Ladies and gentlemen, welcome to Comstock's First Quarter 2023 Business Results Webcast. This is Will Maze with RB Milestone. Ladies and gentlemen, welcome to Comstock's First Quarter 2023 Business Results Webcast. This is Will Mas with RB milestone. For those of you newer to the story, Comstock commercializes innovative technologies that contribute to global decarbonization through three primary operating units, Comstock Fuels, which converts biomass into met gel [ph] renewable fuels, Comstock Metals, which recycles e-waste and critical metals and Comstock Mining, which holds significant gold and silver resource in target-rich districts in Nevada and plans to dramatically expand reserves through generative AI-enabled mineral discovery. Comstock shares are listed on the New York Stock Exchange under the symbol LODE. Joining us today is the company's Executive Chairman and CEO, Corrado De Gasperis, and COO, William McCarthy, to discuss first quarter results and update to current operations, and we'll also be answering questions at the end of the presentation. And if you're interested in asking a question or logged into the Zoom app or web platform, you can submit your questions directly to us in the Q&A module. Please note that this presentation is being recorded today, May 3, 2023, and will soon be made available on the company's website at comstock.inc. Today's call may contain forward-looking statements that are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements that are not guarantees of future performance of the company. No assurance can be given that any of these events anticipated by the forward-looking statements will occur or if they do occur, what benefits the company will obtain from them. Also, some risks and uncertainties may be out of control of the company. Comstock has a full disclaimer contained in their presentation. Lastly, RBMG is not a registered investment adviser or a broker-dealer for more information, please visit rbmilestone.com. Now it's my pleasure to introduce Mr. Corrado De Gasperis and Mr. William McCarthy, Gentlemen, the stage is yours.

Thanks, Will, and good afternoon, everyone, and welcome to Comstock's first quarter 2023 REPORT. As Will just mentioned, you have both myself and Billy McCarthy, our COO, on the call today for this business update and the Q&A that will be following the call. Our business update will include covering the information from today's press release and our recently filed quarterly report on Form 10-Q. We actually received some excellent feedback on the quality of our last call and our annual shareholder letter. Very happy to formally announce, as you just heard, that we've engaged RB Milestone Group, or RBMG, to support our Investor Relations effort and welcome Will Mason the rest of the RBMG team to Comstock. As you just heard, Will and his team are now facilitating these calls, and they will also be enhancing our investor communication efforts by directly interfacing with you and soliciting more and better feedback so that we can both improve our communications and our overall effectiveness. They'll also be working with us to enhance and expand our overall shareholder base. Welcome, Will and thank you, RMBG. Let me start today with the corporate side of the update. As you saw last week, we closed on the 2500 Peru facility, and we're substantially complete with the sale of that facility to American Battery Corp, with $18 million in cash already received, $12 million of which was used just last week to buy the building and another $8 million plus on its way, $3 million of which that is scheduled for next week and the rest coming in as we liquidate the 10 million ABML shares that we have in our possession. We expect all of this to be completed over the next few months, letting us well over $14 million in net cash…

Sure. Well, thanks, Corrado. That's a very informative presentation. As Corrado mentioned, we're now moving into the Q&A portion of the call. [Operator Instructions] We have had several questions submitted prior to the call. So let's get started. The first question is regarding asset sales. The question the investor asked, when will the sale of the 2500 Peru be fully closed?

Thank you for that question. So the transaction ended up closing out on a number of steps and phases, if you will. I believe for all risk purposes, we're substantially complete today. We've received $18 million to date, as I mentioned. That's a net of $6 million cash into our treasury since we used $12 million of that to close on the building last week. We'll get the remaining $8-plus million over a continuum starting next week. Cash will be flowing in essentially next week and then as we responsibly monetize the 10 million ABML shares in our possession. So it will be methodical. It will be wrapped up, and it will all be closed fully within just a few months.

Great. Next question. Can you provide more color on the additional asset sales and the timing of them?

Sure. Our primary remaining additional asset sales really represents our nonmining properties and water rights that are in Silver Springs. In the latter half of 2022, there was a macro pause in the real estate activity for most of, what I would say, the larger real estate investors as the Fed started moving interest rates up hard. And that even included a pause by one of our major potential investors. However, just in the last few months, with Tesla, Redwood and Microsoft announcing these multibillion dollar investments in our immediate vicinity, the activity has picked up dramatically. We can't predict the exact timing, I don't think, but we have never seen this much serious activity looking to invest in Northern Nevada real estate and specifically Silver Springs. These sales alone would allow us to achieve our targeted asset sales. We also have other existing equity investments in both the opportunity fund in addition to the assets that we're holding in Silver Springs and in Green Li-Ion, both of which are on our books at only a fraction of their current market values. We could exceed easily our targets if we sold some or all of these additional investments.

Great. Thanks, Corrado. This next question comes in - so there was a couple of questions on TRLs and this one specifically. Can you provide more information or insight into the technology readiness levels that you've discussed last quarter?

Yes. I think this is a good one for Billy. Billy, can you take that one?

Absolutely. I'd love to talk about technology readiness levels. This technology readiness scale we use is really critical to everything we're doing today. It gives us the ability to assess the risk in a technology development project as we move to commercialization. And it's not a new idea. It was really first conceived by NASA in the 1960s during the Apollo programs. And it was evolved then originally into a 7-level scale in the 1970s and then a 9-level scale in the '90s. And what we use today is a version of that, that's widely used across government and industry today tailored specifically to what we're doing. But the point here is in technology development, as you move up the curve, TRL 3 is a proof of concept in the laboratory and relatively easy to attain. And when we look at the history of innovation here, that's what our universities have largely been doing, and that's what commercial entities do in their basic research function. Commercialization going to 7 to 9 is also relatively predictable. Middle is known widely as the valley of death. Taking that technology from a proof of concept to commercial state is difficult and requires real diligence and discipline in how you do it. Implementing the scale at Comstock and aligning all of our efforts around it contributes value in a number of different ways to us. Accurately estimating the cost and timeline to get to commercialization and quantifying the risks in a repeatable and comparable way is certainly #1. But the opportunity that comes out of this is that we see certain technologies that look risky or difficult. But when applying these objective measures to them can often come in less difficult, less costly than they would appear outside. And this is true for technology that we're developing here, stuff we've talked about and stuff we have in early-stage R&D for the future as well as the third parties that we integrate with to get to a solution for our customers. Especially in fuels, we're building tailored solutions to meet specific customer needs that involve our core technology integrated with a lot of third parties. So overall, we have a great ability using this process to effectively assess where we stand for ourselves. And it gives our prospective customers the same ability to effectively and officially evaluate the offerings that we're showing them.

Good. Thanks, Billy. We've had a couple of questions coming here on the capital structure. The first one here is, are you issuing additional shares?

Thanks, Will. I can say very happily that we haven't sold any shares since February. And the only shares that were actually issued were associated with our convertible debt that we issued last year. We had 3.15 million of this debt outstanding at December 31 of last year, and we currently have only 1.85 million shares outstanding today. There was sort of an unusual circumstance in that, that conversion of debt resulted in the issuance of about 4.5 million shares during the first quarter. And when we issue those shares upon conversion, we're required to estimate the number of shares initially and then do an adjustment subsequently. While in early April, we had an adjustment for an excess issuance of over 327,000 shares, which was returned in April, which resulted in our outstanding shares today actually being lower than our outstanding shares that were issued -- or I'm sorry, outstanding at the end of March. So again, we haven't sold any shares. We don't intend to sell any shares. And we are just seeing some issuances associated with the prior convertible debt.

Great. Well, the next question is kind of the same question in reverse. Are you considering buying back any stock?

Thanks for that question also, Will. No, not really. First, restate what I just said is we're not issuing new shares, but also that we're sitting here today with a tremendous growth portfolio. I mean, think about it this way. Between fuels and GenMat alone, we have huge growth profiles with huge existing markets today. In metals, we have huge growth markets in front of us. And in mining, with what we're fixing to do in conjunction with GenMat in terms of mineral discovery, we have -- literally, the world is the oyster for this technology. So as we sit here, we have 4 exponential growth stories that we expect to deliver incredible returns on. Stock buybacks are typically more for mature companies with excess cash producing businesses that wouldn't normally have these kind of opportunities for growth or capital allocation or they simply just have more cash than they can productively deploy. That's really not our case today, and we believe the market is starting to appreciate this, and the market is starting to see the value. And we're going to focus on funding and delivering the objectives of those businesses that will drive the highest appreciation and the highest recognition of that value in our share price. Look, the current asset sales have had a meaningful impact on avoiding dilution, no question, especially at these levels. We believe the opportunities we have created that are immediately in front of us and all of our business will generate much more superior returns. And we expect to see those returns from delivering our objectives and again, not from buying back our stock.

Similar question. Will you be redeeming any debt early?

That's a good question. I mean, most of our remaining debt is tied to our remaining asset sales. And so it will effectively automatically be paid down as we consummate those transactions. I guess depending on the timing of those asset sales, we could -- we would redeem whatever amount of that remaining convertible debt outstanding. And I guess in that context, we would be not only paying off debt, we would be preventing that stock from getting into the market, effectively buying it back, yes.

Great. Now the next question is more operationally focused. This investor would like to know when will you have the first commercial fuels contract?

All right. Great question. I think maybe both Billy and I will take a shot at this one. Let me start by saying the short answer is that we will be selling our first commercial fuel solution this year. But a better answer is for me and Billy to provide some color on that process. We engineer and tailor our technology solutions to our customers and their specific needs and circumstances. I'd like to both of us just to give you a little bit more insight about that. When I think about the handful of large customers that we're already engaged with, it has typically started with their business development teams trying to solve a problem or in this case, mostly unblock their feedstock constraint. Then we get through them and their internal engineers and technology folks show up and start poking and testing us for the fit of our solution with their problem. And then once we get through that, we evolve to specific request for proposals, typically by third-party engineering firms that do an independent assessment of our technology qualifications and readiness. And it's actually wonderful to tell you all that we're engaged at that more advanced level with at least two major companies already and more on the way. After we close our first sale, there are several phases of these projects before our customers actually deploy our engineered solution and we start earning our royalty piece. However, the initial phases entail a significant amount of revenue generated in engineering for things like prefeasibilities, feasibility, final engineerings, all of which we provide while earning millions of dollars in engineering services and support. These are often structured as upfront fees that will bring immediate revenues for us. But let me just -- let me pause there. Billy, why don't you provide some further insight to the near-term objectives relating to fuels that support these kind of commercialization efforts?

Yes, definitely. All of our near-term objectives relate directly to this commercialization of the field technology, both commercialization today and also some things for commercialization in the future. But what you just said, Corrado, about the processes we're in today, objective number 1 is to make -- get through all these processes at the highest possible quality. And so far, we've had great success. We're making progress, and we've hit no major roadblocks along the way. Second to that, we frontload as much of the work that needs to be done to get approval post the first sale as we move towards commercialization. The renewable fuel programs that provide incentives to renewable fuels are primarily the renewable fuel standard administered by the EPA. And in California, they have a low carbon fuel program as well that provides incentives for fuels. Every production facility needs to be individually qualified and the pathway approved for every project that gets deployed. What we're doing today is really focused on getting all the modeling and all the documentation done. That's not site-specific, so we can accelerate that process as much as possible with our first customers. Beyond that, we're continuing to advance the technology readiness of our system, including deploying an updated -- we have our pilot running in Wisconsin, but we're continuing to upgrade it and getting it to operate continuously. We have over 4,000 hours of run time on the system in Wisconsin, substantial. But we're going to go a step further, and we're going to get that system to demonstrate technology readiness level 7 in our facility. And further to that, the fourth objective is to take a couple of key pieces of downstream third-party technology that provides other functions at these -- for the solution and get them fully qualified as well. We want to expand the capabilities of what we can do and what our bio intermediates can do as they get transformed into fuel.

It's outstanding. I mean, if you can imagine that we're not only engaged with a large number of customers. They're not only visiting our facilities that Billy just described with great reception and great feedback. We're not only advancing to proposing on specific engineered solutions, but we're doing a massive amount of additional work in parallel alongside in anticipation of what it will ultimately take to fully deploy these approved solutions. And all of that will result in a quickening. As we get our first, as we get our second, it will just quicken. So I hope that gives a good sense. We're extraordinarily busy, literally full time dedicated. Every aspect of our fuels team has a hand, a role in how this ultimately comes to market, gets deployed to market and then is supported and sustained once it's in the market. So well, maybe that's good for now. We can go to the next question.

Okay. Thanks. It was very informative. Thank you. The next question has to do with the DOE grant. Have you or when will you receive the funds and the start of the DOE grant project?

Oh, yes, that's for Billy.

So let me just say we were extremely excited when we were selected by the Department of Energy for this project. We've been diligently at work getting everything aligned. So we have 5 core partners on this project: Marathon Petroleum, RenFuel, Xylome, Emerging Fuels Technology and the University of Nevada at Reno. And let me just say, the University of Nevada Reno is a critical partner here that has really transformed what we thought we could do with this project. We're going to be -- we're building a pilot system, prepilot system for a particular pathway in this project to demonstrate its effectiveness. And we're doing all of that work at the University of Nevada here in Reno using a lot of resources at the university and allowing us to now do this project with zero impact on any of our commercialization activities that we've been talking about. So that's exciting. But we're currently fully engaged with the Department of Energy and with all these projects, finishing the documentation, the scoping and ultimately the award agreement for this project. We have a great team at the DOE, who's covering the project for us. Really do appreciate those guys with all of these new grant programs that have come out of D.C. They are well overwhelmed and understaffed for what they need to do. So it's going a little bit slower to get to the final award than traditionally is the case, but we seem to be on the current timeline that everyone is doing. Phase 1 of that project will be very similar to what Corrado just talked about from the commercial process. The first phase will be the Department of Energy coming in with their third-party engineering firm to do qualification and assessment of what we have, going to be a 3-month phase of the project. And we are looking forward to that kicking off, hopefully, in the next few months, but more to come as we hear from the DOE and the process proceeds.

Great. Thanks, Billy. The next question just comes in on Comstock Metals. This investor is asking, with the new emphasis on photovoltaics, does that mean you are abandoning lithium-ion batteries or other types of batteries?

Yes, I'll take that. No, we're absolutely not abandoning batteries. On the contrary, bringing Fortunato into this business allows us to take our existing tech and combine it with his decades of experience and technology and actually enabling us to advance and really efficiently process not just batteries, but a much broader range of materials profitably. Our technology is particularly effective in eliminating the most difficult contaminants that we see the market currently struggling with, including these contaminants within battery cells. We have that capability. We have that technology today. However, we've made the strategic decision now to start with solar panels because they will bring more immediate volumes, revenue and profitability while the nascent North American battery supply chain gains traction. And those recycled materials that ultimately we produce from those batteries can also be used here that are supporting the U.S. needs. The tech that we use, though, for all of these materials is essentially the same. Billy, maybe you can provide a little better summary too of what our near-term objectives are in this business as well.

Yes. So near term here is, again, all about commercial demonstration as well. So we've selected a site here in Northern Nevada. We are actively working to get that site ready, to get the utility and other connections we need and working on the prepermitting and getting ready to submit those permits soon. At the same time, we've got our equipment and our pilot system from Wisconsin on its way here. We've got engineering work for that and securing the supply agreements. Now in this market for photovoltaics, the supply side is where the revenue comes from. And it's a very important component of the business. So near term, we're looking to get the site up and running. We're looking to get those supply agreements in place and set the date for when that facility is going to be operational.

That's great. Thanks. Now this next question moves over to the metals -- the mining segment actually. This question the investor is asking, with gold prices rising, what are your plans to realize the value of these assets? Will you be drilling in 2023?

All right. Yes, a couple of questions there. Thank you for that. I mean, we've actually been discussing this quite a bit internally, and it's been at the forefront of our minds and for sure, our mining team's minds. We're absolutely committed to advancing the existing resources and upgrading them into reserves. We have a clear line of sight on how we want to do that with the first step being to complete prefeasibility for both [indiscernible]. But we continue to be data-centric in how we do this in a much more -- we've always been sophisticated with our geologic data, but we plan to be much more data-centric in how we do this. And really, from our view, right, the more data that we have and the more data that we can corroborate and integrate and analyze before we actually drill, the better. We're not -- we don't -- we're not going to drill with suboptimal data. Our team has completed a tremendous amount of this analysis already. We have a remarkable level of precision with the cross sections of level plans and the integration of that geologic data into our existing model. Really, it's fantastic. But GenMat's abilities and their expanding team, they're literally on the verge of hiring a geophysicist as we speak, will greatly enhance how we can both provide the data and analyze the data that we already have coupled with the new data that will come from GenMat's sensing platform. All in all, the combination of our highly talented team, the better AI tools and the ground [indiscernible] that proves that these enhanced predictions actually result in increased certainty of minerals is what we're really all about. So as we think about these integrated mine plans, we think about integrating the technology into those plans. All of that results in increased certainty of our mineral discovery targets, tremendously reduced cost of our traditional drill programs and increased and better categorization of our resources, ultimately towards them being mostly proven in probable reserves. So look, I think we're all excited about the satellite launch. The satellite launch is a catalyst, but it's not the only catalyst. The data and the analytics will drive everything that we do. Billy has been involved in a lot of the strategic planning associated not only with individually the mining business, but also with GenMat's business. But maybe, Billy, from that context, you could talk about our near-term objectives for integrating GenMat's technology into our mining plans.

Yes, absolutely. So we're kicking off in the next 60 days the Phase 1 development of this digital model with GenMat. As Corrado mentioned, this is all using existing data we have. So this will include all the drilling and assay data in our database, the magnetometer surveys we've done in the past, both aerial and ground, as well as the really robust historical data from the century plus of exploration on the Comstock. So getting this initial model built is going to be our first priority. We're hoping to get that done this year. It's going to give us some initial insights. But what it's really going to do is it's going to position us to be ready to take in the orbital hyperspectral data once the satellite does launch and we have the additional sensor data. But that doesn't mean we're not going to get insights from it as we start, and this is very much underway today.

Good. Staying on that topic, there were several questions that came in related to the launch. Is there any timing on that?

Yes. So there's two factors that constrain or control the launch date. And let's just talk about what they are. So the first is the regulatory approvals. GenMat's applied for, received conditional permit approval from NOA, who permits any satellite that transits data back to earth. And they're working through the final requirements to receive launch approval there. The second factor is the logistics side. The advent of this commercial space industry that enables a company like us to launch a satellite, a microsatellite in this case, a CubeSat is that we didn't rent the rocket and pay for the fuel. We're to ride along with somebody else. So there is a certain amount of uncertainty there that while once we have launch approval, we'll get scheduled. But there's always some variation in that as we wait for our window that we can get on board. We don't see any of this happening before the end of the third quarter, just to be clear, but launch approval soon after that timeline and just waiting for our turn to get on board.

Very good. Okay. I know we're pressing up against time here, but there's another question here on mining. So it was, would you still sell the mining asset?

All right. I'll take that one. I think it's consistent to say that we are and have been open to monetizing the mining assets if it makes sense for our shareholders and with the valuation. With these higher gold prices and they're even much higher today, there's been a lot of interest. But as we advance the assets, as we continue to do the things that Billy just described, they also get more and more valuable. So we evaluate each and every single opportunity that comes our way, including opportunities to potentially lease our property for -- certain parts of our property for revenues, including with and ultimately royalties. We've listened to opportunities about outright sales and in either other types of ventures. However, with our past experiences, we have prioritized the two very critical things, right? Whatever counterparty we're dealing with has to have, especially if there's some form of ongoing relationship, have to have solid management, certainly solid CEO sort of leading the charge, and they have to be creditworthy. Those are critical prerequisites. Of course, it is in addition to what the economic terms or valuations are that are being discussed. So yes, we would absolutely monetize these assets in a potential series of ways as long as it benefits us. But I emphasize that we would always do in a manner that wouldn't conflict with the enormous opportunity that GenMat now presents to us for mining.

Great. Thanks. We are pressing up against time. So Corrado, just wondering if you could just provide some closing remarks and perhaps some milestones that investors should have on their radar?

Sure. Just in closing, during the first quarter, we completed the purchase and sale agreement of a major asset sale. This effectively stopped our sales of stock and funded our growth businesses. The fuels we achieved industry-leading yields of 100 gallons of fuel per [indiscernible] ton of woody biomass on a gasoline gallon equivalent basis and then built a major working coalition of industry and technology leaders like Marathon Petroleum, like RenFuel, among others. We're now collaborating with not only on our recently announced Department of Energy grant but also on other commercialization opportunities. For metals, we're deploying a crushing and separating system for electronic devices starting with solar panels and ultimately recycling critical minerals for all batteries. We believe our system uniquely and efficiently eliminate the most difficult contaminants in all of these electronic devices. But the photovoltaic market is here and now and with an immediate revenue stream from tipping fees. Our mining assets already have nearly 1 million ounces of gold and over 8 million ounces of silver in all resource categories. And our generative AI will be deployed for mining this year first with our existing data. That will be enhanced later this year when we put our own powerful hyperspectral imager and advanced data analytics into production. That will expand and validate our geologic trends in our district and enable new mineral discoveries and mineral expansions ultimately for just a fraction of the cost of conventional exploration. GenMat's goal itself is to develop and commercialize an artificial general intelligence for physics. And it enables the sensing, simulation and engineering of matter. While that sinks in, please do register and get a deeper dive on all of these activities by attending our Upload 23 event on June 28. And please, please, please vote your proxies for our AGM on May 25. Thank you all for your interest, and we really do look forward to seeing you in the upcoming months.

Thanks, gentlemen, and thanks, everyone, for joining us today. And we know we did get a lot of questions that we weren't able to get to, so please send in any questions that you may have to comstock@rbmilestone.com. Again, that's comstock@rbmilestone.com. Today's webinar recording will soon be made available on Comstock's website as well. So thanks again for everybody, and you are now free to disconnect.+