Comstock Cancels Private Placement Announced on August 24, 2012

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 29, 2012) - Comstock Metals Ltd. (TSX VENTURE:CSL) ("Comstock" or the "Company") is cancelling the Private Placement that was announced on August 24th pending the release of new assay results recently received form the Company's follow up trenching program on its QV claims in the White Gold District of the Yukon. The proposed financing was to be a non-brokered private placement of up to 8,000,000 Units at a price of $0.25 per Unit for aggregate gross proceeds of $2,000,000.

The Company feels that the preliminary assay results from the QV trenches have changed its view of the project, and in the interests of all shareholders management has decided to cancel the proposed financing at this time. The Company recently closed a non-brokered private placement as also announced on August 24^th and raised gross proceeds of $2,996,050.

Gord Davidson, P.Geo., has reviewed the technical information in this News Release.

About Comstock Metals Ltd.

Comstock Metals is focused on two principal projects: the QV Property in the Yukon Territory, and the Corona Property in Mexico. The QV Property lies within an area of 494 claims covering 10,374 hectares (25,634 acres) within the prolific White Gold District in the Yukon Territory about 70 kilometres south of Dawson City that were optioned from Shawn Ryan, a Yukon-based prospector responsible for the discovery of two of the prominent gold discoveries in the White Gold district: Kinross Gold's 1.5 million ounce Golden Saddle deposit and Kaminak Gold's Coffee projects.

The Company has also earned a 60% interest in the Corona Property in Mexico and can earn an additional 15% interest from Golden Goliath Resources (GNG) to hold a 75% interest by completing a positive bankable feasibility study by December 31, 2017. Comstock's Corona Gold-Silver project is located in the prolific Sierra Madre Occidentale in Chihuahua, Mexico. The Company completed a drill program in the spring of 2012. The drill program discovered two new zones of gold and silver mineralization. Please refer to the website at http://www.comstock-metals.com/projects/corona_gold_silver/ for details. Previous reverse circulation drilling identified both bulk tonnage and high-grade vein type gold/silver targets, some of which the Company plans to diamond drill. For the Corona Gold Silver Project location, please visit the following link: http://comstock-metals.com/_resources/Corona-SMO.jpg

To learn more, please visit the Company's website at: www.comstock-metals.com

COMSTOCK METALS LTD.

Rasool Mohammad, B.Sc. (Mining), President & CEO

This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Disclaimer for Forward Looking Information

This news release includes forward looking statements that are subject to assumptions, risks and uncertainties. Statements in this news release which are not purely historical are forward looking statements, including without limitation any statements concerning the Company's intentions, plans, estimates, expectations or beliefs regarding the future. Although the Company believes that any forward looking statements in this news release are reasonable, there can be no assurance that any such forward looking statements will prove to be accurate. The Company cautions readers that all forward looking statements, including without limitation those relating to the Company's future operations and business prospects, are based on assumptions none of which can be assured, and are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those indicated in the forward looking statements. Readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance on forward looking statements.

Any forward looking statements are made as of the date of this news release, and the Company assumes no obligation to update the forward looking statements, or to update the reasons why actual events or results could or do differ from those projected in the forward looking statements. The Company assumes no obligation to update any forward looking statements, whether as a result of new information, future events or otherwise.