All participants, thank you for standing by. The conference is ready to begin. Good afternoon, ladies and gentlemen. Welcome to the Conifex Timber Inc Q2 2021 Results Conference Call. I would now like to turn the meeting over to Mr. Ken Shields. Please go ahead. Well, thank you, Patrick, good afternoon, everyone, and welcome to this call covering our first half 2021 results. I'm joined today by Chief Financial Officer, Winny Tang and Operating Head, Andrew McLellan. After a few brief opening comments, I will hand the call over to Andrew to review operations and Winny to review our finances. I plan to review some important near-term developments that we believe will strengthen competitiveness and future cash flow generation at our Mackenzie complex. We'll respond to any questions that shareholders and analysts may have. First, let's quickly deal with a housekeeping item. We will be making forward-looking statements and references to non-IFRS measures, therefore call your attention to the warning statement set out on pages one and two of the MD&A that we released earlier today. For the second quarter, our net earnings were CAD 26.1 million, equivalent to CAD 0.56 per share. EBITDA was CAD 37.8 million. This brought our first half results, net earnings up to CAD 30.6 million or CAD 0.66 a share, and first half EBITDA up to CAD 47.5 million. The sequential improvement in quarterly earnings was driven by dramatically higher lumber prices, improved lumber shipments as railcar supply normalized, and CAD 2.8 million in business interruption insurance proceeds. The settlement we reached with our power generation plant insurer verifies the statement Andrew and I made on previous calls to the effect that neither employee errors nor gaps in maintenance procedures triggered the curtailment of the power plant. I'll now turn the meeting over to Andrew, who will update you on our lumber and power businesses. Thank you, Ken. Good afternoon, everyone. First, I wish to reemphasize our number 1 priority is to protect the health and safety of our employees, their families, and community members. Towards the end of Q2, and so far in Q3, successfully achieving this objective became more of a challenge due to the heat wave in our home province. The result of wildfires led to harvest curtailments, which led to some shift cancellations at our sawmill in Q2. We also incurred extra costs trucking lumber to service our customer base when railcar supply was sporadic. We owe a debt of gratitude to our employees who helped us maintain a safe workplace amid COVID pandemic and helped mitigate disruptions in log and railcar supplies. We also thank our contractors who made their equipment and employees On my last two calls, I noted that the combination of heavy snowpack and wet weather last spring extended the spring breakup period and led to log harvesting and delivery shortfalls at mills in the Northern Interior region of British Columbia. Consequently, our sawmill operated at 83% of capacity in the first half of 2021. Now that our log inventories are being replenished through our active summer logging programs, we plan to extend operating hours at our Mackenzie Mill later this month. Our MD&A discloses that we are targeting an operating rate of 90% in Q3 and an even higher rate in Q4. As always, any number of unanticipated pandemic or wildfire-related production or shipping disruptions could hold us back and prevent us from achieving these production targets. Our power business performed well in the quarter and continues to meet its production targets going forward. I will now turn the discussion over to CFO Winny Tang. Thank you very much. Thank you, Andrew, and good afternoon, everybody. We ended Q2 with cash of CAD 35.8 million and available liquidity of CAD 45.8 million. The CAD 10 million revolving credit facility we arranged late last year remains undrawn. Gross debt at the end of the quarter totaled approximately CAD 62 million, of which CAD 59 million is limited recourse debt related to our over CAD 100 million investment in green power production. We also have obligations totaling CAD 2.7 million for leased office spaces and mobile equipment. After deducting cash, we ended the second quarter with net debt of CAD 20.1 million and a net debt to capitalization ratio of approximately 12%. Our lumber business is in an enviable financial position, with nominal debt and significant cash balances. We deposited CAD 7.8 million in duties in the first half of 2021, and we now have US $16.3 million on deposit that is potentially refundable. Our capital expenditures totaled just under CAD 3 million in the first half of 2021, and we expect to expend similar amounts in the second half of the year. We also expect to pay minimal cash taxes this year and also into the next year as well. In December 2020, we commenced our normal course issuer bid, entitling us to repurchase and cancel up to 2.94 million shares. In the second quarter, we repurchased and canceled 1.45 million shares. Since inception, we have repurchased and canceled 2.38 million shares at a total cost of CAD 5.5 million. Our average purchase price of CAD 2.31 per share represents a 20% discount to our June 30 book value of CAD 3.21 per share. Subsequent to the quarter end, we amended our credit agreement to allow us to repurchase and cancel up to CAD 9 million of our shares between October 1st, 2021, and September 30th, 2022. For reasons that Ken will discuss, we believe our share trades well below our estimate of fundamental value, and we believe the share buyback is an optimal use of excess cash. I will now turn the meeting back to Ken. Well, thanks, Andrew and Winny. Delivered log costs account for about three quarters of the cash cost of producing lumber in the interior region of BC, the competitiveness ranking of any sawmill complex is driven by the procurement cost and quality of the available sawlog supply. We think it makes sense to use the remaining time today to bring you up to date on our fiber supply situation. We've summarized key information about the Mackenzie timber supply area in slides seven and eight in the deck we distributed. The Chief Forester has indicated that she expects to release an updated harvest level determination, these are commonly referred to as Allowable Annual Cut or AAC Determinations. She plans to release a new determination for the Mackenzie TSA before the end of 2021. Under the new AAC Determinations, we believe we will have ample access to better quality sawlogs. Here's why. First, let's discuss trends in log quality. As indicated in slide seven, the Chief Forester presently requires operators in Mackenzie to source the majority of their sawlog requirements from dead and damaged pine stands. Last year, the Ministry disclosed that 60% of the dead pine in the timber inventory in the Mackenzie TSA had lost commercial value and was no longer suitable for lumber production. With this disclosure, it is evident that the shelf life of the remaining beetle-damaged stands in the Mackenzie TSA has expired. This explains why we expect to be able to access a higher quality, "greener" log diet in 2022 and beyond. A "greener" log diet provides us opportunities to materially improve lumber recovery. Here, of course, we have fewer defects in the log than more of each log is available as finished lumber. It also allows us to reduce unit cash conversion costs because we have fewer production jam-ups in our saw lines and our planing and finishing lines. Probably most important of all, it allows us to boost our lumber grade outturns, which leads to much higher average lumber selling price realizations. In this latter area, with a green log diet, we believe we can move about 10% of the output of the mill from low-grade lumber, which sells for something like a discount of CAD 100 per thousand board feet below construction-grade lumber prices. We think we can move about 10% into a premium grade that sells at about CAD 100 premium. You can see that the effect of a "greener" log diet is for something like $20 or say CAD 20 after duty, and with 200 million+ of annual lumber capacity, that's a swing in cash flow generation of over CAD 4 million a year. This is why we're excited about this, and we believe that with the redetermination of the harvest level of Mackenzie that we will migrate to a lower position on the global softwood lumber industry cost curve. Let me talk two minutes about log availability. Based on our review of the future AACs in the interior region of BC in general and in Mackenzie in particular, we believe that the Mackenzie TSA will likely contribute at least 6% of the total harvest in the interior region of BC. Since Canfor closed its Mackenzie mill in 2019, we operate the one remaining sawmill complex in the Mackenzie TSA. At capacity, our mill will consume about 2% of the interior BC AAC. If the Canfor mill restarts, at capacity, it could consume about 2.5% of the interior BC AAC. Given that the Mackenzie TSA is expected to account for about 6% of the total fiber in the interior BC that consume only 4.5% of the fiber, it's apparent that surplus sawlogs are available to us in Mackenzie. This explains the note that we put at the bottom of slide six, which makes the statement that we have one of the highest degrees of timber self-sufficiency of any sawmill operator in British Columbia. In anticipation of having plentiful supplies of better quality sawlogs, we've got three comprehensive studies that are underway. The first study examines the scope and scale of a potential modernization and expansion of our Mackenzie sawmill site. We believe we have a solid opportunity to boost lumber production capacity by about 25%, reduce cash conversion costs, and further improve lumber recovery grade outcomes and sales realizations. Our objective is to identify a plan that enables us to sustain positive cash flow when lumber prices are cyclical low, and a plan that produces attractive returns on investment even under conservative lumber price assumptions. The second study we have underway focuses on the diameter class, quality characteristics, and moisture content of the sawlog supply we expect to access over the next decade and possibly longer. This crucial information will help us specify machine center and dry kiln attributes and performance requirements for any modernization project. A third study that we have underway focuses on the potential to build and operate a log merchandising facility at our Mackenzie site to process our internal requirements, but also to optimize the potential proceeds from the sale of surplus sawlogs harvested in Mackenzie and sold to fiber-deficit sawmills in Prince George. We expect to finalize these three studies shortly after the new AAC Determination is announced. We also expect that any projects we may approve in the future will be phased in over time and funded through a combination of our cash balances, potential export duty rebates or refunds, and drawdowns under our existing credit facility. While we await the release of updated harvest level and mix determination, we intend to continue to repurchase and cancel shares. We have equity in a power plant that we value at over CAD 1 per Conifex share, cash on our balance sheet worth over CAD 0.80 per share, and duty refunds worth as much as CAD 0.45 per share. This totals CAD 2.25 per share. Our recent trading price is CAD 0.50 per share lower than the total of these three items. Clearly, stock market investors presently accord a negative value to our tenures and sawmill complex assets that we believe are valuable and that we have proud to own. Therefore, we continue to believe that our stock is undervalued by a huge amount, given the robustness and quality of the timber inventory in the Mackenzie TSA and given the high return capital investment opportunities available to us. That sums up the key points we wanted to make. We very much look forward to our next call with you, and we would be pleased to respond to any questions shareholders and analysts may have. We'll turn the meeting back to Patrick. Thank you. Please press star one at this time if you have a question. When prompted by the system, please clearly state your name to register your question. There will be a brief pause while the participants register for questions. Thank you for your patience. We'll take the first question. Please go ahead. Paul Quinn, RBC. Sure. Okay, I'll ask you a question. Hey, gang. Now that you've got your balance sheet in good shape again, what are you looking to do? Are you looking to get back in M&A, or is it more upgrades on the sawmill? Paul, good question. To date, all of our study and analysis has been focused on internal enhancement projects, optimizing our existing timber and sawmill and power plant base. We have not been looking for external acquisition opportunities. The rationale is importantly driven by the fact that when you remain with internal projects, you can control the scope and scale and speed of the funding that's required. That's why we're continuing to look internally. Maybe, we've got a pretty hot summer going here. I just wonder what the update on fire situation is in Mackenzie. Do you expect any shuts to occur in Q3 there? Good afternoon, Paul. It's Andrew McLellan here. We've been fairly fortunate with the conditions in Mackenzie and somewhat different than we've seen in the [audio distortion]. We're not anticipating that we'll have anything out of the ordinary here in the back half of August or into September. We did have some disruptions in Q2, it was limited to about two weeks of shortfalls in log deliveries. We didn't entirely shut down log deliveries, we had a two-week period where they impacted our volumes. Okay. Ken, you mentioned that log costs, BC interior with 75% of cash costs, you obviously got hit with a huge run-up in stumpage on July 1st, poised to see another price increase on October. Are you guys able to make cash at these levels of stumpage, especially given the quality of the fibers you're bringing in? Well, let me mention a couple things about that, Paul, and they're both very good questions. First of all, we found that the heavy snowpack and difficult weather conditions that we had in Q1 forced us to incur extra log costs, buying wood to make up for some shortfalls that we experienced and spending extra money buffeting up roads so we could haul wood when ground conditions were very wet. As a consequence of that, our non-stumpage related sawlog costs in the second half of this year will be lower than they were in the first half, and the stumpage will be a bit higher. All the reviews and the scrubbing of numbers we've done indicate that we are going to have a modest single-digit increase in delivered log costs in the second half of the year compared to the first half. Coming back to your second question is that, I think, Paul, that if you looked at our operating earnings in the first six months of this year and divided it by 93.3 million board feet of shipments, you'd find that we had something like CAD 450 of operating income per thousand board feet, and there's probably CAD 25 or so of depreciation in that. In any event, the operating income was right around CAD 450. Through to last Friday, our average selling price realization was about CAD 450 lower than it was in the first half of this year. Right today, we are at approximate break even, and in the quarter to date, we would be slightly ahead of our cash costs. Now we're about to experience the sub-CAD 500 benchmark price orders that we'll be shipping, so we probably dip into negative cash flow territory right now. At this moment, we're continuing to, as Andrew said earlier, we've got a robust summer logging program that enables us to spread our fixed costs over a larger number of units. We are also looking at adding hours to our sawmill complex, and we think that will enable us to reduce our cash conversion costs a bit. Right at this moment, there's not an overwhelmingly powerful argument to take downtime because it's not clear to us yet that the impairment cost would be materially different than our operating costs. Who knows what will happen. Our own view is that the correction in lumber prices has largely run its course, and that as we've got some seasonal improvement opportunities in shipments coming up, and as you and others have written about, there could be some restocking in certain lumber market segments. We think lumber prices are more likely to go up from here and that there isn't an urgent need to consider downtime at this moment. Okay. Full, some answer. Maybe just lastly, I'm quite confused with your hedging strategy. It seems like I've seen quarters where lumber prices are going up and you've had losses, and lumber prices are going down where you've had losses. Maybe you can just remind us what your hedging strategy is and when it's going to start to work for you again. I'm sorry, the monitor line disconnected. Are we still on the conference? Please stay on the line.You are now back in the call. Thank you for your patience. Well, good afternoon once again, everyone. It's Ken Shields. We've had an unusual development with the phone system here. We got dropped from the call. Presumably, you're still on the line. I was in the midst of answering Paul Quinn's question about our hedging strategy. The background to our hedging strategy is that we did obtain some price protection, and then we experienced this incredible run-up in lumber prices. We took significant losses in Q1. We took further losses in April of Q2, and towards late May, early June in Q2, we unwound our positions, and we ended up covering our position at much higher than the CAD 500, CAD 600 level that they reached at the end of the quarter. There was a bit of a loss in Q2 in addition to Q1. We have no positions on the books now, and we don't anticipate doing anything materially in the hedge market at this time. Patrick, are there other questions? Mr. Quinn, do you have any more questions? No, I'm good. Thanks very much, Patrick. Thank you. I'm sorry about that. We do have the next question. One moment. We'll take the next question. Hugh Cooper. Oh, Ken, just two quick questions. First of all, how much is your tax loss carry-forward in the U.S., and what is left in Canada? I can take that question. This is Winny Tang. We have losses in excess of CAD 100 million in the U.S., and in Canada, we had around CAD 50 million at the end of 2020, and so we were able to utilize a large portion of that so far in the year. We do not expect, though, to have any cash taxes payable for the current year. Okay. Ken, I think I might have missed that, but I think you said you had roughly about CAD 0.80 of cash. The duty refund roughly amounts to about CAD 0.45. Your lumber operations were CAD 1, and the biomass plant was CAD 1? No. We said the biomass plant was CAD 1. The CAD 45 million for the biomass only? Yes. Okay. For the equity in the biomass, and then there's CAD 60 million of debt on top of that. It's roughly CAD 105 million. 7x. 7x EBITDA, roughly. Okay. Yes. We said that we infer from that our tenure in lumber business has a negative value built into the current stock price. Okay. How would you value your cut or whatever your reduced cut will be? Do you see that as an asset? We certainly do see it as an asset in Mackenzie. We think that since we sold tenures at approximately CAD 120 per cubic meter a while ago, we think tenure values have come down a bit in BC because of the regulatory uncertainty related to First Nations reconciliation efforts and some of the objectives that are set out in the intentions paper that the Ministry of Forests issued recently gives the province more flexibility to wheel and deal in tenure than to repurchase tenure. I don't know, CAD 90 or CAD 100 might be the going rate, and we've got presently 807,000 cubic meters of tenure, 782,500, actually. Sawmills are valued at, I don't know, $400. Each sawmill is $400 per 1,000 board feet of annual capacity, and we've got [240 million board equipment. There might be $100 million there or something like that. To the nearest whole dollar, there might be CAD 2 a share over and above some of those other amounts that we discussed. Okay. Okay, thanks. That's it for me. Thanks very much, Ken. Thank you, Hugh. Thank you. Once again, you may press star one if you have a question. There are no further questions registered at this time. I would like to turn the meeting back over to Mr. Shields. Well, I just want to thank all of you for your support of Conifex and for bearing with us as we had this telephone interruption today. Thank you. We look forward to chatting to you in early November. Bye now. Thank you. The conference has now ended. Please disconnect your lines at this time, and thank you for your participation.