Good morning, ladies and gentlemen, and welcome to the Altius Renewable Royalties Q1 2023 financial results conference call. 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 an operator. Also note that this call is being recorded today, Monday 8, 2023. I would like to turn the conference over to Flora Wood. Please go ahead. Thank you, Sylvie. Good morning, everyone, and thank you for joining our ARR Q1 financial results call. The presentation for this call is on our website at arr.energy under Investors Webcast. There will also be a recording, and the webcast replay will be live a couple of hours after the call ends. With me today as speakers, I have Brian Dalton, CEO of ARR, and Frank Getman, CEO of GBR. Ben Lewis, CFO of ARR, will be here and joining us for the Q&A. With that, the forward-looking statements you'll see on slide two of the presentation. With that, I'd like to turn over to Brian Dalton. Thank you, Flora. Good day, everyone. I'm on the road today with some potential for weak connectivity, we'll keep my remarks even briefer than usual before turning over to Frank. Our first quarter was a gratifying one as we began to receive first royalties from several new projects that will pay our shareholders for many years and decades to come, while the natural resources that these are based on never deplete. The repowering based optionality that stems from the commissioning of perpetual natural resource projects continues to excite us and obviously others as well, as we are noting an uptick in inquiries around providing royalty financing to repower existing projects. The opportunity set for new investments for all of the use cases we have identified over the past couple of years continued to build during the quarter in fact. There is no doubt that our royalty offering is building in both awareness and acceptance, as increasingly evidenced in our growing list of recognizable counterparties. In addition, market conditions for the major competing forms of capital to our royalty capital, namely debt and equity, have been difficult, and this is helping to drive business our way. With that lead in, I'll turn things over to Frank for his more detailed observations. Good morning, everyone. I'm excited to share with you today an update on our continued progress in building Great Bay and its broad diversified portfolio of renewable royalties. Q1 included revenue from our two new investments, which we closed late in 2022, namely our $46 million investment into Titan Solar. That's a 70 MW AC solar project in California, owned and operated by Longroad Energy, and our approximately $18 million acquisition of a generation-based royalty on 658 MW of a 1 GW wind project in Hansford County, Texas, owned and operated by a top-tier owner operator. Q1 also included our first revenue from two new operating projects from our developer investments. A 2.5% royalty on Young Wind, a 500 MW wind project in Texas developed by Apex and now owned and operated by NextEra, and a 1.5% royalty on Appaloosa Run, a 175 MW Texas wind project developed by TGE and now owned and operated by NextEra. As shown on slide eight of today's presentation, Great Bay now has 10 cash flowing royalties on over 2.4 GW of operating renewable royalty projects. We also expect another project developed by Apex and now owned and under construction by JERA, the 300 MW El Sauz wind project to come online in the near future. Great Bay's revenue for the quarter was approximately $2 million, and ARR's revenue was $1.6 million. The reason that ARR's revenue is not exactly 50% of Great Bay's is due to higher interest income on the cash balances held by ARR. Revenues in Q1 were affected by lower merchant power prices due to a mild winter and resulting low natural gas prices. As many of you know, the marginal price of power is still set by natural gas prices in most regions of the country. On the other hand, I'd note that contracted PPA prices, as recently evidenced by the LevelTen Q1 PPA price index, continue to move higher. There's still strong underlying demand for renewable energy and continued upward pressure on long-term PPA prices, even as near-term merchant prices can be volatile, as we saw on the high side last summer and the low side this winter. When we provided our revenue guidance for the year, we factored in the low gas prices and forward price curve at that time. Accordingly, we remain comfortable with our revenue forecast for the year of $11.5 million-$13.5 million. I'd like to offer a few comments on our built-in pipeline for new cash flowing royalties, even with no new additional investments over the next several years. In particular, I'd encourage you to look at the list of solar and wind development projects on which we hold royalties on slides nine and ten in the presentation. From our TGE developer investment, we now have approximately 6 GW of development royalties as a result of the sale of TGE to Enbridge. Enbridge is committed to moving these projects forward expeditiously and obviously has the necessary capital to do that. We forecast we'll need royalties on approximately 2.5 GW -3 GW of these projects for Great Bay to earn its base return on its TGE investment. Great Bay will then have the option to acquire royalties on the remaining 3 GW+ of projects after they reach COD using the same discount rate we used for our initial investment. This one investment provides Great Bay with an attractive pipeline of cash flowing royalties, with Enbridge providing all of the required capital for ongoing development. Not to mention the royalties we expect to receive in the future from our investments into Hodson and Bluestar. In fact, Great Bay's projected revenue once it receives royalties from its existing investments is projected to be over $30 million, with ARR receiving its 50% share of those revenues. That's with no new investments. After ARR deploys the remaining uncommitted portion of the cash on its balance sheet into new deals, which I believe is a very conservative assumption, Great Bay's run rate would be over $40 million. The point of all this being that we have strong embedded revenue growth already baked into the business. A few comments about new business. I'll simply say we currently have the largest and highest quality pipeline of prospective deals that we have ever had. With the addition of Zach and Peter, we now have additional resources to help us process this increased activity. Uncertainty and higher costs in both the credit and equity markets is driving both developers and operators to look for alternative sources of financing. We are definitely one of those sources. The team is incredibly busy moving these deals along, and I'm confident in our ability to deploy capital into high-quality developer deals and immediately cash flowing operating work project royalties in the coming months. That's it for my update. I'll turn it back to you, Brian. Thank you, Frank. Now we'd be happy to take any questions. Thank you. Ladies and gentlemen, if you would like to ask a question at this time, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from David Quezada at Raymond James. Please go ahead. Thanks. Morning, everyone. My first question, just on the comments around the momentum you're seeing in new potential investment opportunities. Just wondering if there's any color you can provide on that, you know, whether it's weighted towards the operational asset side or development projects or both maybe? Any comment you could provide maybe on how that's split up in terms of technology or region. Sure. It's both on new developer deals as well as operating projects. I would say the biggest development, new development in my mind has been that there's folks now in the mix that we're talking to that I wouldn't have expected would need our capital. I think that, you know, I just think the opportunity set for the folks that are looking for at least a piece of their capital stack to have some, you know, alternative source of financing to help them maximize return is a larger group than I would've thought of in the past. The other thing I would say is we're getting to high-grade, which is a great position to be in. You know, we're not gonna do every developer deal that comes across the transom now. We're getting to high-grade and say, you know, which team is the best, which pipeline is the best. As to where, it's really across the country. The, there's been an explosion of activity since the IRA was passed last summer. Folks are definitely looking at, you know, ERCOT's still strong because, look, it's one of the biggest, you know, economies, you know, in the world, and it's growing and their load is growing, you know, incredibly fast, and it has a great resource. We're also seeing, out west, PJM. New development in PJM is probably a little slower just because people look at the backlog in the queue. I feel great about our position that we're already in the queue with Hodson. I guess. Those are just some general comments on what we're seeing. That's great color. Thanks, Frank. Appreciate that. Then maybe just staying on that topic, I guess, broadly, and I appreciate you already have quite a large opportunity set in the U.S., but do you look at the Canadian market at all now with more activity in certain provinces like Quebec and Ontario and Alberta? Just wondering if you have any feelers out there as a long-term opportunity. We've seen a couple opportunities. I think that I think by far our strongest pipeline is still in the U.S., but we've seen a couple, which we hadn't seen any in a while. There seems to be an uptick, but it's not a huge focus for us right now. Okay. We've got plenty on our plate, with the U.S. market. Perfect. Thank you for that. Maybe one, just one last one for me, if I could. Just wondering if you're able to quantify the effect of lower power prices, maybe like on revenues in the quarter? I don't. Well, we don't need to quantify it. it. I think we break out in our MD&A at least the, you know, the major projects, Titan, Prospero, Northleaf, so you can look at that in the MD&A. You know, prices were lower due to the mild winter and, you know, hoping we still have a summer this year. We'll see, I think significantly higher prices, you know, in the next several months. That's fair enough. Thanks, Frank. I'll turn it over. Thank you. Next question will be from Nicholas Boychuk at Cormark Securities. Please go ahead. Thanks. Good morning. Frank, you guys allocated- Hey, Nick. ... additional capital this quarter to Hodson. I'm curious if you can comment at all on the sort of interconnection queues that you're seeing, and whether or not they're communicating to you that things are starting to pick up a little bit, move a little bit faster. Well, first off, on the Hodson, they hit some milestones, which is great news. They continue to move projects along and hit our internal milestones that we set, that, you know, we agreed to up front, and that's what, you know, triggered the access for them to additional capital. That's all, you know, good news. Things are moving forward. On the queue of PJM, I'd say that once PJM, you know, look, they took a while there to get their plan, you know, organized and approved and communicated to the market. Now that they have, we are seeing them. PJM is working through and doing what they said they were gonna do. They pushed back the start date for the new interconnection queue reform transition process, but that's in part because they were trying to, and they are, moving projects forward through that they had already in the system before that date. we've seen, you know, some activity that they're pushing things through that were kind of grandfathered in. They wanna get off their plate before they enter into the new transition process. they seem to be, they do seem to be moving forward, you know, in processing applications. we are seeing activity in PJM coming from the system operator. That's a good sign. You commented about the high grade of the portfolio and the opportunities that you guys are looking at. Can you comment at all on the pace of expected capital deployment? I'm assuming that some of the sort of announcements that could have happened could have been delayed by the IRA or other developers looking to just kind of finalize the last details. Any comments on how fast you'll be able to deploy the remaining capital? I think, to be fair, and part of it was that we had in closing two deals, right, literally before the end of the year. We had to, you know. We were a little bit behind in processing some things, so we're getting up to speed now, and we're getting. It's really completing the due diligence, making sure that, you know, we still do everything the way we know we should and getting it, these deals worked through our internal processes, our due diligence. It's also on the developer side, we're digging in because there's a lot of new development teams out there and just it could create a great opportunity. I think this is where our background and experience as developers ourselves is really helping us. Like, you know, I think we do an excellent job in looking at the teams, looking at their projects, determining what's a brag a lot, and what's a real megawatt. You know, that just takes time. On the operating side, any comment on the pace of any of those new deals? Yes. We have a number of those, you know, in active negotiation. I think, on that front, I'd just say it's interesting that, you know, the number of folks who are looking for capital has increased dramatically from, you know, previously. Okay. Excellent. Thanks, Frank. Thank you. Next question will be from Rupert Merer at National Bank. Please go ahead. Hi. Good morning, everyone. Good morning, Rupert. Just to follow up on Nick's question on the pace of capital deployment. Can you remind us how much uncommitted capital you have right now, either at the ARR level or GBR level? What's the outlook for needing more capital? You think you'll be in a position before the end of this year that you'll be out there looking for more? The— I think we had- I can take that if you want, Frank. Sure. Well, at the high level, at the GBR level, it's probably fair to think in terms of $100 million or so cash at ARR that, granted there are some ongoing commitments. Don't forget there's also, you know, pretty nicely ramping up cash flows. I kind of look at those as a bit of a wash. About $100 to work with today. That won't cut it for the amount of deal flow that we're seeing come in from Frank and the team, assuming they get a, you know, that there's a normal kinda hit rate in terms of conversions here. Obviously, the job here is to continue to scale and build diversity. We're, you know, we're not sitting on that assumption that, you know, we deploy that amount of capital, and that's it. Yeah, we don't really sleep as far as continuing to look at ways to feed capital to these opportunity sets. There's lots happening here, both in terms of early exploration of debt markets, lots of ongoing discussions with potential strategic investors. Obviously, the equity share price is really not constructive at the moment, so we won't be tapping that anytime soon. Yeah, there's lots of other ways, and there's pretty strong interest, we think, in what's developing and happening in this business. You know, it's very vague, I suppose, answer, but the message we give, you know, we send to the GBR team, as you find the good deals, the money will be there. As part of your discussion with strategics, would asset recycling enter into the mix potentially? Yeah. Look, there's a real disconnect between what the equities markets are saying, you know, about what's happening, I think, in renewables generally and particularly with respect to this royalty financing, and how it's developing. That happens all the time. Again, if we wanted to sell the business to a strategic interest, we'd have a lineup at how much our valuations, I suspect, than the equities markets are saying. You know, we've These things all sort themselves out in time. We'll get it, we'll get it figured out, there is lots of strategic interest. Great. Secondly, if I look at your development properties under royalty in wind and solar, a great number of estimated CODs in 2024. How comfortable are you that the supply chain or interconnection will be there for these projects, and that you'll see them online next year? Is there any risk those get pushed out a little further? I guess there's always a risk things get pushed out. I will say that, you know, we know Enbridge is making a major concerted effort to, you know, in fact, accelerate the timeline on these projects. You know, they have buying power in the market when it comes to panels and things. I think they're not gonna just look at. They're looking at this as a program and how they can do this on a larger scale than, you know, one season, two seasons along the way. I think that they're gonna exercise some of that power and that will, you know, hopefully keep things on track. There's always a risk things get delayed. If they do, you'll remember it doesn't affect our ultimate return. It just means that more projects that would have gone towards our return will fall out of that option bucket, so to speak, that we would have an option to acquire, you know, after we've gotten enough royalty to achieve that return. Right. All right, very good. I'll leave it there. Thank you. Thank you. As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by 1 on your touchtone phone. The next question will be from John Mould at TD Cowen. Please go ahead. Thanks. Good morning, everybody. Frank, maybe just circling back to Texas a little bit to tackle some of the legislative proposals on power renewables we're seeing. I mean, nothing's law yet, but it looks at least on the face that like another endorsement of your portfolio approach to development royalties. Just wondering, you know, bigger picture, how does the uncertainty in Texas change how you're evaluating investments with a significant footprint there? Does it potentially create some opportunities for your capital, given that it may constrain the ability of other developers to sell their projects versus, you know, what they might have been hoping for? Again, I realize a lot of this is up in the air, but would appreciate your thoughts. Sure. Yeah, no, it is up in the air. You know, we'll see what happens there. I've lived through these cycles in markets. I recall when we were developing large scale biomass projects and KKR came into the market at the time and said, "We're gonna build 12 GW of coal power plants." Everybody in the market backed up and went the other way. You know, I said, "I don't know what's gonna happen, but I know that's not gonna happen." We kept moving forward. When that, sure enough, that fell away, we were sitting at the front of the line, and we were able to, you know, have fantastic outcomes because we didn't get caught up. I do think it's the portfolio approach you're talking about. I also think that, you know, even if they pass this legislation, there's still the renewables movement in Texas is. The genie is out of the bottle because it's cheaper. Even economics will drive this continued growth in renewables going forward. You know, could it slow down a bit? Perhaps. You know, that we're protected in our current structures. I think that, you know, even just our existing pipeline today with, you know, Hodson doesn't have very much exposure to ERCOT. We had their whole pipeline. It's, you know. Declan's looking at these things at Bluestar and trying to factor those into where they're looking. They're trying to look and, you know, go where the puck is going to be, not where it is today. They're looking at different markets and things. I think it's a. I think we'll be fine, but I also wouldn't put—y ou know, it's easy to get caught up in the hysteria of today. I think longer term, the drive towards renewables is gonna continue, and I think we're gonna be well situated. Okay. Thanks for that. Maybe just, you mentioned both your developer partners. You know, and, I know you can't get into specific project deals for details, excuse me, for what, you know, Hodson Energy and Bluestar Energy Capital are up to. You know, can you speak more broadly just to how those pipelines are progressing, you know, relative to your original expectations when you, when you made the, when you made those investments? I think the on the development side, they're both doing great. I think that, you know, Declan continues to build up this very incredibly strong greenfield team and is making great progress in building out their pipeline. Again, it's a private company, so I can't get into specifics there, but they continue to make great progress. Hodson, you know, they've continued to expand their portfolio and advance the ones build out their team to advance the projects they already. I mean, we're seeing our capital work again. Like, the idea of that we can go into someone with an established pipeline and help them accelerate their whole pipeline. It's what we did with TGE, it's what we did with Apex, and we're seeing it happen again with Hodson. I feel really great about those investments. The What was another part of your question? I'm trying to think what was the... No, just how it was progressing relative to your expectations. I think, you know, Oh. covered it. Yes, exact. Yes. I remember one other point I wanted to make was just that when. I think that, Declan also, Bluestar also is open to acquiring, you know, development projects from sub-developers or looking that. That market still remains very frothy, which is fantastic for, you know, their greenfield development and Hodson projects. I think, you know, he's being very disciplined about value, and it's. Prices are still. We do have a attractive development project or pipeline. The prices for those are still quite high. He would may have liked to have been able to acquire some projects. He's, you know, sticking to his knitting and just focusing on the greenfield now in the U.S. Okay, great. thanks. maybe just one last one on the IRA and, you know, tax credit transferability. There's been, you know, some reporting on a market for tax credit transfers deals, you know, starting to take shape. you know, are you seeing this enter into, you know, the picture and the deal flow that you're seeing at all, or is it still, you know, really nascent and not so much of a factor in what you're seeing? No, people are starting to actively discuss it. We've not been involved with the transaction that's used it yet. I think what's happening is there's. You know, if you have a just a good project with a great PPA, say it's a busbar PPA, you're gonna go your traditional route and use traditional tax equity, and you're gonna get one of the major tax equity players to step up. If there's anything unusual about your project or it's a repowering or something, you have some merchant exposure or something, then I think that the shortage of tax equity is an issue in the market. That and the interconnection are probably two things that are slowing down, you know, progress the most. I think that those folks are looking at. There's still, I think, believe some additional guidance that's gonna come out, but people are actively looking at that for, you know, repowering projects or things where they may not just be a plain vanilla project. I think people are taking the transferability very seriously. Then obviously, other technologies, you know, whether it be hydrogen or whatever, are looking at as well. We haven't been actively involved in those to date. Okay, great. All right, those are my questions. Thank you very much. Yeah. Thank you. At this time, it appears we have no further questions. Please proceed with closing remarks. Thank you, Sylvie. Thank you everybody for dialing in today to the conference call. Rupert, I'll call you or send an email 'cause we do have the answer to your question ready to answer. Look forward to speaking to everyone again soon. Thank you, Ms. Wood. Thank you, everybody. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.