Good day, and welcome to the Comstock Mining Q1 Update Conference Call. Today’s conference is being recorded. And at this time, I’d like to turn the conference over to Corrado De Gasperis. Please go ahead, sir.

Thank you, Eduardo, and good morning, everyone. Corrado De Gasperis here, the CEO of Comstock Mining, on the line with Zach Spencer, our Director of External Relations and new Treasurer, with us today. We welcome you to Comstock’s first quarter 2020 conference call. I will provide a brief summary of the information that’s included from our press release from this morning, including progress on our strategic initiatives. If you don’t have a copy of today’s release, you will find a copy on our new website at www.comstockmining.com, and please just click on the Press Releases button in the main menu bar. We will have our quarterly report on Form 10-Q filed today, and we’ve also included the basic financial statements with the press release just for your convenience. We actually had one of our fastest, best scheduled and coordinated closings this quarter, despite everyone working remotely, with the full report actually being completed over a week ago. But we’ve been working exceptionally well with our team and the Deloitte team, everyone working collaboratively with a disciplined schedule. And based on everything that we were able to do this cycle, we expect faster reporting going forward regardless of the distancing measures required by COVID-19. Please also let me remind you that we will make forward-looking statements on this call, including an update on our 2020 outlook. But any statements relating to matters that are not historical facts may also constitute and would constitute forward-looking statements. These statements are based on current expectations and are 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 with the SEC and in this morning’s press release, and all forward-looking statements during this call are subject to…

[Operator Instructions] We’ll now take our first question from [James Dell] [ph]. Please go ahead.

Good morning, Corrado. How are you doing?

Doing good. How are you?

Fine. Talking about the Tono stock, can we convert the [indiscernible] can you convert the preferred over to regular?

No. So we have $6.1 million of preferred, as you said, convertible. And it’s not – we’re not allowed to convert it until May 22. So coming soon to a theater near you.

No problem. That’s another source of income that will help get you out of debt and all that. Okay, does Tono have access to the Sutro Tunnel as part of their agreement?

Good question. I think that – so the Sutro Tunnel, which originates in Dayton now down about 3.5 miles South of Virginia City. The entrance of the tunnel is accessible, but it’s caved in at about 200 feet in the immediate term. So in terms of entering the tunnel and using it in a free-moving play stance would be no. It’s not safe. Having said that, it goes right underneath the Occidental on its way up to Virginia City. And both we and they have identified meaningful historical information from prior reports that show grade, and a meaningful grade, like high-grade for lengths at that depth. That depth is 1,400, 1,500, to 1,600 feet. And the Occidental has never been accessed in any meaningful way beyond maybe, let’s say, 500 feet. You might have a working at 700 feet, but it’s very, very little. So the point is that, we know there’s grade at surface. We know there’s grade intermediately. But we have huge evidence that there’s grade at depth. So…

Okay.

So in that regard, we have access to, I’m going to use the term tunnel data, but not necessarily like human entrance [Multiple Speakers].

It’s apparently part of your Tono contract. Can we lease that asset to Tono to generate more capital?

So we have leased – and I may have misunderstood you, but we have leased the Occidental claims to Tono. And yes, it’s – we think it’s going to represent an incredible partnership. We do get paid some monies from that, but it’s the money going in the ground that really will create huge value.

Okay. Now with Tono, it could make their whole – their mining operations a whole lot easier if they can access the Sutro Tunnel, get it cleaned out and whatever else?

Yes. Let me expand the thought, Jim, just one point. Okay. So there’s meaningful amounts – sorry, go ahead.

The Sutro Tunnel is one part of their lease contract, isn’t it?

No.

Okay, that’s something else you could lease, is what I’m saying.

Right, potentially, and – but – so that’s a good thought. I mean, it’s a good thought. There’s no reason to debate it any further. But access to underground adits, even apart from the Sutro Tunnel, could help facilitate more efficient exploration and drilling. It’s just safety is sort of the number one issue. But yes, it’s a good point.

Okay. And then my last question for you is the Silver Springs opportunity drilling fund, if they’re out there clearing other properties before they paid us off, should we not be thinking about cutting the string with them and moving on to someone else, because I think they’re just sort of “jerking us around”?

No, no. So it’s a fair question, but no. So they’re – we’re the priority in the queue and they’ve already paid $400,000 in escrow. We have secured agreements and there’s a very logical sequence of the acquisitions, right, that give the strongest footprint. The airport and the manufacturing facility as operating assets, just the pressure and the circumstance, those had to be first. But the Comstock properties are next in line, and it will happen here. So I think a little bit more patience. It’s taken forever, I understand. But a little more patience and it’s going to be a big win-win and I think everyone’s going to be extremely happy. So it’s all happening.

Okay. Why don’t you tell them that your stockholders are losing patience here? Last thing is it took forever for the whatchamacallit, your conference call folks to dial me in, so I missed the first third of your presentation. Your MCU operation, you’re going to both use a – start a gravel pit with it after you clean it up and sell the cleaned-up gravel? Am I correct?

No, it’s – let me explain a little better. Thank you for that question. So basically, the area under permit is about a 27-mile – I’m sorry, 27-kilometer-long expanse, okay? And there is literally – there are – I may misquote this, and so I’ll be conservative and say like 1,200 miles all along the expanse. And so along the soils, along the surface are alluvial mining activities, and all along the river is mercury contamination. It’s horribly polluted. The process that we have and the one that you will see that we’re even landing here in the U.S., is basically taking alluvium from the surface and processing it and cleaning it. And there is a huge amount of alluvium, sand, gravel, both alongside of the riverbed and in the river. I mean, we will literally be in the river, processing material in a wet format. All of that material, the number one objective is to extract out the mercury and clean the river, clean the soils. In the primary system, there is residual material that comes out, but it’s not designed for higher volumes of that, right? It’s more designed to be surgical in terms of getting the contaminated material, separating the mercury, et cetera. So what we’ve done, because it’s such an expanse, 27 kilometers of soils and riverbeds and materials. We’ve created a higher volume soil and gravel purposeful system with the same mercury controls, the same separators, the same spirals, but it’s at a higher volume. So in that machine, in that system, we’re going to be going to areas, where there’s massive amounts of sand and gravel and, let’s say, maybe minimal amounts of mercury and gold. But even minimal amounts are meaningful. So you’re going to have two systems, one with the primary purpose…

Okay. And how dry is the material when it comes out of the…

Yes. No, it’s not. I mean, I’m not expert in that question. But I think for most intents and purposes, it’s initially wet. It’s a wet process and a wet system. And in some cases, the system will be right in the water and it’s capable to do that, right? So – but ultimately, it will be prepared and ready for the sand and gravel construction uses that we’re targeting for it.

Well, what I was hoping for, dry coming out of it asphalt-ready. Okay, in other words, you can sell it for link-up and build your own asphalt plant and sell that ready-to-go asphalt something you wanted to?

Yes. Our partner – I believe, our partner, Philippine partner is already involved in some of those lines of businesses, so that will – that could be a wonderful complement, for sure. I want to emphasize, though, our number one mission, our number one differentiation is that, we get the mercury and the metal out of the environment, which is huge.

And you’re creating value here, okay?

Huge.

Everything I talk to you about is as you create value, you’ve got to get paid for it. So…

Yes. The market, too, here, is unlimited. I mean, I stopped counting at 1,500 sites in the U.S. alone that have mercury contamination. So – but it’s a global issue and it’s a UN priority. And the UN’s accord that was signed in 2017 targeted 2020 for countries to cease using mercury in industrial mining activities, and so we’re seeing it, right? The Philippines is actually a leader, believe it or not, in the world, telling the miners to stop using mercury and to bring people like us in to clean it up.

Okay.

So this is just the beginning, just the beginning.

Yes. And this may sound clear that some people. My point is you should be generating a lot of sand and gravel as an off-product of this, and being able to – and sand and gravel is a valuable material, not as valuable as silver or gold, but it still has value. And just keep your mind open, because as you accumulate sand and gravel, that eventually will get in your way, so you’ve got to find a way to get rid of it and hopefully, sell it at the same time?

Thank you, Jim, for that, and I appreciate the question. And I will just – as you’re signing off, I’ll just compliment by saying that, I had the epiphany, sitting there in the Philippines, talking to the provincial heads, and they kept asking us, "Why don’t you switch the order and get going right away with sand and gravel?" And I said, "Look, we’re not – that’s not our core competency." Quite frankly, it is. Oro Industries has a lot of competency in building sand and gravel systems, and Paul might be one of the best alluvial miners and processors I’ve ever met, okay But then they said, "Well, what if we take the material from you?" And I’m like, "Say that again?" And the rest was history. So we own 100%. We have nine permits now. Our partner has nine permits that all allow for sand and gravel along the entire expanse, so we’re going for it. So that’s the news. That’s the big update is that, we’re expanding the scope and including that material, and I think it just makes everything so much safer. So Eduardo, next question, please?

Yes. We’ll now take our next question from David Brigham at Brigham Investments. Please go ahead.

Hi, David.

Can you hear me, okay, gentlemen? Hi.

I can. Yes. Thank you.

On the mercury and the gold that you’re getting out of the gravel, I mean, out of the tailings…

Yes.

What form is the gold in? Is it mineralized? Is it recognizable as gold? And what about mercury? Mercury is a liquid. What does that look like at the end?

Yes. So great question, David. Thank you. So mercury, in most intents and purposes, is in its liquid form. I think it’s the only liquid element. And if you come onto the Comstock and you drill down to some bedrock in some river waves, I mean, you could literally have a little ball of silver liquid in your hand, okay, that’s not uncommon. And so the technologies that we have, it’s a mercury – we call it a mercury reactor. It’s a centrifuge, which very, very effectively, and then we have spirals and separators that very, very effectively, I mean, light-years more effective than any standard in the industry in terms of separating the mercury from the soils. And then we have an organic solution, which is the fourth technology. We have three engineered process technologies, and then we have an organic solution that allows us to – and this is big – not only separate the gold, but we – I think the biggest differentiator of the technology is not just the effectiveness, the high-efficiency effectiveness of separating elemental mercury – liquid mercury, if you will, from the soils. But we also have the ability to convert methylized mercury. So what happens when mercury enters the environment is it pools, like you’d expect. Gravity takes it down to bedrock. And then typically, if it’s in a water wave, it will find itself down the rivers. That’s very common, okay? Carson River mercury is a problem because of the Comstock. So – but if it stays in the environment long enough, it will methylize. It will literally absorb itself into the biology, and that could be soils, it could be plants, it could be fish. And when it methylizes, that’s generally has been thought of as the point of no return; you’re screwed. Well, we can convert methylized mercury back into elemental mercury. That’s the breakthrough in the technology, and we can do it with organic materials. So we’ll be filing for patents, we’ll be protecting the technology and that’s our claim to fame. And that’s how it – without going into the black box, we can’t describe how it actually works, but it works. So…

The mercury – does it have a value industrially or something?

No. Okay, yes and no. There are some applications in mercury. But for most intents and purposes, it represents – the disposal and storage of the mercury represents the highest cost in this entire business line and model. In the Philippines, for example, the government has agreed and it was really critical to us that the government agreed to handle the storage, the disposal, the storage of the mercury. We don’t want to see the mercury go back into the mining environment. That would be inconsistent with the UN’s mandate and the Minamata Accord, which is to eliminate it, not reprocess it back in, right? That’s the toxic problem. So we have some ideas about potential future applications of mercury, but they’re just way too early to talk about. And right now, what we’re trying to do is manage the responsibility and the cost of safely disposing of it, not letting it get back into the environment.

Okay, changing the subject just a little bit, Tonogold…

Yes.

I guess, they’re going to be looking for a big chunk of capital to get into production. In your examination of their financial statements and talking to them, do they have a clear path? Do they know where they’re going to get the big bucks that they need to produce gold?

Yes, good question, and it made me think of one other thing I might not have said in the call, in fact. But I think I did say in the press release is that, they’re working very diligently to have fully audited financial statements. They’re on a schedule of completing a full audit with a top public accounting firm, Marcum. They’re planning then to file a 10-K and become a full reporting entity, and they also have upgraded their Board with independent board members. And they’ve already evaluated and filed – and prepared themselves to uplift onto a major exchange, hopefully, New York, but they’ll be on one. And all of that activity was driven by a wave of, I would say, more professional capital coming towards the investment. So they’re attracting very serious funds. They’re attracting very resource-expert funds, and now they’re taking what I would call the logical evolution of steps, right, to prepare themselves for that, number one. Number two, to answer your question, they’ve lined up, I believe, about $5 million of capital commitments for what is really a well-thought-out drill program. Really well thought out and exciting, quite frankly. And so I think that what we will see them do in the next 12 months is spend $3 million, $4 million, $5 million in drilling, that will enable them to publish the technical report that they have. The technical report will have Lucerne as a central aspect to that update, which is great. But it will also expand geologically a lot of what agrees to them and what they’re looking at. And I think that will, in my mind, represent the next valuation or revaluation of the company. And then I think they will be in a much better posture to then think about paths…

Thank you for that. Thank you.

Thank you, David.

We’ll now take our next…

Eduardo?

Yes, sir. We’ll now take our next question from [Harvey Molca] [ph]. Please go ahead.

Hi, Harvey, how are you?

Good. Thanks. Take a look at the strategic value targets that you have…

Yes.

We’re looking at Dayton at $75 million. Back on January 6, that was valued at $40 million. So it’s gone up to $75 million. The Mercury Clean Up was – you have valued at $2 million and $3 million back in 2006. And January of this year, it was $25 million for each of those categories. So there’s some significant shifts in both of those. Can you address that?

Absolutely. Let’s talk about it, because that’s what I want – that all I really want to be talking about is how we evolved that number ultimately, hopefully, on a path to $0.5 billion. But – so with Dayton, let’s just – let me fill it in really quickly. That $40 million was based on an economic shell that one of our prior and really excellent senior engineers had designed. It was based on a very high cutoff and the average grade of the economic shell was over 12.5 ounces per ton, which is outstanding in terms of an average grade. The Lucerne, by comparison, we mined it at about 0.029, so not quite a double, but 75% higher. And the economics showed about a $30 million net cash flow from a relatively short mine life, let’s say, 2.5 years, okay? So the NPV of that number is almost exactly the same as the number; it’s about $40 million. Our Chief Geologist, Larry Martin, has been doing a remarkable amount of work. And that work is based on additional data and additional drilling that we did since what I just discussed with you. So Larry adding geology, adding data, there have been cross-sections building level plans. He has almost done. He has expanded the footprint of what we know. And in my mentations for all that work to get done, because once that’s done, then our Senior Engineer, Mike Norred, will rerun economic pit shells, okay? And he will not only add the geology to the equation and the engineering to the equation, obviously, he’ll change the cutoffs based on what’s optimal with gold prices. So in my mentations, I said, "Let me just use the smaller shell. Let me just use the more conservative functions and slap $1,600 on the numbers that are $1,200." And the number went from $40 million to $75 million. So that’s the simple answer. And I just thought it was prudent. I don’t think it’s prudent to put a $1,900 gold price on it yet or a $2,000, but $1,600, in my opinion, was what I see people now using in the field.

Okay. Why did mercury go down from $50 million down to $5 million?

Yes. So mercury, when I first did that chart, I think, it was at the Annual Meeting, the idea and this is still the case, right? It’s still the case that we’re going to target projects and this will not be difficult, right? We’re going to target projects that have at least $100 million of value. And by the way, I didn’t say it earlier, but use the Philippines as an example. We were talking yesterday about life of the sand and gravel easily 10 years. Easily running for 10 years, okay, easily. But we’re targeting $100 million. And the way we structured our ownership with MCU is that, if we do nothing, if MCU decided to take a project on in an area that maybe we’re not interested in participating, we get 25%. So that’s, to me, every project should accrue value to Comstock of $25 million. And then – but we have the right of first refusal to have a 50% direct ownership in any project, okay? We have the right to first say, "We would actually like to do more and be more involved in this one and have directly 50%." So 50% direct and then technically, you’re getting 25% of the other. 50% through MCU, you get 62.5%. So that’s the $62.5 million. So that was conceptual. So look, we know we’ve got two projects coming. We should be between $25 million and $62.5 million conceptually. And that’s still correct. However, now we have agreements. And in the Philippines, for example, we are going to – I’m going to propose that we do 50% direct, because it’s exciting, it’s economic, it’s looking really good. But ultimately, that’s going to be 62.5% of not $100 million, but 62.5% of $40 million, right? So what I did in…

Yes. I just don’t understand why you were at $25 million per and now you’re at $2 million and $3 million.

Yes. I’m sort of laying out a concept of what we were targeting, and that is exactly what we’re targeting. But now it’s more tangible, and I just want to be more – as we have agreements that are signed, I want to be more precise, right. But our biggest issue, I think, with MCU, outside of just getting the technical proofs out to the market once we get operating, is going to be how we manage the growth, because there won’t be a lack of opportunity.

Okay. If we shift over to the assets and liability page, we’re looking at $39 million of assets, and that is up significantly from the $24 million that you showed in January and the obligations you’re showing at $16.8 million.

So ironically, the – I changed the profile of those net assets there at the bottom of that chart. Again, I think more conservatively, previously in theory I was shown sort of Comstock land values and that was almost in a liquidation mindset, like what would our land be worth. And I took that number out, quite frankly. So what I did put in there was assets that are now known and monetizable. So we have assets that have nothing to do with our mining platform that we’re selling, as you know. But the investment in Tono is also a monetizable asset and we have a receivable from Tono and they have some debt. So I tried to be more pedantic and not speculate about other values and tried to say, "Look, this is money and this is money that we’re going to get." And I know it’s ridiculous that the net value is higher than our market cap, and actually, I just want to just pound that into the market. And I’ve had at least 10 calls with you types of investors, three yesterday, asking me these questions. And slowly, but surely, they like what they’re hearing as they get their heads around it. So I’m going to pound this into the market.

I understand the $5.3 million of debt, but I don’t understand the $16.8 million of liabilities. And what happened to the Northern Comstock debt of $7 million?

Yes. So the 16 – yes. So okay, the $16 million in liabilities is reasonably simple, okay? So $5.3 million of that is the debt. We have about $6 million of reclamation liabilities, which is the long-term reclamation liability associated with the leach pad, okay? So that’s not – that we don’t view that as any kind of near-term cash obligation. So you have the debt and you have the reclamation liability, so that’s $12 million and $16 million. And the other $4 million is either – $1 million of it is deferred liability, which is just some expenses that we received from Tono in advance of spending them, so it’s not a real liability. And then we have deposits for MCU, which we have to show as a liability until we close on the actual transaction. And then we just have a couple million of payables and accrued expenses. That’s the balance sheet, pretty simple and pretty clean.

And what happened to the Northern Comstock debt?

So, Northern Comstock is a real obligation. It’s about $6.6 million. It’s not on the balance sheet, arguably, because it’s kind of a lease type of an obligation, if you will. And so Tono has guaranteed and is reimbursing us for that 100%. So it should still be on the radar screen, because technically, we’re the obligor. But we’re not paying any of that right now. Once we close on the Tono deal, Harvey, that will legally also be gone. But right now, it’s substantively gone.

Okay. How about the number of shares outstanding? It appears to have increased by over 600,000 shares.

Yes. So we did a small placement at the end of March, because I had a strong sense that the asset sales were going to be delayed by a couple of months, which is what’s happened. And we just had to ensure that we had sufficient liquidity to get to the asset sales. And by my math, I wanted to be conservative and make sure that even if we didn’t close this thing until the end of June or July, we wouldn’t have any issues with that. So they’re relatively smaller in terms of anything we’ve done historically. I don’t see any more of that happening in the near-term at all, but we did have to do some. And I wanted to be out there and transparent. We have 27,350,000 shares at the end of March 31. It’s the same number today, and it’s the same number that we’re projecting.

Last question. Based on the comment – based on valuation, why are we not buying back our own stock at this point?

So…

It’s a 10-capper. The stock is really worth $5.

There’s two answers to the question, right? The first one is liquidity, okay? The first one is liquidity and we have to be good fiduciaries. But the second answer, which I think is stronger, is that, look, we’re going to close on these asset sales. We’re going to land the mercury system. We’re going to publish our data. And if we don’t get that value and there is cash in the bank that we have discretion over, then we would. I think we would, I’d have to get board approval. But I think, though that…

So the Board has not approved that yet.

But I think conceptually, everyone would say, that if we did A, B, C and D and it’s real and it’s solid and it’s done and we have cash in the bank and the stock is at a stupid valuation, then we would approve buying some of that back and show that confidence to the market and get the value for ourselves. But we’ve got to do A, B, C and D and really get that foundation and, frankly, get the debt paid off; and frankly, have the cash in the bank. But I think it’s all going to happen. It’s happening.

Okay. Nothing happening with the bank?

We had a couple of people look at it and we had – and they seemed interested, but we haven’t heard back. And that’s within the last four or five weeks. We also had an inquiry about leasing the whole facility, and so we’re – with the other asset sales coming to the finish line here, if it isn’t going to be sold at its value we think it’s worth, then it could become a nice revenue stream for us. And remember, to everyone, that we have $150 million of net operating loss carry forward. So any revenue that we bring into the system, for almost all intents and purposes for us, is tax-free.

What did we pay for the Dayton?

So the total cost of the entire facility, plus the extra 120 acres, plus about 400 acres of mineral claims that was really the original reason we wanted it, we wanted the mineral claims that were between us and that property and we ended up just buying the whole thing, because it came as a package deal – was about $2.1 million.

Can you sell it for $2.1 million?

Sure. We could sell it for $2.1 million right now.

And so we had to buy the stock back?

So we have it listed in two pieces right now, like the four buildings on 70 acres for $2.6 million and 120 acres of free land for $1.1 million. And any offers that we get, we’ll be talking to the people. So we’ll be engaged.

As a shareholder, I think, you’re better off blowing it out of what we paid for it and buying our stock back. Much better return.

Yes. So we could blow it out for what we paid for it, and then the very first use of that would be to pay off our debt. And then, as I said, if we get the other thing done and we have cash in the bank, then it becomes an option.

Okay. Thank you, Corrado. I appreciate it.

We have to pay off the debt first, right? That’s obvious.

I understand.

Yes. So thanks, Harvey. Thank you so much.

You bet.

All right. We’ll now take our last question from [Jeremy Harrison] [ph]. Please go ahead.

Hi, Jeremy.

First question. I got on kind of late. I guess, the system is acting up again. But as far as, I don’t know if you talked about any of the sampling numbers for NCU, started running through the small samples you guys ran through the spirals. Have you all got any numbers on that as far as gold content?

Yes. What we’ve been modeling is very, I would say, has been a very conservative range, meaning, we’ve been modeling grades that I would say are 0.5 gram per ton.

Okay.

And we’ve got feasibility in that range, okay? I think that we’re believing and seeing grades of at least 1 gram per ton. And ultimately, in some of these jurisdictions, there’s two, three, five, seven grams per ton. So in the Comstock, we’re sort of pulling for the lower-end of the range, I’d say, gram-ish per ton. But it gets incredibly exciting when the grades start growing, because – and here’s something we didn’t say. I think it’s obvious, but it’s worth saying. If you compare alluvial mining, which it’s kind of like a lost thing. It’s like a lost art, if you will. But if you compare alluvial mining to hard rock mining, there’s two or three things that jump right out at you. One is hard rock mining takes tens, if not hundreds of millions of dollars to define and prove a resource, ultimately, a reserve, and then tens, if not hundreds of millions of dollars to build facilities and process it. And usually the lead times are sadly, eight to 10 years, right, to bring something into production. It’s a tough business, right? Alluvial mining with an MCU system, on average, $3 million. And when I say $3 million, you have the entire system. You have the mercury technologies, you have a metallurgical lab, you have portable retort, you have a water system. And this thing is impressive, okay, $3 million. And could it throw off $1 million a month? Well, at 2 grams, easy, easy, okay? So the speed, the cycle time, the throughput, the low capital, fast return and I don’t know if I’m weird, but like I love it. I’ll take it any day over the hard stuff, right?. And I guess, I don’t want to disparage hard rock mining, be it open pit or underground at all, because we have a love affair with gold and that’s our core competency, right? But if there’s ways to get at it faster, cheaper, there are other risks, obviously. The biggest one is how well can you sample and confirm the amount of material that’s there? And in some cases, the answer is going to be easy. You’ve just got piles of contaminated stuff. In other cases, where you’re in a river, it’s not as easy. And that’s why the sand and gravel component of our next business is really a wonderful evolution, because it gives us conventional cash stability, while allowing for all the upside to come as we get the mercury and gold. So does that answer the question, as best I could, I guess, at this point?

Yes, it does. I was just curious if we would ever get any actual numbers from that. I know you guys are in the sampling phase…

Yes, as soon as the system is in place up and running, we’ll start sharing with the regulators and everyone the grades that we’re putting in, grades that we’re getting out, the efficacy of the system, how well it’s doing all the things it’s supposed to do. So it’s coming.

Okay. And I’m going to have a – just a clarification, because [Technical Difficulty] changes, was it a financial thing?

No. There ‘s two simple – yes, two simple answers. We, Comstock, slowed down the funding and spread it out over time, in part, because we needed to, but in part because as the winter sort of came in, it’s sort of – if you missed the November/December window, which we kind of slowed down, too, then it doesn’t make any sense. And then we targeted March. And everything is built and ready. All it needed to be was powder coated, painted and reassembled. And when the COVID thing hit, the powder coating company that we use shutdown. So the good news is, they’ve been up now for about a couple of weeks. And we expect within a few weeks, it will all be here, and we’re very excited about. So that’s what happened there.

Okay

In the Philippines, we really were not thinking about a second project until we got to see the tail end of the Comstock work. But the market is sort of coming to us on that one and demanding that we go faster, which has been a little stressful for us, because we’ve got to build two systems and we’ve got to get moving forward. And, again, we’re trying to manage capital and manage liquidity, but it’s all – it’s going very well.

Okay, fantastic. I guess, that’s been the one thing, because with the scalability of it, from what I understood and in the Philippines, I thought that would be – I guess, I’m trying to understand exactly how – has Oro done – already done some scalability testing…

Yes.

…as far as the process? Because to take on a Philippines project, if it’s not proven, so…

Yes. So let me answer that question. Yes. No, that’s a good question. So in substance, the system that we’re landing on the Comstock is going to be an up to 25-ton per hour system. It’s formidable. It’s impressive. But in the grand scheme of things, it’s a smaller rate of capacity, okay? That is by total intention and design, because we want to trial it at 2 tons per hour, 4 tons per hour. We want to have heavy involvement of engineering. We want to have heavy involvement of regulators. We want to make sure that we can perfect the scale-ups. And perfect to us means, you’re in the high-90s of efficiency. And so that system is going to be our last sort of proof-of-concept, if you will, to how high that percentage can go okay? I don’t want to confuse that with the fact that these systems are already very efficient.

Right.

We get 80%, 90%, 91%, I don’t know, they’re efficient. They already work. So depending on the project and depending on the needs, we can deploy now. So…

Gotha.

So we…

Is that [indiscernible] in the Philippines? What size are you all planning on sending there and how many to start?

Yes. So let me say two other things to that exact question. So first of all, despite the system being as impressive as it is and as big as it is, they’re all mobile, believe it or not, okay?

Okay.

So on the Comstock, the 25-ton per hour system, we’re going to be getting material on a test basis, for all intents and purposes, at those levels and bringing it up and processing it there on a test basis. It will be – it won’t be continuous, right? We’ll be running trials. We’ll be running campaigns, if you want to think of it that way, right? But let’s say, there wasn’t enough material. We can take that anywhere we want. We can take it to the next site. We could take it to the next site. We’ve got the permit of use at that site. But the equipment will be used again and again. Now the idea is – the idea, though, is to then scale to a 100-ton per hour system. I don’t know if Paul has a notion of optimal in his head, but I think we’ve heard him talk about 100 to 200, maybe 100 to 300-ton per hour. But one of these – the objective is to figure out what is optimal. What’s the largest scale that we feel good about? The Philippine system, the first one that we’re going to be sending, I think, is going to be like a 50 to 75-ton per hour, okay?

Wow, okay.

So that’s sized for the top part of the river and the rugged nature of the environment that it’s going to be in. Now at the bottom part, assuming there’s fish and mercury and contamination there too, you might put a much bigger system in. The sand and gravel system is bigger, but it’s bigger for sand and gravel. So…

Gotcha.

Yes. So it’s – that’s the range, I think, that we’re thinking about.

Okay. Is that system currently being built, or…?

So just to recap, the Comstock system is built. It’s being painted and powder coated.

Right.

The sand and gravel system is – I think, the system, except for all the mercury additions, is built. I’ve seen pictures of it.

Okay.

But there’s still work to do with the centrifuge and the spirals and those kind of things. So it’s in progress. And that’s the sand and gravel equipped unit. And then the third one has not been started yet.

Okay. And last question, not pushing. I started on the last call.

No problem.

The leach pad with Itronics, I saw the evaluation. What is the plan with that? Is that part of the new clean tech? It’s referenced…

Yes.

So what is the timeframe of that?

So – yes, thank you for that. So that’s great – that’s a great last question, because it’s the only question that really didn’t get addressed yet. So we really, really like the thiosulfate-based solutions. And Dr. Whitney at Itronics – it’s an evolution of that. It’s something even technically more remarkable and we like it a lot. We think it’s usable. It hasn’t – we just have not been able to prioritize the final design of – essentially, what we want to do there is the same thing we’re doing with the first mercury system here, right,, is build a system that’s not to be ultimate scale, but to an economic scale that proves the concept once and for all. Having said that, we have signed some additional NDAs with some remarkable technology that’s completely – it’s different. Always organic, always zero-waste in its objectives, and we’re hell-bent – we’re hell-bent on the notion of commercializing the reprocessing of those tailings and we’ll go through those materials again. But it’s the lowest priority of the list, but it’s on the list, which means it’s a priority, right?

Gotcha.

And so, there will be news coming on that a little bit longer-term, a little bit slow, but we’re hell-bent on making that work. And I think we know enough to see the feasibility. And we just have to prove that then to the world, like we’re doing with mercury and then it goes from there.

Fantastic. Good Luck. You guys stay safe.

Thank you. Same. And, Eduardo, as we wrap up and close, I’d just like to apologize, because I do know – I don’t know what the cause of it is and Zach will follow-up with Eduardo after this call. But a lot of people did have difficulty getting in at the beginning. And usually, I leave a few extra minutes to allow for some of that, but this seems like it was a bigger issue than that. We will absolutely address it. I apologize for it. If anybody wants to follow-up with a call, please reach out to either Zach or I directly, and we’ll take every step to make sure that it doesn’t happen again. Thank you, all. Thanks.

This now concludes today’s call. Thank you for your participation. You may now disconnect.