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Good afternoon, and thank you for joining Comstock Inc.'s Second Quarter 2025 Earnings Call and Business Update. I'm

Thanks,

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

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.

What are the lead times for the equipment? Should we expect higher CapEx due to tariffs?

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.

Can you phase in the capital for a facility?

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.

Can you permit and build facilities in parallel? Are the other states easier or harder to permit in?

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.

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

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.

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

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.

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

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.

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?

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.

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?

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.

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 [email protected] 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?

Yes. I just -- I want to make 3 closing statements. One is I noticed someone had asked

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