Comstock Inc.

Good afternoon, and thank you for joining Comstock, Inc.' 's first quarter, 2026, results and business outlook. I'm Zach Spencer, treasurer and corporate secretary. Today is Thursday, May 7th, 2026. We are streaming live, and this session is being recorded. Our recording will be posted shortly after we adjourn in the investor relations section of our website. Today, we filed our Form 10-Q for the quarter ended March 31, 2026, and issued a press release summarizing quarter end results. Both documents are available on our website. As a reminder, ComSoc is listed on NYSE American with the ticker LODE, L-O-D-E. Joining me today are Corrado DeGasparis, Comstock's Chief Executive Officer, and Judd Merrill, Comstock's Chief Financial Officer. After their prepared remarks, we will take questions. We received more than 25 questions in advance of the call. If you have additional questions during the call, please use the Zoom Q&A window, and we will address as many as time allows. Today's discussion will include forward-looking statements. Actual results may differ materially due to risks and uncertainties detailed in our SEC filings. Full risk disclosures can be found in our filings on the Investor Relations page and on the SEC website. With that, it is my pleasure to introduce our Chief Financial Officer, Jud Merrill. Jud, you may begin.

Thanks, Zach, and good afternoon, everyone. I have a few prepared remarks, and then we'll move on through the slide deck here. The first quarter of 2026 reflects a continuation of the transformation we drove in 2025, but more importantly, it marks the beginning of execution at scale. We are now transitioning from a period of decline by successful balance sheets recapitalization, institutional banking, and capital formation, and expanded and enhanced governance into a period focused on operational development, commercialization, and monetization. Here are a few comments on the first quarter. As we discussed in our last investor call earlier this year, we completed an oversubscribed equity financing of $57.5 million in gross proceeds and $53 million net of offering expenses. Our cash balance at the end of the first quarter was just over $53 million, and this is after $14 million that's already been paid between August 2025 and March 31st, 2026, and that's for our first facility. And funds for our future recovery solutions for producing silver and copper and other metals is estimated at $10 million, and our second facility is estimated at $13 million, and that won't be deployed until our first is up and running and scaling and is profitable. Of that first $14 million for the first industry-scale facility, which many of you have registered to come and see on May 28th during our AGM, $6.8 million was used in the first quarter, and now substantially all the capital expenditures for our first plant have been completed. We also invested $7.75 million in SSOF, And this was at very attractive valuation. And after we committed to natural gas that can power up to 300 megawatts of power to those and to the other Comstock properties in Silver Springs. And now we're positioned for a higher value monetization. We also recognize 1.4 million cash gain on the sale of royalty rights associated with the prior sale of our northern mining claims. reflecting continued progress in monetizing these non-core assets. And separately, we have also now agreed on preliminary terms for selling all of our remaining mining assets, and we're now in the due diligence process with the expectation of announcing a definitive agreement in the third quarter. Should this transaction happen, it would result in significant simplification, meaningful cash, cleaner and stronger balance sheets, and meaningful upside in annual cost savings. We recognized revenue in the quarter from our pilot plant and deferred revenue from solar panel collections, and we are now starting to see both revenue and deferred revenue increase as we move forward this year as we bring the commercial plant online and begin showcasing it to customers in June. Total operating expenses. increased approximately $1.7 million, driven primarily by higher headcount supporting metals operations, higher facility costs, including our industry scale site at Silver Springs, increased professional, legal, and commercialization-related spend, as we expect marketing and sales and metals expenses going forward, and also associated with various monetization transactions. From a below-the-line perspective, interest expense declined significantly year over year, and that's reflecting the elimination of the legacy debt obligations. And even as of this week, we're fully extinguished with no interest expense projected going forward. And then interest income increased meaningfully, driven by a strong cash position. And then derivative-related impacts, while still present, were less significant than in prior years, should be low to zero going forward with substantially all of our make-hole contingencies now satisfied. That loss for the quarter was approximately $9.4 million, largely in line with prior year levels, with approximately half of that loss representing the mining and biolumine segments, and the other half representing metals and the corporation. We expect the sale of the mining assets to reduce cash spending by up to $1.5 million annually, And we also expect the resulting simplification to further reduce cost. Operationally, what matters here most is the quality and the timeliness of the execution underway. The increases that we have seen in operating expense are intentional. They reflect planned build-out of operational capacity, design and deployment of quality systems and industry scale, supporting infrastructure, including infrastructure operations and sales and logistics. And we're also investing in the teams and systems required to support multi-site growth. And at the same time, the reduction in legacy financing, mining, and administrative costs and simplification of our capital structure has begun to show through in our financials. From a liquidity and capital standpoint, we remain in a very strong position. As we previously outlined, we are funded, Following our recent financings, we have eliminated substantially all of our legacy obligations and associated costs, and we've closed on some smaller sales and agreed to other mining and continued advancing multiple monetization pathways for our non-core assets, which we will believe will be significant. And so what does this do? It positioned us to scale and operate our fully paid-for first-of-a-kind industry scale facility expand metal storage and logistic capacity in multiple states, finalize our first metal recovery designs, and pilot a one-time-per-day system, preferably at our existing location here in Nevada, and then secure, permit, and advance our second facility in Las Vegas. So looking forward, the financial model begins to change. As we move into 2026, we expect a shift from project-based revenue to throughput. throughput-driven revenue. We expect improving unit economics as feasibility scale. We expect the facility to be profitable at 20% utilization and the corporation as a whole at 50% utilization. So that is our focus. At the same time, we remain highly dedicated on monetizing legacy mining and real estate assets and also advancing the FSOF-related opportunities, and then accessing non-dilutive capital sources, including grants and industrial financing. So, in summary, Q1 was successfully about positioning, deployment, and readiness, and the rest of 2006 is execution at scale and monetizing our mining and real estate assets. I will now turn it over to Corrado to go deeper into our operational progress and what we are seeing on the ground at Metals. Corrado?

Thanks, Judd. Yeah, no, it's an outstanding overview. We position ourselves to monetize these assets, just as Judd has outlined. We're doing it in mining. We're doing it in SSOF. And it's all to support the growth of Metals. So let's go into Metals. I know that we spoke... it two or three weeks ago you know with the year-end report um i have to say that um an incredible amount has occurred in the last three weeks so i've been actually looking forward to this update you know with with metals especially you know we we've now received deployed we're assembling and commissioning the facility many of you as judge said will be out on the 28th to see it quite a few of you have come out over the last two months you know since january And every time someone visits, even if it's three or four days in between or a whole week, the plant looks remarkably different. This will be not only the first industry scale, high speed, high throughput, zero landfill solution, but it will be a showcase for everyone, frankly, but most importantly, our customers. Our customers are gaining strong traction They're strategic, they're regional, they're national. They understand as we engage them what we intend to do, but we will be able to show them as soon as June. And many have already scheduled appointments to visit in June and in July when we will be operating our first industry scale facility. in Silver Springs. Of course, our objective, as Judd said, is to turn it profitable, ramping it up to 20% utilization, 50% utilization, and of course, we want to run it full. We're also working on upgrading the downstream production line. You'll see the CapEx, you know, that so far has been remarkably in line with our plan, but we've also stepped downstream to enhance recoveries specifically for glass. And we're already able to do that today. And as John said, by the end of this year, we'd like to have a one ton per day fully integrated metal recovery capability. We're not using the term refining. This is the last time Fortunato said I could use the word refining. We're recovering these metals to extremely high purities. And We are already recovering glass now to specifications that even two months ago we didn't know that we could do. And the result of that, I'm going to go into a little deeper now, but it's resulted in a number of extremely large-scale companies that want to use our glass for things like you know, fiber optics for things like cement additives, a whole spectrum of uses. So we're upgrading the production line. We're going to be enhancing recoveries. And we shifted from, frankly, worrying about, you know, where is all this class going to find a home? We were worried about it in a professional sense. You know, we were working very diligently on finding it a home. Initially, the values of those homes were pretty low. their high and their forces for those materials. That's a tremendous update, maybe one of the most salient for this discussion in the last three weeks. We've also identified our second facility. We've already submitted the permits for that facility. We met with our regulators two days ago. It's an extremely positive advance forward. We won't, as Judd said, procure for our second facility until our first one's up and running, and frankly, until it's up and running and scaling up in terms of the throughput that's going through that machine. So we have a nice ability to toggle that amount. You've heard from us more often than not that the silver demand and the market for silver is strong. It's driven by photovoltaics, it's driven by electronics, but the deficit in the industry, you know, which is reasonably nascent, you know, over the last half a decade. It is clearly persistent. China seems to have a bigger implication to that persistence. So the outlook, of course, for silver, which, you know, exceeded 80 bucks a share, announced yesterday and is hovering right about $80 an ounce today, remains very strong. Insofar as our process, The way to think about our offtake is that aluminum is steady eddy. We've been selling our aluminum cleanly, clean aluminum since day one. It's absolutely the lowest maintenance part of our offtake stream. The tailings, we've been selling, most of you know, to less than optimal refiners. I guess the good news updating there is we had previously been shipping our tailings Asia we do now have and we have secured a boutique II domestic off taker we're very happy about that because the economics are better and logistics of course are much better but we always still view that as a temporary condition you know because we are working feverishly on our own metal recovery process where we hope this year you'll hear us prove and demonstrate that we can recover silver from these materials, that will be the first objective for 2026, the announcement that we are recovering our own silver, you know, at a one ton per day pilot scale, of course, and then ultimately that we're recovering copper, that we're recovering pure silicon and silica, and then ultimately, you know, the dore of these remaining critical minerals. Couldn't be more excited about the implications of that. That means that we would then be fully integrated selling all of our materials while still staying in the category of zero waste domestically and overall. The glass is the one that I had mentioned previously and we have a bake through. I'm going to show you the equipment associated with that. And let me talk about the capital because we've been remarkably on plan here. You know, I think generally speaking when we were talking in aggregates, we would talk about 12 to 15 million dollars as the ultimate capital john mentioned 13 that's our that's our that's our real number for facility number two we spent 11 million on the facility i'm going to show you some pictures of it coming on coming together here in just a minute that is for all of the equipment to to load a panel crush a panel condition a panel sort a panel, bag it, the entire process from literally soup to nuts that allows us those three streams. We ultimately spent another $1.1 million in power generating systems. There's a pretty pervasive understanding that the grids are weak, that the grids are short. We didn't plan on being supported by the grid, and we have our own strong natural gas feed right into our facility. And quite frankly, the capital for these power generating systems was a hair higher than the upgrades that were originally planned for the facility off the grid. But the cost of the power is actually lower. So we're very happy about that. There was $2 million that's been spent. These are money spent that you're looking at. There's $2 million that was spent. on on leasehold improvements, construct metal spent that money, the landlord is responsible for that money, that money will come back, you know, from the landlord, we had a need for speed. And so we, we got all that done, the building looks incredible. That includes not just building and we sold improvements to 600 Lake Avenue, but the entirety of of the storage complex, which is the number just below it 1.1 million. And you see the pictures to the side of the fencing and the storage, which is all coming online. By the end of this month, many of you, again, will see all of that. So if you take out the leasehold improvements, we're just at about $13 million, remarkably right on plan. Like I have to say, the metals team has been exceptional in managing their capital budget and their capital spending. We are going to spend another million and a half. Half of that million has already been spent for this product upgrade. What's happened, and I'll show you a picture of it right now, what's happened is we have been engaged with some of the largest glass manufacturers in the country. You know, and we were previously talking about using this glass for recycling, you know, bottles and tiles and vases. Now we're talking about fiber optics and cements. And we're presenting our glass, which is clean of laminates, plastics, glues, and those kinds of contaminants, but still has some dust on it, still has some small shards of aluminum in it. And so we assembled this eddy system that you're looking at that magnetically removes all of the metals. They're really just small traces of remaining metals and then cleans off so that our glass meets the highest specifications of the best glass manufacturers in the country. And we're in final stages of negotiation with multiple parties. I could say, frankly, that all of the parties want all of our glass. And so we find ourselves from a supply and demand position in a very, very good place. In terms of the actual facility, this is an older picture that you've seen before with the facility cells, of course, with solar panels. That's not true anymore. The facility and the leasehold improvements have substantially all been completed. The equipment is being assembled. We took pictures as we were progressing through it just so you can get a sense of how it's laying out and how it's coming together. by the end of this month it will certainly fully be together and including the power generation and including the external scrubbing systems everything is on site and being assembled and the storage facility as you can see fully fenced um you know and um and really laid out extremely nicely now uh the road the improvements are being made to the road uh just alongside it so that we can um you know transport the materials super efficiently super expediently know from storage into the processing facility so a tremendous amount has been done with the core facility with the basic three off streams a tremendous amount has been done with upgrading some of our off take especially and certainly the glass and we've also made a tremendous amount of process on our metal recovery from from these materials we have designed this process we have finalized design of this process we have engaged our major partners, pilot testing, bench testing is being done in a distributed fashion. And as Judd said, we expect it all to come together into an integrated one ton per day solution that we would prefer to have right at the 600 Lake facility. And that was what our meeting earlier this week with our regulators was about. And I couldn't have been happier, you know, with the outcome of those discussions. I want to show you the market as well. We're making continued progress with the market. We're making progress with strategic customers. We're engaged with strategic customers both in terms of customer agreements, master service agreements, and even in some cases co-locating and joint potentially operating agreements. Those are fascinating. I think this picture that everyone has seen before shows how clearly California is Arizona and Nevada represent the oldest panels, the largest end-of-life market in the country. The next map that you're about to see was updated. This map that you're looking at is two years old. The map that you're about to see, California, Nevada, Arizona, is presented identically, but you start to see what's happening in the rest of the country. So just in the last two years, expanded deployments across the southern part of the United States up up the eastern seaboard and even into the mid-atlantic you know and northern Midwest have been remarkable so so a part of this is what's happened in the last two years quite frankly part of this is improvement of data but you can see that this is not a regional play the market is big people always ask me Well, what about, you know, new deployments? You know, the solar industry has really hit some headwinds, hasn't it? My first reaction to that comment is we care less about what's being deployed today because we're end of life. Our market is the end of life. But rest assured, look at the projects that are under development. It doesn't seem or feel like it. know the the solar industry has um has hit a wall it certainly has some headwinds politically and otherwise but um but it's a relative statement to to imagine that um there isn't wide-scale deployment happening is certainly incorrect and so we're we're stable With our projections, we feel very, very good about what this facility looks like running at 90% utilization. We feel really good about the ability to capture high yields of our silver. You know, it's really the first step in our recovery process is to start recovering our own silver over 90%. You know, and with these higher silver prices, our metal recoveries start looking just as good, if not better, than our tipping fees. So this is the thesis. This is what we're working towards. This does not include, you know, higher recoveries of our own metals. This only includes the sale of glass, the sale of aluminum, and the sale of those tailings. So I want to pivot to Sierra Springs just for a couple of updates. Just as much, if not more, has happened here than even what's happening with the metals business. I think we can assure people Judd is fully dedicated to the monetization and sale of all of our mining assets. We're in a diligence and close mode. That's very, very big news. It's very good news. We cannot share any details until the definitive agreements are done, signed, sealed, and delivered. And as Judd said, we expect that with high probability in the third quarter. The Sierra Springs opportunity, we are deploying capital to Sierra Springs. We allocated the specific capital to Sierra Springs. their board and our board have approved a path to controlling this enterprise. And the reason that we want to control this enterprise is because we were successful in securing power for this land. And I can't think of a stronger market to be selling or monetizing into. I was going to say I can't think of a better marketplace to be right now today in the world and critical minerals, but this demand for powered land is generational. It's exceptional. And we're sitting on something that with power comes high value. So it's not only that we're sitting in a very widely recognized, highly attractive area for these data centers and these businesses. and everyone that's listed here is already here. Not to mention the ones that we're talking to that want to come. It sits right in immediate proximity of all of the development that is occurring. When we used to say immediate proximity, we were saying, you know, 10 minutes up the road to Google, 12 minutes up the road to Switch, you know, 15 minutes up the road to Apple. But that immediate proximity now is right across the street from our properties so when when we committed to essentially up to 300 megawatts of power you know we put ourselves in a position with with potentially eight 900 acres of land um you know to be monetizing right alongside what Microsoft, what Tract, and what many of these other land power compute enterprises are doing. We do not want to become a land developer. We do not want to be a day's land power compute company. We want to monetize these properties at the highest value. And if there was a marginal increase, between powered land and unpowered land, which is probably true three years ago when anyone and their mother could submit to the local public utility and get power. It's not true today. It's not true today. Today, if the land is empowered, there's very little interest in the land. And if the land is powered, I mean, people are literally kicking your door down and fighting each other, you know, to get in. So we have some work to do. to perfect and secure the land. That's why we're putting capital in. By perfecting and securing the land, what I mean is, with the same dollars, we not only get control of the entity, meaning greater than 50%, but we have all of the land, the titles, the water rights, and power secured, debt free, obligation free, that we can then market to a major counterparty. When a company like Tract is quoted saying that they're spending $100 billion in this region in the next 10 years, you only have to come and visit us to see the 1,100 acre development that is underway by Tract on the Peru shelf. You only have to come visit us to see the 1,500 acre development that's underway between us and the Peru Shelf. Peru Shelf is only 12 minutes away. So in between us and them is another six minutes, you know, partway there. This is all happening right up the road. And their third development is right across the street from us. So powered land means everything. In fact, we've learned that talking about the land per acre is frankly a misnomer. What these enterprises do is talk about the land per megawatt. You need the land. You need roads. You need, you know, conventional infrastructure. We have that. Preferably, you want flat land. You know, everything that we're seeing developing around us is expending extraordinary dollars. To flatten mountains, it feels like, it seems like, it looks like. But our lands are flat. They're much more valuable in that context. And so, but you need power. Power enables everything. Power to land drives evaluation. So we're not paying per acre. We're paying per megawatt. How much are you paying per megawatt?