Comstock Fuels Executes International License Agreement

Rhea-AI Summary

Comstock Inc. (NYSE: LODE) announced a binding agreement between Comstock Fuels and SACL Pte. for an exclusive marketing agreement in Australia and New Zealand. The deal involves three biofuel refineries in Australia with a total capacity of 1,250,000 metric tons per year, potentially producing over 300 million gallons of renewable fuels annually.

Key terms include:

• Comstock Fuels receives a 20% equity stake in each refinery
• 6% royalty fee on licensed product sales
• 6% engineering fee on capital and construction costs
• Estimated total construction cost of $2.4 billion
• Projected annual sales of $1.5 billion at current market prices

Comstock Fuels' technology offers high yields of renewable fuels with low carbon intensity, positioning the company as a leading global solution for sustainable aviation fuel and other renewable fuels.

Positive

• Exclusive marketing agreement for Comstock Fuels' technology in Australia and New Zealand
• Development of three biofuel refineries with 1,250,000 MTPY total capacity
• 20% equity stake in each refinery for Comstock Fuels
• 6% royalty fee on licensed product sales
• 6% engineering fee on capital and construction costs
• Projected annual sales of $1.5 billion at current market prices
• High yields of renewable fuels with low carbon intensity

Negative

• High initial investment required with $2.4 billion estimated total construction cost

Insights

Financial Analyst

Comstock's agreement with SACL marks a significant expansion into the international renewable fuels market. The deal's structure, with 20% equity stakes and 6% royalty fees, provides a potentially lucrative revenue stream. The projected $1.5 billion annual sales from SACL's facilities could translate to substantial income for Comstock. However, investors should note that the $2.4 billion construction cost and the gradual scaling-up process may delay immediate returns. The upfront payments of $2.5 million per site offer some near-term cash flow. This deal demonstrates Comstock's ability to monetize its technology globally, potentially enhancing shareholder value if execution meets expectations.

Renewable Energy Expert

Comstock's technology boasts impressive yields of 125 GGEs per dry metric ton of feedstock, significantly higher than industry averages. The carbon intensity score of 15 is remarkably low, positioning these fuels favorably in markets with stringent emissions regulations. The process's versatility in producing various renewable fuels, including the highly sought-after sustainable aviation fuel (SAF), is a major advantage. The use of eucalyptus as feedstock in Australia is smart, leveraging local resources. However, the success hinges on consistent biomass supply and maintaining these high yields at commercial scale. If achieved, this could indeed be a game-changer in the renewable fuels sector.

Market Research Analyst

The renewable fuels market, especially SAF, is experiencing a global demand surge, making Comstock's timing opportune. Australia's commitment to reducing emissions creates a favorable regulatory environment for these projects. The planned production of 300 million gallons per year across three sites is significant, potentially capturing a substantial market share. However, competition from established players and emerging technologies could pose challenges. The success of these projects could serve as a proof of concept, potentially leading to further international expansion. Investors should monitor the progress of the initial 50,000 MTPY facility as an indicator of the technology's commercial viability.

Three Australian Biofuel Sites Under Development for 300MM Gallons per Year of SAF and Renewable Fuels

VIRGINIA CITY, Nev., Sept. 18, 2024 (GLOBE NEWSWIRE) -- Comstock Inc. (NYSE: LODE) (“Comstock” and the “Company”) today announced execution of a binding agreement between Comstock Fuels Corporation (“Comstock Fuels”) and SACL Pte. Limited (“SACL”), a Singapore-based renewable fuel project developer, engaged in the delivery of several biofuel production facilities and hybrid renewable energy projects under which Comstock Fuels agreed to grant SACL an exclusive marketing agreement for Comstock Fuels’ advanced lignocellulosic biomass refining processes in Australia and New Zealand.

Early Adopter License Terms

SACL and its associated stakeholders have identified three initial sites for the construction of three refineries based on Comstock’s industry leading yields and decarbonizing impacts, including (1) a 250,000 metric ton per year (“MTPY”) refinery located in southeastern Australia, (2) a 250,000 MTPY refinery located in northwest Australia, and (3) a 750,000 MTPY refinery located on the east coast in northern Australia. Under the terms of Comstock Fuels’ agreement with SACL, Comstock Fuels will contribute site specific technology rights in exchange for a 20% equity stake in each refinery, plus a royalty fee equal to 6% of each refinery’s sales of licensed products, and engineering fees equal to 6% of total capital and construction costs. At least one of the refineries will initially start with a capacity of 50,000 MTPY prior to scaling-up to 250,000 MTPY or more, with early adopter royalty fees of 3% of sales and engineering fees equal to 3% of construction costs until scaling-up to 250,000 MTPY, including initial upfront payments of $2,500,000 payable upon execution of each site-specific applicable license.

The SACL facilities will have an estimated total construction cost of about $2.4 billion and produce over 160 million gallons per year of gasoline, SAF, and other renewable fuels from lignocellulosic biomass (on a gasoline gallon equivalent basis (“GGE”)), and about 140 million GGE from vegetable oils, with over $1.5 billion per year in sales at current market prices.

Best-in-Class Yield and Carbon Intensity

Comstock Fuels offers advanced lignocellulosic biomass refining solutions that produce market-leading yields of cellulosic ethanol, gasoline, renewable diesel, sustainable aviation fuel, and other renewable fuels at extremely low carbon intensities. The Comstock Fuels process generally involves: (1) digestion and fractionation of lignocellulosic biomass, (2) bioconversion of cellulose into Cellulosic Ethanol, (3) esterification of lignin and other derivatives into Bioleum Oil, (4) hydrodeoxygenation of Bioleum Oil into Hydrodeoxygenated Bioleum Oil (“HBO”), (5) refining of these extremely low carbon oils and fuels into ASTM compliant renewable fuels, and (6) gas-to-liquids emissions capture and fuel conversion. The first five of these processes are proven to produce up to 125 GGEs per dry metric ton of feedstock on a gasoline gallon equivalent basis, depending on feedstock, lignin content, site conditions, and other process parameters, with extremely low carbon intensity scores of 15.

Wide Open Market, Unprecedented Results

“Comstock Fuels’ breakthrough yields unlock an abundant, available and efficient feedstock source that enables extraordinary new opportunities for renewable fuels project developers, especially given the ongoing global surge in demand for sustainable aviation fuel,” said Garry Millar, SACL’s founder and director. “The Comstock Fuels process uses proven, off-the-shelf equipment and standard refining processes to convert woody biomass, such as plantation grown eucalyptus in our case, into renewable intermediates and fuels that leverage existing supply chains. We are excited by this collaboration, and we are looking forward to working with the Comstock Fuels’ team and our local stakeholders to develop each of our projects and more.”

“SACL’s team has rapidly advanced their projects, and we look forward to accelerating their objectives as we position our technologies as the leading global solution for sustainable, extremely low carbon renewable fuels,” stated David Winsness, president of Comstock Fuels. “We are concurrently executing on our own plan to build, own, and operate our first four facilities in the U.S., including an initial 50,000 MTPY Commercial Demonstration Scale Facility followed rapidly by three 1,000,000 MTPY Commercial Scale Facilities. Collectively, our planned U.S. facilities will produce upwards of 700 million GGE per year of renewable fuels, including approximately 400 million GGE from woody biomass and another approximately 300 million GGE from vegetable oils. Between SACL and our initial plans alone, we are pushing nearly 1 billion GGE per year of initial renewable fuel production from our solutions before considering all of the other projects and licensees in our pipeline.”

About SACL Pte. Limited

SACL is a Singapore-based project development and management company that intends to develop renewable energy projects in Australia and New Zealand. To learn more, please visit www.saclimited.com.

About Comstock Inc.

Comstock (NYSE: LODE) commercializes technologies that enable systemic decarbonization and accelerate the energy transition by efficiently converting under-utilized natural resources into renewable energy products, and by leveraging physics based artificial intelligence for more efficient and effective mineral and materials discovery. To learn more, please visit www.comstock.inc.

Comstock Social Media Policy

Comstock Inc. has used, and intends to continue using, its investor relations link and main website at www.comstock.inc in addition to its Twitter, LinkedIn and YouTube accounts, as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Contacts

For investor inquiries:
RB Milestone Group LLC
Tel (203) 487-2759
ir@comstockinc.com

For media inquiries or questions:
Comstock Inc., Zach Spencer
Tel (775) 847-7532
questions@comstockinc.com

Forward-Looking Statements

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FAQ

What is the capacity of the three biofuel refineries planned in Australia?

The three biofuel refineries planned in Australia have a total capacity of 1,250,000 metric tons per year (MTPY). This includes a 250,000 MTPY refinery in southeastern Australia, a 250,000 MTPY refinery in northwest Australia, and a 750,000 MTPY refinery on the east coast in northern Australia.

How much renewable fuel production is expected from the Australian refineries?

The Australian refineries are expected to produce over 300 million gallons of renewable fuels annually, including approximately 160 million gallons from lignocellulosic biomass and about 140 million gallons from vegetable oils (on a gasoline gallon equivalent basis).

What are the key financial terms of the agreement between Comstock Fuels and SACL?

Comstock Fuels will receive a 20% equity stake in each refinery, a 6% royalty fee on licensed product sales, and a 6% engineering fee on total capital and construction costs. Additionally, there are early adopter terms for initial smaller-scale production.

What is the estimated construction cost and projected annual sales for the Australian refineries?

The estimated total construction cost for the Australian refineries is about $2.4 billion. The projected annual sales are over $1.5 billion at current market prices.