Comstock Inc.

Ladies and gentlemen, welcome to Comstock's first quarter 2023 business results webcast. This is Will Mays with RB Milestone. For those of you newer to the story, Comstock commercializes innovative technologies that contribute to global decarbonization through three primary operating units. Comstock Fuels, which converts biomass into net zero renewable fuels. Comstock Metals, which recycles e-waste and critical metals, and Comstock Mining, which holds significant gold and silver resources in target-rich districts in Nevada and plans to dramatically expand reserves through generative AI-enabled mineral discovery. Comstock shares are listed on the New York Stock Exchange under the symbol L-O-D-E. Join us today as the company's executive chairman and CEO, Corrado de Gasparas, and COO, William McCarthy, to discuss first quarter results and update to current operations, and we'll also be answering questions at the end of the presentation. If you're interested in asking a question or logged into the Zoom app or web platform, you can submit your questions directly to us in the Q&A module. Please note that this presentation is being recorded today, May 3rd, 2023, and will soon be made available on the company's website at comstock.inc. That's comstock.inc. Today's call may contain forward-looking statements that are subject to risks and uncertainties that may cause actual results, performance, or developments to differ materially from those contained in the statements that are not guarantees of future performance of the company. No assurance can be given that any of these events anticipated by the forward linking statements will occur, or if they do occur, what benefits the company will obtain from them. Also, some risks and uncertainties may be out of control of the company. Comstock has a full disclaimer contained in their presentation. Lastly, RBMG is not a registered investment advisor or broker dealer. For more information, please visit rbmilestone.com. And now it's my pleasure to introduce Mr. Corrado de Gasparas and Mr. William McCarthy. Gentlemen, the stage is yours.

Thanks, Will. And good afternoon, everyone. And welcome to Comstock's first quarter 2023 report. As Will just mentioned, you have both myself and Billy McCarthy, our COO, on the call today for this business update and the Q&A that will be following the call. Our business update will include covering the information from today's press release and our recently filed quarterly report on Form 10-Q. We actually received some excellent feedback on the quality of our last call and our annual shareholder letter. We're very happy to formally announce, as you just heard, that we've engaged RB Milestone Group, or RBMG, to support our investor relations effort and welcome Will Mays and the rest of the RBMG team to Comstock. As you just heard, Will and his team are now facilitating these calls, and they'll also be enhancing our investor communication efforts by directly interfacing with you and soliciting more and better feedback so that we can both improve our communications and our overall effectiveness. They'll also be working with us to enhance and expand our overall shareholder base. Let me start today with the corporate side of the update. As you saw last week, we closed on the 2,500 Peru facility and were substantially complete with the sale of that facility to American Battery Corp. With $18 million in cash already received, 12 million of which was used just last week to buy the building, and another 8 million plus on its way, 3 million of which that is scheduled for next week, and the rest coming in as we liquidate the 10 million ABML shares that we have in our possession. We expect all of this to be completed over the next few months, netting us well over 14 million in net cash proceeds. We're also on track now to exceed our overall $30 million target for this year's asset sales. Let me also acknowledge that we have not sold any additional Comstocks shares since February. And it's these asset sales that avoid us having to sell stock at these still very low levels. The outstanding share count today is the same. Well, actually, it's a little lower than when we reported on March 16th. And we all appreciate and can even see how meaningful this fact pattern is to our share performance. Staying with the asset sales, we are now seeing a significantly greater level of interest in our Silver Springs assets, where we own land and water rights and have a meaningful investment in the Opportunity Zone Fund. Interest from potential buyers of these properties has actually skyrocketed since Tesla and Redwood Industries recently announced both multi-billion dollar expansions in the immediate proximity of Silver Springs. And Microsoft Corporation purchased land directly in Silver Springs. For those of you that didn't hear the specifics, Tesla's not only building an entirely new battery plant next to the existing Gigafactory, But they've also announced that they're manufacturing all of their semi trucks here as well. This is all just minutes from our properties in Silver Spring. We now see a much higher probability for closing multiple Silver Springs transactions this year. And that positions us again to meet and possibly exceed our 2023 objective of $30 million in cash proceeds. So our balance sheet has and continues to strengthen. and as we move faster and better ahead with all of our businesses. As I mentioned in our last update, 2021 and 2022 were about business integration, technology development, and technology readiness. We discussed our readiness for all of our businesses on our last call, including the notion of technology readiness levels, or TRLs. We're currently at TRL 6 for fuels, and we are very excited by the major advances we've made in fuels that we've made in GenMAT, and I'll discuss some of that more later. We've also positioned and advanced our metals and mining businesses. and all the while lined up new and critical strategic technical partners and prospective customers. In our estimate, just our known and ready technologies could easily justify more than a tenfold increase in our stock price based on the current values of comparable companies. And I think we're finally just now starting to see some of that traction. But unlocking that full value comes down to successfully commercializing and using our technologies to generate revenue and earnings while successfully marketing these technologies and the value they bring to our shareholders. We are committed to this end, and we are even more emboldened by the growing number of current prospects and the real market momentum our businesses are gaining. We also recently engaged a professional marketing firm in addition to RBMG. In that context, we are now preparing presentations for each of our businesses, and we are looking forward to sharing all of this at our June Upload 23 event. This event will showcase Comstock's overall system, each of our businesses, their leadership teams, and doing all in a way that will convey a deeper, better understanding of us and our value propositions and greatly expand on the information that we've released to date. Look for more information and registration details for Upload 23 to be released in the upcoming weeks. Let me summarize for each business where we currently are, what our next key 2023 objectives are, and our efforts towards generating new revenues. First, with Comstock Fuels. It's truly remarkable that most renewable fuels draw from the same feedstock pool, typically vegetable oils. But this total supply of oils can only meet a small fraction of the rapidly growing demand. Our technologies unlock this major bottleneck by converting abundant but underutilized woody biomass into bio intermediates like cellulosic sugar and biolium for refining into renewable fuels. Our team recently demonstrated commercial readiness with unprecedented yields of 100 gallons of fuel per dried ton of feedstock on a gasoline gallon equivalent basis. This has caught the attention of a large number of significant industry players, and we are currently engaged with these prospects. We look forward to the execution of one or more license agreements with these more than technologically sophisticated customers this year. Just one of these licenses could create more than 20 years of recurring royalty revenue on top of material upfront engineering fees. Let's move to Comstock Metals. Here the world seems highly focused on electrification to reduce reliance on fossil fuels, including, of course, the growing electric vehicle fleet and their lithium-ion batteries. We're positioned for this market, but it's still a ways off. We also see a much near-term opportunity from the growing number of expiring photovoltaic systems coming out of these large solar fields across the country. And frankly, especially here in Nevada, Arizona, and other parts of the western territories. These materials are now going into landfills and creating a major hazard to the environment. Fortunato, our new president for metals, has hit the ground running, and we have a better plan for deploying our redesigned pilot plant that will commence crushing, conditioning, extracting, and recycling of these end-of-life solar panels first. We've selected the new site and we have commenced pre-permanent activities. We've also coordinated the relocation of our existing system here to Nevada. We believe this modified model is safer and faster. We will receive tipping fees for these materials, that is upfront revenues, and then we will efficiently process them for profit. Fortunato is already directly engaged in sourcing waste solar panel materials or processing, and we now see a clear and faster path to achieving positive cash flow in 2024. Securing these revenue-generating supply commitments is the key objective for 2023, as well as advancing our permitting or processing. Now let me move to Comstock mining. Not surprising to us, gold has strongly crossed the $2,000 mark to 2030, last I checked, and most analysts see this positive upward trend for both gold and silver continuing. We recently enhanced our mining platform with 2SK1300 technical reports, confirming measured indicated resources of over 600,000 ounces of gold and nearly 6 million ounces of silver, plus additional inferred resources of an additional 300,000 ounces of gold and over 2.5 million ounces of silver. Our mining claims cover 12 square miles of property, including 6.5 miles of continuous mineralized strike, yet the ounces that I just mentioned reside in only a very small fraction, say less than 10% of our overall mineralized properties. We do believe that our mining properties collectively contain billions of dollars of potentially recoverable metals, and our plan is to unlock that value intelligently. We will use human intelligence, of course, but also artificial intelligence, AI, if you will. How are we going to do that? Well, first, by combining our massive amount of historical and current geological data with additional hyperspectral orbital imaging data and powerful predictive AI-driven analysis that will expand on and validate geologic trends in our district and enable new mineral discoveries and mineral expansions. Ultimately, just for a fraction of the cost of conventional exploration. Look, conventional exploration, drilling and mining is very risky, expensive, and frankly, insufficient to achieve our goals and the real potential that we see in this district. Believe me, I know I've lived it for 13 years and many of you have lived it with me, but we own one of the largest mineral districts in one of the largest, best mineral jurisdictions in the world, right here in Nevada. GenMAT's hyperspectral imager and satellite is already built and ready for operation. Our satellite is targeting its launch on the SpaceX Falcon later this year. Once all government improvements are secured and the space frees up, it represents one of the most powerful hyperspectral systems to be launched into space and will enable us to extract relevant chemical and physical information for both high-precision mineral prospecting and site-specific recovery. This is what interested us in GenMAT to begin with And after two years of development, we're almost there. Our 2023 efforts here will include launching the satellite and imager, enhancing our data, integrating our analysis, and ultimately our ability to refine and better pinpoint our targets as we expand and integrate GenMats AI into our predictive analysis. We can then ground truth those predictions with drill rigs and proven minerals. This will meaningfully advance us towards the expansion and full economic feasibility of our existing Comstock resources, but it will simultaneously create a global capability for the effectiveness and efficiency of critical mineral discovery and extraction. Again, starting for us here on the Comstock and then the rest of the world. Let me expand further on GenMAT. as their AGI for physics goes way, way beyond the mineral discoverer applications that I just discussed for mining. The market is now very much aware of general artificial intelligence, or AGI, if you will, with daily news on how these large language models are already impacting and affecting businesses. Gen Mat was pioneering this three and four years ago. And we at Comstock also recognized this acceleration in disruptive technology over two years ago. What I would like everyone to understand is that Gen Mat is building and commercializing an artificial general intelligence for physics as compared to these other language-based models. Our AI is science-based. This AI is physics-based, not language-based. GenMAT AI has already simulated critical properties of known materials. This is physics at the atomic and quantum mechanical level. This was done during calibration testing late last year. Remarkably, GenMAT's AI is rapidly evolving its ability to simulate new materials with predictable desired characteristics. GenMAT recently announced a customer showcase planned for later next month since its AI models can now be deployed. commercial use in 2023 genmat will elevate new material simulation capabilities to commercial readiness for us again that means trl6 by deploying the system with early adopting customers for real world applications look our our investment in genmat most certainly stands alone but i believe it's becoming more and more apparent that it also double dips as a crucial component of our own ongoing innovation strategies and business developments We are focused on using this entire platform, fuels, metals, physics-based AI, and mining to break new ground and generate exponential growth and value. Here at Comstock, we operate as one system, with each business having fully dedicated leaders, teams, and plans for significant growth. On June 28th, upload 2023, enables us to showcase this first to you, and then as we proceed on a year-long marketing campaign for all of our stakeholders. This is designed to expand awareness of our technologies and services and show what we will deliver to our customers. It's also designed to inform our shareholders of our existing and potential value. We believe the value creation and recognition here will be enormous. We're also looking forward to our AGM on May 25th. This will be a virtual and downsized, mainly due to upload 23. And we ask you all to vote your proxies online as soon as practical. If you need any assistance in voting these proxies, please reach out to Zach Spencer, our corporate secretary, who will for sure assist you. My last point of emphasis before we take questions is that 2021 and 2022 were about technology developments and readiness. Our system is built on the TRLs, for our IP. 2023, however, is all about commercializing that IP. Well, let's stop there and turn into questions. Billy and I will both be taking questions today. Can you give us our first question?

Sure. Well, thanks, Corrado. That's a very informative presentation. As Corrado mentioned, we're now moving into the Q&A portion of the call. As a reminder, if you'd like to submit a question, you can do so directly in the Q&A module here on your Zoom app. We have had several questions submitted prior to the call. So let's get started. The first question is regarding asset sales. The question, the investor asks, when will the sale of the 2,500 Peru be fully closed?