Comstock Inc. (NYSE: LODE) (“Comstock,” “our,” and the “Company”),
today announced its second quarter 2024 results, certain business
and investment updates and an updated business outlook, with
significant progress from each business, corporate and collectively
across the system.
“While I have personally dedicated the
substantial majority of my capacity over the past several months on
successfully advancing strategic transactions, our equally
dedicated teams have been executing on their respective business
plans without interruption,” stated Corrado De Gasperis, Comstock’s
Executive Chairman and Chief Executive Officer. “Our fuels, metals
and mining businesses have all made significant advances while two
of our strategic investments achieved significant commercialization
milestones. The system itself has gained real traction.”
Selected Segment Highlights for the
Second Quarter of 2024
Comstock Metals
- Completed the critical
commissioning stages at our demonstration-scale production
facility;
- Demonstrated 100% recovery of all
glass, metal and mineral materials, ensuring a zero-landfill
solution;
- Secured a long-term lease for our
first industry-scale facility with 100,000 tons of annual
capacity;
- Received the county permit for
operations and storage for our first planned industry-scale
facility;
- Advanced work on additional state
operating permits required for the first industry-scale
expansion;
- Advanced agreements on long term
supply arrangements and commenced receiving solar panels;
- Advanced agreements on offtake
arrangements for all segments of recovered materials; and
- Hosted Nevada’s Senior Senator,
Catherine Cortez-Masto, for a full solar panel recycling facility
tour.
“Our recycling team is fully closing the loop
for end-of-life solar panel management by ensuring zero-land fill
solutions. Our demonstration facility is about to add a third shift
and we have completed the scaled-up designs and are preparing the
remaining state permits for our now leased and storage-ready,
industry-scale facility,” added Mr. De Gasperis. “Our team is also
fully engaged on both sides of the supply chain with active
collaborations for long-term supply agreements and offtake
agreements for all residual materials. We are on or solidly ahead
of schedule.”
Comstock Fuels
- Advanced sample production of
commercially available hydrodeoxygenated Bioleum™ Oil
(“HBO”);
- Validated higher yields of 125
Gasoline Gallon Equivalents (GGEs), expanding our leadership
position;
- Identified carbon capture and
utilization opportunity for further increasing yields to
potentially 150 GGEs;
- Advanced research and development
activities targeting further cost and capital reductions;
- Finalized project plans and
activities aggressively designed for achieving petroleum cost
parity; and
- Completed preliminary engineering
for our demonstration scale, lignocellulosic production
facility.
“The demonstrated yields from our process have
achieved such a strong level of sufficiency, that we have now
engineered a profitable commercial demonstration scale system to
produce lignocellulosic fuels, including SAF and Renewable Diesel,”
said De Gasperis. “The substantial work that our fuels team has
done over the past two years has met the prerequisite objectives,
enabling us to secure funding for our first commercial
demonstration facility.”
Comstock Mining
- Completed an internal preliminary
mine and reclamation plan with enhanced resources and
economics;
- Assessed productive post-mining
land uses and identified prerequisites for post mining
development;
- Assessed recoverability of silver
from metallurgical residuals from recycled solar panel materials;
and
- Commenced economic feasibility
assessment on extracting and refining recycled silver.
“Our economic assessment for the existing Dayton
resource, including projected cash flows, has dramatically improved
with gold up nearly $500 per ounce and nearly 25% year-on-year, and
13% just in the latest quarter,” added De Gasperis. “The high
silver grades evidenced from our solar panel residuals prompted an
entirely different opportunity for partnering with Comstock Metals,
leveraging our existing refining permits and capacity and uniquely
maximizing the value across the entire system. This is a nascent,
yet rapidly evolving opportunity.”
Strategic Investments (Minority
Investments by the Company)
Quantum Generative Materials (“GenMat”)
During 2023, GenMat developed and deployed its
proprietary Hyperspectral Remote Sensing Imaging (“HRSI”)
satellite, the GENMAT-1 into Low Earth Orbit (LEO) at an altitude
of roughly 520km above the surface of the Earth. GenMat also
deployed its proprietary Mission Control Software System, Saarthi
and HRSI software, known as the atomic sensor fusion platform or
ZenoASFP. The purpose of the GENMAT-1 mission is primarily for
researching and developing mineral exploration capabilities using
GenMat’s proprietary physics-based artificial intelligence (AI) and
newly developing hyperspectral sensing technology. Hyperspectral
imaging collects and processes information from across the
electromagnetic spectrum using contiguous bands, which can be
useful for precision mineral exploration, oil and gas exploration,
agriculture, and forest management.
GenMat recently announced its first commercial
customer agreement with Geometric Energy Corporation (GEC) for
managing the launch, deployment, ongoing operations, and
implementation of two new satellites to its managed LEO
constellation. The new satellites will generate additional
recurring revenues for GenMat once operating.
“Our goal is precise, accelerating the
commercialization of decarbonizing technologies. These are hard,
impacting technologies. Comstock Metals was first over the finish
line and now GenMat, and in each case, from multiple, remarkable
innovations, that represent first of their kind, fully integrated,
systemic solutions. That’s not luck and our shareholders should
start seeing a powerful trend,” stated De Gasperis. “Enabling
systemic decarbonization is one of the most difficult global
challenges. We are just at the starting line, but the real race is
definitely on.”
GenMat plans on adding more satellites to its
LEO constellation network and leveraging its proprietary mission
control, remote sensing, materials science technology and expertise
to enable the rapidly growing space economy.
Green Li-ion Pte, Ltd. (“Green Li-ion”)
Green Li-ion launched its first commercial
battery remanufacturing facility from fully recycled battery
materials that was attended by Comstock CEO Corrado De Gasperis,
Green Li-Ion CEO Leon Farrant, the Hon. Kevin Stitt, Governor of
Oklahoma; and many other local officials, suppliers and many
potential customers.
“Our strategic investments directly impact our
existing businesses but also create inherent value themselves. In
all instances, we were at the founding level of these hard
technology participants in the growing clean energy transition,”
said Mr. De Gasperis. “Participating with and enabling these
innovation-based advancements, from the earliest of TRLs to
commercialization is one of the most valuable and rewarding
segments of the capital markets.”
Corporate
Comstock recently announced the execution of an
indicative term sheet for $325 million ($315 million, net of
transaction fees) in funding through SBC Commerce LLC (“SBCC”), a
U.S. based, globally positioned, private equity group, subject to
final due diligence and any applicable regulatory approvals. This
significant series of milestones, representing a combination of
direct investments and asset sales, recognizes significant
valuations for the Company’s three businesses and secures timely
and essential growth capital to commercialize fuels, metals and
mining.
The transaction package includes $275 million of
gross, direct investments ($267 million, net of transaction fees)
into Comstock’s three main operating subsidiaries, including a $3
million direct equity investment into Comstock itself. The
agreements also include selling the membership interests in the
entities that own Comstock’s directly owned Nevada real estate and
water rights for gross proceeds of $50 million ($47 million, net of
fees) and a non-refundable deposit of $5 million, all subject to
remaining due diligence and approvals, final agreements, and
closings.
SBCC represents a strategic capital partner that
is facilitating the following components of the $325 million:
- $3 million investment in Comstock
Inc. with restricted common equity at $0.40 per share;
- $22 million investment in Comstock
Metals Corporation, for 20%, (with Comstock retaining 60%, on a
fully diluted basis after vesting of existing equity incentives for
its president);
- $50 million investment into
Comstock’s mining segment, for 40%, (with Comstock retaining
60%);
- $50 million to acquire the entities
owning the real estate and water rights in Nevada; and
- $200 million investment in Comstock
Fuels Corporation (with Comstock retaining 60%).
“The remarkable technical and economic
advancements made by our three business segments has led to this
opportunity for partnering with SBCC and enables the accelerated
development, commercialization, and operations of our businesses,”
stated Mr. De Gasperis. “We are working to close on each of these
tranches over the next 90 days, with initial investments and
deposits scheduled for the month of August. There has obviously
been a tremendous amount of work already completed and, in most
contexts, the hard work is just starting. Our teams never stopped
moving.”
Consolidated Financial
Results
For the three-month period ending June 30, 2024,
results showed:
- Increased revenues to $0.4 million,
from nil in the comparable 2023 period;
- Decreased loss from operations to
$5.6 million, from $5.9 million in the same 2023 period;
- Increased loss attributable to
Comstock to $8.6 million, from $5.5 million in the same 2023
period; and
- Net loss per share increased to
$0.06 as compared to the 2023 period net loss per share of
$0.05.
For the six-month period ending June 30, 2024,
results showed:
- Increased revenues to $0.9 million,
from nil in the comparable 2023 period;
- Decreased loss from operations to
$10.2 million, from $11.0 million in the comparable 2023
period;
- Increased loss attributable to
Comstock to $15.5 million, from $11.1 million in the comparable
2023 period;
- Net loss per share increased to
$0.12 as compared to the 2023 period net loss per share of
$0.11;
- Decreased total assets to $104.6
million, down from $106.5 million at December 31, 2023;
- Increased total liabilities to
$29.5 million, up from $28.2 million at December 31, 2023;
- Increased total debt to $10.0
million, up from $9.9 million at December 31, 2023;
- Extended the maturities on our GHF
Inc. and Alvin Fund note obligations until April 15, 2026; and
- Outstanding common shares were
157,820,072 and 175,283,728 at June 30, 2024, and August 6, 2024,
respectively.
OUTLOOK
Comstock Fuels
Comstock Fuels objectives for the second half of
2024 include:
- Closing on a $200 million
investment, primarily to deploy the first commercial demonstration
facility;
- Execute multiple, revenue
generating commercial agreements for industry-scale joint
developments;
- Advancing and expanding our
innovation network for even higher yields and lower costs; and
- Expand our integrated
bio-intermediate production system, including cellulosic ethanol
and HBO.
Our first commercial demonstration facility is
designed to be profitable and to confirm the scale of multiple
industry-scale facilities. Each joint development project could
result in millions of dollars of technical services and engineering
revenues and ultimately, license agreements for additional
production facilities that would generate royalty revenues.
Comstock Metals
Comstock Metals objectives for the second half
of 2024 include:
- Closing on a $22 million
investment, primarily to deploy the first two commercial
demonstration facilities;
- Commissioning the photovoltaic
material recycling;
- Commencing full, three-shift
production of the demonstration scale production facility;
- Confirming the ability to fully and
cleanly reprocess and reuse all residual materials;
- Advancing the technology readiness
for broader material recycling, prioritizing photovoltaics, to TRL
7;
- Expanding our existing revenue
generating supply and offtake commitments; and
- Finalizing the site selection for
our first three “industry-scale” facilities and commencing
permitting.
Comstock Metals has secured all permits for
operating its demonstration scale production facility in Silver
Springs, NV, with commissioning of operations occurring now with
ongoing production immediately thereafter. Comstock Metals has also
secured the initial county level permits for industry-scale
operations and storage and is actively engaged in expanded revenue
generating supply and now, also, residual material offtake
commitments.
Comstock Mining
Comstock Mining’s objectives for the second half
of 2024 include:
- Closing on a $50 million
investment, in part, to finalize the resource, design and mine plan
for Dayton;
- Receive cash proceeds of more than
$2 million from mineral leases leveraging the northern district
claims;
- Commercialize mineral development
agreements that enable expansion of the central district
resources;
- Develop with GenMat, AI-based
exploration tools, using Comstock's extensive geologic data along
with GENMAT-1’s hyperspectral imaging solution to condition,
develop and validate the AI predictions; and
- Complete the mine plans that
enables the economic development of the southern district
claims.
The Company’s 2024 efforts apply economic
analysis to Comstock’s existing gold and silver resources
progressing toward full economic feasibility for the southern part
of the district and the ultimate development of full mine and
reclamation plans and the development of post productive land and
community development plans.
Strategic Investments
Investment in GenMat
GenMat’s objectives for the second half of 2024
include:
- Elevate new
material simulation to TRL 7 by synthesizing and directly testing
the AI’s ability to predict material properties to confirm the
precision and accuracy of those simulations;
- Commercialize
its space-based hyperspectral imaging sensor for mineral discovery
applications; and
- Commercialize
physics-based AI solutions to clients for advanced materials and
satellite enabling solutions.
GenMat has recently announced revenue generating
agreements as GenMat’s technologies, including its space-based
satellite systems, are maturing much faster than anticipated, with
multiple commercial agreements now likely in 2024.
Investment in Green Li-ion
Green Li-ion continues making meaningful
progress in the development and deployment of its system that
remanufactures critical precursor cathode active materials
(“PCAM”), having now deployed its first commercial battery
remanufacturing facility from fully recycled battery materials
deployed. The Company intends to sell the remaining 35,662 Green
Li-ion preferred shares in late 2024 or early 2025.
Investments in others non-mining real estate,
water rights and securities
The Company has announced an indicative
agreement selling its non-mining real estate and water rights for
$50 million in gross (approximately $47 million in net
proceeds) during the fourth quarter of 2024.
CONFERENCE CALL DETAILS
Comstock will host a conference call today,
Thursday, August 8, 2024, at 4:30 p.m. ET to report its Second
Quarter 2024 results and business update. We invite all investors
and other interested parties to register for the webinar at the
link below.
Date:
August 8,
2024Time:
1:30 pm PT / 4:30
pm ETRegister: Webinar Registration
HAVE QUESTIONS? There will be an allotted time
following the results presentation for a Q&A session.
Unaddressed questions will be reviewed by management and responded
to accordingly. You may submit your question(s) beforehand in the
registration form (linked above) or by email at
ir@comstockinc.com.
About Comstock
Comstock Inc. (NYSE: LODE) commercializes
innovative technologies that contribute to global decarbonization
by efficiently converting under-utilized natural resources,
primarily, woody biomass into net zero renewable fuels, end-of-life
metal extraction, and generative AI-enabled advanced materials
synthesis and mineral discovery. To learn more, please visit
www.comstock.inc.
Comstock Social Media
Policy
Comstock Inc. has used, and intends to continue
using, its investor relations link and main website at
www.comstock.inc in addition to its Twitter, LinkedIn and YouTube
accounts, as means of disclosing material non-public information
and for complying with its disclosure obligations under Regulation
FD.
CONTACTS:
For investor inquiries: RB
Milestone Group LLCTel (203)
487-2759ir@comstockinc.com
For media inquiries or
questions: Comstock Inc., Zach SpencerTel (775)
847-7532questions@comstockinc.com
Forward-Looking
Statements
This press release and any related calls or
discussions may include forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements, other than statements of historical facts, are
forward-looking statements. The words “believe,” “expect,”
“anticipate,” “estimate,” “project,” “plan,” “should,” “intend,”
“may,” “will,” “would,” “potential” and similar expressions
identify forward-looking statements but are not the exclusive means
of doing so. Forward-looking statements include statements about
matters such as: future market conditions; future explorations or
acquisitions; future changes in our research, development and
exploration activities; future financial, natural, and social
gains; future prices and sales of, and demand for, our products and
services; land entitlements and uses; permits; production capacity
and operations; operating and overhead costs; future capital
expenditures and their impact on us; operational and management
changes (including changes in the Board of Directors); changes in
business strategies, planning and tactics; future employment and
contributions of personnel, including consultants; future land and
asset sales; investments, acquisitions, joint ventures, strategic
alliances, business combinations, operational, tax, financial and
restructuring initiatives, including the nature, timing and
accounting for restructuring charges, derivative assets and
liabilities and the impact thereof; contingencies; litigation,
administrative or arbitration proceedings; environmental compliance
and changes in the regulatory environment; offerings, limitations
on sales or offering of equity or debt securities, including asset
sales and associated costs; business opportunities, growth rates,
future working capital, needs, revenues, variable costs, throughput
rates, operating expenses, debt levels, cash flows, margins, taxes
and earnings. These statements are based on assumptions and
assessments made by our management in light of their experience and
their perception of historical and current trends, current
conditions, possible future developments and other factors they
believe to be appropriate. Forward-looking statements are not
guarantees, representations or warranties and are subject to risks
and uncertainties, many of which are unforeseeable and beyond our
control and could cause actual results, developments, and business
decisions to differ materially from those contemplated by such
forward-looking statements. Some of those risks and uncertainties
include the risk factors set forth in our filings with the SEC and
the following: adverse effects of climate changes or natural
disasters; adverse effects of global or regional pandemic disease
spread or other crises; global economic and capital market
uncertainties; the speculative nature of gold or mineral
exploration, and lithium, nickel and cobalt recycling, including
risks of diminishing quantities or grades of qualified resources;
operational or technical difficulties in connection with
exploration, metal recycling, processing or mining activities;
costs, hazards and uncertainties associated with precious and other
metal based activities, including environmentally friendly and
economically enhancing clean mining and processing technologies,
precious metal exploration, resource development, economic
feasibility assessment and cash generating mineral production;
costs, hazards and uncertainties associated with metal recycling,
processing or mining activities; contests over our title to
properties; potential dilution to our stockholders from our stock
issuances, recapitalization and balance sheet restructuring
activities; potential inability to comply with applicable
government regulations or law; adoption of or changes in
legislation or regulations adversely affecting our businesses;
permitting constraints or delays; challenges to, or potential
inability to, achieve the benefits of business opportunities that
may be presented to, or pursued by, us, including those involving
battery technology and efficacy, quantum computing and generative
artificial intelligence supported advanced materials development,
development of cellulosic technology in bio-fuels and related
material production; commercialization of cellulosic technology in
bio-fuels and generative artificial intelligence development
services; ability to successfully identify, finance, complete and
integrate acquisitions, joint ventures, strategic alliances,
business combinations, asset sales, and investments that we may be
party to in the future; changes in the United States or other
monetary or fiscal policies or regulations; interruptions in our
production capabilities due to capital constraints; equipment
failures; fluctuation of prices for gold or certain other
commodities (such as silver, zinc, lithium, nickel, cobalt,
cyanide, water, diesel, gasoline and alternative fuels and
electricity); changes in generally accepted accounting principles;
adverse effects of war, mass shooting, terrorism and geopolitical
events; potential inability to implement our business strategies;
potential inability to grow revenues; potential inability to
attract and retain key personnel; interruptions in delivery of
critical supplies, equipment and raw materials due to credit or
other limitations imposed by vendors; assertion of claims, lawsuits
and proceedings against us; potential inability to satisfy debt and
lease obligations; potential inability to maintain an effective
system of internal controls over financial reporting; potential
inability or failure to timely file periodic reports with the
Securities and Exchange Commission; potential inability to list our
securities on any securities exchange or market or maintain the
listing of our securities; and work stoppages or other labor
difficulties. Occurrence of such events or circumstances could have
a material adverse effect on our business, financial condition,
results of operations or cash flows, or the market price of our
securities. All subsequent written and oral forward-looking
statements by or attributable to us or persons acting on our behalf
are expressly qualified in their entirety by these factors. Except
as may be required by securities or other law, we undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise. Neither this press release nor any related calls or
discussions constitutes an offer to sell, the solicitation of an
offer to buy or a recommendation with respect to any securities of
the Company, the fund, or any other issuer.
Comstock (AMEX:LODE)
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