Comstock Mining Inc. (LODE) on Q3 2021 Results - Earnings Call Transcript
Corrado De Gasperis: Good morning everyone and welcome to our Zoom call today. I'm actually very excited about this update. There's been a tremendous amount of activity over the last six months for sure and I'll provide a brief summary of the information that was included in our press release from this morning and from our quarterly report filed on Form 10-Q last night. Those updates will include our progress on recent breakthroughs in lithium-ion battery recycling and especially lithium extraction, cellulosic extraction for producing biofuels, and also comment on the effective restart of our mercury remediation operations in the Philippines and also some promising developments coming online with Tonogold. I'll try to be brief in my prepared remarks and I'm really looking forward to the Q&A. If you don't have a copy of today's press release, you'll find a copy on our website at www.comstockmining.com by just clicking on the Press Release tab on the menu bar. Our Form 10-Q is also available via EDGAR on www.sec.gov. Please let me remind you that we will be making forward-looking statements on this call including our prototype deployments of LIV crushing and lithium extraction technology, trans-cellulose and carbon extraction technology, and how this impacts our forward revenues and values. Any statements relating to matters that are not historical facts may constitute forward-looking statements. Our 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 previously reports filed by the company with the SEC and in this morning's press release. And all forward-looking statements made during this call are subject to those same and other risks that we cannot identify. Once we complete the prepared remarks, Zach will direct all questions zooming in to us and I'll be happy to answer that. If you're not using Zoom, you could follow-up with us after the call directly or via our website with any additional questions. So, we've obviously been very active this year in building both an asset portfolio and an exceptional senior management team, effectively killing two birds with one stone. Our balance sheet has increased to $100 million in net assets tripling from last year-end and importantly adding lithium extraction, cellulosic carbon fuel extraction, and global engineering and manufacturing capabilities that places us in a leading position in each of our businesses. We've increased insider ownership as well to over 20% fully aligning our team with all of our shareholders. Of course it's not the size of the assets it's what we can do with them. We've spent the last six months accelerating our plans for lithium recycling and cellulosic fuels with capabilities of each activity coming online and fully operational prototypes in the first and second quarters of 2022. We're going to talk more about that in a little bit. I'm going to take a few minutes to give you insights on each of these businesses and their developments including some remarkable revenue and profit opportunities that are coming faster in 2022. Let me start with lithium-ion battery metal recycling. You already know that our engineering team led by Comstock's Chief Processing Engineer designed and we are now deploying a crushing and separating technology that would ultimately represent 100,000 ton per annum state-of-the-art battery metal recycling facility in the Tahoe-Reno Industrial Center, right here in Nevada right here in Storey County, Nevada. What you may not know is that we believe we have the only system that can safely crush charged batteries meaning we do not need to discharge the batteries prior to crushing and safely oxidizes out of those materials contaminants, while preserving the lithium and minerals and producing the highest-purity black mass. This system is scheduled to be operational in Nevada in the second quarter of 2022. However, we have a full prototype of the same system arriving in our PSI labs in Wisconsin next month. This is a fully integrated 18-foot-tall replica capable of crushing six tons per day and fully demonstrating this unique technology. We believe this will produce the highest purity dry black mass in the world in just a few months for all to see and differentiating us in the market for what we can do. Much more importantly, we are integrating our super critical intellectual property, a process that will extract lithium -- a lithium extraction system if you will that will follow right on from this crushing and separating system. That's being scheduled to arrive in March, again in Wisconsin that can extract substantially all the lithium from the black mass at the front end of the process. I want to pause at this point because we don't see anybody in the market even attempting to do this. This enables an extremely profitable business even at low volumes and a highly profitable one at higher volumes as we can sell lithium carbonate later this year just from this capability. Can't exaggerate the importance and the impact of this technology and how unique it is. Most of the processes that we see in the market today most of the processes we see being proposed from online in the market tomorrow, destroy most if not all lithium content from this recycling process. For us it's a remarkable breakthrough. We also believe we'll be able to extract graphite at the front end of this process, another breakthrough and another immediate revenue stream that would further purify the concentrated black mass. We haven't -- we're not as far along on the graphite extraction as we are with lithium extraction, but it's coming from a known process that we feel very confident we'll be able to put in place. This again will result in much more pure and much more concentrated black mass, which we may actually need to call it something other than black mass maybe brown mass or gold mass or something. I don't know, but it's going to be extremely valuable. We've also positioned ourselves downstream from there with both Green Li-ion as everybody knows already and just recently entering into a collaboration agreement with Aqua Metals using this highly pure mass for developing clean high-quality metals downstream like cobalt and nickel that strengthens and expands our downstream product line potential and ultimately will include all of lithium, carbonate, graphite, nickel, cobalt, manganese et cetera and hopefully soon with realign co-precipitated cathode materials. I do not see anybody better positioned technologically or operationally than we are in the battery metal recycling space. Lastly, we've also secured a nearly 200-acre storage site for our batteries in close proximity to the LiNiCo facility that opens the door for us to finalize agreements and start receiving storing lithium-ion battery materials in Nevada. We're already receiving lithium-ion battery materials in Wisconsin on a smaller scale of course to operate in our prototype. But this was an important step in our plan and it's getting done. There is still a lot of work to do and we're fully dedicated and we're getting it done. Let me just close on lithium battery recycling by saying that we can showcase crushing and separating in Q1. We can showcase lithium extraction in Q2. And everyone's going to take notice and it's going to be very different. For us, it's the most meaningful milestone for you all to track in terms of this business' progress. Secondly, let me turn to cellulosic fuels. And I appreciate that this is a new discussion and that we just fully acquired Plain Sight Innovations less than two months ago. But we already have our first biofuel facility target and expected to scale up with an initial capacity exceeding 330,000 tons per year of forestry waste over its first years of operation, as it extracts and refines carbon-neutral woody biomass into ethanol, biodiesels and marine fuels. I need to pause this and explain that this business will be the biggest business in our portfolio. It's what I've personally been spending the last 90 days immersing myself in. And it will be by far the largest business in our portfolio and in the most nearest term. As big as LiNiCo potential is and it is cellulosic fuels and the associated byproducts that come from it are significantly bigger. Our carbon-neutral biofuel designs are remarkably scalable. We can make very small facilities. We could make 16 million gallons per year facilities. We can make 100 million gallon per year facilities. The tech is proven. However, we recently had a breakthrough in the speed of the extraction process, literally tripling the speed of converting woody biomass into cellulose and ethanol. We literally take dead wood like sawdust and chips and produce an entire suite of bioproducts. Incredibly for every gallon of ethanol that we can produce we can also produce a 0.5 gallon of alternative biofuels coming from lignin, the lignin in the wood like biodiesel or marine fuels or biogasoline, meaning that a 16 million gallon facility would actually produce 24 million gallons of saleable materials. A 32 million gallon facility would produce 48 million gallons of saleable materials. This breakthrough in speed at which we can process is being extrapolated and engineered up through the entire representative footprint of our first facility, which is planned to be located in Minnesota. This is the business where the feedstock is abundant, it's cheap, and the decarbonizing impact is massive. The market is seemingly unlimited, although, we've defined the market to go about 16 billion gallons of cellulosic fuel per year wherein no one is providing a single gallon today. Remarkably, we've now actually been approached by two major counterparties to purchase from us engineering and construction services for deployment in the same cellulosic extraction technology for paper products, pulp and paper products and also ethanol production, where it's already prudent for significant revenues and profits for Comstock. More will be coming in this area of, I guess, what I'll call clean technology-based sales and services from our model, but it's coming very soon. It's coming early in 2022. And all of this was enabled by the acquisition of Plain Sight Innovations and its intellectual property and the engineering and manufacturing capabilities of RPS, Renewable Process Solutions. I mean, the fact that we can engineer and manufacture this tech that it -- will both be showcased in Wisconsin next quarter, let me clarify a point on that. I already mentioned that, we're going to have lithium, crushing lithium, battery crushing lithium, battery separating and lithium carbon extraction showcased in Wisconsin. But I didn't mention that, we also will to be able to showcase, the same extraction capabilities of woody biomass and cellulose in both cases, with large-scale prototypes. So we'll be able to do that next quarter, and it's foundational to creating these revenue and profit streams that, I'm talking about. We're nearly complete in integrating all of these businesses and plans into one Comstock system. We're one company Comstock, with all of these capabilities. And that's really what we've been doing for the past six months. And unfortunately, and I'm sorry why we've been so quiet for the last three or four. Let me spend a few minutes on the mining activities before we go to Q&A. First with MCU, and then with Comstock, with MCU, we were paused due to requiring additional permit for selling the sand and gravel. So we got up the money in the Philippines. We had all of our permits for setting up the camp and employing the equipment and processing. But unfortunately, we didn't have the permit to actually allow us to sell the sand and gravel, and that resulted in downtime for us between April and August. But our JV has secured that permit. We are now fully resumed operations. We are processing clean materials and we're starting to sell the results of sand and gravel. The delays are very disappointing, as we are still resident and established in the lower part of the Loboc River in the Philippines, where we've been seeing very low mercury and gold content. The good news is that machine is operating. The good news is the government is testing daily, the mercury content in the materials. The good news is, the contents are de minimis and clean, so that we're able to sell the sand and gravel and now we're fully permitted to do so. The system works, the operation's up and running, and we're moving forward. We're also testing up-river, where we expect to see more mercury and gold content from all the artisanal and small-scale mining that occurred up-river, and hopefully, finally establish a meaningful revenue stream that will grow as we see the increases in the mercury and gold. Operationally, as I said everything is in place and operating. We have extracted gold, just not very much. And we're now starting to sell sand and gravel. Government is fully supporting us, and we have an extremely low overhead profile. So business is very efficient. We just need to see more mercury and more gold. So the prospects for the future, outstanding as we see it. Let me touch base on the Comstock and in that context Tonogold. Tono is clearly going through some changes, and there is probably not too many specifics that we can share now. But what I can tell you is they are deeply into an internal transition that's going to result in a remarkably stronger, and highly qualified, and very reputable, mining and leadership team, both directors and officers, with strong capital commitments coming together, and the ability to advance all of their exploration and development plans. They have drafted a technical report on the northern part of the district. It is in final draft form. We are reviewing it, including the Lucerne Mine, and also finishing up their financial audits, all of which should result in getting their plan very, very strongly back on track. And I would say, even better than originally anticipated. We're working with them towards a very positive outcome, and we expect it to all be completed before the end of the year. We are also advancing our technical reporting for the Dayton and Spring Valley complex. We have had two dedicated geologists including our Chief Geologist, Larry Martin, Junior Geologist and then our Chief Mining Engineer, Mike Warnert and we look forward to both Tono and Comstock's technical reports coming together being available my goodness, it's like with inflation surging and gold up $100 an ounce in just the past 30 days, shooting up last I checked past $1850 this morning and climbing. These are very important and I would say, although delayed very timely indicators of our assets and their underlying gold and silver value. The bottom line is that our money and our commitments are where our mines are as we have directly linked all of our performance targets as you know with the goal of delivering the first $0.5 billion in share value. We're saying at least $12 a share to all of our performance objectives. We're now obviously assessing those values as each one of our businesses can exceed multiples of these amounts. As we build and grow them we're really looking at something exponentially larger in terms of growth in terms of the targets that we set regardless because of our significant insider ownership greater than 20% and because our comp other than that is structured such that if the shareholders are not rewarded then neither are we. It's 100% performance-based. We're really positioned for everyone to succeed here as we go forward. I'm not opposed to any questions in the Q&A be it related to any of the activities or otherwise. I'll turn it over to Zach to start feeding me in those questions.
A - Zach Spencer: All right. Thank you Corrado. Our first question is, there seems to be other firms working on lithium extraction in the Nevada area as well and probably recycling too. They seem to be trying to source used batteries at this time. How does Comstock compare in the time to significant commercialization? Other than timing what other differentiating factors are there relative to these competitors?
Corrado De Gasperis: Outstanding. Thanks Zach. So in terms of differentiation let me say, first, that we have a fully state-of-the-art 136000-square-foot battery recycling facility. As far as we understand it, we're the most advanced in terms of the existing facilities that are on the ground and the permit applications that have been submitted, number one. Number two, we don't see anybody in the industry looking to crush materials that are charged and in a dry state. That results in the purest least contaminated black mass with the highest value of minerals residual including lithium. Thirdly, we have the ability to extract lithium almost instantaneously using our super critical intellectual property and process at the very front end of the process. We don't believe anyone is even talking about extracting lithium at the front end of the process. Most of the processes are designed to produce minerals such as cobalt, such as nickel, such as manganese with meaningful losses in lithium and graphite. Our ability to extract lithium and hopefully, graphite at the front end of the process, totally differentiates us, not just in terms of process but in terms of value in the market. What it also enables and this is very important is a profitable endeavor, even with very low volumes of lithium-ion batteries. There is no expert in the market that is predicting anything other than a tsunami of lithium-ion batteries coming out of the market. It's obvious. What's not as obvious is the timing, right? The tsunami is not coming in 2022 or 2023. It's coming much later but it's coming. If you have the ability to produce a relatively low amount of battery feedstock profitably enabled by extracting lithium in our case then you have a sustainable business that's going to explode at some point. If you talk to any of the experts, McKinsey, the mineral industry as a whole, the associations, the explosion is coming and we're going to be best positioned for it.
Zach Spencer: All right. Thank you, Corrado. Our next question is about RCRA, whereas we refer to it RCRA and of course that stands for Resource Conservation and Recovery Act, which was enacted in 1976. The question is, do you have confidence to meet RCRA's time lines in your battery recycling operation? Is your storage site RCRA-approved?
Corrado De Gasperis: Excellent question. So RCRA is the leading authority for hazardous waste management. And here in Nevada, the permitting process for processing hazardous materials is done through the Nevada Department Environmental Protection using a permit called the written determination. And the determination is that we're allowed to operate under RCRA guidelines as long as we don't store the batteries on site. So a very important distinction. None of the recyclers are going to store batteries on site. It's not allowed. In that context, we are highly confident that we will have all the authorities and permits by the first quarter of next year and that we'll be up and operating on the time line that we indicated. Secondly, with storage, we're allowed to store lithium-ion batteries up to one year at a dedicated storage site. We just secured a 200-acre site in very immediate proximity of our operating facility. And all that really requires since we're not processing materials there is a record ID. So it's relatively permit-light. And that is different than if you had a fully permitted universal large-quantity waste recycling facility that would require full RCRA permitting, which often takes many years. I hope that answers the question.
Zach Spencer: Okay. Thanks, Corrado. The next question is for each of your new businesses, could you reiterate a brief commercialization map that is date of first commercial activity and plan?
Corrado De Gasperis: Yes. Let me give that. So for lithium, we are going to have a prototype operating in Wisconsin in January. We're going to have lithium extraction added on to that prototype in March, April time frame. That will produce sample quantities of the material but also provide a showcase to the market of our full capability through lithium extraction. Immediately following that, we will have the crushing and separating system coming online in Nevada. That is the May, June time frame. And then we'll have saleable materials coming from that. Following the lithium extraction will be added on in the most likely early fourth quarter or fourth quarter of 2022, of which then we will have lithium extraction revenues and at a very low volume projecting profitability. So that's number one. Cellulosic fuels is very interesting. We will similarly have a full cellulosic extraction prototype up and running in Wisconsin in the March, April time frame. We have already started and scheduled our first facility, which would be scheduled to come online in 2023 in Minnesota. The breakthrough that we had in processing time has resulted in us reengineering, updating if you will, the engineering of that facility for much, much higher throughputs which I cannot - it's the most exciting thing that's happened for the company in the last six months. It's remarkable. However, there's an accelerator happening here. We've been approached by very recognizable companies to purchase engineering and manufacturing services and equipment to use the same cellulosic extraction technology for pulp and paper. And we expect revenue, meaningful revenue, tens of millions of revenue in 2022 from this and even recently approached by a different counterparty for a much, much bigger project using the same technology. Once we can show in this concept this cellulosic fuel capability, it would be shocking if every major petroleum producer and every large user of these fuels who have stated carbon targets by 2025 and 2030, it would be shocking if they weren't lining up, if you will, to use this technology to meet their carbon goals. So we have an opportunity to create a huge cash-producing business of our own. We own 100% of the company, we own 100% of the technology. And we have the ability to accelerate decarbonization in these transportation industries across a wide of spectrum of huge companies by selling our engineering and manufacturing services to them as well. The services themselves are hugely profitable, but there's also opportunities to profit share, royalty share, cash share beyond that. And so, we're just building those models now and we'll have a lot of discussion about that in the first quarter of 2022.
Zach Spencer: Okay.
Corrado De Gasperis: Zach let me say one more thing.
Zach Spencer: Okay. I'm sorry.
Corrado De Gasperis: With MCU we're up and running. We are selling materials. We did produce some gold. It’s very, very small okay? The important part there is the concepts we improved and the operation being established. No fatal flaw. We're moving forward. Once we start seeing more revenue from gold, gold containing mercury, mercury containing gold, we'll provide better guidance on that. But there clearly will be revenue every quarter here as we go forward. It's just a question of when it gets to the meaningful level, then we'll all care more about the kind of positive track there.
Zach Spencer: Okay yes. Thanks for that update on MCU. There was a question about that. The next question is how much capital will be required to implement your growth plan for the next three years?
Corrado De Gasperis: So the capital requirement this is an important question, right? We've been very careful like in how we've been capitalizing these activities. A lot of the capital with using example has been deployed already through cash. We made over $5 million of cash investment this year already done, and over $7 million of investment through stock that was provided. So LiNiCo is funded through certainly the first half of next year. And it's important for us that we can demonstrate the capabilities that we've talked about here in the first quarter of next year as we plan that forward. There shouldn't be a reason that those projects can't be debt financed when we look at the cash flows that they are purporting to generate. So we're very excited about that. With cellulosic fuels there's a tremendous amount of government support. And everybody has been talking about the infrastructure plan and the significant materials -- I'm sorry, the significant mineral and material subsidies that are being provided to credit the grants, et cetera for carbon neutrality. If you need a list of the technologies that are most impactful, we'd be at the very top of the list. Our access and availability to those funds is tremendous. I spent all day Monday in Las Vegas with Senator Masto, who has been one of the primary sponsors for the mineral extraction subsidies to the benefit of Nevada. So she couldn't be more excited. We couldn't be more excited. We're in the sweet spot. But what people are even less cognizant of is that even in Minnesota, we're getting interest-free loans, grants and subsidies to establish an operation there is in part because it's carbon-neutral, absolutely for sure but also in part that the forestry industry has a big dilemma. The forestry industry has -- generates hundreds of millions if not up to one billion tons of waste wood every year, killing the carbon footprint, carbon detriment, carbon hurting, right. Cutting down trees hurts the carbon footprint. Dead wood hurts the carbon footprint. Taking dead wood and renewing it into pure cellulosic, pure carbon-neutral fuel, I mean there's a scenario where we could be demonstrating carbon negative activity puts us in a position. But even then the cash flow profiles of those projects are able to be debt financed. The other side of which the capital sensitive people will be thrilled to hear about is we have proposals ranging from $50 million in revenue to $165 million in revenue, profits of $10 plus million to $40 plus million that require no capital. That's us providing engineering, manufacturing and construction services to deploy these technologies for decarbonizing impact in other industries that don't compete with what we're using them for. And this is going to be the big story for 2022, and this is going to be the big story for Comstock. The conversations, the proposals are already exchanged. They're engaged. They're progressing. We're just not ready to announce definitive agreements and the specifics there too, but it's coming. And it's coming so strong that, we've recognized this could not only be an entire business in itself. But with load and no capital requirement, the returns are Internet. I mean, it's just remarkable. So this is new. I appreciate this is new. This is a brand-new conversation that, we've had our sights on for 18 months from the first day that, we engaged Plain Sight Innovations, from the first day that David Winsness, who is now our Chief Technology Officer demonstrated this technology to us from the first loans that we made to bridge them and then ultimately our acquisition and in the last 60 to 90 days deep dive planning. So it's going to come fast. We're going to start moving at a different pace. But I appreciate, it's new, and I appreciate your patience on this part of the discussion.
Zach Spencer: Corrado based on your answer to that question, you actually answered quite a few questions that we have in the queue. So pivoting just a little, the next question is, can you please provide an update on the sale of non-core assets?
Corrado De Gasperis: Absolutely. So the activities in Silver Spring are very dramatic like, they're picking up. We've just had announcements of nanotech and graphein companies coming into Storey County Tahoe-Reno Industrial Center, and the exciting businesses exciting technologies. We've gotten major retail companies taking Cornerstone properties in Silver Springs; convenience stores, of which you would recognize the names immediately; hotels which you recognize the names immediately. We had – and we in Springs opportunity funds, specifically was approached by an internationally recognized company to buy an orphan parcel on the other side of Highway 50, which we had no plans for – for almost $9 million. So we're seeing a tremendous amount of economic surge. We're seeing companies coming in and submitting permits and expansions in the area. We're seeing new technologies and new companies flowing in. And we are now much more actively engaged with – and when I say we now in the Sierra Springs, which Comstock is an investor in is getting increased amount of activities for investors. And with the dynamics changed it's going from relatively small high net worth people, looking to intelligently roll capital gains into an incredible value opportunity to sophisticated real estate developers, sophisticated companies that are looking to invest in a much, much larger way. And so we expect, all of that, will result in closing the sale of our two properties for over $10 million of proceeds, within the next few months. This has been a longer story than we originally expected. But when we look back and we see the growth curve and the development curve in northern Nevada and in Silver Springs, we can say, unquestionably that the growth and the inflow and the thesis is significantly stronger and even faster than we were expecting to see. But fast was a relative term. There's a lot of infrastructure the 4 million expansion of Highway 50, all through the Silver Springs properties just got completed. The brand-new second round about just got completed. The intersection of the USA Parkway to the now expanded Super Highway 50, all just getting connected. So it's happening remarkably. We're just being patient and hopefully, it will be done within the next two or three months but it will certainly be done. It's just coming that strongly. Those are the cores of our asset sales. We're monetizing the rest of our total stock. That will happen in due course, especially with some of the good changes that they're about to announce. And then the ranch is already contracted sale expected to close next May. So within the next seven or eight months, we should expect to see all that cleaned up and fully behind us, which provides remarkable funding for us to complement the last question that came up in terms of our new initiatives.
Zach Spencer: Transitioning from non-core assets to the management team, please provide information on your new President and CFO, as well as the other members of the management team.
Corrado De Gasperis: Absolutely. So this is the sort of hidden jewel of the series of acquisitions that we've completed. So with the acquisition of Plain Sight Innovations, we acquired Kevin Kreisler, who became Comstock's President and Chief Financial Officer. Kevin has an exceptional breadth from a decade-plus of hazardous waste management, recycling to a decade-plus of solution extraction and clean technology and is one of the masterminds of tariff-scale decarbonization that Plain Sight INNOVATION is going to enable. With Plain Sight, we also got David Winsness, who was the CEO of Plain Sight but also the leading technologist in all of this cellulosic fuel development. We have an extraordinary full-scale research and development lab in Wisconsin with full-scale operating prototype capabilities that we've just talked about are about to be expanded. That development capability can't be exaggerated from an IP perspective. But I guess, what I maybe I'm not saying clearly enough is from a marketing perspective, that's going to allow us to show the world what we can do, show the capital markets what we can do and show our customers what we can do. It's going to be the single strongest enabler of our sales going forward. Following on that, we acquired Renewable Process Solutions and Rahul Bobbili became our Chief Process Engineer. Rahul has built 21 ethanol facilities in the last 15 years. When I say he's built, I mean, he's engineered, he's designed, he's procured the manufacturing of all the equipment, and he's commissioned them. When we say -- when we talk about our capabilities between David's inventiveness and real engineering and deployment and both engineers as well by education, we have this just twin-turbo capability of building our own facilities and building our own businesses. We do it at faster lead times. We do it at lower capital cost, the lowest by far in the industry. I'll cite the example of LiNiCo where we were going to acquire a $9 million crushing and separating system that we delivered ourselves for a little over $6 million and half the time with much greater capabilities and capacity than we saw. That's just a drop in the bucket of what our capabilities are. And this will be most immediately demonstrated by some of the new sales that we're going to have through these technology and manufacturing and engineering capabilities. We also acquired MANA and Billy McCarthy is our Chief Operating Officer, who is literally synchronizing and coordinating all of these activities into one series of project schedules. So we operate the company always under approved projects, all scheduled and all coordinated. And really it's important here, we're going to talk less, you're going to hear less, words like PSI or RPS, and you're going to hear more about Comstock. Comstock is one system. Comstock is delivering one solution. Our core competency is this super critical extraction process. Imagine my surprise, when we acquired super critical extraction process for taking dead wood into biofuels and the first thing out of David and Raul's mouth, we can extract lithium from black mass the same way. What? Incredible. So we also have another underlying team of senior people that are helping us in terms of all of our business processes, our project managing, our sales and marketing. It's a robust team not just the C suite. It's a robust team of more than a dozen people managing projects, making sales, engineering, manufacturing, delivering solutions. It's beyond what we were expecting. We haven't marketed it other than just the minimally compliant reporting requirements, but we will be now that we've integrated it all into one system, now that we can show clearly how simple the one system is, now that we can demonstrate our technology hard live in person and we can show off the team, which I'm extremely proud of. And I'd be remiss if I didn't say names like Tracy Saville, Chad Black, Colby Korsun, I mean we've got Matt McClellan, I mean, we've got Zach , I just want to give you guys the impression that this is no longer a one-man show. So I couldn't feel more aligned, but what's more exciting is how super confident these people are. I hope I didn't go overboard, but probably did.
Zach Spencer: No. We've had several questions about that, so that was perfect. That's what people were looking for. And now, pivoting to the mining properties, the southern Comstock properties in our portfolio, can you please provide an update on the Consolidated and Spring Valley?
Corrado De Gasperis: Yes. So, two meaningful points there. Our team has been working very hard on finalizing the new resource model for Dayton-Spring Valley Complex. We know that's going to result in a second technical report, with two technical reports being issued one by Tonogold on the north one by Comstock on the south. We are engineering that resource model now. Our junior geologist was just released from the team to do some other work, because he finished and completed his work right time. It's taken longer not because of any problems that we're running into, but with all the integration work that we've been doing in the company, as a whole, in the last five to six months, Mike Norred who's our Chief Mining Engineer, has just been pulled into so many strategic activities that it frankly has delayed the Dayton resource. So it's coming. It's going to be exciting for us to get that published. It's going to be validating. And as I said, the full surging towards 1,900 is going to be timely. There's another thing like we -- I mentioned that we secured 200 acres for lithium battery. This property is adjacent to the Dayton-Spring Valley Complex and really positions the southern part of our district for any and all possibilities. It also has, believe it or not, 12 million tons of aggregate material that could be mined out of it. And so, it's a very multi-use property that we've secured that we look to be closing on before the end of the year. It’s a poor clinical of course in terms of battery storage, but it accelerates and expands what we're able to do in the southern part of the district. So our commitment to the Comstock has never been stronger. We're putting a few last pieces of the puzzle in place. It presents an extremely valuable district play that's only going to get more and more valuable when we show these technical reports and then more and more value as the price of gold and silver continue to move up in this ridiculous irresponsible fiscal government scenario that we're in.
Zach Spencer: The next question is a question looking for any update that you can provide on GenMat.
Corrado De Gasperis: Sure. So, yes, so I wasn't going to plan to say a lot about GenMat, in part because it's a little bit of a stealthy operation. We've invested or we will invest before the end of this year $5 million in cash. And I got to tell you that in a couple of years from now we're going to be looking back saying, holy crap. This is just incredible. We're talking now about the absolute front line of material science. Let me just give you some insight. GenMat specializes in quantum computing and quantum sensing technologies. These technologies are going to absolutely revolutionize how we do material science and engineering in the future. We're literally building an artificial intelligence capability that's going to solve the most complex quantum mechanical equations that are prerequisites that are required for breakthrough materials discovery. It sounds incredible. I can tell you that GenMat has strategic agreements with the most sophisticated the most advanced quantum computing companies in the world. I can tell you that they operate on a scale with those people. I can tell you that the people that we're hiring are on a different scale of anyone that would operate in any technological corridor. And before your eyes roll too far behind your heads, the dedicated focus of this company is breakthrough materials in quantum sensing as it's applied to mining; in new material discovery as it's applied to batteries, as it's applied to carbon capture and utilization, and as it's applied to aerospace. And so we'll probably have a point in time where we'll have a dedicated call where you could even be exposed to the leadership and the teams. They're the best people that you could ever imagine working with. They're the smartest people on the planet and what we've positioned ourselves for following on what we're doing. And I don't want to dismiss or understate the breakthroughs that we're having with materials and engineering with the extraction -- with cellulosic fuel extraction. That's going to be all that we're talking about tomorrow, next week, and for the next two to three to five years. But somewhere in that continuum, we're taking it to another level and that's what GenMat represents.
Zach Spencer: Corrado I believe you addressed this in several of your earlier comments, but several people are asking will there be a need to raise cash from any stock offerings next year?
Corrado De Gasperis: So, look we're always sensitive to the dilution. We are very, very careful with our equity. I couple that with saying that we've been very aggressive right in the acquisitions that we've made. But if you peel the onion on how we've done it, right, we've created a world-class leadership team with a world-class portfolio of technologies all that are commercial-ready and that we're commercializing as we speak with insider ownership exceeding 20%. And will we need to use equity at some of the early stages of some of these developments? We will need to use some equity. Because of their cash-generating nature, it should be significantly less. Because of our ability to sell products, meaning engineering and manufacturing services it would be none because we're able to sell these non-core assets, it will be minimized. So, the answer is yes, but an incredibly capital-sensitive way with huge appreciation models tied to the use of that capital. There was a legacy of having to use equity just to cover operating expenses. That was years ago, okay. It's not what we're talking about here. We're deploying capital into huge exponential growth markets, which I didn't overstate but let me surely state now, we're going to be the leading decarbonizer, like we may be the leading global decarbonizer. The amount of carbon that we are stemming, the amount of carbon that we're reducing and in a little while, we're going to have a very exciting conversation about the amount of cars we're actually taking out of the environment and converting into solid carbon products and graphite is going to lead the world. The capital markets are now laser focused on these investments. The government has prioritized these initiatives single most important thing. And every major fossil fuel using a carbon horrible enterprise is clamoring to get this technology, clamoring to meet targets that they set for 2025, 2030, 2040. They can't conceivably meet. We have the technology to do all of that. So that's where we are positioning ourselves. It's where we have positioned ourselves and we're commercializing into.
Zach Spencer: We're getting near the top of the hour so we have one final question. It seems like you are acquiring and building a strong portfolio of intellectual property. Excluding the human capital such as people, how are you protecting this property vis-à-vis patents, et cetera? And will it be a license to others?
Corrado De Gasperis: Could you repeat the question?
Zach Spencer: Yeah, okay. It seems like you are acquiring and building a strong portfolio of intellectual property. Excluding the human capital such as people, how are you protecting this property vis-à-vis patents, et cetera? And will it be licensed to others?
Corrado De Gasperis: Yeah. Excellent question, sorry. I wasn't really daydreaming. So we have a very, very aggressive IP protection protocol. It isn't in my DNA, like we inherited it as we acquired, Plain Sight Innovations, Kevin is a master at IP protection. We have a very precise strategy. It is biased towards filing patents and protecting the technology. We have in-house capability. Mike Maybelle is one of our Chief Scientist -- is a machine in terms of researching, evaluating, compiling and actually filing for patents. I've never seen a company of our size actually have that kind of internal horsepower. And so the answer is yes. We just filed a patent on a breakthrough that we had in Wisconsin where we're able to actually extract biographite, biographite from deadwood. I mean, anyone that's in the carbon graphite industry can appreciate what that would mean to the world, if we could naturally produce carbon graphite from deadwood. I can't wait for the day where we're talking about producing carbon graphite from carbon dioxide. But that's not worth there. These are game changers. And so yes, we will patent it. Yes we will protect it. And yes we will license it in the appropriate circumstances. Our goal is to decarbonize. Our mission is to decarbonize. Our goal is accelerating the rate at which we do that and generate cash. What's beautiful about the system that we've designed is, every time we reduce carbon, we make money. So this is the new dialogue. This is the new normal, like environmentalists our process centers. The speed at which we decarbonize is synonymous with the speed that we would generate cash. I don't know anyone that's able to say that. That's what we designed our system to do and that's what we're implementing here in 2022. We will license our tech if it increases the rate at which the world is decarbonizing and it simultaneously increases the rate at which we're making money. And so, we've eliminated one of the most profound conflicts in the world which is the conflict between doing good and making money. Like for us, they're not one and the same. Once the markets understand this, we haven't rebranded ourselves. We have not communicated this message. Why? Because we just acquired Plain Sight Innovation two months ago because we just spent the last six months integrating four acquisitions into one system. We now have an identity we have a purpose and we are clear on how we're going to the markets. And we're doing it as one system. We're doing it as one company Comstock, Comstock Inc. So I'm very excited. And we will again, we will license it. We will enable others to decarbonize as long as it accelerates the rates. If they can do it faster than we can if they can do it in markets that we're not familiar in, if we could make just as much of more money doing it we're doing it. Yes.
Zach Spencer: Thank you Corrado. And also, we would like to thank all the participants who Zoomed in today and thank you for all of your questions. And I'll turn it back to you Corrado to close this out.
Corrado De Gasperis: I want to thank everyone for your interest. I want to say like the focus is really consolidating here at Comstock. We will have a lot more to say. We will have a lot more frequency and clarity in how we say it. We will have a new website. We -- it's already built. I've already seen it. Our guys are so fast they didn't want to show it to me, but they showed it to me. I love it. And so, I appreciate that we have a shareholder base that's long-standing that loves the Comstock and loves the precious metals. I understand that we're custodians of those assets and they're only going to be more valuable. I feel remiss that we haven't and can't talk more about GenMat, but we're focused. So it's all to come and we look forward to more. Thank you all.
