Q3 2020 Comstock Mining Inc Earnings Call

Thank you all for your patients today's call will begin momentarily.

[music].

Good day and welcome to the Comstock mining Q3 update conference call Todays conference is being recorded at this time I would like to turn the conference over to Mr. Corrado de Gasperis. Please go ahead Sir.

Thank you Nick and good morning, everyone. It's the Kratos CEO of Comstock on the line with Zacks Spencer our director of external relations on our Treasurer and we welcome you to Comstock mining for third quarter 2020 conference call.

I'll provide a brief summary of the information included in our press release from this morning, including our progress on our strategic initiatives, especially on Mercury remediation business and the monetization of our non mining assets, which has really picked up some incredible momentum.

If you don't have a copy of today's release, you'll find the copy on our new website at Www Dot Comstock mining Dot com I just clicking on the press releases link on the main menu bar.

Also filed our quarterly reports on form 10-Q last night, which is also available on the web site as well as the Edgar on Www Dot $60.

Please also let me remind you that we'll make forward looking statements on this call, including an update on the remaining 2020 outlook and also looking forward into the 2021 and be on any statements relating to matters that are not historical facts may constitute forward looking statements. These.

These statements are based on current expectations and also the subject to the same risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in previous reports filed by the company and with the FCC and in this mornings press release and all forward looking statements made during this call are subject to those same and other risks that we can identify.

Hi.

Alright, let's jump right in I'm trying to sort of shorten my prepared remarks, hopefully lot of little bit more time for Q1 day.

But going into or update you know with the closing of the sale of Lucerne, which we did complete in September our realignment and all the work that really has been going on over the last two to three years.

Is essentially complete with some very positive financial implication, let me summarize about a half a dozen of those are more for you for.

First and foremost we did record for an 18.3 million dollar gain on the sale of Lucerne, which resulted in net income this quarter for the three months ended.

Of 17 point Threemillion for 54 cents per share.

We also recorded net income.

Year to date of actually 18.3 million.

For the nine months ended or 63 cents per share.

The doesn't expect to pay any federal income taxes on these gains for candour incomes are based on our existing net if not net operating loss position.

As most people know of the company has over 175 million in net operating loss carry forwards that stems back 15.

50 years of exploration and development.

And those are in the well carry forwards if you will.

Total assets as of September Thirtyth grew to over 48 million.

That's a remarkable number and it includes about 26 million in current asset sales.

This compares to kind of liabilities at the same period end of 6.6 million and remarkably we've already paid down about 3 million of the.

6.6 million just in the last 30 to 40 day.

So from a balance sheet perspective on net our net assets.

I don't think I've ever been stronger the 26 million in current assets includes investments.

The internal goals common and preferred shares that was as of 930 and they were valued at almost $10 million. It also includes the 12% cash paying.

Coupon.

Invertible note receivable from Tono of 4.475 million, that's doing just about 10 mining the company expects to monetize all of these assets within the next year.

On October 2nd as we did announce a that week tono redeemed the.

The remaining 2.16 million of our convertible preferred stock for at a large premium at over 2.6 million in cash proceeds.

Came in from that redemption and those proceeds for immediately used to pay down the debt obligations that you see on the balance sheet at September Thirtyth of 4.8 million down to just under 2.5 million company.

Somebody actually expected to pay off the range of that yes.

From a variety of sources is obviously a bunch of it could easily from just from the continued monetization of the small portion of those told the go securities. The were on the cost of being debt free from the cost of.

Very strong.

Liquidity and we're on the cost of being able to implement our three year plan through our own financial resources remember also that we still receive currently about $2 million in the annual reimbursement with.

The total goes subsidizing our production platform, resulting in one of the lowest cost production platforms that I'm aware of.

Regardless of what happens so you know in terms of the timing of Lucerne going back into production.

So we still have less than two and a half million dollars of debt almost $12 million and tone of gold securities as we sit here and speak today to be monetized and another 10 million in assets held for sale relating to silver Springs, plus the company recently announced the sales of the ranch for 2.7 million.

Really putting the total cash proceeds from these monetizations at almost 25 million against the residual debt obligations of just two and a half so we're incredibly well positioned financially and otherwise to to move forward on that no looking for work. We have just completed a three year planning.

Process, which will detail a little bit more specifically tomorrow.

At the annual meeting that planning process is is been broken down precisely to grow our intrinsic value to half a billion dollars by 2023, and we published a the the the dozen plus performance objectives that are related specifically.

Quickly to delivering that value by 2023 with the for.

The one tension of linking all management incentives, 100% with the performance of those objectives and the delivery of the values of value today would represent somewhere between 12 and $15 per share that's what we're locked and loaded to do.

We're going to do it by commercializing, our environmentally enhancing precious metal and strategic metal based products and processes and almost everything that we're focused on now in terms of forward activity has some form of positive cash flow returning to the company associated with it.

Deliver that cash flow from our northern Nevada based platform, while still increasing the long term value of our mineral assets. So the next three years are dedicated to this we've published those performance objectives and I'm just going to review them with you right now essentially in three categories for the first one is to establish in growth the value of our mineral properties.

Number one establish the Dayton resource is new made in Standalone mineral resource estimates objective to expand that complex through exploration drilling and Geo physical modeling number three develop and expand the Dayton conflicts towards the full economic feasibility report supporting your decision to go in.

The mining for fully entitled that complex with all the permitting Ah that's required to do so and fixed under the topic of our mineral properties of.

Validating grow our royalty portfolio as many of you know we set of Comstock royalty.

I'll see we are in the process now of of segregating all of our royalties.

Uh-huh into that entity I'm going to talk a little bit more about that you know in a bit but it's growing and it's something that could be remarkable for us in terms of the of the asset value that we're compiling there. The second category is to commercialize our global profitable Merck.

For mediation system and so we have three strong objectives here first and foremost establish the technical.

I think the sea of our Comstock system I'll give you an update on the in just a minute and protect the intellectual property. We just filed the for patent on the system. So that was very exciting progress for us.

Secondly, we want of deploying operate the first international remediation system as most of you know we already shipped the system over to the Philippines, and we're expecting to be heading over there and the weak you know to get it up and running so great progress as well.

And then within the same period identify and prioritize the pipeline of potential new Mercury projects and deploy the at least our third in force project over this period of time the pipeline is growing fast the projects are seemingly feeling like there on limited there now.

The sleep, but there are huge and I'm in the next three years, we want to have at least for projects you know up and running as we looked at the huge growth for active there since the last component last category is the completion of monetizing our non strategic assets. This is now built up the momentum of its own we've broken it down too.

You know monetizing a the.

The the tone of those securities that we previously talked about we talked about monetizing or other non mining assets. We're not and this is the news we are not intending to sell the gold Hill Hotel. We have just an extraordinary view of the cultural value of most of the Comstock on the company and you know with all the other day.

Cost of sales now being contracted and scheduled for completion you know the gold Hill. The hotel, we will keep as as the only cash profitable of entity in or non mining portfolio with the company losses are going to grow the value of our investment in the opportunities on and we are going.

Moving to growth other strategic net obese opportunities that we are in the midst of developing currently so we are laying this out in the very specific schedule, we're laying it out in the very specific.

Sequins, but as we build these blocks very very specifically to the goal. We expect the value of these components to grow to an aggregate of over $500 million, which will be at least $12 per share happy to talk more about that I just want to give you a little bit more color on M.C., you a little bit more color on.

The answer and then I'll turn to Q and a.

With the with the M.C. you as I mentioned, we had last week the system running on the Comstock, We had all the components of the system running independently and then last week, we got all of the components of the system running into the independently except for the Mercury reactor.

That's the last piece that will activate the intention is to activate the mercury reactors. This week, which means that we will have all of our centrifuges problem all of our spirals all of our separators all of our.

Systems are working in conjunction with the Mercury reactor, we've also developed and and at the hires.

The standard testing protocols using coal the for testing process to ensure that we know precisely how much of mercury is going into the system and precisely how much of Mercury is coming out of the other side of the system and again, we've we've.

Created that testing protocol in conjunction with the Nevada Department of environmental protection and the EPA. The that everyone will have validated certified you know excepted results on the effect of C of the system. We've also enhanced our joint venture with our counterparty in the Philippines of clean or solutions.

And we formed a the venture over in the Philippines. As you know we've shipped our system over to the Philippines. We are now are accumulating the peripheral materials. The peripheral operating equipment, you know to get the system up and running.

And as I mentioned, we should be sending Paul and the team are out as early as the next week recalling that we built all of our initial models of $1200 Gold, we think the timing of our our systems coming on line the timing of them.

Starting to be productive could not be better. So were certainly excited about the more news coming out of the systems over the next few months.

We couldn't be more excited about the size of the market that.

That is aggregating around us and it seems like we're really really the only solution that we're aware of that cannot only clean the mercury from the soils stock for the metals from the Mercury, but.

But also of use and the sustainable ongoing basis.

Chemical free for for many of these types of mining operations. So couldn't couldn't be couldn't be happier. They are turning to the day in.

We're expanding we've completed actually all of the foundation of structural geological work that we had been working on for almost the entirety of this year Oh, we'll profile of some of that tomorrow.

The annual meeting, but but it's come together incredibly well, we now are moving from geology of level of plans cross sections to full integration.

On to be engineering, and expand the pit shell you know from that information as well as laying out the drill program you know that would complement and grow that resource as most of you know we also completed the geophysical survey the helicopter.

In October and we just last week GAAP the data alone the day to day and the report.

From that information frankly, we haven't even had the ability yet you know to delve into the the details you know of all of the geological data, but its impressive on you know its of Directionally.

On a very core operating for what we know it's directionally looking to be expenses to what we didn't know, but I honestly im telling you that I am giving you that real feedback just based on the superficial view of the highest level of the report of the details of the data.

It is just tremendous it still shocking that we can get this amount was asked of this amount of detail so efficiently, but now we have it so what will happen is not only will our engineers.

You know update our resource model, our resource estimate with all the geological data that's been done from the ground up internally, but we will now then corroborate and ultimately integrate the.

This data.

In to that data with two results, obviously, we'll hand, the precision of what we already know, but I think the biggest benefit it was it will expand dramatically.

Where we believe the targets.

Prospect too and it will expand it will expand and contract it will modify in both ways. The drilling program to what we would then be able to the as you know the highest prospect targets I think as you guys also known we talked about on the last report that we retain Barry the where we're certainly planning to file the U.S.K.

Client SK 1300 Technical report this is getting to be a first where we are able to report under SCC standard of not a Canadian national instrument 40.

43 went on one standard, but as the C.S.K. compliance standards of our.

Our resource estimate.

We may be the first to do that in the United States, because it's not going to be required.

For FCC filings until the 2021 calendar year, we're looking to do it is part of the 2020.

The results of this year.

And so we.

We think that the fact that our all of our geological resource estimate data.

Typically typically.

Regulated if you will to the technical report prohibited from being in our you know our 10-K 10-Q and as filings right now is going to be required to be in our 10-K 10-Q in EPS filings I mean, we're ecstatic about that we're ecstatic about that because of the disclosure to our investors we're on.

So and the rules also require the information to be maintained in current so you won't have the scenario, where you have a 10 year technical report or seven year steel you know a day to say, you'll you'll have current data.

Remaining and being updated continuously.

In our the U.S. filings and as a of the U.S. Registrar on has the NYSE listed company. We think it on represent sort of the leadership point for us in in resource for reporting.

It will also include our drilling plans, which we are looking very much for two you know in 2021.

Just before I wrap up let me talk a little bit about our royalty portfolio.

You know from a from a from Agenuss. The standpoint, the saw came about when when we sold the certain mining to Tono, we retain the one and asked for set royalty on what we believe is an incredible resource that ultimately tono will publish their technical report on the Lucerne Thatll give.

The much more clarity to the value of our one of the half percent royalty on the mine, which is which is great. But you know tone is also expanding their clean grouping east of the Lucerne in the area that we consider the southern extension of the Occidental load on the accident.

The load itself has some preliminary resource connotations around it.

And then has an additional two miles of extended minerals strike, which is part of tone of those exploration development program. We also retain one of <unk> percent royalty on on the dental one of the more exciting clean groupings here on the Comstock tone.

One of those already launched what we believe is incredibly well conceived and expansive drill program that will include some of those eastern extensions of the Lucerne will include the Occidental and now we'll also.

The always would have but they started on the gold Hill targets. We believe the goal of hill targets represent some of the most prospective claims of some of the most highest great potentials of.

On what was you know the heart and soul of the original Comstock load. We also retain one of the half percent royalty on those claims as well, but through our acquisition of 25% of Pelichem, which owns the Sutro Tunnel company. We also have effectively 25 per se.

Sales of an additional 4% royalty on the.

The school targets. In addition of that we have the option to buy out of the rest of of that entity, which would give us 100% control over the sutro tunnel commodity and more importantly hundred per cent of that 4% royalty. So sitting here with anywhere between one and a half of two five and a half per se.

Yeah.

The realties on some of the most of you know incredibly.

Incredibly perspective claims here on the Comstock has created a value center for us that is attracting and starting to attract a lot of attention and so I think you're going to be hearing more about comstock royalty of what the potential values of these components are and even potentially growing it.

Beyond what we know and already.

So.

Let me just wrap it up to say that our focus now is strengthening in the sense that you know closing Lucerne and monetizing some of these assets and getting the things behind us.

Created a sound financial position, but more so its created.

On a narrowing of are focused on only these.

The objectives that we believe will drive half a billion dollars of value or sort.

So our capacity or capability.

Our per momentum is just getting stronger and we're very much the keyboard to 2021, Nick I'm, just kind of stop there and let's just go ahead and turn to question.

Thank you if you would like to ask the question. Please signal by pressing star one on your telephone keypad.

If you're using a speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment.

Again press Star one to ask the question and we will pause for just a moment to allow everyone an opportunity to signal.

And our first question comes from Mark Reichman. Please go ahead Sir.

Thank you good morning.

Already Mark for your questions Oh pretty good share with respect to date and and I know, you're still kind of interpreting the the geophysical results, but what would your expectation. The in 2021 on the exploration program. You know dollar spent and what do you think is the timing.

To get to a full economic feasibility study for both the.

The galley very.

Very good question, so I didnt say as precisely, but I think that over the course of those for.

For months objectives that I mentioned, there's there's probably three technical reports of meaning you know.

For the publication of our our maiden resource estimate.

Which I think you know we're trying to get this work wrapped up this year, probably looking to see that published.

In the first quarter, you know and the intent is you know as part of our our 10-K filing as well. So we would be able to publish that report, but also be able to incorporate it.

As part of the 10 year for that.

The 10-K filing.

Secondly, the drill program, we already have you know a very of very focused drilling programs sort of pulled together from all the the geological work. That's been done this year and I think the last step now is to.

Refine that you know based on the Geo physical data and I know you say, we're still looking at it I mean, we were literally just we literally just got it. So there is on its it shouldn't it shouldn't be viewed as on so much as it were for it is it's an extremely robust for but.

It really is just the Mount.

The geological and geophysical data.

Deep data. So so our team will now look at our drill program and my expectation to answer your question more directly is there the will be probably from some real refinements you know two drilling I think the will certainly be added target you know for.

From what we're seeing already which is very exciting, but but but.

I really think that.

The first drill program will be modest you know when it when I see modest I mean, you're probably in the range of $1 million to $2 million and the reason I say that is because we have so much data that weve reassembled and weve calibrated and we have a very.

A very precise set of information gaps that we would like to fill in with the drilling program. It will strongly enhance the resource upgrade of the resource it on Italy, and the resource and so I think 2021 will will allow.

Just to set the new platform identify the first real phase of drilling I think it'll be very exciting don't get me wrong, but it'll be very very focused while we're doing that in other words, well we're drilling for explicit.

Expansion explicit connection of what we know we will spend continuously the evaluating the geo physical data to create what I would think is with the is the second phase drilling program.

And and the step out and the expansion you know based on what we learn in 2021, and so I think that that would result in a second stronger expanded resource estimate we don't we don't habit scheduled yet for example to say.

By the by the third quarter and first quarter of next year, but certainly that would feel reasonable you know in terms of of a modest growth program. You know we're here for drilling filling day to updating the known dataset and then updating the resource and then parallel to that we would be working on.

On the economics of what all of that means to us we already feel like we have a good strong economic show the start but we then started adding engineering, what we typically refer to as pre.

Preliminary economic analysis.

With the idea that you know by.

2022.

We will be publishing.

The technical report that would have preliminary economic analysis. It wouldn't be full feasibility of mine plan production decision, but it would essentially be the step before that and then we would look for 2023.

To publish you know to get through for feasibility work one risk factor on the full feasibility is which is a positive context is to the extent the step out into the expenses Geophysical survey show so much more than you know we could have Uh huh.

And on the keys ability.

That we would still want to expand before we went to of production decision. So im wondering in one way.

The access would be get success and so it's just the step out into the spring valley or what we expect them to be single step out more of then we'll step out more I mean conceivably you could spend another you know two plus years, you know of drilling and development you know the come up with a much bigger model.

But I think I think the positive of this scenario is that we know we're going to have a good outcome and then its a question of how much further could we grow it and let the economics sort of the dictate that to us. So I know I know I I think I answer of more than what you asked but I guess, let me just make sure.

Right at least answered what you asked.

Oh, you did that was very helpful. On just one quick follow up before I get back into queue, but so you've been very successful in paying on most of your debt even prior to executing.

The sale of some of your non core assets would still remain so I guess the question is is in light of kind of a modest exploration budget of 2021.

How do you think about how you might allocate that cash that the the expected proceeds do you think it'll still be dedicated to the Dayton and M.C. you or do you think there'll be some portion maybe available for returning capital through a buyback or something like that.

Oh good question. So Sophie Thank you for the question so in terms of day and.

Moving to the the economic potential you know as we look at we just look at some of our preliminary economic shows and you know we look at you know 1400 dollar goes $1600 gold $1900 Gold I mean, you you have a range of you know hundreds of 150 million.

The economic value that that you know to investing you know a million or 2 million to expand that number but the the returns are exponential I mean, they're very very high I mean, if you could spend the million or two drilling to not only support and validate.

You know 100 of $150 million of value in a more robust third party technical way I mean, that's that's that's very high priority allocation for us, but but if you could spend the million or two and had 2025 30 50 million of the.

Al you that's extremely high return for us as well what we had set up until now is that we werent <unk> and this is still true we're not we're not committing the capital until its available the differences, we have absolutely clear sight absolute clear sight to that those.

Funds, becoming available but.

To your point, we we have a clear view of it even before we close on of the silver springs assets for over $10 million and now the day the Deeni ranch for 2.7 million right. So we have a clear path the those funding.

Funding sources with agreements, but even before that.

You know we have almost you know over 10 million of liquidity, you know coming through tone on so so I think the game's gonna be green lighted the as soon as as soon as of the drill program is updated expanded and reviewed with the board we would look for the moving.

On the M.C. use commitments on.

Less than $2 million to go and.

And we also have clear sight.

Actually want to see the effect of C of the Mercury remediation on the U.S. system, which is now happening sort of as we speak we want to see the on the efficiency of the Philippines system, meaning you know the generation of cash flow. There and then you know from our perspective.

Deploying on a million and a half to 2 million for.

For a system that can generate a $1 million to $2 million a month.

You know, it's where we're going to be doing that as fast as you know the organization will allow it and there are some constraints you know if you're going into the different jurisdictions. There are some lead times as we see in the Philippines, even though that's come together very nicely. There's actually the you know the three to four month lead time.

Building one of the systems so.

So you know we want to be deploying those you know as fast as we can you know get the cleanup and the cash flow from.

Moving so those two things are are at the top of the list that's what we've prioritized, but but you know we have other.

Metal processing technologies that we've been developing we have other opportunities, but that's just way too early to talk about so the likelihood is that there could be some excess liquidity in in sort of canvassing the book.

Ward.

There is the receptivity of.

You know to buying back book, but we're going to only do it in the most financially diligent and disciplined ways.

You know we don't we've just gone through three to four years of absolutely brutal restructuring to reposition our liquidity I paid it it it's been miserable, but I'm pleased with where we are book.

You know it it wasn't always the obvious that we would get to where we are so we're very pleased with where we are and we will consider those things very diligently.

You know because I think as we look at the landscape, we have the liquidity to deploy and high return high cash returning on opportunities.

But we May also have more liquidity and if we have more liquidity then yes, we would consider doing something like that it might be modest you know but wouldn't get.

The two exaggerated, but it might be very intelligent so.

Good question and I think you know we can be if we didnt make a decision like that we obviously communicate it immediately.

Thank you so much.

Thanks. Thanks.

Thank you for our next question comes from James Dell. Please go ahead.

Hi, Jim how are you on how are you doing.

Same safe.

What.

Staying safe in this cosy Nightmare [laughter].

Hi, Hey, listen the what kind of true what are you getting on your Mercury.

Mercury system I mean, the risk.

On for hours or anything like that or yeah. So the the U.S. just the compare and contrast, great question just compare and contrast, you know the U.S. system is really been designed you know to to prove concept and the proof of that concept is intended to show operating.

At a range of two.

Up to 25 tons per hour and so what we've been doing so far Jim you know in the U.S. system is is and its and its intended the two to 25 is not it's not it's not on its not a range of possibilities of it's the rate that we want to scale. It up from like we want to the operating a two tons per hour.

The man about operating in three to four times per hour and we want of slowly, but surely move that up to 25 cents per hour. The reason for that is we want to have absolute certainty that it's effective.

You know in two of the.

Definition of the effective is is that you know from whatever amount of Mercury is being fed into the front end of the system. Let's just use an example of 100 parts per million.

On the we want it we our goal obviously the ultimate would be to have zero parts per million come out of the other side, but our goal is to try to get below the 11 parts per million.

11 parts per million is the EPA standard for the you know the <unk>.

If you have left in the loan parts per million Mercury and the material can be used for any purpose, meaning meaning it's defined as clean and non harmful at all and so the goal of yours too is to prove that as we scale. It from two to 25 and all of that data.

We'll be monitored and and corroborated you know the third party. That's why it's also it was very important for us and it wasn't it wasn't the wasn't something we talked about a lot, but one of the most critical success factors is coming up with a sampling methodology. There's many many many of them out there that would be.

The fully accepted universally accepted or certainly by the the EPA and the end of <unk> and we came up with the and the oddity of that is that when you're dealing with Mr. Materials are sampling protocols aren't as statistically acceptable.

No you know, meaning because the materials disturb you can't necessarily extrapolate certain assumptions the way that you can kind of normally geologically except the contacts. So so we came up with this whole vapor sampling profit we didn't invented it existed, but we came up with the.

The way to obtain materials makes materials sample of materials third party prove the materials, you know and and so up until now.

We've been running each part of the system you know quite frankly, each part of the system independently has run excellently, we feel really really good about it last week, we got all the parts of the system running independently and then we ran all parts of the system without the Mercury reactor, which is sort of the central the central.

Core technology.

To our IP into the whole system as a whole.

With the tremendous resolve like in other words without the mean mercury removal.

We ran all other parts of the system with tremendous results you know getting substantial majority of all the mercury out now.

We're going to activate the reactor and run the whole system as of that spoke to your point I expect the we're going to be running you had a true ton per hour rate for for quite a while you know like we want to run it at the two ton per hour rate with varying types of materials like different types of materials going in and at each step of the way.

Proving we're getting all of the Mercury out of which we fully expect to be the case.

Let me contrast that to the Philippine Union, where we're starting at the lower base of the river, where there's a lot of sand and gravel and it's on but it's so far downstream. It's it's got much much less the mercury in other words it wouldn't need.

You know for layers of technological sophistication to get the Mercury on that system will run at 150 tons per hour almost from the onset of you know after a week or two of the getting it up and running it will run that way almost from the onset and and our models show that the.

The system running at that rate would be profitable with.

With no with no precious metal with no goal. So you know even if you had a the 10th of a grammar the 15th of a gram of its search generating a tremendous amount of cash of because of the higher operating range.

So so there are two very different profiles of but not I don't want to make the second either they you know they're both ILUVIEN for mine.

Mining systems, just with different you know a different focus of priority once we get the U.S. system sort of running at the higher end of the the two the 25 ton range with the same result, then we'll start building the the the first.

Sort of fully integrated Mercury system that.

That will go to the Philippines now that one will be more like the Comstock system in some regard, but it's also the very different and how the regards because each one of these things is designed.

You know for you know customized is probably better word for the environment that theyre going into and we're looking for that system to be 75 to 100 tons per hour system with the hires and sophistication that would be the second Philippines, we we we could see.

The Philippine project, having four or five six of the systems deployed at the same time right. So even though we think of.

Each project separately.

The project will tip could typically have much more than one system deployed depending on the size and scale. So.

I know I again contextualize beyond what you asked me, but did I today at least for your questions.

Yes, you did.

[noise], what I'm thinking though is the are you using leach material right.

We started off using leach pad material just to run.

Run the system you know material flow Wise, then we started taking from from tailings from dumps that are in.

In the media proximity called the Baltimore and we've identified a dozen top.

Targets of cross the Comstock that we would bring in feed material up so the U.S. the U.S.

The U.S. prog project is really the proof of concept across a variety of different materials, a variety of different contamination levels and you know frankly different types of of of material fees like different soil, some rocky or something into your you know it's kind of the flow.

The spectrum task.

Okay now you crushing the material before you need to do.

We're not currently a lot of what we're trying to target of material, we didn't with the leach material, we didnt with some of the other waste, we didnt and with any of them. So far you know to the extent the material.

For the extent, we identified material that has let's say excessive.

Sizing the you know like bigger rocks, if you will.

I wouldn't imagine crushing, but we would probably screens price the screen the material before we headed into the system.

Okay, now with my screen or using one on day, one order book.

No we're not currently use of.

Hi thing, but you know probably we would be looking to go below in nature and should the quarter minus maybe.

Maybe smaller you know.

The the systems the handle the bigger bigger component. It's just not I mean, it's just not affect its non efficient use of you know it's the the more granular the material is.

On the battered on process of sites. So you know just for your question of optimizing the side anything for you some form of grizzly or screen or you know to do that which for its very simple.

Easy to deploy we haven't we haven't done that yet probably we haven't confronted day.

Because the way the <unk>.

We can choose the material that we prioritize.

Okay, what is the output consistent deal flow.

The real liquid more.

More on <unk>.

Yeah like all the above right. So so we obviously.

Obviously, we are separating and.

Capturing the Mercury.

At this point in our process.

You know, we're capturing mercury, that's an amalgam price. So we will literally have mercury with metal in it.

And to the extent, we have that we would there would be subsequent processes that we have here for reporting and the refining.

We have.

You know we have slurry we have.

All all the sort of the residual material other than the goals of the mercury that wouldn't be separated cleanly and in our case those materials would just be put on the leach pad you know on a fully contained unit and that's one of the beauties of our platform from doing the process is that you know everything's approved and everything contained.

You know, while we're running of the task.

Okay are you finding on hanging on to the [noise].

Oh good on the look.

Look into it but the are you finding any of.

Other valuable minimal beside from the Mercury.

Like more gas until really the.

The schools and silver Yeah, just goes on so.

Okay, you are finding from you anyway.

And the material through your Merrill Crowe clean.

The there would there there would be a way to use some of the portions of that process, particularly the retour.

You know.

You know for for sort of final stage refining we're not planning to do that right now right now our our goal is to prove that the if it gets the of how much mercury weekend removed from the soil once that once that's proven to others like we're confident in what the system can do but once that's proving the others.

The validation is certified right that that's really the goal of the system and then the intention band would be the be deploying the system.

In larger scale mode in.

For many many many other projects on the country you know in and around the World. So you know we never had a a profit motive.

Modi of even though we've modeled the residual gold et cetera from the Comstock. The goal of the Comstock unit was to prove unequivocally how effective this is that we're moving the mercury from the soil. That's what we're going to do right and we're doing it on.

And then scaling up the bigger systems that would be much much much more profitable and deploying them and that's the highest priority project size early B you know the largest clean up slash you know metal extraction opportunity.

I got you okay.

Which gives you a little bit and he is.

For had mostly on the when you will close on the.

Danny Ranch and the.

Silver Springs standard.

Yeah. So deniz is on beanies very precise what we did it was the signed a two year agreement.

Here.

And it was with the cuts with the drilling services company actually with the drilling services company that tone of gold is currently using and actively drilling with as we sit here and be there very good.

So the owner of the company wants to buy the ranch. So we agreed to sell range for 2.7 million, but the way we did it says we signed a lease.

A two year lease paying 9000, the month in rent and if he closes within the two years the.

The the 9000, a month would apply to the purchase price.

And so so we think that there's a high prospect of that happening, but theres an additional feature in the agreement that says.

On we're able to use his drilling services.

You know that was something one of our business guys negotiated it wasn't something we necessarily we're motivated for driven the do but the end result is it is if we did a half a million for a million dollars worth of drilling it.

It would be very liquidity friendly to us in other words they would drill.

You know those services for US and then those services would apply to the purchase of the ranch and if they did not close on the ranch in that time period on.

Those dollars would be forfeited by then so it's almost like the on the rent payments plus the drilling services become a non refundable deposits on the sale. So I you know when I first understood. The terms from our Guy I was like that's nice to have and I really wasn't thinking of.

Got it in any kind of excited way, but but but as we start to develop some plans here for the day and.

It could be a very strong strong win for us.

Affectively accelerates our drilling in it and it could accelerate the closure of the ranch off for good value. So I. If you asked me my opinion I would say that it will and it's 95% probable that we'll close that we'd be surprised of it didn't but you know that's in the two year window. So.

So you're looking at September.

2022, I think maybe 2023.

Yeah. So so.

So it's all good solid win when you come back to the silver Springs.

You know Cove it has slowed down.

Some of the yeah.

Capital raising activities by the fund.

Really restarted the good good hey, they think there was some.

You know good sort of read connection.

In September but now it's really quickening, we're getting a lot more interest for getting a lot of interest from.

People, who would typically be a 10 31 exchange type people, you know selling real estate and looking to roll the capital gain into another real estate project. They think they're realizing that investing opportunity fund because of much more efficient much more flexible much more user friendly way.

The role of those capital gains so we're getting money, we're getting money at higher valuations that you know much much higher valuation.

So the thesis is being validated every step of the way and the pipeline is growing. So you know is there a prospect of closing these things by the end of this year I think there's a very strong one I'm on the same at the same point like it could be early next year.

But at this point and the since I think important for US all to appreciate you know there was almost the there was almost day.

There was an urgency there still is okay I don't want to the speed, there's an urgency in selling the silver springs property, because most of us including myself side as the most probable if not the sole means for us to stop selling style.

Okay. It was the way to fund ourselves first the pay off our debt remove that risk factor right and then provide for some funding you know the start our business activities. The M.C. you day in or otherwise going for well the reality in the last three months has changed dramatically we pay.

Paid off for senior secured debt completely.

That risk has been removed from the equation. We we did that primarily through the monies that for coming in the originally from the tone of gold rate, taking the day from over 10 million down to you know less than 5 million.

We got more money in from the tone out enough to chip that away a little further which allowed us to sort of reach the knee on a very tight senior secured stringent.

The venture that was do you know the this year two of very flexible extended term unsecured promissory note. So that itself was the big victory.

But then with the tone on Monetizations accelerating and then tone of redeeming you know over two and a half million dollars, we chop that number.

Right down in half.

And so you know as I was saying earlier, there's a clear path to.

We are paying off our debt without these non mining assets sales, it's sort of just the sequence of the money coming in I think the assumption was look we're never going to get any real money from Tono. So let's get these non mining assets sales well you know there was a flaw there tono came through.

The bigger and more surprisingly of then.

Than we expected.

We have liquidity, we're about to pay out for that and the non mining asset sales you know the become the gravy on top whereas previously the Tono monetization was considered the gravy on top that people were putting less priority on what's what's important I think in this thesis is that we're.

Turning gray investors at at the higher values, which is if it's good value you know the the the value of the assets that have been assembled is very high and maybe more importantly, northern Nevada seems to be immune to cool bid.

When it comes to.

Industry and people moving into our area like we have companies coming in that one industrial capacity. We have a list of maybe 10, just you know that want to come the silver Springs, the loan were signing leases and bringing in these companies as you know the for.

Fund is and and the value of the real estate and the value of the water right just keeps going up so so I don't think.

The the urgency remains exactly where it is it's our number one priority.

If you choose to monetize the all of these non mining assets. It did not only does all the things that we just talked about for our financial position, but it also you know simplifies our lives and allows us to focus on the the dozen objectives that actually create half a billion of value.

But I just think the I think the on the the acceleration of the tone of activity closing the deal getting the monies in monetizing some of the Securities has you know has just made it unless the volume. It's it's the <unk>, it's not a desperate of thing. It's just an urgent thing that we're going to continue to draw.

Hi forward I'm very confident I'm, 100% column for that the deals will get closed.

We're just trying to do it with the best.

Investors and the best timing and we all wish it would be faster there's no question, but we haven't seen anything.

That would equate to a step back for a fatal flaw in any of the thinking so I I you know as I'm trying to say I wish it was done.

But I don't feel any less.

I'm confident that its kind of get tight, it's coming and and it's coming faster and faster every week for getting more and more inquiries you know.

There's there's a lot of capital looking to come into the kind of real estate. So its.

What's going to happen.

Okay Corrado of ticking up a lot of your time. Thank you very much I kind of.

Thanks, Jim I like it.

The.

Somebody else. Thanks Yep. Thank you.

Thank you for our next question comes from Carl Frankson. Please go ahead.

I kind of how are you just the real quick the side I'm kind of I'm from.

From left field on lithium it's part of the pistol and Nevada is I guess extensively you know one of the the centers of lithium deposits is the lithium on the radar at all for any of your mining claims or any bike products or anything like that.

Yeah. So it's interesting it's [laughter] fascinating that you asked the question. So last month, we had two board meeting.

Because we've been so incredibly focused on our strategy and if you look at the verbalization of our strategy right, we want to commercialize high value cash generating precious metal based on you know materials that are you know environmentally.

You know environmentally friendly environmentally and socially responsible.

Before I answer your question, let's say two things one is the amount of investor interest.

That were getting for because of the Mercury remediation is is is probably impossible to exaggerate.

We we win from last year, having sharkey type.

The capital always looking to you know one of do short term things not interested in being long term investors you know of which are our responses had been no no no no no right too too you know.

Yes, GE type investors, you know asking of how much capital, we need and its of it's a fun. It's a fun situation to be saying, we don't need the capital raise but we're very interested.

In in in in in.

Enhancing our shareholder base. So you know switching before I answer your question again, our shareholder base, we like we know the people. They know what were doing and you know obviously people want to start seeing huge value leaps.

You know and we think it's coming but we need one way to do that is we need to enhance.

The top 30 a day.

The like in other words, we're not looking to subtract any investors, we like our investors, but we'd like to see six months from now eight months from now 10 months from now.

If I looked at the top 30.

I see 15, new knee for so maybe instead of looking at the top 30, we're now looking at the top 45, and we believe that the foundational driver to get us to $4 a share the get us to $12 a share you know as we look at our intermediate objective what we're pivoting back to your question is when we talk about.

Mercury remediation or we talk about metal rich.

Recycling and these are the two areas we've been investing time.

The in metallurgical process, and metallurgical and engineering process that we're confident.

The the the Investor were spot on is overwhelming I mean, it's it's truly something that is getting me excited about 2021 like to actually go on a non deal road show and talk about Mercury and talk about what we're doing not to mention not to mention.

That precious metals is is in favor and you know, Ohio teachers and Warren Buffett for the first time in their careers have allocated no meaningful capital to the gold industry. So so we love of we're seeing in precious metals, but in those board meetings, we decided to tweak the strategic.

[laughter] statement to say precious and strategic metal. So we tweak the strategy, but it's not insignificant and the reason for that is we're being approached.

By by lithium ion battery recyclers for being approached by other critical mineral opportunities.

That are within our wheelhouse right. So we're not straying from our focus on our core competency, but you know when you look it up of a process that has crushing that leaching you know metal reprocessing, we've done all of that and so lithium and nickel cobalt.

Magnesium, we're getting hit with some pretty interesting idea of more than ideas more and more advanced than Mercury remediation was when we first started talking to that and so I think both from an opportunity to get into the huge cash generating.

Activities remember, we have 175 million of net operating losses.

So some of the returns for us or even more in hand.

And and the peak to feel the investor.

The feedback I mean, it's it's it's it's not strong, but it's kind of overwhelming I think we are positioning ourselves for some incredible growth here and so the answer is too early too early to communicate.

And on.

Opportunity, but we are very strong we looking at those including lithium nickel cobalt you know if it's if it's if it's economically feasible men.

And these are crazy models and some of these models you know you know the return is too much I mean, you invest 20 million, you're generating 15 million of month I mean, there's some stupid numbers here that that are hard to ignore so we're we're we've yes, we've expanded our per view.

But we don't we don't in any way shape or form want to impair the focus that we spent two years, creating so it's important to us to sell the non mining assets not just for the money because we don't want to invest bringing cycle and non mining assets, we don't want to invest brain cycles you know.

In what tone Ogles doing we want Tony will go to the hugely successful we want to benefit from that we want to invest brain cycles in two or three things that have huge opportunity huge cash and the possibility, but are within the wheelhouse of precious or for strategic metal processing, we believe.

Were you know just as aprils anybody else to two if not more so to commercialize so again I I may of over contextualize, but it's if that's your question is one of the things I'm going to spend a little time on at the annual meeting Tomorrow is the tweak in the in the strategic focus, which which is only abroad.

The widening so that we're not limiting ourselves to something that could be the top possibly very lucrative and right in our labs.

Okay. Good okay that sounds good on one of the quick one it's for the Dayton or wouldn't it be possible to speed up a little of the process of I'd be quite on the some of them the little disappointed in how how for <unk>, we're looking at the Oh.

Right right, but could you couldn't you explore the it's a little bit with some of these the.

Streamers seemed like the for the smaller ones like Maverix metals are you like old or something to finance, it and maybe get it going a little earlier.

Well I think so you know if you if you asked me that like six or nine months ago, we would debate a little bit, but I'll tell you I think where does the air now because because with this contract to so the day in you know for lack of a better way to say it we literally have 2.7 million in non dilutive financing lined up.

Theoretically we could do $2.7 million of drilling you know with with a with loops from and it would be paid for right. So I always my key for the day in was I didn't want to allocate the capital to it not because it didn't qualify return wise of up because we didn't have it right and so so so.

Now we have the access to the capital the only thing that I think we're waiting for is to finalize.

The drill program with the Geo physical work that we just received incorporated into that thing once we have it will get moving faster and you know, even though there might be a two to three timeline here The act.

Economics, and the economic appreciation of what we have there is going to grow.

With it for me.

Immediately like as soon as we start publishing this technical data on these technical reports, which were for planning to do in months here, we should start seeing a recognition of that value. You know we could always consider additional funding sources beyond what we have now but I'd rather.

Do that with the published the known.

The resource where were you know, we're not speculating in sort of losing value because we just don't have current day. So I think I think it is going to move faster I think you'll you'll you'll be happy that.

That we are going to start moving it faster because I think the obstacles that we were waiting to remove frankly as of really right. Now are removed its just a little bit of internal work to finalize that drilling based on the latest Geophysical survey.

Okay. Thanks Corrado thanks.

Thank you.

Thank you on our final question comes from Laurence The Danny Please go ahead.

[noise] morning, Corrado, Thanks for all the hard work on like the way. It's the moving forward I'm. My question is regarding the Mercury remediation. So if you can give me a quicker breezy day, abbreviated version of do you sell.

The machinery.

Hypothetically you sell it to another gold mining company due.

Do you then go help.

Implemented and install it and consult.

It's not the whole picture or a free question I'll, let you take the way I know so it was particularly so for the first let me let me say, let me give you a couple of of the given the strength. So first M.C. you.

Which is the company that we're investing in it and we have the right of first refusal to participate 50 50 in every project right alongside of them see you. So the way way. This the structured we end up with 25% of M.C. you and then we have the right.

To do a 50% of each project alongside them. So in theory, we could end up with 62 and a half percentage of the economics of each project.

You know as the structural context, which we like now to answer your question, how how okay. On M.C. you deploy the systems. So the idea of first of all we're not restricted in any way. It's sub 10 C. you. We can decide how we want to deploy the systems and we haven't necessarily ruled.

Any model how as the as a point of matter of fact number one M.C. you has the exclusive right to the intellectual property and the global right you know global exclusive right to deploy the system, how do how would we do it so our first preference [noise] you know is real.

We are coming from the mining perspective of we would like to secure the you know the material that the contaminated and we would like to process that.

Material, we would like to be the ones, you know and we would like to keep.

All of the profitability of that comes from the gold extraction from that material. So so if you use the Philippines is an example of the Philippines, you know does not allow for 100% for an ownership. So in the Philippines example, the local our local partner literally.

[laughter] owns or controls the mining claims.

You know and so we have a 60 40 venture they being 60, we'd be 40.

Where where we come in and we clean it up and we share. The profit. However, we have an accelerator on all of the profit until our original capital is recaptured and then they get 60, we get 40 or so so it's a very nicely set up the for.

For Us and then we own or have you know of security on all the equipment.

As part of our venture there we could do the exact same thing and on a 100% of of the property. You know we're looking at major scenarios the northern Nevada, We're looking at scenarios in Montana, Alaska, California, where you know we could secure the property we could do royalty arrangements.

With the property owner, but we make it very clear to them you know we're not we're not just processing their material, we're eliminating a massive liability right. So so so there's a lot of leverage that we have in terms of.

Well, it's worth having said that could we license the equipment to somebody we could absolutely. There is no restriction could we sell the equipment.

We could there's no restrictions, but it's not our intention to do those two are an.

Initially like we have so many projects.

Around the world, we almost feel like we can pick and choose the one that has the most impact.

And we mean just.

Planes right like the most impact in terms of the economic feasibility and profitability, but also in terms of social impact.

These communities ecosystems are being destroyed by this mercury had yeah, we're really going to be the ones to clean it up.

The interesting that's great that sounds good. So you know look at US you could look at US you know couple of years from now as as the major minor with the doesn't mining projects all around the world right. The only difference is you know we're cleaning up the environment rather than impairing the environment as we're making.

The money and ask for making that progress that's how I like to think about it okay, but theres no apart from the base.

I mean, even the government what if the EPA came in and said Hey, we want to [noise].

The 100.

The clean up the Superfast I mean, there's no we could do that to just take the fee for doing the work you know what I mean, there's no right prohibition yeah.

Plus the new administration is going to be more on vine or pro environmental.

So I'll tell you something that the there's no question about that but we are starting from a point, where the U.N. past the minimize the convention and the minimum amount of convention targeted 2020.

To start eliminating mercury from industrial mining, especially artist and on small scale miners around the world. Okay. This is the year weve already bidding he just with the Washington policy group out of of the.

For the EPA, we've already engaged with the state Department, we've been engaged with district nine we've been engaged with the is tricky EPA, they're all mandated to accelerate and implement minimum on the not just in the U.S., but around the world and so you know their monitoring our our price.

Yes, very closely because they see of says you know as I said earlier one of the few if only the ones that they see that cannot only clean the environment that actually provide a sustainable on going solution. So so we already have feel like where you have huge federal support I think it can only get better to your point.

Right it can only get better.

Right sounds interesting I like the flexibility sounds good.

Yeah, Yeah, it's the real company, it's the real business and.

It's a huge market our our our challenge will be the speed at which we can deploy systems and you know making sure. We just have the organization around it Hum so far in the Philippines. It's been fantastic you know not only do we have you know Paul Cliff the CEO of the company has.

You know family in the Philippines, and it is resident there as well as California, but but our local partners. Just exceptional you know so you know the there they need their company clean or solutions. So everybody is really on the same page you know to set a new standard here for how they'll be moving.

He if we share I could see the we.

Yeah, if we show the of stick, you'll see on the comps, which is more technical and then we show the on the international the success of the paradigm shift and in one of the richest I mean, you know the AVO day, or a which is where we're we're helping the clean up the river and the mowing is one of the richest precious metals districts in Asia.

If we if we can show a paradigm shift.

You know in that ecosystem attitude, the technical aspects or doing here I mean, we're we're we're literally the global leader overnight.

Overnight is like after eight years of hard work right [laughter] right, but I see the potential for sure very interesting yeah. Thank you. It's very thank you. Thank you Lawrence.

Thank you we have no additional questions at this time.

Well I like to just thank everybody for.

You know you're you're I'm interested on your attention you have for annual meeting Tomorrow, which Tom will just be a an emphasis of the things we've talked about today I hope everyone keeps their family safe during Cove. It. It's you know it's it's it's encouraging to hear about the vaccines, but we've got to suck it up until April of what we hear are.

Other than some of the Philippine delays have not really been affected business wise and were just marching forward. So thank you all.

[noise]. Thank you ladies and gentlemen. This concludes today's presentation you may now disconnect.

[music].