Cielo Waste Solutions Corp.

Good morning. My name is Anas, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Cielo Waste Solutions Operational Update and Q3 2022 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. Thank you. I will now hand over to Mr. Chris Sabat, Chief Legal Officer and Corporate Secretary of Shell Waste Solutions. Mr. Sabat.

Thank you, Anas. Some of the statements on today's call might contain forward-looking information. Listeners are cautioned not to place undue reliance on these forward-looking statements, since a number of factors could cause the actual future results to differ materially from the targets and expectations expressed. The company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, unless expressly required by applicable securities law. For further information on risk factors, please see the company's press release dated March 21, 2022, and Cielo's Q3 2022 management discussion and analysis filed with the Canadian Securities Regulatory Authorities and available on the company's website, on CDAR, or by contacting Cielo directly. All amounts discussed today are in Canadian dollars unless otherwise stated. With that, I'd like to now welcome our Chief Executive Officer and Chief Operations Officer, Mr. Greg Gagund. Greg, please go ahead. Thank you, Chris.

Good morning. Good morning, everyone, and thank you for joining us today. We appreciate the opportunity, and we are pleased to provide our shareholders with additional contacts regarding our March 21 Q3 2022 financial results and operational update. Joining me on the call this morning in addition to Chris Sabat is Stephanie Lee, our Chief Financial Officer. Before we begin, I would like to take a moment. On behalf of all of us at Cielo, our hearts, our minds, our thoughts are with the people of the Ukraine as they witness the brutal realities of war that has brought catastrophic loss of life and human suffering. We remain hopeful that a swift and peaceful conclusion is possible. As it concerns the operational update for today, I intend to discuss a level of detail that may not typically be communicated in a conference call, but I think it is necessary to provide a wholesome update to the work that is underway and the prospects the company has going forward. I'm going to address this morning's comments in two parts. First, a strategy overview, and then an operational update. As to the strategic overview, our long-term corporate goals remain unchanged. Cielo is focused on its objectives to build state-of-the-art commercial facilities for the conversion of multiple forms of waste materials into fuels. The strategy for executing our plan was set out in our November 12 press release, and we remain on track to deliver the milestones announced. The plan to achieve our goal focuses primarily on two foundational elements, our Alderside Demonstration Facility and the Fort Saskatchewan and Development Facility. The first element of our strategy is the Alderside demonstration facility. It was developed for the purpose of demonstrating proof of concept that Cielo can, at a commercial scale, transform waste wood to fuel. Further, once commercial production of distillate on a steady-state basis is achieved, it is intended that the Alderside facility will produce naphtha and highway-grade diesel. We have made recent improvements and are in the throes of achieving these objectives. We completed ahead of schedule phase one of the Alderside project announced in our November 12th press release. Right now the facility is being commissioned and we are encouraged by the initial results. The distillate being produced is visibly improved. Initial observations indicate that there is less particulate in the distillate. It was this particulate that was leading to the plugging and other process issues historically. We are very excited, but it is very early days. and we will not declare that we have achieved our goal of steady state production until the facility operates for an extended duration such that steady state production is fully validated. The second part of our strategy is our research and development facility to be located at Fort Saskatchewan site. It is currently under construction at RGA Design Solutions in Nisku, Alberta, Canada. As I have described previously, the facility is being built to be a lab grade skid-mounted 60 liter per hour scaled-down version of our process. This facility will have the flexibility to enable the testing and experimentation with multiple types of waste feed, catalysts, alternative carrier fluids, and many other operating parameters. This will provide the detailed scientific and engineering data needed to take the concept state-of-the-art production we intend to demonstrate at Alderside and to design larger full-scale processing facilities. Here our intentions are to conduct in-depth testing of multiple feedstocks, including plastics, rubber, rail ties, and many other organic materials to collect the necessary data required for large-scale commercial processing facilities and determining the corresponding economic thresholds. I think it's worth repeating at this stage that the combined elements of the strategy, commercial production and revenue generation at Alderside, and the generation of detailed engineering and scientific data through the R&D facility will firstly, support the design of our first full-scale facility at Fort Saskatchewan, and secondly, permit the detailed analysis of the commercial viability for the conversion of different waste feedstocks. The management team views 2022 as an exciting and transformational period for CLO, one in which we will begin the process for the design of our first full-scale facility. Looking now to our Q3 2022 operational update. It is important to frame our progress relative to historical challenges, which we believe we are overcoming on our path to achieving steady state commercial production at Alderside. Cielo has always had the goal of continuous production with commercial volumes of distillate generated from waste. The complexity of this task, especially with wood waste, cannot be understated. In approximately June of 2021, Cielo believed that it had successfully attained his goal. However, it was premature. The system modifications introduced in the late 2020 and early 2021 resulted in stressing system components, including pumps and heaters, the generation of cooking material and the plugging of pipes and other critical process components. During the summer of 2021, we attempted to address these issues at Alderside. Work was time consuming and costly as a facility had to be restarted, taken down and clean between each trial. In September 2021, we recognize that more detailed analysis was required to better understand the system limitations creating these bottlenecks. A technical audit and a deep understanding of the organizational processes were the catalysts for many changes made to the organization. Firstly, we quickly built and established a strong internal engineering and leadership team comprised of experienced chemical engineers with strong facility and process engineering skills. Our internal engineering team quickly began to study the conditions and the performance of the process and establish what the limiting factors contributing to the bottlenecking issues were and the root cause of the steady state production problem. The team also had greater oversight and control over consulting engineering firms employed. and accordingly adjusted to consulting firms and technical support to ensure compatibility and the performance necessary to achieve the outcomes required. We then sought out enhanced external engineering and technical support. Currently, Cielo has partnered with both RJ Design Solutions for the fabrication and installation of the R&D facility at Fort Saskatchewan and Stantec Consulting Limited in relation to the engineering enhancements for phase two at Alderside. RJ is a leading engineering and fabrication firm, while Stantec is a leading global engineering consulting firm with a wealth of professional designers, engineers, scientists, and project managers. We have confidence that our internal teams and external support will continue to meet the goals we set, against which our shareholders should measure CLO. At an operational level, we installed new leadership with strong technical and operational knowledge, supported by an enhanced operations team with relevant skills and experience. Our clear strategy has created a culture of engagement and enthusiasm. Clarity in roles, responsibilities, and accountabilities ensure significant efficiencies and results. Standards have now been established for safe operating practices, improved maintenance programs, operating cost controls, and production reporting. Additionally, Cielo now has a wholesome health, safety, and regulatory management system in place to ensure that everyone on our sites follows safe practices. This is one of the metrics by which we will measure our performance. These changes are material to the progress made over the last two quarters. They have allowed us to design and execute our strategy with the goal of constructing Cielo's first state-of-the-art facility. In this quarter, at Alderside, phase one modifications made to the facility include various process control system modifications, the fabrication and installation of a new reactor waste management system, new circulation pumps, a new recycle loop heater, inlet feed system modifications, just to name a few. The expected results from these changes are extended process runtimes due to reduced plugging and coking problems as observed historically, and validation of the mechanics of flow. Our goal is to have consistent, steady state production. We will operate the facility for significant periods of time, testing the limits of the current configuration. The facility was commissioned on March 14th, ahead of our April guidance, and we are now in the startup phase as we calibrate the facility. As the system stabilizes and the facility begins to produce consistently, we will share the results from phase one. But as I mentioned earlier, the initial test runs look very promising. I have spoken about phase two for Alderside in the past. One of the key drivers for a second phase of improvement at Alderside is the reactor. In our initial design, we contemplated modifying the existing reactor and radically reconfiguring the inlet mixing system. However, we concluded that the most effective and efficient solution was to replace a reactor completely. Since we will require significant changes to the overall system for the reactor upgrade, The final inlet feed mixing system and other equipment will also be installed during phase two construction. We are very pleased to be working with Stantec Consulting on the final design details. We began procuring equipment and we will be commencing fabrication in early June 2022. Our plan is to shut the facility down from July to August for construction and installation, and we anticipate commissioning of the new system to start in September 2022. Upon completion of this properly designed and constructed facility, we expect to achieve a steady state commercial production rate of approximately a thousand liters per hour. We're very excited to complete this work as we strongly believe our efforts will solve the commercialization issue and result in a predictable production rate as designed. At Fort Saskatchewan, we began fabrication of a 60 liter per hour research and development skid mounted facility. Final design details are in progress and we project commissioning the facility at Fort Saskatchewan in August 2022. We are very excited for the data to be generated through the R&D facility as it will form the basis for the design of our first full-scale facility and allow us to determine the economics and processing for the conversion of additional waste feedstocks to fuel. I will now hand the call over to Stephanie Lee, our Chief Financial Officer, to discuss highlights of Cielo's Q3 2022 financial results and outlook. Stephanie?