Comstock Inc. (AMEX:LODE) Q2 2025 Earnings Call Transcript

Comstock Inc. (AMEX:LODE) Q2 2025 Earnings Call Transcript August 14, 2025

Comstock Inc. misses on earnings expectations. Reported EPS is $-0.27 EPS, expectations were $-0.17.

Zach M. Spencer: Good afternoon, and thank you for joining Comstock Inc.’s Second Quarter 2025 Earnings Call and Business Update. I’m Zach Spencer, Director of External Relations. Today is Thursday, August 14, 2025. We are streaming live, and this session is being recorded. A recording will be posted shortly after we adjourn in the Investor Relations section of our website. Today, we filed our Form 10-Q for the quarter ended June 30, 2025, and issued a press release summarizing second quarter results. Both documents are available on our website. As a reminder, Comstock is listed on NYSE American with the ticker load LODE. Joining me today is Corrado De Gasperis, Comstock’s Executive Chairman and Chief Executive Officer; and Judd Merrill, Comstock’s Chief Financial Officer.

We received more than 40 questions in advance of the call. If you have additional questions during the call, please use the Zoom Q&A window, and we will address as many as time allows. Today’s discussion will include forward-looking statements. Actual results may differ materially due to risks and uncertainties detailed in our SEC filings. Full risk disclosures can be found in our filings on the Investor Relations page and on the SEC website. With that, it is my pleasure to introduce our Executive Chairman and Chief Executive Officer, Corrado De Gasperis. Corrado, you may begin.

Corrado F. De Gasperis: Thanks, Zach, and welcome, Judd and Zach and all the investors and stakeholders interested in Comstock for the second quarter results and update. I’m going to use some slides. So, for those that can see the webcast, I think it will be very effective. For those who are just on a dial-in, I will try to voice over what we’re looking at so that you can get the full gist of the update. It’s outstanding. And there’s a heavy, heavy emphasis now following the separation of Bioleum back in May on our metals, right? I think in our January shareholder letter, we said the real objective of getting through 2025 was in large part certain transformational transactions that would result in a public Nevada-based metals company and an Oklahoma-based oil and gas company, both certainly at the highest end of renewability.

And so that’s what we’re getting to. It’s a remarkable thing, completing that separation of Bioleum in May, getting them independently and separately funded by strategic investors. We understand through the financial accounting and reporting process that we will, in the near future, be fully deconsolidating them also from our financials. We think that’s important so that people can have a clear view of what the Comstock Metals and the metal operations look like, forward-looking and real time as well as what the fuels business looks like. As Zach said, we will make some forward-looking statements. But I’d like to take you through a presentation of some aspects of corporate and the recent transactions that we just completed as well as a deep dive into the metal recycling business.

It’s taken off. It’s moving very, very fast. And the recent transaction that we just completed fully funded us through industry scale operations being up and profitable. So, it was an absolutely remarkable offering that we just completed. It’s fully funded as of today. We ended up a pre-offering with just over 35.5 million shares outstanding. We issued 13.3 million shares as part of this offering, bringing in a gross proceed of $30 million, net proceed of $27.6 million on a pro forma basis and combined with some of the incredible proceeds that came in, in May for Bioleum, it puts our cash position at over $45 million. And maybe most remarkably, as part of this offering, we got our largest debt holder who happens to also be one of our largest equity holders to agree to exchange and pay down those promissory notes with equity.

Q&A Session

Remarkably, they also participated in this equity offering. So, a very, very strong testament to one of our largest equity holders not only being happy to work with us to eliminate the debt, but also coming in with even more equity capital for that end. That was about $8.4 million in promissory notes. We also had a tail on those convertible notes, $2.2 million. There were provisions in that agreement to redeem those for cash. We ended up negotiating a slightly lower premium, meaningfully lower cash premium with some additional shares to extinguish those convertible notes. I could say to you unequivocally, those notes have been fully paid off as of this moment, and we don’t have an interest in any of those interim or bridge capital activities going forward.

So, we’ve been trying very, very hard to get the businesses ready to get the businesses commercial to start growing that revenue so that we could attract more broader, deeper institutional capital. And that’s what we just did. In all of my 30 years of doing this, it was one of the most incredible, successful, pervasively well-received offerings and to say that we’ve markedly expanded, broadened and deepened what we would say was an already good represented capital base. What we had was necessary, what we had was not sufficient. We now have a foundation that is not rock. I would say, it’s titanium. Most importantly, — most importantly, we funded such that we have a clear line of sight to metals bringing their first facility online. We have a clear line of sight of that facility turning profitable, and we have a clear line of sight of not needing more equity to go to Facility 2 and beyond, right?

We’re going to give you a deep dive on the metals business, and I’m reasonably certain you’re going to like a lot of what’s happening and what Fortunato has created. Before I do that, I want to say that the bankers who we’ve been working with for quite a bit here, ironically, when we first met them, they were telling us we weren’t ready, we weren’t ready, we weren’t ready in and around the Bioleum separation, eyebrows went up and said, it looks like you’re ready. And they also have an option, a 15% overallotment option that if they exercise it at their option, would result in 2 million more shares and $4.5 million more in proceeds. We’ll see how that turns up as we go forward here. Welcoming Judd to back into the family as our CFO. He’s already made an impact from day 1 settling in.

Huge part of that impact is around the financial organization around the capital needs. Another huge part of that impact is just freeing up a tremendous amount of my capacity. And so that’s extremely welcome. I think things will move faster with that capacity and with our ability to do these things, certainly with our funding. And then Fortunato, who has been really the nuts, bolts, foundation, top bottom of building this metal recycling business and some of the incredibly novel and unique technology that we have. And I’m going to really emphasize that here in this discussion. So Comstock Metals is our business that is recycling solar panels. Some of you — many of you know that we started in the battery metal recycling arena. We built a system.

We were producing some pretty damn good black mass, but we were struggling with getting to battery-grade metals. We were, in other words, struggling to get to salable metals. We know a lot of people in the industry to this day are still struggling to get to battery-grade metals. And we went and looked for a technology that could help us with some of these laminates and plastics and glues. And we found it in Fortunato. I’m going to go deeper into that in a minute. But what — when we found it, his comment to us was I don’t think you should be focused on batteries. The industry has a problem. The industry has multiple problems. One is they’re all chasing the same batteries and they’re treating these batteries like they’re extremely valuable assets and extremely valuable commodities.

And that doesn’t pencil. If the totally variable cost of these batteries, these feedstocks are so high and if it’s difficult to get your hands on them, it’s not going to work. It’s not going to work well. That’s for sure. So he said the entire world seems to be missing this epidemic in end-of-life solar panels. These panels are coming out of the market so much faster than anybody even imagined that they would be. And so my first reaction to that was solar panels, that doesn’t sound that sexy. What’s so great about solar panels? Well, number one, there’s millions of panels coming out of the market today, at least a decade before anybody was expecting to, millions of panels. Number two, it’s growing exponentially. It’s going to be 10x that number in 4 years.

And it’s a major, major environmental problem where the states and the communities and the counties are already mobilizing to prevent these things from going into landfills and nobody is addressing this problem. So fast forward to today, that was 2.5 years ago, we literally take these solar panels, we take them from our customers, and they pay us upfront a tipping fee, $500 a ton to do what, to receive and take from them their environmental liability, their environmental problem that they don’t have a solution for. Nextly, we do not want those solar panels going into landfills. They will contaminate the ecosystem. They will contaminate the water system. Those materials will leachate into the system and be very, very bad for our communities, plus you’re throwing away valuable commodities.

People seem to be surprised when we tell them that there’s over 0.6 ounces of silver in every solar panel. There’s aluminum. There’s also some critical and rare elements, iridium, manganese, tellurium, depending on the types of panels, germanium, like there’s very, very valuable minerals there. So, what we did was we brought in Fortunato’s technology, and we integrated this delamination process into our solution and then expanded it out and built an entire demonstration scale facility. Now, there’s 4 very, very key things that we believe are novel that our technology does that nobody else can do. The first is that we thermally destroy at the molecular level, we’re breaking carbon bonds, and we’re thermally destroying these polymers, these laminates, these plastics.

Such that they are broken down and ultimately reassembling with very, very safe emissions, CO2 going up the stack. So, we have air quality controls. We have scrubbers, but we do not have any harmful emissions, and we eliminate all the contaminants. Secondly, we don’t harm the metals. We don’t carbonize, we don’t destroy, we don’t burn the metals in our process. And to that point, if laminates and plastics are sticking to the silver or sticking to the glass or sticking to the aluminum, they’re not salable. In fact, if you do that, you’re just generating new hazardous materials and the permitting regime that we work under wouldn’t even allow that. So, we have a zero landfill solution because those aluminums, those glass and those silver tailings come out clean, free of those contaminants.

That’s number two. The third thing is it’s ridiculously efficient. Our variable costs are less than 7% of our revenue, less than 7%. Most of that is natural gas and the rest is electricity, but in reasonably and relatively small, small quantities for what we’re doing. And then the fourth, which I think is the most powerful is it’s fast. You do a panel every 7 seconds. What does that mean? Of course, it means we have incredibly high throughput, low variable cost, high-speed process, but it’s more than that because that speed is what enables us to scale. one production line can do millions and millions and millions of panels per year, 3.3 million panels per year from one production line. We don’t know anybody that can do that. In fact, we were R2V3 certified this year as the only company in North America, which to us means the only company in the world, but the only company in North America that is certified, channel checked, audited as generating no waste and having a certified proven 0 landfill solution.

Now, one person said to me, well, that’s nice for the environment. Is it that important? It is absolutely that important for 2 critical reasons. Most of our customers are sophisticated utility companies who’ve had nightmare experiences with landfills and super funds, and they don’t want that. number one. It’s one of the biggest boxes that they check. But number two, every pound that we produce clean, we sell for money. Every pound that wouldn’t be produced clean is not a loss of revenue. It certainly is that. It’s a cost that then is required to be paid to dispose it to the landfill. So, how do you have the total lowest cost? It’s that way. So, we proved this in our demonstration facility in Silver Springs, we proved over a year ago that we can produce clean aluminum, clean glass and these tailings, these really fine residual materials.

That’s all it. That’s all there is. There’s nothing that comes out. We haven’t set 1 ounce. We haven’t set 1 pound of waste to the landfill. Some people said, we don’t understand how you do that. When you’re incinerating in an oven, we don’t incinerate. Our process is not an incinerator, right? It’s much more molecular, much more thermally dynamic and much cleaner than that. What was really a surprise is the grades of silver that we’re concentrating in the metal tailings. We would have been probably pleased with 15, 20 ounces of silver per ton. We’re consistently depending on how fine we screen, we’re consistently getting 30, 40, sometimes 50 ounces per ton of these residual materials. Now these materials here represent — the tailings represent 12%, 13% up to 15% of the weight of the panel that’s coming in.

The aluminum represents 12%, 13%, let’s say, up to 15% of the weight of the panel. And the glass heaviest weight by far is about 70%. So, you’re getting almost $125 per equivalent ton coming in the door in recovery of aluminum. You’re getting another $125 equivalent ton coming in the door of the silver-rich tailings. And let’s say, you’re getting $20 a ton for the glass, even rounding it down, you’re at $250 a ton. So, you’re getting paid $500 a ton to take this environmental problem off the hands of our customer and then another $250 a ton to ship the same material, obviously, reprocessed, reseparated and bagged out the other side of the plant. I want to be clear, though, that we’re selling all the aluminum. We’re selling all the glass. We’re selling it, frankly, as soon as we’re selling it as soon as we can fill up a truck.

The fines are going to a final refinery, typically either in Texas or in Asia. And then the final — the refinery is then refining down now with the metals. Now we’re probably getting paid 50%, 60% of the silver value based on those agreements, which is the equivalent to the dollars I just mentioned. But we do have a notion that we will develop one more step, that refining step. We have refining competency. Fortunato has deep refining competency. We have refining competency from our mining days. We’ll look to do that in the future. But those silver grades and those silver concentrations come at a remarkably good time. In 2025, silver is hitting all-time record levels of demand. Where is that demand coming from? It’s coming from industrial demand, industrial applications, primarily electronics, electrification and especially from solar panels and photovoltaics.

So not only is silver hitting all-time record demand, it’s projected over the 10 years — next 10 years to grow dramatically, more and more silver in demand. And a few years back, finally, the demand for silver exceeded the mine supply. Today, it’s over 200 million ounces a year that’s being consumed more than is being produced, which is what brought the silver prices from the mid- to high teens to the high 20s to now high 30s, pushing $40 an ounce. That increase in price just over the last year contributed our estimates from going from $200 a ton recovery to almost $250 a ton recovery to now slightly over $250 a ton. For those of you that are familiar with our locality, this is Silver Springs, Nevada on this picture that you’re seeing. And this small facility in the back is where we are operating 3 shifts processing solar panels as fast as humanly possible.

We — if you looked at this picture today, if I took this picture today, this parking lot would be completely full of solar panels. It is absolutely 100% full of solar panels. Hence, in May, we got a massive permit expansion. To the left, you see this flat land here in Silver Springs. This facility is 600 Lake Avenue. The land right next to it is 800 Lake Avenue. We secured that land, and we just had it permitted to do what, to store up to 25,000 tons of solar panel material to be able to bring that material in, in advance of starting this plant up so that we continue to grow our market share. Now that small facility, you can see it says 135,000 panels per year. That’s not a small number, but it’s only about 5,000 ton equivalent per annum. The large facility can do 3.3 million panels a year from production line, 3.3 from 1 production line.

That’s a panel every 7 seconds that’s lower than 7% totally variable cost. And that thing will make money even at 21% utilization, anything over 20% utilization, it is profitable. And now we have all the storage that we need as we bring in more and more customers. The market today or certainly last year was about 3.3 million, 3.5 million panels came to the end of their lives. That’s equivalent to about 100,000 tons of material and about the size of one of our production lines. But what’s staggering is in 4.5 years, that number is going to be 33 million panels coming out of the market. And people are like, my God, 33 million panels, that’s massive. No, it’s not. The U.S. has 1 billion solar panels deployed. In 20 years, 330 million panels a year.

It’s a massive trajectory. And I don’t think people understand how big this problem, this end-of-life solar panel issue is. But some people understand California essentially prohibited — classified these materials as universal/hazardous waste, which is what it should be classified as and essentially prohibits and makes it extremely difficult, if not illegal, to put these things in landfills. So, what did we do? We selected Northern Nevada. If you can see the screen, I’m circling the location. We selected Northern Nevada right on the main artery of I-80 coming in from Northern California. Our second site and our site selector is driving down there today as we speak, is on the main artery coming in from Southern California into Nevada. Why is that?

This map shows you a dot, a plot, if you will, for every major solar deployment in the United States. The bigger the circle, the older the deployment. It takes everybody about 1 second to say, well, California is by far the most solar panels deployed in the country and at the same time, the oldest. If you add Arizona and Nevada to California in the Southwest region of the United States, you’re literally sitting on more than half of the entire market for end-of-life solar panels. who’s sitting on it? We’re sitting on it because our 2 — first 2 facilities are putting right in the immediate proximity of all that market share. That’s what we’re all about. What’s remarkable is the next 4.5 years, when that 3.3 million panels of waste becomes 33 million panels of waste per year, more than 50%, that percentage grows between 2025 and 2030 in the Southwest region of the United States.

Eventually, the rest of the country will catch up and harmonize. But for now, this is where almost all of it’s at. Texas, this whole region here centered by Texas, going even all the way up to Colorado, New Mexico, is the second most deployed panels in the country to California. They’re not as old. quite — sorry, there’s quite a few old ones. They’re not as old. But Texas is #2. But then you have Florida, you have North Carolina, you have Pennsylvania, New England and Michigan. We know exactly where these panels are. And our business plan is playing out exactly the way we hoped it would, actually a little better because these are our customers. These are the customers we’ve engaged with. These are people we’re taking panels from. What you see in Nevada, California, Arizona is exactly what we hoped we would see.

RWE is our biggest customer. They’re national. They’re not regional, but their Copper Mountain location has 25 million panels deployed all by themselves. Their replacement rate over the next 8, 9, 10 years is going to be easily 1 million panels a year. It could be 2 million panels a year, probably going to be higher than 2 million at some point in the continuum. What we didn’t expect is that we would have Florida Light & Power and NextEra as a top 3 customer. We didn’t expect people sending panels to Nevada, from Florida, from Pennsylvania, from Ohio, from Louisiana and Texas. That reaffirms to us that they don’t really have a good alternative. They don’t have a good alternative. We don’t see any alternative that can scale. So, when we look at our “competitors”, they have little foreign mechanical systems.

Can they do 5,000 or 6,000 tons a year? Yes, a system probably could do that. Can they scale that bigger? No. They would need 20 of those to match our automated — fully automated continuously operating system. 20 of those would be 2.5x our CapEx, which is a lot, but it’s not even as big a problem as 25x the OpEx. If they need 4 or 5 people to run one of those small systems, we only need 3 people to run our fully automated large system. We don’t have to multiply that number of people times 20 systems. So the economics for us are formidable. We’re sitting on a market opportunity unlike one economically that I’ve ever seen before, which is we get paid $500 a ton to take in the panel. We’re getting another $200. You heard me say it’s really closer to $250 to sell and ship all that material.

That’s $70 million to $75 million of revenue if 100,000 ton facility was running full, even at 85%, 90% utilization, right, you’re $65 million of revenue and you’re making $55 million of profit because our totally variable costs are only 7%. Our totally variable costs are only $35 a ton. The fixed costs are everything else. mostly sales, marketing, administration, logistics management, making the system run. It’s such a low number. All in, it comes out at about $150 a ton. So yes, we want to have our first facility up and running immediately. The plan is that we ordered all the equipment today. This offering that we just closed, all the deposits are going out tomorrow. The permit is due in November. The equipment lands November, December. We’re commissioning in Q1.

We’re up and running and profitable in Q2. That’s the plan. But the minute the Nevada Department of Environmental Protection hands us the permit for the north. We’re going to hand them right back the identical permit application for the South, same state, same department, same bureau chief, same permit writer because we want to corner half of the U.S. market immediately. You could simply say, okay, facility up and running early ’26, facility up and running early ’27, facility up and running early ’28, where is that third facility going to go? Well, we’ll see. Will it be Florida? Will it be Texas? Will it be North Carolina? It will be one of those. Okay. We have 3 facilities. Now ’29, ’30, you’re looking at 1 million tons of waste coming out of the market.

Well, we’ll be generating $150 million, $160 million, $165 million of cash flow. Well, that’s not correct, Corrado. You have to pay taxes on that number, right? No. We have $260 million of net operating loss carryforwards. We will not pay cash taxes on the first $0.25 billion in profits. But I got to tell everyone on this call, Fortunato and I will have a problem with each other, and we’ll have a problem with our team. If come 2029, we only have 27%, 28%, 30% market share. So, Facility 1 will go up fast. Facility 2 will come up right behind it. But 3, 4 and 5 is going to go a little quicker if this thing plays out the way we’re seeing it play out now. So let me just pause for 1 second and say, if you can’t see the screen, I apologize. But what this screen is the other assets of relevance that Comstock has other than this powerful business plan and this powerful focus that has resulted from the separation of Bioleum from our portfolio.

We still have our mining assets. People get upset when I don’t mention it. I’m sorry. We have 12 square miles of mineral properties, the Comstock load. We have almost 1 million ounces all category of gold resources. We have almost 5 million ounces all category of silver resources. The Dayton mine is the one where we have an engineered internal mine plan that shows $400-and-some million of free cash flow. And now as you see on the screen, a net present value, assuming $3,000 gold of over $200 million. We’re working very hard to monetize those assets. What does that mean, Corrado? Are you selling them? What does it mean? It means any way that we can monetize those assets. For the first time in literally 10 years, people are taking an interest in smaller scale but very profitable precious metal assets.

So, we’re happy about that. We also are selling the real estate. I know everyone’s heard it for a very long time, and I know we have some questions about it. But let me tell you what happened. Northern Nevada got overwhelmed with industrial businesses, starting with Tesla’s Gigafactory, then Redwood, then everybody else and their mother seem to come in. And then the second wave, though, was the data centers from Switch to Google to Microsoft. And I could name 5 more without even blinking. And what they did is they really slowed down the public utilities’ ability to deliver power fast — and that, frankly, slowed down the interest from the data centers. It didn’t go away. It’s as strong as it’s ever been, but getting the power thing certainly now slowed us down.

So, I feel badly about that. It was a very sad day for me when that bump hit the road. Now something new has happened. Off-grid power suppliers, hyperscale data center developers and capital are forming coalitions, partnerships, whatever you want to call them. And they’re coming out now again saying, we now have all the pieces we need, forget the public utility. We’d like to do something with these properties. So, we’re working that very, very fast and very, very hard. Green Li-ion is up and running in Oklahoma. They’ve got incredible offtake. They’ve got incredible feedstock. They’re really running. We hope that in 2026, they’ll do something very major in terms of capital raise. They’re planning something very, very big. We think that at that time, we’ll be able to monetize at or better.

Start-up companies are difficult. We see it with metals. We see it with fuels. But these guys really have a grit to them. I got to say, they keep persevering and we’re their biggest cheerleaders. Mentioned the NOLs. They’re not on our balance sheet at any value. We’re required to put a valuation allowance and reserve those assets 100%. But if we generate $0.25 billion of profit, which is right in front of us with this metals business, we’ll be not paying cash taxes. And then lastly, the Bioleum separation resulted in us taking a convertible preferred security. What did we do? We added up every dollar that we invested over the last 4.5 years, $65 million. We protected it in a convertible preferred security that has liquidation preference over even the Series A money that’s coming in.

And we have 32.5 million underlying common shares to preserve our upside. I know some questions came in on that. People keep saying, I’m confused as to how I get value from Bioleum as a load shareholder. Well, first of all, Marathon’s investment was at $700 million valuation. That was actually a valuation cap when they came in, in March, in February, March. Second investor came in with $20 million cash, you all know that at a much, much higher valuation. But even if you use the cap and you see that our underlying shares are 76%, then today, there’s an asset that could be valued at $0.5 billion. Market doesn’t recognize it. Market is not giving us any credit for it. So — but now they’re funded and now they’re moving forward faster some of the most incredible people in the industry are joining that team.

It’s formidable. They’re going to be commercializing. The state of Oklahoma is literally bending over backwards joyfully with us together and our strategic investors to put a platform in place that will create an oil well that never stops producing. That $65 million note will not show up on our balance sheet in the Q that you’ll read tonight, because we’re still consolidating Bioleum in our financials. but it’s completely the objective to deconsolidate them. And based on our understanding of the accounting rules, and we’re going to ask the SEC to validate it for us before we do it, we believe before the end of this year, it will be fully deconsolidated and then people will have clarity to the fuels business and clarity to the metals business.

But we can guide to that clarity today. Obviously, we know what the 2 pieces look like. So, I know there’s more I can say, but I also know that a lot of the questions that have already come in will cover it. So, Zach, why don’t we turn over to the questions.

Zach M. Spencer: Thank you, Corrado. As I mentioned at the beginning of the call, we received more than 40 questions prior to the call. And I can see we have a number of additional questions coming through Zoom. Corrado and Judd, our first question is, congratulations on the funding. We really want to see the solar recycling maintain its market share lead. Have you already negotiated or ordered the equipment?

Corrado F. De Gasperis: Yes. I think I just mentioned that. So let me say something. After about 4 or 5 months of operating a demo facility, we knew we could produce clean zero landfill materials. So that was a huge thing. What we did for the next 12 months was 2 things. We put every single type of panel, we could — we can get our hands on through that thing. I don’t care if it’s monocrystalline, cylindrical, the thin film, those little tile concoctions. I mean, we put everything through the system, proved it, proved it, proved it, proved it, number one. Number two, Fortunato expanded and built a database of every possible thermal cycle time, every kinetic, every chemistry. And with all that data, with all that know-how, we finalized design of the larger system.

Someone said to me, it looks like you’re scaling up 87x. It’s completely not correct. We’re doing 5,000 tons a year now. We’re going to go up to 100,000 tons, a very, very standard almost by the book scale up, going from lab to pilot to now full demonstration operating. We’re almost on 20 months up to just a 20x scale up. And guess what, that scale-up is coming with all of the same manufactured equipment from the same manufacturer and that manufacturer we negotiated, we enhanced, we modified, we finalized those designs so that we literally were ready today to purchase all of that equipment. Most of it requires like a 35% to almost 50% deposit. And so, it’s about $5 million that will go right away tomorrow that will keep us on track for landing all this equipment by the end of the year.

Zach M. Spencer: What are the lead times for the equipment? Should we expect higher CapEx due to tariffs?

Corrado F. De Gasperis: That’s a good question. So, the lead time is 4 to 6 months, right? And that’s not really a range. That’s 4 months for one type of equipment, 5 months for another type of equipment, little buffer. So, people can understand how, for us, getting this ordered by now is absolutely critical so that it could coincide and synchronize with our permits coming in by the end of this year. All of our equipment is manufactured domestically. We have 2 major suppliers in California, very close to home. We have one in Oregon. So, it’s like no tariffs, no tariffs.

Zach M. Spencer: Can you phase in the capital for a facility?

Corrado F. De Gasperis: So that was a question that I think probably came up because of something I previously said. We had laid out a scenario where we could phase in like instead of $9 million to $10 million, sort of phase in 6 million and then another 3 million to 4 million. But the way the ultimate crushing and separating system was designed, we had — I would call it almost like a mini breakthrough where it just makes more sense to deploy the entire system. So, we won’t phase it. It will be 100,000 — well, we’re not going to phase the first production line in the 100,000-ton system. Theoretically, we could deploy another 100,000-ton system in that same facility when the demand calls for it. But the demand is ramping up, right?

The projects are ramping up. The intimacy with the big utility companies is forging forward. And this won’t be linear. It won’t be — this thing is going to improve 10% or 20% every quarter until we’re at 10x. It’s spiky. And when it’s spiky, it means big orders and big panels. And if you’re not in a position to take them and process them, then you better be in a position to take them and store them. If you’re not in a position to do either of those things, you’re going to miss the market. So, deploying this capacity fast is critical, less likely to phase, a full line will go in right away.

Zach M. Spencer: Can you permit and build facilities in parallel? Are the other states easier or harder to permit in?

Corrado F. De Gasperis: So, I mentioned Nevada. I would put Nevada on the harder end of the scale. We did — Nevada somehow became a recycling hub, not for solar panels, of course, we’re the only ones doing that, but for batteries. You’ve got Redwood, you’ve got American Battery. You’ve got some other companies that are recycling here. So, the regulations, every state interprets the federal regulations a little differently. Some of them coordinate with each other. But because Nevada is sophisticated, because of the mining industry’s platform here, they take it very hard and very seriously. So, the good news is we’re through one of the hardest tests. We understand that Texas is easier, no disparagement or opinion on that. What we did do, though, is we hired one of the top regulators from the Nevada Department of Environmental Protection, who was responsible for a lot of these regulations, guidelines and implementations for hazardous waste handling and recycling.

She’s already scanning the country for the sites that we’re — and the states that we’re interested in, and we’re already preparing for how we might modify our existing permitting regime once we leave Nevada. Now, I think there’s no question we’re going to get this first one commissioned in Q1, operating in Q2. We’re going to try to go faster. There isn’t any reason we shouldn’t go faster for the second facility in Nevada, as long as we get that permit filed before the end of this year. That will keep us on track to go faster for Facility 2, get it up and running, let’s say, Q1 of next year. And then I think then though, the question is relevant. Like, what could we do in advance to at least site select 2 or 3 sites at the same time, at least start the permitting for 2 or 3 sites at the same time and at least enable storage.

Because if you do that, if you have storage, which has much shorter lead time for permitting, and if you have any breakthrough in storage, if there’s a preexisting storage, whatever, then you’ll be taking business right away even before you get the permit. So, the permit for processing. So, I think, as I said earlier, if we do 1 a year for 3 years and we have a 30% market share, I personally feel like we dropped the ball. If we have a — look, I want 100% market share, but we’ll see what happens, right? We get 50%, 60%, 70%, it will be because we went for it all, not because we were satisfied with less. So, when you have 55 million of facility, you start thinking about 5, 6, 7 facilities. And remember, everybody, we’re only talking about the United States.

We haven’t talked about anything else. So, it’s big.

Zach M. Spencer: A person is confused by the potential market. Is it millions of solar panels or millions of tons?

Corrado F. De Gasperis: So well, ultimately, it’s both. So today, or at least in 2024, we saw over 3 million panels come to end of life, 3 million panels, which is about 100,000 tons. In 2030, it’s going to be 1 million tons in the United States. In 2050, we’re projecting 8 million tons. So, it’s millions of panels today. it will be tens and then hundreds of millions of panels in the future. It’s hundreds of thousands of tons today. It will be millions of tons in the future. Good question, though. Good clarification.

Zach M. Spencer: And metals success seems to rely on long-term contracts. MSAs are good, but do you expect stronger, longer guaranteed contracts?

Corrado F. De Gasperis: I think this is a really — this question is really profound in the sense of what the market is. So let me reverbalize. There’s 3 things that give us competitive advantage. One, zero landfill solution. Okay? We don’t have one operating competitor that represents that they’re zero landfill. I mean, the best we’ve heard is we can do up to 90% recovery. I mean, someone might have said 95%, I can’t remember, but 0 landfill, number one. Number two, you have the capacity to handle millions and millions of panels. The only people that have the capacity to handle millions and millions of panel are us and a landfill. The major landfill companies don’t want this stuff. They’re not taking this stuff. California, Texas, no.

So where is this stuff going? There’s shady stuff happening, right? So, we’re dealing our customer base, 85% of the market that we’re projecting are highly sophisticated and responsible utility companies that have HS&EP professionals, you would be shocked to hear maybe that the top 2 utility companies in California have directly called our regulators in Nevada, directly reviewed our permits with them. That’s what we want. Now, you’ve got scale, you’ve got environmental peace of mind for your customers. You’re literally selling them environmental peace of mind, because if you can’t — if you can’t destroy and transform those materials into a useful product, that’s a tail on a liability that the customer is stuck to. It’s like a super fun thing.

So, we sell them peace of mind definitively, and we can scale it. So today, the scaling issue is it’s nascent. Like if you get even a big company that has 50,000, 60,000, 80,000 panel, we took 80,000 panels in from one customer in Q1. You might have somebody able to take those panels. I’m not sure when and how fast they’re going to be able to process them, but they could probably get away with taking them. But when you have 500,000 panels, when you have 1 million panels, what are you going to do? So that’s the second competitive advantage. The third is cost. There’s no one that is as fast and as efficient as we are, $150 all-in per ton, absolute lowest cost. However, if you’re sitting right on California, if you’re sitting right on Nevada, if you’re sitting right on Arizona, you win.

Nobody can beat you. Not a chance. In fact, if they’re in Texas or in Florida, it’s going to add another $150 to $250 a ton for transport. Can’t win, can’t beat us. However, if there’s somebody in Florida, then we need to be in Florida. We need to be in Georgia. We need to be in North Carolina. We need to be in Texas so that we don’t have a disadvantage on logistics cost. Now customers pay for sending it to us today, but it’s an all-in cost for the customer. If you’re not minimizing it, it won’t — you won’t hold on to it. So I hope I answered that question effectively. I guess the point, let me make the point, is the MSAs fully and totally define the interdependent and operating parameters between us and the customer. In other words, everything is in place for us to take that many panels from them.

We don’t see anybody else having that in place to take that many panels from them. I think once that becomes clear, once that becomes more obvious, then the agreements probably to their benefit, the agreements will become longer term and more secured, and they’re going to want some kind of economic benefit from giving us all that business, we’re happy to do that. But today, we know we’re the only ones that can take all that business, and it’s not necessarily in our best interest to lock it up in terms of a long-term contract. I know it gives people peace of mind, but we know where the panels are. We know what the economic agreements are. We know what the logistics agreements are and the business is coming to us.

Zach M. Spencer: Why are the asset sales taking so long? What is really happening there? Can you provide some better insight?

Corrado F. De Gasperis: So I mentioned it briefly. The power grid bottleneck when Google and Microsoft and Tract, all came in heavy and negotiated the power agreements that they needed to operate their data center. Switch did that a long time ago. Everything was kosher, everybody was happy, right? Then you get Powerhouse and then you get Encore and then you get — I mean, I can go on and on. And Nevada Energy is like, well, okay, 6-month lead time becomes 12-month lead time becomes 18-month lead time, becomes a 2-year lead time. 2-year lead time is manageable for large industrial development, but it made a lot of people pause. And what they did was they basically scoured the country for megawatts. So, look, there’s 50 megawatts in San Antonio.

Let’s go do a data center. Oh, look, there’s 65 megawatts in Georgia. Let’s go do a data center there. And everybody ran around chasing and finding all these inefficiencies in the market. Now that’s gone. Now people are pulling tens and hundreds of billions of dollars, like sovereign nations, hundreds of billions, our federal government, it’s the whole AI compute data center, and it’s not about making money on data. It is about that, of course. It’s also about who’s going to win this AI race. Everybody and their mother wants to put mega money, they say, “Oh, we don’t have any power”. We don’t care. Let’s get natural gas turbines. Let’s get geothermal, let’s get solar, let’s get nuclear. So, what’s happening now is that these consortiums have aligned themselves to do these things together.

And quite frankly, it’s on a bigger scale than I ever even fathom. So, we’re now engaged with 4 or 5 of these new paradigm approaches and I’m much more confident, although no one will give me any kudos. I don’t want any credibility on this until we sell them, right? I know we’ve gone through a little bit of roller coaster. We understand the roller coaster. It’s not lack of effort. It’s not in competence. It’s — the market is dynamic. And so net-net, it means higher values to our property, but we need to get them sold and move on.

Zach M. Spencer: Corrado, Judd also serves as the President of Comstock Mining. Our next question is, are we going to sell or mine the gold and silver mineral assets?

Corrado F. De Gasperis: So look, Judd has an extensive career in precious metal mining, 3 distinct companies, excluding ours, that led to sales to intermediate or major mining companies. That’s an uncommon track record. we’re going to monetize the assets. I can’t give any better color than that, but there’s companies that would buy them. There’s companies that would joint venture and fund them. There’s companies that would buy a percentage in joint venture and fund them. There’s a big spectrum. So, we’re — it’s not as heavy as the real estate discussions that are going on, but it’s absolutely picking up. So, I don’t know where it’s going to land. But what our goal is, is, a, some money, hopefully, it’s meaningful; and b, we unlock the value of this thing for our shareholders.

So maybe separating, maybe spinning them. But it’s one of the transformational transactions that I alluded to in the January shareholder letter. But I’m going to tell you right now, for the first 5 or 6 months of the year, all we got was inquiries that sort of played out as being not credible or not meaningful. And now we’re getting some meaningful incredible inquiries. Again, without Judd, I’m not sure how well we would have been able to prioritize those things. Now they can be fully prioritized.

Zach M. Spencer: Corrado, as a shareholder, this person is not clear what they get from a future Bioleum IPO, will it get shares equal to the shares?

Corrado F. De Gasperis: Again, apologies for me that to the extent we caused any confusion initially using terms like spinout and maybe examples of what was possible, we might have set the wrong expectation. So, there was no real way to efficiently do a share-for-share spinout, okay? So that got taken off the table very quickly. There’s no way to do it in a tax-free manner for our shareholders. More importantly, Bioleum is not generating revenue or profit yet. So, taking that company public in the near term would have been an absolute disaster in my opinion. So, what we did do was we protected the investment with the preferred, and we have 76% today of the underlying common, 32.5 million shares. The way that our agreement is written is that we can’t convert to common shares until there is an IPO.

If there’s an IPO and we hold on to the investment, we’re limited in the amount of common shares that we could convert unless we wanted to distribute it to our shareholders, in which case we could distribute it all to our shareholders. I have no idea when it’s going to go public, what the value is going to be when it goes public and how — and if we would distribute it to shareholders. However, if the company goes public and it’s a multi, multibillion dollar enterprise and we own a lot of it, okay? If it’s public, if you have a validated public valuation, then the probability and chances of it showing up in our valuation are a hell of a lot higher, more probable than it would be today, where we’re seeing almost none of it show up in our valuation.

So ensuring that they are funded, ensuring that they can continue this incredible business plan, which is bigger than anything I’ve ever seen, ensuring that they can get profitable, ensuring that they can get revenue, ensuring that they can then go public will be extraordinarily valuable for our shareholders any way you want to cut it, any way you want to cut it. okay? If for some reason, we have a multibillion-dollar company that we own more than half of that is not showing up in our share price, then we’ll be forced to do something like distribute it out or whatever, okay? But we don’t — we’ll see when we come. The answer to the question is we’ll be the absolute best fiduciaries based on what we know and what we see for our shareholders always, which is what we’ve always done.

And even though we haven’t seen bigger recognition, we are seeing recognition. We are seeing enablement. We are seeing funding go directly into the business. And we’re seeing now world class, and I don’t say that with any hesitation, world-class institutional investors, dozens and dozens of them in our stock today. That wasn’t true yesterday. So, we now have a formidable high, high, high-quality institutional capital base to complement a very, very sophisticated high net worth and retail capital base. It’s the best of all worlds starting now. Now, what does that mean? We need to execute going forward. I purposely wanted to go through this metals plan the way that I did because it’s all about execution, get the permit, land the equipment, commission the facility, get more and more bigger customers, build that storage, get the second site, submit the permit, get the third and fourth site and then pay attention to the landscape.

Where is the competitor that can do what we can do? They’ll show up eventually. But if it takes them 2 or 3 years, they’re going to be too late.

Zach M. Spencer: Thank you, Corrado. Well, it looks like we have come up on 1 hour. So that concludes Comstock’s Second Quarter 2025 Earnings Call and Business Update. If we did not get to your question, please send it to ir@comstockinc.com and we’ll do our best to respond either directly or we’ll post the response on X. For anyone who is not following us on X, our main account is at Comstock Inc. Please follow us. And Corrado, did you want to your closing thought?

Corrado F. De Gasperis: Yes. I just — I want to make 3 closing statements. One is I noticed someone had asked Zach that there was — why was a bit of the use of proceeds like over — a little over $1 million being used for Northern Comstock. And I’d like to just address that one because as part of these proceeds and as part of our agreement, we had acquired some very, very, very valuable mineral properties in the central part of the district. We did it through this Northern Comstock entity. And what the agreement says is that if we have a liquidity event of over $12.5 million, we have to accelerate one payment. So, we’re accelerating one payment, but here’s the good news. This acceleration results in the completion of the payments for that mineral property, 100% complete, and it also represented almost $820,000 of expenses in our annual P&L that are gone.

So no more obligation, no more expenses going forward from that. And we own 100% of these mineral properties that have hundreds of thousands of ounces associated with them. So that’s number one. Number two, we concluded prior to this offering, fully extinguishing the obligation associated with the acquisition of the organosolv technology for fuels with American Science and Technology. That’s extinguished. And that had also like almost $1 million a year of lease and rent expense that’s been extinguished. We now own the property 100%. We pay no more rent. We also completed — we haven’t closed on it, but we’ve eliminated the obligation. This was before not using these proceeds for the acquisition of the Haywood Quarry, which is an absolutely critical mining property adjacent or near adjacent to our Dayton operation that enables that mine plan to get to the finish line.

And we extinguished the obligation associated with the acquisition of LiNiCo, which is who owns that Green Li-ion investment. So, we’ve extinguished all of these obligations on balance sheet, off balance sheet, they’re all gone. And then we extinguished the convertible note and then we pay down the promissory notes. So, it would be hard for me to clearly and easily — it would be very hard for me to exaggerate the difference — and I know there are some investors who are thinking this in their minds right now. Those sale pressures using stock to acquire something, using stock in a bridge with a convertible note, using these — that’s what was always hurting our valuation. Now some people are upset, some people sold some shares. I feel badly about it.

You should buy them back tomorrow, honestly, because now the foundation is set, the technology is set, the customers are coming in, the revenue is growing, and we’re funded. We’re funded and we’re funded in a way where these things that we previously had to do, right, we previously saw no other ability to do are gone. They’re behind us. And I don’t want to speak for others, but our bankers were like, we don’t even want to introduce you to these institutional investors unless our diligence proves that you’re done with this. Like we need to see. We need to come in and see. Are these liabilities gone? We want you to agree not to incur them again, blah, blah, blah. It’s done. So, I really want to say that, that’s huge. Please look out for updates in metals.

It’s going to be remarkable. Fuels will be giving their own updates. And Oklahoma is beyond bending over backwards to make us prosper there. It’s partly because of our coming out of Oklahoma from 4 or 5 different perspectives. So, I know we’re over the time, Zach, sorry, but just wanted to get those last few comments in.

Zach M. Spencer: Okay. Thank you very much, Corrado. And thank you, everyone, for joining us today. This concludes our webcast.

Corrado F. De Gasperis: Thank you.