Polaris Renewable Energy Inc.

Good morning, ladies and gentlemen, and welcome to the Polaris Renewable Energy, Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Anton Jellick. Sir, the floor is yours.

Thanks, John. Good morning, everyone, and welcome once again to our Q3 2022 Earnings Call. In addition to the press release issued earlier today, you'll find our financial statements, MD&A, and quarterly information form on both CDAR and our corporate website, PolarisREI.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. I'd like to remind you that comments made during this call may include forward-looking statements within the meaning of applicable Canadian securities legislation regarding the future performance of Polaris Renewable Energy and all its subsidiaries. These statements are current expectations and as such are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include the factors discussed in the company's quarterly information form for the quarter ended September 30th, 2022. I'm joined this morning, as always, by Mark Murnaghan, CEO of Polaris Renewable Energy. At this time, I'll walk through our financial highlights. Power generation. During the three months ended September 30th, 2022, quarterly consolidated power production was lower than the same period in 2021. due to lower hydrology in Peru and planned major maintenance performed in Nicaragua and Peru, partly offset by the additional production from the solar project in the Dominican Republic, acquired on June 28th, and the hydroelectric project in Ecuador, acquired on September 7th. During the nine months ended September 30th, power production was 475,536 megawatt hours net, compared to 480,000 981 megawatt hours net in the Nine Lens ended September 30th due to the decrease in production at the San Jacinto facility expected from the natural decline of the reservoir. The decrease was partly offset by the increase in production as mentioned by the Peruvian facilities coupled with production contributions by Canoa One and HSJM, both acquired during the Nine Lens period ended September 30th. Revenue. Total revenue was $14.5 million during the three months ended September 30th compared to $14.8 million in the same period last year. Total revenue of $45.8 million for the nine months ended September 30th compared to $44.6 million in the same period last year. Net earnings loss. The net loss attributed to owners was $1.5 million for the three months ended September 30th. compared to earnings of 2.2 million for the same period in 2021. Further, the net loss of tributary loaners for the nine months ended September 30th was 0.5 million compared to net earnings of 1.4 million for the same period last year. Adjusted EBITDA. Adjusted EBITDA was 10 million for the three months ended September 30th compared to 10.9 million last year. As well, adjusted EBITDA was $33 million for the nine months ended September 30th, compared to $32.7 million for the same period in 2021. Cash generation. Net cash from operating activities for the nine months ended September 30th of $20.7 million, lower than the $33.9 million for the same period last year. mainly because in the 2021 period, San Jacinto collected approximately $8 million overdue receivable balance after the sign-off of the new PPA agreement. Net cash used in investing activities for the nine months ended September 30th was 57.3 million compared to 8.6 million in the same period in 2021. The large increase resulted from the 20.3 million cash paid for the acquisition of Emerald in the Dominican Republic and 15.2 million cash paid for the acquisition of HSJM in Ecuador. Net of a total cash received of 3 million from both acquisitions. In addition, the company has funded 19.9 million for the construction of the binary project in San Jacinto and 3.4 million for the solar projects in Panama. Net cash used in financing activities for the nine months ended September 30th of 24.4 million compared to net cash provided by financing activities of $14.5 million reported in the same period in 2021. The decrease was driven by the net proceeds relating to common shares issued during the first quarter of 2021 compared to higher dividends paid in the first quarter of this year and the net impact of the repayment of debt and refinancing completed in Nicaragua in February 2022 compared to the 2021 period. And finally, dividends. we would like to highlight that we do intend on paying our 27th consecutive quarterly dividend on November 25th of 15 cents per share to shareholders of record on November 14th. This continues the board and management's commitment to regular positive distributions to shareholders, coupled with an ongoing emphasis on attractively valued accretive acquisitions. With that, I'll turn the call over to Mark, who will elaborate on current business matters as well as on our quarter-end results. Thank you.

Thanks, Anton. So first, starting with the quarter, this third quarter was always anticipated in terms of the EBITDA and production to be a lower, I should call it our seasonally lowest quarter, given the maintenance in Nicaragua and it is the dry season in Peru, although we did come in lower than anticipated for what I'd call one-time items, but In terms of actual dollar estimates that I run, I would say the dry season in Peru cost us about $500,000. For the quarter, we originally budgeted 47 megawatts net in Nicaragua. We came in at about 45, which we did talk about that a little bit in the press release due to just two wells. It took a bit longer to recover. That was about $500,000. And then Actually, the bigger one was on the G&A line, some deal costs from the acquisitions, et cetera, in terms of the private fees and legal fees of about $600,000. So you're looking at about $1.6 million in costs. I would say either costs incurred or low revenue in the quarter in terms of the net impact on EBITDA that I wouldn't consider significant. go forward and definitely not what we're running in our numbers going forward. Give you an example, San Jacinto in October was 51 and a half net, which is right on budget. The Peru plants in terms of hydrology and production are right back on budget. Ocho de Augusto in October did as much production as the whole Q3 so the rainy season has started in the normal fashion and that's actually more important than having a dry dry season in terms of numbers to us so we're happy with that a few other things about the quarter we call it Dominican was, I would say, as expected, and that did have a full quarter contribution, even around the 1.4 to 1.5. San Jose to Minas was only about a month, so that didn't really contribute anything there, but it is running as expected. And then we did have a small carbon credit sale that brought in about $427,000. in revenue. And that was actually for 2015 vintages. And I'll talk a little bit about that later, but we sold those at a price of $2.30. So that did come in in the quarter. But I think in terms of once San Jose to Minas was Current quarter, it's going to be a full quarter. Obviously, the DR is a full quarter. So before the binary and Panama Solar, though, I think the current quarter where we're running is more indicative of, call it a go-forward number. And I would have that in, call it a $12.5 million range ballpark for current quarter EBITDA. And then, but that does not include the Binary Unit, nor Panasolar in Panama. So in terms of those projects, though, the Binary Unit, we are still looking at a COD in December, the commissioning date in December. And we had spent up to about $23 million in At September 30th, there's another $2 million, so we're expected to come in on budget for that and starting in December. So Q1 should be a full quarter with the binary unit. The Panasolar, and that's the big one of the development projects, the solar in Panama. is moving as expected and as budgeted as well um and we're looking at end of december potentially early january but um for for commissioning so um maybe a little bit of slippage but not much there and on budget uh which is great so so those should come in so q1 next year would be again more on the what I'd call the go-forward run rate, as I just mentioned, plus a quarter of the binary, plus a quarter of Panasolar, and likely some carbon credits as well, which are not in those numbers that I quoted there. In terms of the other development projects that we have on the go, We were, Kanoa 2 would be the most important one. That's the expansion at the site. So we did, two, three weeks ago, we did receive what is called the definitive concession for the ability to double the capacity there. That was or is necessary in order for the off-taker and us to formally do the actual power purchase agreement. So we couldn't get into the pricing term with the off-taker until this was granted by the authority, which it hasn't been granted. So we're now actually exchanging documentation in terms of the contract. And so we hope that to move pretty quickly. And we will, given that, we're gonna be starting what I call the very sort of early stage small dollar site prep designs, et cetera. So that's going to start moving very quickly now, which is great. That would be, call it our first expansion project on the backs of the acquisitions that we announced earlier. The other one that we're going to be starting construction on either this month or first thing in December is the, it's a small expansion, brownfield expansion project at the San Jose de Mina site in Ecuador. which is about a $3 million project, but we think it should increase production by about 20% to 30% annually. Very good payback project, and that should be started, and we're looking at about a nine-month construction there. And then the other that we have yet to, I would say, fully define, but we'll have it by end of December, in terms of what the plan is, is some certain acid jobs on wells in San Jacinto. We've been assessing this with the technical consultant for the greater part of the year. And we think that we have some real interesting opportunities here. Principal one being one of the wells for two where we had to use a lot of mud during drilling because it was We got a lot of steam kicks during the drilling. We're getting estimates of anywhere from, well, 3 to 10 megawatt potential there, and this is something that should cost us about $750,000 to do. So that is something that we will hope to have. The only thing that's left is really what is the exact way of doing it. There's a few options, but we should have that nailed down and can communicate it to it. I think this is important because we don't see any large program drilling at the field for years now, but we do see what I call more typical maintenance slash optimization. And this will probably be the first one that we will execute to kind of validate the thought that we've, call it a maintenance capex of, you know, one to two a year, we can sort of change the, you know, either sustain the 0% decline and potentially even improve the production from where we're at today, which would be very economic for us. Last thing I'll mention is the carbon credits. We did get, so Ocho de Agosto a month ago was finally fully verified. So that's great. So we now have what I call relatively recent credits that we can sell there. And we are in the process on three other ones, which would include the Panama Solar, actually El Carmen in Peru, and the binary unit is actually being done separately. So those should all be done. We've spent a lot of time on that. Those should be done this year. We should be entering, call it next year, with around 350,000 tons annually. in terms of annual production. And where we see the market today is that that is, call it what I would call recent vintages, seem to be going for $4 to $5 a ton, which I think is quite a strong signal given, you know, despite the war, despite inflation, I would have expected maybe more of a pressure on those prices, but... but we're not seeing that. We are seeing transactions getting done. So I would expect, I don't, at this point, I don't see us doing anything in Q4, but given that Ocho de Agosto's done, and we have actually at San Jacinto alone from 2017 and 18, about 300,000 just sitting there in inventory. So I think a policy for us will be just to keep working off things that are four or five years dated. As I said, we sold 2015s. Things closer to today, I think we can get four to five. So I think we would start in Q1, Q2 to look at starting to sell some of that older inventory and even some of the more recent, even if reduced small bits of it. So I would think that next year, in terms of, as I said, the numbers that I quote, I don't put the carbon credits in, but I would expect it to be represent a larger number in terms of our total revenue next year than it did this year. So that's it for my comments. We can open it up for questions now.

Thank you, ladies and gentlemen. The floor is open for questions. If you have any questions or comments, please indicate so by pressing star 1 on your touchtone phone. Pressing star 2 will remove you from the queue should your question be answered. And lastly, while posing your question, please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Once again, that's star one if you have a question or a comment. And the first question is coming from Nick Boychuk with Cormac Securities. Your line is live.

Hi, Nick. Hey, thanks. Morning, Mark. Just on Nicaragua first, can you please clarify the three to ten megawatts that you're looking at getting out of that additional well, that's totally new capacity that we'd be adding, right?

Yeah, yeah. So this is a well that when you drill, we had a steam kick, which means steam comes in the only way before you've cased your well. And so you have to basically kill it, which the only way to do that is you dump a lot of mud. You dump a lot of mud in it, and it took us two weeks to kill it. Then you keep drilling we had another one and so Basically there's a lot of mud in the formation Right and so this well for two only produces about one to two megawatts despite how strong these kicks were so all the data suggests that There's for sure production there. The question is you know, how effective can your your acid, clean it out. The good news is because it's a very shallow production zone and we don't need a big rig to get there. So our estimates, as I said, are anywhere from one to even higher than 10 megawatts. So that was part of the 2017-18 drilling campaign. And right now, as I said, it's a tiny producer, but our average well in the field is about five, six megawatts now. So If you assume the average, then we'd get like an extra four, let's say. And that's probably a good thing to ballpark. We just need to finalize the actual process, the actual asset, and then we can communicate it and put it in the budget probably by the end of the year.

Okay, so budget by the end of the year, and then roughly in terms of construction timeline, how long do you think that would take?

Oh, we would do it likely mid-year, but it's a one-month process.

Okay, sweet. Looking into Panama, can we get a little bit of extra color on Panasola 3? What are you seeing in terms of the development process, cost to develop it, and also power price market, where merchant rates in Panama sit currently and how you're thinking about PPAs versus going full spot on those two assets?

So in terms of the current build, we're still on, but are you talking the current one that we're building or even further?

I'm thinking more Penicillin 3.

Yeah, just so phenomenally, my bad, but it's technically two projects what we're building just because they have two different generating licenses, but we're doing two and three now, and we're looking at doing a few more later next year. But just let me comment first on the spot market. The trailing 12 months is around $100 a megawatt hour there. We definitely have interest in contracting, although given that – so the first projects that we're building right now that are going to come on, call it Jan 1, would only represent – two to 3% of our total production and everything else is 100% contracted. So I don't think, and we've equity funded it. So we're not rushing out to get contracts. We have started conversations with people that are interested in buying, but I think we'll just start the year and call it merchant there. And I run my numbers at about $85 a megawatt hour. And yeah, it's at about 100 right now. The LTM is at about 100. In terms of the cost to get there, I think our all-in will be about $9 million. It's 12.5 megawatts DC, 10 megawatts AC, which is, I think, very good. And we executed this project with our own sort of project management team. And I think that is something we will look at. Going forward, it was the same with the binary, and it will likely be the same with Kanoa too, so as opposed to hiring an EPC contractor, because we see about a $0.10 to $0.15 per watt difference in doing that. And so for the smaller or expansion projects, we think we can handle that, and it does make a big difference in terms of the net return to you.

Okay. That's helpful. Thanks. And then in Ecuador, were you guys able to submit the bids for the 720 and 27 megawatt projects in the October 31st auction?

It's not until November 18th is the bid date. But we are evaluating. We are reevaluating because they did publish some prices for max prices. And hydro is $52, which is it would be maybe possible to get our returns. I think very few people are going to bid. Then immediately after that, there was a change in the minister of energy for the ministry. So I think they're going to have to redo the whole thing, quite frankly, and we're going to come back in Q1. And they'd already talked about two. So I think we'd be very shocked if people show up at that price. and or they basically redo the whole thing, and in Q1, it's back on track. So, yeah, I don't – our plan is really going to be to do the expansion. We can go ahead with everything at San Jose and Aminas, but in terms of the bidding process, it's likely going to be more of a Q1 thing now. Okay. Thanks.

I'll hop back in the queue.

Up next, we have David Quezada with Raymond James. David, your line is live.

Thanks. Morning, Mark. Leaving my first one here, just maybe a longer-term question, just thinking about growth opportunities across your footprint. Obviously, you've got a lot of stuff on the go right now, but just curious about what kind of potential you see for storage across your footprint and what kind of timeline would you look at there?

suspect it's a few years out um and what what would you need to see in terms of contractual underpinning for something like that so yeah and in terms of a few years what i would hope that actually contractually is sooner than that in terms of uh having something nailed down for storage um we are actually are moving ahead with a very small storage project in Next year, but it's pure frequency regulation. So it's not really energy storage, but it's going to be like a one megawatt hour lithium project. And again, that I think will be very good. All that knowledge for us is a little baby step to do it, which actually the second one, we have a solar plus battery project in Nicaragua right now at a very small scale. and we're going to do this one in Peru, and then I think the next one will be the Dominican. We've already had conversations with them. What they told us was we really wanted to get this definitive concession for Kanoa done, which we have, and now we're going to go move ahead with that project. On the backs of that, though, what we need to do is just change our concession plan which right now it is technology specific, which is solar. So technically we need an amendment and it's not actually hard. It's just taking, instead of saying solar, it says solar and batteries. And we can now start that process because, and we are gonna start it. The nice thing with the Dominican is that they've already published reference prices for solar projects that add storage. and it's an increase, and it's a material increase, and they're not definitive. They use the term referential for a reason because they're trying to guide people. I would say that the guiding that they're doing is close to making a lot of economic sense, not quite there, but they've already had a task force that's working on it, So I would hope we can have that kind of amendment in the first half of next year to say that we can do it, and then it would get into negotiating that price and the size. So how big do you need to start? Can you go sort of small-medium, or do they want you to go big? That'll be a bit of a negotiation, but I think it'll literally be – hopefully mid-next year, we're going into them saying, okay, here's the price we're willing to do, like 50 megawatt hours or 100 megawatt hours of storage on the backs of Kanoa 1 and 2, and we have the land for it. So that's where I would hope that we would start, and maybe it's two to three years in terms of actual production, but in terms of project definition, contracting I would hope it is much sooner than that and then on with that I think the messaging will be that is going to be a really big focus for the company going forward and that our call it a key growth engine for the company is going to be storage absolutely okay awesome that's great color thanks mark

Maybe just one more for me, as you look to move forward on some of your expansion projects here, like Canoa 2 and in Ecuador. I'm just curious what you're seeing in terms of supply chain. Like, are you out looking to procure panels? I think in the past you've suggested that, you know, the size of projects you're looking at, it's not too much of an issue. Just curious, you know, what you're seeing there and if you see that as a hurdle in any way.

Yeah, we just interestingly recently got indicative quotes on panels and inverters, and they both were lower than what our project in Panama was done at. So that's – obviously, that's good. I think what we're seeing more is it tends to be more – certain parts of a project do have issues, whether it's with transportation or there is some supply chain issue. Obviously, a massive percentage of the world's goods do parts flow through China, and they are still having issues. So I would see it more as timing, though, necessarily than budget at this point. That's what we're seeing. What was this? So it can cause delays, but that's where you need to focus more so than it's causing, call it, cost increase. And I would reiterate that we don't, you know, a lot of the countries we're operating in, they aren't seeing the same type of inflation levels that you're seeing in the United States and the Western world.

Okay, excellent. I appreciate those comments, Mark. I'll turn it over. Thanks.

Once again, if there are any remaining comments or questions, please indicate so by pressing star one. Up next, we have Najee Beydoun with IA Capital Markets. Your line is live.

Hi, good morning. I just wanted to go back to the Panama solar projects. If I understood correctly, you're comfortable operating the projects that are going to be completed soon on a merchant basis for now. And then maybe you think about contracting for the next ones. There's no rush, essentially, to get PPAs in the door to be able to raise that financing. You're okay with the way things are for now? With the current one, absolutely. And what about, let's say, the next tranche of projects in Panama?

Yeah, so it really depends on which type of We have a couple on the solar side with the same developer that we think will be ready back half of next year, as well as the hydro project that we have been working on for quite some time and had signed a deal several years ago. It's still in our queue. It actually has contracts, so if we were to move ahead with that and our go-no-go on that is in the next three months, As the same company, we could use those contracts. The amount contracted is higher than what the first solar plant would produce, and it would actually be a good percentage of the next ones. So it could be a good little package, in which case we wouldn't have to get new contracts if we did it that way. If we did not do the hydro project and we just go do a few more solar, we absolutely would look for a percentage of contracting such that it just makes the financing a little bit easier, even though, again, the percentages on a pro forma basis would be quite small as a company. We would want to raise some debt locally in the market in Panama because it's a very, it's actually a great market from that perspective. So, you know, maybe we'd try to get 40, 50% contracted as a package when you include the new ones and the current one.

Right. Okay. That makes sense. I was just thinking about if you can pull any equity out of those projects, but I guess we'll hear more about Chuspa in a few months.

I think we would in the sense that if you – let's just say all we did was the solar, and let's just say each one's $10 million and we've already spent 10. We could probably do the next two on debt using local debt. but not if the whole package was 100% merchant. You'd probably need to get 40% contracted, and then you could. And then our equity quote has already been spent and invested.

Exactly. Okay, that's good. And just on Pramila too, is that maybe just give us an update on the timelines and sort of milestones to get that project moving for next year?

Yeah, so I think... As I said, we're now into negotiations with the PPA. We're going to start doing certain land prep immediately. I think it'll take us to be truly, like, large, you know, the full construction start. Probably not till April or May. We will have – next year we will have some of the works done, so – I would say I don't think we would have it for a full year for 2024. Likely end of Q1 ready 2024. Okay. Okay.

But I guess an FID soon and then construction, so call it, you know, mid to back half of next year for 2024. Yeah. Okay. And just one last question, if I can, to go back to the Ecuador bidding, I mean, Just based on public information, it seems like it's going to be a competitive process with a lot of interested parties. I'm just wondering, you talked about the pricing on the hydro, which I think is going to be about 150 megawatts. We're also looking to add wind and solar in that RFP. Is there any more you can say about that? Is that something that you're interested in? And let's say they come out with the award in Q1 next year, what would be kind of the timeline to build those projects?

So, just Don, I don't think the wind and solar is as interesting. It's not that we wouldn't do that in Ecuador, but that really wasn't what we wanted to focus on. So, yeah. I think partly because I think there is a little bit more competition. I don't think I'd say it's medium competitive on those, whereas it's low to mid on the hydros. So I think for us, you know, one scenario would be if the hydros don't happen, there's going to be people that get some solar and wind and that don't have the equity capital to go ahead. We absolutely look to work on that. Because, you know, that whole dynamic of still capital-constrained, small project developers, I mean, not only does it exist still, it's gotten a lot worse. So I think that's better for us. I think we would play more of a wait-and-see on those, and I'm sure we would get a call on the solar and the wind. And then in terms of the hydro, yeah, I don't think – What I think would happen on a, call it, project win in Q1, let's say, assuming that happens, the original thinking would have been that a hydro project comes online, call it, for 2025. So if you had sort of Kanoa 2 plus the solar, Panama, and maybe the hydro coming on in, call it, 2024, you have the hydro 2025. I don't think that's changed, but it's probably been pushed back three to six months to mid-2025.

That's very helpful, and then we'll definitely sort of be a continuation of a steady pace of growth. Okay, so focused on the hydro and maybe keeping some options open to partner with someone else on wind or solar. Yeah. That's great. Thank you very much for those details.

Okay, up next we have Vivek Punjabi with National Bank Financial. Your line is live.

Hi, Mark. This is Vivek from National Bank on behalf of Rupert. Doing good. Thank you. I just want to circle back on carbon credits. I know you provided some commentary on that. But just to understand how should we think about carbon credit sales leading into the next year? Should we see it at a higher run rate pace from what was in Q3 or and is the strategy more dependent on pricing for the recent verifications versus the old ones? Just would love some.

So where I think we're going to go. So it was, would have been a year ago or maybe it was a year and a half ago, Corsia, which was the, so the airlines have a buying consortium called Corsia. And they're one of the, the, And there's also an oil and gas one called IETA. They're big buying consortiums, and I think they're in the voluntary market. They would be some of the larger buyers. But a year, year and a half ago, well, yeah, it was 2021. Of course, they came out and said, if it's before 2016 vintage, we're not really interested. And so that kind of had a bit of a demarcation line in terms of pricing, So any vintages, because again, you don't need to sell these right away. You can inventory them. So that made a bit of a demarcation line. So we've gotten rid of... Now, interestingly, we were able to sell some 2015s this quarter, or the past quarter, at $2.30, whereas what I call more recent vintages, so below five years, seem to be in the $4 and $5 range. So what I think we will do... And I would view that as a risk. I think it's great that you have these buying groups dictating a little bit as to where this market goes, as opposed to the accrediting agencies. But your risk is that they say, okay, now we only want things that are not five years, but three years, no more than three years dated. And so we still have, so for instance, at San Jacinto, some remaining inventory just for 17 and 18 alone is like 300,000 tons, okay? So I think what our policy will be will be to start moving off older inventory to remove that risk before it kind of switches into a lower pricing environment that's being dictated. So And what we're seeing in the market is the $4 or $5 is being achieved with some 2017s and 18s because it's still within that sort of five-year thing. So I think where we'll start next year is doing that. I don't think we would – so let's just say we did $300,000 next year and $4 to $5. You can do the math. So, you know, $1.5 million. I don't think I can say that's sort of a guidance, but that's at least the thinking right now. I think the thinking is that, as I said, the fact that it's still at four or five in this environment to me suggests that that, you know, to the extent we do reach any form of normalization, I think there should be more value in these, in the even more recent vintages than $4 or $5.

Sure. Thank you for that. And just to circle back on the Panama Solar that was recently acquired, I know you said December, January, but just wanted to learn if there's any risk that it could be delayed further than probably worst case, early January?

There is. The risk is, I think it's small. I mean, it's a smart transformer from Huawei, which is the last piece of equipment. And it's supposed to be delivered the last week of November. And that's the last communication we had. that slips now that just to be clear that that already is is later than um than what we thought um but uh if that happens we're still good for what i said if that's two weeks late it might be two weeks late but that's sort of we're down to kind of one key piece of equipment from you know a much much larger set so we think we've wrestled it down to to a reasonable low risk but yeah so the Technically speaking, it could get pushed out, and it's coming down to that, that one.

Sure. Sure, sounds good. Thanks for that. I'll leave it there for now. Thank you.

If there are any final questions or comments, please indicate so now by pressing star 1. Once again, that's star 1 if you have a question or comment. It looks like we have a follow-up from Nick Boychuk with Cormark Securities. Your line is live.

Thanks. Mark, just coming back to the Ocho de Agosto maintenance, can you just kind of give us a little bit of color on what work was done at the plant, if this is going to have to be annual moving forward, and if other run-of-the-river hydro assets in Peru are going to require similar work?

Yeah, so you do try to do your maintenance in the dry season, obviously. It was mostly turbine blade cleaning. was the big work and other what I would call more routine maintenance. I do think that this should go down a lot going forward. These are not big dollar caps, it's just it's downtime and you try to minimize the downtime by doing it the dry season. I would suggest that, you know, of the two, they call it hydrology versus maintenance. It's like 90% hydrology for the quarter, not the maintenance in terms of the difference in production.

Okay. So I guess I'll fall up into that. Is there any read-through in terms of that weak hydrology changing what this asset should be doing in the future? No.

No, I mean, you're just going to have years that are low. You're going to have years that are high. I mean, if you look at the nine-month spaces, we're actually ahead of where we were last year, right? So when it's just a quarter and it's just the dry season, you are going to have – you're dealing with lower numbers too. So, yeah, the nine-month numbers aren't that far off. As I said, I think they're a bit better. And we're running right on budget in October. So, no, we don't see any reason to change our numbers. Okay. Perfect.

Thank you.

Once again, if there are any final questions, please indicate so by pressing star 1 on your touchtone phone. Okay. It appears there are no further questions in queue.

Okay. Thanks, everyone.

Thank you. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.