Q3 2024 Comstock Inc Earnings and Bussiness Update Call
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This meeting is being recorded.
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Speaker Change: Welcome everybody to Comstock third quarter of 2024 results and business update this is Trevor Brucato with RV milestone group Comstock U S based investor relations firm.
Speaker Change: Comstock is listed on the NYSE American under the symbol L. O D E and joining us today as Comstock executive chair and CEO product to gas price and C O O.
Speaker Change: Mccarthy.
Speaker Change: I'd like to thank the hundreds of investors who registered for today's event.
Speaker Change: We received your questions during the registration process, but if any new questions surface. Please submit them in the zoom Q&A module and we'll do our best to address them following management's prepared remarks.
Speaker Change: Please note. This presentation is being recorded today October 22024, and will be made available on the company's website at Comstock Dot Inc. Shortly after today's event.
Speaker Change: Thats Comstock Dot Inc.
Speaker Change: I'd also like to thank those who participated in Comstock Q3 stakeholder perception analysis report that was published on October 3rd and portrayed a positive shift in investor sentiment compared to previous quarters in the coming days, we'll be opening up the survey for the fourth quarter will be circulating are linked to registrants and subscribers.
Speaker Change: <unk> E mail, but it will also be available on the company's website at the top of the investors section.
Speaker Change: As a reminder, the final reporting boots trends on Comstock proceed strengths weaknesses and milestones and will be published shortly after the end of the quarter.
Speaker Change: Your participation will be much appreciated as it will continue to help strengthen Comstock investor Communications efforts and guide the focus of our upcoming events.
Speaker Change: Please note today's presentation may contain forward looking statements that are subject to risks and uncertainties that may be out of comp Sox control and should not be construed as a recommendation or solicitation to buy or sell any security for the companys full disclaimer. Please visit Comstock got Inc. Lastly, our B M. G R B milestone group.
Speaker Change: Is not a registered investment advisor or a broker dealer or more information honest. Please visit our be milestone at dotcom and.
Speaker Change: And now it is my pleasure to turn it over to Comstock as executive Chair and CEO Corrado de aspiration Corrado stages yours.
Speaker Change: Thanks, Trevor Hello, everyone and welcome to our third quarter update I'm very happy to report that we have positive updates insights and outlooks on all three of our businesses and a meaningful number of expanded partnerships that have positioned our system and capacities in a way that is already altered.
Speaker Change: The way the market perceives us and is engaging.
Speaker Change: It's truly gratifying to see all of our teams getting this traction across the board.
Speaker Change: Similar to our last call, we'll take live questions. After these prepared remarks.
Speaker Change: I'll cover corporate first since we have announced some very meaningful transactions ranging from recent partnerships with the department of energy and the National renewable energy lab to our previous announcements regarding capital with S. P. C. Then Billy will update you on metals and mining and I'll wrap us up.
Speaker Change: With Comstock fuels before turning to questions.
Speaker Change: Okay. So from a corporate perspective, I'm happy to update that I've spent the past two days with S. P. C. In a capital partner and we are methodically moving forward. We're generally genuinely excited with how we are positioned comstock fuels metals and mining and the opportunities we are now capitalizing.
Speaker Change:
Speaker Change: We are deep in the due diligence structuring process with SPC and believe we have a high level structure well outlined could facilitate the capital.
Speaker Change: Some of you have asked about equity versus debt and we're just trying to optimize the structure for the businesses and our shareholders.
Speaker Change: These monies are specifically designed to find each of our businesses with the right amount of the right capital to accelerate their commercialization have shared their markets and exponentially grow value, while taking maximum advantage of our net operating loss carryforwards and maximizing companywide value.
Speaker Change: From the remarkable technological and market advances that both fuel and metals have achieved in just the past three months plus.
Speaker Change: Plus this recent surge in precious metal prices people are really starting to appreciate.
Speaker Change: The potential value coming from what we are creating.
Speaker Change: There is some complexity here and everyone needs to be just a little patient as we work through the tranches. They are coming and we're committed to maximizing the value of the enterprise and the safest and best way.
Speaker Change: Our liquidity remains stable as we close on some other minor asset sales and the previously announced $1 5 million convertible note, while we advanced with SPC and frankly, some other capital transactions I stated on the call last time that I expected us to be a bit over 200 million in shares and we're now at 209 million outstanding.
Speaker Change: From a corporate transaction perspective, we announced a binding agreement to restructure and own 100% of Genmab material science discovery business, including the material Science AI technology, the related material science team and the associated know how and IP.
Speaker Change: We're doing it without issuing new shares or cash, but rather assuming the team and attack into what will become both Comstock AI engine and its own business.
Speaker Change: Conversely, the satellite the satellite software in the space based employees as well as a small investment in extra Opex will go with deep in a new venture that we understand will be called Star Raso.
Speaker Change: Our focus is has been and will remain material Si.
Speaker Change: We're 100% focused on it and we cannot be happier to have our own team, 100% dedicated to material science breakthroughs with dramatically less required span dramatically less required capital outlays. We also expect to develop an AI business with external customers, while supporting all the advances of Comstock Owens.
Speaker Change: Breakthrough materials.
Speaking of Comstock, we've done a tremendous amount we've achieved a tremendous amount in just the past three months.
Speaker Change: As you've read Comstock innovations announced that truly landmark agreement.
Speaker Change: We're in we acquired the exclusive rights for Lignocellulose take IP that was developed by the National renewable energy lab.
Speaker Change: And M I T in conjunction with the department of energy.
Speaker Change: This tech is exclusive to Comstock and includes substantially all of the world's different Woody biomass is within those patents.
Speaker Change: The market is starting to understand that there is really no way.
Speaker Change: To produce even a small fraction.
Speaker Change: The required renewable fuels of the required sustainable aviation fuel without an abundant extremely low carbon feedstock.
Speaker Change: Most people are starting to understand that Woody biomass is the only practical answer we have the technology and rail hasn't been knowledge this and the leadership of our enabling technology, making our technology platform and frankly, our global team second to none.
We've consolidated the IP into our platform and we are jointly developing the next generation of higher yields lower Ci scores and significantly lower costs.
Speaker Change: We didn't go to Enbrel enbrel didn't come to us just to combine IP portfolio.
Speaker Change: They wanted to and we are very receptive to working with them together on the opportunities that they've identified the breakthroughs that they've already advanced to get to this significantly lower Ci score significantly lower cost and next generation of higher yields.
Speaker Change: Let me comment on metals and mining revenues ramping up rapidly in the market is expanding for us almost daily Bill He's going to walk you through the update and then I'll come back around and I'll wrap it up with the fuels update Billy Please go ahead.
Billy: Thanks Corrado.
Billy: So to start.
Let me refresh everyone on some of our core thinking on the energy transition.
Billy: And I include both the what in the Wan and when I say that what I mean, what technologies do we think are going to make a real impact and when I say when I mean, how these markets are going to evolve over the coming decades.
Billy: And our core thinking or are focused today leads to this core assumption that in the energy transition, where we go from producing the majority of our energy from fossil carbon to producing the majority from biogenic carbon and other renewable sources.
Billy: There's no question that we definitely need more metals.
Billy: We need them for all stages of energy production transmission and storage, so simply put the energy transition need the metals.
Billy: And I don't just mean exotic and rare metals precious metals are a big part of this story too.
Billy: Silver has already emerged as a crucial resource necessary for the energy transition.
Billy: Demand for silver by solar panel producers has nearly tripled since 2021.
Billy: You may have seen the recent news from Samsung about a solid state silver battery.
Billy: We think this is an exciting early development, but are in our opinion. It's only just the beginning of a new energy storage industry generating substantial demand for silver and other metals in the coming decades.
Billy: Both our Comstock metals and Comstock mining businesses are positioned to capitalize on this opportunity.
Billy: We're seeing the price of silver over $34 today, continuing to move towards $35 per ounce spin.
Billy: It's been over a decade since we've seen prices like this.
Billy: Many in the market are looking for a breakout even higher one that can test the historical highs.
Billy: On the gold side, we've seen strength all year, and we think it's here to stay with.
Billy: With gold as a safe Haven asset.
Hedge against policy and inflation effects in another asset values.
Billy: Geopolitical conditions around the world are unstable on multiple fronts. The global monetary system is pushing boundaries. We previously thought were impossible and new gold discovery continues to lag historical norms.
Billy: Yes gold prices are at all time highs, but we see a long way to run.
Billy: We agree with the recent call by Bank of America Strategists, Michael Heartmate that gold is heading well above $3000.
Billy: This opportunity is setting up perfectly for us.
We have known resources in the most significant mining district in the United States with a mature infrastructure and team on the ground in place.
Billy: All the necessary pieces are there to move fast.
Billy: Our team has spent the past year sharpening pencils and laying out the plans for the next steps.
Billy: Our latest independent technical report on the Dayton consolidated published in 2022 by Barry Dahl Bear estimated measured and indicated mineral resources containing 293000 ounces of gold and $2 1 million ounces of silver plus an inferred mineral resource containing an addition.
Billy: 90000 ounces of gold and 480000 ounces of silver.
Billy: As we look forward into next year, we're planning to start work on the preliminary economic economic analysis for the Dayton consolidated resource.
Billy: First step in advancing the project to production, which we intend to do on the shortest possible timeline.
Billy: Beyond the Dayton, we're working up exploration and development plans for our other mineral targets in the Southern district, South and west of the Dayton as well as the Lucerne Wood-wool in soccer Valley targets in the Central District.
We're planning to put all of these assets to work.
Billy: And then when we're done mining, we're committed to reclaim redevelop and leave the district better than we found it.
Billy: That's going to be a big plan and it's going to take years to reach that goal.
Billy: For the immediate future will focus on developing our targets getting to production and realizing the value of these resources in Dayton and spring Valley with CERN and the satellite claims.
Billy: Colorado and I will be at the New Orleans investment conference in late November with the team will be presenting more on our plans for Comstock mining in 2024 beyond.
Billy: You can look out for us to release more information on our website ahead of that conference.
Billy: Now, let's pivot to talk about a different kind of mining what we're calling urban mining.
Billy: Comstock metals is collecting and extracting a non virgin silver resource.
This is the same silver we pull out of the ground on the Comstock.
Billy: With a different source of ore and a different process.
Billy: Today, nearly 18% of global server supply comes from recycling.
Billy: 19% of that supply goes to solar panel manufacturing.
Billy: As solar panel production increases so does demand for silver.
Billy: As 10, and 20 year old panels reach end of life the opportunity to expand recycled supply of silver is more than substantial Comstock metals is on track to become a significant silver producer.
Billy: On the operating side, our team found unfilled another meaningful gap in the supply chain this quarter.
Billy: Before the end of life solar panels can be recycled by Comstock metals.
Billy: They need to be disassembled removed and transported to our facility.
Whats known as decommissioning.
Billy: After winning our first bids with a full service offering that included decommissioning.
Billy: Our team was able to quickly mobilize our network of contractors to these sites.
Billy: To begin the work of disk decommissioning panels and transporting them to us within days.
Billy: This expanded offering at an $80000 to revenue in Q3.
Billy: But that was from only a few days of operations in late September.
Billy: We're confident this new capability add significant strength to our market position versus our competition.
Billy: Strategically we established this business in the southwest U S. Locating first in Nevada, because the region has the largest concentration of old solar panels nearing end of life.
Billy: But there are aging panels in every state.
Billy: In recent months, we've seen increased demand from customers outside of our region and across the country.
Billy: These customers are willing to incur the increased freight costs.
Billy: To use our services.
Billy: We're competing and winning against what are effectively lower priced alternatives lower price because we're further away.
Billy: And I think this is a powerful statement to the quality of service and the exceptional value proposition offered by the Comstock metals team to the market.
Billy: In the near term through the end of this year.
Billy: We're focused on continued development.
Billy: Adding state permit submissions for our first industrial scale processing facility in Silver Springs, Nevada and.
Billy: <unk> County permits for additional storage capacity.
Billy: Looking out to next year. In addition to the Silver Springs expansion, we're planning site selection and permitting kickoff for additional facilities in the southwest plus youre going to continue to hear and see more details on our plans for expansion nationally it's happening now.
Billy: So yes, I'm very excited for where we are and the pace that we're moving in both metals and mining and look forward to a strong Q4 setting up for a very busy 2025, I'll stop here and turn it back to Corrado.
Corrado: Thanks, Billy or I may be a little redundant on some of my comments here, even though I knew you were going to say, but really just to emphasize that our metal recycling business is developing much faster.
Corrado: Broader and stronger than we originally anticipated, giving it a tremendous outlook both metals and mining are extremely well positioned and we are no way letting up on the contrary, we're moving forward full speed as Billy just outlined to be sitting with.
Corrado: With such a unbelievable silver resource.
Corrado: From both sources is is joyful.
Okay, Let me wrap up by moving into fuel. So as we previously announced we have now validated the fuels team has now validated with strategic customers higher yields of up to 125 gasoline gallon equivalent.
Corrado: We were we were frequent in saying when we were over 100 that we were nearly double the next technologies.
Performance, our yields we are well over double the next technologies performance in yields with up to 125 gasoline gallon equivalents from just one dry tonne of wood and we're in the final stages of securing a bolt on gas lift.
Corrado: Waves, if you will technology from one of our longtime industry, leading technology partners out of Tulsa, Oklahoma emerging fuels technology.
Corrado: Whose gas to liquid circuit will convert that additional carbon emission into.
<unk> up to 15 to 20 more gallons of sustainable aviation fuel Cushing, our yields to over a 140 gasoline gallon equivalents per tonne of dry wood and at the same time lowering are already extremely low carbon intensity.
Score.
Corrado: In our industry by the way the lower the Ci score the higher the revenue.
Corrado: The planned developments with Enbrel should further enhance these numbers potentially increasing yield certainly reducing operating costs and capex and hopefully.
Corrado: Putting us in striking distance of achieving cost parity with petroleum this is our obsession.
Corrado: We understand that cost parity with petroleum is a real stretch goal, but the plans to get there are already developed the experiments have been designed.
Corrado: They've been started with who and extraordinary list of partners, including an ROE and that is successful even better positions us to truly and sustainably decarbonize all of mobility.
Corrado: During the quarter, we announced our first three independent commercial fuel agreement with South Asian carbon limited or as they go by as ACL for the delivery of three different biofuel production facilities.
Corrado: Including one starting at 250000 metric ton per year refinery, which will be located in south Eastern Australia.
Corrado: Second 250000 ton per year refinery in northwest, Australia, and a third 750000 ton per year refinery located on the east coast of Northern Australia under.
Corrado: Under the agreement with S. ACO Comstock deals will contribute site specific technology rights in exchange for a 20% stake in each refinery.
Corrado: Also royalty fee equal to 6% of each refineries revenue.
Corrado: And on top of that pre production engineering fees equaled, 6% of total capital in construction cost.
Corrado: Some people might say well Wow, that's a pretty good negotiation, but it really wasn't a hard negotiation.
Corrado: Because typically when you construct a multibillion dollar or three ultimate multibillion dollar.
Corrado: Project's it's common for the engineering construction and procurement firm to charge about 15% of total capital and construction cost what we were able to demonstrate to our partners was that we do at least a third of that work for them. We do the preliminary engineering, we can order equipment weakened.
Or.
The commissioning of these facilities.
Corrado: So we're going to get 6% of what is typically a 15% fee those fees alone.
Corrado: That approach of $150 million in revenue for Comstock fuels over the next 345 years, depending on the pace at which they commercialize their three projects.
Corrado: Yet this is just the tip of the iceberg for fuel we expect another international deal in the near term and multiple commercial agreements in the United States.
Corrado: I'll include off takes site selection first facility and feedstocks.
Corrado: We finalized our full business and financial plans for fuel so it's been updated now.
Based on 125 gasoline gallon equivalents.
Corrado: And that plan includes building our own profitable commercial scare scale, sorry demonstration facility should sound familiar.
Corrado: We're building a demonstration scale facility that will be profitable at site for 50000 dry tons of woody biomass per year or higher that could produce over 6 million gasoline gallon equivalents or higher per year.
Corrado: And once that's up and running.
Corrado: Then building three more.
Corrado: Industry scale industrial scale facilities, if you will that could utilize potentially up to 1 million.
Corrado: Tons of Woody biomass.
Corrado: And that would represent if we're using the ft gas to liquids circuit on top potentially up to 140 million gasoline gallon equivalents of fuel per year.
Corrado: Facility.
Corrado: That's what the 200 million in capital was designed for the exact number that we have slotted into our model because about 150 of that is dedicated to the 50000 ton a year.
Corrado: Commercial demonstration scale facility that model with.
Corrado: With just the demonstration scale facility and three industrial scale facilities and a few licensees reflects a multibillion dollar valuation based on discounted cash flows.
Is robust.
Corrado: The $150 million is dedicated to deploying that demonstration facility as I. Just mentioned it will include the first site selection the final engineering the permits the construction and operating it.
And those are the conversations that we're having.
Corrado: Are we co locating it with a refinery or we co locating it with a feedstock source. The answer is yes, yes, and yes, we have choices now.
Corrado: Many of our commercialization partners are also negotiating with the right to also invest in Comstock peoples. So there's a really strong.
Corrado: Let's call it project and capital pipeline that is developing here the business is definitely in a new state of reality with our yield profile.
Corrado: Compelling market to us as we engage the market.
Corrado: And coincidentally will be engaging most of those strategic partners starting tomorrow at the advanced.
<unk> leadership conference based in San Francisco.
Corrado: Okay.
Corrado: Our goal as precise as a company.
Corrado: We're accelerating the commercialization of Decarbonising technologies, these are hard impacting but practical technologies.
Corrado: We're now doing it across the system and all of our businesses are getting tremendous traction.
Corrado: Even our mining assets, which really referred to with gold today at nearly 27 50 and as Billy highlighted we all believe head in much much higher silver well over $34 50 for the first time in over a decade.
Corrado: Remarkably.
Corrado: With just three Nevada based recycling facilities urban mining if you will operating at 100000 tons per year, each and assuming and estimating the low end of the silver grades that we've experienced so far non virgin.
Corrado: We could easily be in the top three silver producers in the state of Nevada, which is saying a lot.
Corrado: Most of you already know that Nevada is the silver state because of the Comstock Lode, we couldnt be prouder.
Corrado: And yet we're just getting started with those three facilities in the southwest region.
Corrado: To summarize and before turning to questions.
Corrado: The metals business is at two shifts and preparing the move with training going on right now to a third shift.
Speaker Change: As Billy mentioned potentially tripling combined revenues again in the fourth quarter versus the third including those decommissioning services.
Speaker Change: While we prepare to file our remaining state permits for our first 100000 ton facility right here in Silver Springs in the next few weeks and then starting to assess that.
<unk>, Nevada sites.
Speaker Change: As the business starts taking a national versus regional ramp up beyond that.
Speaker Change: With the higher gold and silver prices continues to inherently accrue value. These are our assets just based on the known gold and silver resources that we have here in the ground that Billy referred to.
Speaker Change: The capital that's coming in for that will allow us to expand the resources expand the mine plan, but even without expanding the Dayton mine plan.
Speaker Change: We're pushing nearly $400 million in free cash flows when we start considering these higher price resources at the higher grade cutoffs.
Speaker Change: A staggering amount of money.
Speaker Change: Maybe not at all reflected in our market cap.
Speaker Change: Fuels, we're going to announce two to three transactions as I mentioned.
Speaker Change: Domestically, both domestically for sure and possibly internationally during the fourth quarter, but will have multiple transactions announced further validating and expanding our growth.
Speaker Change: We will start bringing strategic capital.
Speaker Change: And which will result in a quickening of all of these activities, but rest assured we haven't slowed our effort.
Speaker Change: Despite lean resources.
Speaker Change: So with that summary, Trevor I'm keen to turn to questions. Please.
Trevor Brucato: Thank you Corrado, Thank you Billy and congrats to you guys and teams across the Comstock platform for a successful quarter.
Trevor Brucato: For everybody that is interested in asking a question you can submit those in the Q&A module and I'll try to keep this by topic here across the metals fuels.
Trevor Brucato: Mining Jen, Matt and SBC slash corporate type of topics here. So on the metal side, let's kickoff with that how many tons of end of life panels are presently stored at Comstock warehouse and any color on storage capacity.
Speaker Change: Sure Trevor.
Speaker Change: We have a lot of capacity. We currently have over 300 tons and storage and you may recall, we process about two tons per shift and the existing facility.
Speaker Change: But that said we permitted received permits earlier this year for much expanded storage and not really to be sufficient for the first industry scale facility 100000 ton facility in silver Springs. So we're working through the market developing the market. This is really a huge advantage for us it's letting us develop that market.
Speaker Change: The sales pipeline grown and operating before the facility is operational so that we can really hit the ground running once we're there.
Speaker Change: Thanks Billy.
Speaker Change: It is interesting I mean, as urban and clinical at urban mining operation with where silver prices are.
Speaker Change: Talking about you guys being a potential producer here of larger scale producer of silver H.
It makes you question. Okay. So what are what's really coming out of these panels. So the question. Here is you have already successfully sold aluminum from recycling the end of life solar panels, what about the other valuable materials in the panels and stockpiling them onsite at the moment.
Speaker Change: Yes, it's good question so.
Speaker Change: There are three streams really that we look at coming out one of the aluminum, which which we're currently selling to is the glass, we're having a lot of conversations with different users of that glass and really trying to find the right home for it.
Speaker Change: It's really not a question of if but it just a question of who and when we put that in place for the long term.
Speaker Change: The third stream is.
Speaker Change: The or the solar panel or or you know regulatory regulators are calling it tailings.
Speaker Change: But this is the material that has metal content has spillover and it has other critical metals other recoverable metals and this is this stream.
Speaker Change: Two things going on today.
Speaker Change: On one side the mouth team as well.
Speaker Change: People, beating down the door looking to talk to us about this material and we're gonna be making some announcements soon for some initial agreements and some initial sales in the next few months.
Speaker Change: And the prices were seeing that people are willing to pay for this or really substantial as well. It really shows this shortage in the silver market and what it's going to come we're seeing it on the ground floor in the market for this material now at the same time.
We know a couple of things about extracting silver from or.
Speaker Change: And our mining team has been working with our processing consultants as well as our internal team.
Speaker Change: Not to ask and we extract it but really to look at can we do it in a way that's more efficient and more profitable than selling it to a third party and I'd say as it is right now the answer is maybe and we know we're going to we'll probably have another six months or a year to really get to the point, where we know for sure but in the meantime, the markets are.
Speaker Change: Very robust and there's a lot of demand for that material.
Speaker Change: Thanks billion. Some of you have probably heard me say I mean as urban mining operation is essentially avoiding the exploration risk.
Speaker Change: Or identifying the feedstock into black feedstock solar panels and processing knows and essentially becoming a producer of these commodities. So it is quite new boat type of business, you're that Comstock metals is embarking on.
Speaker Change: So kudos to you and the team.
So additional questions here have come through but let's shift a little bit more towards mining so going from urban mining to say traditional mining.
Speaker Change: It is exciting to hear that Comstock is reactivating. If you will is historic gold and silver mining assets in Nevada Billy.
Speaker Change: Billy I know that there's going to be more news coming out here around New Orleans conference, but.
Any clarity leading up to <unk> 90 plans, leading up to that PPA.
Speaker Change: In the next in the new year related to Dayton and any of the other assets.
Billy: Yes, we will look and let me say a couple of things and Corrado I I'm sure Corrado have lot. He wants to say about mining too I know he is just as excited as I am.
Billy: If the data is the number one priority, it's where we have the most work the most current work and we've got a fairly well defined plan that our team has been working on again over the past year.
It is really about getting a fast track towards production.
So again, what you're going to see next year is that we're going to be doing this preliminary economic analysis. This is really formalizing. This plan right with the independent consultants getting everything lined out. So we can move down the line ultimately to permitting and then the production.
Billy: So Dayton is at the top of our list, but just worth noting that.
Billy: The whole district is still there and there are a lot of value in it. So we're looking at this as a staged plan starting with the Dayton and not really stopping until we've seen the full realization.
Speaker Change: Yes, I mean, I would only add that.
Speaker Change: When you're talking about exploration and development you always have this.
Speaker Change: Risk hurdle rate of achieving economic feasibility.
Speaker Change: And the fact that we have an economic mine.
Speaker Change: We're majorly derisked, so we can start stepping out and growing those resources.
Speaker Change: Without.
Speaker Change: A fatal fail, we know once once we define the resource once we start defining the resource we can start mining.
Speaker Change: Frankly.
Speaker Change: At our leisure at our at our decision point.
Speaker Change: So because we've got infrastructure because we've got legacy permits because we are intimate with the permitting regime, because we have such a great amount of known geology, it's relatively low risk.
Speaker Change: Adventure.
Speaker Change: With the metal prices continuing to move up it makes it exciting.
Speaker Change: Yeah, it's worthwhile mentioning that this is not a grassroots type of operation. This is been around and you guys have advanced it.
Speaker Change: So I'm sure our stakeholders are looking forward to.
Speaker Change: What's to come here on those mining assets, let's shift our focus a little bit more towards the Jen Matt.
Speaker Change: Deal.
Speaker Change: How should investors be looking at comps Nextgen, Matt AI business for material science going forward and is Jen Matt satellite still planning on analyzing Comstock mining assets.
Speaker Change: Yeah, Great question. So I mentioned in my prepared remarks that we're all about the materials Science development. This is foundation lease strategic to US. The reason we invested in Jen Matt in the first place.
Speaker Change: Because we believe if you're in the business of developing materials through technology.
Speaker Change: And you're not using these types of simulation these types of artificially intelligent.
Speaker Change: Compute horsepower youre going to be a dinosaur. So we don't have any interest in being a dinosaur we've learned a tremendous amount over the last four years, we've developed a tremendous capability over the last four years.
Speaker Change: And then that ability expanded and expanded deep has strong vision <unk> forward.
Speaker Change: His his desire to put the satellite into orbit was tied towards developing more artificial intelligence geospatial Geo physical.
Speaker Change: And ultimately we rationalize that.
Speaker Change: That it made sense for us to support that because it could benefit the comstock so part of our agreement remains.
That any information any geophysical modeling any geophysical planning that we've been doing in connection with that Jen Matt team, we get the benefit of.
Speaker Change: Secondly, when they're ready willing and able to scan the Comstock district at no additional charge they will do those deal.
Speaker Change: Physical scans, those hyper spectral scans and provide us that data.
We always viewed that additional data that additional capability as a bonus for us because we have a tremendous amount of geological knowledge structural.
Speaker Change: Metallurgical geochemical, we already have it we have a tremendous amount that's what made the comstock and ideal training ground for the AI.
So we'll get that data will continue to expand this district the way that Billy described it intelligently.
Speaker Change: With that information.
Speaker Change: But really.
That foray into space with that satellite created additional opportunities and so.
Speaker Change: There's a huge opportunity right for space bearing I think deeps going into it with a passion and the knowledge.
Speaker Change: We support but it's not directly consistent with our material science development thesis, which created the opportunity now that business. He would need to speak to obviously is developing its nascent it's exploding all of the above the materials science discovery business is.
Speaker Change: Is a little bit more advanced still requires development still requires.
Speaker Change: Competency so were thrilled to add to our innovation capacity those resources, but as I said, if we develop what we need to develop in and it will be in a more comstock focused solution way Theres. No reason, we wouldn't be selling that services to others. There is no reason.
Speaker Change: That that line of business couldn't have its own tremendous value.
But we want it to benefit Comstock directly first same idea use our material developments are material advancements as the training ground to develop technologies and tools that we can use and hopefully sell and have others.
Thanks Corrado.
Speaker Change: It is also worthwhile mentioning.
Speaker Change: A slew of of data historical data on the mining assay to begin with so that's probably as you Ann.
Speaker Change: Your hands full already.
Speaker Change: Another question here on Jen, Matt. So Comstock you guys mentioned that there is no new issue of cash or shares related to this Jen Matt deal can you explain how the 1 million payout will be funded yes. So look we'd previously funded Jen Matt.
Speaker Change: And so.
Speaker Change: By doing up the assets.
Speaker Change: We're able to fund that million dollars without additional disbursements.
Speaker Change: From our treasury.
Speaker Change: Okay.
Alright, let's shift over to fuels as part of the SPC deal $200 million earmarked for your fuels subsidiary business you touched on this earlier grotto, but can you comment on how a debt equity structure versus just equity would change sbcs original.
Originally proposed on ownership of 40% in the subsidiary.
Speaker Change: Yeah, no. It's I mean, I think it's relatively straightforward to answer.
Speaker Change: If you're if you're using some debt in your capital stack or in your capital structure, you don't get ownership for that right. So we're trying to optimize the capital stack and we're also trying to position the company for maximum value creation and.
Speaker Change: Practical and safe value creation, so we're being very thoughtful about those pieces.
Speaker Change: Okay.
Speaker Change: Thanks, Corrado It was mentioned that the binding contract Comstock fuels landed with S. ACL is anticipated to bring in around $150 million in revenue from <unk>.
Speaker Change: The engineering fees alone over the next three to five years can you talk about ccls upfront payment obligations. So the way it's structured we would get for the Theres, a new entre for they're requiring them to build a 50000 ton facility first and then scale it up.
Speaker Change: To $2 50, the beauty of that is it can be done in the same site with the same assets. Okay. So when we're doing the 50000.
Speaker Change: There is a 3% fee when we move up to the 250000 and above it's a 6% fee and so as soon as the site licenses granted in the first entity setup not only do we get 20% of the equity as I mentioned earlier, when we get an upfront $2 $5 million payment and then it.
It would be 6% right up the capital and construction costs.
<unk> moved from there I don't I don't have a view of the final project schedules and how they overlap certainly we will start one and it will start moving forward engineering fees $2 5 million plus then some screen then another one will start $2 5 million plus some stream and then there'll be some point where.
Speaker Change: They have the most going on and then it will tail down and hopefully once the facilities are commissioned it will shift from an engineering feat to a royalty on revenue.
Unknown Executive: Congrats on the MIT NREL partnership. Can you emphasize the importance of this partnership? And would you say that this might expedite your process, the team's process, and establishing a footprint in the United States?
Speaker Change: Congrats on the general partnership.
Speaker Change: Can you emphasize the importance of this partnership and would you say that this might expedite your process the teams process and establishing a footprint in the United States.
Corrado Gasperis: Yeah, I mean, look, ironically, it feels like the benefit that we've gotten from that so far has been credibility. I think when the highest technological counter-party in the industry and the space is picking our technology as a leading platform, is picking our solution as the one to invest and build on, it's validating. So that's great. Okay, it's validating.
Speaker Change: Yes, I mean look ironically, it feels like the benefit that we've gotten from that so far has been credibility.
Speaker Change: I think when when when the highest technological counterparty in the industry. In this space is picking our technology as a leading platform is picking R. R.
Speaker Change: Our solution as the one to invest and build on.
It's validating so that's great okay. It's validating.
Corrado Gasperis: We were way more excited. The breakthroughs that they had identified on the bench at the breakthroughs that had identified moving toward TRL-3, and we were like, holy crap. Okay, we will find the acceleration of those activities, obviously, with the goal of getting to TRL-6, TRL-7. The beauty of those developments, though, is you don't get to TRL-6 and then say, "Hey, let's go build a plant," like you normally would. You get to TRL-6, and you say, how do we upgrade our existing commercial demonstration-scale facility? How do we enhance it? How do we accelerate it? How do we cut two steps out of its process and reduce CAPX by 30 percent?
We were way more exciting [laughter] at the break is that they had identified on the vantage at the breakthroughs that had identified moving towards TRL three.
Speaker Change: And we were like Holy Crap.
Speaker Change: Okay.
Speaker Change: We will fund the acceleration of those activities, obviously with the goal of getting to TRL six TRL seven the beauty of though developments, though.
Speaker Change: Is you don't get the TRL six and then say Hey, let's go build a plant like you normally would you get the TRL six can you say how do we upgrade our existing commercial demonstration scale facility, how do we enhance it how do we accelerate it how do we cut too.
Speaker Change: <unk> out of its process and reduce capex by 30% how do we reduce operating expense by 30% how do we increase yield how do we make.
Corrado Gasperis: How do we reduce operating expense by 30 percent? How do we increase yield? How do we make an SAS with an energetic profile that doesn't require blending, 100 percent, SAS? These are the things that are on the table that they have already validated to certain degrees of technology readiness. One, two, three. And we're saying, wow, let's move those forward together. And when we say together, we don't just mean funding them. We mean there are certain activities that will be tested and piloted in our Walsh always constant laboratory. There will be certain activities that will be tested in Colorado.
Speaker Change: NSA yeah.
Speaker Change: With with with an energetic profile that doesn't require a blended 100% SaaS. These are the things that are on the table that they have already validated to certain degrees of technology readiness 123, right and we're saying Wow, let's move those forward.
Speaker Change: Together and when we say together, we don't just mean funding them.
Speaker Change: We mean there are certain activities that will be tested and piloted in our Wausau, Wisconsin laboratory there'll be certain activities that will be tested in Colorado and so it's a remarkable remarkable fact remarkable remarkable thing we could not be more excited and we have other development.
Corrado Gasperis: And so it's a remarkable, remarkable thing.
Corrado Gasperis: We could not be more excited. We have other development projects also internally. We have other development projects that we've disclosed without talking about who they are and exactly what they're doing externally. And when you put all of those together, and I know this takes, right, you know, you're not going to get 100 percent hit rate timely on everything that you do. But you're going to see the leading platform get better and better and better. In our view, whoever is chasing us, they're going to get smaller and smaller behind. We're moving faster, further ahead in designs and objectives than what anybody's even talking about working on to get to where we are today.
Projects also internally, we have other development projects that we've disclosed without talking about who they are and exactly what theyre doing externally and when you put all of those together.
Speaker Change: And I know this takes right you're not going to get 100% hit rate timely on everything that you do.
Speaker Change: But you're going to see the leading platform get better and better and better in our view whoever is chasing us.
Speaker Change: We're going to get smaller and smaller behind we're moving faster further ahead in designs and objectives than what anybody is even talking about working on.
Speaker Change: To get to where we are today, we don't know anybody that's doing that so it's it's tremendous.
Corrado F. De Gasperis: We don't know anybody that's doing that. So it's from us.
Unknown Executive: seems like they are the perfect person out to get you guys to cost parity with petroleum.
Speaker Change: Seems like they are perfect.
Speaker Change: Perfect perfect personnel to get you guys to cost parity with petroleum.
Speaker Change: Okay.
Corrado Gasperis: On the capital markets front, capital needs and so on, SBC shifting over there a bit, there seems to still be some confusion on New York Stock Exchange and the listing requirements versus NASDAQ. Can you quickly touch on anything related to this, whether it be de-listing or reverse stock glitch just to put this one in there?
Speaker Change: On the capital markets front capital needs and so on SBC shifting over there a bit there seems to still be some confusion on New York stock exchange Amex listing requirements versus NASDAQ can you quickly touch on.
Speaker Change: Anything related to this whether it be de listing or reverse stock split just today I just wanted to add people.
Corrado Gasperis: Yeah, people keep asking, if we're below a dollar, are we at risk? And I think, frankly, just simply, they're confusing us with the NASDAQ.
People people keep asking us if we are below a dollar are we at risk and I think frankly, just simply they're confusing us with the NASDAQ.
Corrado F. De Gasperis: So the New York Stock Exchange and X listing, the market exchange that we're on, doesn't have that dollar limit; it's a much lower number. We're nowhere near it, and, you know, we've been on the New York Stock Exchange for 14 years. So we're very familiar with it. So I think it's just confusion.
Speaker Change: So the New York stock exchange Amex lifting the market exchange that we're on it doesn't have that dollar limit it's much lower number we're nowhere near it.
Speaker Change: We've been on the New York Stock exchange for 14 years. So.
Speaker Change: We're very familiar with it so I think it's just confusion.
Corrado F. De Gasperis: Thanks, Corrado, and you mentioned that Comstock's liquidity remains stable as you close on some other minor asset sales and previously announced 1.5 million convertible note to top up on the existing one. If you can provide a little color on this and the capital needs and so on, moving forward here. Yeah, look, we've got that liquidity coming in. You know, we're going to try to get that first 5 million in the door with SBC. We've had a great couple of days; it's coming, so we're happy about that, right? And then we'll bridge that to, you know, the bigger capital funding, and then hopefully, you know, having these conversations anymore.
Speaker Change: Thanks, Corrado and you mentioned that comp stocks liquidity remains stable as you close on some other minor asset sales and previously announced $1 5 million convertible note to.
Speaker Change: To top up on the existing one as you can provide a little color on this in the capital needs and some of them moving forward here. Yeah look we've got that liquidity coming in we're going to try to get that first $5 million in the door with SBC. We've had a great couple of days, it's coming so we're happy about that right and then we'll bridge that to the bigger capital funds.
Speaker Change: And then hopefully.
Speaker Change: Having these conversations anymore.
Corrado Gasperis: Corrado, we are coming up here on the hour, so I'll put the ball back in your court for any final comments. Just to summarize, you know, I really want to emphasize that, you know, the discussions about, you know, professional funding are all tied to a relatively high level of sophistication in our financial models. We have a sophisticated model and business plan for fuels, and the language and joyfully, we've been updating it quite a bit over the last three to six months because of enhancements. So that's really, really great. You know, metals, we've been updating because the average revenue per panel has been above our expectation because the realized revenue from selling renewable clean materials is above expectation because we have decommissioning services.
Rather we are coming up here on the ourself with the ball back in your court for any final comments.
Just just to summarize you know I really.
Speaker Change: I really.
Speaker Change: Want to emphasize that the.
Speaker Change: Discussions about you know.
Speaker Change: Professional funding.
Speaker Change: Are all tied to a relatively high level of sophistication in our financial models, we have.
Speaker Change: <unk> sophisticated model and business plan for fuels and knowingly and joyfully, we've been updating it.
Speaker Change: Quite a bit over the last three to six months because of enhancements. So that's a really really great.
Speaker Change: Metals, we've been updating because the average revenue per panel has been above our expectations because the realized revenue from selling renewable clean materials is above expectation because we have decommissioning services and then with our mining assets.
Corrado F. De Gasperis: And then, with our mining assets, you know, the precious metal prices keep going up. And you know, you can change the price in the model. That's simple. But I think most people appreciate that when the gold price goes up, the cutoff goes down, which means you have to reengineer the mine, resulting in more tons of ore and less tons of waste. The strip ratio improves dramatically. And so that's what's happening, you know, you know, with the mine plans. But then all that management effort to determine what does it take to build three industrial scale plants for metals?
Speaker Change: Precious metal prices keep going up and you can change the price in the model that simple, but I think most people appreciate that when the gold price goes up the cutoff goes down which means you have to re engineer the mine.
Speaker Change: Resulting in more tons of ore and less tons of ways. The strip ratio improves dramatically and so that's what's happening.
Speaker Change: No.
Speaker Change: With the mine plans, but then all that management effort to determine what does it take to build three industry industrial scale plans for metals, what does it take to build these facilities for fuels.
Corrado F. De Gasperis: What does it take to build these facilities for fuels? That's a lot of engineer. That's a tremendous amount of engineering. I mean in fuels it's exponentially higher amount of engineering than it is in metals, but it's still a lot, and those permits have to be ultimately submitted with those engineering plans. More importantly, we have to have project schedules; more importantly, we need to know what the spending is. So the reason we're successful in attracting specific capital both from SBC and from our strategic partners is because they're able to validate those models, and validating those models is not a financial jocky sitting in a cubicle, right, reviewing the Excel spreadsheets. On the contrary.
Speaker Change: Fuels, that's a lot of engineering.
Speaker Change: That's a tremendous amount of engineering I mean in fuels its exponentially higher amount of engineering than it is in metals, but it's still a lot and those permits have to be ultimately submit it with those engineering plans more importantly, we have to have project schedules more importantly, we need to know what the spending is so the reason.
Speaker Change: We're successful in.
Speaker Change: In attracting specific capital both from SBC and from our strategic partners is because they are able to validate those models.
And validating those models is not a financial jockey sitting in a cubicle right reviewing the excel spreadsheets on the contrary.
Corrado Gasperis: It's you know it's petro you know it's petrochemical engineers visiting Warsaw you know it's chemists assessing you know metal recycling. These these are all science based you know businesses it's it's some. You know my engineers in geosynthesis assessing our mind plans. So we feel very, very good about the foundation that we've built. It's very substantive.
Speaker Change: It's it's petro.
Speaker Change: As petrochemical engineers visiting Wausau.
Speaker Change: Qantas assessing.
Speaker Change: Our metal recycling. These these are all science based businesses it's.
Speaker Change: My engineers and Geophysicists assessing our mine plans. So we feel very very good about the foundation that we've built it's very substantive we wish it had happened sooner you always wish that we have gone faster, but we're not disappointed with that.
Corrado Gasperis: We wish it had happened sooner. You always wish that we had gone faster, but we're not disappointed with the results. We're extremely excited about the results, and we look very much forward to what's going to happen over the next six weeks. We look forward to talking to you. When it happens, announcing it and then, of course, circling back early in the new year for the annual results.
Speaker Change: Results were extremely excited about the results and we look very much forward to what's going to happen over the next six weeks, we look forward to talking to you when it happens announcing it and then of course circling back early in the new year for the annual results.
Unknown Executive: Thank you, Karato and Billy, and thanks to everyone for joining today for Comstock's Q3 event. Please keep an eye out for today's recording and Comstock's brief Q4 investor survey, which will be circulated by email and posted on the company's website at Comstock dot ink. If you have any questions, please feel free to email us at I are at Comstock ink dot com. Again, that's I are at Comstock ink dot com, so management can review and respond to them accordingly.
Thank you Corrado and Billy and thanks to everyone for joining today for Comstock Q3 event. Please keep an eye out for todays recording and complex brief Q4, Investor survey, which will be circulated by email and posted on the company's website at Comstock Got Inc. If you have any questions. Please feel free to E mail us at <unk>.
Speaker Change: <unk> at Comstock, Inc. Dot com again that IR at Comstock in Dot Com, So management can review and respond to them. Accordingly. Thanks again that concludes today's event, we look forward to keeping you all posted on our progress throughout the rest of 2024. Thanks again, thanks to our outstanding Thanks Billy.
Unknown Executive: Thanks again. That concludes today's event.
Unknown Executive: We look forward to keeping you all posted on the progress throughout the rest of 2024. Thanks again.
Unknown Executive: Thanks, Travis. I'll see you in the next video.
Unknown Executive: Thanks, Billy. Have a great day.
Speaker Change: Good day.
Unknown Executive: Goodbye.
Speaker Change: Goodbye.