Good morning, ladies and gentlemen, and welcome to the ARR Q3 2022 conference call and webcast. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, November 8, 2022. I would now like to turn the conference over to Flora Wood. Please go ahead. Thank you, Lara. Good morning, everyone, and welcome to our Q3 2022 results call. Our press release and filings were released yesterday after the close, well after the close, and are available on our website. This event is being webcast live, and you'll be able to access a replay along with the presentation slides that are on our website at arr.energy. Brian Dalton, CEO of ARR, and Frank Getman, CEO of GBR, will both be speakers on the call. In the Q&A, we also have Ben Lewis, CFO of ARR, for questions. The forward-looking statement is on slide two of the presentation. It applies to everything we say, both in our formal remarks and during the Q&A. With that, I will turn over to Brian. Good morning, everyone. It was another busy quarter for ARR, but most of the activity concentrated around the developer side of the barbell approach to growth investing that Frank has discussed in recent periods. We followed up on the investment made with Bluestar Energy Capital that was announced in the first half with a CAD 40 million royalty funding agreement with Hodson Energy. The capital is helping Hodson advance and grow its portfolio of solar and storage-related projects. The deal also demonstrates that high-quality development groups continue to be attracted to the benefits of our royalty financing. They are increasingly recognizing and appreciating our ability to provide them with the partner-like flexibility to simultaneously advance multiple opportunities without having to take on restrictive debt covenants, and perhaps more importantly, without having to dilute their corporate equity value. Preserving the equity capital structure is becoming more important than ever to these developers as they are seeing increased interest from larger players to acquire portfolios rather than single projects. This was further evidenced during the quarter when the first developer that we backed, TGE, was acquired by Enbridge. This followed TGE's incredible portfolio growth trajectory over the past few years, for which Frank and the team at GBR can rightly claim a very strong supporting role. The acquisition also has important direct implications for us, as it effectively resulted in the sale of all of the projects in TGE's portfolio. This, in turn, made each project subject to our royalty, with a very strong new counterparty in Enbridge. We now expect the number and value of royalties to be received from our investment in TGE to significantly overshoot our original investment case and minimum return thresholds. Frank will have more to say on these events in his remarks, but suffice it for me to say that it is strong proof positive that our structures are working and adding value to our partners, which we are confident is being noticed by the rest of the developer community and will allow us to back more groups such as TGE, Hodson, and Bluestar as we move forward. While the announced progress in Q3 was distinctly developer-focused, this by no means describes the extent of activity. There's a strong market evolution underway relating to later stage development and operating stage projects that is keeping the team busy as well. Perhaps most notable here is the continuing strong shift we are seeing from these sponsors to preserve a component of merchant market and price exposure in their projects. This, combined with rising interest rates and lender risk aversion, is reducing the amount of debt that projects are being financed with, opening a hole in capital structures that our royalty capital is well-suited to fill. Busy and fun times. Over to you, Frank. Thank you, Brian. We continue to make great progress in building our company. I wanted to share some highlights and observations in a few important areas. First, I'm gonna touch on our accelerating revenue growth and positive cash flow at Great Bay. I'd like to make a few comments about the recently announced acquisition of TGE by Enbridge and its impact on our business. Finally, a few comments on the current state of the renewables industry in the U.S. and the outlook for Great Bay and our royalty financing. First, on revenue growth, we continued positive cash flow at Great Bay. Q3 was another strong quarter of accelerating positive cash flow. It was our third consecutive quarter of positive cash flow, all well ahead of our forecast at the time of the ARR IPO. Merchant prices were strong in Q3, particularly in ERCOT, which positively impacts our Cotton Plains portfolio, which is approximately 70% merchant, and our Prospero Two royalty, which is about 30% merchant. Attributable revenue of CAD 1.6 million in Q3 as compared to a negligible amount a year ago and CAD 600K in Q2. As a result, using the midpoints of our guidance, even though there's just one quarter remaining, we've increased our 2022 revenue guidance for Great Bay approximately 35%, from CAD 4.5 million-CAD 5.5 million to CAD 6.5 million-CAD 7 million. It's also important to note that we currently have three new projects totaling approximately 975 MW under construction, which have royalties in favor of Great Bay, which are expected to reach commercial operations in the next few months. Continued strong growth in revenue and cash flow built into the business for the foreseeable future based on our existing investments to date is already built into the business. A few comments about the acquisition of Tri Global by Enbridge. On September 29th, we announced that our development partner, Tri Global, had been acquired by Enbridge. This deal represents a true win-win-win for everyone involved. For TGE and its shareholders, the strong price they received was a validation of the great development team that they've assembled in recognition of the value of their approximately 6 gigawatt pipeline of high quality renewable energy projects across the US. It's important to note that the vast majority of that 6 gigawatt pipeline was developed using royalty capital from Great Bay. For Enbridge, acquiring TGE gives them the renewables projects pipeline and development team that they need to grow and accelerate their North American renewables business. It brings in-house for Enbridge key renewables development expertise, which they did not have. For Great Bay, this deal essentially represents an acceleration of the sale of TGE's entire 6-gigawatt pipeline, which is now subject to a Great Bay royalty. As the projects continue through the development process and achieve commercial operation, Great Bay will continue to receive royalty contracts until we hit our threshold return on the $46.5 million we've invested in TGE. After Great Bay has received enough royalties to achieve its threshold return, we'll have the option to acquire royalties on any future projects from that 6-gigawatt pipeline that achieve commercial operation based upon an agreed upon valuation that uses a similar return profile as the royalties received by Great Bay prior to the threshold return being achieved. Using concurrent development timeline projections, we estimate that it will take approximately 2.5-3 gigawatts of projects for Great Bay to achieve its threshold return, leaving approximately 3-3.5 gigawatts of projects potentially subject to Great Bay's purchase option. If there are delays in getting projects to commercial operation, our capital is accruing, and it will take royalties on more of the 6 gigawatts for us to achieve our threshold return, leaving fewer projects subject to our purchase option. Obviously, if a project is canceled or never achieves commercial operation, it would not be subject to Great Bay's purchase option. Bottom line is this provides much greater certainty that we'll receive enough royalties to hit our base threshold return with a terrific counterparty in Enbridge and gives us the option to acquire royalties on another 3-plus gigawatts of projects at an attractive price. As I mentioned earlier, we believe this deal represents a true win-win-win for everyone involved. It also represents a second major developer backed by Great Bay to be acquired, first Apex, then TGE, and shows the direct impact a royalty financing can have to create significant value for our development partners. This point has not been lost on the developer market and is fantastic for our business development efforts. It's also why we have tried to include equity ownership or warrants as part of our more recent developer deals, namely our Hodson and Bluestar deals. Lastly, a few comments on the current state of the renewables market in the U.S. The big recent news in the industry was the passage of the Inflation Reduction Act. It provided a huge boost to the entire renewables complex. Probably the largest impact was the extension and resetting of the PTC and ITC. Many projects that, because of the passage of time, had been 80% or 60% PTC projects, have now been reset as 100% projects. Also, the IRA also included the ability for the direct sale of tax credits in some situations. This sounds great, but it remains unclear how big of an impact it will have. I don't think this means the end of tax equity by any means. For example, the direct sale of tax credits does not include the benefits from accelerated depreciation, which is included with tax equity and represents a large source of tax benefits, especially for utility scale wind and solar. Tax equity will likely remain a big part of the market, but you may see the use of the direct sale of tax credits for less established earlier stage technologies, which could mean a real shot in the arm for hydrogen and other earlier stage technologies. Overall, the insatiable demand for shovel-ready renewables projects continues as everyone in virtually every industry seeks to reduce their carbon footprint. PPA prices are moving up as overall energy prices increase, and there remains continued strong demand from commercial and industrial buyers of renewable energy as everyone is trying to achieve their own ESG goals and mandates. However, the IRA didn't provide any immediate relief to address some of the ongoing headwinds the industry currently faces. Interconnection backlogs are probably the single biggest issue facing the industry. It's really a two-prong issue. Both one, delays in processing of applications, and secondly, the interconnection costs are coming in higher than anticipated. There's also supply chain constraints, physically getting access to solar panels and batteries. The IRA does provide some domestic content incentives to hopefully stimulate US production of equipment. It's designed to help address these supply chain issues, but it will take some time for that to really have an impact. Finally, the general outlook for Great Bay and the adoption of our royalty financing. The future has never looked brighter for Great Bay and our permanent, non-dilutive, flexible partner-like royalty financing. With recent weakness in equity markets and higher debt costs, the market is looking for alternatives. We see significant opportunities for our royalty financing, both in earlier stage developer deals like our Bluestar and Hodson deals, as well as for the operating stage, immediately cash flowing royalties like our Longroad and Northleaf deals. The market is definitely moving in our direction. Ray Faust, Josh Levine, and Bill Rodgers continue to do a fantastic job in identifying, negotiating, completing due diligence, and closing new opportunities, as well as monitoring the progress of our growing portfolio of royalties. It's a major effort, and I'm so proud of the execution and professionalism of our team. We recently added two new hires, Peter Leahy from Goldman Sachs and Zach Farr from GE, have joined us, and their plates are full already. This is an exciting time for Great Bay, and we believe we are still in the early innings of what is a tremendous market opportunity for the foreseeable future. That's it for my update. I'll turn it back to you, Brian. With that, I guess we'll take any questions. Thank you. Operator, can you open the floor for questions, please? Absolutely, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch tone phone. You will hear a three-tone prompt acknowledging your request. If you would like to withdraw your request, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any key. One moment please for your first question. Your first question comes from the line of David Quezada from Raymond James. Please go ahead. Hey, thanks. Morning, everyone, and congrats on the quarter. My first question here, just on the TGE sale to Enbridge, and I guess the royalty purchase option on the latter sort of 3 gigawatts, Frank, that you outlined there. Just curious what the decision-making process is gonna be on whether or not you exercise that option. Like, is there actually a scenario, you know, given the contract structure you have there that you would not move forward? I'm just curious, you know, how to think about that, those additional opportunities. I think the way to think about it is that we're using the valuation metrics that we use for the developer stage royalties. We know because we're active in the market of acquiring operating stage royalties. We know that they're in the money today, so to speak. Obviously, if interest rates were to spike really high, it is a fixed valuation metric. If there was a dramatic move in interest rates higher, they may not be economic, but something would have to change pretty dramatically for them not to be, you know, valuable for us to acquire. Okay, great. That's a good color. Thank you. Maybe just, Yeah. another one. Just one more quick thing on that that Brian just pointed out is that we also make that decision at the time, it's six months post-COD, and it's you know project by project. It's not an all-in, all or nothing proposition. We can do it selectively, you know, project by project. Right. Right. Absolutely. Okay, great. Just a question on, I guess, on the topic of interconnection delays and, you know, obviously your investment in Hodson seems like an interesting one and kind of, maybe I guess partly arises because of that issue. I'm just curious if there is a, you know, a squeeze being created for certain development projects that's really more than anything, creating an opportunity for you in that market. Like a, you know, projects there that maybe need some liquidity that are having to wait for the interconnection queue. Yes, I think so. First off, on our Hodson deal, we factored in those delays 'cause we had visibility into what the new proposals were from, you know, from the ISO and PJM. We factored that timing into our investment decision. With other folks, you know, time is money, and there is some pressure building. I also think investors with a defined time horizon, you know, private equity and the like, you know, if you're talking three or four years before a project even is going to, you know, get its interconnection application reviewed, that is creating some opportunity. Thanks for. For long-term capital like ours. Right. Perfect. Thank you for that. Maybe just one last one for me, if I could. Just on the topic of strong power prices. Obviously, that was a lift in the quarter. I'm just curious how are those being incorporated into any royalty agreements that you might be negotiating today? Does that mean that most likely we'll see more, I guess, kind of variable rate royalties, if it was on an operational project? I guess the question ultimately is, you know, how much does the current high power price environment affect the negotiation process for a new operating stage asset royalty? It's largely what's happening is that the sponsors are wanting the owners are wanting more exposure to some of the higher pricing than, you know, having a lower price, fixed price PPA. There's a tension, right? Because tax equity and debt want everything locked down, but they feel like they're leaving money on the table. There's been a dramatic change in the market in the last, you know, 18-24 months of the way that historically, owners maximize value of projects was to lock everything down and then put as much leverage, low cost debt and leverage on them as you could to increase your equity returns. Now, I think folks are treating these more like the resource assets that they are and saying, "How can I maximize the value of the output from these projects?" What we're seeing now is a movement towards, I would say 10, 20, maybe 30% merchant exposure for a brand new project coming online. We're also seeing opportunities where folks may have a hedge in place that may, you know, even though it perhaps didn't, you know, blow up, was in a market that, you know, it wasn't subject to Storm Uri and the exposure they had in ERCOT, but now it's brought to light some of the embedded risks in some of these hedges, and there is a movement to look at maybe they can unwind some of those hedges, and our capital is ideally suited to help do that. In terms of selection for like more or less merchant exposure, it's really not our call. Obviously if we're looking at an operating stage project, we'll look at what that sponsor has chosen and, you know, price and basically choose which projects we wanna invest in accordingly. I think it's probably fair to say we like the way things are going, and we like the blended mix we're getting right now. That's really just a function of what the market more broadly is how it's structuring itself. You're starting to see it widely, just more merchant exposure, but still a healthy component of fixed contracted prices. I think it's fair to say our portfolio will evolve probably pretty much in line with that as it continues. Excellent. Thanks for that color, guys. I'll turn it over. Thank you. Your next question comes from the line of Rupert Merer from National Bank. Please go ahead. Good morning, everyone. Good morning. Your opportunity set is growing. Where are you seeing most of the new demand for financing coming from? Is it more on the early stage end of the barbell, or is it in the operating assets, given the financial stress we're seeing in the market? I think the nearer term opportunities we're seeing are more on operating projects. The developer deals take a little bit longer to come together just because you're asking them to contribute their entire portfolio to the program. There's a little bit of you know, give and take on both sides to get you know, is it a team and a portfolio that we like, and are they you know, open to, 'cause we're not gonna do it. That's one of the key tenets of our developer stage investments is we don't do it on just a subset of their assets. We require them to you know, their whole portfolio to be subject to the program. I would say some of the nearer term opportunities will likely be more immediately cash flowing operating projects, but there's a healthy mix of both in the pipeline. Okay, great. Looking at the tax credits, it sounds like there are some puts and takes around the IRA. Just wondering if you can give a little more color on that. We are seeing an acceleration of potential growth in the market, so more developers coming forward. Some need equity, but at the same time, maybe a smaller hole in the capital structure for developers. Do you see it overall as a positive, negative or maybe a wash? Overall, I think it's a positive, but I think your characterization is accurate. There is some things pulling and pushing in both directions. There's going to definitely. It has accelerated the overall need for capital because a lot of projects that were either had, because of the passage of time, had become marginally or maybe even not economic are now back in the mix again. Those folks are actively in the market looking for capital. With the movement towards, you know, wanting a little more merchant exposure, that's an opportunity for us. But like I mentioned, it didn't. There's still an undercurrent of angst, I guess I would call it, in the industry with some of these interconnection delays and how are people going to fund through that. I mean, I don't still believe we're on a trajectory of massive growth overall for renewables. I just think it's part of the growing pains that you see. Thank you. Then as a follow-up, in Canada, it looks like we may have our own tax credits coming soon. Are you seeing any opportunities developing in Canada or is that something you have on your radar screen? We have it on our radar screen. We haven't. There's so much opportunity right now in the US. We've had a few introductory calls with companies in Canada. We haven't seen yet the same level of opportunity that we're seeing in the US. Great. Thanks. I'll leave it there. Thank you. Your next question comes from the line of John Mould from TD Securities. Please go ahead. Hey, good morning, everyone. Maybe just starting with the Great Bay staffing updates. You know, you've added a couple of people. Can you just maybe talk about how this improves your bandwidth for deal flow and for how long do you think this puts you at a steady state in terms of your personnel needs at the BD? Sure. I think the way to think about it is. This is what I shared with the board at the time when we were making the decisions to grow and staff up a little bit, is that with the four of us, we had been doing kind of like I would call batch processing, where we would find and identify opportunities, then, you know, it would, you know, literally take most, if not all of our time, you know, to move those through the process to negotiate, document, do due diligence, and then close those ultimately. Then we would be back to, okay, now let's go find, you know, the next best opportunity. Zach Farrar at GE was on the sales side, on the origination side for the wind services division, head of global wind services for GE. He brings with him a deep and broad expertise in organizing ourselves on the front end, on the origination front. We had a very long Excel spreadsheet. He has now had us working with a CRM system, so we're able to slice and dice our leads and identify opportunities and organize them and high-grade them in a much better fashion. I think what we're already seeing, that work is ongoing now. It doesn't stop while we're working to close other deals. I think adding Peter is just... You know, the way that we kinda work is someone will take the lead, then everyone else supports, and then someone else is the lead on another deal. We're able to process multiple deals now at the same time. I think we could deploy an awful lot of capital with the team that we have. We're turning into a really finely tuned machine. I don't see the immediate need. Maybe on an analyst or something on a junior side, we could use some additional support, but I feel like we're in pretty good shape for you know, for the foreseeable future to be able to process and close deals. Okay, great. Maybe just on that, you know, on the question of funding. I mean, when you layer in the TGE projects that Enbridge is looking to develop where you've got that royalty option, and granted there's a longer, much longer term runway there, you know, beyond 2024. You've got a line of sight on projects that likely exceed, you know, your capital availability right now and, you know, also with Bluestar and Hodson, those are likely to get tranched out the door over the next 2-3 years. How are you thinking? Maybe this is more of a question for Brian, but how are you thinking more about, you know, the midterm funding plan and keeping the door open for executing on maybe bigger opportunities on the operating side, you know, just given that those tend to have larger tickets associated with them? Yeah. Thanks, John. It's Brian here. There's somewhere around $50 million at the ARR level, and then of course, you've got the matching funding from Apollo. You know, Frank and the team have good liquidity for, I guess, what's on their plate right now. The point I'd make as well with regards to, like, the future tranches under the Hodson and Bluestar agreements, like, don't forget that there's pretty serious cash flow ramp-up starting to happen in the business. I'm not overly fussed about that, you know, those future tranches as we go forward. Yeah, I mean, our expectation is that we are going to need to continue to bring capital to the table to basically to keep up with the deal flow that's happening. Previously in different quarters, we talked about, you know, are we getting to that point where we could start to introduce some leverage into our own structure to help support that? I'd say we're still on the early side for that. And to be fully honest with you know, the debt market isn't looking nearly as attractive today as it would have even a couple of years ago. Still thinking in terms of longer term, I think, or not longer term, but medium term, around front-ending, you know, equity as the main source of funding for the business going forward. Obviously, markets are tough. Share price is by no means where we think it should be at the moment. Don't forget as well that, you know, renewables is very strongly supported, and in particular, Altius Minerals is also reaping very strong cash flows in this market and is highly committed to making sure that ARR does not run out of money to execute its growth. You know, it's interesting. I mean, it's I guess it's always the way when the markets are tough, opportunities are greatest. You know, there's that little bit of push and pull. Anyway, long story short is the message to Frank from the shareholders and the ARR and Apollo is, make good deals, the money will be there. That's full stop. Okay, great. That's great color. I'll leave it there. Thank you very much. Thank you. Your next question comes from the line of Nick Boychuk from Cormark Securities. Please go ahead. Thanks. Good morning, everyone. Brian, coming back to your comment about how the debt markets aren't as attractive, is the rising of interest rates having any impact on the competitiveness of your royalty? Or alternatively, could you guys potentially see a scenario where your 8%-12% targeted IRR actually has increased now if you were to go with an earlier stage developer, for example? Yeah, I mean, we'll keep an eye on those developments in the market. Yeah, we're obviously, as a royalty player, you're competing with all other forms of capital. I think, you know, Frank would agree with this, more particularly, we feel like we compete with the equity cost of capital for players. You know, you just have to look at valuations for the IPPs to know that that hasn't gotten cheaper in the last little while either. I think in terms of more specifically on the debt side, it's not just the pricing. When you get in these kinds of environments, you know, it used to be black swan events were things that happen every so often. I don't know if there are any white swans anymore. Everything's a black swan, it feels like. It's not an environment where you find lenders to be overly constructive when you're trying to do creative and neat things. I'd always look at not just the cost of debt, but also what comes with the debt and how restrictive it is around your business in what ultimately are the most opportune times. There's lots of push and pull. I'll just go back. We're not, you know, actively involved with trying to bring capital into the debt markets at this time. I'm sure it comes, but right now I think it would be almost too much of a distraction to the growth trajectory and an unnecessary pain in the arse, too, quite frankly. Nick, I would just add on the 8%-12% range, that's like, you know, there's nothing says that's fixed in stone forever and ever, and we're always looking to do the best deals we can. It's not like there's a posted, what's the market price of royalty capital and renewable? We're always trying to test that and press that and see, you know, is there opportunity for us to scooch up our returns? I'd say on every single deal, we're looking to maximize our opportunity. That's an ongoing process. Okay, that's great. Thanks, guys. Coming back to a comment that you made about the attractiveness of the U.S. market. Obviously, with more developers looking to get and more sponsors looking to get the merchant exposure, is the opportunity set in Europe becoming more attractive? Could Bluestar start to maybe introduce you guys to some opportunities there? Or is the U.S. just so bountiful that there's no need to expand beyond the borders? It's interesting. I think that we recently had a board meeting at Bluestar, and I think that they're seeing there is opportunities for some M&A type opportunities from sub-developers for Bluestar in Europe. In the US, the pricing is so high, I think they're very much focused on greenfield, and they have a very strong team they put together and continue to grow to build out that greenfield development in the US. I think you know there's no. Obviously, our royalty financing, you know, they're obligated to provide us royalties in the US under Nova Clean Energy and not in Europe, although we have exposure through our Bluestar ownership. There's an ongoing dialogue and you know the benefits of our capital you know are not lost on Declan. We'll see how that moves forward. You know nothing immediate. Nick, I might only add, like, you know, this question would have come up a lot around the time of the IPO, you know, where are we focused. What we said then is probably still mostly true. The key here is to get adoption in what we think is the most sophisticated capital market for renewables. That's obviously happening. Awareness of the royalty financing for the sector is growing. You know, international, I think, is still on our radar. You're probably zoning in pretty right here that when it happens for us, it's probably gonna happen in conjunction with some partner who's expert in the region. Not this month. Okay. No, that's still helpful, guys. Thanks a lot. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the number 1. Presenters, there are no further questions at this time. Please proceed. Thank you, Lara, and wanna thank everybody for joining us on the call today. We'll see you next quarter your end. Thanks, everyone. Ladies and gentlemen. Thank you. This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.