Comstock Inc. Water Tower Research Virtual Insights Conference

Afternoon, and thank you for joining us for this WTR Insights conference session featuring Comstock Inc., which trades on the NYSE American under the ticker LODE. I'm Peter Gastreich, Managing Director of Energy Transition and Sustainable Investing at Water Tower Research. It is always a pleasure to welcome Corrado De Gasperis, Chief Executive Officer of Comstock Inc. Corrado, thanks so much for being with us today.

Hey, Peter. Thank you for your interest in Comstock and also just for having me here again.

It's a pleasure. So we'll have just a few housekeeping items here, so just bear with me before we begin.

First off, Comstock's safe harbor statements can be found on the investor relations tab of the company's website. Second, investor questions are welcome throughout, so please submit them in the chat box and we'll be sure that those are delivered to Corrado and his team during and after the fireside chat. Finally, and most importantly, anyone wishing to request a meeting with Comstock management can do so through the conference portal. With that, let's get started. Corrado, could we start with a high-level overview of the company as it stands today, and how your constraint-based systems approach shapes your decision processes and where you put capital and your attention?

Yeah, absolutely. At the highest level, Comstock Inc. is really supporting renewable technologies, breakthrough renewable technologies, and really the flagship of that is the renewable metals and solar recycling activity that I'm happy to say today that we've exited what most startup technology companies would call, I guess, the valley of death, right? That difficult stretch between early-stage technology readiness is anywhere from TRL3 to TRL6, or even TRL7, where many companies fail to truly commercialize and truly scale to an industrial level, or we call it industrial scale. Because today we're now operating that industrial-scale facility at what we would say is the inception of TRL8. Our solar panel recycling is operating continuously.

It's 24 hours a day, seven days a week, with our first-of-a-kind, zero waste, zero landfill, high-speed processing that can ultimately handle, just from the one production line that's been put in place, 3.3 million panels per year. I guess I emphasize that it is a first of its kind. It is doing what we don't see anyone else currently able to do today. We're operating, we're leading, and we're really looking to make renewable metals the backbone, and I guess I would say frankly the focus, of the whole enterprise. Our view of the system is logically and practically constraint-based, right? We define the system holistically, which means we don't define Comstock Metals, for example, as a one-site production facility. We don't define it even within the meaning of the four walls of our company. We really look at the entire supply chain.

We look at the entire problem that the industry is facing and that others have not yet been able to solve, right? That's the basis of how we approach the industry, how we approach the supply chain, and how we approach what we prioritize a breakthrough in. In this case, the problem is this just very significant and rapidly growing wave of either damaged or end-of-life panels that have really no safe or efficient disposal solution. That number is growing from millions a year to tens of millions a year, and that's what we've prioritized the allocation of our capital for. We're prioritizing the allocation of capital to this industrial supply chain, because we believe it's not only the most enabling thing, it's the most valuable thing, and that's what for our company and our investors would position the highest return on capital.

At the end of the day, if you summarize it, the industry's problem is that there is a growing environmental liability, a massive environmental liability for our customer. Our solution provides the capacity, the scale, the effectiveness, the efficiency of solving that problem, that environmental liability problem for our customer. That's really foundationally where we are, state of the union, and how we approach and where we come from.

You describe this wave of upcoming end-of-life solar panels with nowhere to go. How would you frame the size and timing of that wave for investors, and what is making this problem so urgent for the panel owners right now?

Yeah. We see the size of the problem in two ways. Currently, easily 4-plus million panels coming to end of life in a year, this year. We've also seen some very bad practices, like stockpiling or improperly storing or scrapping, in some cases the landfilling, and delays even in repowering, that sort of shifts the liability of this material, but never really eliminates it. These numbers are increasing by potentially 5 to 10 times over the next 5 to 10 years. You say, "Well, those are two big ranges." It's definitely increasing every year. It's definitely increasing over the next 5 years, 10 years, 20 years, 30 years. The real question, though, Peter, is the estimated end of life. What we do know is the original estimates of 25 to 30 years were remarkably overstated. We are seeing panels come out a full decade sooner than anyone thought.

But if they come out in 15 years or 17 years or 20 years, makes a very big impact on ultimately how many are coming out in 2028, 2030, 2032. But they're coming, right? For us, it's really not a question of if. We know it's not if, right? It's when. The urgency for panel owners around the magnitude of the problem has gone from curious to problematic to extremely difficult. Shortly, it becomes unmanageable if there isn't the capacity, either for storage or for processing, to dispose of them. Right? With this emerging situation, with electricity demands growing, with repowering growing, with even in some cases deferrals or stockpiles growing, there's limits on all of that. We feel very good about it. Our strategy around it is to focus first.

Look, we can take any type of panel in any type of condition, in almost any type of scenario. That's really a positive thing. But we focus on the key accounts because the utility scale, the high scale utility scale customers, the RWEs, the NextEra Energy, they are 80-plus% of the market. We're tackling it from every known posture, but with the biggest, largest, and fastest-growing in the whole industry.

In our conversations, you've said that you don't see a competing system that can do what Comstock Metals can do. Where do you see the real kind of technical gap between Comstock and others that are working in the space, and how durable do you view that gap?

Yeah, that's a good question. I think I don't want to dismiss the difficulty, the complexity of building a national or even ultimately global supply chain. The things that come with decommissioning, with storing, with processing, with upgrading, et cetera, they're all relevant, and we spend quite a bit of time on all of it. PV panels, and frankly, most other electrification products, have heavy lamination. They're laminated, and these laminates, plastics, and glues are the nasty contaminants when you're deconstructing, when you're destroying the materials that have to be effectively eliminated. Frankly, they have to be effectively and efficiently eliminated. There's extremely high variation in the nature and material compositions of these panels. Our process simultaneously eliminates those contaminants, and the liability completely while producing clean, salable materials. If you're not simultaneously eliminating the contaminants, producing salable materials, then you're simply generating hazardous waste.