Comstock Inc. Q2 2026 Earnings Call

Good afternoon, and thank you for joining Comstock Inc.'s second quarter 2026 results and business outlook. I'm Zach Spencer, treasurer and corporate secretary. Today is Thursday, July 23rd, 2026. We are streaming live and this session is being recorded. A recording will be posted shortly after we adjourn in the investor relations section of our website. Today, we filed our Form 10-Q for the quarter ended June 30th, 2026, and issued a press release summarizing quarter-end results. Both documents are available on our website. As a reminder, Comstock is listed on NYSE American with the ticker LODE, L-O-D-E. Joining me today are Corrado De Gasperis, Comstock's Chief Executive Officer, and Judd Merrill, Comstock's Chief Financial Officer. After their prepared remarks, we will take questions. We received more than 40 questions in advance of the call. If you have additional questions during the call, please use the Zoom Q&A window.

We are extending this webcast today to address as many questions as possible. Today's discussion will include forward-looking statements. Actual results may differ materially due to risks and uncertainties detailed in our SEC filings. Full risk disclosures can be found in our filings on the investor relations page and on the SEC website. With that, it is my pleasure to introduce our Chief Financial Officer, Judd Merrill. Judd, you may begin. Thank you, Zach, and welcome everyone.

I'd first like to briefly touch on this slide. Over the past several months, we've worked intentionally to build a stronger capital base and surround the company with high-quality investors, strategic partners, and commercial relationships. We view these relationships as important validation of the progress we've made and opportunities that are ahead. Before I begin my financial remarks, I'd like to recognize our board of directors. We have an exceptionally engaged and experienced independent board that is actively involved across every aspect of the company's strategy and governance. Our directors are highly focused on disciplined capital allocation. They remain fully informed on our liquidity and cash position, and they work closely with management to ensure that we deploy capital carefully and judiciously. This is primarily towards accelerating our metals recycling platform and advancing the monetization of Sierra Springs investment.

Of the board, there's committees, and each committee is playing an important role as the business evolves. Our audit committee is actively overseeing our financial reporting, risk management, and the implementation of controls that support our new Comstock Metals operations. Our compensation committee continues aligning both the annual incentive plans and the long-term equity incentive with shareholder value creation. That means that these are truly performance-based incentives. Our environmental committee is providing important oversight as we advance first of kind permitting and sustainable operations. Now I will move to some comments on the quarter. Our second quarter progress represents another set of important achievements in completing Comstock's transformation. Last quarter, we talked about positioning the company for execution. This quarter, we have begun executing on virtually every major objective we laid out at the beginning of the year.

Our balance sheet remains strong, our business has become significantly simpler, and our first industry-scale metals recycling facility is ready. We continue advancing several high-value monetization opportunities, including the sale of the mining assets, the positioning of the sale of our real estate through the now nearly 50%-owned Sierra Springs investment. Here are a few financial highlights from this quarter. We ended the quarter with approximately $31.4 million of cash and no debt. We also ended the quarter with total working capital of $39.9 million, reflecting current assets of $58.1 million against lower current liabilities of $18.2 million. We do expect another $20 million in cash in August once we close on the securities purchase agreement and sell 100% of our legacy mining assets to Mackay Precious Metals.

That sale of the mining assets will also remove all mining reclamation liabilities and related bonding requirements and associated costs from our balance sheet. That's while retaining an upside in both the NSR royalties across the district and retaining meaningful equity in Mackay. The mining sale will also eliminate annual costs of about $1.4 million and free our capacity to focus more on the recycling business. Our outstanding share count at June 30th, 2026, was only slightly changed since we filed our first quarter 10-Q, reflecting only director stock compensation. We are also added to the Russell 2000 and the Russell 3000 indices in late June. We believe that represents another step in strengthening our institutional capital base.

Let me spend a minute and review how we deployed the capital during the first six months of the year and some color on why and what we are investing in. Our largest source of cash this year was our January equity financing, which generated approximately $56 million in net proceeds. We also generated nearly $6.5 million in additional proceeds, and that includes receiving over $2 million in cash from mining asset sales, including the sale of some older royalties, mining rights, and the recent discount sale of a note receivable. I received another $1.8 million from debt extinguishment related to recoveries where there was a make-whole provision, and that resulted in positive funds coming back to us. There was $2.6 million solar panel recycling revenue. That's including the deferred revenue from our growing metals operation.

That's where the sales in June and then continuing even in this month of July, were about double the rate that we experienced in May and the prior months, and we're just beginning to bring in larger recycling operations online. On the uses side, virtually all of our investments were intentional growth investments. Let's review those. Approximately $21 million was invested into Sierra Springs. It enabled the close of over 2,200 acres of land and nearly 2,000 acre feet of water rights. That's effectively consolidating one of northern Nevada's premier industrial land and infrastructure opportunities, while simultaneously increasing our ownership in Sierra Springs to nearly 50% and positioning for major future monetization. We also spent approximately $5 million completing the first industry-scale metals recycling facility. That's including the equipment installation and commissioning.

Another $1.3 million expanding our product upgrade capabilities, particularly our higher value glass products, and approximately $1.4 million in advancing our new metals recovery technologies, and approximately $3 million metals operating costs as we ramp up operations and expand the sales. We are deploying this capital as planned with product upgrade, CapEx, and metal recovery R&D accelerated on the heels of our January equity offering. We believe this deployment will generate better, higher future operating cash flows for metals. Metals billings during the quarter continued to ramp up, especially in June and now July, reflecting both activity from our small demonstration facilities together, plus deferred revenue associated with the growing customer and sales collection. Our new storage area is completely graded, fenced, and ready to open, and the total panels on the ground and ready for processing approach 9,000 tons.

With our first industry scale facility beginning continuous operations in August, we expect revenue to increasingly transition from decommissioning activities to our industry scale commercial production. Operating expenses remained as expected. Those investments included efforts for commissioning our first industry scale facility, expanding commercial organization, building operating infrastructure, advancing product upgrading capabilities, and developing downstream metals recovery technologies. These are planned investments designed to support multiple future production facilities, not just our first operating facility. Now, looking ahead at the objectives for 2026. As we move through the second half of 2026, the financial story begins to change. Our capital spending associated with the first facility is complete. Our focus now shifts towards operating performance, throughput, customer growth, and generating higher and higher revenues.

While we're working on that, at the same time, we'll complete the monetization of our mining assets, monetize opportunities associated with Sierra Springs and our remaining real estate, expansion of our metals platform into additional locations, and refocusing Bioleum's strategy by advancing commercialization, integrating Hexas, and attracting third-party capital. Even after recording this quarter a non-cash, non-strategic impairment, which is part of simplifying and strengthening our balance sheet, the carrying value of our investments increased to approximately $67 million. We are continuing to clean up the balance sheet, maintain a stable liquidity position, and remain highly focused on disciplined cash on return investment decisions. Now I will turn it over to Corrado to discuss these corporate and subsidiary objectives in greater detail.

Thanks, Judd. Corrado. Appreciate it very much.

I think I'm going to give just some color on a lot of what Judd said, maybe some visual. This probably might be the last time we show this slide, but just maybe to segue into real production. This was the slide that we had even before we built the demonstration facility. Now today, we've completed all the pilot work. We then subsequently ran the demo facility for two and a half years. It's still running because it's effective. We keep processing panels through it and testing other panels and types of panels as they come through. Remember the four fundamental tenets that we still think are the prime differentiators. We still do not see a competing system that can eliminate all contaminants. We don't see a system that can eliminate all those laminates, plastics, glues at all.

We can do it very efficiently with no harmful emissions, we do it effectively, which is the most important thing, because eliminating those contaminants allows us to produce clean, saleable materials. If they're not clean, if they're contaminated, then we're a hazardous waste generator. We don't have a permit to be a hazardous waste generator. We have a permit to be a recycler of clean materials. We do it at an extremely low variable cost, those things will start to become visible after a quarter or two here that very efficient use of natural gas, very efficient use of electricity, those are our two primary variable costs. It's like the 92%, 93% of our variable costs. We do it at high speed, which makes it scalable. We're effective in terms of the output, and we're effective in terms of our ability to scale.

This cartoon becomes a reality. We now have the industry scale 001, first of its kind, deployed. What we've deployed and what we intend to start running immediately here in August is at about 25% capacity. In August, we will be ramping that up over the course of the month, we will start feeding panels in the front and getting panels out the back. September, October, November, December, as far as our plans are concerned, will be at least 25% capacity. It might be 25% capacity for four months. That's very important for us. It's very important for us that everyone, especially our customers, can see this showcase, can see what we're capable of doing, and how we're capable of doing it. Very transparent with the money that we spent.

Judd mentioned almost all of these numbers, 12 and a quarter million for that full system that you just saw in that schematic. We were planning to spend a million and a quarter, $1.2 million, $1.3 million with NV Energy. They got delayed. We put in our own power generating system for a little bit more than that's portable. We've got some nice optionality there, regardless, we can generate power. We spent a little bit on the rolling stock because storage became a critical aspect as all these panels are going to be coming in, we've created a pretty huge storage capacity right next door. That's it in a nutshell.

I think Judd mentioned a smaller number, Judd, we ended up with the additional add-ons to the Eddy system, spending almost $1.8 million, $1.9 million on the product upgrades. Those product upgrades are immediately effective. They've been completely stress-tested. They're fully operating. It allows us to produce not only high-specification glass for sale. Now we have more than enough customers for taking that glass as it comes online. We also were able to get residual metals and residual materials. As everybody probably is tired of hearing from us right now, we capture it all and we sell it all. Those product upgrades have multiple value enhancements to us and certainly major de-riskers. When we raised the money in January, we said we'd spend up to $10 million in a metal extraction capacity.

This will also be first of its kind. We're ahead. We're moving very fast on deploying a 1 ton per day metal recovery system this year. That's a pilot. Okay. That's a pilot. 1 ton a day pilot by the end of this year is what we're really, really pushing hard for. Very important in that process is validating, both technically and efficiency-wise, economically, that we can extract and yield high amounts of silver from those industrial tailings that we're producing. That we're doing that, we've engaged third-party resources that are helping us do that. It's currently not being done in Silver Springs. It may end up very well being in Silver Springs by the time we're done. We'll see. That would be a 1 ton a day system. That's not to be confused, right, with the 100,000 ton annual capacity that we have now deployed.

This is in addition to that. The product upgrades and the up-speccing of the glass is in addition to that. Not to be defensive, we are a few months later than we thought in terms of bringing the big machine online, even though it's imminent now. It's imminent. It's going to be done by the end of this month in terms of full testing and full commissioning. Then we will be ramping it up in August. We also added a 1 ton a day pilot system to the scope of our projects. We accelerated that aspect of what we were doing, and we added the product upgrade. That was by market demand, right? We responded to the market quickly in terms of glass and certain residuals, and we accelerated our own plans for a pilot. Now, you do a pilot for specific reasons.

You don't do it for academic reasons, okay. We need to prove out that this will be both technically and economically feasible. Technically means we want to recover all of these materials. We don't see anyone that has done this before with these types of materials. We did submit a grant for this, by the way. Government was fast and furious in their demands. We submitted it in January. They still haven't awarded it to anybody. We never intended to wait. Even though we're still in the running for some of those monies, and it would be wonderful if we got them because they might be in time for the demo unit. We didn't wait in terms of that capital to start piloting. That's why we raised the money in January.

2026, we're going to spend that extra $2 million and prove out the extraction of silver, hopefully, and get a one ton a day operation that then we can take to the next level in 2027 with what we would call a commercial demonstration system. Commercial in the sense that it's 25x scale-up, also in the sense that you build a supply chain around that, exactly like we did with our recycling demo facility. This is a picture from the annual meeting. Many of you were there. I think you can see the bus back here. Two reasons I wanted to show this aerial shot. One is where you see cars or in the back here or where you see empty space in the front here, those are all covered with solar panels now.

I drove around last Thursday through the entire parking lot, I had to make sure I didn't scratch the truck. It's tight. The good news is now you can see a bird's eye view of the storage area. That'll hold easily 25,000 tons of material. Embarrassingly, we're just plugging in the last electrical outlets and installing a toilet in the little supervisor building, it's up and running. Everything's come together very nicely. It's a tremendous amount of work to get all of this done. This is more than just an industrial scale recycling facility. This is literally our platform and our campus for recycling, for upgrading, for piloting and testing the new processes and technologies, and for storage. Silver Springs is really the hub of all of that. The equipment is all here. It's substantially all installed. There's only one or two more steps of connectivity and stress testing to go.

No fatal flaws. Supremely advanced scrubbers and air pollution control you see on the left. Highly automated arms you see on the right. These robotic arms have been stress tested to the point where they've exceeded our expectation. Not by a lot, our expectations were pretty high. What do I mean by that? Some of you may have seen the videos that were posted. The thing that's impressive is that we were able to stress test the loading system for an extended period of time, essentially loading two panels every 13.7 seconds. You can time it on the video if you wanted to prove me out. That means we are actually loading a panel faster at every seven seconds. There's two things that are very important there.

One, obviously, that brings us to the 3.3 million panels per year capacity that we are looking to affect. This is the constraint of the system. This is if the arms aren't moving, then throughput's not flowing. Also, you can see in the video, it's not greased lightning. It's not scary fast. It's not like stand out of the way or you're going to get your head taken off. This is a very stable, very methodical, very automated, continuous loading. We just don't waste any seconds. We keep doing it. The metal recovery system, as I mentioned, wasn't even in the original plan. We thought we were producing the cleanest glass. We were, when some of the more sophisticated customers came in, they asked for even cleaner.

Kudos to the team for being so responsive, so dedicated, so knowledgeable that we were able to deploy these systems and have them operate. We're not just producing high spec clean glass, we're also recovering some of the metals that some might have thought were inconsequential. The 1 ton a day is really designed to be the second maximizer. We get the clean aluminum, we sell it all. We get the glass, we upgrade it, we clean it, we sell it to various customers. Now we take these industrial tailings, this is the real development effort. This is the first 2 million and then 8 million to really get to the point where we can be ready to scale this also to industry scale. So far, everything's coming together.

I think if you did the analysis is that in the grand scheme of what we wanted to do plus what we added on doing, I would say we're on schedule, if not slightly ahead of schedule. To me, that's kudos to Dr. Villamagna and an incredible team of operators and engineers that just are working their butts off. Many of you met them, of course, as you came to visit the facility. What we're seeing in the market is getting updated. We're getting more and more intimate with marketing data. We're doing more and more analysis of the panels that are deployed. We're starting to get very specific with all the panels, all the ages, all the dates, all the locations. More importantly, engaging the customers and the people that are in there. There are ranges of possibilities here.

It's interesting for us because the age that these things come off are highly sensitive. Everyone's talking about panels lasting 25 years. We know that's not true. We're seeing panels come out anywhere from 14 years to 18 years. We looked at the sensitivities of our database on what if everything came out at 14, which won't happen. What if everything came out at 18? What if things came out higher? What if things came out lower? We're getting a good handle on these ranges, and we're learning some things. One of the things that we learned is that the ultimate macro scale up might be a little slower than anticipated, we're seeing regions like Texas and North Carolina that are actually bigger today than we originally estimated they would be based on the ages.

We're modifying our views of how we would roll out the rest of the network. Fortunato has come up with some pretty remarkable phasings of our deployments where instead of deploying 100,000 tons day one, you could deploy 25, increase it quickly to 50, increase it to 75, increase it to 100. We haven't made any decisions on any of that, I think what's important is we won't make any decisions to deploy the next production equipment until the first facility's up and running, until the first facility is running profitable, until it starts scaling up.

However, we are site-selecting Ohio, we are site-selecting northern Nevada, we are looking in Texas, we are looking on the East Coast, and we're looking at is there a smarter, more intelligent way to secure market share, minimize the cost of the supply chain, grab those customers, and then scale that capital more intelligently. These, for us, are very, very positive advancements. There's more deployments across the U.S. than we originally thought. That means panels already out there. That means panels already that have been in production. You saw that we announced an OEM. We got an OEM with Illuminate. Remarkable customer. Over a year of working that customer because a competitor had entrenched themselves. We really expressed positively what we thought we could do, and apparently to the customer, that was better than what they thought other people could do. We're very pleased with that.

It's another segment of the market. The utility segment is the biggest segment of the market. It's the one we're doing the most work and analysis on. Sorry about that. What's even more remarkable is new developments. Normally when you're an end-of-life discipline, new developments are sort of in the back of your mind. They're sort of not on the forefront of your marketing work. We're seeing breakages in these installations. Again, those are not as persistent, as reliable, as continuous, but they're higher than we would've expected, and we've got a lot of trucks that have come in just from breakages, especially in Texas. We have not changed any of the foundational or fundamental aspects of our guidance. Silver price is down, so we're keeping a monitor on that.

You all have heard from us that we don't love the idea of selling our tailings and only recovering portions of the silver value. Excuse me. We're excited about accelerating our own metal recoveries. We can't wait to see the results from that. We can't wait to share the results from that. We do see clearly, if you just look at the utility segment, which depending on how you estimate the market, could be 60% of the market, could be 65% of the market. We see clearly in the next four and a half years a cumulative of 1 million tons coming out. Now, we've got analyses depending on those age ranges that says could be that much in a year. We have analyses that says it could be half that much in a year.

The bottom line is we see a lot of panels coming out in the next four and a half years. We have a much stronger intimacy as to where they're coming from, and we believe we could not be better positioned to lead in this market. A lot of wood to chop, a lot of execution to do. As Jed said, we're expanding our capabilities for all of that purpose. At the end of the day, it comes down to this. Finish the commissioning. We're weeks away. We'll be done with those commissionings by the end of this month. We will start feeding panels in in August. There'll be some time before we ramp up to a certain rate, then we'll keep it either steady at that rate or growing from there. We've already upgraded the lines capable of making the high-spec glass.

We've already finalized the design of the downstream recovery. We're piloting the heck out of it. We've selected site number 2. We've selected site number 3. We're looking and very close to selecting 4. We're more than halfway through the year. We've got more than half of these things done already. Operating a one-ton-a-day system. Ordering that equipment for the second facility, and we're revisiting, as I mentioned, how do we do that? How do we phase that? We ain't doing it until one is up and running, till one shows us successfully, like the ramp, that we're expecting to see it. More and more of our capacity is being allocated to securing larger and longer-term supply agreements.

As Jed said, the compensation programs are fully aligned to these objectives on an annual basis, and they're fully aligned to our equity values On a long-term basis. I'm going to spend a little bit of time talking about Sierra Springs because we deployed a lot of capital this quarter. I'm going to spend a little time talking about Bioleum because we're getting good inquiries about it, we'll open it up for questions if that's good. I think everybody knows we're in a great location. I think the location's great because we're one truck day away from about seven states and 75 million people. It's an extremely well-infrastructured location, as the crow flies, very close to the California border, with huge industrial expansion happening.

The industrial expansion that was happening in Reno, the industrial expansion that was happening in this northern part of the industrial park is pretty well documented. When this connecting highway came down to Silver Springs, it didn't just enable Silver Springs, it opened up the entire quadrant. Now what's happening in northern Nevada is quite remarkable. It's quite remarkable in terms of the quality of companies that are coming in. It's quite remarkable in terms of the magnitude of companies that are coming in. It's even more remarkable in terms of the capital and infrastructure that they're building.

When one CEO says, "We're going to spend $100 billion in the next 10 years," within a year of saying that, has 2,600 acres under construction in the Tahoe Reno Industrial Center, just secures another 500 right in Silver Springs, they're walking the talk, we're feeling it. This might be the best-kept secret in the nation in terms of these industrial developments. We're fixing to help try to change that. What we've put together through this vehicle, Sierra Springs, which had always been a novel, curious potential monetization of a small percentage of something, it's just got much bigger than that. Our board's been extremely diligent here. Check the boxes. Land is land. Infrastructure is infrastructure. Where's the power?

As soon as we were able to step in and secure that power, Comps changed, values changed, but most importantly, market interest changed. A minimum of 300 megawatts puts you in the major leagues. Getting over a gigawatt makes you headline news. We're being very pedantic about making sure the readiness is sufficient for these counterparties. We're in regionally, locationally, logistically, a very good place. Even environmentally, it's not only a stable, dry temperature, which is ideal for the operation of these kinds of facilities. It's extremely safe insofar as natural hazards are concerned, earthquakes, tornadoes. We don't experience those things in our geography. Certainly not like in the rest of the country. We've put together enough acres and enough power to make it interesting to a lot of people.

We've looked at the various types of power and how it can be generated from that gas commitment. We've also acknowledged that even though the grid hit a wall, the Greenlink project by NV Energy bringing 4 gigawatts. The only negative concern with NV Energy is delay. It's just taking so much longer. When you talk to hyperscalers, when you talk to people with serious ambitions about compute and power, there's comfort in the grid. There's comfort in transitioning to the grid. There's comfort in partnering with the grid. The grid is going to be tremendously complementary to what we're doing in the future in Silver Springs. The one thing that most people don't think about is fiber. Do you have fiber? Do you have transmission of data? We might be in the best location other than being smack dab in Silicon Valley in that context.

We cover it all: power, flatness, geography, climate, temperature, to put together an offering that we want to monetize. Our goal, and hopefully you're feeling it. When we were getting a lot of inquiry in Q1, we weren't able to say a lot of things because the transactions were being negotiated, the approvals were being sought. Both boards, Comstock, Sierra Springs, have approved this consolidation of everything that you see in front of you, which then allows us to go to market in unison, in alignment. Really monetize this thing. People ask me timing. We do think that we will launch this marketing effort later this summer. We do think we will be engaged very quickly with a lot of very prominent counterparties. We do think we can structure transactions before the end of the year.

Remember, most of these firms will take 90, 120, 150 days of due diligence. We're making sure that regardless of how long that due diligence takes, the answers are going to be the answers that they're seeking, okay? We're self-disciplined in that regard. We don't know when we'd actually monetize. Hopefully, it would be sooner thereafter. Also, the power commitments phase, right? We got a lot coming in 2028. We have even more coming in 2030, okay? We're positioning this thing so that the counterparties see it as very strategic, very significant, and very growth-enabling for them. Just lastly, and I'll do this briefly, Bioleum has been moving forward under the radar. We haven't been speaking about it as much, quite frankly, and hopefully you see because we're bringing an industrial metals business fully online. It's our number one priority. Selling our mining assets, that's done.

We're weeks away, hopefully, from closing that. The only thing that's holding that up, I think Judd said it, is TSX clearance. We talk to them on a 2 or 3 times a week basis. Everything's going fine with the TSX. They just spoke with them yesterday. We expect this is imminent. Sierra Springs has taken the lion's share of my capacity, and now other Comstock resources. We're pleased with the progress. There's a lot that's going on there. The Bioleum team, following the RenFuel acquisition, following the Hexas acquisition, really recalibrated in a much, much more focused, much more realigned way their thesis. Their thesis solves the industry's problem. The industry is bottlenecked by feedstock. There's an abundance of woody biomass in the world. You've heard us say that a bazillion times.

The abundance of woody biomass, when it's diverse, disparate, and all over the place, makes it very, very difficult to build and deploy capital unless you have reliable, consistent, long-term offtake agreements for feedstock. Acquiring Hexas solved that problem. We now have the technology, the capability, the feedstock to ultimately deliver the fastest-growing, highest-yielding, lowest-carbon, lowest-cost solution that you see right in front of you, that can be converted with our facilities in Madison, Wisconsin, which you see right in front of you, which will allow us to control the integration of this farm-to-fuel platform so that when you are looking at site selection, you can put it where it's reliable, where you want it to be, and it can be fully integrated. You won't be dictated by the unreliabilities of these various feedstocks. Can we convert waste wood? Yeah. Will there be opportunities to do it? Yeah. It's a convenience for us.

It's a bonus for us. It's an enhancement for us because we've integrated a solution that's better, and it's much better. The fact that you can grow a perennial crop, that means you don't have to plant it every year, that has the highest yielding tonnage of any known usable biomass in the industry, okay? Where it grows even on marginal lands, where food isn't capable, where it's already been EPA-approved as a feedstock, where we can leverage existing farming infrastructure. It was designed for that purpose. Basically describe it as a corn stalk and a bamboo stalk having a baby. There's no vegetable. It grows in marginal climates. It grows fast, it grows strong, and it has a strong lignin content. It was almost tailor-made for this marriage.

You combine that crop with our process technologies, our conversion technologies, and I would say the world's leading lignocellulosic team. You can produce more fuel per acre of land than anything that even comes close. Having said that, you can produce many, many other things with this feedstock. An interesting pull that we have right now is Hexas being able to sell solutions and sell feedstocks to others, and we expect that's going to be happening in the short term.

This is not a slide that I want to cover here, but basically what is relevant to know is from everything that Marathon did with their Virent technologies, taking sugars to fuels and sugars to oils, everything that RenFuel did, esterifying and making oils from lignin, everything that NREL, MIT, and these others have been doing to advance lignocellulosic solutions for fuels, and everything Hexas has done to frankly unblock the true bottleneck in the industry, we've amalgamated into one system, into one company, into one solution. We have it all in one place. We're not any less excited. We're disappointed at the speed that things move forward. We're disappointed at some of the readiness that we thought was in place that wasn't in place. We're being transparent and frank about it.

We're downsizing, we're streamlining, primarily because we're focusing on the solution that actually is integrated, primarily because we're focusing on the solution that actually works. Okay? It's going to be commercializing. I believe we will have revenues in 2027, other than from Bioleum generating fuels. We won't have any revenue from Bioleum generating fuels. We'll have revenue from Bioleum generating materials for fuels. We'll have revenues from Hexas, and that will be very exciting for us. We're also getting and continue to be approached by the leading government and the leading university and the leading technical segments of the market to want to partner with us on this solution. It's very proud to say the National Lab of the Rockies and MIT is our partner and we have exclusivity of that tech and we're advancing it, but more are coming.

More are coming soon in terms of those partners and with grants and with money that will come with that as well. We do expect revenue. We expect it next year. We expect to be able to raise capital both non-dilutively and from third parties at the subsidiary level, also non-dilutively for LODE shareholders, before the end of this year. We're realigning, we're recalibrating, and then we'll move forward to that end, hopefully very soon. This is the famous summary. It hasn't really changed materially, other than we're seeing an amalgamation in Silver Springs to the extent that all we were able to. I think Judd mentioned it's not a small feat.

Our increase to almost 50% of Sierra Springs Opportunity Fund was coincident with funding them closing on 157 parcels of land representing over 2,000 acres of land, representing over 2,000 acre feet of water rights. That's all owned now. No big obligation, no big monkey on the back. That's owned. We own half of it, plus our properties. When you put those together into one thing, it's highly valuable, and that's what we're going after. I think, Zach, it's good. Let's turn to questions if that's okay.

Thank you, Corrado. As I mentioned at the beginning of the call, we received more than 40 questions prior to the call, and I can see we have a number of additional questions coming through Zoom.

Great. Corrado and Judd, our first question is, does Comstock Inc. expect adjustments in the number of outstanding shares?

Yeah. In the number of outstanding shares, no. If that question's talking about future issuances of shares for equity raises or anything like that, as we've talked about, a lot of the CapEx spend is behind us. We got first facility funded, paid for, second facility well-funded. The R&D activity is well-funded. We are just focused now on executing, and that's our focus is just getting that up and running. We also have some additional dollars coming in from the mining asset sale. We remain strong on our balance sheet and to be able to fund the future.

Thank you for that, Judd. Our next question is, how long until this company starts making money?

We have been making money from the pilot operations. We will start making additional as we ramp up the plant. I think the question really probably is more about when do we start getting cash flow positive? We've always talked about plant number 1. Once we reach 20%-20+%, we're generating cash from an operation standpoint. Then if we think about company-wide, once we start hitting that 40%-50% of operations just from plant number 1, we're covering all the cost, and we start generating cash. That's not too far off.

Going specifically to Comstock Metals, here is a two-part question. Which company is Comstock's most significant competitor? How will Comstock be able to gain and keep enough business to become and stay profitable?

I'll take that one. I think starting from the second and going backwards maybe, Zach. The panels are out there. I mentioned it earlier, our studies show that the panels are out there. We now know more intimately. We've always known a lot. I don't want to make it sound like we're just seeing this stuff for the first time. Absolutely not. We've hired independents to assess it. We've cross-referenced it on our database. We get more and more data all the time. I think the most important thing is just being engaged with customers directly. Walking the fields, talking about what their problems are, talking about how they're dealing with their problems. These are the big ones. Like RWE, like NextEra, like the Florida Power & Light, these are the big ones. We have a good national handle on it.

I think that the answer to the question is we solve their problem. They have an environmental issue first, we solve it completely, we extinguish that liability, and we do it expediently. Secondly, we can scale to the magnitude of their problem. Now, that's not as evident to everybody today. The panels are starting to come out, they're coming out faster, they're coming out in bigger quantity, it's getting bigger. How fast that grows is still not the easiest thing to predict. As I mentioned earlier, you run the models now with 18-year lives versus 20-year lives versus 16-year lives, dramatically different result in the near term. Once we get through 2030, 2031, it starts to concentrate because there's so many. I think, we keep doing what we're doing in terms of how effectively we engage these customers.

In terms of competition, I mean this humbly. It is aggravating to us that people still will exploit the loopholes in the regulations, the inconsistencies in regulations, send things to landfills. We see sometimes material gets hidden in auto fluff and tries to get passed off as solid waste. We see people shredding things, we would say irresponsibly. Because all the hazardous, the cadmium and the lead and the glues, it's all stuck to it and ship it overseas. Technically, by the letter of the laws and the right manifesting, that's not allowable. Practically, we're seeing it get stopped when it is discovered. We are. It's still happening. We feel, competitor is probably the wrong word, the alternatives that are still being exploited are implicating to us. We're not getting those panels coming through our system.

Once we have our big machine up and running, as we improve our ability to effectively communicate these issues throughout the organizations we're talking to, not just the field operators, not just the engineering firms that are deploying and/or decommissioning these fields, not just to the directors of HSE and E&P, but the C-suites of these companies. That's what we're doing. The penetration of that. It's a nascent industry. It's new. A lot of this is new to people. When you talk about actual competitors, this is not being disparaging or disrespectful at all, to fundamentally say, we do not see anyone who has a science-based solution that can effectively generate clean materials and scale. We don't see it. When you're operating a 5,000 ton a day demo, there's two or three or four people you can point to that are doing similar things.

When you're operating a 100,000, 5,000 ton a year demo, when you're operating a 3.3 million panel or 100,000 ton a year system that can scale, that is scaled, that is cleaning glass, that is recovering metals. We don't see anybody, I don't even see anybody that's actually trying to do that. I think that we feel we're spending less time looking sideways, we're spending more time just engaging the customers, it's working.

Thank you, Corrado. I have two questions again, it's just one topic.

Yep. The first facility should have been operational in June.

Yep. Is it still the case?

Are operations still expected to start early in August?

Right. Yeah. There's a little overlapping there. I don't want to repeat myself too much. We will be done testing the oven by the end of July. It's the last piece of the equation, okay? We're very familiar and confident with the ovens. All the gas lines, gas hookups, they're all in place, they're all connected, electrical. We'll be done by the end of July. In August, we will start feeding a panel in the front and material coming out the back. Keep doing it and keep doing it and keep doing it. There's a little bit of, okay, you're running the whole thing altogether, a week or two, get all that. How's it working? Some of the new employees, some of the training. Okay. Somewhere in August, not too far, a week or two, it's going to be running at a certain level, and it's not going to stop.

I said earlier, yes, it's a month or two later than we had hoped. We didn't ever expect to have a full class upgrade system in place and already operating. We didn't even think that we would start on the metal extraction until August of this year. Okay. We changed those plans and pulled everything forward. In one case, because of the market, and the second case, because of the government prompted us, and we're thankful. Now we're ahead of that curve.

I just feel like by the end of this year, when all three things are running, we will be ahead of our original schedule. Not that it's that important if we're a little ahead or a little behind, but it's just in fairness, right. We're doing more than we originally thought we would at this point.

What are the potential revenue and profit margins from the Illuminate agreement?

We wouldn't ever disclose that, right. The thing that's positive about having OEMs is that there's a lot of material that gets scrapped and wasted. Maybe not relatively a lot to them, but it's a lot to us that gets scrapped and wasted in all forms, right. We're not necessarily getting full broken solar panel. We could, right. You could break one at the end of the assembly process, but we're getting other types of scrap materials that are very enhancing to our metal yields, right. It's very complementary, and we like it. The relationship's getting stronger and stronger. We like it, and of course, we have a site in Ohio, and I may or may not have said earlier, but that site's filling up with panels, too. Right. We're happy that we opened that site when we did.

Thank you, Corrado. Are you going to have sufficient panels to satisfy three shifts in the new big plant? What about the second plant?

That's a good question. It's a good question for a different reason. The efficiencies of our variable costs, the relatively very low amount of human labor required to monitor the system as it's operating. Obviously, you've got to load panels on the front end. You've got to unload super sacks on the back end. Okay. Make it most economical to run the system continuously once it starts up. You could run the trade-off analysis, but at 25% operating capacity, you're running the system full all the time. We're going to be running it full all the time, essentially starting in August. Okay. The answer to that question is there's a very, very low breakeven threshold for one of these facilities, as Judd mentioned, and it is not only unlikely, it's not ideal operationally that you wouldn't run one shift. It doesn't work that way, right?

Once those ovens turn on, they're going to keep running. It's very efficient to do it that way.

Corrado, pivoting to Bioleum, will we get more regular updates on the technology developments, and how should we interpret the Q2 impairments?

The impairments, Judd, I think, made a point that they were non-cash, non-strategic, right? Non-strategic means there was intellectual property associated with the acquisition. Most of that was done as a stock acquisition that it's very interesting technology. We don't have any role for the technology and the goal of the company. It's difficult to justify keeping that asset on your balance sheet and amortizing it over 20 years. Just doesn't make any sense, so we impaired it. We think the impact that it has on our business is zero. Okay. That became apparent as we realigned and focused Bioleum on its one true goal. I do think you'll be hearing more updates, right? In part because both Hexas and the Bioleum team together are active in the markets. You're going to see some commercial things.

I think you're going to hear some technology developmental things that are both new and evolving. They have a dedicated team. They're working hard. Right? They separated last May, and we're less involved in the day-to-day. That shouldn't be interpreted to mean we're not as excited. They frankly were gearing up to raise capital, and it became apparent that getting realigned, getting tightened around this incredible thesis of farm-to-fuel was important to be done. Like get it done. Right? In that context, once that all gets done hopefully in the next 45, 60 days, then we could look back out into the market. My confidence level of being able to raise capital directly into Bioleum like we did last May is very high. It's very high. I think it's very high with the right plan. It's very high with the right story, and we have it.

It's just taking a little longer. Disappointing, I want to be clear. Disappointing. Disappointment is I said it at the annual meeting, I'll say it again. Okay? No less excited about the potential.

Corrado, you also answered the next three questions on Bioleum. Let me go to the next question on Bioleum. That is what is the status of the Bioleum capital raise?

I think, well, I kind of just said that, Zach, right?

Yeah. a pause, resume September, October, high confidence.

That's followed by at what point does Comstock need to start giving cash to Bioleum to keep it going?

If there's some bridging that needs to happen between now and then, we're looking at that, and it's in our best interest, I think, to do that. We'll be, as Judd said, extremely judicious with our money and also very safe. It would almost certainly be a bridge loan type of a notion, not more equity. We're ready for them to be capital independent.

Thanks, Corrado. Most of the questions that are coming in are on Comstock Metals. Let's pivot back to Comstock Metals. How robust is your solar panel process to an unexpected power or natural gas outage? This person is asking that because they've seen cases where early plants run into issues due to an unexpected power outage causing damage to sensitive equipment.

That's a good question. I think in the SSOF presentation I showed we're in a very safe location. We don't have any kind of history of those kind of natural disasters. Having said that, interestingly, we have electrical power to the plant with NV Energy. We actually were trying to upgrade that electrical capacity, that didn't work, we essentially put natural gas generated electricity in place, which you could think of as portable, mobile, and/or redundant. It's not full redundancy, but there's a bit of redundancy there if something should happen, which we don't expect. I think we bought two generators, not one. We actually have a lot of power capacity in place and some redundancy with the grid. I'm not suggesting we have complete and total redundancy, but we have a lot of redundancy.

I don't see a scenario where the plant would go down. I do see a scenario where if the world ended, we may be operating something less than full. I think we're well protected is probably the simple answer.

Has Comstock Metals made progress in offtake agreements and license agreements?

Lots of offtake agreements. I think the thing that's probably clarifying there is we're signing a lot of agreements, we're signing a lot of agreements with a lot of big companies. That doesn't mean every big company has a lot of panels today. I think I've said in the past, you could have a scenario where a customer base could deliver 25,000, 30,000 tons of business in a year, then four or five years from now, that same exact base could be five times or 10 times that number depending on what region they are, what the age of the panels are, and how they scale. We're getting more and more intimate with that today. I feel like we're leading in market penetration in securing these customers.

I think that the thing that maybe is a little deceiving is securing a customer doesn't mean that you have 100% of the maximum amount of business that they would give you the first day. Because their business is the maturation of those panels. It's like when they come to end of life. Their needs today are much smaller than their needs in the future. I think people will have a better feeling about that in October, November, December, January. We start to see flows and they're not going to be tsunamis. They're going to come. We're going to keep layering them on. We're going to get new customers. There'll be more panel flow. To Judd's point, 45%-50% we'll be in a happy place.

We won't be satisfied, when we see those kind of ramp up starting, then we'll start thinking about how do we, again, judiciously deploy in Southern Nevada, in Ohio, in Texas, maybe with less capacity to start, that kind of idea.

What ramp up should investors expect going into year-end?

We're not going to guide past running this 25% level. We feel very confident running at the 25% level. We will be disappointed, maybe investors will be disappointed too, if it's not higher than the 25% level. It's just still too nascent for us to be able to protect the ramp up. We've got incentive to double that number. We're working very hard, I don't feel like we need incentive. We want to get the plant running full. We're just going to keep pushing. 25% proves what most people are looking to see. Does the machine work? Does the machine work a panel every seven seconds? Does 25% turn profit at the line of business level? It is relevant to say it's profitable at the line of business level. It's relevant to say. It's not that relevant.

We're not a line of business, we're a corporation, we need to be profitable at the corporation level, company-wide. Company-wide, right? Getting to 50%, getting to 25% is a hugely meaningful milestone. It works, it works reliably, it works profitably. Three big things. Getting to 50%, we're profitable as a corporation. Holy crap. The questions are going to be, well, why isn't Texas up? Why isn't Ohio up? Right? We'll be happy to hear those questions.

Corrado, we have one of those questions already. What is the timeline for the Ohio facility and current utilization of California transfer facility, including number of panels stored?

Yeah. We can say that we've got somewhere between 8,000-9,000 tons of panels on the ground, okay? We're not disclosing how much at each site and that kind of thing. There are panels in California. There are panels in Ohio. There are a lot of panels in Ohio, okay? When are we going to start? We don't have a timeline. We do not right now have a timeline, right? The absolute mission-critical thing, get the first system up and running, ramp it up, show that ramp, feel that ramp is sustainable, okay, we'll pull triggers on deploying more capital after that. I know some people are nervous that we're going to be premature. We're not going to be premature. For those who want us to go faster, let me put your mind at ease.

Selecting the site, permitting the site I can probably anticipate that question and knock it off right here, right? We are ready for Ohio submission. We did submit in Nevada. I think I read one of the questions that came in, like how come it's not logged in at NDEP? We submitted it and we anticipated there could be some delay before they process it because they're very, very, very busy, which is why we submitted it early. Right now, we're comfortable with the lead times, right? We're prospecting Texas. I'll share with you, we waffled a little bit. We slowed down in Texas, now we want to speed up again, right? The market intelligence is telling us there's more panels there than we originally thought. There's more older panels there than we originally thought. The actual market is breaking panels and shipping a lot of trucks.

Those two things got our attention and we've sort of quickened our step here with at least site selection. Site selection is not synonymous with deploying production capital. I just want to be clear about that. Being ready with the site is very inexpensive. Deploying the capital is when you have a major decision on allocation. Those two things are different, people should feel good that we're not resting. We're building out the network, but that's not synonymous with deploying all the capital.

Okay. Pivoting to Sierra Springs Opportunity Fund.

Please. Can you please give us an update on the power procurement and timeline?

2028 open bid came out, we participated, we signed a precedent agreement, and we're fully compliant with that initial 50,000 dekatherms a day that can translate to up to 300 megawatts. That puts you in the game, right? You're in the game, you've got enough industrial land and enough power to get everyone's interest, full stop. Okay? We don't believe, we know, right? There's another follow-on bid that's coming that is much more efficient to participate in. We participated in 2028, we're in a pole position for 2030. We've already expressed our interest. It's already been acknowledged, and that's all fantastic. What does that mean? That means we feel like we'll put up to a minimum of 200,000 dekatherms, 50 plus another 150. Okay? The requirements for that are later, right?

It really works into our scheme very, very nicely that you can literally come out and say, "We have up to 1.2 gigawatts and the lands to hold it." That's it. That's what we're working on. Could it be 1.5 gigawatts? Could it be 1.8 gigawatts? Pretty easily. Pretty easily. We're being extremely diligent. We're very careful. More importantly, we're just making sure all of the salient, important prerequisites are addressed. This is not, hey, let me put a shingle up on the property and say for sale. There's fiber, there's power, there's water, there's land, there's infrastructure. We're checking all those boxes very, very well. We're not far away from being ready, like, I don't know, three, four, five, six weeks, right? Whatever it takes, we're going to do it, and then we'll be out there.

What is the status of the opportunity zone property that Comstock owns on its balance sheet?

Our properties are adjacent to these other properties. In fairness, we've always saw them as two assets. I think with us having near 50% and likely over 50%. It's all amalgamating in our minds, right? What is the consolidated amalgamated powered land value that we can maximize, right? The answer is it's in lockstep.

If the real estate monetization yields greater than expected proceeds on a return of capital, would there be share buybacks or a special dividend?

With the magnitude of potential, those are all possible. I think the timing's not certain, so we're not going to get ahead of ourselves, but certainly those are all things that are possible.

What are some conceptual financial structures you are considering regarding the monetization of the SSOF property?

I don't know who's asking that question. The easiest answer to that question is the market. The market will have an influence on it, right? Could someone just come in and say, "We want to acquire the whole thing"? The financial structure will be very simple. We don't know what that's going to be yet, right? It could be phased. It could be bifurcated. We don't know. We know what the value components are. We just don't know how much of those are interesting to who, but we will know that once we engage.

Okay, Corrado, this is the final question on SSOF. What is the status of the surety bond on the additional 900 megawatts of natural gas for the SSOF property?

The reference to that is what I was referring to earlier, right? This probably came from my comment. If we have already committed to 50,000 dekatherms, signed hard precedent agreement, which is the equivalent of 300 megawatts, then another 150,000 presumably would be equivalent to another 900 megawatts. That's correct, right? That's analogous. What I said earlier is that even though we're in the priority queue for that, it hasn't come to formal bid yet, right? We see it, we have it in our purview, but it hasn't been locked, loaded. The good news to that is the bonding is pushed off, right? The way it worked last time is once we committed, you had a number of months, right, to deal with putting up either collateral or bonding. Okay. It's the same thing.

To the extent we haven't formally hard committed, then there's going to be a little more time, and I think that should be wonderful, because that almost presents a scenario where the counterparties, the buyers, the interested developers might step into that scenario before we'd have to. We don't know any of that yet, right? The answer to the question, though, is it's going to be later than we originally thought, and certainly not in my mind by September.

Corrado, we're going to pivot back to Comstock Metals because we've received just so many questions on it, and these are rapid-fire questions. I'll try to keep up with you.

Go fast. Here we go.

Could you give us a status update on silver recycling from solar panels?

Yeah. I think everybody knows that silver is one of the important value drivers in the equation. We're very unsatisfied with the recoveries that we get by just selling our tailings, the answer is that one of the priorities in the development of the metal recovery solution is to test and validate the ability to yield out silver first. If we're going for a 110 a day system by the end of the year, hopefully we'll know about silver before the end of the year.

Any updates on the visibility of procuring more panels for recycling?

Yes. I think we answered that one, Zach. We have a lot of visibility to a lot of panels, it's all we're doing right now is procuring more. I would use the word securing more flow. Yeah. Could you indicate the number of solar panels Comstock Metals will recycle in years ahead and the amount of silver this will produce?

Look, if you're operating at 25%, that's 2,000 tons a day. I mean, sorry, a month. If you're operating at 50% capacity, that's 4,000 tons a month. Those are our two intermediate objectives, where we'll call victory at two, not just we know we'll get to two, it's just the output that results from that will be great. Then when we get to four, that will be great, and then we'll update our guidance because we'll know a lot more when we get to those points. I don't think it's practical to talk about silver yields because that's what we're testing right now. Once we test it, once we've proven a process, once we've had some statistical predictability to the yields, right, then we can talk hopefully with some joy about that, but it's premature.

Corrado, you'll need your crystal ball for this one. What is your forecast for the price of silver?

No. Everyone was with us when we were at 35 and 40. Everyone was gasping for air at 110. We're below 60 now, so not something that I think anybody's capable of predicting. We're bullish on the metal from a supply and demand perspective, of course, over the long term, but that is not a prediction.

Okay, here's a similar follow-up. Do you foresee silver being substituted by copper in new solar panels?

We foresee a lot of changes, right? That's a great question. I'm glad that somebody asked that question. We foresee a lot of changes. We foresee increased wattage. We foresee different metals. We foresee a lot of changes. I guess this is the place where I'd like to say, this is when we like being chemistry-based. We like being periodic table grounded, and quite frankly, we see a lot of renewable metal opportunities of different ilks and different quantities and different sources. It's always been our view that you need to walk before you could run. The one example that I'll use is, we were approached by the Nevada Division of Minerals through one of our directors. "Hey, you guys are processing industrial tailings?" "Yeah." "You're able to recover metals from industrial tailings?" "We believe so.

We're still piloting it, but yeah." "You think it would work on some old industrial mine tailings?" "Depends on what the composition is," right? I think, obviously, the administration is trumpeting magnets today. I don't know what the exact driver of that is, there are a lot of metals that we have our eyes on. Those are much, much longer term and certainly not worth talking about. I think the takeaway from that question is we're not going to be-- What we know is this. There's going to be a lot of waste, and it's got a lot of metals in it. What do you want to be good at? The chemistry, the science, the responsive nature. This is going to sound remedial, and it's not.

When major glass companies come in and they're talking about specifications of materials and specifications of metals and specifications of compositions, do you have the ability to assess, right, the technical and economic ability to recover those materials practically, okay, and then engineer and deploy a solution? Your technical competency, your practical operating experience, your lab turnaround time, your analytic and sampling time. I don't know how to layer on the practical nature of that. Fortunato is remarkable. I sat in rooms with four PhD chemists, right? All brilliant in terms of chemistry theories and possibilities, he's always the voice that's saying, "Yeah, that won't work for this reason." It's a science-based reason. It's a fact-based reason. The amount of false start or the amount of capacity that you preserve not going down those rabbit holes translates to speed.

Translates to speed and effectiveness in what we're actually deploying. I think the Eddy system is a fantastic example. It wasn't even in the plan in January. It was up and running in May. Like that, right? That's remarkable. It's valuable. It's not an R&D lab. Oh, by the way, we have an R&D lab at 600 Lake, right? We need to test the chemistries. Anyway, this was a really great round of questions. I'm thrilled at the amount of participants on this call. I think we might have broken the record again. I'm glad, Zach, that you decided to take a little more time to answer most of the questions. We'll leave it with this. Please, I know most of our investors are not shy, please reach out. Judd's been incredibly busy from call to call with outreach.

That first slide that he showed is who's in the stock, right? There's just as big a slide of the people that are outreaching to talk to us, often for the first time. Let's keep that going. Thank you, Corrado.

That concludes Comstock's second quarter 2026 earnings call and business update. Thank you all for joining us.