Comstock Inc. (LODE) Q1 2021 Earnings Call Transcript

Good morning, everyone. This is Corrado De Gasperis and welcome to our First Quarter Zoom call. I'll provide a brief summary of the financial information included in our press release from this morning and from our quarterly report filed on Form 10-Q last night, including our progress and specific performance objectives, especially our silver and gold exploration and developments MCU, our mercury remediation business, that is now up and running in the Philippines, where we actually reported our first revenues this week. And the good progress on lithium-ion battery recycling business, LiNiCo, whose scope is even expanding and some major, major achievements on our financial position. If you don't have a copy of today's press release, you'll find a copy on our website www.comstockmining.com by just clicking on the Press Releases tab on the main menu bar. Our Form 10-Q is also available via EDGAR on www.sec.gov. Please let me remind you that we may make forward-looking statements on this call, including our 2021 outlook and our plans for the next three years. 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 previous reports filed by the Company and the SEC and in this morning's press release. All forward-looking statements made during the call are subject to those same and other risks that we can identify. Once we complete the prepared remarks, Zach will direct all Zoom inquiries. Please use the raise hand function and he will convey them to me and I'll happily answer that. If you're not using Zoom, you can follow up with us after the call directly via our website with any additional questions or inquiries that you may have. If you could please use the Q&A function, rather than the raise hand function for Zach so that he will then direct all those questions to me and I can answer them. Okay. So in just three short months, we saw a dramatic leap in the strength of our balance sheet, where our assets increased from $43 million at year-end to over $70 million by the end of the first quarter, with our debt completely eliminated. We've made strategic investments including secured investments with MCU, LiNiCo, and PSI, all yielding unique IP that will commercialize to growth, high gross sales, and cash generators for us. A significant asset increase was driven primarily by five factors: increases in our investments from just over $3 million to almost $10 million, driven primarily by LiNiCo and MCU in the Philippines, extinguishment of all of our debt obligations, and an increase in cash to over $10 million. Debt is zero, gone, alongside an increase in our secured monthly cash interest paying note receivable with Tonogold by over $1 million, and an increase in a new derivative asset which relates to shares—the 3 million shares that were contributed to LiNiCo as part of our investment. The derivative asset reflects the economic value of those shares in excess of our commitment that comes back to Comstock that we retained, indicating a tremendous, tremendous improvement in the balance sheet. Turning to the P&L, our operating costs were down dramatically in the quarter due to a couple of non-recurring but very positive items. We had one item, which is the accounting for a large reimbursement receivable, a new reimbursement receivable from Tonogold during the quarter of over $800,000 associated with an accelerated land payment that we made during the quarter that we will get reimbursed for. The reimbursement was added to the secured interest-bearing note that Tono pays us cash interest on monthly. We also had to update our estimated reclamation liability, and that update resulted in a decrease in liability by almost $1 million. Both those items benefited us positively during the quarter. We recorded an overall net income of over $8 million, principally driven by the value of that increased derivative asset related to the investment in LiNiCo. Our quarter ended with our total outstanding shares at March 31st of 42,455,515—that's the same exact number that we reported on our last quarterly call and that includes the 4 million shares that were issued during the recent capital raise and it includes the 3 million shares that were issued with the LiNiCo commitment. Our cash remains over $10 million, plus we have multiple current non-core asset sales that are in progress and waiting to be closed, including our industrial and commercial non-mining properties totaling $13 million, all under contract for sale. We do expect those to close this year. We're seeing tremendous progress in the opportunity zone—not just in progress in fundraising capital, which is operating very effectively at a significantly higher valuation than last year, but we've been receiving inquiries on a weekly basis from companies looking for land and buildings. As of last month, our manufacturing facility owned by the opportunity fund is now fully leased with two brand new tenants. The airport is fully open and operational. The $335,000 that Comstock has on its balance sheet as part of our $70 million of assets is now valued, based on the most recent capital raise, at over $12 million. As I mentioned, we're raising money at $1.80, which puts our investment value at over $12 million, but if we consider the valuation of the assets held by the fund for land comps, water right comps, sewer rights comps that the fund owns, the value of those shares is closer to $3 to $6 a share, putting our investment at closer to $20 million to $40 million. That's not a market validated assessment—the $12 million is, and the $20 million to $40 million is our view of the land and underlying value of that fund holding relative to our investment. All in all, there has been tremendous progress. We still hold well over 11 million common shares of Tonogold, along with 5.55 million in secured note receivable that is due in the next 10 months. Today, using today's value, both those assets represent over $7.5 million in combined value. When you combine those contracts to sell our properties at $13 million with the Tonogold Securities and secured note values, that brings us to over $20 million, combined with our existing cash representing $30 million in potential liquidity over the next 12 months. This is in conjunction with currently holding zero debt. That's the balance sheet and financial position. Let me turn to our three lines of business. Considering that gold and silver are both above $1820 today, let me start with our gold and silver properties. During the first quarter, we finally received the full airborne geophysical survey of the entire Comstock District properties. We published some of the high-level pictures associated with those. The survey includes both magnetic and proprietary electromagnetic surveys covering almost 1,200 line kilometers, with the data now finally fully received and incorporated into our database, and full interpretations are ongoing. I think I mentioned on the last call that what is remarkable about this data is the clarity of the three-dimensional images of our district's geological structures, and what is even more remarkable is that 3D clarity is at depth and often exceeds 1,200 feet below the surface. Our updated modeling on the Dayton is now well underway. We will publish a series of interpretations and developments once the geophysical data itself has been properly interpreted. That work will be completed well before full incorporation into our models and before publishing our full technical report. We've engaged buried Aubert and have had several planning sessions with them, providing detailed overviews of our geological cross-sections, our level plans, and all the work done in the Dayton to integrate that into a final updated resource model. I should have mentioned that we already have a previously published existing resource estimate for the Dayton. That estimate was almost 0.5 million gold equivalent ounces in measured, indicated, and inferred resources. These are near-surface oxide ore resources, and we've even conducted preliminary economic shells where just 80,000 ounces of that gold and 800,000 ounces of that silver could generate nearly $100 million in cash over a very short mine life. Our work will continue to build and develop on those existing resource estimates, with a new technical report set to come this year for the Dayton Resource. As for Occidental and Lucerne, Tono has finally made some great progress in publishing drill results. These properties are where we hold significant NSR royalties. All Northern Mineral properties located in Storey County, which includes Lucerne and the entirety of the Occidental straight claims, are being explored with exciting results. Tono is now preparing a technical report with resource estimates already completed for Lucerne and is now working to include a potential resource estimate for the southern part of the Occidental. Tono has recently published results from three new drill holes from the southern part of the Occidental that I'd like to overview with you for just a couple of minutes here. These are not deep hard rock drilling targets; these are very near-surface oxide ores, with all three holes hitting excellent lengths and grades of near-surface mineralization. They reported hole number TC-007, which included 70 feet of over a tenth of an ounce of gold, including about 25 feet of over a quarter of an ounce of gold per ton; all near surface, each one of those reported results included nearly one ounce per ton of silver, at 0.95 ounces per ton of silver concurrent with every ounce of gold that was discovered. They also reported hole TC-006, which had over 50 feet of over 0.05 ounces per ton of gold, including 15 feet of a tenth of an ounce of gold. Again, almost an ounce per ton of silver concurrent with the ounces of gold—just to put that in contrast, gold grades of 0.03 ounces per ton are strongly economic in this environment. So Tono is ramping up near-surface drilling and has announced plans to add another drill rig to the Southern Occidental, partly because of these favorable results, planning an additional 23 holes, or 7,500 feet of near-surface high-grade targets. They plan to fully complete and accelerate that near-surface oxide ore drilling and subsequently develop a resource estimate for the southern part of the Occidental, adding it to those resource estimates and putting out a technical report for those combined resources. Again, we have royalties on all these properties. In overview, the Tono transaction has turned out extremely well for us. We have annual return reimbursements of over $2 million and a monthly cash income that would annualize at almost $700,000 on that 12% secured cash paying note; remember that security is on the entirety of Lucerne and this mineral resource package. We have 1.5% NSR royalties on all the properties, including Lucerne and Occidental, and we have 2.5% on the higher-grade, more prospective Northern Comstock lode claims. There is an option to increase that by an additional 3%, making it a 5.5% royalty on the most prospective parts of the lode, which is a significant advantage for us. Let me get more granular here for us. Turning to the mercury remediation business, during the first quarter, we invested our full 25% of MCU. We took that ownership plan and option right to fruition, plus we own directly an additional 50% of the MCU Philippines joint venture, giving us a total of 62.5% of all of MCU's participation. Last week in the Philippines, we received our first order for 300 cubic meters of clean sand and gravel, and the last truckload of it was picked up yesterday. This is for a contractor of a flood control project just 7 kilometers away from our operation, and they already require another 4,000 cubic meters of 2-inch clean gravel, plus a whole ton of cobble rock. Our process cleans the mercury out of the soils, and it also cleans these higher larger rocks that we produce. We have two other sand and gravel buyers currently in negotiations for additional clean offtake. There seems to be monstrous demand for clean sand and gravel in the Philippines, especially with all the construction that's going on. Having said that, there is an even bigger sand and gravel scarcity globally that we've been reading about and understanding, so we are in a very good position there. The gold and mercury content have been very low in the lower part of the river as expected. We're starting in the lower part of the river and continuously moving ourselves upstream. Later this week or next week, we'll publish some photographs of the operation as it moves upstream. You’ll get an appreciation for the scale of what we're doing. We're starting to see meaningful amounts of mercury content as we sample upstream. So this is really the first month where we have stable operating activities. In March, we were just getting started with a lot of government oversight. In April, we renewed the facility twice as we settled in. There were also some flooding and typhoon weather that set us back, but now it's looking promising. So we believe this month is the turning point. I want everyone to recall that we've secured our 50% equity in the Philippine operation with a $2 million secured loan, which has accelerated repayment provisions. As the revenue starts generating, we will start getting repaid on that loan while retaining our 50% ownership in a project that has a potential life span of six to nine years—paying very well beyond the recapture of our investment. Moving on to LiNiCo. During the first quarter, we acquired nearly half of LiNiCo in one fell swoop, with rights already committed and research conducted to own over 64%. Critical to this acquisition is the securing of the previously permitted state-of-the-art battery metal recycling facility located in the Tahoe Reno Industrial Center in Storey County, just 10-15 minutes from our Silver Springs properties. The plant sits on 11 acres of prime industrial land and could not be better situated in the U.S., directly across the street from the Gigafactory, to move into this business. We assess the plant, including the building, lab facilities, water treatment facility, air quality control, and equipment—to be valued at well over $25 million. LiNiCo secured the acquisition of that facility for $14 million, with Comstock having security over that facility. So, it couldn't be more perfectly situated to receive, crush, and separate battery materials into black mass. When we initially secured the facility, we committed $10.75 million for that 64% of LiNiCo, which puts it at a post-deal valuation of only about $17 million. As I mentioned, we believe that facility is already worth that, but that’s not what's exciting for us. What's exciting is having a 20,000-ton battery metal recycling facility that can produce pure cathodes. Just last week, LiNiCo selected ECM Renewal Process Solutions along with another company called Plain Sight Innovations, which are highly experienced designers and builders of large-scale renewable material manufacturing facilities to build our crushing and separating system that produces the valuable black mass while separating byproducts like copper and steel. This will allow us to finalize our permit submissions and enable the first major phase of our business plan while Green Line and their associated engineers finalize their engineering design and construction for the Phase II part of the operation, which is then to take that black mass to produce pure cathode materials. We have also engaged RPS to develop a second process for taking wet masks to pure lithium carbonate, nickel, cobalt, magnesium, and graphite. We've always intended to have multiple product lines downstream but have been so impressed with the work that RPS and PSI are doing on the crushing system and with the technology they already have in-house for solid construction, that we will develop our own IP to produce pure commodities. The business end markets are expanding from the very same source of the battery metal material. Let me conclude my prepared remarks by emphasizing that we established and published last year at our Annual General Meeting, very specific performance objectives that are consistent with what I've just updated you on and everything else we are doing for the next three years. This includes commercializing high-growth ESG compliant renewable businesses, acquiring additional high-growth cash-generating ESG businesses, establishing and growing our existing mineral properties, and monetizing non-strategic assets to fund the growth of these new businesses. The bottom line is we are extremely focused on items and timeframes that we have published, and we believe it will become extremely clear, clearer than ever, regarding our commitments to these businesses beyond MCU and LiNiCo. Our goal is to deliver $0.5 billion in shareholder value, at least $12 per share, and to align all our people with 100% performance-based stock compensation. This program has been published in January—it’s crystal clear, if we deliver, our shareholders are rewarded; if we don't, we don’t get anything. So, I'll pause on that and turn it over to Zach for the Q&A through the Zoom Q&A mechanism.

Yes, that's great, Corrado. Not surprisingly, we received quite a few questions while you're making the presentation. And also, not surprisingly, you addressed a lot of those questions within your presentation. However, we do have a question that is asking for a little more detail. What is the timing of the mineral resource estimate and preliminary economic assessment and feasibility studies for Dayton and Spring Valley?

So we have a schedule. It’s precise; Mike Norred, who leads all of our resource engineering and resource estimate work, has taken the data Larry Martin, our Chief Geologist, and Mike Howe, our geologist, has spent almost a year pulling together. The schedule has about three months, right, to create the resource estimate, which is now underway, update the resource estimate, and cooperate with buried Aubert for the review and publication of the report, the preliminary economic assessment. To be clear, the second report that would follow this one will include a certain amount of drilling that will occur in the Dayton. That drill program has already been defined by our team as we review it. We will incorporate it and publish it as part of the first technical report. The first technical report will discuss certain economic considerations but it won't be technically a PEA. We intend to publish the resource estimate first, then conduct some drilling, and then the second report will include a preliminary economic assessment or a PEA. We wouldn’t expect that report until 2022 because, in between the first report and the second report, we have some exciting drilling to do.

And moving on to one of our other segments, you mentioned MCU revenue. What are your expectations for the remainder of the year?

So the system in the Philippines operates at about 150 tons per hour. It's actually faster than the mercury remediation system we have here on the Comstock, which is more of a pilot 25-ton per hour testing system. We are up and running, as I mentioned, in sand and gravel. All of our profiles show that if we're running the system fully and selling all the sand and gravel that we are producing, we would be operating at a profit without any mercury and gold content. So this is a huge de-risking measure for us, and to be blunt, we had no intentions of being a sand and gravel producer. Our goal was to remediate the soil, extracting the mercury, and then extracting the gold, being a soil remediator and gold producer. In other words, the soils would have been going back into the environment clean. The fact that the sand is salable is a pleasant surprise for us. So we can guide to the notion that we will be in a positive position. We see that now; that’s what we expected for sure. That's not the goal. The goal is to remediate meaningful amounts of mercury and get significant amounts of gold. That's what's expected. We don’t have enough data yet to project grades of gold and revenues, but over the next month or two, we'll start to obtain more data. The grades improve as we move upstream based on how the artisanal mining has impacted the river's waste material. Most of it is at the top of the river; as it flows down, much of it remains trapped in the upper part of the river. So the key will be as we continue sampling and as we're operating, we have advanced teams constantly sampling upstream. It is primarily to determine the best location for the remediation process but it also gives us intelligence on higher mercury and gold contents as we go up the river. So to answer your question, we don’t know enough yet. I can say this: when we modeled the original business plan, it becomes meaningfully profitable just with a tenth of a gram of gold per ton. That’s a very, very tiny number. We consider the low end of the business model range as 1 gram—literally 10 times more. So it falls within the range that we will discuss, ranging from 0.15 to 1 gram per ton coming out of these amalgams, but we are not limited to that; those numbers could be significantly higher. But at those values, we’re going to be very profitable. We’re excited to see this develop! Literally, for the last four days, three or four trucks a day have been leaving our site with sand and gravel that they purchased. The fact that we're operating steadily on a daily basis and generating good revenue represents a significant milestone for us.

Our next question or first statement. Thank you for providing additional information on LiNiCo in your presentation. As you know, this sector has its challenges such as securing permits and supply agreements. Can you speak to these two topics?

Yes, I have to tell you that the lithium battery recycling business has been the most engaging and exciting over the last two months. There are complexities and meaningful challenges that we're managing right now, and they fall right into our wheelhouse. So we think of the business in three major phases. The first phase is securing feedstock receipt and storage of materials. You would think that would be the simplest part of the process, but it's actually the most complex, given the retro rules, environmental laws around moving and storing battery material, which is incredibly complex. It's especially complex if you don't have retro permits, which pretty much none of the battery metal recyclers are pursuing because retro permits are equivalent to needing permits. It potentially takes half a decade to achieve those, and that's not part of our business plan either. What is part of our plan is to synchronize the receipt annually of 20,000 tons of batteries per year to our state-of-the-art facility and to have alternative sites for storage. We believe we have a competitive advantage since we not only have an existing state-of-the-art facility—10 square miles of land right in the same county on the Comstock properties, some of which are perfectly situated for receiving these types of materials. This gives us a combined strategy of overseeing storage while partnering with suppliers of these materials. The second phase of the business is crushing, separating, and producing the black mass. We have designed a system, and the experts in the field and those redesigning the system believe it is state-of-the-art—in terms of crushing and separating. The outcome will yield the purest black mass. The third phase is to produce pure nickel, cobalt, lithium, magnesium, graphite, and cathode materials with extremely high market value. For all of these aspects, the value of these materials is increasing significantly, leading to a growing market. I couldn't be more excited right now. More information will be shared as we move forward with permit filings, the start of material receipt and storage, which will be achieved soon. We're also looking at very interesting complements to that line of business that will dramatically enhance our capabilities, with some being tied to market breakthroughs that address regulatory restrictions.

All right. Well, we have a couple of questions about business here concerning the Comstock Lode. To the extent possible, could you please comment on some of the management changes with Tono and how it might affect their exploration plans? Additionally, Comstock picked up two patented mining claims at the northern end of the Occidental trend. Can you comment on their significance?

Yes, with Tono management, I don’t want to speculate too much, but they did make a management change in terms of their CEO. Brian Metzenheim, who was their Chief Geologist and an exceptional technical professional, has agreed to be the Interim CEO. We know Brian very well and have worked closely with him; he has been leading all drill program results. We always thought that combining the drilling program of going after some deep, high-grade targets in the northern part of the lode alongside some near-surface targets, complementing Lucerne at the southern part of the Occidental trend, was the right strategy. They seemed to have prioritized deep drilling first, but it now seems to be rebalancing to both targets, which we believe aligns with the right strategy. I don't think they will miss the beat with the Occidental, as it has easier near-surface drilling targets. The grades from the three holes surprised us; we knew there was gold and silver in there, but the near-surface oxide ore grades are significant. The grades came out remarkably within the three holes, and when you look at their press release regarding the proximity to the surface and the drilling trend, it reinforces our confidence. The southern part of the Occidental and Lucerne are almost twins—near-surface resources located right next to each other. This represents remarkable potential for value aggregation. I think Brian's Interim CEO role signifies that they might be considering another CEO. However, the company is very focused on exploration, and being that Brian is an exploration driller, I believe they are in good hands.

We have a question about the Daney ramps at the other end of the trend, and the shareholder wants to know if we still retain the mineral rights to them?

Yes, that's a good question. Generally speaking, every time we do something, we would want to retain rights as a matter of velocity. We definitely have the Daney patent, which is right next to the Daney Ranch—that’s actually what initially drew us to acquire the Ranch. We were acquiring 400 acres of mineral properties, including the Daney patent and the Daney original mine works, which are adjacent to the Ranch. We've retained all of those, that was our objective in the first place. We don’t see meaningful mineral prospects beyond that patent within the Ranch area. We have a 2-year leased option. They have the right; they are leasing the facility now, paying a good rental price to us with the right to acquire it next September. We suspect they will acquire it; there’s a 90-plus percent chance that will occur. If for any reason they didn’t, we’d be happy to have a phenomenal property. Every property on Highway 50 and around there continues to increase in value every month. We are getting a good price, and they are acquiring a good property, but there are no significant implications to consider.

Following up on that, we have a question. Did I understand correctly that the drilling comes after the updated technical report?

Yes, the first technical report will include a new resource estimate and details from the drill program. It will provide economic insights but won’t be a PEA. The drilling will then follow or occur in conjunction with that report. The sequence will involve the results from that drilling being incorporated into a second technical report, which we are considering. The second technical report could expand the resource estimates resulting from the drilling, while the third report could potentially include a Preliminary Economic Assessment. The reasoning behind that is not due to any delays or deferrals; it’s just that if the resource expands meaningfully, we’d want the analysis to correspond with the mine's potential. So there’s some dynamism involved here, but yes, the intention is for the first report to encompass the drilling report.

We have a shareholder wanting to drill down a little on MCU Philippines. They want to know how that loan will be repaid and if there will be a choice of currency, whether it will be in dollars or Philippine pesos?

The way it’s structured is as a secured loan. We get profits out of the joint venture in the Philippines. We have a fantastic joint venture partner; if we could operate in 15 countries, I would wish that our joint venture in the Philippines were the same. The way the structure works is 75% of the profits that come out of the joint venture prioritize repaying us first. Operationally, locally, we need to work in local currency. However, everything that comes out of there is based in U.S. dollars. So we don’t incur currency risk; it’s all U.S. dollar-based in terms of the loan and repayment. Local generation will be immediately converted to U.S. dollars.

This is a very important topic for Comstock Mining. We have a question: Does zero debt mean that we no longer have an environmental obligation?

If you look at the balance sheet, there are almost no liabilities left, current liabilities in the hundreds of thousands, which is nothing. The only obligation that remains is a reclamation liability of about $6 million to $7 million intended for covering the ultimate reclamation of our leaching operations at American Flat. This liability is estimated, and it would mean that the Nevada Environmental Protection Agency would have to assume responsibility and execute that work for us. That would entail significant administrative and project management costs. In short, the company's winning strategy would mean spending less than the reported liability. The net liability does not even start until we finish mining and processing activities. Even in Tono's best-case scenario, they wouldn’t begin thinking about mining Lucerne for a couple of years, so then we could think about remediation afterward; it remains a long way off.

This question is a common one we receive during calls. People would like to summarize the expected sources of cash and timing to be realized over the next 12 months associated with asset sales, sales of marketable securities, and notes receivable?

Absolutely, that's a great question. First, we have over $13 million to come from the Silver Springs Opportunity Fund for the sale of land totaling 98 to 160 acres and some advances we've made. This fund has raised meaningful capital over the last two years, and all our prior obligations associated with acquiring the airport, the manufacturing facility, and a massive bulk purchase of land, real, and water rights are all addressed. The next commitment is to Comstock for the closing of the land sales. We expect $13 million plus in the next three to four months. From Tonogold, we hold over 11 million common shares and expect $5 million to $8 million from that over the next 12 months. Also, Tonogold has a note receivable to us that secures cash interest every month—about $60,000 monthly. This note is due on March 31st, 2022, amounting to another $5.5 million. So those are the main sources from securities, notes receivable, and asset sales, totaling over $20 million. That provides the timeframe for our expectations.

We typically have this question in every call. People want to know about the current stock value as they’ve seen a downward trend this month, and we hope you could provide your perspective on it.

There has been volatility, and we’ve seen a lot of interest. We've spent the last couple of months focused on MCU getting it up and running, and on LiNiCo's planning and scheduling, working 18 hours a day—our engagement in LiNiCo’s development is outstanding. I published this in our last press release and comments: we've been working on an additional transaction that is very complementary to everything we discuss now that will undoubtedly demonstrate how committed we are to material science, manufacturing, revenue, and cash generation potential within our lines of business. We're headed for another line of business. Concurrently, we are building a substantial target list of ESG-savvy investor targets, starting discussion meetings at the end of April and early May. Setbacks in my capacity have limited engagement in direct discussions. Our goal is to increase our investor base by more than 50%. In other words, our top 30 investors in the next six to nine months will increase from 30 to 45. We’re not seeking to lose investors but to attract quality, ESG-savvy investors who recognize markets and want high-growth potential at a reasonable price. So, while we appreciate our existing base, we’re focused on building strength brick-by-brick. Our work has just begun. Two firms are together building the task and target list to prepare. We want to announce the next transaction so we can enter a whole different sector, gaining credibility and attracting stronger investor interest. We are excited about our existing base and what has happened over the last months, but we are just laying a foundation for growth, with a calculated plan targeting a $0.5 billion valuation. We also have a very calculated vision of exceeding $1 billion once we reach that mark. Remember, there’s a very specific plan for this, and I’m excited to talk to new investors about revenue and cash flow.

Quite a few participants in the conference today have asked about your success with MCU, Philippines. Can you provide an update on the MCU pilot plant on the Comstock?

Surely! Before answering this question regarding MCU and LiNiCo, I wish to emphasize our approach—our focus on intellectual property that's distinct and differentiating. We’re conceivably targeting commercialization into cash flow and protecting our capital as we do so. In MCU’s case, using secured loans to acquire equity is not common. In LiNiCo’s case, ensuring the acquired assets are more valuable than the capital invested is essential. I don't like to discuss downside protection, but I want people to understand how meticulous we are about safeguarding assets. Our team deeply commits to making these businesses work. Now back to your question: we are sampling various materials extensively while running the pilot on the Comstock, learning a tremendous amount about material interactions, the efficacy of the mercury reactor, and centrifuges. We’re currently testing and sampling materials through our centrifuges and conducting alternative activities. Our engineering teams work incredibly hard to refine our processes and ensure that as we restart, we’re optimizing extraction. We are reopening our lab next to the MCU facility on Comstock properties to expand our capacity while testing and sampling through our systems. We are experiencing a very active period right now; Paul Clift, who is a designer and deployer of these systems, is working extensively on this project around the clock in the Philippines while his team manages operations here on the Comstock.

Excellent. We’re at the top of the hour now. That concludes our questions. I definitely want to thank everyone for joining us today, and I’ll turn it over to you, Corrado, for your closing comments.

I want to thank everyone for their interest. If there are any additional questions, please reach out to us directly. A very important note: our Annual Meeting is on June 3rd, and we expect significant participation. We will showcase various aspects of our operations including Comstock geology, MCU, and LiNiCo, and hopefully, we will have more updates on developments across all of these lines of businesses. Thank you very much.