Altius Renewable Royalties Corp.

Good day and thank you for standing by. Welcome to the Q4 2021 results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. And if you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Ms. Flora Wood. Please go ahead.

Thank you, Patricia. Good morning, everyone, and welcome to our Q4 and year-end 2021 conference call. Our press release and filings, including the AIF, were released yesterday after the close and are available on our website and on CDAR. This event is being webcast live, and you'll be able to access a replay of the call along with the presentation slides on our website. Brian Dalton, CEO of ARR, and Frank Getman, CEO of Great Bay Renewables, will both be speakers on the call. And in the Q&A, they'll be joined by Ben Lewis, CFO of ARR. The forward-looking statement on slide two applies to everything we say in our formal remarks and during the Q&A. And with that, I'll turn over to Brian's.

Thank you, Flora. I'll keep my comments today fairly brief and general. I know it's Frank that you're all most keen to hear from in terms of our business development. What I will say is that 2021 was a very pivotal year in the history of this business. And I say that because I feel it was the year in which our royalty financing products really gained a toehold in the renewable energy sector. For several years leading up, the major challenge we faced was in getting players within the sector to take the time to learn how royalty funding could fit into their capital structures. It involved a lot of cold calling, but the perseverance of Frank and his team is now really paying off. Most of the renewable sector, in the US anyway, now has awareness that our royalty funding is a new tool available to them in funding projects, and also that it has a wide range of potential applications. In other words, we believe that our innovative, often bespoke structures and solutions have reached a point of early adoption and acceptance. I cannot commend the entire Great Bay New Hampshire team enough for this accomplishment. Personally speaking, it has been an incredibly fun and exciting thing to be part of. The past quarter may have seemed relatively quiet from the outside looking in, particularly as compared to the flurry of deal announcements we made in Q3. Q4 was anything but quiet internally, however. In Q3, several deals closed that were the result of initiatives that were begun earlier in the year. With those closings, we essentially began a new cycle of deal origination, much of it in fact stimulated by the attention those announcements drew across the sector. Each of these new initiatives take time to properly advance, as in most cases the challenge we are trying to help our potential counterparties address requires specific tailoring with a focus on forming long-term partnerships. Several opportunities are currently being advanced, and I would say the team is now busier than it has ever been. to the point that new people are in the process of being added to lead particular files. While there is never an assurance that deal work will lead to closings, we are optimistic that 2022 is shaping up as a great year. Finally, I continue to be amazed at how rapidly things are evolving within the broader sector and the pace at which our team is adapting to these changes with real-time solutions for our partners. With that, I'll turn it over to Frank.

Thank you, Brian. What I'd like to cover today, I'd like to provide an update on our progress in 2021, an update on the current state of our growing royalty portfolio, and I'd like to provide a few comments on the state of the renewables market in the US and how that's evolving, and then the implications and prospects for our business moving forward in 2022 and beyond. On the progress update, 2021 was a fantastic year on all fronts. Deployment and new investments, creation of new royalties from our developers, And internal execution from the team was just amazing to get this all accomplished. On the developer front, when we started, we were focused on providing early-stage development capital. The program proved quite fruitful in 2021. Our partner, TGE, sold five projects in 2021. That's for a total of eight projects sold with royalties since our initial investment. And we received three royalties from our deal with Apex. So we have 11... total developer royalties to date. On new projects, you know, investing royalty cap elements in new projects, that was a new market that we added in 2021, investing in projects at NTP or COD as part of our target market. In that category, we did the long road deal, which was a $35 million investment in their 250 megawatt Prospero 2 solar project. And then on operating projects, that our Northleaf deal was a good indication of that. It was an investment in two operating wind projects and one operating solar project for a total of $52.5 million. So between Long Roads and Northleaf, we've deployed $87.5 million in operating projects. Those investments provide near-term cash flow, unlike our developer royalties. And opening up these new and operating projects target market as potential investment opportunities is a big deal when you look at our addressable market. Now, not only every development stage pre-production project is an opportunity, but every existing operating project is now a potential target from Great Bay as a real investment opportunity. As I'll discuss in a moment, we expect this segment of new and operating projects to be an important part of our business in 2022 and beyond. When we look at our diversified portfolio, when we set out to build this company, We had the vision and goal of creating a deep and diversified portfolio of renewable energy royalties. We felt then and continue to believe that the royalty model is simply a better way to invest in renewables. In 2021, we made great progress toward building that highly attractive diversified portfolio. We now have a royalty portfolio of 16 royalties totaling over 3,500 megawatts. That's 72% wind, 28% solar, and about a little less than 1% hydroelectric. It's spread across five different states and four different power pools with nine different sponsors, owners, who are ultimately our long-term counterparties on these royalties. So we're well on our way of building a highly attractive diversified portfolio, diversified across technology, region, and counterparties. I'd like to turn to the current state of the renewables market in the U.S. So there continues to be an insatiable demand for shovel-ready renewables projects. You know, everyone in every industry are seeking to reduce their carbon footprint, so the demand remains very, very high. There's continued strong demand from commercial and industrial buyers for renewable energy, either through corporate PPAs or, in some cases, direct investment in projects. That's the Amazon, Googles, and Microsofts of the world. And then on the investor side, there's strong investor demand to invest in these projects. I'd like to address a couple of headwinds that the industry is facing, started to face in 2021 and is continued into 2022. I'd note the interconnection backlog in several regions in the country, particularly PJM and SPP, is probably the single biggest issue facing the industry and supply chain constraints. Solar panels out of China are a particular issue. And these headwinds are causing delays in projects coming online, which I guess this would be a good place to note that we did get an update in Q4, which caused some of the projects that TGE is working on in particular regions to be pushed out a bit in their expected COD date due to some of these issues. And that is in part why the revenue forecast for the year was adjusted. But I would note that in no way affects our ultimate return because that just means that they'll owe us more royalties. And I guess as we're turning from a pre-production or pre-revenue company to a revenue company, I guess I'd caution about trying to find a point on exact COD dates for these development projects. I guess I'd stress that investing in developers, the reason that we structured our deals the way we did where we it's not tied to certain dates and we're covered if there's delays and that we don't give them credit for the royalties until they're six months post commercial operation that it's the things that are happening now in the industry that are causing delays that are the exact reason why we structured the deal the way we did um so uh a couple other things that i'd note facing headwinds facing the industry some headwinds or some tailwinds i guess depends which side of the ledger you're on rising inflation um rising interest rates, rising energy prices. And for the first time in some time, we're seeing merchant power prices starting to move up. And more and more players are wanting and seeking to have increased merchant exposure. And I guess this is a blessing or curse, depending on where you sit. As Brian has taught me, royalties love inflation and higher prices. So while these things could create some delays and higher costs, the higher prices ultimately are beneficial to a royalty. I'd like to comment on the increased merchant exposure we're seeing in the market. And with rising prices, there's more desire from project sponsors for exposure to market prices rather than locking everything down with long-term PPAs at low prices. More and more sponsors are either leaving some of the output subject to market prices from the beginning of operations. If you look at our Prospero 2 investment, that 30% of that project is merchant from day one. or they're seeking to unwind hedges on existing projects in fuller part, particularly if there's shape risk or minimum delivery requirements on those hedges. Overall, this movement towards more market price exposure for the offtake of these projects creates an opportunity for us. What's happening is these projects can't use as much leverage as they may have in the past with the long-term PPAs due to the perceived risk So they need sources of capital to fill the hole in the capital stack. The sponsors can write a larger equity check or use, in our case, use royalty financing to help fill that gap. And also, if an owner is seeking to unwind ahead, sometimes we'll need to come up with a cash payment to do that. Well, they can use equity or they can use our capital. So the increased merchant exposure is creating opportunities an opportunity for us to invest directly in the capital stack of the projects, where historically we invested in the capital stack of the developers. So the implications for the current state of the market is what we're calling our barbell approach, where on the developer front, if you look at developers with larger pipelines who previously needed capital to advance their pipeline, they're being pursued by larger strategics and institutional investors are willing to write big checks to basically buy their pipeline at an early stage these institutional and strategic investors used to buy projects now they're looking to buy more the entire pipelines of projects and this is a fairly recent change in the competitive landscape and it has made the developer pipeline deals which is where we started uh more difficult for us because our capital that we're competing against folks are trying to buy the uh the entire pipeline um Our response has been to seek earlier stage partnerships with good developers who don't yet have a large pipeline and partner with them to help build a pipeline of projects on which we receive royalties. It's similar to our concept with our TG and Apex deals and that we're looking at pre-production projects. It's just a bit earlier. It's not too dissimilar to Brian's very successful project generation business he's used with Altius and Base Metals to essentially create their own royalties. At the other end of the barbell, later stage development or operating projects where we're part of the capital stack of the project themselves, not the developer's capital structure. You know, our long road in Northleaf deals. Interestingly, when we started this business, this is where we wanted to invest, but the market at the time was too competitive and the returns too low to invest in operating projects. That's why we initially started with our developer deals. But now with shorter term PPAs, more market price exposure, These projects are perceived as higher risk by the banks, so the project sponsors can't use as much leverage and we have an opportunity to invest directly in operating stage projects. These are generally larger checks, larger investments, and they provide near-term or immediate cash flow as compared to our developer deals. So that's basically our barbell strategy given current market conditions. Earlier stage partnerships with developers to help create a pipeline of projects and royalties and direct investments into later stage development or operating projects. We've been heads down in Q4 and thus far in Q1, refilling our pipeline of potential investments because, as Brian mentioned, we've got a number of active discussions underway and we're confident we'll be able to continue to deploy capital throughout 2022 and beyond. The renewables market continues to evolve, but it's evolving in a manner that requires new and innovative sources of capital, such as our royalty financing. And I'd like to just make a couple final comments about our overall structure in our partner-like capital in general and why I think we're having success in gaining adoption. Our royalty financing represents long-term, flexible, partner-like capital. In every one of our investments to date, the counterparty had something unique to them where we were able to structure or shape our royalty investment to address their specific needs, yet still achieve our investment objectives. We're looking to build long-term relationships where these counterparties look to Great Bay for their financing needs again and again. This isn't a short-term trade for us. We're offering permanent, non-dilutive, partner-led capital. I think this is a big part of what differentiates us from the market, and it's a big part of why we're having the success that we are in gaining growth and adoption. That's it for my update. I'll turn it back to you, Brian.

Thank you, Frank. We've got some time for questions. Operator, if you could maybe put some of those to us.

Thank you. And as a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, please press the pound key. Thank you. Please stand by while we compile the Q&A roster. Your first question comes from the line of David Quesada from Raymond James. Your line is open.

Thanks. Morning, everyone. My first question here just on the topic of rising merchant power prices and just thinking about your business, I guess, from a high level strategically. I'm curious if you're exploring or if you see any other ways to potentially get more exposure to higher merchant power prices, be it you know, providing funding to projects that may be coming off contract that are owned by, you know, an entity that needs capital or even repowering type projects that are outside of, you know, assets you already have royalties on. Just curious, you know, how you can position yourself or if there is any way to kind of try and take advantage of those higher prices.

Yeah, that's a great question. We are talking to folks who projects that may be later in life and may only have a shorter time left on their PPAs. And traditional sources of capital, you know, bank debt, would want to see them go lock that up. Well, these owners are less willing to do that as they see the tide is turning in their direction and that merchant tail, so to speak, that you refer to, you know, could have real value. So whether it's repowering or, you know, maybe it's almost like we could provide capital almost like a cash-out refi to invest in the future of the project. those are real opportunities. And I think going forward, that's only going to become a bigger part of our business. But it makes sense that at this point, because the renewables industry, you know, there's only certain projects now that are hitting that period. Because remember, when we started in this business, everything was locked up under really long PPAs and PPAs duration has gotten short of a time. So the window for those projects to move through the the time life or the life cycle of these projects is just starting to happen, and there's a huge backlog, I think, of opportunity for, you know, as time moves forward, for us to invest in those type of opportunities. So we have some going now, and I expect us to have more of those conversations moving forward.

I'd just add, David, that it's happening naturally. I mean, let's face it, we are – passive here, and I think our exposures will evolve with the market, and the market is definitely going more merchant. I mean, sure, we can pick and choose between projects that have more or less merchant exposure, but overall, I think we're aiming for some balance, probably in the same way that many of the project operators are, but just naturally, sector as a whole is becoming more price exposed, which I think is a natural and a good thing. Not dissimilar, as I said many times before, to evolution we would have seen even in industries such as the gold market that had incredible impact in terms of making royalty financing become mainstream in establishment.

And it has a direct impact on the sources of capital available. I was on a conference recently and I heard a very large bank say that with merchant projects, they haircut the merchant curve by 20% and they reduce their leverage ratio from 80% or 70% down to 50%. Well, that creates a hole that somebody has to fill.

Absolutely. That's great, Collier. Thanks, guys. And then maybe just digging into your comments around the barbell approach and specifically what you're doing to help developers build a pipeline. Just maybe add some more color on exactly what kind of activities you're doing there and how that, you know, what kind of attention does that take and, you know, who are you backing in terms of early stage developers?

Yeah, I can't provide specific names at this point, but it's really finding this industry is really, development is all about people. So when we find an earlier stage team, and we've been in this a long time, and we think that they have the skill set to be successful, or someone, in some cases, when some of these larger developers are acquired, maybe some of the fruits of that purchase don't filter all the way through the organization the way everyone would like, and there's teams that want to spin out and pursue things on their own, there's lots of, there's new developers getting into this business. We're not gonna develop, support someone who doesn't have any experience, or we don't feel confident, has a strong track record, but there are becoming more and more opportunities. And it is a little different, we're having to look at that and say it's almost, we're learning from Brian's experience in project generation, it will be, you know, the deal structure will be something like we'll provide you flexible capital, but we get a royalty on, you know, a certain, you know, number of gigawatts that come out of your pipeline, and we'll get an equity kicker as part of that as well, or something along those lines, because it is a different stage investment, and I think that, you know, our investment return profile needs to reflect that.

Yeah, and I'd add... An amazing thing has happened over the course of the year. We would have talked, even at the time of the IPO, about capital for developers being difficult and expensive to come by and probably a little too easy for construction and operating stage. We feel like that's reversed to some degree. I'm sure you've seen some of the deals in the market, but development portfolios are trading at enormous valuations right now. but it's become a little more difficult for operators, particularly those that want market exposure. But we've learned and evolved as well. Our focus on developer deals early on was heavily, heavily based upon getting our comforts from the scale of the portfolios that these groups held. But as time has gone on, we've continued to learn and I think we've probably evolved more to the point that It's a belief now that we're investing as much in the people that put projects together as we are projects. Projects are just things on paper until they're not. It's the people that turn them into real things. Just a little bit of evolution along the way and certainly some evolution in the markets and relative valuations. We could be on here in two quarters talking about that having completely reversed again. Whatever it is, we'll roll with it.

I'm excited that we're able to use our structure and have found different spots. As the industry evolves, we've been able to evolve our structure and be able to participate where we see the best opportunity and the best value. That's what's most exciting to me.

Absolutely. Appreciate the color. Thanks, guys. I'll get back in the queue.

And we have your next question coming from the line of Rupert Merrer from National Bank. Your line is open.

Hi, good morning, everyone. Wondering if you can put some goalposts on the amount of investment that you could make this year. You have a fairly strong balance sheet. You've also issued a prospectus recently. How long could it take for you to deploy the amount of capital you could have available?

I think we said at the time of the IPO that we were going to have everything deployed in 12 to 24 months. I think we're well on track to meet or exceed that. We're 12 months in right now.

It's a hard question. There's lots of field origination in the pipeline. If it all works out, we'll likely overshoot, but again, it's just not something we can or we're prepared to make promises around. Deals aren't done until they're done.

Right. Okay. Fair enough. And then on the pipeline, you've talked about the barbell strategy and you really have a more, say, diversified types of projects in that pipeline. What does it look like today? How many opportunities are you finding in these, say, earlier stage investments versus late stage investments?

I think it's going to, I think the, the, the, I think it's reasonable to assume that the, uh, lion's share of the dollars deployed will likely be in the later stage projects right now. Cause that seems to be, you know, the, the, the earlier stage ones, they take longer, right? Cause it's more of a partnership. There's a lot more making sure when you're investing into an operating project, it, you can really get your arms around that, that pro that project, how it's performing. what the market is in that area and so forth. So I would expect that the lion's share of our investment will occur into the operating project side or the new project side. I do love this idea of having this barbell approach and having some of these earlier stage investments that will pay out over time. Because as we're seeing, there's a lack between when you invest in a developer to when they actually get a project across the line or multiple projects where you actually have a cash flowing royalty, there's a lag and it's hard to predict. But I do like having those that kind of built in pipeline of royalties that are coming over time.

Great. And how do you consider the risk from merchant? You mentioned how the big banks might handicap the potential returns on the market price, for example. What's your own internal process and How do you handicap those returns? What sort of returns do you think you can target in the future? Could they be better than what you targeted on your, I'll say, developer pipeline historically?

Yeah, I don't know that they'll be better. I think they'll continue to fall in that range. I think when we look at the, you know, there's basically, you know, two or three large forecasting projects uh agencies everyone looks to for their forward price curve and then people make their own assessment of judgment of those my experience over time and this is going back 20 years has been they always are slow to appreciate when things turn up and they're slow in adjusting their curves and then they stay too long on the other side after a period of higher prices when things start to go the other way they're too slow and adjusting downwards so there seems to be a lag and i feel like we're just at the beginning stage so There's been some modest adjustments in their forward price curves, but I think all signs, at least seem to me, to be pointing to continued upward pressure on merchant prices.

All right, great. I'll leave it there.

Thank you. And your next question is from the line of Nick Boychuk from Cormac. Your line is open.

Thanks. First question on the barbell approach. One of the questions I was going to ask is if you participate in the equity upside, the potential exit of those earliest stage developers, can you comment on what that return profile might look like? Obviously, if you're going for 8% to 10% on your prior developers, would that be magnitudes higher?

Well, who knows, right? That's the function why it's equity investment versus the a royalty or, you know, something with a little more certain cash flow profile. I mean, who knows what the market's going to hold in the future, but the current valuation for these developers is very, very high. So my simple logic is if we can participate in that, again, we're not running their businesses for them, but, you know, make certain investments and partnerships with top quality teams and get our royalties and then have participation in that, know it could be lucrative but but that's really hard to try to say what that return you know will be it's gonna you know i'm sure that uh if you had talked to apex a few years ago they wouldn't have expected the kind of price that they were you know the you know kind of you know prices we're seeing today but you know who knows what the what that might be in the future i just think it's smart for us to have some alignment there so we have some participation and we're going to help create these pipelines and provide the capital to do that, I think we should participate not only on the royalty side, but have some exposure. We're in it for the royalties, but have some exposure to the equity side.

I think that's the key point. I wouldn't want this to be seen as a signal that we're adding a major equity investing, speculative equity investing component to the business. This is a royalty business. But there are some cases where some equity can be help lead into a royalty type deals or just, you know, as Frank said, help with some alignment, but it's not, you know, a new strategy for the business per se. It's just part of the business development royalty business development strategy.

Okay. Perfect. Thanks. Um, and then to follow up on the comment that you made about the lion's share of dollars potentially being deployed and operating, um, what's the split or, um, sort of target partner there? Is it an operator like a Long Road who wants your non-dilutive capital or someone who's more distressed like a Northleaf? What's the typical arrangement?

A little bit of both still. I think there's still some folks that are sorting through some of the... Not everyone has sorted through the impacts of URI last year in Texas and still sorted through some of the... the losses that they associate with that. But I think going forward, I would expect it to be more in the operating projects, people just looking to maybe own these projects or to write less of an equity check, project equity check, so we'd be able to participate directly, like I said, at the project investment stage.

I mean, it's a direct function of that lower leveraged percentage and and that you know more capital required from the equity or equity like side of the side of the ledger you know we're finding that our capital is substituting in there really nicely okay that's perfect and the last one for me just on the uh the current quarters results on specifically from the north leaf assets it looks like if we're kind of tracking for

revenue of about $4 to $7 million from those assets on an annual basis in the first 10 years. It seems like, did only the revenue from the cotton plains royalty come in this quarter? Can you kind of walk us through how that timeline and what we should expect moving forward with these offerings, like if there's a lag before they actually fully turn on?

It's not that it was termed as a lag in our revenue recognition. It's something we probably should have appreciated. We haven't had operating projects before, but we recognize revenue when the project collects their money, not when the megawatts are generated. What's account receivable for them is not revenue for us. It's when it becomes cash to them becomes an account receivable for us. And we can recognize that revenue. So there was a lag. So it doesn't reflect, basically, it's not a full quarter's worth of revenue. from the Northleaf investment. So there's a timing lag in that revenue recognition is what's going on there.

Okay. But just to confirm, it's not as if just the verbiage in the MD&A, it's as if it was just Cotton Plains. It's not the case. Like all three of Phantom, Cotton, Old Settler were revenue generating in the quarter?

I think that the cotton planes had the largest, uh, and Ben, you might be able to help me. I think they had the, were they the one that, uh, there was a delay in them getting paid and that's what caused the delay. And I was recognizing revenue. I'm not sure if it was mostly from cotton planes or whether it was all of them.

Yeah. I think in the MDNA, we call three of those were all these collectively cotton planes. That could be the computer on that part. But, uh, Frank, I think you nailed it on the description of it's just a timing lag and, and, you know, it may be a little bit lumpy, but, uh, over the long run, it will smooth out. Okay, that's great. Thanks, John.

And your next question is from the line of John Mould from TD Securities. Your line is open.

Thanks. Good morning, everyone. Maybe just starting with the competitive landscape. It's been a year since you've gone public. I'm wondering what, if anything, you're seeing happening when you're out there in the market in terms of royalty offerings competing with your own or any other, let's call it novel financing sources that maybe, or non-traditional financing sources that maybe would be competitive with your capital. Is that something you're seeing any more than you were a year ago?

I've seen several pitches of royalty offerings that somehow I was able to see that with a similar concept, I've not seen any of them executed yet or competed. You know, we haven't seen them head to head in a particular project. What we are seeing is more of, I would call it, mezz debt or preferred equity type structures. There seems to be, you know, I think that's more what we're competing with at this point than a pure royalty concept. competitor, though I expect it will come. I know folks are trying. I do think, you know, unless you are deeply ingrained in this business, it's not something you can just say, oh, cookie cutter, just go do this and put one of these in place. Maybe someday it'll be that, but at least right now, each of these investments is, you know, they're bespoke, I think, as Brian mentioned.

Okay, great. Thanks for that. And then, you know, maybe just on the broader, the broader impact of let's call it tax credit and policy, you know, uncertainty, uh, in the U S and the class, but this quarter last quarter, I guess, as you look to more, I mean, it wouldn't really be relevant for operating projects, but as you look at late stage opportunities, you know, maybe that, that have yet to hit financial closes, but are close. is the uncertainty around will there be direct pay? What's the picture going to look like on the extension side? How relevant is that right now to keeping potential partners from moving forward with something just given that there's still hope out there, let's say for the next eight months or so anyways, that something might get done on that front?

I don't see it affecting things much at all right now. I think direct pay would just be Great if it happens, but I don't think it's the industry isn't waiting for it. There's plenty of, it seems to me, there's plenty of tax equity. Obviously tax equity is from investors who have profits. They're seeking to shield. There was lots of profits in 2021. So there seems to be, uh, in fact, you're seeing some other new participants, you know, corporate side, usually traditionally it's been banks who provided the tax equity. You're seeing some more, you know, Facebook's and Google's the like, you know, even getting into the tax equity game. So I'm not really seeing much of a delay. I think the biggest delay, as I mentioned, is more on the sheer number of projects that people are trying to connect to the grid and bring online. These system operators were never set up to handle this kind of volume, and it's just causing real pressure and delays in some cases.

Some of that's probably been reflected as well in what we're talking about, how existing portfolios are trading at very big prices right now and that was particularly true for anyone who's well advanced on with interconnect because you can't just originate from scratch and say you're going to be producing in a year but even that even current status in the cubes in some areas is actually quite up in the air big issue big opportunity we just I would have to figure out how to fully crystallize it.

Okay, got it. Thanks. And then maybe just one housekeeping question on the revenue. I look at Great Bay of $4.5 to $5.5 million. You pointed to about $6.7 million back in October. I guess, can you just provide some context on how much of that delta is changes to expected COD dates versus anything else? you know, that might have been a contributor, whether it's some of the merchant exposure you have at your operating assets and maybe how that view might have evolved or any other inputs into that update.

Ben, you can add anything, but I think the high end of that range is based on what we know today. And, you know, that's based upon the operating projects we have and the projects that are already, you know, from our, you know, Jayhawk, for example, things that we know. I think that some projects that last year we may have thought were going to be operational, but this year may have gotten pushed to 2023. I think that's the vast majority, if not all, of that change. Is that correct, Ben?

Yeah, that's correct. Yeah, and as obviously with, in particular with TGE, if we If there are delays, we end up with more royalties in the long run based on the structure of the deals. It's all good in the long run.

We've taken a pretty conservative approach with these numbers just because there is probably a little more uncertainty than there would have been even a few months ago. There could be a quarter here or a quarter there. We could surprise the upside too. I think our range is definitely conservative, but it just reflects probably more uncertainty out there right now. Not talking about big slippages here, but just normal course kind of stuff. It's a little tough out there right now to get things done. Great.

Okay. Thanks very much for that detail. I'll leave it there.

And there are no further questions. Let me turn the call back to Flora Wood for any final remarks.

Thanks, Patricia, and really appreciate the questions in the Q&A. Thank you all for joining us, and it won't be long until we're back with Q1.

Thanks, everyone. Thank you.

This concludes today's conference call. Thank you all for participating.