Good morning and welcome to Mercer International's third quarter 2021 earnings conference call. On the call today is David Gandossi, President and Chief Executive Officer of Mercer International. I'm David Ure, Senior Vice President, Finance, Chief Financial Officer, and Secretary. I will now hand the call over to David Ure. Good morning, everyone. As usual, I'll make a few opening remarks about our financial performance before turning over the call to David to discuss our operations, our strategic capital program, the markets, and, of course, our recent acquisition. I'd like to remind you that in this morning's conference call, we will make forward-looking statements, and according to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, I'd like to call your attention to the risks related to these statements, which are more fully described in our press release and in the company's filings with the Securities and Exchange Commission. We achieved record EBITDA in Q3 primarily due to solid overall production and sales, strong end product pricing in most markets, and relative to Q2, a much lighter scheduled maintenance program. While somewhat mixed depending on the particular market, our average NBSK price realizations remained stable and relatively high in the quarter. We also benefited from the impact of a stronger U.S. dollar on our euro and Canadian dollar denominated expenses. These tailwinds to our earnings were partially offset by modestly higher wood costs, particularly in our Wood Products segment, along with the weakening of the US lumber market. As we reported in July, we also operated our Rosenthal pulp mill for the quarter without the benefit of its turbine generator. The absence of green electricity generation at Rosenthal during the quarter negatively impacted our results by about $12 million. We are now roughly midway through the process of repairing the turbine generator. But as expected, the largest contributor to the sequential improvement in the quarter was the absence of heavy scheduled maintenance and capital downtime that we took in Q2. You will recall that we took 105 days of downtime in Q2 to both rebuild our recovery boiler at Peace River and complete most of the work to increase Stendal's pulp and electricity production capacity. We generated EBITDA in the third quarter of $148 million, compared to EBITDA of about $84 million in Q2. Our Pulp segment contributed record EBITDA of almost $130 million, and our Wood Products segment contributed solid quarterly EBITDA of $22 million. As usual, you can find additional segment disclosures in our Form 10-Q, which can be found on our website and that of the SEC. Changes during the quarter for softwood and hardwood pulp price movements were mixed across major markets. In China, the Q3 average NBSK net price was $832 per ton, down $130 from Q2. European list prices averaged $1,345 per ton in the current quarter, compared to $1,288 per ton in Q2. NBSK remains at a considerable premium to hardwood, with the average Q3 net eucalyptus hardwood price in China at $623 per ton, down $144 from Q2. In total, average pulp sales realization movements positively impacted EBITDA by about $5 million compared to the prior quarter. Pulp demand remained steady in the quarter, and our higher overall production led to higher sales volumes compared to the previous quarter. Our Q3 sales totaled almost 448,000 tons, which was up about 87,000 tons from Q2. In Q3, our mills were down a combined 44 days for capital and annual maintenance work. This is roughly the equivalent of 43,000 tons of production, compared to 117 days, or about 173,000 tons of production in Q2. The impact of the Q3 planned downtime compared to Q2, including higher production and lower direct costs, benefited EBITDA by $65 million. Our lumber realizations were also mixed this quarter compared to Q2. The Random Lengths US benchmark for Western SPF 2 and better averaged $495 per thousand board feet in Q3, which was down $848 from last quarter. Our average European sales realizations were up approximately $180 per thousand board feet compared to Q2. Historically, the European market has not been as volatile as the US market and generally lags the US pricing trends. The benchmark lumber price in the US is currently about $620 per thousand board feet. Our Wood Products segment continues to perform well. We sold about 98 million board feet of lumber in the quarter, which was down slightly compared to our Q2 sales volumes, primarily due to the mill taking a week of planned downtime in Q3. Our electricity sales totaled roughly 200 gigawatt hours in the quarter, which was up relative to Q2 due to less planned downtime. However, our sales volumes were held back due to the absence of the generation at Rosenthal for most of the quarter. Our Cariboo Pulp Mill Joint Venture, which is accounted for using the equity method, contributed another 20 gigawatt hours to this total. Included in these energy sales results, Peace River set a quarterly sales record, and Stendal and Cariboo both achieved near-record level sales in Q3. We reported net income of $69 million in the quarter, or $1.05 per basic share, compared to net income of $21 million or $0.32 per share in Q2. Cash used in the quarter totaled approximately $46 million, compared to $11 million in Q2. Our cash usage in Q3 was primarily the result of our acquisition of Mercer Mass Timbe r, our CapEx spending, and working capital movements in the form of higher accounts receivable and inventory balances. The uses of cash were partially offset by strong operational cash inflow. We invested $39 million of capital in our mills this quarter, and we remain on course to invest approximately $150 million in our mills this year. We also invested roughly $51 million in the acquisition of Mercer Mass Timber, our cross-laminated timber production facility located in Spokane, Washington. David will provide updates on our recent acquisition and our CapEx program shortly. At the end of the quarter, our liquidity position totaled about $647 million, comprised of $339 million in cash and $308 million of undrawn revolvers. Our strong liquidity position will support planned seasonal growth in working capital, along with our ambitious 2021 and 2022 high-return capital spending programs. We continue to work on finalizing the business interruption insurance claim associated with the recovery boiler rebuild at our Peace River mill. As a reminder, GAAP treats these types of insurance claims as contingent gains, which means that we won't be able to record the insurance proceeds until we have an agreement with the insurer. We believe the proceeds will ultimately be in excess of $20 million. In addition, we are now working on a business interruption insurance claim for Rosenthal's turbine downtime. As part of this downtime, we made the decision to pull roughly 50 days of major planned turbine maintenance from 2022 into 2021. As a reminder, our competitors who report their results under IFRS are permitted to capitalize the direct costs of their annual maintenance shuts, while we expense our costs in the period of shut completion. And as you will have noted from our press release, our board has approved a quarterly dividend of $0.65 per share for shareholders of record on December 22, 2021, for which payment will be made on December 30, 2021. That ends my overview of the financial results, and I'll now turn the call over to David. Thanks, Dave. Now, this has been an exciting quarter for us. We returned to normal production levels after an extensive period of maintenance and capital shuts in Q2. We achieved record earnings while navigating the ongoing complications of the pandemic, and we advanced a key element of our strategic growth plan with our entry into the mass timber space. I'll talk more about how this CLT acquisition fits with our view of a low carbon, high value add future for Mercer in a moment, but let's first review our operating performance. I'll begin by saying I'm very pleased with our record operating results this quarter. These results reflect the hard work of our teams during the period, often under challenging operating conditions, along with the benefits of our recent investments in Stendal and Friesau. In Q2, Stendal completed the work necessary to increase annual NBSK pulp production by 80,000 tons, and despite ramping up that equipment in Q3, still managed to achieve near-record pulp and energy production. In addition, Friesau's new planers, scanning, edge trimming, controlled drying, and sorting capabilities are providing the expected benefits of maximizing our production efficiency and grade outturn. Overall, our mills ran very well, and strong production combined with overall steady demand for products when compared to Q2 were key drivers in our strong results this quarter. I believe these results highlight Mercer's cash flow generation potential, considering we achieved these results with Rosenthal's turbine being down for most of the quarter, along with a long Peace River mill outage for the recovery boiler rebuild. Both of these situations will generate significant business interruption insurance claims, which as of yet have not been finalized. Our pulp markets were mixed due to regional differences that were primarily the result of global logistical challenges. We saw modest price improvements in Europe and weakening prices in China, where paper makers found it difficult to export the paper products due to high shipping costs. These factors, combined with energy usage restrictions in some areas of China, resulted in reduced paper production and overall reduced pulp demand. Meanwhile, in Europe, paper makers benefited from reduced paper imports and ran their machines full, creating solid pulp demand in that market. The negative Chinese pulp market dynamics were more pronounced on the hardwood side, in part due to expectations of new eucalyptus capacity set to come online, while softwood pulp capacity or supply in China was relatively tight due to delays in Canadian pulp deliveries, again, the result of supply chain bottlenecks. We don't expect the supply chain issues to be resolved in the near term. Consequently, we expect generally steady NBSK pulp demand in Europe with reasonably stable pricing. In China, we expect a continuation of modest negative pricing pressure as energy restrictions continue and logistics channels remain constricted. We should all remember, however, how quickly China can bounce back once conditions begin to normalize. Currently, the price premium softwood commands over hardwood is at historically high levels, and we believe this discrepancy could remain for some time due to the different capacity growth trends for each grade. The August pulp statistics reflect increased producer inventory levels, but these numbers need additional context as we believe the global logistics challenges are increasing the number of days reflect a balanced market. In addition, these statistics don't reflect paper producer inventory levels, which we feel are low due to logistics slowdowns and delayed buying, especially in China, as paper producers are not expecting pulp price increases in the near term. Overall, we believe that growing global economic activity will support demand for all commodities, including pulp, lumber, and extractives. We also believe government economic support will bolster this growth, and as a result, we are optimistic that steady economic growth and strong market fundamentals will support pulp prices. Our wood products business achieved solid operating results. The European lumber market was strong during the quarter, while the U.S. market experienced a significant correction. As we discussed last quarter, the correction was precipitated by a drop in do-it-yourself demand and fears the negative outlook could spread to the housing market. However, since mid-quarter, U.S. lumber pricing has been slowly increasing due to limited supply, in part due to the heavy wildfire activity in Western Canada and higher stumpage fees. On the housing demand side in the U.S., despite modestly higher mortgage rates, housing starts have stayed steady and home builder sentiment remains positive. The European lumber market has shown steady price increases through the first half of the year, but as a result of the weaker U.S. market, we are seeing downward pricing pressure as some European producers reduce their exports to the U.S. market. We will continue to optimize our lumber products and customers to achieve the strongest sustainable realizations that we can. In Q3, 39% of our lumber sales volumes were to the U.S. market, with the majority of the remainder of our sales in the European market. To date, Mercer has not been directly impacted by the global logistics challenges in a meaningful way. We are seeing modest increases in freight costs as we are forced at times to utilize more expensive modes of transportation or increased storage costs as a result of delays. We did have small volumes of pulp and lumber sales that will be recorded in Q4 due to shipment delays, but overall, our logistics strategies are serving us well. Looking forward, Rosenthal's turbine and generator will likely remain down until the first quarter of 2022 as we affect the necessary repairs. At current energy prices, the negative impact of lost energy sales and energy purchases is roughly $4 million a month. Our wood product segment achieved another solid production result, producing almost 102 million board feet of lumber, which was down compared to Q2 due to a week of planned maintenance downtime during the quarter. In Germany, our wood costs, particularly for pulp wood, remain at historically low levels due to the abundance of needle-damaged wood, and we expect this pulp log supply dynamic to generally continue in the fourth quarter, but expect prices to increase modestly. We are seeing strong demand for saw logs, which is driving some log cost inflation, but we expect our dedicated fleet of railcars will allow us to mitigate transportation cost increases that many of our competitors will be unable to avoid. In Western Canada, pulp wood supply remains steady and price changes have been modest in our fiber baskets. However, the impacts of the summer fire season are being felt in the form of reduced saw mill activity, which we expect will create modestly higher fiber costs in Q4. While our annual major maintenance work is complete, significant capital expenditures to grow the company are ongoing. We are using our well-managed liquidity and strong balance sheet to continue to pursue the growth aspect of our strategic plan in areas where we have core competencies. Specifically, we have focused our growth on market pulp, building products, green energy, and chemical extractors because we believe our expertise in these areas, along with our expertise in timber supply, procurement, and logistics, will add long-term shareholder value. We also recognize the importance of planning for the long term, and as part of that, we are putting a lot of effort into our transparency related to ESG practices, policies, and performance. We are looking forward to the publication of our sustainability report in early 2022, which we trust will further support our messaging regarding our sustainability approach and values. Two good examples of putting sustainability and innovation into action are the Canadian fiber logistics and processing projects, commonly referred to as the Wood Room projects. These projects will allow us to transform our supply chain, increase our capacity, and significantly reduce the cost to produce our own wood chips. The projects will also allow us to accept alternative forms of lower quality residual harvest wood that previously could not be effectively processed. As a result, we will lower our costs, improve our resource utilization efficiency, and reduce our greenhouse gas emissions. We expect the projects to be largely complete by mid-2022. We have continued to cautiously advance the engineering and permitting process for our Stendal sawmill. The initial plan for the mill contemplates a 400 million board foot capacity with a product lineup and flexibility of our Friesau mill, but we expect to build the mill in such a way that will allow for incremental capacity increases in the future. Currently, however, we are seeing significant delays in the delivery of saw mill equipment, along with large increases in capital costs for many components, including the equipment itself for steel, concrete, and electrical installations. We will obviously move forward cautiously on this and hope to advance this project at some point in the future when conditions are less challenging. In the shorter term, we expect to invest about $25 million of CapEx in Q4, putting our total 2021 CapEx signatures at approximately $150 million. While I have more to say on that at our next earnings call in February, we are expecting our 2022 high return capital plan will be quite ambitious with a portfolio of projects that will drive new product development, ESG advances, production improvements, and input cost reductions. The 2021 highlight of our growth strategy will likely be our recent acquisition of Mercer Mass Timber. This is an entry point for us into a sector that fits well with our value add solid wood strategy and a product whose end demand growth is very exciting. While we build up the order book for the plant's core product, cross-laminated timber panels, we recently began producing long-length finger-jointed lumber, and we expect to begin producing our first CLT panels in Q4. This facility has an annual production capacity of approximately 140,000 cubic meters of CLT, which represents about 30% of the current CLT manufacturing capacity in North America. We are truly excited about the CLT market going forward and believe that the environmental and construction flexibility benefits compared to traditional steel and concrete construction methods make this product right for future growth. After considering our recent investments, Mercer's financial position remains strong. We will continue to take advantage of our financial flexibility as we move forward with executing our growth strategy. A catchphrase we're using a lot within Mercer these days is "Fit for the Future." What we mean by this is that we strive to be on the right side of the climate change challenge, given our role in managing forests and producing physical goods and green power from renewable resources. Along with our focus on human talent and our strategy to operate only top performing modern mills, we believe and expect Mercer will be a welcome industrial player for the future. This will not be the case for everyone operating in our space, and therein lies the opportunity. Now, let me conclude by remarking that COVID-19 continues to be a concern, including the impact of variants on infection rates globally. As a result, we remain focused on our protocols to ensure the safety of our employees, contractors, and the ongoing operation of our mills. And in keeping with one of our core values, I encourage everyone to get the COVID-19 vaccine to keep your families, friends, colleagues, and neighbors safe. Thanks for listening, and I'll now turn the call back over to the operator for questions. Thank you. Again, as a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question or if your question has been answered, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Hamir Patel from CIBC Capital Markets. Your line is now open. Hi, good morning. David, what level of sales would you be targeting for 2022 from the CLT plant? And should we think of the initial year as kind of being a break-even in terms of profitability, and where would you see sort of steady-state EBITDA contribution from that plant when it's fully ramped up? Yeah, thanks for the question, Hamir. Good morning. I think the honest answer is we're just going to have to wait and see. We haven't been in this business before. It's an emerging business, and we're booking our first projects for the plant, and what the margins are going to be is really going to depend on things like fixed cost coverage, doing a good job of matching the wood costs with the panel quotes and those sorts of things. And so we're working hard on those strategies. It's a very modern facility. It's got all the electronic scanning capabilities so the grading and certification of the panels can be top-end, and it's got a lot of horsepower, a lot of capacity. So I'm very optimistic about it, but I really can't. I'd be kidding you if I tried to imagine how quickly we're going to have that press full and what the margins are going to be. But I do believe in the fullness of time. I believe it's going to ramp up faster than most would expect. We're seeing all kinds of inbound interest and recording on projects as we speak. And yeah, I'm expecting we'll be making panels by the fourth quarter, and I believe we'll be investing in capacity enhancements in that facility in the coming year or two as well, which will further take us down that road of generating good EBITDA levels. Fair enough. Then, David, just turning to the lumber side, you're pointing to some further moderation in prices in Q4. Is there any way you could maybe scale what the domestic price in Europe levels are, or at least what sort of maybe sequential change you would expect there in Q4? Yeah, it's been a pretty shallow slope downwards. I mean, it's just like a softening. I don't have a percentage for you, Hamir. It's nothing like the U.S. in terms of the correction. It's just a psychological feeling in the market that there should be a little more product available because there's less product going into the U.S. market. I don't know how much truth there is to that. It's more an impression that the market has, I would guess. So it's a slight downward movement, but not the big correction. Would be maybe the way I'd describe it. Thanks. And just last question for me, for David, could you remind us of the timing of major maintenance outages in 2022? Yeah, we haven't pinned those down formally yet. I mean, I think probably February would be a better time, but it should be. I can say that it'll be a more normal year next year. So each mill will have a typical shut. So you'll recall that we have one or two mills that can go on an 18-month schedule, but for 2022, all four of the pulp mills will have a typical two to three-week shut next year. And David, I can maybe add, I've got a pretty good idea where they're going to fall. I think Peace River and Celgar will be Q2, and Stendal and Rosenthal will be Q3, would be my guess. Okay, great. Thanks. That's all I had. I'll turn it over. Your next question comes from the line of Sean Steuart from TD Securities. Your line is now open. Thanks. Good morning, guys. I want to follow up on Hamir's questions on the CLT facility. Can you give us, David, some context on, I guess, how you're marketing the product? Is it all inbound calls at this point, or is there a formal process you're setting up to sell the product into the market? And I want to follow up on a little bit vague in terms of the response with respect to the ramp-up timeframe and what EBITDA might ultimately look like. But if you're spending $50 million to acquire the asset, what are the return parameters you're focusing on over the long run for that investment? Any detail you can give us there? Yeah. Yeah, I don't mean to be evasive, but I don't want to blow sunshine either, Sean. And like I said, we haven't operated this facility like this before. And in the early stages, the growth and demand for CLT is staggering. I mean, the forward-looking CAGR could be in the 35%-40% growth per year range. There's more projects in design today that have been built in the previous five to seven years. So how these are all going to be, how these projects will all be priced by the various competitors, I just don't know. But the demand is significant, and the amount of things we have to work on is significant. The way we're, what we've been doing is building our team. We've got gentlemen with us that know everything. I believe we've got very good operations personnel. We've got very good marketing support, and we're continuing to build some of our technical sales support staff as well. There's a number of different assets to marketing CLT. I mean, some of it is the custom buildings. You might think of the architect Michael Green and the type of buildings he would do, which are all custom, big showy architectural wonders by all stretches. CLT is also becoming almost like a catalog component for architects and owners, GCs that are wanting to build a building. So certain sizes will be specced and designed and more or less a catalog, and these engineering firms that are supporting architects will just pick out of the catalog the different floor plates or walls or the components that they need. And when you get specified, it takes you away from bidding on every project. You become a component of a bid from a bigger, like you're not bidding just your piece. You feed into a bigger project that's being bid to an owner type of deal, if that makes any sense. So obviously, we're in this business to make money, and we've got a very modern facility. And similar to what we did when we entered the lumber business, we're going to build our team to win. So we're going to expect to grow this business quite aggressively. And so we're recruiting and bringing in top talent. And we just honestly need a few quarters to really get a better feel for how it's all going to ramp up, just being honest. Understood. And is the intent to break this out as a separate segment in your financial disclosures going forward? Yeah, I think that's our understanding, is that it will need to be, it's a different order fulfillment process, different customers, quite a different business to lumber. So initially, it'll be in the corporate segment, but as it becomes more material, it will be broken out on its own, is what I've been told by our finance team. Okay. Second question for me. Friesau out of this quarter, there was seasonal downtime. I think in the last call, you'd suggested that Q3 production would still be around 125 million board feet, even with seasonal shuts. Any context on the discrepancy there? Is it just the fact that North American markets rolled over so hard you were inclined to take more downtime than you might have otherwise? Any detail there? No, no. There would be no reason to take any kind of market curtailment downtime. It's really just more a function of a number of factors that the maintenance is a kind of a rotating outage. It's not like a pulp mill where you take everything down all at once. In our saw mill, we would take the log input line down, and then we would take a saw line down, take another saw line down, work on sorters, that sort of thing. It's just the coordination of all of those different pieces of work. I think there were some COVID delays in there, not transmissions within the mill, but availability of contractor support. I think the average log dimension that we procured in the quarter was a little narrower than had been planned, and then that reduces the volume as well. All in all, I would say it was a great quarter for the mill. They got all their work done. They got it done safely. Mills took the whole tickety-boo. And yeah, it's all words and numbers. We were feeling pretty positive about the direction that lumber markets are going to go as well. Okay. Thanks very much, David. I'll get back in the queue. Your next question comes from the line of Marcus Campeau from RBC Capital Markets. Your line is now open. Hey, good morning, and thanks for taking my questions. Firstly, could you help us understand what you're seeing from the Chinese pulp market currently, including the sectors that are most impacted? How much production is actually being curtailed? And when your customers expect the mandated curtailments to end? Yeah. So it's not everywhere in China, but particularly along the coastal regions where there's a lot of paper production, they're having these really provincially mandated caps on power usage. So maybe on average, paper mills might be able to run three days out of the week. So it's really a shock to their system. It's quite unusual for them to have to operate that way. And then as well as not being able to operate fully, it's also really important to understand the deglobalization of the different fiber markets right now. So a Chinese paper producer cannot get paper into any of its export markets economically. The freight costs are just crazy, like 10 times what they would normally be. So they don't have the electricity to produce, but they don't have the export market to serve either. So it's really all driven towards domestic consumption. And this is where I personally think that this China concern is a little bit overblown. I made a comment in my prepared remarks that when China comes back, we've seen many times how quickly it can recover. The paper companies are not going to be sitting on massive overhangs of paper stocks. There's not going to be a lot of pulp in the pipeline for them. And when logistics normalize, which could be sometime second, third quarter next year, I'm guessing, but they will normalize. They'll be back, and they'll be back with abandon. And so I just don't think we need to be as negative about China as we are being. And I think also in the midterm, the other markets are pretty stable because they don't have competition on the end product side coming from imports. So that's the situation as I see it, Marcus. All right. Thanks for the detail there. That's helpful. Maybe jumping over to the wood products business then. Your unit manufacturing costs stepped up pretty materially quarter over quarter here. Part of that is probably due to the downtime, but there's also increased usage of green wood in the mix. Are we through most of that beetle-damaged wood now? And should we therefore expect an upward shift in the cost structure going forward? Yeah, for the saw mills, yeah, I think that's right. A lot of our competitors in Germany can't handle beetle-killed wood, basically. A lot of the European saw millers don't plane and kiln dry. They're producing green products. So there's been steady demand on fresh wood. And so there is more fresh wood available. We can create a good margin with that wood, so we do buy it. We also buy beetle wood if we can, if it's the right length and the right dimension. For now, I'd say pulp log prices are going to inch up slightly. I think we're going to get through the spruce beetle by next year. So we'll see some pulp log cost inflation going into next summer, probably. I think we can see where German saw logs are going. I think we're at a level now, which kind of feels toppish to me. But it has moved up quite a bit in the last, call it, three or four months. Okay, great. And then maybe lastly, still on the lumber business, your average selling prices were down quarter over quarter, but all your European peers were also reporting higher quarter over quarter pricing. I know you have a bit of a higher exposure to the North American market, but is there anything else in there that could help to explain the quarter over quarter decline in pricing? No, not really. I think it's primarily the US market. All right. Thanks. That's all I had. Once again, if you would like to ask a question, please press star one on your telephone. Your next question comes from the line of DeForest Hinman from Walthausen & Co. Your line is now open. Hey, thanks for taking my questions. First one, can you just give us a little refresher on revenue recognition as it relates to if there's product on the water and all this stuff we're dealing with on the logistics side? Was there any issues with being able to recognize revenue on stuff that's floating or stuff that's on the dock as it relates to revenue recognition? Yeah. Yeah, I think David hinted in his comments, DeForest. So if you're shipping to Asia by vessel, if the product, if you've got the order and it's more or less committed, you recognize the revenue or the sale when the ship leaves the dock. It's the push-off that is the transfer of risk. And we did have, I think, about 15,000 tons on a vessel that was supposed to go in September that got pushed into October. So it just simply gets booked the day after the month end. With rail, it's usually FOB, your plant, or the customer, depending on the customer's wishes. But a lot of times, we book it when it's received by the customer. Okay, perfect. And this is more of a big-picture question. You see your share price at the current levels. You talked in your prepared comments about looking to build a saw mill, knowing the costs that are out there, but you had previously purchased Friesau and invested money there. You probably have some expectation or thought around what the value of that asset is. You put a mark on cross-laminated timber with a $50 million investment. And then you probably are thinking about the replacement values for your pulp mills. And you put that all together, and you have your debt, and you have your cash balances. And you're weighing making a pretty substantial investment in a Stendal saw mill. But when you see your share price at the current levels and having a pretty good understanding of replacement values and having a pretty substantial amount of cash and not near-term debt maturities to worry about, should the board be thinking about buying back some amount of the shares? Yeah, DeForest, we talk about it every quarter. Somebody always brings the question up. And our board, we do think a lot and hard about capital allocation. But the way we see it right now is our leverage is a little bit high for the comfort of some because of the cyclicality of the business. So in time, our goal is to continue to chomp away at the debt levels and bring those down. They're not levels I'm nervous about, by the way, but I think taking some capital and buying back debt or on refinancing opportunities to try to bring that down makes good sense. I think one of the challenges we have as a company in our stock is that we're a smaller-sized company compared to many of our peers. And I think a bigger market cap would provide more liquidity, which would unlock some of that liquidity discount that we believe is inherent in the stock. I think another piece is that we really believe that this company is going to be on the right side of the climate equation. And the type of assets we operate and the way we operate them and the way we engage with stakeholders and all this work we do around logistics in time is going to become recognized. And in a fiber-constrained world where people are worried about carbon and industrial players that are not on the right side of this stuff, we're going to find failures. And that won't be us. And so we believe the inherent value of our portfolio of mills is significant. And I agree with you. It's undervalued by the market. But we're here to create long-term value. Taking our liquidity and buying back stock, you can do the math, run an enterprise value calculation. It psychologically feels like the right thing to do if you had massive amounts of liquidity like some of the companies have had that it just makes sense to start buying themselves back. That's great. But in our case, the amount of stock we would buy back while trying to keep all of our other options open for these growth opportunities, it just doesn't feel like the right thing to do. It hasn't felt like the right thing to do so far. So we're focusing on growth. We're focusing on maintaining liquidity so we've got flexibility, deploying our capital in a very smart way, and focusing on debt reduction as and when we see the opportunities. And that may change over time, but that's been our strategy for quite some time. And I don't see that changing in the short term. Okay. Just for clarity then, when you talk about debt reduction, are you thinking in terms of the mathematical of higher cash, net debt falling and maintaining that dry powder, or open market purchases of bonds? Yeah, we've potentially thought. Do you often refinance those bonds early? Well, we've got a long track record of working on our bond portfolio in transactions that make sense for us at the time. I always look for, can we do this in a net NPV positive way, continue to bring the rate down and bring the levels down. And I'm not trying to do something we're not talking machete stuff here. We're just talking proper financial engineering to recognize that seeing some debt reduction, I think, would be appealing to some of our investors and makes sense to me as well. And meanwhile, continue to grow the platform of assets and ensure that they're fit for the future. And once that light bulb goes on for the market, I think the stock is going to perform really well. So it's just steady at the helm. Okay. Thank you. Thank you. Yeah, you bet. Your next question comes from the line of Andrew Shapiro from Lawndale Capital. Your line is now open. Hi. Good morning, guys. A few questions here, quick ones. On the business interruption insurance claim status here, regarding each of these large claims, is there any beyond normal negotiations that are going on between the company and your insurers, or is this just standard stuff or disputes right now? Yeah, I wouldn't even call it a dispute. I mean, it's a— No, it's the wrong word. It's a ton of work to get your claim together, and then you have to get it over to Factory Mutual, and they have to review it and be discussed and check all the assumption and inputs and all that kind of stuff. So this is process. The generator is a little bit unusual. You don't see many generator failures. And so how the waiting period, or in other words, the deductible gets applied, is always a question, making sure that we really get that right before we submit the claim. So yeah, I mean, these are proper insurable events, and we will resolve them, I'm sure, in the next few months. And the $20 million, was that both of them combined, or that was just? No, just Peace River. Just Peace River's business interruption. And there's not enough of it? No, I don't want to give guidance on the generator until I know what we're going to. Okay. Claim. You don't know yet. And what's the expected timing of resolving what is owed on the Peace River? And then I guess you haven't submitted Rosenthal yet. What is the general timing for you to get this together to submit and then hash it out with the insurer? Yeah. Our team feels that we've got a pretty good shot at getting this all into the fourth quarter. Both of them? Yeah. Oh, good. And when it does come in and the payment comes to whatever it is, for accounting purposes, is it above the line? And And where? Or Or where will it flow through on the income statement? Dave, do you want to take that? Yeah. Generally, they go in the cost section, the cost of sales section. So in EBITDA, but in the cost. Okay. And on the CLT business, did you say or can you say what the burn rate of its operation is at present? And do you expect the burn rate to increase before starting its move towards profitability? Yeah. No, it's interesting. It's such a modern facility. I think we've got roughly 20 employees today, and we'll be hiring probably about 10 more, half of that on the marketing order fulfillment side and half on the operation and maintenance side. So it's not a big burn. And what we're doing today is we're making what's called long-length finger-jointed material. So we buy dimension lumber in the market, 2x6, whatever length we get, and we finger-joint it into long lengths. We can finger-joint up to 40-foot boards. So the average length that the market seems to want is somewhere around 28 feet. And there's a pretty good margin on that value-add product. So I would say that covers the overhead, more or less, plus some today. And so it's not going to be a drain, but then the real margin will come as we start loading up the press and getting those higher value-added products out of the facility. So it's not a big number of people, Andrew. Okay. And where is it optimal to source your timber for the plant? And is your lumber from Germany of the type that would ever be needed to be used and could be used if the supply costs surged again? Yeah. No, we don't need to buy from Germany. There's lots of local options for us around the facility in Spokane. And our procurement strategy is one of you need a number of different qualities to make CLT. You've always got number twos on the outside longitudinal panels parts, and you can put number three on the inside, and you've got all the finger jointing capacity. So basically, it's a strategy of local suppliers that are sort of selected based on optimizing what you're getting for what you're paying. And I know this sounds complicated, but sawmills have their premium qualities and their grades that they want to ship to the market right away. And then they often have some out-of-profile or maybe they've got some shorter lengths or different material that needs to be discounted to move it. That's the kind of stuff we can buy and just reman it ourselves. We create our own lumber stock, in effect. Everything that we buy, we sort. Wet boards go one way, dry boards go another way. They're all electronically scanned. They go into a whole bunch of different bins, and then we dry and we plane and create our own lumber stock. So it's really no reason to focus on bringing in our own product. I think we do a much better job buying from all the local mills around us. Okay, and I asked this a few quarters ago, and your guidance was to give it some amount of time. So I'm asking now, is the time period for the first harvest for Santanol and the sandalwood business still around the end of this year? And what are the metrics that will be involved? I don't know if you want to call it KPIs or otherwise. Is it acres, tons of trees? Is it pounds of oil? How are we going to start thinking about this and measuring the ramp-up of that business? Yeah. When we announce results, I mean, you've got the timing, right? Next year will be a year where you'll start seeing some results. We'll be describing how many hectares we harvested, how many tons of wood we processed, how many kilograms of sandalwood oil we produced, and our sales and cost of sales and EBITDA. That's all to come. Around when might you be expected to provide an estimate of the quantity of oil to be produced and the potential price range of those oil sales and margins? In other words, kind of setting forth the business model and your expectations since the way that business needs to operate is that you have a crop each year that's going to start coming in as an annuity. Yeah. Right. Yeah. Yeah. We'll definitely be working on helping the Street understand that business as it unfolds. I'm reluctant to give guidance today on pricing or volumes. Partial build. Right. But in time, I think we'll be able to signal pretty clearly what that business is going to be looking like going forward. Okay. And last, what are your plans for virtual or in-person investor relations activities in the coming months? Yeah. Well, let Dave take that. We have a few things on the books here. Yeah. Yeah. We'll have a pretty busy next few months. Goldman Sachs is hosting us for, I call it, a client fireside in the third week of November. And then in the first week of December, we'll be attending conferences sponsored by BofA and also the RBC Forest Products Conference, an annual conference. And then in mid-January, we'll be presenting at the CIBC Industrials Conference and also the Stifel Nicolaus Small Cap Conference. So a pretty busy couple of months. If there's anything there that's of interest to folks, don't hesitate to give me a call, and I'll line you up with the right people. Excellent. Thank you. Your next question comes from the line of Roger Spitz from Bank of America. Your line is now open. Thank you very much. On the insurance proceeds, I just want to make sure I heard that you were not going to give an estimate of insurance proceeds you could receive, or did you give one? I heard $20 million versus Peace River, but I wasn't sure if that was the FM or the recovery. Yeah, Roger. David and his remarks suggested that the Peace River business interruption will be in excess of $20 million, that we're comfortable saying that. We don't have the number for Rosenthal yet. The event is not over. So we're just not going to put a guess out. We need to find out when the turbine is ready to bring back into service and then add up all the chips and make our claim, so. Got it. But of course, you did call out $12 million headwind just in Q3 related to the Rosenthal turbine. I know. Yeah. So the way to think about it is, at some point during the event, we will be through the deductible component, and the business interruption will compensate us for everything we're missing under normal operating circumstances. And have you. If it's a question of. No, go ahead. Have you given the amount of the deductible? And I suspect it's a per incident deductible, meaning there's a Peace River deductible and a Rosenthal deductible. Yeah. I don't think we've really talked about it. It's pretty complicated for the Street to get their head around it. Typical waiting days deductible for a turbine would be 45 days. As David mentioned, because the generator is down for repairs, 2022 was the year we were going to do a full revision of the turbine and generator, the once every 10-year revision. We've pulled all that other work forward into this period. Roughly, that's a 50-day chunk of work. Rather than doing that next year, we're doing it all this year. The turbine is down anyway. That's another factor in determining what the BI is going to be. It'll be a sizable claim because of the length of time it's taking to repair the generator. Got it. So when you said you're going to get some proceeds in Q4, it sounds like that is just the Peace River component that we're speaking about, not the Rosenthal component. Or you're saying you might get some of the Rosenthal? Can't promise. I mean, if you're far enough along and you know what it's going to be, then you can book it, right? And that's just a question of where we get to. We might be a bit optimistic to think it'll come in the fourth quarter, but it's possible that it could, so. In terms of accounting, you said it's going to go on cost of sales and EBITDA. Will that just be the BI portion of the proceeds, or would you be also including the casualty amount, the proceeds from fixing the plants? Y eah. That's just the BI. That's just the BI. But imagine the capital, the cost of the actual repair is actually not particularly high. It's really the downtime. In this case, it's creating the loss. Got it. And then shifting to the 44 days of downtime, I didn't think I heard it. Did you break it down, number of days at each of the mills that made up the 44 days? I don't think we did, Roger, but the primary Rosenthal was the primary, a little bit of Peace River, and sort of a bit of Stendal in there. That would be the three components, A.D.? Yep. That's right. Okay. Got it. And have you given any or can you give any thoughts on what working capital in Q4 might look like in an inflow or outflow in 2022? Among other things, presumably, you will need to build inventory on the CLT plant, I would think. Yeah. What we saw for working capital here in Q3 would certainly be the largest change in the year. So you can imagine we're coming off of a period in Q2 with a lot of maintenance shuts. So we're building the inventory up again and at fairly high prices. So now that we're running full again, all the mills are back up. I would say the inventory in terms of the finished goods should be relatively stable. We have a little bit of inventory build for wood, just preparing ourselves for the winter. Our inventories will rise a little bit. And then depending on your view on pricing and the impact that has on accounts receivable, we might have some changes there. But I would say it's going to be more stable than material changes going forward through the winter here. Then as far as CLT, sorry, I missed a few parts of your question, Roger. In terms of CLT, yeah, the inventory is remarkably smaller than you might have at other parts of our business. For example, you don't have the wood, the large log inventories. You're buying lumber, different grades of lumber. So you'd have inventories there. But because the end products are generally made to order, you wouldn't have large inventories of panels, for example, going forward. So it will not be as material as you'd see at a pulp mill or even our sawmill. Kind of lastly for me is there any steer, if not guidance, on 2022 CapEx we can put into our models? Yeah. I think it's going to be ambitious with quite a bit of carryover from this year, obviously, as we've got the two wood rooms. And so I think I'd be—if we're modeling, you could maybe think about moving from 150 to 175, something like that. We'll give you a better feeling in February. But I think it'll be ambitious. We've got lots of good things we're working on. Perfect. Thank you very much. There are no further questions. At this time, I will turn it over back to David. Okay. Well, thank you, everyone. And thanks for joining our call. And as always, Dave and I are around, happy to talk one-on-one if anybody wants to take the time to call us. Otherwise, I look forward to speaking to you all again on our next call in February. So bye for now, and have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.