What changed in this filing

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Item 1. Business

2022-03-28 compared with 2021-03-10 · 409 added, 293 removed, 32 unchanged (96% of the section changed)

Unless the context otherwise indicates, the terms “Comstock,” “we,” “us,” “our,” “our Company” or “the Company” mean Comstock Mining Inc.

and its consolidated subsidiaries.

The Company is an emerging leader in climate-smart mineral development and production of increasingly scarce strategic and precious metals, focused on conservation-based, high-value, cash-generating, minerals and metals essential to meeting the rapidly increasing demand for clean energy technologies.

The Company has extensive, contiguous property in the historic Comstock and Silver City mining districts (collectively, the “Comstock District”) with fully permitted, metallurgical labs and an operational, mineral processing platform that includes a growing portfolio of gold, silver, lithium, nickel, cobalt, and mercury remediation extraction and processing facilities .

The Company’s goal is to grow per-share value by commercializing environment-enhancing, precious and strategic-metal-based products and processes that generate a rate of predictable cash flow (throughput) and increase the long-term enterprise value of our northern Nevada based platform.

The next three years are dedicated to delivering that value by achieving performance objectives in line with the strategic plan approved by the Company's Board of Directors.

The strategic plan is designed to deliver higher per-share value over the next three years, while positioning the Company for continued growth beyond 2023.

The Company began acquiring properties in the Comstock District in 2003.

Since then, the Company has consolidated a significant portion of the Comstock District, amassed the single largest known repository of historical and current geological data on the Comstock region, secured permits, built an infrastructure and completed two phases of test production.

The Company continues evaluating and acquiring properties inside and outside the district, expanding its footprint and evaluating all our existing and prospective opportunities for further exploration, development and mining.

The Company and its subsidiaries now own or control approximately 9,358 acres of mining claims, parcels, and royalty interests in the broader Comstock District and surrounding area.

The acreage includes approximately 2,396 acres of patented claims and surface parcels (private lands), and approximately 6,962 acres of unpatented mining claims (public lands), which the Bureau of Land Management (“BLM”) administers.

The Company's headquarters is on American Flat Road, immediately north of the Lucerne resource area and just south of Virginia City, Nevada.

Because of the Comstock District’s historical significance, the geology is well known and has been extensively studied by the Company, our advisors and many independent researchers.

We have expanded our understanding of the geology through vigorous surface mapping and drill hole logging.

The volume of geologic data is immense, particularly in the Lucerne and Dayton resource areas.

We have amassed a large library of historical data and detailed surface mapping of Comstock District properties and continue to obtain historical information from public and private sources.

We integrate this data with information obtained from our recent mining operations, to target prospective geological exploration areas and plan exploratory drilling programs, including expanded surface and underground drilling.

Our Dayton resource area and the adjacent Spring Valley exploration targets are located in Lyon County, Nevada, approximately six miles south of Virginia City.

Access to the properties is by State Routes 341 and 342, both paved roads.

Our sale to Tonogold Resources, Inc.

("Tonogold") of the membership interests in Comstock Mining LLC ("Comstock LLC"), the owner of the Lucerne Mine, resource area and related permits, closed on September 8, 2020.

The Lucerne resource area is located in Storey County, Nevada, approximately three miles south of Virginia City and 30 miles southeast of Reno.

The Lucerne resource area was host to the Company’s most-recent test mining operations from 2012 through 2015.

Lucerne is the subject of ongoing assessment, exploration and development plans by Tonogold.

The Company retains a 1.5% net smelter return ("NSR") royalty in the Lucerne properties.

The Company achieved initial production and first poured gold and silver on September 29, 2012.

The Company ceased mining in 2015 and concluded processing in 2016.

From 2012 through 2016, the Company mined and processed approximately 2.6 million tons of mineralized material, and produced 59,515 ounces of gold and 735,252 ounces of silver.

Figure 1 - Comstock Mining's Land Position in the Comstock District

Comstock Mining’s Corporate Realignment

Since 2019, the Company's Board of Directors approved, and the Company's management has been pursuing, a transformational strategy focused on high-value, cash-generating precious and strategic metal-based activities (the "Strategic Focus").

The Company advanced the Strategic Focus by facilitating the formation of dedicated subsidiaries that optimize the alignment with the goal and the performance objectives.

The realignment was completed in 2019, and the Company has begun investing in activities aligned with the performance objectives, including MCU, Pelen, and Comstock Royalty Holdings.

Figure 2 - Comstock Corporate Realignment

The Company completed the realignment during 2019, such that the new corporate structure is now well aligned with the Strategic Focus.

Comstock Mining Inc.

remains as the parent company that wholly owns the realigned subsidiaries.

Comstock Processing LLC owns the American Flat processing facility and additional land for potential expansion.

Comstock Northern Exploration LLC owns or controls the remaining Storey County exploration targets, primarily located north of the Lucerne properties, including the Occidental Lode.

Comstock Exploration and Development LLC owns or controls the Lyon County mining claims and exploration targets, including the Dayton Resource Area and the Spring Valley target.

Comstock Industrial LLC owns the Silver Springs properties and water rights.

Comstock Real Estate Inc.

owns the Daney Ranch and the Gold Hill Hotel.

Comstock LLC controls the Lucerne properties, including those owned by Northern Comstock LLC, and is now owned 100% by Tonogold.

The Company recorded a gain of $18.3 million associated with that sale during 2020.

Current Projects

The Company has identified many exploration targets on its land holdings in the Comstock District, but has focused, to date, on the Dayton resource area and, through our Membership Interest Purchase Agreement with Tonogold, the Lucerne resource area (including surface and underground exploration).

We have also leased other Storey County mineral properties, including the Occidental group and the Gold Hill group of exploration targets, to Tonogold, which is currently performing exploration activities and plans to ultimately develop towards feasibility for those assets.

We are developing updated geological interpretations and associated exploration and development plans for the remaining areas, primarily the Spring Valley group of targets that we view as an extension of the Dayton resource area.

Dayton Resource Area and Spring Valley

The Dayton resource area is south of Virginia City in Lyon County, Nevada.

It generally includes the historic Dayton, Kossuth and Alhambra patents, including the old Dayton Consolidated mine workings, south to where the Kossuth patent crosses State Route 341.

The historic Dayton mine was the last meaningful underground mining operation in the Comstock District, before being closed after the War Production Board published Limitation Order L-208, 7 F.

7992 on October 8, 1942, that closed down all gold mining operations in the United States and its territories.

The Dayton resource area ranks as one of the Company’s top exploration and potential mine development targets.

In January 2014, the Lyon County Board of Commissioners approved strategic master plan and zoning changes on the Dayton, Kossuth and Alhambra mining patents and other properties located in the Dayton resource area, enabling a more practical, comprehensive feasibility study for mining.

Geological studies and development planning are currently underway utilizing data from extensive metallurgical testing and assessment during 2017, 30,818 feet of additional drilling completed in 2015, geophysical analysis and interpretation completed in 2013, and extensive geological data from pre-2013, drill programs.

The Spring Valley group of exploration targets lies adjacent to the Dayton resource area at the southern end of the Comstock District, where the mineralized structures, trending to the south from the Dayton resource area, lie mostly concealed beneath a veneer of sediment gravels.

The area includes the Kossuth patented claim south of State Route 341, the Gennessee patented claim, the Dondero patented property, the Daney patented claim, the New Daney lode mining claims, and the Company’s placer mining claims in Spring Valley and Gold Canyon.

The Dayton Resource area and the remainder of the Company's Lyon County properties were the primary focus of a 3-D, airborne geophysical survey flown in September and October 2020 by Geotech Ltd of Aurora, Ontario, Canada.

Lucerne Resource Area

The Lucerne resource area has been the primary focus of the Company’s exploration and development efforts since 2003.

It includes the previously mined Billie the Kid, Hartford and Lucerne mining patents, and extends east and northeasterly to the area of the historic Woodville (southern-most of the historic Comstock bonanzas), Succor and Lager Beer patents and north to the historic Justice and Keystone mines.

The Lucerne resource area extends approximately one mile along a strike, with explored widths from 600 to 1,800 feet.

Our Lucerne exploration activities included open pit gold and silver test mining from 2004 through 2006, and from late 2012 through 2016.

As defined by the SEC Industry Guide 7 and regulation S-K 1300, we have not yet established any proven or probable reserves at the Lucerne Mine, now owned by Tonogold.

Tonogold now controls the Lucerne resource area through their acquisition of the membership interests of Comstock LLC.

Tonogold has begun work on an updated resource estimate, leading to a Preliminary Economic Assessment.

The Company and Tonogold hold the key mining permits required to resume surface or underground mining of this area.

Tonogold Agreements

There are three current agreements between Comstock and Tonogold:

the Membership Interest Purchase Agreement, the Mineral Exploration and Mining Lease, and the Lease Option Agreement for the Company's American Flat processing facility.

Tonogold and the Company previously entered into an Option Agreement in 2017 that was terminated during 2019.

Membership Interest Purchase Agreement

On January 24, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) to sell its interests in Comstock LLC, a wholly-owned subsidiary of Comstock with sole net assets of the Lucerne properties and related permits to Tonogold.

The Purchase Agreement, as amended, requires a total purchase price and fees of $17.6 million, comprised of $11.5 million in cash (excluding interest) and $6.1 million in Tonogold Series D Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock (“CPS”).

Tonogold also guaranteed the Company’s remaining financial responsibility for its membership interest in Northern Comstock LLC, which owns and leases certain mineral properties in the Lucerne area, and assumed certain reclamation liabilities, both totaling approximately $7.0 million.

At the initial closing on November 18, 2019, Tonogold received 50% of the membership interests of Comstock LLC.

On September 8, 2020, the Purchase Agreement was closed, and 100% of the membership interests were acquired by Tonogold.

The fair value of the consideration delivered by Tonogold for the membership interests in Comstock LLC was $18.8 million, including cash, CPS, and a note receivable, net of the contingent forward asset.

The Company retains a 1.5% NSR royalty on the Lucerne properties.

Mineral Exploration and Mining Lease

Effective September 16, 2019, and restated on December 23, 2019, the Company entered into a renewable mineral lease with Tonogold for certain mineral properties owned or controlled by the Company in Storey County, Nevada (the "Exploration Lease").

The Exploration Lease grants Tonogold the right to use these properties for mineral exploration and development, and ultimately the production, removal and sale of minerals and certain other materials.

The restated lease clarified and increased Tonogold’s exploration spending, permitting, and engineering commitments to a minimum of $1.0 million per year, for a cumulative total of $20.0 million over 20 years.

Tonogold also committed to specific milestones for issuing technical reports on their results, culminating in a published Feasibility Report by the 20 th anniversary of the agreement.

The initial term of the Exploration Lease (the "Exploration Term") is 5 years, with Tonogold committing to spending at least $5.0 million for exploration, at the rate of $1.0 million per year, and to producing an NI 43-101 compliant technical report by the end of the 5 th year.

The Exploration lease will automatically renew for a second, 10-year term (the "Development Term") as long as the commitments have been met.

During the Development Term, Tonogold is committed to an additional $10.0 million in expenditures for exploration, development, and technical reporting, at the rate of $1.0 million per year, and to producing an economically viable mine plan and an NI 43-101 compliant Pre-Feasibility report by the end of the 15 th anniversary of the agreement.

The Exploration Lease will automatically renew for a third, five-year term (“the Planning Term”) provided that the spending and reporting commitments have been met.

During the Planning Term, Tonogold is committed to an additional $5.0 million in expenditures for exploration, development, permitting, and technical reporting, at the rate of $1.0 million per year.

By the 20 th anniversary of the agreement, Tonogold also commits to producing an economically viable mine plan, and an NI 43-101 compliant Feasibility report, and will produce a mutually agreed-upon schedule for placing the properties into production.

Tonogold pays a quarterly lease fee of $10,000, in advance.

The lease fee will escalate 10% each year on the anniversary date of the Exploration Lease.

Tonogold will also reimburse the Company for all costs associated with owning the properties.

The lease also provides for royalty payments after mining operations commence.

For the first year following the commencement of mining, royalties will be paid at the rate of 3% of NSR for the properties.

The rate will be reduced to 1.5% of NSR thereafter.

The Company accounts for the Exploration Lease as an operating lease.

Occidental and Gold Hill Targets

The Occidental group and Gold Hill group of exploration targets represent longer-term exploration target areas that contain many historic mining operations, including the Overman, Con Imperial, Caledonia, and Yellow Jacket mines.

We believe that our consolidation of the Comstock District has provided us with opportunities to utilize the historical information available to identify drilling targets with significant potential.

The Occidental and Gold Hill properties are currently being explored through drilling by Tonogold under their Mineral Exploration and Mining Lease.

Lease Option Agreement for the American Flat processing facility

The Company and Tonogold also entered into an agreement (the "Lease Option Agreement") to lease its permitted American Flat property, plant and equipment to Tonogold for crushing, leaching and processing material from the Lucerne Mine.

If the option is exercised, Tonogold will pay the Company a rental fee of $1.0 million per year plus $1 per processed ton, in addition to all the costs of operating and maintaining the facility, up to and until the first $15.0 million in rental fees are paid,

and then stepping down to $1.0 million per year and $0.50 per processed ton for the next $10.0 million paid to Comstock, and then stepping down again, after the first $25.0 million of revenue is received, to $0.25 cents per processed ton, with no annual rental fee but with a $100,000 per quarter minimum revenue.

Tonogold will reimburse American Flat expenses of approximately $1.1 million per year during the option life.

We believe we have exceptional mine engineering, geological, regulatory, environmental, financial and operating competencies on our management team.

As of December 31, 2020, we have 9 full-time employees, inclusive of our general and administrative function.

We have also strengthened our system through agreements and relationships with key partners.

Corrado De Gasperis, Executive Chairman since September 2015, director since June 2011, Chief Executive Officer since April 2010, brings more than 30 years of industrial, financial, project management, and operational metals and mining, manufacturing, capital markets and board governance experience.

De Gasperis is also a Director, President and CEO of Sierra Springs Opportunity Fund, Inc., a strategic investee of Comstock Mining, since July 2019.

ITEM 1 BUSINESS

Unless context otherwise indicates, the terms we , us , our , Comstock , or the Company mean Comstock Mining, Inc.

and its subsidiaries on a consolidated basis.

Comstock innovates technologies that contribute to global decarbonization and circularity by efficiently converting massive supplies of under-utilized natural resources into renewable fuels and electrification products that contribute to balancing global uses and emissions of carbon.

We intend to use our technologies to achieve exponential growth and extraordinary financial, natural and social returns by:

building, owning, and operating a fleet of advanced carbon neutral extraction and refining facilities;

selling an array of complimentary process solutions and related services, and

licensing selected technologies to qualified strategic partners.

Our objective is to generate over $16 billion in revenue on an annualized basis by 2030, by responsibly producing and selling renewable energy products that enable us, our clients, and their downstream stakeholders to reduce greenhouse gas emissions by at least 100 million metric tons per year.

Meeting that objective would offset the equivalent of more than 234 million barrels per year of fossil fuel, or about 6% of the U.S.

transportation burn.

Our technologies unlock vast quantities of historically wasted and unused feedstock supplies with enough short cycle carbon to offset many billions of metric tons of long cycle fossil fuel emissions worldwide.

Most of that potential is provided by our Cellulosic Fuels technologies, which efficiently convert wasted, unused, widely-available, and rapidly-replenishable woody biomass into intermediates and precursors for the production of carbon neutral oil, ethanol, gasoline, renewable diesel, jet fuel,

marine fuel, and other renewable replacements for long cycle fossil derivatives.

Our full portfolio of patented, patent-pending and proprietary technologies includes many additional processes that complement and add to that potential.

We expect to use our technologies to meet our 2030 objectives with less than just 8% of the biomass residues produced annually in the U.S., however, we have structured our business to achieve and enable exponentially greater gains.

We believe that the Earth’s natural carbon cycle provides the simplest, fastest, most scalable, and most practical path for enabling systemic decarbonization and achieving a net zero carbon world.

Our strategic plan is consequently based on commercializing our technologies and renewable energy products to simultaneously:

reduce reliance on long cycle fossil fuels;

shift supply chains that terminate in combustion to short cycle renewable fuels;

lead and support the adoption and growth of a highly profitable, balanced worldwide short cycle ecosystem, that continuously offsets, recycles, and contributes to neutralizing global carbon emissions by rapidly growing and replenishing vast quantities of feedstock for renewable circular fuels.

In that fashion, we plan to empower our clients, the industries in which they operate, and the populations they serve to Burn Less fossil fuels, to Burn Smarter with renewable fuels, to Burn Cleaner by recycling emissions into additional renewable fuels, and to thereby make disruptive contributions to global decarbonization and helping to achieve a net zero carbon world.

OPERATING SEGMENTS

We group our business activities into two operating segments to manage performance:

Renewable Energy Products Segment

Our renewable energy products segment will own and operate extraction and refining facilities that convert wasted and unused biomass and other natural resources into valuable renewable energy products, including intermediates and precursors for advanced renewable fuels, such as carbon neutral oil, ethanol, gasoline, renewable diesel, jet fuel and marine fuel and electrification products.

We are currently evaluating several sites for the construction of facilities based on our Cellulosic Fuels technologies, the first of which will be designed to convert at least 330,000 metric tons per year of qualified feedstocks into at least about 33,000,000 gallons of renewable fuels per year and offset more than 330,000 metric tons of carbon dioxide emissions per year.

We are also currently equipping an existing production facility in the Tahoe Reno Industrial (“TRI”) Center in Storey County, Nevada, with sufficient capacity to extract and refine lithium, graphite, nickel, cobalt, manganese, copper, aluminum and other metals from up to 100,000 tons per year of lithium-ion batteries ("LIB").

Our renewable energy products segment will also license selected technologies to qualified strategic partners, and offer an array of complimentary upstream and downstream design, engineering, fabrication, procurement, and construction solutions based on our experience and core competencies in technology development, process engineering, and project deployment, with a focus on processes that support long-term feedstock and offtake clients.

Strategic and Other Investments Segment

We own and manage a number of investments and projects that are strategic to our plans and ability to produce and maximize revenue and throughput in our renewable energy products segments, but that are not a component of that segment or otherwise have distinct operating activities for management purposes.

Our strategic and other investments and projects include our recent investments in quantum computing and carbon dioxide utilization technologies as well as our mining, mercury remediation and related investments and our property development assets and related investments.

Summary Segment Results

We earned $228,123 and $201,700 in revenue in our strategic and other investments segment for each of the years ended December 31, 2021 and 2020.

We earned $634,042 and $0 in revenue in our renewable energy products segment for each of the years ended December 31, 2021 and 2020.

We had loss from operations of $4,604,326 and $5,474,261 per year for the years ended December 31, 2021 and 2020 in our strategic and other investments segment.

We had loss from operations of $1,801,595 and $0 per year for the years ended December 31, 2021 and 2020 in our renewable energy products segment.

We had total assets of $83,952,795 and $43,123,562 in our strategic and other investments segment at December 31, 2021 and 2020.

We had total assets of $43,001,837 and no assets in our renewable energy products at December 31, 2021 and 2020.

See Note 20, Segment Reporting , to the Consolidated Financial Statements

RECENT DEVELOPMENTS

Comstock historically focused on natural resource exploration, development, and production, with an emphasis on mining gold and silver resources from its extensive contiguous property holdings in the historic Comstock Lode and Silver City mining districts in Nevada (collectively, our “Comstock Mineral Estate”).

Between 2012 and 2016, we mined and processed about 2.6 million tons of mineralized material from the Comstock Mineral Estate, producing 59,515 ounces of gold and 735,252 ounces of silver.

We subsequently focused on exploration and development activities in anticipation of continued production, while evaluating and exploiting opportunities for the monetization of selected assets, debt elimination, new investments, and diversification.

During 2020 and 2021, we completed a series of transactions that were designed to build on our competencies and position us to address and capitalize on the global transition to clean energy.

Those transactions primarily included (i) our sale of Comstock Mining, LLC, the owner of our Lucerne resource area in Storey County, Nevada, and related permits, (ii) our acquisitions of 100% of Comstock Innovations Corporation (F/K/A Plain Sight Innovations Corporation), 100% of Comstock Engineering Corporation (F/K/A Renewable Process Solutions, Inc.), 100% of MANA Corporation and 90% of LINICO Corporation, (iii) our acquisition of intellectual property assets from FLUX Photon Corporation, and (iv) our purchase of 48.19% of Quantum Generative Materials LLC and 25% of Mercury Clean Up LLC.

Collectively, these transactions added the management, employees, facilities, intellectual properties, and other assets we needed to restructure and transform our company and business into an emerging leader in the innovation and sustainable production of renewable energy products, including cellulosic fuels and electrification metals.

Additional information on these transactions is provided in Note 2 to our Consolidated Financial Statements.

COMPETITIVE STRENGTHS

Our management team has deep experience in a diverse array of industries, including renewable fuels, hazardous waste, graphite, mining, metal manufacturing, agriproducts, and intellectual property research, development, and commercialization.

We have core competencies in systemic management and innovating and scaling new technologies to commercial maturity, with significant expertise and know-how in the design, engineering, construction, integration, operation, and scaling of facilities based on our patented, patent-pending, and proprietary processes and other technologies.

Our expertise, know-how, technologies, and patent position collectively comprise our primary competitive strengths, and form the basis for our growth plans and the value-added renewable energy products, process solutions, related services, and client licensing options.

Our team has designed, engineered, built, commissioned, and operated many industrial processing facilities in multiple industries, including 26 advanced renewable fuel production facilities for third-party clients.

Most notably, our team invented and commercialized technologies that integrate into the backend of corn ethanol plants to extract and recover what was an historically-overlooked natural resource – inedible crude corn oil, for use in the production of advanced carbon-neutral liquid fuels and other biomass-derived alternatives to fossil fuel products.

Upwards of 95% of the U.S.

corn ethanol industry uses that technology today to offset more than 20 million barrels of fossil fuels per year, with an estimated total lifetime contribution in excess of 250 million barrels of avoided fossil fuel.

Those results are validating proof of a repeatable and scalable concept that we plan on capitalizing on with our patented, patent-pending and proprietary technologies.

Our strategic and tactical plans rely on the commercialization of technologies for renewable energy products that shift and leverage the consumption patterns of industries and populations to enable systemic decarbonization and contribute to a net zero carbon world.

BUSINESS OVERVIEW

Electrification and continued advancements in energy storage are vitally necessary to reduce reliance on fossil fuels.

However, more than 70% of the electricity needed to power that infrastructure is currently generated by the combustion of fossil fuels, notwithstanding the impact of increased global urgency, continued innovation, and the accelerating growth of renewable energy.

Simultaneously, about 9% of the estimated 70 million new vehicles sold worldwide in 2021 were electric.

While electric vehicle (“EV”) sales are anticipated to account for between 30% and 50% of new vehicle sales by 2030, there will only be about 145 million EVs on the road in 2030 under those aggressive growth scenarios.

In contrast, there were more than 1.45 billion passenger cars and commercial vehicles in use worldwide at the end of 2020, and more than 98% of them were powered by gasoline or diesel fuel.

Those vehicles accounted for 63% of the 7.3 billion metric tons of carbon dioxide emitted by the transportation sector in 2020, and that amount is expected to increase by more than 50% as the combustion fleet

continues to grow beyond 2030.

The growth and turnover of that fleet will continue to have a significant impact on the world’s harmful carbon emissions.

Accordingly, we believe that combustion will continue to be the dominant source of power for transportation and energy for decades to come, if for no other reason than the fact that the associated infrastructure is already deployed on a planetary scale.

We also believe that the world’s entrenched combustion apparatus can play an extremely important role in enabling systemic decarbonization and achieving global net zero.

Using it will require focus to shift to burning in balance – to sustainably cycling carbon by burning less fossil fuel, by burning more renewable fuel, and by growing and monetizing more biomass to recycle emissions and maximize the production of renewable fuels.

The Earth’s natural carbon cycle provides a highly-scalable pathway for global decarbonization.

The key to using it is to strike and sustain a profitable new balance between its living systems and humanity’s global uses, wastes, and emissions of carbon.

We plan on doing so by focusing on and working exclusively with the abundance of short cycle carbon that’s already on and above the surface of the Earth, and by leaving as much long cycle fossil carbon as possible in subsurface reserves.

Humanity’s combustion practices can become a part of the natural carbon cycle by providing sufficient quantities of carbon dioxide to grow more terrestrial biomass, which would increase and ultimately iterate to a healthy balance with the available emissions.

In a simple example of the associated impact, sustainably harvesting 3.4 billion metric tons per year of biomass would be enough to absorb 4.0 billion metric tons of carbon dioxide per year and produce 1.5 billion metric tons per year of renewable fuels with our Cellulosic Fuels technologies.

That fuel would shift 10% of the global burn to short cycle carbon, thereby reducing the net addition of previously sequestered long cycle carbon into the atmosphere and oceans by 4.0 billion metric tons to 36 billion metric tons per year.

Total fuel consumption worldwide would remain at 15 billion metric tons per year, and total emissions would remain at 40 billion metric tons per year, but 10% of the global burn would then be circular.

The World Resources Institute (“WRI”) estimates that the world’s forests absorb about 16 billion metric tons of carbon dioxide per year, or about 8 billion net of emissions due to deforestation and other disturbances.

Reducing and replacing half of those losses would offset 10% of humanity’s annual emissions, however, prior methods for effecting such solutions had limited economic value.

Our Cellulosic Fuels solutions dramatically alter that dynamic by unlocking and efficiently converting wasted, unused, and rapidly-replenishable woody biomass and other short cycle renewable resources into intermediates and precursors for the production of carbon neutral crude oil, ethanol, gasoline, renewable diesel, jet fuel, marine fuel, and other renewable replacements for long cycle fossil derivatives.

Our strategic plan is based on innovating and using our technologies and the renewable energy products that they enable to reduce reliance on long cycle fossil fuels, to shift to and maximize throughput of short cycle fuels, and to lead and support the adoption and growth of a balanced global short cycle carbon ecosystem, with embedded economic incentives to offset, recycle, and contribute to neutralizing emissions by growing and selling more feedstock and fuel.

Our objective is to generate over $16 billion in revenue on an annualized basis by 2030, by responsibly producing and selling renewable energy products that enable us, our clients, and their stakeholders to reduce greenhouse gas emissions by at least 100 million metric tons per year.

Meeting that objective would offset the equivalent of 234 million barrels per year of fossil fuel, or about 6% of the U.S.

transportation burn.

We also make strategic and other investments that contribute to our mission of enabling systemic decarbonization and help to realize our vision of a net zero carbon world.

Our current investments include advanced new technologies involving atmospheric water harvesting, carbon capture and utilization, and quantum computing to harness quantum-enabled generative adversarial neural networks to develop breakthrough new materials for energy storage, electronics, carbon capture and utilization, and mining.

We compete with other renewable fuels, electrification metals, clean technology engineering, licensing, and mineral exploration companies in connection with the acquisition of properties and other assets, feedstock and offtake agreements, and clients, and the attraction and retention of human capital.

Those competitors may have substantially greater financial resources than we do.

While we plan to produce and sell renewable alternatives to fossil crude to fuel producers, we also have the capability of directly refining those alternates into renewable fuels, We accordingly face competition from producers and suppliers of fossil fuels, and producers, marketers, traders, and distributors of renewable fuels.

Our cellulosic ethanol products will compete with ethanol produced by the highly fragmented U.S.

corn ethanol industry, including from plants owned by farmers, cooperatives, oil refiners and retail fuel operators that may continue to operate even

when market conditions are not favorable due to the benefits realized from their other operations.

As of December 31, 2020, the top five corn ethanol producers operated 69 plants and accounted for approximately 40% of the domestic production capacity with capacities ranging from 800 million gallons per year to 1.8 billion gallons per year.

About half of the corn ethanol plants in the U.S.

are standalone facilities that accounted for approximately 38% of domestic production capacity.

The size of the biomass-based diesel industry is small compared to the size of the petroleum-based diesel fuel industry.

In the United States and Canadian biomass-based diesel markets, we will compete with independent biomass-based diesel producers, as well as large, multi-product companies that have greater resources than we do.

Ag Processing Inc., Archer Daniels Midland Company, Cargill Incorporated, and Louis Dreyfus Commodities Group are major international agribusiness corporations and biodiesel producers with the financial, feedstock sourcing and marketing resources to be formidable competitors in the biodiesel industry.

These agribusiness competitors tend to make renewable fuel as part of their integrated agribusinesses.

We will also compete with several large and well capitalized producers of renewable diesel.

Neste Corporation has about 900 million gallons of renewable diesel production capacity in Asia and Europe, a significant portion of which is imported into the U.S.

Diamond Green Diesel, LLC, a joint venture between Valero Energy Corporation and Darling Ingredients Inc., produces about 275 million gallons per year of renewable diesel and it is in the process of expanding capacity to 675 million gallons per year by 2022.

In January 2021, Valero announced that it will build a 470 million gallons per year renewable diesel plant in Texas with Darling.

We expect significant renewable diesel capacity to initiate new production by 2030.

According to the U.S.

Energy Information Administration data, renewable diesel imports from Singapore to the U.S.

totaled 173 million gallons in 2018, 252 million gallons in 2019, and 280 million gallons in in 2020.

Significant additional import activity from other countries is likely to occur.

We also face the prospect that petroleum refiners will be increasingly competitive with us, either by converting oil refineries to produce renewable diesel or by co-processing renewable feedstock with crude oil.

Several petroleum refiners in the U.S.

have affected conversions of their facilities from crude oil to renewables in the past year including but not limited to Sinclair, Phillips 66, Holly Frontier, Marathon, and Exxon.

Some of the largest refiners have started co-processing renewable feedstocks or have announced plans to do so.

If refinery conversions accelerate or if co-processing expands significantly, the competition we face could increase significantly.

We also face competition in the biomass-based diesel RIN compliance market from producers of renewable diesel and in the advanced biofuel RIN compliance market from producers of other advanced biofuels, such as Brazilian sugarcane ethanol producers and producers of biogas used in transportation.

We also operate in the lithium-ion battery (“LIB”) recycling industry, where we face competition primarily from companies that focus on one type of recycling, some of which have more expertise in the recycling of that material than we do.

We also compete against companies that have a substantial competitive advantage because of longer operating histories and greater financial and other resources.

National or global competitors could enter the market with more substantial financial and workforce resources, stronger existing customer relationships, and greater name recognition, or could choose to target medium to small companies in our markets.

Competitors could also focus their substantial resources on developing more efficient recovery solutions than our highly efficient processes planned for lithium, graphite and other material extraction.

Competition also places downward pressure on contract prices and profit margins, which presents significant challenges to maintaining growth rates and acceptable margins.

The Company is not dependent on a limited number of customers for its sales.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE

We are an emerging leader in the global shift to a circular economy.

Our systemic management methodology, corporate social responsibility (“CSR”) and environmental, social, and governance (“ESG”) policies and framework defines, seeks, and accounts for benefits in ways that align all of our stakeholder interests with sustainability objectives that are designed to rise to the realities of our time;

where benefits are defined in terms of three different interdependent forms of capital – financial, natural, and social, that we generate while making a positive impact on the economy, the environment, and our local and global communities.

by at least 100 million metric tons per year.

Meeting that objective would offset the equivalent of more than 234 million barrels per year of fossil fuel, or about 6% of the U.S.

transportation burn.

REGULATORY MATTERS

Once operational, our renewable energy products segment will be sensitive to government programs and policies that affect the supply and demand for ethanol, gasoline, renewable diesel, jet fuel, marine fuel, other renewable fuels, and their intermediates, precursors, and derivatives, which in turn may impact our throughput.

The demand for cellulosic and carbon neutral fuels is rapidly increasing, and supply is virtually non-existent for the want of recently developed process technologies.

Global demand is approaching 10% of the total fuel supply, with stable market prices linked to carbon reduction standards.

America’s renewable fuels standard (“RFS II”) is driving innovation by both requiring and incentivizing use of advanced cellulosic fuels, including for upwards of 16 billion gallons of cellulosic ethanol annually by 2022.

Under the RFS II, renewable fuel producers are essentially guaranteed market access inasmuch as fossil fuel producers are required to purchase renewable fuels to meet RFS II quotas.

The EPA assigns individual refiners, blenders and importers the volume of renewable fuels they are obligated to blend into the fuel supply each year based on their percentage of total fuel sales.

The EPA has the authority to waive the mandates in whole or in part if there is inadequate domestic renewable fuel supply, if the requirement severely harms the environment, or harms the economy of the nation or a state.

The RFS II volume requirements apply to petroleum refiners and petroleum fuel importers in the 48 contiguous states and Hawaii, who are defined as obligated parties in the RFS II regulations.

Obligated parties are required to incorporate a certain percentage of renewable fuel into their petroleum-based fuel or purchase credits in the form of renewable identification numbers from those who do.

An obligated party’s RVO is based on the volume of petroleum-based fuel they produce or import.

The largest U.S.

petroleum refining companies, such as British Petroleum, Chevron, Citgo, ExxonMobil, Marathon, PBE, Phillips 66, and Valero, represent the majority of the total RVO, with the remainder made up of smaller refiners and importers.

The RFS II requirements are based on two primary categories and two subcategories.

The two primary categories are conventional renewable fuel, which is primarily satisfied by corn ethanol, and advanced biofuel, which is defined as a biofuel that reduces lifecycle greenhouse gas emissions by at least 50% compared to the petroleum-based fuel the biofuel is replacing.

The advanced biofuel category has two subcategories:

cellulosic biofuel and biomass-based diesel, which can be satisfied with ethanol made from woody biomass and renewable diesel, respectively.

The total advanced biofuel requirement is larger than the combined cellulosic biofuel and biomass-based diesel requirement, thus requiring the use of additional volumes of advanced biofuels.

The RFS II requirement for advanced biofuels can be satisfied by any advanced biofuel, including fuels produced with our Cellulosic Fuels technologies, so long as it meets the 50% greenhouse gas reduction requirement which our solutions meet.

The advanced biofuel RVO is expressed in terms of ethanol equivalent volumes, or EEV, which is based on the fuel’s renewable energy content compared to ethanol.

Renewable diesel typically has an EEV of 1.7, compared to 1.0 for ethanol.

Accordingly, it requires less biomass-based diesel than ethanol to meet the required volumes as each gallon of biomass-based diesel counts as more gallons for purposes of fulfilling the advanced biofuel RVO, providing an incentive for refiners and importers to purchase biomass-based diesel to meet their advanced biofuel RVO.

Advanced cellulosic and other fuels are able to be sold at higher prices than traditional corn ethanol due to their increased GHG reductions.

The EPA ensures compliance with the RFS II by assigning a Renewable Identification Numbers (“RINs”) to each gallon of renewable fuel produced or imported into the U.S.

RINs are generated by renewable fuel producers, passed onto fossil fuel producers that purchase renewable fuels, and then submitted to the EPA.

Producers assign RINs to their renewable fuels and the RINs are detached when the renewable fuel is blended with transportation fuel domestically.

Market participants can trade the detached RINs in the open market.

Fossil fuel producers that do not want to buy and distribute renewable fuel can buy RINs and submit them to the EPA to show compliance with RFS II.

Obligated parties must obtain and retire the required number of RINs to satisfy their RVO during a particular compliance period.

An obligated party can obtain RINs by buying renewable fuels with RINs attached, buying RINs that have been separated, or producing renewable fuels themselves.

All RIN activity under RFS II must be entered into the EPA’s moderated transaction system, which tracks RIN generation, transfer and retirement.

RINs are retired when used for compliance with the RFS II requirements.

The market price of detached RINs affects the price of renewable fuels in certain markets and can influence purchasing decisions by obligated parties.

The value of RINs can significantly impact to the price of renewable fuel.

In 2020, RIN prices reported by the Oil Pricing Information System, or OPIS, fluctuated significantly throughout the year and ranged from a low of $0.37 per gallon to a high of $1.03 per gallon, or 45% of the average spot price, in December 2020.

The federal biodiesel mixture excise tax credit (“BTC”), provides an additional $1.00 refundable tax credit per gallon to the first blender of biomass-based diesel with petroleum-based diesel fuel.

The BTC can then be credited against federal excise tax liabilities or the blender can obtain a cash refund from the U.S.

Treasury for the value of the credit.

The BTC was first implemented on January 1, 2005 and has been allowed to lapse multiple times before being retroactively reinstated.

The BTC is an incentive shared across the advanced biofuel production and distribution chain through routine, daily trading and negotiation.

In December 2019, the BTC was retroactively reinstated for 2018 and 2019, and made effective from January 2020 through December 2022.

Individual state and other governments are also pushing the demand beyond the federal requirements.

California, Oregon, Washington and British Columbia all have Low Carbon Fuel Standards (“LCFS”) that encourage consumption of advanced biofuels by setting annual carbon intensity (“CI”) emission standards which reduce over time.

According to the U.S.

Department of Energy, more than 40 states have implemented various programs that encourage the use of biomass-based diesel through blending requirements as well as various tax incentives.

The goal of California’s LCFS, for example, is to reduce GHG emissions from the transportation sector by 20% by 2032.

The regulation quantifies lifecycle greenhouse gas emissions by assigning a CI score to each transportation fuel based on that fuel’s lifecycle assessment.

Each petroleum fuel provider (generally the fuel’s producer or importer, or “regulated party”) is required to ensure that the overall CI score for its fuel pool meets the annual CI target for a given year.

A regulated party’s fuel pool can include gasoline, diesel, and their blendstocks and substitutes.

Any alternative fuel is characterized by its CI, generating credits based on its carbon emissions (or lack thereof).

Fuels with the lowest CI score, generate the most credits, and reap the highest market price.

Although any fuel can generate credits, California also has an E10 mandate which requires all gasoline be mixed with 10% ethanol, this has led to a consistent demand for over 1 billion gallons of ethanol per year.

As the LCFS and CI requirements get increasingly stringent, fuel providers will be unable to meet their required CI reductions with corn ethanol alone.

Comstock’s advanced cellulosic ethanol is less carbon intensive than conventional corn ethanol, thereby providing opportunities for increased sales.

For comparison, the market value of cellulosic ethanol in the California market is equal to the price for conventional ethanol, plus the RIN value, plus the LCFS value based on the CI score.

Under current market conditions, our cellulosic ethanol would have a market value in California ranging from $4.97 per gallon with the lower limit CI scoring, to $4.43 per gallon using the upper limit for CI scoring, as compared to $2.16 per gallon for corn ethanol.

We will obtain carbon credits when we sell qualified fuels into California.

During 2020, California LCFS carbon credits ranged from $167.50 per metric ton to $218.00 per metric ton, as reported by OPIS.

Likewise, the Oregon Clean Fuel Program requires a 10% reduction of the average carbon intensity of Oregon’s transportation fuels from 2020 levels by 2025.

The baseline year for the program is 2020 and represents 10% ethanol blended with gasoline and 5% biodiesel blended with diesel.

The Oregon Renewable Fuels Standard requires all gasoline sold in the state to be blended with 10% ethanol (“E10”).

In addition, all diesel fuel sold in the state must be blended with at least 5% bio-based diesel.

In March of 2020, the Oregon Governor issued an executive order to expand the Clean Fuel Program to achieve at least a 20% reduction from 2020 levels by 2030 and a 25% reduction by 2035.

The executive order is currently in a rule making process, with a targeted effective date of January 1, 2023.

We will obtain carbon credits when we sell qualified fuels in Oregon.

During 2020, Oregon OCF carbon credits ranged from $105.00 per metric ton to $155.00 per metric ton, as reported by OPIS.

In the European Union, or EU, the Renewable Energy Directive established a 10% target by 2020 for the use of renewable energy in the transport sector in EU member states.

Given the existing limited market presence of alternative fuels or electromobility, the majority of the target has been realized through biofuels.

In 2018, a revised Renewable Energy Directive, RED II, was established.

RED II set a target of 14% renewables in transport and a 32% reduction of greenhouse gases, to be progressively achieved from 2021 until 2030.

Biofuels produced from certain types of waste feedstocks, such as used cooking oil, benefit from extra incentives and so-called advanced feedstocks even get a specific sub-mandate.

Additionally, RED II opens up new outlets such as marine fuels or renewable aviation fuels.

In 2021, each of the EU Member States is in the process of ratifying RED II into national legislation.

Since the adoption of RED II, the EU has introduced the European Green Deal, a package of new measures that are intended to align the EU's environmental goals with the Paris Accord objectives and, according, the European Commission is exploring whether to update RED II.

A small refinery is defined as one that processes fewer than 75,000 barrels of petroleum per day.

Small refineries can petition the EPA for a SRE which, if approved, waives their portion of the annual RVO requirements.

The EPA, through consultation with the DOE and the USDA can grant a full or partial waiver, or deny it outright within 90 days of submittal.

The EPA granted significantly more of these waivers for the 2017, 2018 and 2021 reporting years than they had in prior years.

This totaled 790 mmg of waived requirements for the 2021 compliance year, 1.82 billion gallons for 2017 and 1.43 billion gallons for 2018.

doing so, the EPA effectively reduced the RFS II mandated volumes for those compliance years, and as a result, RIN values declined significantly.

Biofuels groups have filed a lawsuit in the Court of Appeals for the D.C.

Circuit, challenging the 2019 RVO rule over the EPA’s failure to address small refinery exemptions in the rule making.

This was the first RFS II rule making since the expanded use of the exemptions came to light;

however, the EPA had declined to cap the number of waivers it grants, and until late 2019, had declined to alter how it accounts for the retroactive waivers in its annual volume calculations.

The EPA has a statutory mandate to ensure the volume requirements are met, which are achieved by setting the percentage standards for obligated parties.

We believe the EPA’s recent approach accomplished the opposite in that even if all the obligated parties complied with their respective percentage obligations for 2019, the nation’s overall supply of renewable fuel would not meet the total volume requirements set by the EPA.

This undermines Congressional intent to increase the consumption of renewable fuels in the domestic transportation fuel supply.

Biofuels groups have argued the EPA must therefore adjust its percentage standard calculations to make up for past retroactive waivers and adjust the standards to account for any waivers it reasonably expects to grant in the future.

Our design, engineering, licensing, installation, commissioning and maintenance services are subject to various federal, state and local environmental, health and safety laws and regulations, which require a standard of care to control potential pollution and limit actual or potential impacts to the environment and personnel involved.

While our engineering and installation work regularly exceeds health, safety and environment requirements, a violation of these laws and regulations, or of permit conditions, can result in substantial fines, natural resource damage, criminal sanctions, permit revocations and/or facility shutdowns.

We do not anticipate a material adverse effect on our business or financial condition as a result of our efforts to comply with these requirements.

Operating expenses to meet regulatory requirements, including all environmental permits, will be an integral part of service costs.

Costs for compliance with environmental laws include safety and health protection measures, controls limiting air emissions and effluent discharges, emergency response capabilities, storm water management, recordkeeping and training.

We often assist our customers in environment, health and safety compliance issues, including new requirements concerning greenhouse gas emissions.

It may not be possible to completely segregate our environmental, health and safety responsibilities from those of our customers.

In 2019, in a supplemental rule-making to the 2020 RVO rule, the EPA changed their approach, and for the first time accounted for the gallons that they anticipate will be waived from the blending requirements due to small refinery exemptions.

To accomplish this, they added in the trailing three year average of gallons the DOE recommended be waived, in effect raising the blending volumes across the board in anticipation of waiving the obligations in whole or in part for certain refineries that qualify for the exemptions.

Though the EPA has often disregarded the recommendations of the DOE in years past, they stated in the rule their intent to adhere to these recommendations going forward, including granting partial waivers.

In January 2020, the U.S.

Court of Appeals for the 10th Circuit ruled on RFA et.

EPA in favor of biofuels interests, overturning EPA’s granting of refinery exemptions to three refineries on two separate grounds.

The Court agreed that, under the Clean Air Act, refineries are eligible for SREs for a given RVO year only if such exemptions are extensions of exemptions granted in previous RVO years.

In this case, the three refineries at issue did not qualify for SREs in the year prior to the year that EPA granted them.

They were thus ineligible for additional SRE relief because there were no immediately prior SREs to extend.

In addition, the Court agreed that the disproportionate economic hardship prong of SRE eligibility should be determined solely by reference to whether compliance with the RFS II creates such hardship, not whether compliance plus other issues create disproportionate economic hardship.

The Court thus vacated EPA's grant of SREs for certain years and remanded the grants back to EPA.

The refiners appealed for a rehearing which was denied.

Two of the refiners appealed the decision to the U.S.

Supreme Court and in January 2021, the Supreme Court announced they would hear the case.

If the decision against the EPA is upheld by the Supreme Court, it is uncertain how the EPA will propose to remedy the situation.

In light of the 10th Circuit ruling, a number of refineries have applied for “gap year” SREs in an effort to establish a continuous string of relief and to ensure they are able to qualify for SREs going forward.

A total of 64 gap year requests were filed with the EPA and reviewed by the DOE.

In September 2020 the EPA announced that they were denying 54 of the gap year requests that had been scored and returned by DOE, regardless of how they had been scored.

Without a string of continuous SRE approvals, almost no small refinery would be eligible to apply for hardship relief in this manner, unless the Supreme Court overturns the 10th Circuit ruling, which we believe is unlikely.

Our renewable energy products segment activities are subject to various and extensive environmental and other regulations.

We will be required to obtain and maintain various environmental permits to operate our plants and other facilities.

Renewable fuel production involves the emission of various airborne pollutants, including particulate, carbon dioxide, oxides of nitrogen, hazardous air pollutants and volatile organic compounds.

In 2007, the U.S.

Supreme Court classified carbon dioxide as an air pollutant under the Clean Air Act in a case seeking to require the EPA to regulate carbon dioxide in vehicle emissions, which the EPA later addressed in RFS II.

There has been an increase in battery regulation globally in recent years.

For example, California is evaluating a policy to drive Recycling Efficiency Rates as close to 100% as possible, potentially beginning as early as 2022.

In Canada, Ontario is requiring Recycling Efficiency Rates for lithium ion batteries (“LIBs”) of over 70% by 2023.

China has required functional material recovery rates greater than 80% since 2018, with specific targets by key materials (nickel, cobalt, and lithium).

The European Union proposes to update its EU Battery Directive during 2021 to implement more aggressive recycling targets, including minimum material recovery rates of 90% for both cobalt and nickel by 2025, a minimum recovery rate of 35% for lithium by 2025, and a Recycling Efficiency Rate of least 65% by 2025.

Our renewable energy products segment holds all licenses currently required in connection with its technologies and operations.

We have engaged a third-party consultant to work across all projects, supporting us with permitting and regulatory compliance, and keeping us apprised of all relevant regulations and related changes.

A violation of these laws and regulations, or of permit conditions, can result in substantial fines, natural resource damage, criminal sanctions, permit revocations and/or facility shutdowns.

We do not anticipate a material adverse effect on our business or financial condition as a result of our efforts to comply with these requirements.

Operating expenses to meet regulatory requirements, including all environmental permits, will be an integral part of service costs.

We often assist our customers in environment, health and safety compliance issues, including new requirements concerning greenhouse gas emissions.

It may not be possible to completely segregate our environment, health and safety responsibilities from those of our customers.

Mining operations and exploration activities are subject to various federal, state, and local laws and regulations in the United States, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances, and other matters.

We have obtained substantially all licenses, permits, and other authorizations currently required for our mining, exploration and other development programs.

We believe that we are in compliance in all material respects with applicable laws and regulations.

Capital expenditures relating to compliance with laws and regulations that regulate the discharge of materials into the environment, or otherwise relating to the protection of the environment, comprise a substantial part of our historical capital expenditures and some of our anticipated future capital expenditures.

For example, we incur certain expenses and liabilities associated with our reclamation obligations.

We are generally required to mitigate long-term environmental impacts by stabilizing, contouring, re-sloping, and re-vegetating various portions of a site after mining and mineral processing operations are completed.

These reclamation efforts are conducted in accordance with plans reviewed and approved by the appropriate regulatory agencies.

The Nevada Revised Statutes (“NRS”) 519A to 519A.280 and Nevada Administrative Code (“NAC”) 519A.010 to 519A.415 promulgated by the Nevada State Environmental Commission and the Nevada Division of Environmental Protection (“NDEP”), Bureau of Mining and Reclamation (“BMRR”) require a surety bond to be posted for mining projects so that, after completion of the work on such mining projects, the sites are left safe, stable and capable of providing for a productive post-mining use.

Over the past four years, the Company has provided a reclamation surety bond, through the Lexon Surety Group (“Lexon”), with the BMRR.

The BMRR, with concurrence from Storey County, has approved our most recent reclamation plan, as revised, and our estimated total costs related thereto of approximately $7,251,950, including $6,751,950 for BMRR and $500,000 of additional reclamation surety bonding directly, with Storey County.

As part of the surety agreement, the Company agreed to pay a 2.0% annual bonding fee and signed a corporate guarantee.

The bonded amount is $7,251,950, and the collateral held on deposit at December 31, 2021 is $2,695,944.

CONTINGENCIES

Under Comstock’s insurance programs, coverage is obtained for catastrophic exposures, as well as those risks required to be insured by law or contract.

The deductible per occurrence for environmental impairments is $500,000.

Environmental liability insurance is carried with policy limits of $10,000,000 per occurrence with a $5,000,000 umbrella.

We also carry professional liability, pollution, auto and worker’s compensation insurances.

From time to time, we are involved in claims, investigations and proceedings that arise in the ordinary course of business.

There are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

INTELLECTUAL PROPERTY

We protect our intellectual properties through a combination of patents, patent applications, license agreements, common law copyrights, and trade secrets.

Comstock IP Holdings holds our portfolio of patented, patent-pending, and proprietary technologies, including our Cellulosic Fuels and Electrification Metals technologies, as well as an array of additional processes, including atmospheric water harvesting and carbon capture and utilization.

The earliest of our patents are scheduled to expire is in 2033, however, we have additional issued and pending patents that are expected to expire at later dates.

We have also developed and use trade secrets to protect our know-how in the systemic extraction, valorization, and processing of wasted or used resources.

HUMAN CAPITAL RESOURCES

The attraction, retention and development of employees is critical to our success.

We accomplish this, in part, by our systemic management practices, competitive compensation practices, training initiatives, and growth opportunities within the company.

Comstock currently has 32 full-time employees.

We also employ sales, engineering, research, geological, regulatory, environmental, operating, financial, and administrative personnel.

There is no union representation for any of our employees.

EXECUTIVE OFFICERS

Corrado De Gasperis, Executive Chairman and Chief Executive Officer

De Gasperis brings more than 35 years of industrial manufacturing, financial, governance, operational and project management experience in the metals, mining, and recycling industries.

De Gasperis has served as Comstock’s chief executive officer since 2010 and executive chairman since 2015.

He is also a director and president of each of the Company’s wholly- and majority-owned subsidiaries, and Sierra Springs Opportunity Fund, Inc., a strategic investee of Comstock since July 2019.

From 2006 to 2009, Mr.

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(“GrafTech”), a global manufacturer of graphite and carbon cathodes and electrodes.

From 2001 to 2006, he served as the Chief Financial Officer, in addition to his duties as Vice President and Chief Information Officer, which he assumed in 2000.

From 1998 to 2000, he served as the Controller of GrafTech and a leader of its transformation and recapitalization.

From 2001 to 2006, he served as the Chief Financial Officer, in addition to his duties as vice president and chief information officer and a leader of its transformation and recapitalization.

From 1998 to 2000, he served as the controller of GrafTech.

From 1987 to 1998, Mr.

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KPMG announced his admittance, as a Partner, effective July 1, 1998.

De Gasperis is also a founding member and the Chairman of the Board of Directors of the Comstock Foundation for History and Culture, a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").

He is a board member and previously served as Chairman of the Virginia City Tourism Commission, and is a member of the Northern Nevada Development Authority and the Northern Nevada Network.

De Gasperis has served as a director of GBS Gold International Inc., where he was Chairman of the Audit and Governance Committee and the Compensation Committee and a member of the Nominations and Advisory Committees.

De Gasperis is also a director and the chairman of the of the Board of Directors of LiNiCo Corporation and chairman of the member committee for Quantum Generative Materials LLC.

He is a director of ROK-On Building Systems, a manufacturer of low-carbon, renewable building materials and a strategic investee of Sierra Springs Opportunity Fund Inc and also a founding member and the chairman of the Board of Directors of the Comstock Foundation for History and Culture, a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").

DeGasperis previously served as a director and as chairman of the Virginia City Tourism Commission.

He also has served as a director of GBS Gold International Inc., where he was chairman of the Audit and Governance Committee and the Compensation Committee and a member of the Nominations and Advisory Committees.

De Gasperis holds a BBA from the Ancell School of Business at Western Connecticut State University, with honors.

Martin, Director of Exploration & Mineral Development since 2010, and Chief Geologist since 2008.

He brings over 40 years of successful precious metals exploration, mine development and production experience.

He participated and supervised exploration projects in Northwest Territories, Canada;

Liberia, West Africa;

Honduras, Central America;

Sinaloa, Mexico;

and the western region of the United States, predominantly Nevada.

Martin’s supervisory production experience includes the following Nevada mines:

Manhattan, Borealis, Hog Ranch, and Denton-Rawhide.

Martin’s geologic technical expertise overlapped into the environmental and civil engineering disciplines of geology.

He was an instrumental member of the geologic team reporting to the U.S.

Geological Survey during a three-year program conducting detailed geologic and structural mapping of the proposed nuclear repository site located at Yucca Mountain, Nevada.

Martin participated in the Vadose Zone Hydrology studies of the environmentally sensitive sites of Hanford Nuclear Reservation, Washington and Anniston Army depot, Alabama.

Martin was a key member of a geologic team supporting Atkinson Construction, Washington Group and Zachry Construction Group during the construction of the largest earth-core rock-fill dam in the United States, East Side Reservoir Project, Riverside County, California.

Martin received his Bachelor of Science in Geologic Engineering from Colorado School of Mines in 1978.

He is a Qualified Person (QP) and a Certified Professional Geologist (CPG) accredited by American Institute of Professional Geologists (AIPG).

In two separate trials before the United States Department of the Interior, Office of Hearings and Appeals, Mr.

Martin was qualified as an expert in two categories:

mining exploration geologists and mining structural geologists.

Norred , Director of Strategic Planning and Resource Development since December 2017, and in similar and consultative roles from 2007 to 2013.

He designed and led the effort to analyze and incorporate an unprecedented amount of historical and modern data into a comprehensive geologic database of the Comstock District.

He implemented QA/QC protocols and procedures, trained and coordinated geologic staff, and maintained the database updated through five years of field work and drilling, including over 400,000 feet of additional drill results.

Norred brings over 40 years of experience in resource modeling, surface mine design, geological database management and software development.

His geological modeling experience includes precious metals, base metals, industrial minerals, coal, oil and gas.

Norred is also the founder of Techbase International, Ltd, where he has served as President since 1982.

He designed and led a team of programmers to develop the Techbase ® engineering database management package.

He successfully commercialized the software and served and supported users worldwide.

He enabled clients in the implementation of robust modeling and database management and the development of internal processes for a variety of projects and industries.

Norred received his Bachelor of Science in Mining Engineering from the Colorado School of Mines in 1978, and was named Colorado School of Mines Young Alumnus of the Year in 1987.

He is a Qualified Person (QP) as defined by Canadian National Instrument 43-101 and as defined by SEC Regulation S-K 1300, and is qualified in Federal Court as an expert witness in open pit mine modeling.

As a QP, he has authored or contributed to National Instrument 43-101 and JORC compliant technical reports.

Chris Peterson, Director of Health, Safety, & Environmental Protection and General Site Manager since 2020.

Peterson previously held positions with Comstock Mining ranging from Senior Grade Control Geologist to Director of Mining and Mine Development.

Peterson returns to us from a period in the consulting industry where he was an Environmental Scientist, Air Quality Specialist and Site Management Consultant.

With over 10 years’ background in mining and related disciplines while working in the field, leading research projects, conducting geologic mapping, and supporting ore process and production, Mr.

Peterson has held increasingly responsible leadership roles.

Peterson held positions at Kona Gold LLC and EM Strategies at DeLamar Mining Company.

Prior to that, and while previously with Comstock Mining, he oversaw the realignment of Nevada State Route 342, and completion of the Lucerne Underground Project.

Peterson earned a Bachelor of Science in Geology from California State University;

Chico, and a Masters in Geology from Mackay School of Mines at the University of Nevada, Reno, both degrees earned with Honors.

Spencer, joined Comstock Mining in 2017, as Director of External Relations with more than 30 years of experience in the communications field and 16 years dedicated to the Nevada mining industry, including investor, government and media relations.

Spencer has held similar roles in Nevada with General Moly, Inc.

and Newmont Mining, Corp.

Spencer has produced and directed broadcast television and managed marketing and communications for the telecommunications industry.

He is a founding member and former officer of the Reno Media Press Club and served on the boards of the Nevada Mining and American Exploration & Mining Associations, chairing their Public Outreach Committees.

Spencer earned a Bachelor of Arts from the Reynolds School of Journalism at the University of Nevada, Reno and a Master of Business Administration from the Ageno School of Business at Golden Gate University, San Francisco.

Kreisler, President and Chief Financial Officer

Kreisler joined Comstock as its president and chief financial officer in September 2021.

He is also a director and chief financial officer of each of the Company’s wholly- and majority-owned subsidiaries.

Kreisler has a diverse background in agriproducts, renewable fuels, hazardous waste, and intellectual property development, with deep expertise in building and scaling commercial production processes and companies in regulated markets.

Kreisler served from 2003 to 2021 as managing director for Viridis Asset Management LLC, a family-owned investment company focused on the development of early-stage companies and technologies, with a specialization in commercializing technology-driven profitability incentives that leverage existing infrastructure and consumption behaviors to produce globally-meaningful sustainability gains.

In that capacity, Mr.

Kreisler founded GreenShift Corporation in 2005 and served as its chairman and chief executive officer through

GreenShift developed and commercialized patented technologies that integrated into the backend of corn ethanol plants to extract and recover a historically-overlooked natural resource – inedible crude corn oil, for use in the production of advanced carbon-neutral liquid fuels and other biomass-derived alternatives to fossil fuel derivatives.

Today, upwards of 95% of the U.S.

corn ethanol industry uses that technology to displace more than 20 million barrels of fossil fuel, trillions of cubic feet of natural gas, and tens of millions of metric tons of greenhouse gases every year.

In total, those gains are globally-meaningful and have accumulated to industry-wide savings exceeding 250 million barrels of fossil fuel.

From 1998 to 2004, Mr.

Kreisler served as a director and officer of Veridium Corporation, which developed and commercialized an array of selective metals separation technologies, where he led the design, engineering, and construction of an advanced facility for the recycling and reuse of inorganic hazardous and industrial wastes from thousands of different waste streams from dozens of industrial processes.

Kreisler is a graduate of Rutgers University College of Engineering (B.S., Civil and Environmental Engineering, 1994), Rutgers University Graduate School of Management (M.B.A., 1995), and Rutgers University School of Law (J.D., 1997).

Kreisler is admitted to practice law in New Jersey and the United States District Court for the District of New Jersey.

McCarthy, Chief Operating Officer

McCarthy joined Comstock as its chief operating officer in July 2021.

He is also the chief operating officer over each of the Company’s wholly- and majority-owned subsidiaries.

He brings over 20 years of experience to Comstock, focused on the development and implementation of systemic, scalable business strategies to drive profitability and revenue growth across a diverse range of industries.

Previously, Mr.

McCarthy was a co-founder and chief executive officer of Mana Corporation, a developer of biomass-based business strategies.

From 2017 to 2020, Mr.

McCarthy was the principal of Normandy Road Partners, a boutique advisory firm focused on empowering scalable growth in emerging industries.

From 2005 to 2016, Mr.

McCarthy held roles of increasing responsibility at SVP Global, a global investment firm focused on distressed debt, special situations and private equity opportunities, most recently as Director of Risk Management.

From 2003 to 2005, Mr.

McCarthy was an Associate with Resurgence Asset Management, a private equity manager.

He began his career at the Principal Financial Group.

McCarthy earned a B.A.

in Economics from Tufts University.

Winsness, Chief Technology Officer

Winsness joined Comstock as its chief technology officer in September 2021.

Winsness has spent his professional career targeting the extraction and recovery of materials from byproduct streams and repurposing those recovered materials into high value markets.

Winsness previously served as GreenShift’s chief technology officer from 2006 to 2018, where he invented, developed, and commercialized the largest innovation to occur in the corn ethanol industry:

back end corn oil extraction.

The technology efficiently extracts corn oil from byproduct streams so that it can be sold separately without consuming any additional power or corn.

The technology has been adopted by more than 95% of the 209 U.S.

corn ethanol plants, where it generates more than an estimated $3.2 billion annually in additional profit for the industry.

Winsness subsequently served as chief executive officer of Plain Sight Innovations LLC and its predecessor, FLUX Carbon LLC, where he led the development of a technology portfolio for cellulosic fuels and other clean technologies, focusing on advanced carbon-neutral fuels and alternatives to fossil fuels.

Winsness attended Clemson University and graduated with a Bachelor of Science degree in Mechanical Engineering.

Rahul Bobbili, Chief Engineering Officer

Bobbili joined Comstock as its chief engineering officer in June 2021.

He has nearly 20 years of experience in process design, patent licensing, equipment manufacturing, commissioning, project management, and start-up.

From 2006 to 2021, Mr.

Bobbili served as the chief executive officer of Renewable Process Solutions, Inc., a now wholly-owned subsidiary of Comstock.

Bobbili invented multiple chemical processes in the renewable industry and built twenty-six biofuel refineries in the last fourteen years.

Bobbili has managed multiple industrial-scale projects from construction phases, commissioning, and operations.

Bobbili received a B.S.

in Production Engineering from Osmania University, India, a M.S.

in Mechanical Engineering from Old Dominion University, Virginia, and an Executive Finance certification from Stanford University, California.

AVAILABLE INFORMATION

The Company maintains a website at comstockmining.com.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any filed or furnished amendments to those reports pursuant to Section 13(a) of the Securities Exchange Act of 1934 (“Exchange Act”) are made available through our website as soon as practical after we electronically file or furnish the reports to the SEC.

Also available on our website are the Company’s Governance Guidelines and Code of Conduct, as well as the charters of the audit, compensation and nominating committees of the Board of Directors.

Comstock maintains a website at www.comstock.inc.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any filed or furnished amendments to those reports pursuant to Section 13(a) of the Exchange Act are made available through our website as soon as practical after we electronically file or furnish the reports to the SEC.

Also available on our website are the Company’s Governance Guidelines and Code of Conduct, as well as the charters of the audit,

compensation and nominating committees of the Board of Directors.

Information on our website is not incorporated into this report.

Stockholders may request free copies of these documents from:

Comstock Mining Inc.

Spencer, Director of External Relations

Virginia City, NV 89440

Principal Operating Segments

We did not have any production or revenue in our mining segment during 2020 or 2019, and we had $0.2 million of revenues in our real estate segment for each of the years ended December 31, 2020 and 2019.

We had operating losses of $4.9 million and $5.5 million in our mining segment for the years ended December 31, 2020 and 2019, respectively, and an operating loss of $0.6 million for the year ended December 31, 2020 and operating income of $0.1 million for the year ended December 31, 2019 in our real estate segment.

We had total assets of $34.3 million and $8.8 million in our mining and real estate segments, respectively, at December 31, 2020.

We had total assets of $30.1 million and $9.5 million in our mining and real estate segments, respectively, at December 31, 2019.

See Note 20, Segment Reporting, to the consolidated financial statements.

Government Regulation

We have obtained substantially all licenses, permits, and other authorizations currently required for our mining, exploration and other development programs.

We believe that we are in compliance in all material respects with applicable laws and regulations.

For example, we incur certain expenses and liabilities associated with our reclamation obligations.

See Reclamation section below.

These reclamation efforts are conducted in accordance with plans reviewed and approved by the appropriate regulatory agencies.

The Nevada Revised Statutes (NRS) 519A to 519A.280 and Nevada Administrative Code (NAC) 519A.010 to 519A.415 promulgated by the Nevada State Environmental Commission and the Nevada Division of Environmental Protection (“NDEP”), Bureau of Mining and Reclamation (“BMRR”) require a surety bond to be posted for mining projects so that, after completion of the work on such mining projects, the sites are left safe, stable and capable of providing for a productive post-mining use.

Over the past four years, the Company has provided a reclamation surety bond, through the Lexon Surety Group (“Lexon”), with the BMRR.

The BMRR, with concurrence from Storey County, has approved our most recent reclamation plan, as revised, and our estimated total costs related thereto of approximately $7.3 million, including $6.8 million for BMRR and $0.5 million of additional reclamation surety bonding, primarily with Storey County.

As part of the surety agreement, the Company agreed to pay a 2.0% annual bonding fee and signed a corporate guarantee.

The cash collateral percentage held on deposit by Lexon is typically one third or less of the current bond amount.

At December 31, 2020, the total current bonded amount is $7.3 million, and the total collateral held on deposit was $2.7 million.

We compete with other mineral exploration and mining companies in connection with the acquisition of gold and other mineral properties, and the attraction and retention of human capital.

Such competitors may have substantially greater financial resources than we do.

The Company began acquiring properties and developing projects in the Comstock District in 2003.

The Company produced over 12,000 ounces of gold and over 53,000 ounces of silver from 2004 through 2006 from our Billie the Kid mine and American Flat heap leach processing facilities.

Our test mining activities were concluded in January 2007 when, based on our longer-term production plans, we prioritized land consolidation and mine planning.

After five years of intensive geological mapping and interpretation, drilling, resource modeling and mine planning, the Company restarted mining operations in the third quarter of 2012 and resumed pouring doré bars of silver and gold in September 2012.

The Company produced 59,515 ounces of gold and 735,252 ounces of silver from September 2012 through December 2016.

The Company completed leaching from its existing leach pads in December 2016, and has since focused on exploration and development activities, primarily in the Lucerne and Dayton resource areas.

In September 2020, the Company completed the sale of Comstock LLC, owner of the Lucerne Mine, resource area and related permits, to Tonogold.

The Company retains a 1.5% NSR royalty interest in the Lucerne properties.

The Company is not economically dependent on a limited number of customers for the sale of its product.

The real estate segment has numerous customers and is not dependent on any one customer.

Stockholders may request free copies of these documents from Comstock Mining Inc., P.O.

Box 1118, Virginia City, Nevada 89440.

FINANCING EVENTS

S-3 Shelf Registration

On February 18, 2019, the Company filed an S-3 shelf registration with the SEC (the "S-3 Shelf"), for the sale of up to $50 million of the Company’s securities, from time to time, and used $8.2 million of that capacity through December 31, 2020, leaving an aggregate unused capacity of $41.8 million.

As long as the aggregate market value of the Company’s voting and non-voting common equity held by non-affiliates is less than $75.0 million, the aggregate market value of securities sold by or on behalf of the Company pursuant to the S-3 Shelf during the period of 12 calendar months immediately prior to such sales is limited to being no more than one-third of the aggregate market value of the Company’s non-affiliated voting and non-voting common equity.

On December 31, 2020 and March 5, 2021, these limitations resulted in $8.8 million and $20.8 million, respectively, of unrestricted, available S-3 Shelf capacity.

There can be no assurance the Company can sell common shares up to that capacity.

Equity Issuance Agreements

On March 2, 2021, the Company entered into equity purchase agreements (the “Equity Purchase Agreements”) with certain investors to issue and sell in a registered direct offering (the “Offering”) 4.0 million shares of common stock at a price of $4.00 per share.

The shares are being offered by the Company pursuant to its shelf registration statement on Form S-3 (File No.

333-229890) filed with the SEC on February 26, 2019 and declared effective on March 7, 2019, and prospectus supplement thereunder dated March 2, 2021, and filed with the SEC on March 2, 2021.

The Equity Purchase Agreements contain customary representations, warranties and agreements of the Company, and customary conditions to closing, indemnification rights and obligations of the parties.

The Offering of the shares closed on March 4, 2021.

The Company paid Noble Capital Markets, Inc., the placement agent for the Offering, an aggregate cash fee equal to 6% fee of the aggregate gross proceeds raised in the Offering, and agreed to pay up to $30,000 for other fees and expenses, resulting in expected net offering proceeds of $15.0 million.

On February 8, 2021, the Company entered into an equity purchase agreement (the “2021 Leviston Sales Agreement”) with Leviston Resources LLC (“Leviston”) to offer and sell registered shares of common stock at an aggregate offering price of up to $5.0 million from time to time, at the Company’s option, on terms deemed favorable to the Company.

Any shares offered and sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 and the related prospectus (File No.

333-229890) filed by the Company with the SEC pursuant to the Securities Act.

Sales of common stock, if any, under the 2021 Leviston Sales Agreement may be made in sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act, at a price of ninety percent (90%) of the volume weighted average closing sales price per share of the common stock on the NYSE American stock exchange on the day of each respective put date.

In July 2020, the Company entered into an equity purchase agreement (the "2020 Triton Equity Agreement") with Triton Funds L.P., (“Triton”) to offer and sell registered shares of common stock at an aggregate offering price of up to $1.25 million, from time to time, at the Company's option.

In July 2020, the Company issued to Triton 2,040,483 common shares with an aggregate sales price of $1.25 million, at an average price per share of $0.61, and paid related cash fees of $15,000.

At December 31, 2020, the 2020 Triton Equity Agreement has no capacity.

Also in July 2020, the Company entered into an equity purchase agreement (the “2020 Leviston Sales Agreement”) with Leviston to offer and sell registered shares of common stock at an aggregate offering price of up to $2.5 million, from time to time, at the Company's option, and paid a commitment fee of $125,000 in shares of common stock and $52,500 of cash fees.

From July through September 2020, the Company issued to Leviston 2,793,586 common shares with an aggregate sales price of $2.5 million, at an average price per share of $0.89, and an additional 173,611 common shares in commitment fees.

At December 31, 2020, the 2020 Leviston Sales Agreement has no remaining capacity.

In October 2019, the Company entered into an equity purchase agreement (the “2019 Leviston Sales Agreement”) with Leviston to offer and sell registered shares of common stock at an aggregate offering price of up to $1.25 million, from time to time, at the Company’s option, subject to certain restrictions and a $125,000 fee payable to Leviston in shares of common stock.

In October 2019, the Company issued to Leviston 1,863,150 common shares with an aggregate sales price of $0.8 million, at an average price per share of $0.43, and an additional 284,852 common shares in commitment fees.

From March through July 2020, the Company issued to Leviston an additional 913,539 common shares with an aggregate sales price of $0.4 million, at an average price per share of $0.49.

As of December 31, 2020, the 2019 Leviston Sales Agreement has no remaining unused capacity.

In February 2019, the Company entered into an equity purchase agreement (the “2019 Murray Equity Agreement”) with the Murray Family Office (“Murray”) to offer and sell shares of common stock at an aggregate offering price of up to $5.0 million, from time to time, at the Company’s option, subject to certain restrictions, at a 10% discount to a volume weighted average sales price per common share, and paid a fee of $250,000 in shares of common stock and cash fees of $50,715.

From May through September 2019, the Company issued to Murray 2,988,120 common shares with an aggregate sales price of $1.9 million, at an average price per share of $0.65, and an additional 213,156 common shares in fees.

As of December 31, 2020, the 2019 Murray Equity Agreement has no remaining capacity.

See Note 14, Equity, and Note 22, Subsequent Events, to the consolidated financial statements.

Convertible Preferred Stock

In June 2019, the Company entered into a securities purchase agreement with Temple Tower Group LLC ("Temple") providing for the issuance and sale to Temple of 1,274 shares of convertible preferred stock with a stated value of $1,000 per share, for net proceeds to the Company of $1.1 million, with 191 of the preferred shares representing due diligence fees.

The total of 1,274 preferred shares had a stated value of $1.3 million and a fair value of $1.5 million based on a third-party valuation study.

The Company recorded the difference between the net proceeds of $1.1 million and the fair value of $1.5 million as a cost of issuing the preferred shares.

The preferred shares were issued pursuant to the Company’s S-3 Shelf, and were convertible into shares of the Company’s common stock.

The number of common shares issuable upon conversion was determined by dividing the stated value of the preferred shares by the conversion price.

The conversion price was calculated as 90% of the lowest reported volume-weighted average price per share of the Company’s common stock as reported at the close of trading on the NYSE American stock exchange during the seven trading days ending on, and including, the date of the notice of conversion.

From July through September 2019, Temple converted all of the preferred shares for 2,240,441 common shares at an average conversion price per share of $0.57.

Reverse Stock Split

In November 2019, the Board of Directors of the Company approved a one-for-five (1:5) reverse stock split (the “Reverse Split”) for all issued and outstanding shares of the Company’s common stock, par value $0.000666, and a

contemporaneous one-for-five (1:5) reduction in the number of shares of the Company’s authorized common stock from 790,000,000 to 158,000,000 shares.

The Reverse Split resulted in each outstanding five pre-split shares of common stock automatically combining into one new share of common stock without any action on the part of the stockholders.

No fractional shares were issued as a result of the Reverse Split.

Fractional shares were rounded up to the nearest whole share, requiring the issuance of 9,114 additional shares of common stock, included in issuance of common stock in the consolidated statements of changes in equity.

The Reverse Split was effective for trading purposes on November 29, 2019.

The total number of outstanding common shares was reduced from 126,970,215 to 25,394,043 on the effective date.

All common shares and per share amounts set forth herein give effect to this Reverse Split.

The Reverse Split also applies to awards available for issuance under the 2011 Equity Incentive Plan.

For the year ended December 31, 2021, we sold 9,220,123 registered shares of common stock at an average share price of $2.97, and net proceeds of $26,335,500 after fees and expenses.

In connection with these sales, we issued 143,787 shares for in payment of commitment and due diligence fees.

We also issued 26,863,156 unregistered shares of common stock as consideration for acquisitions, investments and payment for mineral rights.

Debt Financing Agreements

The Company entered into a long-term promissory note ("GHF 2021 Note") with GHF, Inc.

on December 15, 2021, with a principal amount of $5,000,000, of which $4,550,000 was funded and $450,000 was an original issue discount ("OID").

The full principal is due on December 15, 2024.

Interest is payable monthly at a rate of 6% annually.

Prepayment is allowed in full or in part at any time without premium or penalty.

The loan is secured by all non-mining related assets of the Company, Silver Springs land and water rights, and the Daney Ranch, excluding the Lucerne and Dayton properties.

The Company is required to prepay the promissory note with any net cash proceeds received in the sale of any collateral.

If the promissory note has not been paid in full on or prior to December 15, 2022, the Company will issue warrants to GHF allowing them to purchase 1,000,000 shares of the Company’s common stock, half of which are exercisable at a price per share of 150% of the 20-day volume weighted average closing price (“VWAP”) of the Company’s common stock on its primary trading market for the 20 consecutive trading days preceding December 15, 2021, and the remainder at a price per share of 135% of the 20-day VWAP as determined on December 15, 2022.

At December 31, 2021, the warrants were valued at $70,879.

We recognized interest expense of $19,720 during the year ended December 31, 2021 in connection with the GHF 2021 Note.

RISK FACTOR SUMMARY

An investment in our securities involves risk.

You should carefully consider the risk factors detailed in Item 1A, “Risk Factors”, in addition to those discussed elsewhere in this report, in evaluating our Company, its business, its industry and prospects.

You should carefully consider the risk factors detailed below in Item 1A, Risk Factors , in addition to those discussed elsewhere in this report, in evaluating our Company, its business, its industry and prospects.

These risks include, but are not limited to, those described in the following summary:

Business and Operating Risks

You may lose all or part of your investment.

We have a limited operating history.

• We may never earn significant revenues from our mine operations or our other precious metal-based activities.

• We are exposed to global health, economic and market risks that are beyond our control, which have adversely affected, and could continue to adversely affect, our financial results and capital requirements.

• Transportation and weather interruptions may affect and delay proposed mining operations and impact our business plans.

• If we are unable to secure raw materials and exploration supplies we may have to delay our anticipated business operations.

• We have invested capital in high-risk minerals and metals projects where we have not conducted sufficient exploration, development and/or engineering studies.

• We will not be successful unless we recover precious or strategic metals and sell them for a profit, and/or provide related services for a profit.

• We do not have proven or probable reserves, and there is no assurance that the quantities of precious metals we produce will be sufficient to recover our investment and operating costs.

We may never earn significant revenues from our operations.

We may be unable to manage our future growth.

We may not be able to successfully implement our growth strategy on a timely basis or at all.

We are exposed to global health, economic, supply chain, and market risks that are beyond our control, which have adversely affected, and could continue to adversely affect, our financial results and capital requirements.

The Renewable Fuel Standard, a federal law requiring the consumption of qualifying renewable fuels, could be repealed, curtailed or otherwise changed, which would have a material adverse effect on our revenues, operating margins and financial condition.

Loss of or reductions in federal and state government tax incentives for renewable fuel production or consumption may have a material adverse effect on our revenues and operating margins.

We intend to derive a significant portion of our revenues from sales of our renewable fuel in states with Low Carbon Fuel Standards, however, adverse changes in the associated laws or reductions in the value of the applicable credits would harm our revenues and profits.

A decline in the adoption rate of renewable energy or electrification, or a decline in the support by governments for renewable energy and electrification technologies, could materially harm our financial results and ability to grow our business.

Our success will depend on acquiring, maintaining, and increasing feedstock supply commitments, as well as securing new customers and offtake agreements.

Our margins are dependent on the spread between the market prices for our renewable energy products and the costs for our feedstocks, which may be volatile and can cause our results of operations to fluctuate substantially.

Our operations depend on the availability of sufficient water supplies.

Owning property and water rights and options on property and water rights carries inherent risks.

We do not have proven or probable reserves, and there is no assurance that the quantities of minerals and metals we produce will be sufficient to recover our investment and operating costs.

The cost of our exploration, development and acquisition activities is substantial, and there is no assurance that the quantities of minerals and metals we discover, acquire or recover will justify commercial operations or replace future reserves.

• The prices of gold, silver, lithium, nickel cobalt and other metals fluctuate on a regular basis and a downturn in price could negatively impact our operations and cash flow.

• The use of hedging instruments may not prevent losses being realized on subsequent price decreases, or may prevent gains being realized from subsequent price increases.

• We compete with other mineral exploration, metal recycling and mining companies which could result in lost opportunities.

• Actual recoveries may vary from our estimation of the ultimate recovery of gold, silver and other metals, which is subjective.

• Resource and other mineralized material statements are estimates subject to uncertainty due to factors including metal prices, inherent variability of the mineralized material and recoverability of metal in the mining and beneficiation processes.

• Our mining and metal recycling production depends on the availability of sufficient water supplies.

• Cost estimates and timing of new projects are uncertain, which may adversely affect our expected production and profitability.

• We may experience increased costs or losses from hazards and uncertainties associated with mining and processing.

Resource and other material statements are estimates subject to uncertainty due to factors including market prices, and the inherent variability and recoverability of targeted natural resources in extraction and beneficiation processes.

Risk management transactions could significantly increase our operating costs and may not be effective.

In addition to changes in prevailing commodity prices, our results of operations could be significantly affected by the volume, mix, and composition of the various wasted and unused natural resource feedstocks that we are targeting, all of which are subject to variance.

If one or more of our facilities become inoperative, capacity constrained, or if operations are disrupted, our business, results of operations or financial condition could be materially adversely affected.

Our facilities and our customers' facilities will be subject to risks associated with fire, explosions, leaks, and natural disasters, which may disrupt our business and increase costs and liabilities.

The dangers inherent in storage and transportation of our renewable energy products could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.

Increases in transportation costs or disruptions could have a material adverse effect on our business.

We operate in highly competitive industries and expect that competition will increase.

Our activities are inherently hazardous and any exposure may exceed our insurance limits or not be insurable.

• The Company’s costs of close-down, reclamation and rehabilitation could be higher than expected.

• Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.

• We rely on contractors to conduct a significant portion of our operations and construction projects.

• Our business requires substantial capital investment and we may be unable to raise additional funding.

• We may not be successful in selling non-mining related assets.

• Owning real estate and water rights and options on real estate and water rights carries inherent risks.

• Illiquidity of real estate investments could significantly impede our ability to respond to changes in economic and other conditions.

• The unique nature of our properties, including our held-for-sale properties, may make it difficult for us to sell or develop those properties, and could require considerable, additional capital to adapt the properties for sale or other productive uses and could negatively affect our financial performance.

• Our indebtedness and other payment obligations could adversely affect our operations, financial condition, cash flow, and operating flexibility.

• Mining companies are increasingly required to provide benefits to the communities in which they operate.

Legal, Regulatory and Compliance Risks

• Our ability to execute our strategic plans depends upon our success in obtaining a variety of required governmental approvals that may be opposed by third parties.

Our operations are subject to strict environmental laws and regulations, including regulations and pending legislation governing issues involving climate change, which could result in added costs of operations and operational delays, and could have a material adverse effect on our business.

• Our operations are subject to certain soil sampling and potential remediation requirements, which may result in added costs and delays;

and we are also potentially subject to further costs as the result of on-going government investigation and future remediation decisions.

• Our insurance and surety bonds for environmental-related issues are limited.

Failure to comply with governmental regulations, including EPA requirements relating to RFS II or new laws designed to deal with climate change, could result in the imposition of higher costs, penalties, fines, or restrictions on our operations and remedial liabilities.

Our ability to execute our strategic plans depends upon our success in obtaining a variety of required governmental approvals that may be opposed by third parties.

Closure, reclamation, and rehabilitation costs could be higher than expected, and our insurance and surety bonds for environmental-related issues are limited.

We are subject to federal and state laws that require environmental assessments and the posting of bonds, which add significant costs to our operations and delays in our projects.

• We may be subject to litigation.

• Title claims against our properties could require us to compensate parties and divert management’s time.

Risks Related to Investment in Our Common Stock

• Our stock has historically been a penny stock with trading restricted by the SEC’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

• If we are unable to maintain the listing standards of the NYSE American stock exchange, our common stock may be delisted.

Technological advances could render some or all our plans obsolete and adversely affect our ability to compete.

Our business could be adversely affected if we are unable to protect our intellectual property, or others assert that our operations violate their intellectual property.

Unfavorable economic conditions have a material adverse effect on our business, results of operations and financial condition.

Natural disasters, unusually adverse weather, epidemic or pandemic outbreaks, boycotts and geopolitical events could materially adversely affect our business, results of operations or financial condition.

Illiquidity of investments could impede our ability to respond to changes in economic and other conditions.

Our business requires substantial capital investment and we may be unable to raise additional funding.

The price of the Company’s common stock has and may continue to fluctuate significantly, which could negatively affect the Company and holders of its common stock.

Our stock has historically been a penny stock with trading restricted by the SEC’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

We may be delisted if we are unable to maintain the listing standards of the NYSE American stock exchange.

We do not expect to pay any cash dividends for the foreseeable future

• The terms of the Operating Agreement of Northern Comstock LLC require significant cash payments and may significantly dilute the ownership interests of the common stock.

• We may issue equity securities in the future that could dilute the ownership interest of existing stockholders.

Risks Related to Strategic Transactions

We may issue additional common stock or other equity securities in the future that could dilute the ownership interest of existing stockholders.

Nevada law and our certificate of incorporation and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

We have and may continue to pursue investments in other companies, acquisitions, divestitures, business combinations or other transactions with other companies, involving our properties or new properties, which could harm our operating results, may disrupt our business and could result in unanticipated accounting charges.

• We may undertake joint ventures, investments, joint projects and other strategic alliances and such undertakings, as well as our existing joint ventures, may be unsuccessful and may have an adverse effect on our business.

We may undertake joint ventures, investments, projects and other strategic alliances and such undertakings, as well as our existing joint ventures, may be unsuccessful and may have an adverse effect on our business.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business