Comstock Metals Ltd.: Recap of 2018 and looking forward to 2019

Dear Shareholders,

Although our current share price is disappointing, 2018 was both a busy and productive year for Comstock Metals Ltd.

We re-examined our mission statement and objectives last winter. In addition to focusing on our gold projects at QV (Yukon) and Preview SW (Saskatchewan), we decided to also invest in potential lithium and cobalt opportunities.

In mid-May, with the support of our board and largest shareholders, including Select Sands (SSV.V) (with a 24.6% stake) and Gracetree Investments (with a 17.2% stake), I was appointed interim-CEO and President for an initial period of one year.

In July, Comstock closed an approximately C$600,000 private placement of units at a price of C$0.05 per unit, with each unit consisting of one common share in Comstock as well as a full warrant allowing a warrant holder to buy an additional share of Comstock at C$0.10 within 24 months after the closing date of the placement (expiring July 3rd, 2020).

Comstock used $400,000 of the proceeds from the private placement to invest in Alberta based E3 Metals Corp. (symbol: ETMC.V) in which Comstock acquired 1 million units at a price of C$0.40 per Unit. Each unit in E3 Metals consisted of 1 common share and a full warrant, allowing Comstock to purchase an additional share at a price of C$0.40 for an initial period of four months (now expired), increasing to C$0.60 until August 20, 2019.

This initial 1 million share acquisition gives Comstock a nearly 5% stake in E3 Metals (with the potential to acquire an additional 4% plus equity position in E3 Metals if the warrants are exercised, assuming no material additional financing takes place in the interim). As part of our arrangement with E3 Metals, I joined E3 as a strategic advisor. There is more about E3 Metals later in my letter.

On December 3, Comstock announced that it monetized two non-core properties; the Old Cabin gold project in Ontario was sold for $96,000, while Fresnillo Plc (FRES.L) exercised its option to purchase the Corona project in Mexico in which Comstock had an interest, and for which Comstock received US $164,000 (approximately C$215,000) in cash. Comstock still retains a 0.5% Net Smelter Royalty in Corona.

Rawhide - Cobalt Silver Property in Ontario's Cobalt camp

We entered into an option agreement in April to acquire 100% of what is now Comstock's Rawhide cobalt-silver property located in Ontario's Cobalt camp.

Comstock's Rawhide cobalt/silver property is an early stage exploration project, which has already been the subject of sampling and trenching programs. Previous operators completed 650 metres of drilling in the 1950's and 1960's. The holes that were drilled as part of that exploration program were relatively shallow (the average depth was less than 50 metres), but did result in some high-grade silver, copper and cobalt assays. During the past summer, Comstock executed a follow up surface exploration program on Rawhide which returned promising values for cobalt, copper and silver. Please see our press release dated September 18, 2018 for further details.

Preview SW Gold Project

With respect to our Preview SW gold project in Saskatchewan, last month Comstock completed a diamond drilling program at the Preview North zone (the "North Zone" or "Preview North"), following up on positive exploration results from its 2017 winter and summer exploration programs. The drilling program was designed and implemented by our project geologists at APEX Geoscience Ltd. during late November and December 2018. The program was designed to test the interpreted down-plunge extension of shear hosted, gold-bearing vein zones at Preview North, which is located within the same major northeast-oriented structural trend that hosts the Preview SW deposit. We expect to start seeing assay results from the 2018 program next month.

The 2018 drilling program at Preview North focused primarily on testing the down-dip and down-plunge continuity of gold mineralization previously identified during the 2017 winter and summer programs, and from 2013 drill hole PR13-183. Results from the 2017 drilling at the Preview North zone included 87.16 g/t Au over 3.25 m core length starting at 41.15 m depth, 5.08 g/t Au over 16.7 m core length starting at 23.3 m depth, 16.19 g/t Au over 5.0 m core length starting at 51.0 m depth, and 1.21 g/t Au over 18.5 m core length starting at 42.5 m depth. Please see our press releases dated September 28, 2017 and November 9, 2017 for further details.

The Preview North zone is located approximately 2.6 kilometres north of the Preview SW deposit, which hosts Indicated resources containing 158,300 ounces of gold (2.61 million tonnes grading 1.89 g/t Au) and Inferred resources containing 270,800 ounces of gold (5.70 million tonnes grading 1.48 g/t Au)1, both based on a 0.50 g/t Au cut-off grade (see Comstock's news release dated September 14, 2016). The main Preview SW deposit is comprised of several sub-parallel northeast-trending gold-bearing quartz-sulphide mineralized structural zones, 550 m in strike length and totalling 150 m in width. Preliminary metallurgical test work indicates total gold recovery in concentrates ranged from 90% to 93% (see Comstock's news release dated January 23, 2018). In addition, there are six additional known gold zones on the 853-ha property with only limited drilling.

1 Preview SW Mineral Resources outlined in 2016 NI-43-101 Technical Report, Preview SW Gold Project, La Ronge, Saskatchewan; the report can be found on Comstock's website (www.comstock-metals.com) or on SEDAR (www.sedar.com)

QV Gold Project

We were also pleased with the developments surrounding Comstock's QV Gold project located in the prolific White Gold district in Canada's Yukon Territory, approximately 70 kilometres south of Dawson City, 44 kilometres northeast of Goldcorp Inc.'s (G.TO, GG) Coffee project, and across the Yukon River from White Gold Corp.'s (WGO.V) Golden Saddle and Arc deposits. According to public filings, Agnico Eagle Mines (AEM.TO, AEM) and Kinross Gold (K.TO, KGC) each own about 19.5% (approximately 39% in total) of White Gold Corp., which has been releasing significant drill results since the fall of 2018 for their White Gold and JP Ross properties, located immediately south and east of Comstock's QV project (see White Gold Corp.'s news releases dated October 16, 2018 and December 6, 2018).

While no active exploration work was conducted at QV in 2018, Comstock completed a successful 6-hole diamond drilling program at the project in the fall of 2017, targeting orogenic style gold mineralization at the VG zone. Results from the 2017 program included 1.42 g/t Au over 45.5 m core length starting at 67.5 m down hole in hole QV17-018, which successfully confirmed the VG deposit extends more than 125 metres down dip from where the previous diamond drilling program ended. Please see our press release dated December 18, 2017 for further details.

To date, Comstock has completed 4,300 metres of diamond drilling in 23 drill holes at QV, 17 of which formed the basis for a maiden Inferred Mineral Resource containing 230,000 ounces of gold (4.4 million tonnes grading 1.65 g/t Au)2 at a 0.5 g/t gold cut-off (see Comstock's news release dated July 8, 2014). The VG deposit remains open to expansion and is proximal to other untested sub-parallel structures. The VG zone has similar geology and style of mineralization to White Gold Corp.'s Golden Saddle deposit, located 11 kilometres to the south. Additional promising targets exist at the QV Project, with potential for the discovery of significant intrusion related and/or orogenic gold mineralization.

2 QV Inferred Mineral Resource outlined in 2014 NI-43-101 Technical Report, QV Project, White Gold District, Yukon Territory; the report can be found on Comstock's website (www.comstock-metals.com) or on SEDAR (www.sedar.com)

Comstock's plans for 2019

Comstock hasn't finalized its exploration plan or budget for 2019 as we are waiting for the results from last month's drilling program at Preview SW North Zone. Depending on the drilling results and available financing, Comstock is looking at further drilling and exploration on a number of projects in 2019 including its Preview SW project, its Rawhide property (cobalt/silver), as well as possible further exploration work on QV, whether on its own or in conjunction with one or more other parties.

Based upon our track record to date, including the results obtained from our winter and summer 2017 drilling in the Preview North zone, we remain 'cautiously optimistic' about the upcoming drill results from Preview.

Comstock was also recently approved by the government of Saskatchewan's Targeted Mineral Exploration Incentive scheme and may receive up to a C$50,000 incentive payment from the government of Saskatchewan towards its current Preview drilling program which began in late November 2018.

With respect to Comstock's QV Gold project, that deposit is located in the heart of the Yukon's White Gold district which has become an area being actively explored by many of Canada's leading mining companies, including Agnico-Eagle and Kinross (through White Gold Corp.) as well as Goldcorp and Victoria Gold (VIT.V).

On December 23, 2018, Comstock received an exploration permit for the Rawhide cobalt-silver project in Ontario which is valid for 3 years. Comstock is in discussions with the two First Nations communities who have been active in the area where Rawhide is located. Comstock is considering a maiden drill program at Rawhide to be conducted later in 2019, subject to available financing.

E3 Metals Investment - Joint Venture and Equity Investment

We have been quite pleased about Comstock's joint venture and equity investment in Alberta based E3 Metals Corp. (ETMC.V). See E3 Metals' website (www.e3metalscorp.com) and news release dated August 8, 2018 for more details.

E3 Metals has been rapidly advancing its three petro-lithium projects located in the Leduc Reservoir, Alberta. The Clearwater, Rocky and Exshaw projects have combined Inferred Resources totaling 6.7 million tonnes lithium carbonate equivalent (from 27.4 billion cubic metres of brine formation water with a weighted average grade of 72.7 mg/L)3. To put that in perspective, according to E3 Metals, this makes them the 5th largest in the world for total lithium resources held by publicly listed companies4. As well, E3 Metals has been advancing its proprietary lithium extraction and concentration technology (see E3 Metals' news release dated December 4, 2018).

Given the anticipated expansion in demand for lithium in battery manufacturing in the next number of years, and given the current spot market (China, Japan and Korea) for battery grade lithium carbonate (at about $12,500 -$14,500U.S. per tonne and lithium hydroxide at about $15,000 to $17,000 US per tonne5). Comstock believes that E3 Metals has great potential. Indeed, should E3 Metals be successful in proving its extraction and concentration technology on a commercial scale, it is anticipated Comstock's investment in E3 Metals could demonstrate a very healthy return over the next 3 to 5 years.

E3 Metals currently has about 21 million shares outstanding, of which Comstock owns 1 million common shares. Comstock's additional 1 million common share purchase warrants can be exercised to acquire an additional million common shares in E3 Metals for C$600,000.

Assuming E3 Metals continues to prove out its proprietary petro-lithium technology (including building a prototype plant), 2019 and 2020 could be significant years for E3 Metals' petro-lithium resource and technology.

3 Combined Inferred Mineral Resources outlined in NI 43-101 reports for Clearwater, Rocky and Exshaw Projects; the reports can be found on E3 Metals' website (www.e3metalscorp.com) or SEDAR (www.sedar.com)

4 E3 Metals Corp. Corporate Presentation: Unlocking a New Source of Lithium in Alberta, October 2018

5 Fastmarkets MB (https://www.metalbulletin.com/lithium-prices-update) as of January 4, 2019 based upon spot prices from the London Metals Exchange

Conclusion

Comstock has streamlined its asset portfolio and monetized two non-core exploration properties which helped increase its cash position. We are now focused on our QV deposit (gold) in the Yukon Territory, Rawhide project (cobalt/silver) in Ontario and Preview SW (gold) in Saskatchewan, as well as our joint venture and equity invest in E3 Metals (petro-lithium). We are actively seeking ways to increase the value of our assets and our company for shareholders.

Comstock is currently waiting for the assay results from the drilling program carried out last month at our Preview SW gold project. We anticipate that results should become available later this month or next month.

Despite a very depressed share price, and a very challenging precious metals market this past year, we are very pleased with the progress the company made last year. We believe that even with a limited budget, we have positioned Comstock well to take advantage of the investments we have made during the past few years.

We hope that 2019 will be an exciting year for our company. On behalf of management and the directors of Comstock, we wish all of our shareholders a very happy, healthy and prosperous New Year!

Yours truly,

Comstock Metals Ltd.

Steven H. Goldman,

Interim President & CEO

Qualified Persons

Kristopher Raffle P.Geo., Principal of APEX Geoscience Ltd. and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical disclosure in this letter.

Forward Looking Statements

This letter includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Such statements include statements regarding the drill program results on the Preview SW Gold Project, the QV project in the Yukon, possible future exploration programs at the Rawhide project in Ontario and the future of E3 Metals' technology and petro-lithium resource. These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include but are not limited to: the expected benefits to the Company relating to the exploration conducted and proposed to be conducted at the Preview SW project, QV project, Rawhide project, and the future technological or resource development by E3 Metals Corp.; failure to expand or identify any additional mineral resources; the preliminary nature of metallurgical test results; uncertainties relating to future financing; fluctuations in securities and currency markets and commodity prices; change in national and local government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with the business of mineral exploration (including environmental hazards, industrial accidents, unusual or unexpected formations pressures, cave-ins and flooding); employee and First Nations' relations; availability of necessary licenses, permits and approvals; the unlikelihood that properties that are explored are ultimately developed into producing mines; geological factors; actual results of current and future exploration; changes in project parameters as plans continue to be evaluated; title to properties; and those factors described under the heading "Risks and Uncertainties" in the Company's most recently filed management's discussion and analysis. Although the forward-looking statements contained in this letter are based upon what management of the Company believes to be reasonable assumptions, there can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward-looking information, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements.

Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Release.

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