforts are primarily sourced from end-of-life photovoltaics.
The market reaction following the disclosure reflects investor sensitivity to announced capital raises and the uncertainties that accompany planned public offerings. The 30-day over-allotment option and the stated uses of proceeds were highlighted in the company’s description of the transaction mechanics and intended allocations.
Standalone summary: Comstock disclosed an underwritten public offering to fund expansion and refining efforts for Comstock Metals, naming Titan Partners as sole bookrunner and granting a 30-day option for up to 15% additional shares; the offering is conditional on market factors and shares fell 13.6% in after-hours trading on Wednesday.