Evergen Infrastructure Corp.

all participants to our website at www.evergeninfra.com, where you will find a copy of the first quarter 2024 earnings presentation. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the first quarter 2024 management discussion and analysis. I will now turn the call over to Misha Zatman, Evergen Infrastructure's President and Chief Executive Officer, to begin.

Thanks Jeremy, and thanks a lot everyone for joining the call today. As you'll see, it was a constructive start to the year as we continue to ramp up Fraser Valley Biogas and develop our core project pipeline. We are all set and well established for continued long-term revenue growth. To go into more detail on our Q1 results, I'll hand it over to our Chief Financial Officer, Sean Hennessy.

Thank you, Misha, and welcome everyone to the Q1 Unix call. Q1 2024 was a strong quarter for Evergen, and as a result of the completion of the Fraser Valley Biogas RNG expansion in December, as well as the commencement of RNG production at Brotek in Q3 2023, revenues increased 92% compared to Q1 2023. During the same period, our direct operating costs after adjusting for depreciation increased by only 14%. And as a result, our adjusted EBITDA increased to $654,000 for Q124, up from $18,000 from last year. Our net loss was impacted by the absence of a contingent consideration gain recorded in Q123. And the increase in revenues touched on earlier was partially offset by an increase in depreciation and as well as finance costs both related to the completion of the Fraser Valley biogas energy expansion. Our cash and working capital balances were utilized for Fraser Valley biogas. During Q1 2024, we drew down $3 million under a $3.5 million term loan, which improved the working capital deficit by $2.5 million. In summary, Q1-24 represents the strongest first quarter results in Evergent's history, and RNG production reports were broken at Fraser Valley Biogas during a period where the facility is still in a ramp-up phase. As we look forward, the focus is on maximising the production capability of the Fraser Valley Biogas facility to continue to drive revenue and earnings growth. I'll now hand the presentation back to Misha.

Thanks a lot, Sean. So in spite of the strong start to the year, we still have a lot of work to do and milestones to achieve in 2024. We continue to advance phase two of our GrowTech project in Lethbridge, Alberta, and we expect to be in a position to announce FID at the project in Q3 of this year. Similarly, at our project radius in Southern Ontario, we are in advanced discussions with a financial partner and remain on track for FID in Q3. But where we've made significant advancements is with the RNG development at Pacific Coast Renewables in Abbotsford. We are close to finalizing pre-feed work at the project and identified a viable high solids anaerobic digestion technology provider for that project. Now, in spite of the multiple expansion and development initiatives underway, our team remains steadfastly focused on ramping up and optimizing Fraser Valley Biogas. While there have been normal course starts and stops, we're pleased that Fraser Valley has demonstrated the ability to exceed nameplate capacity, which speaks to the work of our project and operations team in delivering a world-class facility. We have secured significant sources of long-term energy rich feedstock for the project and made substantial progress in resolving programming glitches, which are commonplace in any ramp up. As Fraser Valley approaches full capacity, we expect to experience continued revenue growth on a run rate basis. So with Q1 behind us, we believe we're in the right stage in the right sector with the right team to take the leap from developer to established operator and step into the role of consolidator with a decreased cost of capital. With all that while remaining entirely focused on core project delivery. We wanna sincerely thank shareholders and stakeholders for all your support and for joining the call today. And we'll now pass it over for Jeremy for the Q&A portion of the call.

Thanks Misha. The first question, can you provide an update on what the key milestones we'll be focusing on over the next few quarters?

Yeah, definitely. So as I mentioned, Now with Fraser Valley in the final stages of getting to fully ramped up and achieving nameplate capacity, we're focused on core project development and the delivery of those three projects that I mentioned. So there will be obviously significant milestones to be achieved associated with the delivery of those three projects. We're really focused right now on finishing the design, the front end design, engineering design for Pacific Coast Renewables. And we expect to be able to provide some further color on that in the coming months here.

Great. Thanks, Misha. Next question relates to Pacific Coast Renewables. Are there any updates on the grant funding for Pacific Coast Renewables and timeline going to be involved?

Yeah, thanks, Jeremy. I can answer that. So we executed the contribution agreement with Natural Resources Canada in February of this year. So that any costs incurred from that period onwards are eligible for reimbursement. So perhaps the question was, wondering if that was an upfront payment. The way that the grant works is the expenses related to the project are submitted and then 30% of those costs are reimbursed. We provided our first round of costs for the quarter ended March 31st at the end of April and expect to receive the first payment from

uh under the grant uh shortly here thanks sean the next questions with regards to frieza valley um can you please provide thoughts on timing and potential pricing of the off-take agreement

Yeah, so we're still working through with our off-taker on the full agreement. We've gone through multiple page turns. We're expecting to finalise this sometime during the second quarter. The pricing isn't significantly higher than what we currently have, but there's the ability to share total cost, total revenue per RNG. And as I said, we're expecting to finalize that before the end of Q2.

Great. Thanks, Sean. The next question is respect to operating results. Is the expectation still 5 million EBITDA from Peace Valley Biogas on a run rate basis?

Yes, that's still the expectation. That was based on our $160,000 capacity. As we've touched on further, we believe the facility is capable of producing more than that, and we're still working through that. But there's also additional potential upside with the carbon credits, which I touched on as well.

Yeah, and we've taken some steps to secure some long-term feedstock arrangements at that facility. With the expected increased production capacity at the facility, we've been able to, at the expense of tipping fee revenue, secured longer-term arrangements, which give us that security to ensure that we'll achieve those production targets, which we think was a good offset for us to achieve.

Thanks, Sean and Nisha. The last question is with respect to the pipeline. Can we provide any detail on progression of the unannounced project pipeline?

Yeah, absolutely. So we, as I mentioned, we're obviously focused on our core projects. Um, that's what, what, what, you know, what, where our team, where the majority of the resources of our team are focused on in terms of delivering, uh, obviously optimizing, uh, Fraser Valley biogas delivering on grow tech, um, Pacific Coast Renewables and Radius and ensuring that those FIDs get achieved this year and the development and construction that would occur thereafter. Now, we still are advancing our project pipeline that hasn't been announced. We have a handful of projects that we're advancing, that we're continuing to work on. You know, this company has... being a growth company since its inception, we brought in, you know, one to two new projects each year, and we plan on continuing to grow at that pace and continuing to infill. So, you know, as we hopefully are able to achieve a lower cost of capital, we wanna, you know, we think that this space continues to, if not now, more so than ever, is ripe for consolidation where there remains to be lots of opportunities for quality projects that need capital and need operational expertise. So yes, we expect to be able to continue to add projects into our core project base, and we're advancing our unannounced project pipeline concurrently. Thanks, Keisha. That concludes our earnings results presentation. Thank you, everyone, for tuning in.