Comstock Inc. (LODE) Q1 2024 Earnings Call Transcript

Good morning, ladies and gentlemen. Welcome to Comstock's First Quarter 2024 Results and Business Update. This is Trevor Brucato with RB Milestone Group, Comstock's U.S.-based Investor Relations firm. I'd first like to thank everyone for joining at this earlier start time as we were trying to accommodate different time zones during this cycle. This presentation is being recorded today, April 30, 2024, and will be made available on the company's website at comstock.inc shortly after today's event. Again, that's comstock.inc. Comstock trades on the New York Stock Exchange under the symbol LODE, and joining us today is the company's Executive Chairman and CEO, Corrado De Gasperis; and its COO, William McCarthy. At the end of the prepared remarks, we will open up the call to questions that were submitted during the registration process and those that surface throughout this presentation. Please note that the investor surveying period for Comstock's Q2 stakeholder perception analysis report is now open. The survey can now be accessed on Comstock's website at the top of the Investors section. We recommend filling out the survey throughout this presentation, while the information is still fresh and completing it after receiving the full update provided by Corrado and Billy. The final report will ultimately provide trends on Comstock's perceived strengths, weaknesses and milestones and will be published shortly after the end of the quarter, like we've done previously. Your participation will be much appreciated as it will help strengthen Comstock's investor communications efforts and will help guide the focus of future events. Please note today's presentation may contain forward-looking statements that are subject to risks and uncertainties that may be out of the control of the company, in this case, Comstock Inc., and it should not be construed as a recommendation or a solicitation to buy or sell any security. For Comstock's full disclaimer, please visit their website at comstock.inc. Lastly, RB Milestone is not a registered investment adviser or broker-dealer. For more information on us, please visit rbmilestone.com. And now it is my pleasure to introduce you to Comstock's Executive Chair and CEO, Corrado De Gasperis. Corrado, the stage is yours.

Thanks, Trevor, and hello, everyone, and welcome to our First Quarter update. I'm going to allocate a little more time this morning to our strategic investments and innovations, then cover fuels, metals and mining. And after my comments, Billy is going to provide a deeper insight into our now operating solar panel recycling business, including our view of the markets, operations, tactics and importantly, provide real guidance on the robust amount of net cash flow that we now expect metals to generate in just a few years. After that, we'll turn to questions. Let me start with the corporate update, again, focusing on our strategic investments and how their own progress positively impacts both us and their own valuations before I then turn to our businesses. From a corporate perspective, financially, our first quarter itself was very stable, with spending in line with plan and prior periods, although the mix reflects a higher allocation to investments in R&D and particularly investments in our technology partners. Our commitment to higher R&D investments like RenFuel, GenMat and now certain others are all based directly on specific opportunities that we have identified and now secured that further extend our leadership in this massive energy transition. The investments were also structured such that we could experience returns beyond just the direct impact that they may have on our businesses. RenFuel is a great example. We have now executed both an exclusive license for their technology in the Americas and just last week, completed the investment agreement with RenFuel effectively combining the power of our IP portfolio with theirs and bringing this world-class technology and team tightly into our innovation network. This investment is senior secured. It was safely and intelligently structured to ensure our efficient access to RenFuel's critical IP. We've already physically deployed RenFuel's proprietary esterification process to refine our Bioleum oil at our Wisconsin facility, and we are now producing our own samples for our own customers to test and ultimately use in their refineries for direct lending with their existing vegetable oil feedstocks. RenFuel's technology is incredibly complementary with ours and has already positively impacted our commercialization activities. However, we haven't stopped there nor can we. In fact, you're going to see in our disclosures that we've made and are making additional investments into new breakthrough technologies with new development partners that can dramatically advance the efficacy of our solutions. You might be wondering to what at. Well, our ultimate longer-term goal and frankly, the goal of the whole renewable fuel industry is and should be what we internally refer to as the Holy Grail, which means to us achieving cost parity with petroleum. This notion was unrealistic just a few years ago. However, with the advancement in yields and costs that we've already established and the new pathways that we have now identified, we believe we have line of sight on breakthroughs for further increasing our fuel yields and further reducing our operating costs, all towards this ultimate objective of achieving cost parity with petroleum. I know and respect how huge of a statement this is. And we're tempering our excitement internally because there is still real work to do. However, our leading and now expanding IP, our pioneering innovation team and our expanding development network has brought this objective closer and into much plainer sight for us. We'll have more to say on this and the specific developments as they occur. But I can assure you, these new allocations have been extremely diligent and support our biggest goals in this energy transition. Our existing solutions are already changing the renewable fuel game, but to sustain and grow our technology leadership, our strategy must ensure that achieving our goal actually wins the day, and that is what these innovations are designed and intended to do. Let me move over to GenMat because our investment in GenMat is motivated by the same goal, accelerating these commercialization of these energy enabling breakthroughs. I'm thrilled to announce that we have realigned our investment in GenMat, taking something rather complex and simplifying it. We've invested $15 million over the past 3 years, and we now own 32% of GenMat, full stop and hopefully with no confusion. We also retained the rights for using GenMat's AI for both biofuels exclusively and mineral discovery and mining, positioning us to lead in these fields of use. This restructured investment puts our initial valuation at $47 million, and we believe this should already easily reflect at least a 10x return when compared to other comparable commercial-ready AI companies, although it's nearly impossible for us to find an AI company capable of what GenMat is currently demonstrating to the market, and they're proving it in the market as they are now in discussions with several early adopters, including globally recognized stakeholders in high-value applications, starting with batteries and semiconductors that will leverage their physics-based AI for material development application. Remarkably, GenMat's also developed and deployed a fully operational and new proprietary mission control software for managing GENMAT-1, its low earth orbiting satellite and hyperspectral imaging system. GenMat's also now engaged with even more customers for their imaging and predictive mineral discovery algorithms of which, of course, Comstock's very interested in and also with customers signing up for satellite control system software. So, they built their own satellite. They deployed their own hyperspectral imager. They built encryption technology, programmed it themselves into the system and then developed an entire software control system to control the missions of the satellite. And other companies who are putting satellites into orbit are saying, we'd like to pay you for leveraging your system. Our restructuring position GenMat for both their commercialization and monetization efforts in every single way. And it was designed to support their ability to raise much more capital from third-party sources at much higher valuations, which we expect will occur later this year. This would both validate their technology with third parties and their valuations. And ultimately, that would terminate our future funding obligations, which will reflect the powerful win-win-win all the way around. It should be clearer and hopefully, clearer and clearer that our innovation system, this extended innovation system, which includes GenMat, which includes RenFuel and now includes new partners is already world-leading for technologies that are enabling the energy transition. And amazingly, each and every one of them independently is commercializing. Green Li-ion is another example that we're proud to highlight. Green Li-ion just launched their first commercial scale facility in North America, and they have differentiated themselves in a very difficult EV recycling market with a very high-value product proposition. Their Oklahoma plant is now producing battery-grade precursor cathode active materials and we understand that they're receiving offers for more capital financing at even higher values. This is in line with our plans to monetize some or all of our Green Li-ion investment this summer. In fact, Green Li-ion and Sierra Springs Opportunity Fund were both very early-stage investments for us. We were literally in the seed round in both cases, and both have seen enormous appreciation in value over just the past 3 years, yet both are also directly supporting and/or have advanced specific aspects of our individual lines of businesses. Our initial Green Li-ion investment alone has grown over 10x and Sierra Springs values growth has been even higher. Some of you may not realize it, but Sierra Springs Opportunity Fund has the only large-scale manufacturing complex in Silver Springs, and Comstock Metals has secured this capacity for both its existing production and its next industry scale facility. Silver Springs with all of its new highways and infrastructure provides immediate access to California and to Las Vegas, which is perfectly suited for Comstock Metals. Our sale of 2,500 Peru last year and our ability to pivot so quickly to a new solar panel operation would not have been possible without the availability of this Nevada platform. Silver Spring's also just received and executed an LOI for the purchase of one of its properties that more than doubles the last known transaction value, and hence, correlates and doubles the underlying value of our most recent investment and represents another significant increase in the value of Comstock's original investment in this equity. These advancements position us to monetize both our Green Li-ion investment and our directly owned real estate, Comstock's directly owned real estate in Silver Springs at over $60 million in cash proceeds. And again, to be clear, that $60 million does not include our equity investment in this year's Spring's Opportunity Fund, but just the 250 acres of land that Comstock owns separately in Silver Springs. Also to be clear, the LOIs for lands owned by the Opportunity Fund for one part of the land adjacent to our Comstock properties there. Let me turn to our businesses and just give some brief updates. And as I mentioned, Billy will take you through a deeper dive with our metals recycling business. So let me start with mining and fuels and then I'll segue and wrap with metals. Our mining team has advanced our monetization plans for the northern part of the district, primarily our Storey County mineral estate, including the northern targets that are currently under lease, where we are experiencing current revenues and the possibility of even higher cash flows from expanding those transactions, again, just in the northern part of the district. More excitingly, internally, our mining teams have advanced our internal economic feasibility assessment for the southern part of the district during just the past few months. We've updated our mine plan for the Dayton Resource using current pricing assumptions. You should be thinking $2,300 gold, not $1,800 gold, $27 silver. Our published technical reports use a cutoff that was actually equal to gold prices of $1,800, where gold prices have now increased by $500 since then alone. So our internal assessments are showing nearly a doubling of value of the Dayton Resource, both on a net cash flow and a net present value basis from our analysis just over 1.5 years ago. We've also advanced Dayton's expansion plan as we build a new model together with GenMat's geophysics team and prepare a new geologic baseline for the full imaging scans by GENMAT-1 of our districts, which we should be in a position to commence shortly. So, we build a base, we've expanded the base and then we're going to add that data to the base to ultimately come up with a whole new predictive ability to expand our mineral resources. So, in 2024, we're still looking to receive cash proceeds now well above $2 million that we originally predicted for the mineral leases in the northern part of the district and potentially entering into additional sales agreements, as I just mentioned, while we develop this Dayton resource and expand the mine plan ultimately for production. Turning to fuels, which by the way, has been keeping us by far the busiest of all of our businesses. As most of you know, last year, we validated industry-leading yields exceeding 100 gallons per dry tonne of wood and we confirmed extremely low carbon intensity scores from our solution. We're now engaged across the industry for both commercial adoption and monetization. We're advancing multiple client discussions for monetization and deployment of our technology and very much expect multiple commercial agreements this year. We're in active in advancing conversations in the United States, in South America, in Europe and now even in Asia. We expect multiple commercial adoptions with industry leaders this year. I know this is what people are very interested in and waiting for. And I'm confident as our teams convey offers to our partners that will not only validate our leading technology, but also unlock tremendous value for Comstock. And let's talk about that for a minute. Everyone is very, very focused on the first revenue. The assumption being revenue will cover our cost, the assumption being revenues will minimize dilution. That's all good. But we're receiving and entertaining strategic interest by various partners for investing directly into Comstock Fuels, the subsidiary and accelerating our deployments with these partners. This will have tremendous impact on our liquidity on this notion of dilution or rather accretion of value in exceptionally positive ways. These impacts will certainly be faster than when our technology starts pouring its first gallons, which will also be huge, but later than the monetization that I'm talking about and that we expect to consummate this year. This is all consistent with what we've been saying about commercialization and monetization with early adopting partners. We're just getting very, very close and it's all coming together. Let me conclude with metals. Last and certainly not least, where we cross the finish line with the successful commissioning of our first zero-landfill solar panel recycling business. And it's now producing 3 distinct, fully renewable and salable products from those end-of-life panels. We had a little excitement last week with our senior senator from Nevada, Senator Catherine Cortez Masto visiting and pouring our new facility. And to be crystal clear, we're now receiving panels, processing panels. And effective this week, recording revenue on the completion of processing those panels. I mean, just in this quarter alone, we secured all the required operating permits and commenced production. We secured revenue-generating contracts and began receiving large quantities of end-of-life panels. We commissioned and successfully tested every stage of production, producing 100% saleable materials from those materials that were coming in. We collected cash payments on receivables for substantially all of the panels that have been received to date. Remember, this is a tipping fee model, we get paid upfront. And we've now selected the site in Silver Springs, the same size, the same complex for our industry scale production facility that's going to represent up to 100,000 tons of annual production. And that's not all. We've prepared and already submitted permits for the first expanded industry scale storage side, and we've expanded our revenue-generating contracts into California, into Arizona, into Texas, where we're getting tremendous interest. Our metals team really rocked at this quarter. And I'm now going to let Billy now take you into a deeper dive of our plans there, including what I feel is just a remarkable economic profile that we feel really, really good about executing on.

Thanks, Corrado. It's very true. Our metals team has been quite busy this past quarter, and it's not going to slow down. So I want to share some slides and talk a bit today about where the business is going to go from here, and I'm going to provide some more precise forecasts for this business. Before we dive into that, though, I want to take a minute and go back and talk about how we got here in this space of electrification product recycling. In 2021, Comstock acquired LiNiCo, which was a development-stage lithium battery recycling company. And some pictures here on the screen, that's me at the 2022 Annual Meeting showing off our pilot system. And we showed a video of the system in operation, recycling batteries and producing black mass. Now in early 2022, battery metal commodity prices were at all-time highs. The market was really frothy. And we were doing what we like to do, which is to try to derisk our process by looking for partners that can enhance our capabilities and derisk our plans. As Corrado and I made the rounds with our competitors, we're sitting in the conference room in one of them in early 2022, and they were bragging about their market-leading economics in their battery recycling process. Corrado and I looked at each other, I had to bite my tongue because they showed us a model that was based on expectations of commodity prices at all-time highs, going up perpetually for decades to come. Now you probably know the story and how it actually played out. Our competitors raced to build up capacity for battery recycling, hoping the market was going to keep going up, hoping the supply of batteries was going to grow extremely quickly. And instead, those commodity prices fell, that tsunami of supply didn't materialize and pain became the norm throughout the industry. Many of these competitors have not relented, and they continue operating on the hope that the market is going to perform to their models. We made the strategic decision to exit this market. We executed an opportunistic sale of our battery recycling facility in 2023, and we partially realized our investment in Green Li-ion. Now as Corrado says, we believe Green Li-ion has a unique position in this market as a value-added operator downstream, but we still see future monetization of that position as well. Now in 2023, we pivoted to solar panel recycling. The EIA is projecting 1 million tons per year of end-of-life solar panels available for recycling by just 2030. The first solar boom was really over 10 years ago in the Southwestern United States. Now solar panel manufacturers quoted average life of around 20 years. What we see in the market is that the reality is much shorter than that, and these panels are already starting to come into the recycling space. In early 2023, Dr. Villamagna joined us and came with a proven process to recycle these laminated systems with prior success in other materials. We've been able to develop a first-mover advantage, including an advantage in sales with California being our primary source market as well as building on top of an advantage in permitting and operation in Nevada. We have long-standing relationships with the Nevada Department of Environmental Protection that have allowed us to move very quickly on the permitting side. Today, in 2024, we're operational. Our demonstration facility in Silver Springs, Nevada is processing panels today. We're quickly filling up our existing storage capacity from customer contracts. And we're getting recognition on the local and national stage. As Corrado mentioned, Senator Cortez Masto visited last week to tour the facility and learn more about our process. Not only is Senator Cortez Masto, our Senator from Nevada, she also sits on the very important Senate Energy and Natural Resources Committee that defines a lot of policy around this area. And her support has been very welcome. As we move forward from here, we're planning to build at least 3 100,000 ton per year facilities with an expected cost of $12 million each to get to operation. We're going to bootstrap this with project-level financing for each of these projects, and this is going to be publicly supported financing, including industrial development bonds, USDA rule development financing, and potentially 48C tax credits from the Inflation Reduction Act, of which a new program was announced this week for renewable energy projects. The best part about this business is it moves very quickly, and we expect it to be self-financing in just 2 to 3 years. We're planning to stage our expansion over the next 4 years. Facility #1 is our demo facility that's operating today. That facility is going to scale to full capacity operating 3 shifts later this year. We're using this demo facility to shake out our process and ensure a rapid and successful scale up as we move to the larger facilities. And you see here, the expected timelines for these projects are short, one year to go from funding to initial operations and one year to go from that initial operation to operating at full capacity. We're staging this out over several years; these are conservative projections. We think there's a good chance that we can beat this schedule and move even quicker than this. As we think about our capacity build over the next several years, we're looking at 75,000 tons of capacity by 2026, to 150,000 tons by 2027 and over 300,000 tons by 2029. The pace of this growth is going to be dictated by the demand. For each of these facilities, we're establishing storage capacity in advance of the production capacity. We're filling up that storage capacity with revenue-producing inventory. This is an interesting industry because inventory is a source of cash, not a use. Inventory contributes to the funding of the build of these facilities. We're not going to do what the battery guys did. We're not going to build excess capacity. We're going to manage our market risk and we're going to move at pace with the demand in the market. Again, we think these projections are conservative, and we expect this market to grow much quicker than this. The projected results from this plan would produce over $125 million in top line annual revenue in just 5 years, with $100 million in net profit for an 80% operating margin. It's a very capital-efficient business, a very capital-efficient growth program. And again, it becomes self-funding in just 3 years, which sets us up for future growth to continue to pace growth in the market. Before I finish, I want to touch on one last point. I'm getting a lot of questions about how do we price our services. What does it cost to recycle a solar panel? I mentioned last quarter that this is not information we're planning to share publicly. There's a few reasons why. First off, this is truly a service business, not a commodity business. Every contract is unique. Every contract is negotiated, and our sales team is motivated to seek the highest price possible for our services. Secondly, our customers are really marking up our services. We're acting as a destination. This solar installer who's taking down old solar panels is also seeking for the largest price it can get for the removal and disposal of those old panels. And those customers expect that we're going to keep our pricing confidential in order for them to have the best position in negotiations. Our competitors here today are really landfills. We're cost-competitive with hazardous waste landfill pricing, which is also generally a negotiated nonpublic price. For this reason, we think it's prudent to keep this information confidential and let our sales team operate to the best of their abilities. So I'm going to wrap up there and turn back to Corrado and look forward to any questions on this as we move.

Thank you, Billy. That image depicts the smaller facility, approximately 7,000 square feet, situated next to the larger facility, which exceeds 100,000 square feet on the same campus. I want to emphasize how significantly this achievement aligns with our financial, environmental, and social goals, which form the basis of our planning and objectives. Financially, the local market is substantial, far exceeding 10 times the capacity of a single facility. We're projecting this to reach 1 million tons in a relatively short time. As Billy indicated, we can quickly and flexibly deploy capacity as needed. Even a conservative estimate for that 1 million tons could generate nine figures in cash flow. I appreciate businesses with very low total variable costs that are completely variable, featuring fast cycles measured in hours rather than days; this is what we refer to as throughput, with margins exceeding 80% cash. Additionally, it's important to note that our company has $250 million in net operating loss carryforwards, which will help shield a significant portion of profits from federal taxes. The metals alone would ensure Comstock's success with the figures we've discussed. The business is self-financing due to its rural location and the nature of its operations. We have access to USDA loans for rural development and Nevada industrial bonds, which typically have a limit of around $10 million in project funding, but there is no limit when it comes to renewable or recycling projects. Environmentally, we are the only zero-landfill solution preventing a significant influx of toxic materials from California into Nevada landfills. Socially, we are fostering a clean, sustainable ecosystem in Silver Springs and creating jobs in an opportunity zone that urgently requires it. We are truly proud of what the business has accomplished and its potential. Trevor, with that, we can shift to questions.

Well, thank you, gentlemen. Let's kick off with the first question here. So, Corrado, Comstock has said it would sell its noncore strategic investment assets, namely the Sierra Springs real estate and Green Li-ion shares. Would you say your confidence level in selling these assets in 2024 is higher now compared to previous quarters? And if so, why?

Thanks, Trevor. So let me start with Green Li-ion first. As I mentioned in the presentation, Green Li-ion was a seed investment for us. They had a remarkable idea that was complementary to our recycling process. That idea was to take black mass and go all the way to precursor cathode-active material. It's pulling themselves way up and above the commodity value chain. We love that. We still love that aspect where they really positioned themselves in the market. But they were an idea and then they were producing a prototype. But today, literally today, Green Li-ion just announced their first operational facility in Oklahoma, and they're producing precursor cathode-active materials. And we understand that, that was an important prerequisite for them to start the process of their next capital raise. And we understand that they're getting remarkable interest from infrastructure level and energy transition funds. And so we are more confident. We are highly confident because their value has literally increased in every one of their offerings almost in a textbook manner. And that the demand now is so large and so established, we're already getting secondary interest from the secondary markets in our share. So, we look to synchronize our monetization with those plans that are near term this summer. So, I feel very confident and especially since we were successful in doing a piece last year. Sierra Springs is a little bit different, right? Silver Springs itself was sort of the last bastion of development in Northern Nevada. Reno is exploding to this minute. The Tahoe-Reno Industrial Center was the marquee location for heavy industrial businesses. And then that got complemented by distribution and that got complemented by data centers. Well, that explosion has now fully spilled over into Silver Springs, not only with the announcement last year of Microsoft claiming their stake in the ground adjacent to our properties, but also this recent announcement about another hyperscale data center coming in and establishing a more than double valuation. And so, the bad news is because Silver Springs was sort of the last bastion, the last sort of frontier of industrial development, it's taken longer. The good news is property values have only gone up in that time period and to have a direct comp that is adjacent to Comstock's properties there, right, gives us an active ability now to market, negotiate and monetize those properties. So, I think Green Li-ion is this summer and then Silver Springs is going to be right on its tails.

Thank you, Corrado. Could you please comment on Comstock's plans to address dilution during times of rapid operational growth?

Yes, I understand this is a concern. First, let me clarify that we are very mindful of how we use our capital and our current stake in the business. We also recognize the importance of seizing the business opportunities in front of us. We have positioned ourselves very effectively, which is why I focused on our strategic investments. If you examine how we allocate our capital, a significant portion is directed toward the development and expansion of our intellectual property for immediate commercialization across all areas. It's crucial for us to maintain momentum and not slow down. We typically adopt a capital-light approach and have been conservatively capitalized due to our sensitivity about issuing shares. Additionally, we issued nearly 7 million shares in April with strategic partners under restrictions, which will help us maintain future value while adding two large shareholders to our capital base. We are being careful in this regard. Now, regarding our management strategy, my primary focus is on monetizing these assets. I am particularly keen on the potential $40 million to $60 million in cash we could realize. Our priority has always been to advance the business, not to delay it. However, depending on the timing of transactions like RenFuel and GenMat, we’ve had to invest more capital and utilize more of our currency than some might have anticipated. We believe this investment is justified given the high value of the markets we are addressing and the tremendous potential for unlocking value. Moreover, as our commercialization efforts mature, we find ourselves engaged with strategic partners on a daily basis, and these interactions are highly collaborative, as we share common objectives in bringing low carbon fuels to market. Consequently, we have a strong capacity to access capital at subsidiary levels, which may become imminent. Our foundation of value and clear value proposition allows us to explore various capital sources within the enterprise, helping us minimize dilution. I want to emphasize that I am not saying we will refrain from issuing shares; rather, we intend to leverage the value of our platform to maximize future value and returns while ensuring the overall safety of the enterprise. There is too much value at stake for us to take reckless actions. I believe we are navigating a balancing act, and importantly, we have numerous factors in play that will support our success and ability to move forward.

So let's dig a little deeper into that. Here's a multipart question. How much capital has been committed to each business segment and how much future investment is needed for each? Where will these funds come from? So Corrado, I think it might make sense to perhaps kick off with the monetization strategy around your metals business.

Yes, I’ll address that. In the metals segment, it’s an excellent business. I completely agree with Billy on the cash projections. Sometimes I hesitate to speak up, but we are being cautious and practical, fully aware of the risks associated with launching new facilities. We understand the capital requirements and the locations involved. Furthermore, we've accessed USDA loans and Nevada industrial bonds. We haven’t accounted for the point Billy made about working capital being a source of cash rather than a drain. Our approach is very conservative. I believe this is a self-funding business that can generate capital without diluting Comstock Metals. Eventually, it will become a cash source for the corporation, initially to support ongoing growth. If we consider three facilities, that equates to 300,000 tons, which is impressive in terms of cash flow. However, we see a potential one million-ton market ahead of us. In mining, our costs are low; we spend around $2 million annually on resources, and our revenue is nearly at that level, meaning mining is covered. We haven’t approved future funding for mineral asset development yet, but we’re working on models to expand resources either through fixed costs or our GenMat initiative. Once we monetize these assets, we can progress with their production. The same applies to fuels, which require more capital, approximately $6 million to $8 million. The great aspect of the fuels profile is that most spending goes towards innovation, engineering, research and business development, with minimal administrative costs. It’s all aimed at advancing the business. We do want to accelerate certain initiatives, such as the demonstration facilities in Wisconsin. If resources allowed, we would construct a larger facility ourselves, but we are fortunate to have at least two customers interested in building the first few production facilities. This capital will flow directly into the subsidiary and unlock value, as investing in the Comstock Fuel subsidiary will necessitate valuing it. The value of that subsidiary won’t initially reflect the enterprise's current value, but once it’s valued and capital is infused, it should directly increase the enterprise's worth. I hope that makes sense. Also, I want to mention that GenMat is in a similar position as fuels. GenMat is working with industry scale partners and will seek capital from experienced investors, establishing a valuation similar to fuels, where we own one-third of that value. To provide specifics, we’ve committed an additional $4 million to GenMat for this year, $1 million in total for RenFuel at $1 million a year for three years, and about $2 million to $3 million for new partners bringing valuable breakthroughs to our existing platform. These developments aren’t completely new but are improvements to our core operations, which we expect will significantly elevate our position. I hope that addresses your question adequately.

No, it does, Corrado. At a high level, what are the general monetization strategies? We can see that capital is being generated at both the corporate and project levels from strategic partners. It's about owning a smaller share of a much larger endeavor. There are numerous projects that we aim to implement in the coming years. Could you please elaborate on the various strategies?

I think a simple summary of it would be today, right, the readiness has been such that we've had to fund the businesses from the corporation. And as you see, that requires and has required the issuances of equity and some amount of debt to do that. Now we're seeing that they're getting to the point of maturity where they can self-finance. Billy summarized it very well for metals. It's right there for us. They've crossed the finish line. We now have empirical data. We can show revenue, we can show costs, we can show projections. That's all we need to start bringing that capital in. Fuels and GenMat, all we need is the commercial validation; they're happening already with industry scale and sophisticated early adopting customers. And so that is all we need in addition to the business plans, which are fully now developed, to start bringing that capital in at the subsidiary level. So that's what's going to happen. The beautiful complement will be if we could get some asset sales done a little more timely here, it releases all the pressure on everybody's minds, but it's coming.

Let me just add, we talked at last quarter when we did upload 24 about our commercialization process, right? It's a 4-stage process. We innovate, we develop, we engineer, we activate. Activate is where these things come into play, right? And as Corrado said there's a lot of different ways to do it, but it's all about bringing outside capital, bringing outside partners into this business. Developing and engineering is about getting things ready for that, making them attractive, filling in all the pieces. Especially in fuels today, a lot of these partnerships, these deals we're doing with other third parties, significantly accelerate our ability to get to that point. So every single one of them is like a leap forward in what we could do otherwise on our own. And it's really putting us into a tremendous position in the market with a lot of connectivity.

We're activating an activation often is synonymous with monetization.

And shareholders keep on hearing about the progress with metals, and it's great Billy that you showed a picture of the facility. There's a little bit more of a tangible look at what you guys are embarking on. So, I mean, do you anticipate maybe videos more pictures as the operations develop, at least at metals?

Yes, our marketing team was filming a video at Metals last week. You can expect it to be released in the next few months.

Coming soon.

Are you able to elaborate on the March 1 securities purchase agreement with an R&D company?

We are extremely focused on our current initiatives. When someone comes to me with ideas about acquisitions or diversifications, I tend to be resistant. Our main focus is on commercializing fuels and metals, and I believe our work in GenMat is strong. If a significant breakthrough occurs, like new market developments or promising technology that could impact our efforts, we must take notice. Our innovation team has spent considerable time evaluating these developments to determine their potential value. If we conclude that an opportunity could significantly change our trajectory, we consider it, but we also have to be realistic about our capacity. If a project requires $20 million or $50 million, we simply can't take it on due to resource limitations. However, if we can push something forward with a smaller investment, like $1 million or $2 million, and it could substantially enhance our offerings, we would pursue it. While I can't discuss specifics, I want to emphasize that we would be missing an opportunity if we didn't consider such investments seriously. I'm proud of our team’s capabilities, which are top-notch. We are engaged with leading professionals and institutions, with RenFuel being a notable example, and soon people will recognize GenMat as a key player. In the realm of fuels, especially concerning the catalytic esterification process, RenFuel consistently stands out, and we are thrilled to partner with them. I hope this clarifies our position.

Let's just add procedurally, like we talked again last quarter and if you want more color, rewatch the video with Kevin Kreisler, our Chief Technology Officer. We really have an innovation network we're working with. Before we get to the point of making this kind of investment in something, there's a tremendous amount of work that our team is doing collaborating with these other groups, looking for solutions, looking for ideas, looking for things we can really bring to market someday soon. RenFuel is another good example of that. We were working with RenFuel for over a year before anybody here really heard of them before we started talking about them. There's a lot of deep work going into these things, probing, finding synergies. And in this case, as is disclosed in the filing, developing new technology. Our team contributing to some of the stuff this group was working on. We're really proving out the thesis early on before we commit any capital to it.

And I would also add to that our bias is not to be stealth, like certainly my buyers who want to be stealth. But it doesn't serve any purpose to discuss things that aren't going to be tangible and aren't going to be relevant to our shareholders. And even within our own organization, we compartmentalize it. We don't want David Winsness and the commercialization team distracted by things that aren't right in front of us right now. But when we can discuss it, we absolutely will, and we want to.

Coming up on the hour here. So, let's look at just one more question, and then I'll pass over to you for summary comments. Any thoughts on the stock split? I think it's a little premature to start talk about that, but I'll put the ball in your court to just address any sort of reverse stock split I should say.

No, we don't have any notions of that. We meet all 5 listing requirements of the Direct Stock Exchange, right? The easiest one to meet is typically the price and the other 4 are really substantive. So, there's no issues with delisting and there's no concept of stock split, reverse stock split in our mind at all as we sit here and speak. So no, we love our listing, and we love our liquidity, and we expect it just to get better.

So Corrado, could you please provide a summary of Comstock's near-term milestones that investors can look forward to?

No, thanks, Trevor, for all of that. We appreciate all those questions. And as you said earlier, if we didn't get to some of your questions, we'll follow up and look forward to answering them all. But just to wrap up, let me summarize what I would call our highest objectives, I guess in reverse order, starting with metals. We're going to run this facility up to 3 shifts by this summer, while initiating the expansion in Silver Springs at the existing manufacturing complex. We've already filed permits for the storage expansion, and we're preparing the permits for the facility scale expansion. So, it's just grow, grow, grow. From the fuels perspective, we're going to secure and announce the adoption of our technology with industry-leading partners and customers, possibly on every continent, starting with the Americas and including a highly valuable monetization of Comstock Fuels. As I said, GenMat is going to do the same exact thing commercializing with industry-leading partners and customers and monetizing its value through third-party capital. For mining, we will monetize, transact, and generate cash in the north and develop and publish a highly economic and valuable mine plan for ultimate production in the South. We're going to continue innovating towards this Holy Grail cost parity with petroleum, while and by expanding our network of innovation partners. And they and the technology will be world-leading. Lastly, eye on the prize, monetize $60 million of assets, put this balance sheet discussion to bed. We appreciate everyone's interest, and we look forward to many updates in between now and our next call in July. Thanks, Trevs.

Thanks, Corrado and Billy, and thanks, everyone, for joining Comstock's first quarter business update and outlook. As a reminder, please keep an eye out for Comstock's brief Q2 investor survey, if you have not already filled it out. This will be generated and completed and announced and posted on the company's Investors section shortly after the end of the Q2 quarter. Again, a link on for that is at the top of the Investors section. Also, today's recording is going to be present on that page as well. If you have any additional questions that have not been addressed today, please feel free to e-mail us at [email protected] and management and I will do our best effort to get back to you guys. Again, that's [email protected]. Thanks again. That concludes today's presentation. We look forward to keeping you all posted on Comstock's developments throughout the rest of the year. Have a great day.

Thanks, everyone.