Comstock Inc.

Ladies and gentlemen, welcome to Comstock Inc's 2022 First Quarter Business Results Webcast. Here is Comstock Inc's Executive Chairman and CEO, Mr. Corrado De Gasparis.

Good morning, everyone, and welcome to our First Quarter Update. I'll provide a business update, including the information in our press release from this morning and from our quarterly report filed on Form 10-Q last night. If you don't have a copy of today's press release, you'll find a copy on our website, www.comstock.inc, at the top of the investor page in the newsroom section. Our Form 10-Q is also available on the website on the investor page under SEC filings, and also via EDGAR on www.sec.gov. Please let me remind you that we will make forward-looking statements on this call, including specific outlooks for our Biolium and Linoco businesses and the progress on our asset sales. Please understand that any statements related to matters that are not historical facts may constitute forward-looking statements. Our statements are based on the current expectations and are subject to the same risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the previous reports filed by the company and the SEC and in this morning's press release and all forward-looking statements made during this call are subject to those same and other risks that we can't identify. Once we complete the prepared remarks, Zach will accept and direct all questions. Let me briefly start with our financial position. Our recently reported assets totaled over 115 million, which includes the full consolidation of our Linoco business that we just acquired the substantial majority of in late December. And our balance sheet represents the foundation of our decarbonizing assets and our deep portfolio of intellectual property. This includes our IP for producing carbon neutral cellulosic fuels, and especially our breakthrough biolium product. with multiple granted patents and pending patent applications. It also includes our cellulosic fuel pilot and demonstration facility located in Wisconsin and currently being expanded to further demonstrate the production of carbon neutral pulps, paper, cellulosic sugar, ethanol, and biolium. It includes our IP for lithium ion battery crushing, separating and extraction, where we have now filed several provisional patent applications. And Linaco state-of-the-art 137,000 square foot battery metal recycling facility here in Nevada, now cleaned, upgraded, prepared, and deeply into the permitting process. And also when it goes actual battery crushing and separating system currently being commissioned in Wisconsin and scheduled to be in Nevada later this year. Our balance sheet also includes our strategic investments, all of them at cost, like quantum generated materials and our equity in the Sierra Springs Opportunity Fund. and it includes our mineral properties also at cost and now including lucerne properties again along with the rest of the 10 000 acre mineral district for which we are evaluating monetization options as well as our other real estate that we have already contracted for sale as you'll have noticed in the 10q these numbers now exclude mcu reflecting the disappointment in the philippines that we discussed just last month The real estate assets contracted for sale and our Sierra Springs investment together represent nearly 30 million in fair value with 15 million in proceeds expected here in the near term. At the end of April, we had 69.9 million shares outstanding with our current market value trading below our adjusted book value and well, well below what we see as our fair value. We're working very hard and our near term and intermediate objectives that I'm going to outline today are designed to unlock this value. In fact, we're focused on delivering billions of dollars in future value from our renewable energy businesses. Excuse me. With our fuels, battery metal and engineering integrations now complete, our entire organization is operating under one goal, which is to accelerate these high growth decarbonizing technologies while unlocking the value of our other assets by monetizing them. Our newly integrated assets and teams represent decades of experience commercializing biofuels. We are now physically demonstrating our technology and building the capacity to rapidly enable continued product development for our customers. Our teams have already designed and built Our breakthrough crushing and separating solution for advanced pure highly mineralized black mass from lithium ion batteries and we are currently advancing our existing extraction technology for lithium. When we proved just last year that we were capable of producing a carbon neutral equivalent to petroleum, in addition to the ethanol. We immediately filed a trademark for the name Biolium, and we're continuing to expand an already significant patent portfolio to cover these breakthroughs. As I mentioned on our last call, our senior leadership team will all be on hand later this month at our annual meeting in just a few weeks on May 26 in Reno. Please do register and attend. Registration ends on Friday, where you can meet, speak, and discuss our capabilities, further detail our processes, our technologies, and our products, and discuss our technology and near-term commercialization plans directly with our team firsthand, face-to-face. Let me expand a bit on renewable fuels. As I just mentioned, we have already created and trademarked a breakthrough alternative to fossil crude oil derived from the woody biomass called biolium that can be used in producing drop-in carbon neutral fuels like diesel, like sustainable aviation fuel, leveraging the existing infrastructure. We've also established a near-term goal to commission our first hundred plus million gallon biolium biorefinery by 2025. We've commenced construction on a demonstration facility for production of biolium in Wisconsin. We've commenced site evaluation and selection process, prioritizing target sites with ready access to these available feedstocks. And we've commenced direct discussions for renewable fuel offtake agreements to support our first biorefinery and well beyond. Our broader portfolio of these technologies efficiently converts waste in the form of widely available woody biomass into these advanced cellulosic fuels. We can do this today, operating under existing incentive programs and existing regulations very profitably. When we say waste, we mean sawdust, mill residuals, slash, that no one else is using for high value fuels that work perfectly for us. There is an abundance of this feedstock generated annually in the United States alone. There's twice as much in Canada. So our plans are to rapidly build, deploy, own, and operate a fleet of these advanced carbon neutral extraction refining facilities using these widely available feedstocks. Our two major near-term objectives include operationalizing the demonstration system for biolium in Wisconsin. and announcing our first offtake contract, both which will occur in the second half of this year. Our differences position our fuels business for billions in enterprise value, just based on current comps of public companies with less capable technology, much less carbon impact, and absent the feedstocks to sustain exponential growth. Plus we have the team. Our engineering technology and management teams have extensive experience exploring solutions in the renewable fuels industry, having now designed and built over 20 large industrial renewable fuel facilities over the past 15 years, and also having commercialized breakthrough extracted oils that are widely used in the biofuel industry today. Remembering that just one of our biorefineries alone can produce over 100 million gallons of biofuel per year, including over 80 million gallons of cellulosic ethanol and 30 million gallons of renewable diesel, again, per year, from just 1 million metric tons of woody biomass. Each refinery is expected to produce well over half a billion dollars in annual revenue. Our first offtake agreements will clearly demonstrate our capability and potential, and more importantly, prove the value of potential. Let me now turn to Linoco, where we've made tremendous progress in the past few months, where we've hired our new president, Leo Riera, who has hit the ground running and is already living here in Reno, working from the Linoco facility every day. We've also received and installed our proprietary lithium ion battery crushing and separating system that we are now commissioning in our R&D facility in Wisconsin, and we have already crushed batteries, a huge milestone. We've secured our new 200 acre storage facility in immediate proximity and already commenced the local permitting process on that storage facility. We are on schedule to be producing highly pure black mass in our Nevada facility. And we have just commenced construction of our prototype lithium first extraction system in our R&D facility. And we're scheduled to be producing marketable battery grade lithium carbonate in our battery metal facility in Nevada by the end of Q2 2023. And lastly, we have continued and commence new ongoing discussion with feedstock sources, especially with our storage site now secured. Things are moving fast, as everyone can see. EV registrations continue to explode, having more than doubled in 2021. Even the most conservative estimates for increases in EV demand will likely require about five times more lithium carbonate than the entire lithium mining industry produces today. The conventional recycling process that we are seeing deployed suffer from extremely high, if not total losses, of the lithium. Our technologies meet the reality of this demand shortfall by extracting lithium early and profitably. We will extract lithium immediately after crushing and separating in a manner that maximizes the lithium recovery for reuse and batteries. These market leading yields and additional revenues allow us to be profitable at very low production levels by putting lithium first. Our near-term outlook and objectives for the next six months here include completing the validation of our crushing and separating system this quarter, completing the validation of our lithium extraction process in the third quarter, receiving our written determination for the Nevada recycling facility and our conditional use permit for the newly acquired storage facility also in the third quarter, all of which enable us to start announcing our feedstock supply agreements also during that same third quarter. As I mentioned, our first commercial prototype, the six ton per day crushing and separating system is being commissioned as we speak. We've already demonstrated our ability to safely crush batteries and we'll soon be producing high purity black mass. This positions Lineco to also contribute billions in value, again, based on existing valuations of comparable public companies and our perceived competitive advantages that we're about to start demonstrating. We are now in the markets, speaking with partners, fee stock providers, customers for offtake and investors with great reception. Let me just conclude with the monetization of our other assets. We made real progress here as well during the last three, the first three months of this year. We completed a material transaction with Tonal Gold in the first quarter that paid us over 1.25 million in cash. And we exchanged the 6.65 million note due to us for all of Lucerne properties. So we have regained full ownership of all of the mineral assets covering the entire district. Tony has an option to repurchase discern and will continue reimbursing us to the tune of approximately three plus million this year for the cost of maintaining the mining platform and certain other mining property payments. we're scheduled to close on a daily ranch this quarter with over two and a half million in proceeds and we're confident we will close on the 10 million in proceeds from our silver springs properties later this year. So, in summary. We're commercializing two incredible renewable energy businesses with specific near-term objectives that I just outlined here today, and they're right in front of us. These objectives and the systems we're bringing online will demonstrate credible, operable technology, scalable manufacturing capability, and be complemented with the market validation from new feedstock and offtake agreements, which we're now ready for. Proceeds from the asset sales will support funding our new operating businesses while aligning substantially all of our focus towards cellulosic fuels and lithium ion battery metals. We believe this will unlock the highest and best value to all of our shareholders. Zach, let me stop there and turn to questions. Do we have our first question?

Yes, we have our first question. There are other companies claiming biofuels and offtake agreements. How are you really different from them? Thanks, Zach. Thank you for the question.