Comstock Mining Inc. (LODE) CEO Corrado De Gasperis On Q1 2022 Results - Earnings Call Transcript

May 03, 2022 10:47 PM ETComstock Inc. (LODE)
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Comstock Mining Inc. (NYSE:LODE) Q1 2022 Earnings Conference Call May 3, 2022 11:00 AM ET

Company Participants

Zach Spencer - Director-External Relations, Treasurer and Secretary

Corrado De Gasperis - Executive Chairman & CEO

Conference Call Participants

Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear. The machine-assisted output provided is partly edited and is designed as a guide.

Zach Spencer

00:04 Ladies and gentlemen, welcome to Comstock Inc.’s 2022 First Quarter Business Results Webcast. Here is Comstock teams Executive Chairman and CEO, Mr. Corrado De Gasperis.

Corrado De Gasperis

00:15 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.

00:48 Please let me remind you that, we'll make forward-looking statements on this call, including specific outlooks for our Bioleum and LiNiCo business 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.

01:16 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.

01:35 Let me briefly start with our financial position. Our recently reported assets totaled over $115 million, which includes the full consolidation of our LiNiCo business that we just acquired the substantial majority of in late December. And our balance sheet represents the foundation of our decarbonizing the assets and our deep portfolio of intellectual property. This includes our IP for producing carbon-neutral cellulosic fuels and especially, our breakthrough Bioleum product, with multiple granted patents and pending patent application.

02:11 It also includes our cellulosic pure pilot in demonstration facility located in Wisconsin and currently being expanded to further demonstrate the production of carbon-neutral pulps, paper, cellulosic sugar, ethanol and Bioleum. It includes in our IP for lithium-ion battery crushing, separating and extraction where we have now filed several provisional patent applications. And then, it goes 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.

03:01 Our balance sheet also includes our strategic investments, all of them at cost, like, quantum generate materials and our equity in the Sierra Springs Opportunity Fund. And it includes our mineral properties, also a 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 all noticed in the 10-Q, these numbers now exclude MCU reflecting the disappointment in the Philippines that we discussed just last month.

03:39 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 very well below what we see as our fair value. We are working very hard and our near term and intermediate objectives that I'm going to outline today are designed to unlock this value.

04:14 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 integration is 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 in building the capacity to rapidly enable continued product development for our customers.

04:54 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 Bioleum and we're continuing to expand an already significant patent portfolio to cover these breakthroughs.

05:31 As I mentioned on our last call, our senior leadership team will all be on hand later this month at Annual Meeting in just a few weeks on May 26, in Reno. Please do register and attend. Registrations 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, first-hand, face-to-face.

05:58 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 Bioleum 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 100 plus million gallon Bioleum by our refinery by 2025. We've commenced construction on a demonstration facility for production of Bioleum 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.

06:56 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 see waste, we mean saw dust, mill residuals/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 is twice as much in Canada.

07:36 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 and the demonstration system for Bioleum in Wisconsin and announcing our first offtake contract, both which will occur in the second half of this year.

08:04 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 to 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.

08:47 Remembering that just one of our biorefineries alone to produce over 100 million gallons of bio fuel per year, including over 80 million gallons of cellulosic ethanol and 30 million gallons of renewable diesel again pre year from just 1 million metric tons of woody biomass. Each refinery is expected to produce well over $0.5 billion in annual revenue. Our first offtake agreements will clearly demonstrate our capability and potential and more importantly, prove the value protection.

09:22 Let me now turn to LiNiCo 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 has already living here in Reno, working from LiNiCo 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. And we have secured our new 200-acre storage facility in immediate proximity and already commenced the local permitting process on that storage facility.

10:02 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 commenced new ongoing discussion with feedstock source, especially with our storage site now secured. Things are moving fast as everyone can see. EV registrations continue to explore having more than doubled in 2021, even the most conservative estimates for increases in EV demand will likely require about 5 times more lithium carbonate then the entire lithium mining industry produces today.

10:56 The conventional recycling process that we are seeing deployed suffer from extremely high, if not total losses of 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 in batteries. These market leading yields and additional revenues allow us to be profitable at very low production levels by putting lithium first.

11:29 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 from the battery recycling facility, and our conditional use permit for the newly acquired storage facility also in the third quarter, all of which enables us to start announcing our feedstock supply agreements, also during that same third quarter. As I mentioned, our first commercial prototype is extended per day crushing and separating system is being commissioned as we speak.

12:05 We have already demonstrated our ability to safely crush batteries and will soon be producing high purity black mass. This positions LiNiCo to also contribute billions and 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, feedstock providers, customers for offtake and investors with great reception.

12:34 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 in Tonogold in the first quarter that paid us over $1.25 million in cash and we exchange the $6.65 million no due to us for all of the Lucerne properties. So if we -- so we have regained full ownership of all the mineral assets covering the entire district.

13:00 Tono has an option to repurchase Lucerne and we'll continue reimbursing us, to the tune of approximately $3 plus million this year for the cost of maintaining the mining platform and certain other mining property payments. We are scheduled to close the Daney Ranch this quarter with over 2.5 million in proceeds and we are confident we will close on the $10 million in proceeds from our Silver Springs Properties later this year.

13:27 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 are now ready for.

13:53 The proceeds from the asset sales will support funding our new operating businesses while allowing 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.

14:10 Zach, let me stop there and turn to questions. Do we have our first question?

Question-and-Answer Session

A - Zach Spencer

14:15 Yes. We have our first question. There are other companies claiming biofuels and offtake agreements. How are you really different from them?

Corrado De Gasperis

14:28 Thanks, Zack. Thank you for the question. So first, our technologies use waste wood that is unfunded and inexpensive. Literally a fraction of what these other companies are using like, corn or vegetable oils. Corn today is over $300 a ton, and we are less than a third of that much less. The carbon impact of these fuels is also much lower, so we get maximum revenue credit for our fuels. Critically, our feedstocks are abundant and widely available positioning us for highly profitable and nearly unlimited growth. Said differently, everyone else is constrained by feedstock, whereas we are not. All of this was true when we acquired the technology for cellulosic, like ethanol.

15:21 However, the ethanol only uses half of the feedstock guide into the system. Our biggest breakthrough was cracking the code on the other half of the wood. Bioleum takes a profitable model and adds another revenue stream from the same feedstock. Not the same type of feedstock, the same ton of wood. We can now extract the carbon-neutral equivalent to petroleum from the rest of the wood turning another waste stream into diesel, aviation fuel and other core products. So we're sitting with a profitable long-haul with the 70 million gallon facility that now can make 110 million gallons with no more feedstock and a tranche right into the truck, tranche right into the plane using the existing infrastructure and it drops right to our bottom line. Call that pure throughput.

16:10 We have a second question, Zack please.

Zach Spencer

16:13 Yes. The next question is, you said your battery crushing and separating system would be online in the second quarter? What happened?

Corrado De Gasperis

16:25 Thank you, Zach. Our crushing and separating system arrived in April and we have already been successful. I just mentioned in crushing with lithium-ion batteries just last month in Wisconsin. The full system is being commissioned there, as we speak and we were producing black mass from that very same system very soon. We have a very sophisticated crushing technology that can crush charged batteries. Critically, important differentiation and purifies the black mass while preserving the lithium, another huge differentiator. We have now also begun constructing lithium extraction system in Wisconsin. So what we did was we expanded and resubmitted our primary operating permit to include both this new crusher in addition to the systems that were already included in the first permit submission and the lithium extractor. First and major differentiator and we expect that permit in the third quarter, and then the air quality permit in the fourth quarter. We'll then plan on moving the crushing and separating system to Nevada coincident with the permits. So we can operate when all permits are approved. And as I said earlier, will be followed by the lithium extraction in the second quarter of next year. To be fair, we will be the first and fastest to crush and separate the purest black masses in the industry and for sure be the first extracting lithium first.

Zach Spencer

18:04 Okay. Corrado?

Corrado De Gasperis

18:08 Yes.

Zach Spencer

18:09 Our next question is, it seems like the media never writes about us, what are we doing about marketing?

Corrado De Gasperis

18:20 Thank you for the question. That's a very good question. So we spent most of the last eight or nine months, not only integrating the operations and integrating the team which is now complete. But also in finalizing the plans for marketing and communicating all of this information. It took a major change in our public disclosures, which are now complete. And it allowed us to put up our new web site, which has been -- a put up and we love and is beginning now the channel for much more expensive expansion, including information about LiNiCo, including information about cellulosic fuels.

19:09 And now we are just over the last few weeks commenced outreach into the market that outreach includes investors and includes customers and includes feedstock providers and we've got everything in place now to back that up. So we are actually very excited about what is now coming forward in the context of marketing communications and just to give further insight, we've got a dedicated team that is now working a daily on just the notion of communicating these technologies of communicating our capabilities and making sure that people understand not only what we have but how different it really is.

Zach Spencer

20:01 Corrado, our next question is about Dayton and Spring Valley. Is a new reserve report coming out now that you have Lucerne back?

Corrado De Gasperis

20:13 Good question. Thank you. So we saw that Tonogold published the results of their technical report, which is for the Lucerne properties. We're very happy that information is fully current and updated and that's, there is a mineral resource thereof me. We are planning to publish the technical report for Dayton and Spring Valley sometime here in the second quarter. We're confident the process is advanced, it's gone much slower than we expected, but the third-party our mineral consultant is fully engaged and we expect that here in the second quarter. So we would have a technical reports that essentially in combination cover the entire district.

Zach Spencer

21:07 Okay. How are supplier agreements coming with the battery recycling business? And are there any more regulatory or permitting processes to be completed?

Corrado De Gasperis

21:22 From a regulatory process, I'll hit the second part of the question first. We filed a written determination, which is the primary operating permit. I just mentioned that we expanded it meaningfully to not only include expanding and more sophisticated crushing and separating but also lithium extraction. So that one is on -- is we think it’s ahead in terms of the substance and timing. We expected here during the third quarter. We have an air quality permit at the facility that we are modifying now for those same changes and we expect that in the fourth quarter.

21:58 The storage facility that we just acquired, we've already submitted the pre-application that kicks-off the local permitting process that process is only local and has much shorter lead times. So we'd expect that also in the third quarter. So from a permitting process things are excellent. From an engagement over the market process from the feedstock perspective, it's critically important that you can demonstrate that you have a facility that is in the process of being permitted. And it's even more important that you have a storage site that's in the process of being permitted. So to answer the question, we've had a tremendous number of extremely positive conversations very, very receptive. We don't see any disadvantages in there.

22:49 On the contrary, we see some huge advantages given our platform that we now have in position and now we have the specificity to be able to start entering into formal agreements and immediately thereafter start receiving feedstock. So we're very excited about where we've come, it was a long time coming, we frankly feel like we're ahead of most everyone outs and we always we should could go faster.

Zach Spencer

23:19 Corrado, our next question is, what are your top three deliverables in the next three months to six months to increase shareholder value?

Corrado De Gasperis

23:30 So I think we mentioned more than three. I can just high three, let's say, with LiNiCo obviously, the ability to demonstrate the crushing and separating in the highly pure black mass that's coming this quarter. With LiNiCo to be able to demonstrate lithium extraction that's coming, and then the permits that will follow it will allow us to fully demonstrate those capabilities in Nevada. So all of that except for lithium extraction which we will demonstrate our capability, but not deploy the final system in Nevada until next year, all of that is happening in this year. Okay. So those are the most immediate and really demonstrating the manufacturing and technology capability is there.

24:23 In Bioleum, our ability two things to commission the system that will occur this year. So we already have the ability to take woody biomass and produce cellulosic sugar and ultimately ethanol, but we're expanding that capability to be able to also demonstrate Bioleum that will be done by the end of this year. And just as importantly, if not maybe more importantly than the market first off-take agreement for those fuels.

Zach Spencer

24:59 Okay. Following up on the Bioleum, is there any residual waste from the cellulosic fuel business is it hazardous or sellable material likes for fertilizer?

Corrado De Gasperis

25:10 Yeah. There -- the initial model there is -- there was residual waste that was basically targeted for burning as cleaner fuel. As a replacement of natural gas with the Bioleum breakthrough. We will use a substantial mature of that material for even higher value and product mix. So that's remarkable. There may -- there any of the residual woody biomass waste has productive use in high-end, low-end product uses. So it's an extraordinarily circular zero waste operation.

Zach Spencer

25:56 After paying off our previous debt, we are now back up to $5 million in debt. Why is that?

Corrado De Gasperis

26:03 So we took advantage of the opportunity to get some very good promissory notes in place. They provided a nice bridge for us as we were kicking off some of the activities. Those amounts are very, very low relative to some of the asset sales that are about to occur and we've committed as part of that when some of those asset sales occur, those debts will be paid off. So, just with the Daney Ranch loan, you'd see more than half of that debt reduced and we like that profile. We like the profile today of having a little to no debt prior to launching and commercializing new businesses.

Zach Spencer

26:47 Your $12 share price target, do you still feel comfortable with that number. And is your timeline still intact?

Corrado De Gasperis

26:59 So our -- the $12 share target is low. The $12 share target was obviously communicated before the launching of these businesses. So we are -- we not only feel confident with that target and the timeline, we're looking way, way past it, just with the commercialization of LiNiCo and cellulosic fuels. So we're going to break out of this year as soon as we start demonstrating and the market appreciates not only what our real capability is, but how different it is from our competitors.

Zach Spencer

27:33 With regard to the selling of non-mining assets such as the Daney Ranch and the property in Silver Springs. How are the sales prices compared to what you paid for those properties?

Corrado De Gasperis

27:50 Yeah. I mean in all cases, we -- in every case of our balance sheet and the properties in our balance sheet they are stated at very, very low cost -- very, very low cost. So I think in the worst case scenario, we're getting twice the value that we paid and the other case is much, much more than that -- in the Ranch case much more than that.

Zach Spencer

28:16 Can you please describe Kevin Chrysler's position as President and CFO? And how he became a major shareholder at over 5% of the company?

Corrado De Gasperis

28:29 Absolutely. So, Kevin, is absolutely a critical part of our senior team. He is President and CFO. But I'll tell you, we have a lot of bench strength now. So the specific answer is, when we acquire Plain Sight Innovations, which had all of the cellulosic technology embedded in including our Wisconsin R&D and pilot and demonstration facility. Kevin came on board as part of that acquisition. But the real answer to the question is when I mentioned this on the last call between Kevin, Billy McCarthy Rahul Bobbili, David Winsness, we have a senior team with decades of experience in commercializing these types of technologies. So Kevin was involved in commercializing a new extraction technology across the entire biofuel industry which has over 99.5% (ph) penetration as we talk today, Relos led the effort in building over 20 biorefineries at large scale over the last 15 years and the team's ability to not only scale up, but operate these businesses is reflected in what we've accomplished in just over the last three or four months. So there was a lot of acquisition and integration activity in 2021.

30:00 But I think you're just starting to see the beginning from the results we announced this morning of how fast things are moving and how much we are achieving, we're going to be much more pedantic in terms of outlooks, you've already seen it in this press release. We're going to be talking to you about the next three months to six months, right. We're going to build the credibility of this technology. We're going to build the credibility of this manufacturing capability and we're going to build the credibility of this team based on delivering what we say we're going to deliver. We'll let the market start to figure out how big the potential is, clearly done it for some of the other companies that we believe have inferior technology and inferior capabilities. And we just think it's a matter of time before figures it out for us. To the earlier question, the marketing and communications has just started in that regard.

Zach Spencer

31:01 Recently, you were at the Noble Conference. Are we seeing any new investor interest and could we potentially see any partnerships in the future?

Corrado De Gasperis

31:10 We're seeing tremendous new investor interest and we're seeing tremendous partnership opportunities and we're going to be very selective in that context, right. So it's very good news. I'll tell you personally, it's taken, I've gone from taking 10% to 15% of my time to taking more than 50% of my time and I expect that to continue as we engage the market more and more you're going forward.

Zach Spencer

31:41 Do you have any update on the consulting contract discussions previously mentioned in the biomass business space?

Corrado De Gasperis

31:53 We are engaged, I'm not sure exactly what that references to, but we are engaged right both on the feedstock and the partner levels in that space, and I think that's consistent with our new guidance that we'll be announcing offtake here in the second half of this year.

Zach Spencer

32:15 Okay. And our next question is, what is your plan to increase more analyst exposure for the stock?

Corrado De Gasperis

32:30 Yeah. That just follows right down to my last point, we're getting a lot of the interest. We are engaging numerous discussions from investors and even banking communities like. And we will be very selective as we move forward and extending our coverage with relevant knowledgeable professionals in the space.

Zach Spencer

32:55 Okay. The next question, several gold and silver companies are using load in their company names. Do we have any rights to the load name and if so, are we pursuing legal permitting’s?

Corrado De Gasperis

33:14 We have the NYSE listings, you know, that's our right nobody else has that. I guess I would say lightly that, -- there is only one Comstock low. I don't want to say. There, everyone else as opposer.

Zach Spencer

33:34 And our next question, does your asset value include your tax credits, your intellectual property, the gold equivalent value of any proven reserves?

Corrado De Gasperis

33:47 Yeah. It's a great question. So none of our mineral resources that have been now disclosed in the Lucerne hundreds of thousands ounces of gold and millions of ounces of silver, nor the ones that were about to disclose for the Dayton. Those are resource estimates not reserves to be clear. It's one step removed from the full reserve, but it's very, very strong resource estimates. Those are not present on our balance sheet in any way shape or form. Even the underlying land that houses in situ, those mineral resources are fractionally reflected on our balance sheet at very, very, very low original costs. Can you repeat this -- the other part of the question, I'm sorry.

Zach Spencer

34:42 Yeah. Let me get back to that intellectual property?

Corrado De Gasperis

34:45 Yeah. The intellectual property is also recorded on balance sheet in the form of intangibles, but you know you're talking about $12 million to $14 million, $15 million for something with billions of dollars of value. So it's a good comment. We have $150 million of assets in our balance sheet, representing just a tiny fraction. In our opinion, right of the real fair value of what we're about to do here. And I mentioned there, right that we have patents, the portfolio of patents. We have new patents pending and the breakthroughs that we've had just over the last 12 months. And we have a tremendous amount of know-how embedded in our key to deploy these processes. Most and out of that would be looks like that are on the balance sheet.

Zach Spencer

35:40 Okay. And we're still getting a few questions about MCU. And so people would like to know what the current status is and how the process works?

Corrado De Gasperis

35:55 Yeah. So two things, right. The current status is we’re fully winding down the operation in the Philippines. We're very disappointed at the lack of the mercury/gold content that we expected in the river to be true and to be fair, every sample hole that we drilled all up along the river had mercury and gold content. It was just much, much lower than we thought it was going to be and that was indicated previously that it could have been. So that was a big disappointment. Our joint venture partner in the Philippines is exceptional and so all of our equipment is being safely are contained in stored on his campus and insight and so that's, that's all in progress actually expect it will be done by the end of week. Look, these systems are sophisticated alluvial mining systems. If they were operating and the area where there was no mercury contamination, they could still extract inventory. There is value to the assets and we're assessing now the best way to fully wind down and monetize that, but we're moving forward like we just have to be very frank with this. I have never ever in my career been confronted with an opportunity like cellulosic fuels. I've never in my career been confronted with an explosive market like what's happening EVs. We are very focused on our fiduciary responsibility to deliver the highest best shareholder value and we think these two lines of businesses are just incredible in terms of their potential and we want to ensure that this bigger, broader, deeper management team is fully dedicated to the renewable energy.

Zach Spencer

37:49 Okay. The next question is about Tonogold. Will they be able to meet their obligations to Comstock?

Corrado De Gasperis

37:57 Tono has today, no matter obligations. They never seem to be ahead of schedule. Quite frankly, they're not hardly ever on schedule, but they do get there and they've just gone through a major restructuring. They have gone through a major management change and from what we are understanding a highly professional reconfiguration of their Board. So we're optimistic that all of these positive developments will allow them to get back on track and progress the drilling and development and we'll see. The good news is we have monetize a tremendous amount of value from those mineral properties today almost $30 million and we have 100% ownership and control of the entire district. That puts us in a position to have the most marketable monetizable asset with full control sitting in our hands, I'm happy about that. We are working with them. We want them to be successful. They have the potential to be successful. Let's see how it goes.

Zach Spencer

39:04 Okay. And the next question is for investor confidence. How are the new ventures been handled differently than MCU. So they don't run the same course?

Corrado De Gasperis

39:18 That's an excellent question. First, let me highlight and this is not a deflection of responsibility, I personally take full responsibility for MCU. But we only had a 25% interest in MCU. We were not the management for the MCU, okay. We very much love the social impact and financial impact that it could have delivered, but it didn't, okay. We have Comstock. We have a management team. I mean I've never seen anything like this and it's going to be much more visible to you starting at the Annual Meeting. And at least five and I say at least five, certainly by people that have been CEOs that have run businesses and I have never worked with the team of people on such a peer level so productively. The brutal honestly, the passion, the intellectual horsepower, the commitment to decarbonizing profitably, right, is something that I can't -- I can express to you well enough, which is why I really love you to come to the annual meeting to see for yourself, but that's the difference, right? One of my team, on common goal, working 24/7 to achieve something meaningful. Meaningful in terms of decarbonization, meaningful in terms of financial impact, meaningful in terms of social impact.

40:52 Let me say that we have taken great pains and elegantly designed the system where the rate that we generate cash is synonymous, with the rate that we decarbonize, every gallon that we produce helps the environment and makes money, I don't know how to say it simpler, there is no conflict in our organization between doing good and decarbonizing and making money. It's a very unique thing and when people realize it and they see the speed at which it does it, throughput as a rate when they see the speed at which it does it, they're not going to be able to calculate fast enough of the impact and that's when we'll have -- that we have something special. And that's what people will start to really realize it.

Zach Spencer

41:40 Corrado you referenced, our Annual Meeting in a few weeks on Thursday, May 26 in Reno at the Atlantis Hotel. Can you please provide us with some more details about the Annual Meeting and if it will be online or webcast via Zoom?

Corrado De Gasperis

41:59 Happily. Thank you for that question. So the meeting starts first thing in the morning on the 26th. We will all be there. That means our expanded board including Christian Slanina and Kevin Chrysler. That means our full management team. Okay. So we will all be there. We will spend the entire morning going through. Yes, the normal protocols of an annual meeting, but also an update and an insight to what these amazing businesses are about to do. We have our models of the business processes. We have samples of our products. Very, very tangible where you can engage in touch. And we would expect to -- that the formal part of the meeting is typically about 3 hours, let's say, 9 to 12 and we'd expect to be engaged at least till mid after 2, 2.30. Where then we will have some other business activities to follow. So we would look very much forward to speaking directly to our shareholders for all of that activity.

43:04 In terms of the virtual versus live, we will certainly be live that's the whole basis of what we're doing and we will take the opportunity in that meeting to videotape the presentations in the preceding so that down, it will be available to all others thereafter. It won't live stream because there's just so many activities going on, it would be like a reality TV show that we can handle that. So, well, it will be available afterwards but not during.

Zach Spencer

43:38 Okay. Thank you for that. And then I don't know if you can speak to this directly, but in general sense has there been any dialog with companies like Tesla or Panasonic?

Corrado De Gasperis

43:55 There have been dialogs with companies in the EV industry absolutely. We can't disclose which ones until or we won't disclose which ones until we have agreements and we're telling people specifics.

Zach Spencer

44:09 Okay. And then, we've had a few questions about MCU possibly being used in the States or on American flats here on the Comstock LODE?

Corrado De Gasperis

44:22 The systems can operate anywhere where there is alluvial, anywhere where there is materials that can be processed either to remove the metals or to remove the contaminations. The system that is here on Comstock was designed as a pilot system, not as a full production system. System in the Philippines was the production system. So there is no prohibition to where those systems could operate. They were designed to be mobile, so yeah.

Zach Spencer

44:57 Okay. And the next question, can you tell us a little more information about GenMat (ph)?

Corrado De Gasperis

45:07 So GenMat is part of our R&D. It's a hardcore longer term part of our R&D. We really don't have -- we have a policy not to discuss things that are pre-development and in development. As I stated earlier, we're going to talk specifically about the things that we're going to be delivering in the next three months to six months. We won't be talking about the R&D that's going on in Wassa. Other than that, and we won't be talking about the developments that are happening with GenMat other than that.

Zach Spencer

45:44 Okay. And the next question is about our commemorative silver medallions, and they would like to know how many of those remain?

Corrado De Gasperis

45:55 So there is not many of that are remaining, it's remarkable how I mean literally someone is asking for them all the time. So it's not huge quantities and request. But there is just continued request. So they’re dwindling down, I mean I don't -- I haven't looked at the inventory, but if there was 100, I would be surprised.

Zach Spencer

46:20 Yeah. That sounds like about the right quantity remaining. Okay. The next question, this person would like to know if we have any technical papers that can show with the prototypes we have, can produce such as the black mass or biofuels something that could be shown to the markets?

Corrado De Gasperis

46:41 Yeah. I think that we have a tremendous amount of technical information and we will have to assess one some, once our broader patents are filed, how beneficial it would be to us to publish information. I think that most likely will occur in some form. But I would focus the most important thing, which is our ability to demonstrate at scale what these systems can do, right? When people can touch it and kick it, they're going to know that it works.

Zach Spencer

47:18 Okay. And this investor would like to know how the new ventures will be handled differently than MCU.

Corrado De Gasperis

47:30 So I think my answer to that I’m just going to reemphasize that rather than being once removed and a governor of our business. We're fully engaged and in control and operating the businesses. So we don't have, we don't have any other passives business interest, right? Cellulosic fuel is 100% owned, LiNiCo almost 90% owned. We control plan, communicate and execute every single day. That's our job. It wasn't our job at MCU, but that’s our job with cellulosic fuels and battery metals.

Zach Spencer

48:18 Okay. The next question, why did the Mana agreement fall through?

Corrado De Gasperis

48:27 So Mana, well, it did and it didn't, right, because a big part of our management team, including our Chief Operating Officer and our Head of Business Development and quite a bit of our marketing communication team, we're joined to us via that acquisition. What didn't work out is the agreement to produce some biomass in Idaho. And frankly, we diligenced the heck out of it and it just was nowhere near as attractive and nowhere near as powerful as the two business that we're operating. It was disappointing that that happened, but it was also joyful right that we made the right decision and it's enabled us to accelerate what we're doing in our two core businesses now. So every decision we've made in the last eight months has been to enhance and strengthen our focus on the businesses that bring the shareholders the largest value. I think, frankly, the ability to say, we made a mistake. The ability to not spend or allocate capital to things that aren’t best for our shareholders is a strong ability. And I think it should be reflective not just of my leadership of the entire management team, right? Who challenges each other for what's best for our shareholders and what's best for our value and that was an example of it. It was a hard decision, it wasn't a devastating decision, it was -- we were evaluating it. We started moving into it. And we just couldn't prove what we needed to prove to ensure we could deliver to our shareholders and we very efficiently moved away from it. We got all of our shares back, right. And we were thrilled by that. So we're moving forward fast.

Zach Spencer

50:20 Pivoting back to mining. Are you going to try to market the mining operations?

Corrado De Gasperis

50:27 Yeah. We're going to, right. There is a high level of interest in the entire district. There is a lot of value supported by the technical reports and we're going to do, look its capital allocation decision, if you can deliver hundreds of billions of value in cellulosic fuels, right, where do you want to put your capital, where you want to put your resources, where do you want to put your team? So we made that decision.

Zach Spencer

50:55 Okay. And the next question, can you please describe the raises that were recently awarded?

Corrado De Gasperis

51:07 Yeah. Look, when we did the acquisitions and we brought the team on, we came in al it below market values that was done by necessity, right? We needed to get started right away. We didn't have necessarily resources right away and we did something out of necessity. I don't think anybody would benchmark any of our salaries or any of our compensation today or over the last five years is being anything other than below market. Okay. So what I love about this team is that their passion, their commitment, their dedication to decarbonize is second to none, right. These are incredibly experiencing, incredibly knowledge, but also incredibly dedicated people we have something special here, right? From the Annual Meeting, you'll see how special it is, it's just remarkable.

Zach Spencer

52:02 Is it possible to get pictures of the current crushing system. This investor believes that would help the share price and also updates to investors that aren't aware of everything that the company is doing?

Corrado De Gasperis

52:18 Yeah. We will expand the visual repertoire. We will absolutely start to show visuals as it's appropriate. Okay. So when the system is up when it's fully visible, we're testing parts of it now, and very soon to test before integrated when those things are available, we will show that, when do you see the inside of the facility. Both the main question in separating areas as well as the refining areas there'll be very impressive. Okay. And so when appropriate as due over the next six months, as these things start coming online and we're announcing their completions will add some visual aids to that equation and we're happy to do that.

Zach Spencer

53:12 Okay. And the next question John Winfield used to be a large shareholder in LODE. What is his position now?

Corrado De Gasperis

53:24 John remains a large shareholder. John is an excellent shareholder. John is supported shareholder. And John is an example of probably a dozen shareholders that have been with the company for over five years, and in his case over ten.

Zach Spencer

53:43 Okay. And a quick follow-up question on the silver medallion. What are those being sought for? What’s the price?

Corrado De Gasperis

53:53 So those medallions were to commemorate the sesquicentennial, right, the 150 year anniversary of Nevada as a state, which was founded based on the silver and strengthen the financial Comstock low. So we charge $100.50 to commemorate the 150 years.

Zach Spencer

54:16 Okay. Yeah. And you made those back in 2014.

Corrado De Gasperis

54:22 2014 that was the sesquicentennial. States now like 150 or so. Okay.

Zach Spencer

54:33 The shareholder would like to know if we have a backup funding plan and how close are we too selling our non-mining assets?

Corrado De Gasperis

54:45 So our non-mining assets are, as I mentioned the Daney Ranch, in the second quarter and the rest of it, by the end of this year, we're highly confident about that and the confidence isn't superficial there has been a tremendous amount of activity so to Springs, there has been a tremendous amount of value appreciation in Silver Springs, but more importantly, there are large capital pools coming into Silver Springs that will enable us to complete what we've contracted for. And we're very happy about that. And we do have funding alternatives that are in place, the capital needed to get to through this piolet and scale facilities is all in our plan. It's all laid out over the next nine months and we're capital fine to get through all of this, and our plans frankly are to move as fast as possible. The market opportunities are there for us immediately. So we want to make sure that we get to the market immediately.

Zach Spencer

56:00 Okay. Corrado, we're approaching the top of the hour. Yeah, one more question. First, the statement, thank you, nice presentation that was the statement. And then this person would like you to tell us when we are going to be driving a semi-truck fueled by Bioleum across the country.

Corrado De Gasperis

56:20 It's very question. So look, we said that we targeting our first facility by 2025, right. That sounds like a far away, but it’s not that far away, right. We will have full demonstration capabilities by the end of this year that will ultimately translate into announcing our first site. And then once that's arranged and everything is in place, it's two years from that point, right. But what will be even more exciting is that most of these aviation companies, most of these transportation companies, all of the sweeping mobility have committed to carbon targets that being mathematically cannot achieve. And so we will be signing off take arrangements that will, that will support and enable the first facility and facilities beyond. And so the real answer to that question is very, very soon because our fuels are drop in, right. So in case anybody is not clear why we're talking about fuels that work in the existing infrastructure. We're talking about fuels that run trucks that run planes, we see the explosion of EVs, but even in the most aggressive EV projections. If you get to 10% of the mark. Yeah. That means a 150 million electronic vehicles on the road. It also means 1.5 billion fuel burning vehicles on the road. So we couldn't be better positioned to grab the growth of EV, but the big gain is liquid fuels. And we have the carbon-neutral solution.

Corrado De Gasperis

58:16 Thank you, everyone. We look forward to not only seeing you at the Annual Meeting, but the communications that will come out of that meeting. We're very excited about. Thank you.

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