Greetings. Welcome to the Polaris Renewable Energy Fourth Quarter and Year-End Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this call is being recorded. I will now turn the conference call over to your host, Anton Jelic, CFO at Polaris Renewable Energy. Sir, you may begin. Thanks, Holly. Good morning, everyone, and welcome to the 2022 Q4 and year-end earnings call for Polaris Renewable Energy. In addition to the press release issued earlier today, you can find our financial statements, MD&A, annual information form, and annual sustainability report on both SEDAR and our corporate website at polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. I'd like to remind everyone 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 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 annual information form for the year ended December 31st, 2022. I'm joined this morning, as always, by Marc Murnaghan, our CEO. At this time, I'll walk you through our financial highlights. Power generation. Consolidated power generation for the 12 months ending December 31, 2022 and 2021 were 649,756 MWh and 643,523 MWh, respectively. These production figures are net of all plant downtime, both planned and unplanned. With respect to Nicaragua, we saw total megawatt hours of 113,189 in the fourth quarter of 2022 versus 113,395 same period last year. In Peru, total megawatt hours in the fourth quarter of this year was 39,923 versus 49,147 in the same three months period last year. As well, in our newest acquisitions in the Dominican Republic and Ecuador, we re-realized fourth quarter production of 14,139 MWh and 6,946. 9 MWh, respectively. Revenue was $16.9 million during the three months ended December 31, compared to $14.9 million same period last year. This increase was the combined result of higher effective PPA prices applied to our Peruvian facilities and the additional revenue from the facilities in Dominican Republic and Ecuador acquired in the year, partly offset by lower production in San Jacinto, Nicaragua. In addition, the company sold $0.9 million more in carbon credits in 2022 compared to 2021. Revenue was $62.6 million for the full year compared to $59.5 million the same period last year. Net earnings. Earnings attributable to owners was $2.5 million for the 12 months ended December 31st, compared to $0.5 million earnings for the same period in 2021. This increase was the combined result of higher operating margin and the deferred tax benefit driven by the foreign currency impact in our Peruvian assets, partly offset by higher finance costs and lower gains compared to year 2021. Adjusted EBITDA. Adjusted EBITDA was $44.9 million for the 12 months ended December 31st, compared to $43.8 million for the same period last year, principally as a result of higher operating margin discussed above. Cash generation. Net cash from operating activities for the 12 months ended December 31st of $33.5 million, lower than the $41.1 million for the 12-month period in 2021, mainly due to an unfavorable change in non-cash working capital due to a larger accounts payable balances settled during the period and accounts receivable collection returning to normal levels compared to the same period in 2021. Net cash used in investing activities for the 12 months ended December 31st was $66 million, compared to $10.1 million the same period last year, due to $32.4 million spent in the acquisitions closed in the year, coupled with $29.1 million spent in the construction of the Binary Unit in Nicaragua and the Vista Hermosa Solar Park in Panama. Net cash used in financing activities for the 12 months ended December 31st of $30.1 million, compared to $6.9 million net cash from financing reported in the same period last year. In 2022, the company refinanced PENSA's senior debt and made higher dividend payments, whereas in 2021 we received $39.4 million in proceeds from share issuance. Finally, dividend. I'd like to highlight that we've already announced we'll be paying a quarterly dividend on February 24th of $0.15 per share to shareholders of record of February 13th. With that, I'll turn the call over to Mark, who will elaborate on current business matters as well as on our year-end results. Thank you. Thanks, Anton. First, I'll just start with some color on the Q4 numbers. San Jacinto was in line with our expectations, actually flat with Q4 of 2021. Peru and Ecuador was, call it the negative impact of hydrology. The rainy season just started later. Usually it gets going in sort of November and really starts going in December. It really didn't start till early January this year. That impacted the numbers in Q4. On a revenue side, I'd say it's around $600,000-$650,000 impact there for both Peru and Ecuador. Plus we did have a little bit higher costs, I would say more of a timing issue that landed in Q4 in Peru. You get up to around about a $750,000-$800,000 call it variance for Peru and Ecuador there, which would get that call it adjusted EBITDA closer to $12.5 million, which is, w hich would have been what we were looking at. The Dominican Republic was essentially in line, a snick lower, but essentially in line and an EBITDA of exactly what we were looking at there. Very happy with that. That's sort of the Q4 commentary. Given the acquisitions in the Binary Unit, I think we're set up for a very good 2023 relative to 2022. On the Binary Unit, as we did already announce, it was really started production December 30th, fully operational December 31. Ending cost in terms of total capital was $26 million versus the $25 million, a snick above, due to some logistics issues, smaller parts and supply chain and transportation continues to be an issue. We're very happy with that result given the overall economics and the environment. That is online, which is great. In terms of Peru, as I mentioned, hydrology was low in Q4 but has been strong so far this year. We're actually running at or a little bit ahead there this year or year to date. That's good to see. We also expect on May 1 another price increase because the contracts in Peru are full, call it US CPI, indexation. We're already so that it goes from May 1 to April 30. That industry is already at 4.6%, and you need it to be 5%. Only 0.4% is needed in the next few months. It's essentially guaranteed. We think that we'll get another price bump of 5%-6%, probably closer to 6%, starting May 1. We do think we also we should see some minor cost efficiencies or cost reductions this year in Peru. Call it good margin expansion in Peru this year. Moving to Panama, we have called it Vista Hermosa Solar, just in terms of the nomenclature. We anticipate mid-March ready, literally two components necessary for the interconnection on our side of the fence, so to speak, have caused the delay, but the plants are basically done, installed, ready, and we just need this interconnection equipment. That's looking like mid-March. Budget essentially remains the same, though. We haven't had any cost overruns there. Budget the same, a little bit later. What I would note though is that the pricing in Panama has been quite strong. It remains stronger than what we would budget. We're hoping to make up some of that lost time in terms of the numbers for this year, once we put it online next month. In terms of other projects, we have a small battery project. It's only a $500,000 battery project, but that's in Peru, which we will be starting in the second half of this year, which is an interesting project. We think that's about a 3.5-year payback there, which we'll be funding from cash flow from operations. At the site in Ecuador, San José de Minas, we're initiating works next month on the expansion there. It's a brownfield expansion. It's again not a huge project. It's only about $3 million, $3 million-$3.5 million, but that should increase our revenues and cash flow by about $800,000 a year. So again, call it a brownfield existing site, but high return on capital project that we'll be starting next month. In terms of the Dominican, we did receive the definitive concession for the expansion at our solar plant there. We call it Canoa II, is what we're really keen to get going on. We signed that in December. There's been back and forth in the PPA. We think we're in at the 11th hour of that negotiation, and the PPA should be signed imminently. Even some very small sort of site prep, we've already started that. The minute we sign the PPA, we can get going on construction, and we would expect sort of a 12-14 month time to complete that. That's about a $25 million-$30 million project. Where our view would be that we would fund the equity out of cash flow for that expansion. The last call it project I'll mention here would be, we have been working with technical consultant for the San Jacinto project, the geothermal project, and they've identified a few wells that production wells that they think we can do some acid jobs on to improve permeability. We think these are really good shots on that because there's about $500,000-$700,000 per well. Not big drilling CapEx. But we think we would do two this year, and we think that the outcome there is something in the 2 MW-5 MW megawatt range. Obviously zero is possible, but the 2 MW-5 MW megawatt range is what we're targeting, and we know of other sort of projects that have done the same thing and achieved the same results. That would be, you know, almost a $2 million-$5 million pickup on that type of CapEx. High impact. We wouldn't be able to start that though realistically until July, probably just because of the lead time in getting these types of acid to site. We're quite excited about that. All of what I'm mentioning there is within our cash flow, within our budget, call it, that we don't need to raise capital for that. I think one thing that's important to note is that these are, you know, Canoa II is an expansion and a new project, but these are all what I would call a high, sort of low-hanging fruit, high-return projects at current sites, current operations. We think in this environment where rates have risen dramatically, which has had an impact on the industry, that we first and foremost, we need to focus on, call it current projects, current operational projects where there are very good, high return and much lower risk expansion projects. Those are, call it, all on the docket for this year. We do have other projects, like the Chuspa- Hydro project in Panama. We have other projects in Panama on the solar side that we are quite interested in. We're moving those, I would say, in parallel with capital alternatives, because to do those, we would look to raise some capital. There's also lots of other projects and acquisitions that are in the hopper. I think for those, we're really trying to marry up the fact that rates have risen and making sure that we even get that out on the other end on the equity. It is a bit of a, it's just a balancing act right now because offtakers aren't sure if rates are gonna stay high forever and neither are developers. In my mind, it's just a question of marrying. W e just need to make sure that if the borrowing costs are gonna be higher, that we're getting that much out on the other end. I definitely think that's possible. I think one of the, I mean, we've already gotten term sheets on Canoa II, for instance, and those are quite frankly, better than we expected. so that looks good. For us, given that as a company, you know, we have a very long contract life, and we're 100% contracted, except for the Panama, which is coming on, which is only about 2% of our global revenue. Highly contracted with a long contract life, and yet we only have, call it, 3 x debt to EBITDA. We are going to explore some other opportunities to be able to go after more of these projects, like the ones I mentioned in Panama and/or other opportunities, which we. These rising rates definitely are impacting other developers. We actually see the opportunity set going even higher for us. It's just there's probably been a bit of a lull here in the last three to six months in terms of a little bit of a pause, but we actually think that there's going to be a bit of a shakeout. We think we're gonna be able to take advantage of a, call it, relatively under-levered balance sheet to go after some more of these opportunities. And even if, i t might be the back half of this year where that all shakes out, but we absolutely see that in the hopper, and we really hope that we can take advantage of that. That's sort of concludes my remarks, so we can open up for questions now. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to be removed from the question queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Your first question for today is coming from Rupert Merer at National Bank. Hi, Rupert. Good morning. With the Binary system, can you give us a little more color on how it's operating so far, and what's the outlook for operations? How should we model this as far as capacity factors and maybe, you know, your maintenance costs and maintenance downtime going forward? In terms of cost, we see about an extra $400,000-$500,000. It's mostly just chemical treatment that's really our bump up in operational cost. I can even get into some more details on how I would model the Op cost. The way that I would model, call it the revenues, is typically, call it 10 MW net. You know, I model about 9.5 MW, Rupert, just for some downtime and maintenance, right? Then, in terms of the steam, you know, we look at sort of anywhere from net 47 MW-50 MW. It really depends. We did net 50 MW all of last year, and so if you take a 3%-4% decline from that, add 9.5 MW for the Binary Unit, that's I think at a very high level how I would do it. Okay. If that makes sense. Yes. And then- Go ahead. As I said, you need to add some OpEx there. Let's call it $400,000-$500,000 for chemicals. Okay. I may have missed this, I apologize, but on Canoa II, so once you have a PPA signed, you're ready to move to construction, what do you think is the timing on that? What's the outlook for getting a deal done in order to hit that COD of I think Q2 2024 you're looking at? Yeah. I mean, I really think, we're within 30 - 45 days. I think as long as we sign that in Q2, we can hit the Q2 2024 target. Things are, you know, call it progressing enough that, and we have enough comfort that we can do some of the longer lead items and get that going now without expending a lot of capital. With the supply chain issues that we have seen, it seems you have some certainty on the cost. You're comfortable you'll be able to get quite attractive returns on this with the terms you might be able to achieve with a PPA? Yeah. I mean, we're Interestingly, I would say on the big stuff, the panels and the inverters are better than we would expect, which pricing is better than for instance, the Panama solar we did, which we were happy with those panel prices. We're seeing even 15%-20% lower than that. We are not worried about the big items at this point in time. If we did contract, let's say in the next month, we would absolutely look to lock in those panel and inverter prices because they're very attractive right now, actually. We didn't even have any logistics issues on the big items in Panama, and we would expect the same in the DR. It's just that there's We do still see issues on these smaller items where it's not the $5 million, you know, panel purchase, it's a $50,000 pump or piece of electrical equipment where it's hard to have, you know, call it massive liquidated damages in these contracts, where if they don't deliver, there's huge penalties. You really can't do that on the smaller. I don't see really budget issues. It would just be making sure we can hit the timelines, would be the, our bigger issue. You know, if the, if we are happy with the capital costs, which I really think we will be, then we're gonna be getting those returns in the mid-teens for sure. Great. Well, thanks for color. I'll get back in the queue. Your next question for today is coming from Nick Boychuk at Cormark Securities. Thanks. Good morning, Marc. Morning. Just sticking with Canoa II, I was curious if you could give us any update on a battery energy storage update in Dominican market and what the outlook for adding that type of an additional capacity would be? We are expecting more prices to be published in the next two weeks as well, where last year they did a report which included energy storage prices. We are expecting a revision of that. It's actually the revision we're expecting is much more on the solar-only price to include the fact that interest rates have gone up. We are expecting an increase year-over-year from what they're sort of publishing as the guided rates. They will add on top of that the storage. We are expecting that, and that should provide a bit of guidance. What we do know is that it's more acute because we're not the only one. They're gonna sign several contracts on the solar side. You know, their spot prices are very high in the country. It's an 82% fossil fuel-based grid. So it's really expensive. That's why they want more solar, but they're going to be limited, and they're now they're even more cognizant of the fact that if they bring on, let say, five, six, seven solar projects, that should really reduce their cost of energy. But there's, they're not as much as it really should, because they need some storage. The issue for us is, and what everybody is telling us is let's nail this, let's call it second phase down, i.e. Canoa II, but also knowing that they're negotiating with other groups. They want to get all of those contracts signed in the next month, and then it's going to be sitting down and talking about the storage aspect. We need to get Canoa II going, but then we do know that immediately thereafter, the conversations on the storage are going to start. And we're ready for that, and I think these are conversations that can be had at very high levels because it's, you know, it's going to become a strategic priority. It's just that they got to get these other contracts signed and going first. With that, it's hard for me to give you really definitive timelines. I think it would be more that this year is going to be a year of positioning and potentially getting into contract negotiations. In terms of, a nd we would really hope that that can actually, in terms of total scale for us, be very relative and very material. I would say this year we're hoping to really define all that. That would be my goal is that we really know what the opportunity is there in terms of total. We do think there's going to be more to be done outside of just call it Canoa III, which is some solar with storage. We think there's going to be more to do on the island in that, and we really want to position ourselves for that. Okay. That makes sense. Next available asset, Chuspa. Any update you can give there in terms of what brought that back into the picture and why you're confident with the Q4 2024 expected COD? Yeah, I would just say that it's more that it's kind of always been there for us. We had to, I would say, get local support really from a social perspective and from the municipality. It was an issue that the prior people ran into, and they would admit they didn't do a very good job on the social. We've been doing a lot of that, but we needed to make sure that not just the community, but also call it the leaders of the municipality were on board. If we kind of launched that, it's because of all the work that we've done on the municipal relations and the social, the community. That's really been the big change, I would say. Okay. In terms of PPA, though, nothing signed imminently that could potentially be off for now? No, there is a PPA that exists on that project. Okay. It's one that, yeah, it would only go to 2027. It's not, it's not based on COD, it's just it started, and if you build it, great. What would be interesting for us is that, you know, if to the extent we move forward while we're in construction, we could use some of the PPA for the solar if we wanted to, although the market's higher than that right now. We would be able to combine that. That's the other thing is we do see benefits of combining the solar with the hydro in Panama. Okay. Got it. Your comments around kind of M&A strategy and how you could lever the balance sheet were pretty interesting. Can you share any more details on how that sort of structure might work within the balance sheet? What type of a facility you'd be considering and the potential magnitude of that? Yeah. This is where I would say it's just, let's say 3 x gross, a little bit less net debt to EBITDA with the contract life. You know, I don't see us going to 6 x, could we go to 4x? I think so. Add new projects into the mix. We're looking at several things, it would be more just to give you. Just think of a note or a bond that we could corporately raise to look at going after more projects. I think that's absolutely something we're gonna look at doing. We think even with sort of the fact that rates have risen, we can make these projects work and that the returns are there, and then some on the other end. You do need to do it in parallel, right? We need to sort of have that and the projects and that's what we're in right now, which is trying to marry up those two things. That's, I would say in the next two to three months, we hope to have that sort of lined up whereby we've got the projects on the one side, capital on the other. In terms of projects, when I mentioned that, I am referring to, let's say, Chuspa and some of the solar in Panama. There's also a whole bunch of other, you know, acquisitions of assets, anywhere from $2 million-$10 million of EBITDA that are out there. We are having these conversations. It's some of these private owners. It's always just a game of, are their expectations sort of in line with current market, right? There's enough of them. We feel like we have enough of them in the pipeline that we'll land on them. We'll land on some for sure. Okay. Thanks for the color. Your next question is coming from Devin Schilling at PI Financial. Hi, guys, thanks for taking my question this morning. You mentioned that the rainy season in Peru is kind of, you know, kicked off in January here, looking to be at kind of historical levels. Is that safe to assume, or sorry, assume that that's the same with Ecuador? Yeah, yeah. That's correct. Okay. Okay. I know it's only whatever, February 20, but sort of year to date, we're sort of at, or as I said, a snick above budget on that. Okay. No, that's good. Panama with the, with the solar projects, you mentioned a few delays in some small components. Is there any outstanding approvals still that we're waiting on for that project as well? Or is it really just these two components? It's a good question. We have the interconnection agreement already, but we do need the local authorities to make sure that you've done it in technically appropriate way before they allow you to actually put the electrons on the grid. Technically speaking, we do need something, although we don't really expect that to be an issue whatsoever. They just need to go through the process. We need to finish, which we would hope next week, the actual site, and then the authority does their work, which is like, should be like a week. Okay, that's helpful. The remaining components, they're all in country and ready to go. One of them is still in Colombia, but it's supposed to be shipped out next week. Okay, perfect. I guess lastly here for me, you mentioned a small battery project that you guys are adding to your development pipeline here. What's the size of that project for CapEx and expected return? Yeah, it's very small. It's like $400,000-$500,000 CapEx. We're looking at about a $120,000-$150,000 annual increase in cash flow. Okay, great. That's everything. Three and a half year payback. Perfect. Thank you. Your next question for today is coming from Gabriel Moreau at iA Capital Markets. Hi. Good morning. Hi, Gabriel. On the carbon credit sale, are you still expecting to do about $1 million this year? Do you have any information about the run rate revenue for the carbon credits? I think that's a good number. It is quieter right now on the carbon credit front, just given inflation and you know, people in the voluntary market really paused. You know, I think it's gonna be more back half-weighted. We have about a $500,000-$1 million revenue number in mind on the carbon credit front, although that would not be like what I would call a run rate, because our carbon credits can be inventoried. In terms of what we have, sort of fully verified is around $300,000 by mid-year and annually. By mid-year, that number should be, call it $350,000-$400,000, let's say. We have seen prices in the $3-$4 per ton recently for our type of credits. Volumes are just pretty low right now. You know, we're just gonna have to be sort of opportunistic. My guidance on that would be, we really wouldn't look to do much in the first quarter, probably start looking to do more in sort of Q2 and Q3. Thank you. About the in Ecuador, San José de Minas, have you been able to progress in the negotiation to acquire the minority interest you don't own in the project? No, they, we could do it at any instant. It's not about negotiating. We know sort of what the cost is gonna be. We're not. For us, it's more we need to get this expansion project done first before we're gonna do that. We're really in sort of investment mode, finish that, and then we'll look to do the minority. Perfect. That's it for me. Thank you. Your next question for today is coming from Stephen Kammermayer at Clarus Securities. Hey, guys, it's Steve. Hey, Dave. Sorry, Steve. That's all right. Just back to the Binary Unit here, just following the production year to date. It looks like, you know, you've run it as high as just north of 12 MW. Is that just for commissioning purposes, and then it's gonna settle out around 10 MW? Or do you think you can get a little bit more out of that going forward here? We have, Steve, but it's like, you can't really. We don't think you should be budgeting for more than what I said, because we are gonna have some downtime, right? For instance, when we do our major maintenance, you're gonna have a few wells offline, and so we won't have enough brine to keep it at that 12 MW. It would drop below. it's not that we can't, and we, you know. Yeah, I mean, I think the last week we've been, we've been higher than the 10 MW on the, on the actual Binary Unit, on average, probably close to 11 MW, something like that. I still think from an average perspective, it's better to at least we're gonna budget the 9.5 MW for the year. Okay. No, that's good. Just on the wells there. I mean, it looks like the variance has been a little higher than normal. Do you think any of that could be attributed to the Binary Unit coming on and maybe having some cooler water injected back in, or is that just normal variance of those couple wells? Yeah, so important question. For sure, not cooling effect, in the sense that what we have been trying to do on our. That variability has been 100% related to some changes in the injection system that we made that we thought would actually improve. Because what we've been doing the last year, which worked, we thought very well in, for. Q4 was very stable. Was doing as much outfield injection as possible, based on recommendations from our technical consultant. Really was working. But there's only so much that we can do or we could do before we put the Binary Unit on. Interestingly, when you put the Binary Unit on, your actual temperature of injection water does go down, but that means that you could... One of our biggest injection well, which takes about two-thirds of all injection, is called 11-2. It's in the north, and it really has no connection with the field. If it does, it takes sort of six months to get there. That is the most quote-unquote outfield well we have. When your brine is colder, you can actually inject more. We increase the load outfield for exactly what you were referring to or what the concern might be. One, which is the lower temperatures, so the more we can push outfield, the better. Also just that to improve enthalpy in the field as a whole, which had been happening based on the strategy we had. We were able to send sort of even more brine outfield, but that did cause some instability in some of the wells in January and early February. We've gone to sort of back to half of that, and it's, you know, we're back to very similar levels to where we were in Q4. Year to date we're sort of 57 MW net, that's total with the binary. Last week we were, like, 59 MW, 60 MW, something like that. I would say the stability's returned, and it's just something we're gonna continue to manage. I would say from the full year, the numbers I gave, I would still, we're still on those numbers. Okay. Okay, just one other quick one. When is the major maintenance scheduled for 2023? It's not. We're going to do January of 2024. We've decided to move to 18-month cycles given the number of maintenance jobs we've done, and we've never had any issues with the turbines. In consultation with Fuji, everybody agreed that we can go to 18-month cycles. The next one's gonna be January of next year. Okay, great. That's, all I had. Thanks, guys. Your next question is a follow-up question coming from Nick Boychuk. Nick, your line is live. Thanks. A quick follow-up on the Ecuador market. Just curious, Mark, in prior commentary, you've got the bids that could be entered, sometime in March for those additional hydro projects. Any additional information you can share on that process and how that market's shaping up? I don't really have any updates on that, Nick. I don't. We are supposed to hear on a call another tender. It just hasn't. It's been quiet year to date so far, so I don't really have much on that, what the timing will be. Okay, thanks. There are no further questions in queue. Okay. Gentlemen, there are no further questions. Okay. Thanks for everyone for joining. This concludes today's conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.