All right, hello and welcome, everyone, to the Comstock Fireside Chat. My name is Robert Blum, Managing Partner at Lytham Partners, and today I'm pleased to be moderating a Q&A discussion with Corrado De Gasperis, Comstock's Executive Chairman and Chief Executive Officer. Comstock trades under the ticker LODE on the NYSE American. Corrado, welcome.
Robert, thanks for having me. It's a pleasure to be here.
Fantastic. Let's jump right in. Talk a little bit about the origins of Comstock and what inspired the company's focus on this technology development.
Absolutely. Let me start with the Comstock origin, then I'll talk a little bit about how I segued into it. The Comstock was one of the largest silver discoveries in 1859, shockingly producing almost 200 million oz of silver and over 8 million oz of gold. The real story underlying the district was all of the industrial innovation that was required to get that much gold and silver out of the mines. It really became a hub of industrial mining innovation and is still a recognized national landmark to that end. In the 1900s, things wrapped up with the old-timers, and the district was pretty defunct and dilapidated, for lack of a better word. It started to revive itself maybe more as a tourist attraction.
My origin was I spent the first part of my career turning around a global industrial graphite company that was, frankly, the largest, one of the largest renewable supply chains in the world, taking petroleum coke from the industrial oil and gas refining process, converting it into synthetic graphite, and then making electrodes that recycled scrap metal in an electric arc furnace. My origin was that there really was never a conflict between practical, deployable technology, clean energy, clean processes, renewables, and making money. I guess because we turned that company around, we restructured it, recapitalized it, we systematized it, which means we took it from being a siloed country company, independently run series of fiefdoms into one system.
By doing that, we unlocked not only a tremendous amount of capacity and profitability, but then we unlocked all of the innovation that was stuck inside those silos. The last five years I was there, we filed 700 new patents and launched five new products into the market, getting recognition as the top 100 commercialized products five years in a row. Somehow that dubbed me as a turnaround guy in the metals and mining sector. I got a call to see if I could help revitalize, reinstitute this mining district. I didn't really know anything about mining or gold and silver for that matter. We did the same thing.
We reorganized it, we recapitalized it, we proved out the resources, we put it into production, and we got national, state, and local recognition for our stewardship, our environmental restoration and reclamations, and proving out the resource. I went to the board about five years ago, which is really the answer to your question. I said, "Look, we've fixed broken companies a few times now. Why don't we take this platform of innovation, this platform of systems thinking, and invest in new renewable technologies?" Therein lies how Comstock Fuels and Comstock Metal Recycling was born, very much with the idea that a platform with the systemic mindset could make major impact on new businesses.
That's a fascinating history there. Maybe let's dive into each one of these. You mentioned the mining already. You mentioned fuels and metals. We'll go into each one of them in just a minute, but maybe expand upon that commonality really that runs through each of them and what drives this business here.
Absolutely. I mean, the challenge that the board made to me and I made to the board is, can we elevate and operate something that's truly sustainable? That word used to irk me because so many people used it so many different ways, but something that's truly sustainable. I mean, we looked at technologies that could literally take carbon from waste wood. The initial thought was, how do we make a mine sustainable? We were mocked. There's a finite resource in the ground, Corrado. It's going to be expended. It's going to be depleted. I said, "That's not good enough. We can think better than that." The initial idea was taking these materials from waste electrification products. Could we get it out of batteries? Could we get it out of solar panels?
We also explored, could we get value, carbon, out of waste wood? Therein was born this wood-to-fuel technology. Therein was born this waste metals, waste electrification products to silver technology. I'll tell you, one thing that we're very proud of is we now have a platform where we believe in the metal recycling. We have created a silver mine. People are calling it an urban mine, but a silver mine that never depletes and continues to produce, and an oil well that never depletes and continues to produce. In both instances, they improve the environment. They don't hurt the environment. Hence, no conflict between doing good and making money. The mining assets, we think we have a—we've circled back around after going two for two with fuels and metals.
We've circled back around, and we think we have an idea on how to make that sustainable, which we can talk about later on in the interview.
Let's go into fuels first, right? Maybe talk about some of the—where you stand, some of the key agreements that you have. You've laid out a number of objectives for 2025 for those that maybe haven't seen it. Talk through each one of those.
Absolutely. In fuels, the core technology is to take a ton of dry waste wood from a lumber mill, from a pulp and paper mill, from anywhere, really, forestry residuals. There is abundance of it. When we looked at this supply chain, we said, "What's the bottleneck? Where's the constraint in this macro fuel system?" Shockingly, in the renewables, it was feedstock. It was not anything other than there is not a sufficiency of affordable feedstock. People were using very expensive vegetable oils. They were competing with the food chain. Our technology takes a ton of waste wood, which has two major components to it: cellulose, which is carbohydrates and sugars, which most people are familiar with, and lignin, which is a dense carbon sort of protector of the wood that most people are not familiar with.
It was common practice to be able to extract cellulose and make pulp and make paper and make alcohols, even ethanols with that. It was not a practice at all to do anything with the lignin. We cracked the code on the lignin. We were able to liquefy it with what we call an organic solvent, an organosolv process, and create a material that we call Bioleum, which is the functional equivalent to petroleum. What happened, the skinny of it was people went from an industry standard of 45-50 gasoline-gallon equivalents per ton of wood to us catapulting to doubling that number to 100 because we were using all the wood versus less than half the wood, and then increasing that to 125, and now we're at 140. This is a monstrous breakthrough in yields.
It's not only the highest yielding process on earth for waste wood to fuel, it's also carbon negative. It's very, very low carbon impact. Now with the new feedstocks we're introducing, it goes to carbon negative. With the abundance of wood, with the ability to extract 140 gasoline-gallon equivalents, and with the ability to actually take abundances of feedstock and grow purpose-grown feedstocks, we really created a situation now where we have oil wells that never stop producing. We signed a critical agreement with Hexas Biomass, which has a purpose-grown fuel stock. Corn yields like 10 bbl per acre per year of oils. Hexas yields 100 bbl per acre per year. We've unlocked this incredible natural resource that decarbonizes as you go.
We also signed an agreement with RenFuel, which is a company that takes this lignin, this crude lignin that we produce, and it esterifies it, makes it into an oil that blends immediately with vegetable oil. Lastly, we signed an agreement with the National Renewable Energy Lab. They're recently highlighting that it's one of the most promising projects that they have because not only is this the best source to make sustainable aviation fuel, they have technologies to increase the yield and break what they call the blend wall to eventually be able to not have to blend sustainable aviation fuel with Jet A, but make it a drop in fuel. It is going remarkably well. We signed five international license agreements. We've gotten grants from the state of Oklahoma. We've gotten bond allocations from the state of Oklahoma.
We're selecting a site, hopefully within the next few weeks, for our first fully owned refinery, and we're integrating the supply chain from soup to nuts. It is an extraordinary thing that's happening here. We didn't just commercialize the technology. We've essentially integrated a series of technologies, then a series of companies, and we're creating essentially a new standard for oil, which doesn't compete with other energy sources, complements and enhances other energy sources. The notion of making countries energy independent or, frankly, making the U.S. energy dominant is right in our bullseye, right in our wheelhouse.
Fantastic. For most companies, we'd probably be digging more into just the fuels, but there are two other areas as well. In the interest of time, we'll sort of move on to the metals. Again, talk about sort of the technology, the process, the facilities, and the objectives here for 2025 within the metals.
Absolutely. Coming from a silver mining background, we had good metallurgical professionals. We had good mining engineers and geologists. We were looking at what could we do better, what could we do more. We thought initially taking lithium-ion battery and recycling it would make some sense, getting some of the lithium, nickel, cobalt, manganese out of there. We decided that it was a crowded space. It was a very early space. There was still a lot of technology development to go. We pivoted to recycling solar panels, which seemed to be missed by most. Not only were solar panels supposed to last 25- 30 years, and were only lasting 12 - 15 years, but nobody had the capacity to scale for the amount of panels that are now end of life and coming out of the market. It's creating a crisis.
California went one step further and prohibited the use of these panels to going into landfills. As we're sitting here in Nevada, right on the California border, we built a facility that can recycle solar panels. The technology, Robert, the real claim to fame, the real differentiator is that all of these products, be it a solar panel, be it a battery, you name it, they all have these laminates and plastics and glues that really make it impossible to reuse the minerals if they're contaminated with those substances. What our technology does very efficiently is it eliminates cleanly the laminates, the plastics, the glues. One person said to me once, "The hardest thing to recycle is a milk carton because that stingy, nasty little film on the outside of it, that waxy plastic." That's the issue exactly in the industry.
We're able to eliminate the laminates, produce clean aluminum, clean glass. What we're shocked by is like a super silver-rich tailings. Today, we're getting paid to take these end-of-life panels. Some people call that a tipping fee. It's an environmental service fee. We're taking that material. We're reprocessing it. We're selling the aluminum, selling the glass, selling the silver. In our first facility, we expect to do 100,000 tons per year, which would be remarkably profitable, $50 million, $60 million, $70 million in cash flow from a $12 million-$15 million investment. As exciting as that is, one facility would make us the second largest producer of silver in the state of Nevada. Two facilities would make us the largest producer. Might as well be the largest producer in the country because Nevada leads in silver mining.
There is no stopping from there. Legitimately, a silver mine that never stops producing.
Talk about just a couple of the objectives here for 2025 as investors are looking into the equation. Walk through just a couple of the key milestones they should be paying attention to.
Absolutely. For fuels, we are closing on a Series A offering right into the subsidiary. Marathon Petroleum announced two weeks ago that they're investing. They have invested directly into that subsidiary. Now we have a handful of strategics rallying around to close the Series A, hopefully right here during the second quarter, selecting the first site for Oklahoma, and initiating the project financing to build that first site for fuels. We are in a very exciting ramp-up mode. Also, we have five international licensees who are breaking ground on sites. They pay us upfront fees for our license. They pay us engineering fees. They pay us royalty fees. We have a remarkably robust licensing agreement insofar as economics are concerned. On the metal side, we submitted permits for our industry scale. We are running three shifts full on our small-scale facility right now.
The biggest milestones will be, A, getting the large customers. We're getting almost all of the—if you look at the top 10 generators of solar panels, the largest utility companies in the country, the largest clean energy companies in the country, we're locking them all up as our customers, frankly, because we're the only solution that, A, can scale to their size, and B, is certified as an end-of-life, zero-landfill solution. None of the materials we take in will end up in a landfill. Announcing those customers, announcing the completion of our permits, getting the first industry scale up and running, that's 2025. Really, we're in a fast growth mode for both of these businesses.
Obviously, then circling back to where you started here with the mining, for those not familiar on the silver gold, just sort of walk through the operations that you still have and how you intend to utilize those assets.
Absolutely. We have almost 12 sq mi of mineralized contiguous properties in northern Nevada. It is literally the Comstock Lode, hence our namesake, Comstock Inc, hence our trading symbol, LODE. We have two resources that total almost 700,000 oz of gold and over 7 million oz of silver on just a small portion of the district. The first resource is the Lucerne. The second resource is the Dayton. We are excited about both those resources. The economics were attractive to us at the $1,800 to, let's say, $2,000 an oz gold. Gold is over $3,000 an oz today. Silver is still lagging, but at $33 an oz. The cash flow from Dayton alone would be $400 million over a six-year mine life. That is net of everything. There is a hidden asset there that people are not aware of, ironically, or at least not valuing. It is an incredible resource.
We have third-party technical reports on these resources, so third-party validations. We are fully infrastructured and permitted. We have mined before. This is not an exploration-stage mindset. The last thing I will say is we challenge the teams that they have to do better than just mining profitably. They have come up with some extraordinary plans because of our location, because of our proximity to Virginia City and Carson City and Reno, where there could be remarkable post-productive uses to the land in an area that is just exploding industrially. When Tesla came to northern Nevada, it seemed like everybody and their mother wanted to come to northern Nevada.
What we're doing now is we're synchronizing mine plans that mine and reclaim at the same time, something we've gotten awards for, by the way, on the Comstock, so that when we're done mining, instead of having a big 30-year liability, we have an incredibly valuable and productive asset. Those plans aren't final yet, but they're in motion. We're excited about all three of these segments, if you will.
Fantastic. In some of your discussions here, conference calls, press releases, you've sort of talked about ultimately your goal is to create two high-growth publicly traded companies, right? A renewable metals and a mining company and sort of a renewable fuels company there. Talk sort of through what the vision is, bigger picture for this company, longer term, and how everything you just described here comes together.
Yeah, I'd love to. We have this very systemic mindset, right, where we build systems, and we really focus extraordinarily on a singular goal. The overriding goal of the company is to accelerate the commercialization of these breakthrough, impactful technologies. You can see we're doing that with fuels. We're doing that with metals. This acceleration of commercialization has to do with what we call the valley of death. Hugely impactful ideas, great technologies that get stuck on a continuum from one to nine, the technology readiness levels continuing from one to nine, they get stuck at three, four, and five. The reason for that is not because the ideas aren't great, not because the founders or inventors aren't geniuses, not because they ultimately couldn't be economically feasible. It just takes a breadth of companies to cross the finish line. We're not playing golf, right? We're playing football.
You need a full team to get over the finish line. That valley of death, unfortunately, kills, destroys capital, and kills companies unjustifiably, unnecessarily. What we did is we stepped into scenarios where there was incredible competency, incredible experiences necessary, we would say, but not sufficient to get to the goal line or over the goal line. We complement those. The only guidepost we put on ourselves is, let's do something meaningful. Let's do something important. To create literally an oil well that never stops producing, to create a silver mine that never stops producing, and that's simultaneously impacting the environment is meaningful. I guess now, and we're very humble about this, but we've been so successful with these two businesses that the capital that's being attracted to them, especially fuels, is saying, "We don't understand why you have three different businesses.
We don't understand metals and mining. Wouldn't it be better, Corrado, if it was a standalone fuels company? We're very excited about that. I said, "Yes." It seems like at this point, it would be better. We're getting a tremendous amount of focused capital interested in fuels. I know that if some of the resource investors understood what seems to be under the cover right now for metals and mining, we have an extraordinary—we're about to unlock an extraordinary precious metal resource. Coeur Mining is the largest silver miner in Nevada. They produce over 4 million oz a year. Every year that they produce those 4 million oz, their resources deplete by more than that number. Our resources don't deplete. In fact, they keep growing overwhelmingly.
A public Nevada-based public company, Comstock, symbol LODE, that really unlocks an innovation in terms of metals and precious metals is super exciting. An Oklahoma-based fuels company, also public, that unlocks a new standard in oil, I think it's something we're going to feel proud of. I want to emphasize to the audience that we have fully dedicated teams. I'm not running either one of these businesses. They're all loaded with top technologists, top engineers, top experienced seasoned executives that are commercializing global supply chains. Most people see fuels as a remarkable global supply chain, and they see metals as a remarkable regional play. It's not a regional play. It's going to go global, and there's nothing stopping it. It's really, really—we feel very proud of the teams, and we're very excited about what's about to happen here.
Fantastic. Again, fascinating opportunity here. I guess maybe any closing remarks before we got just a couple of minutes left?
I would just say that we're quickening. It always seems like it takes forever to do these things. You're not just commercializing one niche of one technology into one segment of one market. We're consolidating and integrating a true global system of technologies, of competencies, frankly, of companies working together. We have reached a critical mass in the context or readiness, if maybe is a better way to say it, where we're actually commercializing. You're going to see the metals revenue pop meaningfully. You're going to see the fuels contracts, commercialization partners pop meaningfully. In the fuels case, that'll probably be kicked off by a Series A offering that will have participants that we could only be remarkably proud of being part of our system or we become part of their system, however you think of it.
That's coming April, May, June, July. It's happening very quickly.
Fantastic. Corrado, thank you so much for your participation in the discussion here today. Thank you to everybody who's watching right now.