Comstock Inc. (LODE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, to the historic Gold Hill Hotel, here in Gold Hill, Nevada. I don't know if you're aware, but we just recently had new proprietaries takeover. Tony, coming down the step. And Jill, his wife and family relocated from across the country to take over the operation of the hotel. If you haven't been in here a while, things are remarkably different, better. And I mean if you haven't visited and you're online, please come back. It's truly a crown jewel of the Comstock. I want to welcome everybody and call the meeting to order. We have a full house, about 35, 40 people here. I want to welcome everybody that's here, and I want to welcome everybody that's also online. We already have an equal number of people participating virtually that we do have in-person, we're used to having about 75, 80 people at our Annual Meeting. So it's -- it feels good to be back in the saddle. My name is Corrado De Gasperis. I'm the Executive Chairman of the Board. And let me first introduce and acknowledge our 4 independent Directors: If you guys could just raise your hand, Mr. Leo Drozdoff, Mr. Walter Marting, Mr. Judd Merrill, Mr. Bill Nance. Thank you all for being here today. And I'd also like to acknowledge actually quite a few special guests of the company that are also present here today. Again, if you gentlemen and ladies, would just raise your hands when I call you out. First, Mr. Larry Martin, our Chief Geologist; Zach Spencer, Director of External Relations; Chris Peterson at the back door, General Manager and Director of Environmental, Health and Safety. I don't know if Alexia is in the room. So Alexia Sober is outside. She's our Mercury Market and Grant Manager. She's also a Director of the Comstock Foundation for History and Culture. She also recently got appointed to the Planning Commission here in Storey County. Here she is, can you raise your hand? We just said a lot of great things about you. Zach [indiscernible] in the back. Zach just came on board. He was a strategic project manager and he is been dedicated to the LiNiCo Project. Right next to Zach is Michael Vogel. Michael is the founder and CEO of LiNiCo. LiNiCo is an acronym for lithium nickel cobalt, and it's our lithium battery recycling with the ion battery recycling business. Tom Manz, Tom back in the room. And is Brad here? Brad had to go back to the mine site? So Tom and Brad, our founders of -- and principles of Mercury Clean Up, the MCU, mercury remediation business. Steven Saylor. Mr. Saylor, Executive Director of the Comstock Foundation for History and Culture. Is [ Johnye ] here? Hi, [ Johnye ]. [ Johnye ] is a Director of the Foundation, along with Alexia. I don't know if everybody is aware, but there's been just an enormous restoration effort going on at 1 of the 4 remaining major Comstock mills, the Donovan mill in Silver City. Every time I go in there, I'm shocked when I see flywheels operating and stamps moving up and down. You'd be shocked, I think, if you went in there. The Foundation is graciously offered. If anybody wants to take a ride down the street and walk through that mill, we're available. And we're planning to do that as part of the activities that can occur today. Dan Shore. Dan is a founder and partner and president of Sierra Springs Enterprises, Sierra Springs Opportunity Fund Inc. Comstock strategic investee, in the Opportunity Fund where we consolidated almost 3,000 acres of land, thousands of acre feet of water rights, an operating airport. I know Peggy was here yesterday helping us setup but I don't think she is in the room right now. We own and operate the Silver Springs regional airport. We operate manufacturing facility adjacent to the airport with 2 incredible tenants with breakthrough building material concepts. One is materials, and one speed of manufacturing. Silver Springs has got a lot coming. Dan is also one of our top-5 shareholders, I think Dan has been in the top-5 for the last 3 meetings but this year you'll see in a few minutes, he is shared by some incredible good company. Just ahead of him is Vanguard, just behind him is BlackRock, I mean, incredible institutional investors so it's a good company. [ Fred ], you can't hear me? I'm going to blame [ Klay ] for that. Can you hear me now? Thanks [ Fred ], Thank you. So I was just saying, I think, #4 is Vanguard, #5 is Dan Shore, and #6 is BlackRock. So you'll see that this transformation to environmental, sustainable and governance platform is taking hold. Clyde Tinnen. So Clyde sitting there to left by the cover of jukebox. He is also our inspector, general today. Zach will -- I won't steal any of thunder but Clyde has been here since day 1. He's been our general counsel, outside counsel and everything in between, for the last decade. Thank you for being here. We also have our auditors. Our independent registered public accounting firm Assure CPA. Jeff Michael. Jeff in the back there, thank you for being here. Had an incredibly smooth transition with our auditors last year and we are very excited to keep that all going. So we want to welcome all of you to our annual meeting of shareholders. We plan on conducting a fair, informative and constructive meeting. I think it will be very efficient. We very much appreciate any cooperation just in observing the normal rules of conduct. For the most part, the only thing we're concerned about there, is just making sure everybody has a fair chance, as to speak and ask questions, we'll make sure that that's the case. We typically try to limit each person to 3 minutes and it's only in the context of wanting to make sure that everybody has a chance. Today's a little expanded, because after the annual meeting we're going to have a little we're going to have a little bit of, I want to say showcase, I want to say happy hour, I want to say any/everything in between, where we've got specific booths setup for the Comstock Mining activities for MCU, for LiNiCo, for the Foundation and for Sierra Springs. And so there will be another opportunity to mingle and ask questions and get some feedback. [Operator Instructions] As a courtesy to the other shareholders, if there's anything that you'd like to talk about that's really not relevant to the meeting agenda, please reserve that for after the meeting. We're happy to talk about anything and anything that relates to the Comstock or otherwise. As I mentioned, as soon as we're wrapped up here, we will transition up to the depot where we're set up. There will be some food. There will be some drinks, and there also is transportation. I mean you can literally walk to the depot from here, just go out the side door, and it's a couple of minutes up the Hill. But I think there'll be some transportation, if anyone needs that. The use of cameras, recording devices, et cetera, is prohibited. It will interfere with our recordings and also not appropriate for the meeting. So please, please don't use those devices as we go. So let me pause there, hand it over to Zach to provide the Secretary's report. So that's a perfect example of let's try not to use those devices. Thank you, Zach.

Thank you, Mr. Executive Chairman. The Board of Directors fixed April 6, 2021, as the record date for determining the shareholders entitled to notice of and to vote at this meeting and any adjournment of this meeting. Shareholders of record at the close of business on April 6, 2021, were provided with the notice of the meeting and may vote either in-person or by duly authorized proxies. Clyde Tinnen has been appointed to act as the Inspector of Elections, and he has taken his oath as the Inspector of Elections, which will be filed with the minutes of this meeting. Based on the information from our transfer agent, EQ Equiniti, Broadridge Financial Solutions, Inc. and the bylaws of the company, a quorum is present, and this meeting has been duly called for business. Upon entering the meeting, each of you should have registered at the registration desk. If anyone has not registered, you should please do so. In addition, each of you should have received an agenda. On the reverse side of the agenda are the rules of conduct for the Annual Meeting. In fairness to all shareholders and in order to permit an orderly meeting, we ask that participants abide by these rules. There will be time for questions immediately following management's presentation. I will now yield the floor back to the Executive Chairman.

Thanks, Zach. There are 3 matters of business on the agenda for today's meeting and shareholders of record, and their duly appointed proxies are entitled to vote on these 3 matters. If you previously returned your proxy card and you do not wish to change your vote, no further action is required. If you have already completed, but not returned your proxy card, you should do so at the same time that the ballots are collected. If you have not already voted by proxy or if you wish to change your proxy vote, please raise your hand and we'll provide you with a ballot. Is there anybody in the audience that would like a new ballot? Seeing none, ballots will be collected after the resolutions have been presented and discussed. The first matter is to open the voting to elect nominees to serve as Directors of the Board of Comstock Mining Inc. to expire at the 2022 annual meeting of shareholders. The following individuals have been nominated for election as Directors of Comstock: First, myself, Corrado De Gasperis; second, Leo Drozdoff; third, Walter Del Marting; fourth, Judd Merrill; fifth, Bill Nance. Do I have a motion from the Board to open the vote on the election of the Directors?

I make a motion.

Bill Nance, thank you for that motion. Do I have a second?

Yes.

Thank you, Del. All in favor? [Voting]

All opposed? [Voting]

Hearing none. Thank you. The second matter -- that as motion has passed. The second matter on the agenda is a proposal to ratify the appointment of our independent public accountants, Assure CPA, as the company's registered accounting firm for the fiscal year ended December 31, 2021. Do I have a motion to open the vote to ratify the appointment of Assure CPA.

[ Yes ].

Judd, thank you for the motion. Do we have a second?

[indiscernible].

Leo, thank you for the second. That motion also is passed. Thank you. The third matter on the agenda is the proposal to approve a nonbinding advisory resolution related to compensation of our named executive officers. Do I have a motion to open the vote on this nonbinding advisory resolution?

[indiscernible].

Del, thank you for the motion. Do I have a second?

Second.

Bill, thank you for the second. Thank you. The matters before us are now ready for vote. It is now 9:17 a.m., and the polls are open. Any person holding proxies to vote at this meeting who has not already turned them into the Inspector of the Election or holding a completed ballot, should turn them in now to the Inspector's table. Again, by the jukebox, turn them into the Inspectors table located back the room by jukebox. Mr. inspector once all those proxies have been received, please let us know. So we will now turn the meeting and allow for the final tabulation of all the proxies and all the votes to the report on the business of the company. I'm going to do a presentation. I'm actually going to do 2 presentations. I'd actually like to be the other presentation first. Yes, if you don't mind, just switching it over. And let me just caution everybody, while [ Klay ] is doing that, that there is certain information that will be presented in this meeting that may contain forward-looking statements. It's all but certain that they will contain forward-looking statements. In general, please refer to the forward-looking statement notice contained in the back of your agenda. Correct. Yes. So there are a number of new people in the room, which is joyful to see. And before I do the specific presentation on Comstock, I'd like to do a -- in advance to that, a second presentation. It's a little bit more philosophical. It's only going to take about 5 minutes, right? But it's a presentation that I did about 3 or 4 years ago in Carson City. Yes. And it's a notion of how we view business, how we view capitalism, for lack of a better word, and it's going to give you a very strong insight indirectly on how we operate our own company, philosophically and operationally. And fundamentally, when I was asked to do this presentation and speak about the company and speak about something that was important, I said how about the downfall of capitalism. I said that when we -- and fundamentally, when we talk about ESG, when we talk about sustainability, okay, there is a new term popping up in the world called greenwashing. It's kind of associated with the notion of whitewashing, where very superficially you're trying to paint yourself as someone that cares about sustainability, someone that cares about green technology, but you're really full of, you know what, right? And so it's ironic as we now start to market ourselves and the things that we're doing in the context of sustainability that we've always had this philosophy, and it's always how we've operated here in the Comstock. But when you look at the world, right, and you look at what we glamorized, what we idolize and you look at what our children are reading, looks like inventing money or the big short or currency wars. And they truly are idolizing these kinds of topics. they're very relevant to our business as we go forward. And when you look at the fathers of the quality movements and people who really meaningfully transformed business, Dr. Deming was quoted saying, change isn't necessary, survival is not mandatory, okay? And so it gives us the notion about what we need to do, what we need to change, not only to be successful as a business, not only to sustain as a business, but to thrive as a business and make a positive impact. So when our government lives in a fantasy, right, and when our leaders, like the Chairman of the Federal Reserve says that like gold, U.S. dollars only have value to the extent that they're strictly limited in supply, right? Everyone would pretty much agree with the first part of the quote. And he goes on to say, the U.S. government has a technology called the printing press. That allows us to produce as many U.S. dollars as it wishes, also true. But the last 4 words had essentially no cost is the big lie, that they can print -- hey, look, I don't want to increase taxes 10% this year. That's going to piss a lot of voters off. Why don't I just print 10% more money and everyone's okay, except we're not okay because now our dollar is only worth about $0.90, okay? So when they say at essentially no cost, okay, it's a lie. It's an untruth. And when you burn 1 trillion a year, you got to start worrying about it. We know that this year, we've earned almost $7 trillion, shocking. So we can continue to live in economic fantasy or we can start thinking about facing reality. By the way, I was born just south of Rome. So my ancestors were Roman, and the Romans did the exact same thing that the Americans are doing now. They started with a 1-ounce silver coin, and slowly but surely, over a few centuries, very small percentage of silver still left in that coin, okay? They devalued their currency. It didn't really matter if you started with rocks, with trinkets, with gold with fiat currency or even crypto, okay? If you don't limit the supply, if you can just create something out of nothing, somebody is going to pay for it. So we -- when we think about money and when we think about sustainability, our fundamental philosophy is that every action, every transaction, every engagement, every interaction has to create wealth on both sides. If you do transactions where you create wealth on one side by taking from the other, we call that scarcity. When you create scarcity on one side. No, it's not ethical. Happens to be legal, okay, but it's not sustainable. And just think about it from a commonsense perspective. If you do a transaction with me and I take from you and you get burned. Are you coming back for more? No. If you got replenishment, you might come back 1 or 2 more times, but that's sadistic. We don't do that. It's not sustainable. Now apply that to everything you do. You're going to drill a hole. You're going to mine a quarry. Are you going to leave it better than when you first got it or are you going to leave it worse. Simple ethics. Simple business principles. If a highway fails, are you going to point fingers and blame someone else? Are you going to fix it? So we think profoundly about the notions of sustainability right down to the daily transactional level. So now we look at new literature, right? Not the big short, not inventing money, but a different dialogue, right? Dr. Deming taught us about the new economics, taught us about how getting out of the crisis entailed a different notion of systemic management, a different notion of measurement, a different notion of quality, avoiding the accounting traps and the quarterly earnings, focused on daily generation of throughput and the speed and quality at which we do things, and we can choose. We can choose. We could continue to focus on the short term. We could continue to focus on scarcity. We could be transactional. We could be takers. We could create scarcity. We could be greedy. In terms of my stomach, when I hear leaders in Wall Street saying, it's fear and greed. It's not our philosophy. It's not where we come from, okay? We think long term. We think daily. We think continuous, and it's about sustainability. When we say create wealth on both sides, yes, we want to be profitable. Yes, we want financial returns on our financial investments. We want superior financial returns on our financial investments, but we need to make the impact. And the impact needs to be natural and the impact needs to be social and the impact needs to be financial. So we've claimed the term triple point, right? Your measurement system is going to measure the rate that you generate cash every day. The rate that you make social impact every day and the rate that you impact nature positively or negatively every day. Every day, carbon -- capture carbon emissions and environment. I don't understand why our society has gotten into a battle versus being green and being pro-business. I don't understand it. As if they're diametrically opposed positions. We see zero conflict and being green, being clean and being pro-business, we don't understand why people have to take positions in fight. It just requires a little bit of brain power and a little bit of innovation, not a lot, quite honestly. So Dr. Deming drew this picture on the back of a napkin in 1950. It was the first time someone defined a system -- I'm sorry, defined an organization as a system instead of a hierarchy, okay? And he said, it's not enough to do your best, you actually have to know what you're doing. So the notion of understanding all the pieces of the system, the interdependency of the system and what it's driving to and knowing it profoundly. Then Dr. Goldratt shows up. Dr. Deming was a physicist. Dr. Goldratt was a physicist. But Dr. Goldratt had a different notion of system. Complementary, not in conflict, but he said, a system can only move as fast as its slowest part. And we introduced a whole new theory of management based on manning your system horizontally versus vertically and measuring the speed at which the system generates units of the goal every single day. So we put those 2 notions together, we say a system cannot be a system if it doesn't have a precise goal. A precise goal. And we see 3 monstrous obstacles to operating in this much more intelligent manner. We see the hierarchy, the infrastructure of the hierarchy, the command and control being opposed to operating systemically. So you say, what does it look like operating systemically? You have a team. Everybody knows exactly what their role is. Everybody knows what their interdependencies are. People are reliable to each other and they deliver. What do they deliver? Units of the goal. What else are they working on? Shouldn't be working on anything else. If you're not operating on what the company is trying to achieve, they'll go somewhere else and do something else. Second thing is, the measurement system is flawed, right? The measurement system is flawed. I'm expert in GAAP accounting, spend a decade doing it. I Have a CPA, and I'll tell you that it's important that all of our financial accounting and reporting is complete, accurate, relevant and if God's willing, timely, okay? So that you can all see, right, what the history was. We do that very well, but we do not use GAAP accounting measures to measure the performance of our business. And you ask me why because GAAP doesn't measure the rate at which the system generates units of the goal. I looked at every single promulgated GAAP pronouncement ever written. Now one of them says, this is how you measure the rate that you generate units of the goal. Some of you might be saying who cares. You might not care. Don't invest in companies that don't measure the rate at which they generate units of the goal, unless if you don't care if they achieve the goal. So how is it possible that the entire measurement system of the world is not measuring what we're actually trying to do. I don't know, but that's the way it is. We don't care. Actual non-GAAP accounting and GAAP accounting reporting for SEC and NYSE and investor happiness and totally different measurement system to compare the performance of the company. And then how do we control the company? Well, if you have a system and the system is designed to generate units of the goal, wouldn't you want to know predictably that the systems can do that? Yes. So how do we control it? With statistics. Statistical process control is what Dr. Deming introduced to Japan in the '50s, where Toyota business systems used to become the world leader in quality. It's what Japan used to outperform every American company in terms of quality, and that's what we think is the right way to go. So hierarchy versus the network, right? We organize ourselves that way, not that way. Number two, to organize yourself that way, you've got to be a team of people that are willing to subordinate to the goal of the company. You have to be a team of people that are willing to work interdependently. They have to be selfless, meaning they have to care more about the goal of the system than they care about themselves personally, okay? It's very unusual to put a team of people like that together. Not only are we doing it, it's about to expand rapidly. Next one. That's not how I look at Jeff Michael when I look at him. I see a handsome man, but that is kind of how I think about GAAP accounting as it's regulated in our world. I much further measure the rate, right, that we're generating cash. Next one. And use statistics, right, to ensure the system can deliver versus budgets. Next one. And by the way, if anybody thinks that mean we don't plan our spending, that's not true. We plan our spending every weak. We monitor our cash every week. We're always looking at the 13 weeks that's in front of us. We have very strong control. But you create a foundation of quality by designing the system, knowing where its slowest point is, measuring it statistically and ensuring that it can continue. And Dr. Deming also said that, if you can't describe what you're doing as a process, you don't know what the hell you're doing, okay? So our system is designed on process. And last night, we were talking about Senge and Drucker and The Fifth Discipline, and these guys institutionalize quality of process, okay? So we think about process. So we know what we're doing. Next one. And so when we look at the world and we look at what's happening with the company, the company is that little thing in the middle, okay? But we're starting to connect with partners. That could be MCU. That could be MCU in the Philippines. That could be LiNiCo, which will be global. That could be partners for storing and receiving battery metals. That could be new technologies, engineering services, businesses. So we create something that's much, much bigger than what you perceive we have, and that's how we see a completely different vision of the world. So in our world, if we're going to stay with the old organizational design, with the old measurement system, with the old control systems then don't talk to me about ESG, don't talk to me about sustainability because it's not only that you're not committed to it, you don't understand it. You just don't understand it at the foundational level. So now let me turn over to the company presentation, and I hope that's helpful, just to put in context how we think about things. So the company has gone through a tremendous amount of change. The last 5 years has been incredible. The last year has been very fun because 4 years prior to last year, we were fixing the foundation. We're fixing the balance sheet. We were establishing security of our existing assets. And so I don't want anything that I say today to imply that we don't love gold, and we don't love silver. You'll be hard-pressed to find anyone that loves gold and silver more than we do, okay? We love gold and silver. We're not ever abandoning precious metals, okay? It's very important. But not only did we keep that foundation together, not only did we hold all those assets together and start to advance them, we position new opportunities. We position new opportunities, and our balance sheet went from having a relatively lower amount of assets and a meaningful amount of debt to almost doubling the assets and no debt. That's where we stand today. That's where we stand today, doubling the assets with no debt. I'm going to expand on that when I talk about each of our investments, which is a big part of the reason that we're growing our assets. So philosophically, and this is new. This is new. philosophically, you've seen us go from being a junior miner transitionally to being a strategic and precious metals focused company. So we went from being a junior miner of gold and silver to expanding into looking at more critical minerals, more critical and strategic metals like what, like lithium, like nickel, like cobalt, magnesium, graphite. So we are very, very keen on minerals and metals, be it with our existing investments in LiNiCo, our existing investments in MCU, more to come. We also have our existing investments on the Comstock, and we couldn't be more excited about how those properties are positioned to be developed or that gold is at $1,900 an ounce. But we're also looking into other natural resource opportunities. We're looking into broader battery, broader power categories. Biofuels energies, we're looking into this whole tera-platform of carbon capture and carbon utilization. We have in our purview technologies that will surprise people. We're also looking at water. So it's a very, very broad spectrum. The items that are on this sheet are referring to what I've talked about over the last month or so that we're engaged in other possible acquisitions of technology, other possible acquisitions of business, lines of business, and they will all fortify and enhance our position as the company that's going to grow very, very fast. Grow throughput and cash generation very, very strongly. And in each case, making a tremendous impact on the natural and social order of what's happening in the world. Sounds dramatic? It is. It sounds dramatic, it is. What are we specifically doing? We're specifically right now focusing on these scarce mineral recoveries. I'm going to talk about LiNiCo in a minute, but it's staggering to think with even the most conservative growth profiles of lithium ion batteries, how scarce the metals are. I'm going to show you some statistics in a minute, incredibly scarce, okay? We are developing our resources. Larry Martin is going to be talking later today about the Dayton resource. I'm going to talk about it briefly here. We have an existing resource of goals gold and silver. We've done a tremendous amount of geological work. We're about to expand it. We also have Tonogold working on the northern part of the district. They're drilling deeply to the north, more shallow to the center. And in both cases, technical reports are forthcoming to certify the ounces that are in the ground here in the Comstock. And In all cases, we retained meaningful royalties on all of the properties. And lastly, what I just mentioned before, we're looking at other natural resource opportunities to renew. So can we renew other metals? Can we renew other minerals? Can we renew other natural resources? So in February, we announced LiNiCo and something dramatic happened. Yes, the share price moved, that was dramatic. We appreciate that, that happened a lot, right? Quite frankly, we had about a $12 share price targeted before we announced LiNiCo, okay? So we appreciate the movement in the share price. We're still markedly undervalued just based on our existing assets. I want to explain that a little better. But we also made it clear, right, that we are a preeminent ESG platform. We didn't just decide that we were going to brand ourselves as ESG, which you'll see in a minute how much we've done in the last decade in this arena. But all of a sudden, Heights Capital Management ,#3; Vanguard Group, #4; mentioned Dan was #5; BlackRock ,#6; and Group One, #7; Susquehanna ,#9; Geode Capital out of Boston, #11; Jane Street ,#13; Citadel, 14; Bridgeway, 20; and 29, one of my favorites, U.S. global investors. One of the largest investors in natural resource space, which was 1 of our top 5 investors in 2012, '13, '14 has come back. Okay. So how do we deliver value to our shareholders. We can promote -- we don't like that very, work very well, okay? We could market and explain much better what we're actually doing. We like that. We're going to do that. But fundamentally, we have to build our shareholder base brick by brick by brick from the bottom up. We don't want to lose shareholders, right? We don't want to lose shareholders. So we literally have a performance objective that says that we will increase the institutional representation of our top 30 by 50%. We will ensure that 30% are focused on ESG. BlackRock is one of the biggest institutional investors in the world, $1 trillion under management. What did they say? They want at least 10% of their portfolio focused on impact businesses. That's what we're seeing in the market. So LiNiCo, we have shown this map to people on a number of occasions, but you guys may not have seen it. So this is where we're sitting right here. This whole teal is the 10 square mile property position of the Comstock Lode. This area is where Sierra Springs Opportunity Fund has consolidated 3,000 acres of private land, industrial land, commercial land, residential land an operating airport. The big black line coming down the middle, Highway 80 to Highway 50, was USA Parkway. Elon Musk demanded that the state builds this highway, if he was going to bring Gigafactory #1 to Nevada, and they built it, essentially putting Silver Springs on the map, okay? So we tour a page out of the Comstock playbook by saying, look, we don't want to make an investment or 2 in Silver Springs, we want to consolidate the district. And so you see in the bottom left cap corner, that water mass there, that's like Tahoe. We're sitting right now, 10 miles as the crow flies from the California border. There is an overwhelming series of macro events happening right now. Let me tell you what they are. First and foremost, I don't know how many of you are California residents, but you appear not to like it. The Californians are flooding into Nevada, okay? They are sick and fed up and tired of the regulation, the money -- and I think Dan even said to me once, I actually wouldn't mind paying more taxes, if they actually do something positive with my money, right? But they're not. So there is a huge inflow of people into Nevada. Fred, you bought a condo here for pennies on the dollar, right? Your timing couldn't have been perfect, right? You're going to sell it to Californian, and I have no doubt, okay? Number one. Number 2, right? Manufacturing has started dating with the United States again, okay? No more breaking up and going to China, we want to come back. So we're seeing manufacturing come back. And when you're sitting next to Silicon Valley, and they're creating new businesses, right, they get to choose where they go. Guess where they're coming, they're coming here. They're either coming here or in Texas. The top 2 places for new manufacturing companies to come, but there is something even bigger happening, and it's a part of what I just said. How many of you have children? So when you walk up to your front door, you have to tiptoe over 4 or 5 Amazon boxes, okay? Like I have Amazon boxes showing in my house every other day. So it is projected that retail sales are going to go from 15% to 30%. That's staggering. But guess what that means? We need distribution facilities, and we need data centers. Guess what we're building in Tahoe Reno Industrial Center, distribution facilities and data centers, and they're mega. They're mega. So you have 3 monster macro trends all coming here. If you own land in this area, you're in a good place. That's the LiNiCo facility right there. It used to be the Aqua Metals facility. It's literally across the street from Tesla's Gigafactory. We found out yesterday that there was some $30 million to $40 million invested in this gorgeous 11-acre site, okay? We're buying it for, let's say, $15 million, state-of-the-art battery metal recycling facility. Our investment in LiNiCo was at a valuation of $17 million. American Battery Metals has a valuation of $1.25 billion. Do they have a facility? No. Okay. Redwood is in Carson. They are not public, but they have Gates and Bezos backing them. Li-Cycle is in New York, what's their valuation? $1.3 billion. Not only did we invest at $17 million valuation and we have a facility, but LiNiCo has a 20% stake in Green Li-ion and likely negotiated a $10 million valuation for that investment. We are working to bring this technology to them, right? In this facility, we almost finished the design of our crushing and separating systems. We were originally looking at a $9 million system from the state-of-the-art German manufacturer. We're going to build design a better system and have it delivered for less than $5 million. Equipment will start arriving in the fourth quarter, it will be up and running in the first quarter. We'll be making black mass. So when other people tell you they're going to be making black mass, just ask them when their facility is going to be up and running, okay? Our facility is up and running. Being cleaned out now, it will be ready by August in terms of all of the former equipment and everything being cleaned out. There was a small fire in this facility. It's being repaired. That will be ready by November. And then November, December, January, our equipment arrives, starts getting up and running, and we're producing black mass. We don't stop there. We're designing our own proprietary system to produce commodity metals. What commodity metals? Lithium, nickel, cobalt. Green Li-ion goes one step further. They've designed a system that can produce 99.9% pure cathodes. So we will have batteries, crushing, black mass. Black mass is salable. Steel, copper byproduct salable. Lithium carbonate, nickel, cobalt, cathodes salable. From this one facility revenue can be over $400 million, depending on what our mix is, right, depending what our mix is. Selling capital is much more valuable than selling lithium carbonate than selling nickel and selling cobalt. But guess what's happening with the prices of those scarce metals, going up. The market's too big to describe, okay? So we love everything you'll see. It's new tech. The market is enormous, okay? And the speed of cash generation is fast. Don't want to disparage a mine, but a lot more capital, lots lower cash flow. So I mean, you look at any projection, it's unfathomable. How big -- I just want to make a point. Gigafactory #2 is in Austin, Texas. And they've already decided to back integrate into lithium carbonate and cathodes. What are we doing across the street from Gigafactory #1, lithium carbonate, cathodes and other minerals. But if you just look at some of the projections for bringing on transportation semis, Tesla has already built the facility here to start building their first 100 semi-trucks, and we heard it yesterday, we were at the Gigafactory, okay? If you were just to replace the European fleet, which they want to do by 2030 with registered EV vehicles, one segment of the market in one jurisdiction, you would need 53 years of mining to have sufficiency of nickel. You would need 538 years of mining to have sufficiency of lithium, and you would need 866 years of mining test efficiency of cobalt. But do we now understand what the word scarcity means, isn't going to be able to make them? Right now, the government's rules motivate the lithium-ion batteries to go to landfills. 97% of these batteries are going to landfills today. So people ask me, are you going to have enough batteries to process? Yes. Okay. And we're not only going to have a facility that can crush over 30,000 tons of material, which would produce 15,000 tons of black mass, which then would produce thousands of tons of lithium, nickel, cobalt cathodes, right? We can make all of the major segments of the cathode process. Be it lithium cobalt oxide, lithium-ion phosphate, lithium manganese oxide, et cetera. Musk has already come out and said, they're going to use LSPs in their intermediate range vehicles and preserve the cobalt solutions for the longer-range vehicles. Why? [indiscernible] cobalt. So let's switch to MCU, okay? MCU is absolutely remarkable. What blew my mind and what I wasn't aware of is that in 2017, this is what the MCU team brought to us that the Minamata Convention, the UN Minamata Convention signed up 140 nations to eradicate mercury from industrial mining around the world by 2020. Our timing could not be more perfect. These governments, including the United States, including the Philippines, including almost every other one has committed to eliminating mercury from mining. Now my reaction to that was, people still use mercury in mining? I didn't even realize, my notion of Mercury was historic districts like the Comstock having residual mercury. People are still using mercury, I'll tell you right now. All over the world, artisanal and small-scale miners with extremely high grades of gold are using mercury as the amalgam to take the gold down. And guess what, it's very easy to do. Guess what else, it kills you. Guess what else, it kills your children. Guess what else, it leaves about 1/3 of the gold trapped in that amalgam. So our solution is to deploy systems into these ecosystems, into these environments, clean all the mercury from the soils and get that trapped gold out. What does that do? It allows us to invest the capital in each project, a huge obstacle when governments want somebody to come in and clean up, money as an issue. If we deploy our own capital and we immediately start getting returns, funded by the gold, you have a win-win solution. You have a win-win solution. This is not foreign to us. Most of you know that the Comstock was using mercury from 1859 to about 1907,'1908 when cyanide leaching was perfected in Nevada actually here on the Comstock through the University of Nevada, Reno and replaced mercury essentially in the first world. So in the U.S., we don't use mercury anymore, okay? But around the third world and all these artisanal environments, they keep using the mercury. So we created a sampling plan with the EPA. It was one of the most robust plans that they've ever developed. We remediated mercury from our soils here before we did any mining and any development. And then in 2017, we had 100-year events of rain and the road collapsed. And nobody could touch the road because there was mercury contamination. Nobody could touch the road because no one had the permits, the plans, the remediation protocols to deal with the contamination. Nobody could touch the road because there was a U.S. waterway, except for us. We had the plans. We had the remediations. We had the protocols. We had the permits. We ripped out the road, cost $6 million. We rebuilt the road, cost $3 million. And we got $9 million of gold and silver out of that old all those waste dumps that was stuck in the old mercury. In 4 years of mining, we barely had 100 pounds of mercury come out of our process. In just fixing that road, we had 2,000 pounds of mercury come out of that process. We said, holy c***. We are doing something right here. So over the time, we've built a prototype system, the one on the left, which is in orange, is the cadillac of the mercury remediation unit. It's got 3 centrifuges of mercury reactor spirals, and we're working to further advance those centrifuges to get to the point where we're getting all the mercury out of the soils and substantially all of the mercury out of the waters, okay? We're still working on it. That's the pilot. That's to get there. The muted to the left is a simpler unit that is already commercially in place in the Philippines, cleaning sand and gravels from the basin, the banks and the river. Cleaning the mercury out, separating the gold and actually selling sand and gravel into the construction industry. This was a derisker for us because we could be profitable just with the sand and gravel, not very profitable. When you're covering all your expenses and then some before the gold comes out, you're in a very, very good place, right? So that's where we are. We've had ridiculous -- so every year, there is typhoon season from January to March in the Philippines, it's expected. It was planned for, it was worked around, but it extended this year into mid-May, right? So we've had -- we still have some start-up activities going on. We actually just got 2 or 3 new sand and gravel customers. They want 2-inch minus 6-inch minus and bigger rocks. So we're building grizzles and screens to be able to get the right sizes to the right contractors. And hopefully, within a week or 2, we'll be back up and running full, with the water issues behind us. All of our permits updated in place and operating going forward very effectively. We think of both of these as our pilots, okay? In the U.S., we're sampling across the district, we're identifying different types of materials in Mercury, and we're processing them through this pilot facility in orange. In the Philippines, we want to establish our first commercial unit and have it positioned. We have dozens -- Tom and Brad will tell you, dozens of inquiries of other countries and other projects to come clean up their mercury, okay? We want to make sure we got it right before we start expanding into the market. But when it expands, it's going to expand very rapidly. And our performance objective is to have 4 projects in 3 years. Now 4 projects might not sound like a lot, but in the Philippines, we can have 4 systems deployed, 5 systems deployed, 6 systems deployed, okay? And each system standalone generates gold, generates mercury, generates cash. So it's very exciting the growth profile that's in front of us. So that's the 2 environmental things that we're dealing with substantially on the ground expertly today, but there is more coming as we move forward. But again, if you look at our history, go back 7 years, go back 8 years, we've had top awards in reclamation, top awards in mercury remediation. And when you're in the state of Nevada and you're a miner, okay? And you get a #1 first place award for removing mercury and restoring a highway or a #1 award for fully restoring an open pit and historical character around it, you're up there receiving that award with Barrick, Kinross and Newmont. There is no other junior miners on the stage okay. So I do take the fence when people suggest that our environmental initiatives are superficial or that there is some greenwashing going on. Not too many people have done it, but doesn't take too many to upset me, right? Because this has been the foundation of what we've been doing since day 1, okay? Now the Comstock Lode. We just finished in the first quarter an entire geophysical survey. The most endearing thing to me when I first came to the company was Larry telling me that he used a handheld magnetometer down in Spring Valley and found some anomalies that were very interesting. And I was like, what does that mean? And he said, well, when we get magnetic lows or we get these anomalies, its indicators of potential mineralization. So then he drills some holes, big discoveries, 30 feet below the surface, it's quarter ounce tons per gold. I'm like oh, this works. But the handheld magnetometers, they don't go very deep, right? They're doing surface analysis of these signatures, okay? This exercise was done by a helicopter, not by Larry's hand, okay? And it went down to depths of over 1,000 feet. We now have 3-dimensional data down to over 1,000 feet of the same type of information. Larry and Mike and I are going through this data and correlating it to what we know, right? And we're finding our drill programs now so that they can even be more surgical in their identification of the targets that we're drilling. We're going to issue -- that's okay. We're going to issue a technical report that includes all that geophysical data, all the cross-section level plan work and a new resource estimate for Dayton before we do any more drilling. That's coming soon. Then we're going to drill, and we're going to update that report, and we're going to continue to move that forward. Please feel free to talk to Larry about this at length because so much work has been done. But when we just take a quick pass at what we already know is there, what we've already carved out, we see a project that -- in our view, when you were talking about $1,200 gold, it was worth $40 million to $50 million. When we look at it with a $1,600 gold, [$75 million ]. When you look at $1,900 gold, it's $100 million. That's just for Dayton, right? Spring Valley has another 1.5-mile strike length with all this geophysical data, where we've hit on every hole that we've targeted. And so we're very excited to expand this resource. To the north, we've decided to work with a partner Tonogold. You may or may not know, Tonogold has paid us an incredible amount of money to acquire the Lucerne. We're very happy about that. They have royalties on all of the properties. They reimbursed us about $2 million a year in our annual expenditures. Our annual expenditure is about $4 million. So that's 50% of our expenditures being covered to maintain the platform for mining. They also owe us about $6.5 million secured on the Lucerne asset and pay us 12% interest every month on that, okay? So we have no debt. We have an incredible asset platform, Tono is increasing the gold and silver resources in the Lucerne and the Occidental. We're increasing the gold and silver resources in the Dayton. Technical reports on both will be forthcoming, and that will validate not only the assets that's in the ground, but the royalties that we have that are tied to those assets. We like what they're doing, all right? Just to be frank. The Occidental has always been a top target for us. They drilled some near-surface holes. They hit on every hole. Just recently announced that, we're excited about it. They drill some very, very deep holes to the north. Larry was the first one to say, those are excellent targets. Those are very treacherous holes. Be very, very careful before you spend $0.5 million drilling one hole, okay? And look, they've drilled 2 or 3 holes, and they learned a lot. They learned a lot. And they're recalibrating their plan. They've just raised some additional money, and they're moving forward, okay? They made some changes that hopefully will keep them focused on achieving what they're going to achieve, but we're in a great position. These are our assets. These are our securities, and we only want them to be successful in doing it. But their fundamental thesis that we just saw on the Board is true. And that fundamental thesis was that the old timers had a 50-gram cutoff before they chase any material into the ground. What's 50 grams? It's like 1.5 ounce. It's ridiculously high grade. Then once they went down, and they had established the drift and they had invested in the tunnel, it moved to 33 grams. That was a cutoff. Was that ounce per ton? Ounce per ton. What they're saying is, if it wasn't an ounce per ton, they were leaving it behind. They weren't chasing it. So we know there is a tremendous amount of gold underground. Now there is 700 miles of underground tunnels. It's treacherous. It's deep. But that's Tono's thesis. They're looking to prove out the residual of those high-grade deposits. They say, well, are they looking for another bonanza? They don't need to look for another bonanza. They don't need to. That's not their thesis. That's not the concept that they're trying to prove. The concept is a lot of high grade was left behind. Was a bonanza left behind? Well, the mathematical probability says, 100% yes. So maybe in the process, they hit a new load, okay? But they don't need to hit a new load to prove their thesis and that's the point. So lastly, let me wrap up with the opportunity zone. So I mentioned logistics companies. I mentioned data centers. Most people don't realize that it's 69 to 72 degrees here 80% of the day. It's a perfect climate for data centers. Why is Apple investing billions? Why is Google investing billions? And why is Switch investing billions? Because it's an ideal climate. But when we think of climate, we don't just think of high desert, dry, nice temperature, we think of business environment. I don't know of any business environment that's more friendly than Nevada. I don't know of one. Low taxes to no taxes, incentives, economic development dollars. The opportunity zone was almost like putting that on steroids. It was just adding to the whole thing of what was already there and why people already want to come here. So companies are pouring in -- hundreds of companies are pouring in, tens of thousands of jobs are being created, and there is an immediate and dramatic housing crisis. Reno's to the moon and so expensive. Fernley is built out. You can't build in Stagecoach. Dayton's too far. Where are you going to build? There's one more. First go forward. So here's what we've laid out, right? This is literally where USA Parkway enters into Silver Springs. And if you guys haven't driven down there, USA Parkway is a beautiful brand new 4-lane highway. There is 2 massive roundabouts. One is at the western end of the airport, our airport. The other is at the eastern end of our airport. Brand new, built by the county and built by the state. Then they took that lonely highway, that lonely 2-lane highway, and they made it a 4-lane highway. The infrastructure is incredible, okay? It's all being built in Silver Springs, there is nowhere else to go. So we have the airport. We have manufacturing. We have industrial. We have mixed use industrial. We have commercial. We have downtown commercial. But in the blue, we have residential, residential, residential. Thousands of homes that need to be built. People are not -- companies are not coming because they don't have the supporting housing market. So Silver Springs is the next frontier. Nine projects, just to start. Nine projects, just to start. We have a requirement that when capital means, are invested into the product. Not only do they get an immediate tax deferral or a massive tax exemption at the end, but we have 6 months to deploy that capital because we have 9 projects. Our average capital deployment has been 2 days, not 2 months, not 5.5 months, 2 days. Go back. So what we did was we locked up these projects. The airport, check. The manufacturing facility, check. The Harvey property, check. We've locked up additional properties. Then we locked up a huge bulk purchase option, where we went to a family, we bought all options, bought all their land, all their water, all of their sewer rights, all of their water rights. And by doing that bulk agreement, we drilled the average cost of our acreage down to $10,000 an acre. There is properties for sale right now for $250,000 an acre. We think the reasonable range of comps that's mature and balanced, is somewhere between $70,000 and $140,000 an acre, okay? At $70,000 to $140,000 an acre, these assets are worth $0.25 billion to $450 million. That's $3 to $6 a share of that company. So -- and we're doing the same thing. We have such a position that we could actually choose the companies that we allow to come into our properties. And so we're choosing companies that are focused on sustainability. We've invested in a company called ROK-ON Building Systems. They make a nonflammable, noninfestible, nonerodable building material that's lighter, stronger and cheaper than the alternative and has a 3-hour fire rating. They have exclusive use of a foam material in the middle. They have worldwide license to it, and they build their boards and assemble them, going to be happening in Silver Springs. They're going to change the housing market. It's unbelievable. We have another tenant who manufactures homes in 1/3 the time and 1/3 of the cost, okay? So we're investing in companies that are making impact. Making an impact by providing affordable housing meets our criteria. When we look at the equity that we're bringing in and the economic development dollars that are afforded to us by the state of Nevada, by the federal government, our exit values with very, very conservative exit cap rates, it's $2.2 billion. We're seeing cap rates in the TRI Center that are making our head spin. They're still valuable. We're not using those rates when we calculate $2.2 billion. So we're really feeling like we're in a good place, and -- right? I toured the Gigafactory yesterday. I mean it's clear as day, talking to them, that they are making expansion decisions between Austin, Buffalo and Nevada based on their surrounding infrastructure, okay? I don't think Nevada is going to lose, but I think we're going to be delayed because they're making decisions now to do things in Austin, decisions now to do things in Buffalo because the supporting infrastructure here is not yet sufficient, okay? And we have the solution for that. So the thing that's different about the Opportunity Fund is, of course, location, location, location. But also, we've committed to listing the company publicly, whereas most of these funds want you to lock up for 10 years. We're lifting and trading publicly. We feel that our investors should stay if they want to stay and should not say if they don't want to stay, okay? So we provide liquidity, incredible diversification, incredible development expertise with Dan. And then this public company transparency, this public company liquidity, this public company security of our investors. So when you look at -- and I'll close on this, when you look at what we announced at the end of last year that we were going to identify about a dozen performance objectives. And that we concluded that if we didn't achieve these performance objectives, we didn't want to be compensated, okay? So we have stock-based compensation that is 100% performance-based. If we achieve all of these items on this list, which we published in the proxy, which we published in the annual report, we get 50% of our vesting. If the share price goes above $12 a share, over $0.5 billion of valuation, we get the other 50%. What was the thinking on that? Thinking was like, we don't want to be paid if we don't perform. So let's perform these things and get paid. Well, what if you perform these things and the market doesn't recognize it. You can perform all these things and the market might not realize it. Well, then we shouldn't get paid because if the investors aren't getting the value, then we shouldn't be getting the value. I haven't seen 100% performance-based programs out there in the world in a very long time, okay? I'm sure they're out there. I just haven't seen it, okay? But we're putting it at the highest level of governance. And every one of these things is driven to the goal that we've stated, which is based on sustainability. Environmental, sustainable, governance, this is the highest level of governance to walk the talk and put you might where your mouth is. So in summary, we already have established ourselves as reclamation experts, mercury experts, EPA partners, for lack of a better term, and we've been recognized for it, right? The Mercury Remediation System is not going to clean mercury and get gold itself, yet it's going to do that. It's literally regenerating ecosystems that are impaired because of the contamination. And what we see in the Philippines is almost identical to what we saw here. You have Mount Davidson here. You have Mount Diwalwal there. You have the Carson River here. You have Magat River there. You have miners on the mountain, putting shed to the river, okay? It's the same exact thing. We're cleaning up the whole ecosystem. They also were a thriving tourist destination. It's a beautiful, beautiful landscape there. Can't have tourism if you're killing people, right? It's the same thing. So we're cleaning these ecosystems. We're closing the loop with lithium-ion battery cycling and it's complex. It's complex. The record rules are complex. They're motivated not to allow you to store batteries. Joe Biden is saying, let's stockpile these materials and let's develop them domestically. But the record will say, you must send them to a landfill, otherwise you're going to have liability. So we're working through that so that we have storage capability here on the Comstock. It's a rule that you cannot store the batteries at the recycling center. Does that sound weird? It should because it sounds dumb, okay? But we can't do that. So that means the day the battery arrives at Michael's facility, he has to crush it and process it. So -- but you could store it at alternative sites. Advantage Comstock, we have 10 square miles of land here with former quarries, former mine sites and locations that we can safely restore, okay? So we're going to be storing materials. We're going to be processing materials, okay? We're going to monetize all of the assets that have nothing to do with our gold, okay? And what that will translate between now and the middle of next year, the $20 million coming into our treasury from selling non-mining assets that have no impact on what we're doing, and then we're going to continue expanding our ESG platform. That means new announcements, new competencies, new lines of the businesses. And one of the things I'm most excited about, and you'll see it very, very soon, the expansion of our team and our engineering and processing capability is going to go off the charts. We already invested in PSI, plain sight innovations and RPS, renewable process solutions. These are engineering companies that can build -- design, build these facilities, design, build these businesses, and we've hired them, and they're designing most of LiNiCo's processes that aren't coming from Green Li-ion. So we're going to have engineering capability to enable these things. We're not going to be talking about them. We're not going to be negotiating and buying, we're going to be building them with our bare hands, okay? So that's where the transformation is heading. And that's where I'll pause the presentation. So we will now open up for questions from the floor.

Are we available for any [indiscernible] these projects in the [indiscernible].

Yes. So when -- first thing that Alexia did when she came on board, was to start looking for grants available for mercury remediation and available for cleanup, okay?

[indiscernible].

It's okay. So we -- in terms of direct money for cleaning the Carson River, it's very meagre, okay? It's very meagre. In terms for grant money for developing the technology, developing the process it's very good, okay? So we've kind of filtered through, is there anything available for the cleanup? And quite frankly, the BLM -- I'm sorry, the EPA is saying, maybe we don't need to clean up the Carson River. Maybe we don't need to spend the money. I guess what we're saying, wrong, wrong. The mercury never goes away. The mercury methylizes and gets into the vegetation. The mercury methylizes and gets into the biology. So we -- there is no headspace here. If you don't clean that mercury up, it isn't going away. And so we have been dealing -- Tom and I, we've been dealing directly with the state department. We've been dealing directly with the policy group of EPA in Washington, D.C., and they're very motivated, right, to see us get broadly commercialized, and they're even asking us -- District 9 is San Francisco, District 8 is Denver. They're asking us, hey, we've got projects in Montana. We've got projects in this country. And I said, why does the U.S. care about projects in other countries? Well, the U.S. has taken the banner to help Minamata get implemented globally. So the EPA not only wants to see U.S. sites remediated, they want to see us getting outside the U.S. So that is -- so there is money available. We just need to get focused on the right -- exact type of the right money and start bringing it in right.

Is that money state of federal or private?

So mainly, mainly, mainly federal. We're looking mainly at federal now, but there are other sources. There are some private, and there is also some not for profits, right, that are eligible for money that we wouldn't be eligible for, that are getting money for cleanup that we couldn't, that we're either partnering or working to partner with them or seeing if our foundation could be part of that because of the Carson River. Good question.

Mr. Executive Chairman, just a point of order real quick. I'll repeat the questions that are asked here in the great room at the Gold Hill Hotel. [Operator Instructions]

Do we have any questions online at the moment?

Let's see. We do have one. When will there be additional revenue on the books?

So that's a good question. So we mentioned that LiNiCo will be up and running in the first quarter. The first quarter is the startup, okay? We're going to have the crusher. We're going to have the separating, and we're going to have black mass. Black mass is salable, and we'll be selling some byproduct as well, okay? We don't prefer to sell black mass, right, because we can make very valuable minerals from it. And we can make very valuable cathodes from it. But we can and would, when the opportunity presents itself. So I think Q1 is the start of the ramp-up for LiNiCo. On MCU's basis, MCU already had some sales in May. They were initial sand and gravel sales, which was very exciting for us, right? Not a lot of money, nothing to do backward, summersaults or flits about. But we've proven the market, right? We've got major construction projects that are going on that not only have already purchased our clean materials, but they're asking for bigger sizes and different sizes. We have like a boulder-type rocks that they're saying, they'll take as much as we can provide and be cleaned, right? So I think the first project that we sold to was literally a project that was only 7 kilometers away from our site, and it was a flood barricading project, right? And they bought like 300 cubic yards and then 4,000 cubic yards, right? So it's going to start picking up. We just had meetings literally over the last 2 or 3 days with additional customers. So I don't think there is going to be any issue. We actually -- this is not -- this is also new to me. We -- there is like literally a global sand and gravel scarcity crisis as well, right, which we didn't realize. There is some papers published that [indiscernible] had provided us. So when Tom and I were first in the Philippines and the regulators are like, what about sand and gravel? What about sand and gravel? We're like, well, we're kind of here to do mercury and gold. And they said, Well, what about sand and gravel? And we really weren't getting it. We were like, look, we're happy to ultimately evolve into that business, we understand it, but the priority here is the remediation. And then they were like, well, what if we will take all the sand and gravel that you make? Okay. Let's start with sand and gravel. So it wasn't really our intention to do that to begin with, but anything that covers all the cost and then gives us a little profit, derisks the equation very strongly. To be fair, right, we've had start-up issues in MCU in the Philippines. I mentioned the typhoon season was extended. That was very difficult. But Paul was quarantined for over 2 weeks with COVID, right? And they put them in a quarantine facility. So as an American, I wouldn't want to be getting put into a Philippine quarantine facility all by myself, but he just got out like 3 days ago. He said, he's feeling good, right back to business, right? And so there's been some start-up issues, but we don't see any fatal flaws in terms of what we're trying to do there.

[indiscernible] somewhat familiar being in the few number of years and i remember patience. What is the difference between Redwood industries that currently exist with LiNiCo. I can know from a fact, speaking to some of the employees that they are moving pallets and pallets and pallets and that is to Redwood industries, [indiscernible]. And the primary order of that company lives right in [indiscernible]. quite an understatement with Musk, And he's done really well and apparently this one is a little on the radar, as you know, but is this a competitive industry to...

Yes. Yes. So great question.

Okay. Corrado, repeat the question. Yes, that's quite a statement, but just the question.

So regarding LiNiCo, is Redwood industries (sic) [ Redwood Materials ] with their CEO, JB Straubel and American Battery Metals with their Chief Technology Officer, Ryan Melsert, both of those 2 gentlemen came from Tesla. One is in Fernley and one is in Carson City. And are they competitors. So there is -- I will answer it 2 ways. The first answer is, yes. We're looking to do the same things, okay? American Battery Metals says that they have a site selected in Fernley and they're looking to build the facility. JB has a facility in Carson, and we have a facility in the industrial center. Our facility is a state-of-the-art battery metal recycling facility. I don't -- I can't explain how Redwood is receiving batteries and pallets because there is specific permitting requirements to do that. We are applying for those permits. We have no concerns about those permits because the facility that we have was previously permitted for the exact same thing, and we checked with the regulators and asked if there is any obstacles to our permits. They said, no. So that's a process. You can't receive batteries if you have those permits. So we just don't understand that. But the more important question is, they are using a different process for recycling the batteries than the ones that we're intending to use. American batteries is also using a slightly different process than we're intending to use. Our process will be patented, and we're kind of in the same game. Here's what's fascinating, 97% of these batteries are going to landfills, and there's no company today that's currently producing minerals from recycled batteries. Li-Cycle, which would be the fourth one. So we have LiNiCo, Redwood, American Battery Metals and this company called Li-Cycle, like lithium cycle. They are apparently receiving sorting and trying to produce black mass. They have a new facility they're just opening up in Rochester, but it's a brand-new playing field, right? So you got 4 teams joining you. Here's what's amazing. We're sized at about 30,000 tons. I think ABML is 20,000 tons. I would estimate Redwood is probably 20,000 to 30,000 tons. If all of us were running full, we would be a tiny, tiny portion of the batteries that are currently going to the landfills, right? So I don't see a loser in the first 2 or 3 years because there is just so much metal to be recycled. But the winner, I think, is the one that's going to be able to scale up and grow the fastest, right? And we'll see how that plays out. The amount of auto companies that are announcing that they're going into EVs is staggering. And Tesla has about an 8-year lead on those companies. They already have 2 Gigafactories in the United States alone. Nobody else has the battery capacity. When we asked Tesla, where the constraint in their system was, yesterday, they said just receiving the cells from the Japanese and the Korean, from Panasonic. The cells are what -- they can move faster, if they could just get the cells faster. So where is this material coming from, right? Who's ramping up, right? So when GM says they're going to be electric by 2030 or Ford says it, where is the lithium come? Where is the nickel come? Where is the cobalt coming from? Yes. I mean -- so that means prices are going up, demand is going to be strong, right? And we want to secure the feedstock. Yes?

And will all this be handled [indiscernible].

Right. Right. I'm glad you said, pick up your cell phone. I thought you're going to say, pick up your gun. I was getting a little nervous. Yes. No, I appreciate the question. I want to emphasize the valuation points here. Is American Battery Metals worth $1.25 billion? I don't know. That's what the market says. Is Li-Cycle worth $1.25 billion? I don't know. That's what the market says. We invested at $17 million. We're not $1.2 billion behind them. I can assure you that. In many ways, I feel like we're neck-and-neck or ahead. So we're very excited about it.

Yes. What are you actually doing with the mercury?

So that's a great question.

Corrado, can you repeat that question?

I'm sorry, Zach. Yes. Thank you. What are we actually doing with the mercury? So in -- let me profile this for you. In one of the models that we ran, we're running 150 tons a day at about $1,500 gold with 1 gram per ton in the amalgam. We were generating almost $1 million from one system, which cost about $2 million to deploy. Generating $1 million, I didn't say per month, okay? Take -- deducted from that $1 million is about $300,000 of cost for mercury storage, okay? There is no good solution today -- I'm sorry, there's no inexpensive solution today for mercury storage. There's no inexpensive solution. So in our model, we assume the worst that we're going to have to pay to properly have it disposed, okay? And there is a way to do that here in the U.S. In the Philippines, it was a Tom-negotiated. It was a prerequisite. For us to take them on as our first project, the government would have to handle all of the mercury storage and give us assurances that they weren't going to sell it back into the black market. And so containment areas are being built by the government right on site, and they're handling all the mercury. So that's a huge relief for us. It will depend site-by-site, and I don't want to get too far ahead of our business plan, but Tom already has a longer-term strategy in the works for our own mercury storage because there's no cheap solution. There's legal, effective solutions. They're expensive, bad news. Good news, we make a lot of money despite that. Bad news, it's expensive, right? So we could come up with a cheaper solution. I don't know if people care very much about this, but it's an industry -- it's priority industry issue #1 in mining in the country. All the miners store their mercury on site, substantially all. Why? Too expensive to send it to the government solution, right? So when you think of like nuclear power plants, you know how they have the old spent fuel rods, nowhere to send them, right? They don't want to let them go to Yucca. So they sit -- each nuclear site has spent fuel rods. Each mine site has mercury sitting on it, okay? Because it's too expensive to send it off site. And so hopefully, we'll be part of a bigger solution, but we're not doing it to help the mining industry, we're doing it because of the MCU business. Question?

[indiscernible]

Yes. So that's a great question. So...

[ Please repeat that question ].

Thank you, Zach. The question is, we're moving the mercury, but we're not really doing anything with it. So isn't it still a problem? Is that the right question?

Yes.

Yes. So first of all, mercury is -- if it's not the only -- it's one of the only liquid elements, okay? So what tends to happen in mining areas, which are typically topographically more mountainous, okay, the mercury will run down, right, run down, gravity will take it down ultimately into the waterways and ultimately into the rivers. That's exactly what happened here. So the Carson River Mercury Superfund Site is because mercury that was used on the Comstock and the Comstock mills found its way. And so where we find it mostly is in riverbeds and in the river, right? Or even dry beds, okay? So that's number one. Number two, it methylizes, right? So which means it gets into the biology, it gets into the fish, it gets into the vegetation, okay? And so once it methylizes, there's almost -- there had been almost no way to get it out, okay? The elemental mercury, you can imagine, the silver ball in your hand, but the methylized (sic) [ methylated ] mercury is invisible to us. Our solution can separate elemental mercury and, through the reactor, can re-elementalize. I know that's not a word, but take it from methylized mercury back into elemental mercury, right, and then separate it, okay? So we have a mechanism to extract mercury that we don't -- that we believe is unique, and we filed a patent for that. And the patent application has already been accepted. The patent has not been approved yet, just to be clear. So that's number one. So the first thing, to answer your question, is simply by removing it from the environment and safely storing it, you're restoring the ecosystem back to its natural state. So you're not contaminating people anymore, okay? That's number one. Number two, our solution can replace the current artisanal activities of using mercury. So what's been happening across the world is, government say to the miners, "Stop it," and they're like, "No." Then the government comes in and arrests them and shuts them down and then they come out of the wood work and they start up again because they can't live if they can't mine, right? So by the government's dealing with the effect, people just persist. We think we have a solution that addresses the root cause, which means once we clean up, let's say, Naboc River in the Philippines, then we can use our system going forward to process the gold and silver without using mercury. And we could either provide that service to the artisanal miner, where they will make more money safely, right, or they can use that ability to do it. So -- and then thirdly, when we take it out of the system, we're storing it in a way that can't go back into the system. In other words, we don't want it to go back into the environment. That's why it was important to us. Okay, it's great that the Philippine government is willing to take responsibility for it, but they can't then go sell it to China and then they start using it again for mining, right? So that -- I think that's the answer, right? We've got to get it out of the ecosystem so it's not impacting humanity. It's not impacting our health and our welfare.

[indiscernible] involved in small mining ventures that may be were not quite [indiscernible] should have been.