Corrado De Gasperis: Yes, happily. So we haven’t spent almost any time in 2022 with Mercury Clean Up. We did recapture 100% of the assets in that business — some of you may recall, we were a 25% owner. We weren’t actively managing that business. We did recapture 100% of the assets of that business, which means we have two physical systems, one, a pilot system sitting here at the Comstock, one, a fully operational system, which is still currently in the Philippines, but we are making arrangements now that freight costs have dropped dramatically — to ship that equipment and related mining equipment and related infrastructure back here. Those equipments can be used for alluvial mining. I may have mentioned previously that, even though the systems have efficacy at removing mercury contamination from the materials, it doesn’t need to have mercury contamination to process alluvium and separate gold.
The spirals are highly precise. So we have the equipment. We have not prioritized that business. I think, you can see why the impact of fuels, the impact of GenMat’s work, the impact of metal recoveries are €“ are tremendous for us. But we will reevaluate what we do with those assets. In recapturing 100% of those assets, we also recaptured a little under $1 million of cash back. So we currently don’t have any asset recorded on our books. We wrote those down as part of this process, despite having taken 100% of the physical assets within our portfolio. So I wouldn’t say, and as you heard from my comments here, it didn’t show up on the 2023 objectives as a priority. But we will ultimately make a decision on what we do with either, a, those assets or be the business.
Zach Spencer: The next question is, do we have any ongoing royalty income?
Corrado De Gasperis: We do not have any ongoing royalty income. We do have royalties associated with our mining properties, but we have now recaptured a reconstituted all of our mining properties back into our portfolio. For total clarity, we own or control 100% of all of those assets, all of those patented and unpatented mining claims, properties, lands, et cetera. And as we move forward in the fuels business, it is a licensing and royalty-based model, which we’re extremely excited about, but we don’t have any currently operating as we speak.
Zach Spencer: When do you expect the battery recycling to go into initial and then full production?
Corrado De Gasperis: So the battery metal recycling business is being repositioned, okay? We made big profit, 8-figure profit in flipping this facility. We also have an unrecognized significant gain sitting in the green line investment that we just talked about. So if we’re looking at a short scorecard financially, we’re sitting pretty happy with our position. The negative implication of selling that building was the repositioning of the asset, which will also require repositioning of the permits. However, as I mentioned, as we look at this market and we see the rate at which it’s ramping up, and we see some of the other markets and opportunities in front of us. We’re reassessing how we’re going to deploy the pilot, where we’re going to deploy the pilot there are various modifications that will occur associated with the permitting.
And we will come back later with a much more specific plan, much more specific objectives, much more specific time line. But I want to emphasize, we’re leveraging tremendously existing infrastructure. We’re leveraging tremendously existing human resources that are knowledgeable and capable adding Fortunato to that equation, we have a very efficient capital-light repositioning of this business, yet not only would we not diminish the growth perspectives, we feel we’ve broadened the growth perspectives. And we’ll talk to you about some of these other markets where we see some immediate ability to move into feedstocks and different abilities to process and recycle other metals. So, more to come on that. I guess, what I would commit to is when we give the next update, we will try to accelerate and put metal recycling at the front of our updates.
Zach Spencer: Corrado, what are the company’s plans to get the share price to catch up with the valuation?
Corrado De Gasperis: Thank you very much. That’s — I appreciate the way the question was postured. When you look at the achievements that have occurred in 2022, and I want to be clear, we wanted to do more. We had outlined in many cases that we would do some more. But when we look back at what was achieved and when we acknowledge with discipline, the technology readiness is that we’ve advanced. We really have an incredible value creation. Has it been realized by the market? Obviously not, right? But we feel we’ve created it. We feel it’s positioned us for tremendous growth going forward. Now, what are we going to do to unlock that value? First and foremost, we’re going to communicate on a much clearer basis. We’re going to make sure that you understand where we truly are transparently, technologically, how ready we are.
I’m excited about how ready we are. I’m excited about these engagements with new customers. I’m excited about the proximity that GenMat and these other metals businesses have with new business. Now, in addition to advancing the plans that we just outlined, we are communicating more broadly. I mentioned that fuels has just set up their own website. We’ve gone a step further. We’ve dedicated a team, right, to start communicating and marketing the activities. We already have dedicated sales and business development. We will be in full attendance and keynote speakers next week get the advanced biofuel conference. We will be targeting investors that have expressed a keen interest in these segments of the market. They are long-minded institutional investors that see now the position that we brought the company forward to, see the readiness of the solutions that we’re bringing to market.
Interestingly, even some of the customers that we’re talking to, have referred us to investment capital. So we are positioned to better target, better communicate, better market and start to realize a much, much bigger percentage of the value that we believe has already been internally created and unlock it for the investors. And second to that, just continuing to forge forward on meeting these 2023 objectives.
Zach Spencer: Well, that’s a good segue. Corrado. What do you expect your 2023 R&D expenses to be compared to the 2022 R&D expenses?
Corrado De Gasperis: Yes, it’s a great question, because I think you’ll see, that we went from about $0.5 million in R&D expenses in 2021, the year that we acquired these businesses to over $7 million in 2022. That was the best money that we spent, that money went into the piloting and now the continuous operation in Wisconsin, the — not only ability to create cellulosic sugar and Biolium, but to be able to provide stable, repetitive, high-quality samples to our prospective customers, the design, engineering and building of the crushing, conditioning and separating system to prove that we can produce these high-quality black masses. I can tell you that right now, we’re spending at a lower rate than we did last year. However, we want to turn that around, right?
Because, we now have the ability to, advance some of these opportunities even faster. So I would say our current plan, our current look just on the R&D side would be comparable, right? We want to replicate and enhance the advances that we’ve just done. What you don’t see — what you don’t see is that we’ve invested $7.5 million into GenMat, and that is doubling the development efforts and look at the results that we’re getting from it. When we look at companies that are generating AI, that are truly bringing to market something that works to the level of accuracy that GenMat’s created or the amount of money that’s been invested, I would say, — honestly, I would say, it’s not dilutive at all. It’s been a tremendously accretive deployment of capital, both in the research, the development and the teams that are surrounding and advancing all of these activities every day.
I’m frustrated by the share price, but not in any way this made by it in the sand that we know what we’ve created, we know how we can communicate it and the credibility that will come with these validations will continue to evolve and expand and grow our capital base. It’s inevitable. It’s inevitable.