Good morning, ladies and gentlemen, and welcome to the Polaris Renewable Energy Inc. Second Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Anton Jelić, CFO. Sir, the floor is yours. Thanks, Ali. Good morning, everyone, and welcome to the second quarter earnings call for Polaris Renewable Energy. In addition to the press releases issued earlier today, you can find our financial statements, MD&A, quarterly information form on both SEDAR and our new corporate website at polarisREI.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. I'd like to remind you that comments made during this call may include forward-looking statements within the meaning of applicable Canadian Securities Legislation regarding the future performance of Polaris Renewable Energy and its subsidiaries. These statements are current expectations, and as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include the factors discussed in the company's quarterly information form for the quarter ended June 30th, 2022. I'm joined this morning, as always, by Marc Murnaghan, CEO. At this time, I'll walk everyone through a summary of our financial highlights. During the six months ended June 30th, 2022, power production was 163,119 MW net, compared to 150,676 MW net in the three months ending last year. As well during the six months ended June 30th, power production was 340,884 versus 331,659 in 2021. Revenue was $15.2 million during the three months ended June 30th, 2022, compared to $14.2 million in the same period last year. Revenue was $31.3 million during the six months ended June 30, 2022, compared to $29.8 million in the same period last year. Net earnings loss. Loss attributed to owners was $1.5 million for the three months ended June 30th, compared to earnings of $0.2 million for the same period in 2021. Despite reporting higher operating income during the period, the company did report a net loss driven by a $2 million charge from the revaluation of a conversion option liability. As well n et earnings attributable to owners for six months ended June 30th, 2022, was $1 million, compared to a loss of $0.8 million for the same period in 2021. Adjusted EBITDA. Adjusted EBITDA was $11.2 million for the three months ended June 30th, 2022, compared to $10 million for the same period last year, principally as a result of higher operating income. Adjusted EBITDA for the six months ending June 30th was $23.3 million, compared to $21.8 million for the same period in 2021. Cash generation. Net cash from operating activities for the six months ended June 30th, 2022, of $21.8 million, lower than the $24.2 million for the same period last year. Net cash used in investing activities for the six months ended June 30th was $40.5 million, compared to $1.5 million in the same period of 2021. Net cash used in financing activities for the six months ended June 30 was $19.7 million, compared to $22 million net cash from financing activities reported in the same period last year. And finally, dividends. I would like to highlight that we do intend on paying our 26th consecutive quarterly dividend on August 26th of $0.15 per share to shareholders of record on August 15th. This continues the board and management's commitment to regular positive distributions to shareholders, coupled with an ongoing of some attractively valued accretive acquisitions. With that, I'll turn the call over to Marc, who will elaborate on current business matters as well as on our quarter-end results. Thank you. Thanks, Anton. Yeah, first about production at San Jacinto in the quarter, at 51.8 net average MW delivered, and that compares. In Q4 of last year, we did 51.4%, and in Q1 of this year, we did 52.7%. I would say we're seeing a, call it a flattening of the production, lowering of declines into what I would call expected and anticipated decline rates, which we model around 3%-4% decline rate. That's. I would suggest that what we've seen over the last three quarters running, that we are flattening into that range of declines, which we like. I would point out that Q3 of this year is when we're doing our major maintenance. Just for everybody to keep that in mind in terms of the numbers. This quarter, current quarter, Q3, will be impacted by our annual maintenance, which we do every year. It's just we can't always get it in the same quarter as it is. It's somewhat due to the availability of Fuji technicians in terms of the timing. The Peru numbers, I would say, were up on three things really, all of which are good. Somewhat less downtime, but more importantly, better Hydrology, particularly at 8 de Agosto, which is the largest plant. We did have, not all the quarter, but part of the quarter, the pricing adjustments came into effect for May and June, which were. They are linked to, call it U.S. CPI. There was a reasonable adjustment on price in those escalators, and it's a full call it adjustment at the revenue level. That's good. Things moving in the right direction there. We are also anticipating that we should be getting a further price increase at 8 de Agosto as we are waiting for the approval of the reduction in the committed energy, which we were expecting all along. We're hoping that it starts to get applied and we get approval within the next month. Other call it things of note for the quarter. Obviously, people saw we did close the Canoa acquisition on June 28th. Given that obviously no impact on Q2. The nice thing we will have full results, full impact of the results of that acquisition in Q3. The actual reduction in cash as a result of that was $20.3 million, as that included some cash and working capital or positive working capital that was on the balance sheet when we closed the acquisition. All part of the acquisition. That's great. We also the Panama solar projects, which we had actually closed earlier, that everything is moving nicely there. To date, we've spent about $2.5 million. That's call it off the balance sheet, off the cash number, about $2.5 million. There would be another call it $7 million in the budget to be spent this quarter and next. We do have a COD on that plant still maintaining call it a December commercial operation date for that. The Ecuador acquisition that we announced, we are still working through some documentation with the ministries. We need approval for the share transfer and there's call it two or three other government agencies that need to give the sign-off. We're in the process of getting all that. We don't anticipate any problems other than it just being documentation. We would expect to close this quarter. With assuming that, we would then start to see those numbers coming into Q4. In terms of the other big project we have on the go, which is the binary unit, everything is on schedule, on track. We're aiming to have a commercial operation date in December. CapEx to date spent is about $20 million. Our budget always was $25 million. It still is. There's about $5 million more spend to come on the binary unit, which is on budget. As I said, we're still on schedule, so we're quite happy with that. We have about 90%-95% of all equipment is on site. The foundation's already built, and we're now very close to just starting to assemble and erect the unit. That is moving very well. Just to sum up, just from a cash perspective, just so everybody has this. We showed consolidated just over $60 million in cash. We will have another $5 for the binary estimated. Another, call it $7 for Panama Solar. Closing of the Ecuador transaction would be approximately $17 million. Just so people have those numbers. With that's just under $30 million of the $60 million. We have all the cash to close all this and get those projects to commercial operation. In terms of other focuses, I would say the primary focus post these acquisitions is.. Would be Canoa II, which is the expansion project in the Dominican. The site has the ability, and the actual current concession has the ability to double the size of the plant. We are working with one of the main, call it, government entities to get approval to move forward with that and start negotiating prices for that contract. We're targeting to have, call it, the green light to move ahead in the next 60-90 days on that. They have published some reference prices locally. Conversations have started. That's gonna be a big focus, and we're hoping that that's, call it, our first sort of project that we get going on that's part of our quote-unquote pipeline. We are also working and getting ready to prepare for the upcoming bid in Ecuador in October. We are working with some partners, local partners. The current bid date is October 28th, and we have call it three projects identified that we would like to bid in. We're quite focused on that. I would say those would be the two between Canoa and getting ready for the bid in Ecuador. We're quite focused on that. As well as with these the projects in Panama that we're building, it's quite small, and the plan is definitely not to stop at just those solar projects. We have... We are looking at both doing more solar with the current developer, a very similar type transaction, as well as, there are several Hydro projects there that we're looking at. We really wanna move that forward as well. There's a lot happening on that front. There's nothing that's, call it, ready to be announced, but we are working diligently on some development opportunities in Panama. The theme really is on the back of these acquisitions, we really think that there's growth opportunities in all of those markets. That's where we're focusing our efforts at this point in time. Last comment I would make is on carbon credits. We did have a very small sale in the quarter. We are, I would say generally, prices somewhat stabilized since March, April. The sales that we've done would be a little bit below that, call it average, that we're seeing in the market. We are still seeing interest. We're still seeing. It really depends on the vintage of the credits, but we think we'll do maybe a little bit more this quarter, call it older vintages. I think we have some from pre-2016, which I think is an important call it date, but we're likely gonna sell a little bit more. Anecdotally, even though pricing seems to have flatlined a bit, I would say anecdotally, the interest in the credits in general continues to go up and different parties that wanna discuss doing something and at prices that are better than, you know, where they are today. Continued, I would say, momentum there. We're every sort of growth project that we're looking at, we are already in the process of moving with a form of validation and verification processes. We get all of those certified so that we can get our. Our goal is, what I'm seeing is an ability, call it entering 2023, to be generating on an annual basis around 400,000 tons a year. With the goal to increase that as we continue to grow, because I think our development projects, we can get them validated, verified as well going forward. Not hugely material yet, but I would say at $5 a ton, which we are starting to see that, it starts to get, I think, quite good for us. We continue to make sure that we're focused on that, and it doesn't take a lot of capital to get all of our projects kind of ready and have that option value. Continued progress there. With that, I'll turn it over for questions. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Thank you. Our first question is coming from David Quezada with Raymond James. Sir, please pose your question. Thanks. Good morning. My first- Hi, David. Maybe starting with some Canoa and I guess the potential expansion for the Canoa II project. Just curious, Marc, what your thoughts are on, like, how the Supply Chain is looking today for panels in Latin America, and you know, when you would look to secure them if you get the green light for that project. Yeah. Good question. We haven't started that process yet. I would say it's 32 MW DC, call it 25 AC. That would be considered quite small. I think it's easier to get panels for that size of the project than for 250 MW project. When would we be going, realistically? End of the year, early next year. That would be the timing. We didn't have any issues with the current ones in Panama that we're doing. At least initial conversations with them at a very high level of, "Hey, we're doing something like that," or in Dominican Republic. Closer to the end of the year, they're telling us that should be fine and the pricing indications are stable, which is good. Okay. Excellent. Thank you for that. Maybe moving on to Ecuador and your comments around the upcoming bid and the three projects there. I believe it was Hydro that you're primarily looking at there with your partner, so maybe if you could just confirm that that's Hydro and any other color you can provide on, I guess, maybe ballpark size of those projects. Yes, it's Hydro for really two reasons. One is, we think that just from a globally competitive perspective, the Hydro there is super interesting. There's a lot of very high quality Hydro projects there that, you know, yet to be developed, and we think it's globally unique. Combined with we see doing more solar and possibly wind, for instance, in the DR and to Panama. I think just from a diversification perspective, it makes sense for us as well to focus on Hydro for Ecuador. Given that our partner sort of has the local experience in Hydro in terms of knowing the contractors, knowing how to, you know, do budgets properly, et cetera, and manage the risks. We feel like we have something that's a little more unique in Ecuador than, call it, doing the solar and the wind, which I think will also be somewhat more competitive. In terms of the project sizes that we've been looking at is basically as small as 17%. Actually, I'm not gonna give specifics, but I'd say it's that would be at the low end, and we're actually looking at things as high as 45 MW and some stuff in between. It's a bit of a range, I know. Yeah, that all of those would be, again, I think below where it gets really competitive, and of a size that I think we can handle. Okay. Awesome. That's super helpful. Thank you. Maybe just one last one, actually, one that I meant to ask, about Canoa II. You mentioned that there have been some reference prices put out there. I'm sure you can't say anything specific. I'm just curious, maybe any color around how prices have trended in that market recently and how you think a subsequent contract would compare to the existing PPA you have at Canoa I. I can tell you, I mean, with the reference prices, they're ranges, but call it anywhere from $80-100 for solar, which I think globally you'd say is still quite good. Obviously lower, and that has more to do with the fact that panel prices, for instance, when Canoa I was done, were much higher. They know that panel prices have come in, hence the reference prices have come in. The only thing I would say is I don't think those reference prices were in a way published before this, call it, increase in nat gas and oil. I think that there's room to do a little bit better than that, because the one thing that's different, David, is it's not as if they're like a fixed price, which they publish it and that's it. These are reference, quote-unquote, "reference prices." They're guiding the market, but I think, as I said, they were put out a little bit before the recent run up and the grid in the DR is reasonably heavily, call it, on the fossil fuel based or percentage. I think there's a bit of room from the $80-100 range to do a bit better. Perfect. Helpful again. Thanks, Marc. I'll turn it over. Okay. Thanks, David. Thank you. Our next question is coming from Nicholas Boychuk with Cormark Securities. Sir, please pose your question. Cool. Thanks, Mark. Morning. Morning. Could we get a little bit of color on the plans for the remaining $30 million cash on hand? Just any info you can share on how that's gonna be deployed and what your thoughts are around using debt financing for both Canoa, Ecuador, just how you're gonna be able to leverage that $30 million to get more of these projects developed. Yeah. I would say, one thing I didn't mention, but there's a very small, like a $2-3 million expansion project at the current, or again, we're expecting to close, let's say, in the next 30 days in Ecuador. Once we do, there's a small project that's like $3 million, but quite profitable, brownfield expansion there. Then if we have success, assuming we do on Canoa II, I would say, you know, that's call it a $30 million ± project. If you just let's say 60/40 equity or debt equity. That'd be like $12 million of equity, right? I would say that would be the principal thing that we have a line of sight on right now for use of that cash on hand. With the assumption, which we're quite comfortable with, that, call it, getting borrowing, like, debt on that wouldn't be hard to get. I think our plan initially, let's say we do Canoa II and then assuming we have some success on more in Ecuador, we see and I would even put Panama in there. We have more to do in Panama. Whether it's something in Ecuador or Panama, we will be using up, I would say, the rest of the equity. It's a question of timing. The other big assumption is we see every one of those markets locally wanting to provide a reasonable level of debt onto these projects if we want it. I think the funding strategy is use cash on hand to do equity for at least a couple of the projects, borrow locally, but then if it comes at us call it a little bit faster, we still think we have room to do call it. When I run my numbers for next year, we're at call it 3x Total Debt to EBITDA, not even net debt. It's be a little bit lower on a net debt to EBITDA basis. We're in the process of the certification to do green bond financing type. We're even considering you know do we do a bit of a subordinated debt green bond, something like that. We're not quite there yet, but it is definitely sort of something we're considering for sure, to the extent that the pipeline comes at us, in an accelerated way such that we're using up that $30 million in cash quicker than, you know, than we can generate. Okay. I guess a follow-up to that, what would potentially catalyze that pipeline to come at you a little bit sooner? Could it be maybe corporate PPAs in the local market? Would you be more open to taking merchant exposure rather than waiting for auctions? What could be drivers that would push that faster? I would say it'd be two levers. It partly would be PPAs in local markets. The plan really in September, October as an example, so in Panama where we hundred percent equity building because it's a small plant. 100% equity, but we have the opportunity to do more. I think to do, you know, to double or triple that, we're gonna wanna get a better sense as to what the PPA market is like there, and which is not gonna be too hard to do. We're gonna start looking at that in the fall here. Again, given prices have been much stronger in that market than what people are expecting because of fuel costs. I think we're hitting it at a good time. I also think though that we are just sensing that the demand locally for backing projects like this from a lending perspective is quite strong. Their willingness to take some merchant exposure is something that's part of that equation as well. If I talk about Panama, I think there's a lot more to be done there, but we wouldn't go spend another, you know, $40 million on a pure merchant basis without knowing whether we can finance it, and it's all merchant. We're gonna try to put those pieces in place in the fall here. You know, you mentioned the PPA. I'd say that's one of them. The other one is, call it, debt accessibility in the local markets. We're getting a sense it's quite good right now. And w e're gonna start to try to put those pieces in place in the fall here. Okay. That's good color. Thanks. The last, just you kinda mentioned twice that there could be opportunities, particularly in the Dominican for wind. That's a bit of a new development and new fuel type for you guys. Can you talk a little bit about the, I guess, the experience, the track record, and what you're seeing in that market to suggest that those specific projects are available? Yeah, I would just say it's from conversations with developers, early stage. I would say the dynamic of at below a size range, i.e., below, let's say $200 million project size, there's still very few, call it corporates doing what we're doing. We've had conversations with several people that have some wind projects in development. We've also had some that are actually already in production. Yeah, we're just seeing whether it's a single project owner of an operating one or somebody that can't really even put the equity together to get it built. That dynamic exists, and it plays out in a lot of these markets as long as, again, we're not doing a $250 million project. We keep seeing that. I would say we see less in wind, for instance, than we do in solar and Hydro, but we do see some. We see it, and to your point about experience, we don't have it yet, which is why it's probably we haven't done it yet. I don't think that I wouldn't let that prevent us from doing something in wind because I do think it would be good to round out the portfolio. I don't see it as complicated as Hydro and geothermal. We would absolutely be cognizant, for instance, if we did a development one, we sort of know where we need to draw the line between our capabilities and what we have now and what we don't. You might be a little bit heavy on the third-party engineers in terms of resource assessment, designs, construction costs, assess all of that, actually, third-party engineer to actually an owner's engineer, sorry, to help you build it. You know, we'd probably be heavier than we would on some of the Hydro where we do have the experience. We would need to lean a little bit more on outside consultants, but I wouldn't let the fact that we don't have wind stop us from doing one. Got it. That makes perfect sense. Thanks. Just last follow-up, you mentioned that $200 million threshold is kind of like the, I guess, the break-even or where you're seeing more competition above that from higher players. Is that kind of roughly a good number to think of for wind, solar, Hydro in each of your markets? Yeah. I mean, you know, debatable maybe. Maybe, $200- 250 maybe. Yeah, I don't know if it really is. At least what I haven't seen is whether it's really technology dependent as much as dollar dependent. Gotcha. You might- Okay. Get a little bit more competition coming down a bit more on the Hydros because they're so unique. At the same time, the big people have almost stopped because they know they can't grow another 5,000 MW in Hydro, so let's do that in solar and wind. More dollar value driven than necessarily technology driven. Okay. Beautiful. Thanks so much for the call, Marc. Thank you. Our next question is coming from Naji Baydoun with iA Capital Markets. Please pose your question. Good morning. I'm sorry. Good morning. I missed the part of the call earlier, so sorry if you've already maybe addressed some of these topics. I guess, maybe just a quick update on Panama seems to be going in the right direction. Maybe just a quick update on Ecuador and the Dominican Republic. What are sort of the next steps or the timelines to execute on the expansions in both of those, I guess, the assets that you've already acquired or are acquiring? Ecuador, we have yet to close. We're just in back and forth with some of these government entities. We're anticipating next 30 days. Once we do that, we have a $2.5-$3 million. I'm calling it an energy expansion, which we really, you know, we don't need any approvals. We just go do it. We can do that right out of the gate. There's a capacity expansion, which we would need to bid into the call, and that's in October. The plan there, you know, we think given that all you're doing is adding a turbine, the actual, there's no more upfront cost. Our ability to be competitive in the call is very high. We would need to bid in, okay, for that. There's sort of two stages. One, we don't need anything. Second one, we'd need to get a bid or win in the bid. As far as Dominican, we close June 28th, and we're in the process with the authority to get the concession basically agreed upon, which gives us the green light to go start negotiating prices with the distributor. There's been conversations already with on both moving. There's a lot of back and forth. There have been conversations with the distributor, which is the current one that we sell to right now. That's the number one focus here, and we're, what I said earlier was call it a 60-90-day timeline to have, call it, clarity on a contract and pricing. Okay. Got it. Then once we have that, assuming we get that, then you go to do final designs, and then you go start to finalize a real budget. In my mind, it's a 2023 project. Okay? Okay. From a construction perspective, that's what we're aiming towards. Yeah. Beginning construction sometime next year if you can get everything, sort of lined up, before the end of this year. Yep. Okay. Correct. Just based on your earlier comments, it sounds like, I mean, capital is no longer a big hurdle. You have the development assets now that you're clearly focused on and executing on, and it's just about getting, I guess, the right agreements and the right contracts in place. With all of that, where do you see sort of the company going in the next two, three years as you build out these development projects? You already have the jurisdictional diversification. In your view, what's sort of the next phase of the evolution of Polaris renewable now instead of infrastructure? Well, I think the issue with, call it, this development pipeline is that we're gonna move it forward, but the timelines of development aren't quite as fast as call it acquisitions. I would say that we spent, you know, years building an acquisition pipeline in addition to this, to what we have. There's more than just the DR and the Ecuador acquisitions. In fact, before we announced those, there would have been a few others that we actually thought were the lead candidates. Once we signed the three, the Panama, Ecuador and the DR, we put that pipeline, call it on hold, not from a knowledge perspective, but from an execution perspective. I would say it's still kind of in that phase, but it's still there. The principles that I just said to Nick, which is below a certain size range, there still is much less competition that we see. I would suggest that there's going to be, you know, that pipeline of acquisition opportunities is not gonna go away, and it'll be part of what we will be looking at doing in parallel with these development projects in the next two or three years. Okay. It's on the southern. The ideal is like, you know, well, both Ecuador, I would say, and they are current operations with expansion opportunities sort of already built in, but also entering into a market where you see much more. We do see ones like that in the pipeline. I think at a point in time, you know, that should come back. Maybe just to kind of summarize. If M&A was the primary focus on new jurisdictions, you have that today. Now maybe the focus from a capital allocation perspective is a bit more balanced in terms of development today and maybe M&A tomorrow. I guess maybe just to finish off, what does that leave maybe the dividends and on the stocks, so sort of lower on the priority list? I don't know if I would say that. I think we want to get back to dividend increases, because I see that I don't necessarily see that as going counter to wanting to allocate capital to acquisitions because I think that if we got back to dividend increases, our ability to raise capital for you know, they are different sort of kettles of fish doing a development project, which is, I think, you know, Canoa, we can just fund it with cash on hand plus internally generated funds, which is great. If we do find something that's, you know, call it another Canoa or bigger, that's operational, you know, I think would we look to raise some capital? Likely, if we find the right opportunity and we're at the right share price, then I think dividend increases likely helps that. Okay, got it. Thanks for the updates. Really appreciate it. Once again, if there be any final questions or comments, please indicate so now by pressing star one. There appear to be no further questions in queue. Do you have any closing comments you'd like to finish with? No, just thanks everyone for joining our call. Have a great day. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day, and thank you for your participation.