Assets and Liabilities Held for Sale

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

As of September 30, 2020 and December 31, 2019, the Company had assets with a net book value of $6.3 million and $10.5 million, respectively, which met the criteria to be classified as assets held for sale. Those criteria specify that the asset must be available for immediate sale in its present condition (subject only to terms that are usual and customary for sales of such assets), the sale of the asset must be probable, and its transfer expected to qualify for recognition as a completed sale generally within one year.

Assets held for sale include:


	September 30, 2020		December 31, 2019
Silver Springs properties:
DTSS (Land)	$	3,589,876	$	3,589,876
Industrial Park (Land and water rights)	2,738,462		2,738,462
Daney Ranch (Land and buildings)	—		2,146,575
Lucerne Mine (Mineral rights and properties) (Note 20)	—		1,558,787
Gold Hill Hotel (Land and buildings)	—		478,366
Total assets held for sale	$	6,328,338	$	10,512,066

Liabilities held for sale include:


	September 30, 2020		December 31, 2019
Lucerne Properties (Reclamation liabilities)	$	—	$	1,019,705
Total liabilities held for sale	$	—	$	1,019,705

Assets Held for Sale - Silver Springs, Nevada

On September 26, 2019, as amended on November 30, 2019, December 26, 2019, March 31, 2020, June 30, 2020, and October 1, 2020, the Company entered into agreements with Sierra Springs Enterprises Inc ("SSE"), a subsidiary of SSOF (Note 23), to sell two properties in Silver Springs, Nevada (the "Silver Springs properties"). The agreements include the sale of 98 acres of

industrial land and senior water rights for $6.5 million, and 160 acres of commercial land along with its rights in the membership interests in Downtown Silver Springs LLC (“DTSS”) for $3.6 million. The carrying value of the 160 acres of commercial land and DTSS membership rights were adjusted to the contract value of $3.6 million less estimated costs to sell, resulting in an impairment of $0.5 million, charged to other expense in the consolidated statements of operations as of December 31, 2019. As of September 30, 2020, the Company received $0.4 million in escrowed deposits from SSE for the sale of these assets and expects the sales to close during the fourth quarter of 2020. Proceeds from the sale of the Silver Springs properties must satisfy certain obligations due under the terms of the Promissory Notes described in Note 11.

Properties No Longer Classified Held for Sale

The Company had classified the Daney Ranch as an asset held for sale at December 31, 2019. On September 1, 2020, the Company, as lessor, entered into an agreement to lease the Daney Ranch for $9,000 per month, with lease payments applicable to the purchase price through an option to purchase the property for $2.7 million, if closed by September 1, 2022. The lease is extendable for a third year, with lease payments increasing to $10,000 per month, with just the last twelve months of lease payments applicable to the purchase price, if closed by September 1, 2023. As a result of this agreement, the property is included in properties, plant and equipment on the condensed consolidated balance sheets at September 30, 2020. Upon the change in status, the Company recorded depreciation expense of $0.5 million included in real estate operating costs on the condensed consolidated statements of operations, to recognize the depreciation that would have been recognized had the property not been held for sale.

On September 8, 2020, the membership interest purchase agreement with Tonogold closed (Note 20), and the Company transferred 100% of the membership interests in Comstock Mining LLC, the entity that owns the Lucerne Mine mineral rights and properties, to Tonogold. The associated assets and liabilities held for sale were removed from the condensed consolidated balance sheets.

The Company had classified the Gold Hill Hotel as an asset held for sale at December 31, 2019. On September 28, 2020, management decided to retain the Gold Hill Hotel as an income-producing property, and canceled its listing for sale. As a result, the property is included in properties, plant and equipment on the condensed consolidated balance sheets at September 30, 2020. Upon the change in status, the Company recorded depreciation expense of $0.2 million included in real estate operating costs on the condensed consolidated statements of operations, to recognize the depreciation that would have been recognized had the property not been held for sale.