OFSTF - Earnings call transcript Q2 2022 | Carbon Streaming Corporation

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Operator

Welcome to the Carbon Streaming Quarterly Financial Update. Please note that all lines are in a listen-only mode. After the presentation we will open up the call for questions. [Operator Instructions]. Please note that this call is being recorded today, Tuesday, February 15, 2022 at 11:00 AM Easter Time.

website, over of speakers that assumptions Carbon find Carbon call on as you that the contain a two may and slide Streaming Streamings have turning inherent to which uncertainty. and your noted can forward-looking risk Before statements comments involve some Investor Presentation known These to risks future and statements are results and unknown subject may differ materially.

and to I are encouraged to Carbon regulatory the on you SEDAR company's would over to filings www.carbonstreaming.com. may at like the you on receive information Justin website more Streaming’s turn Officer. For meeting Chief begin. now their Mr. available Cochrane, Executive Cochrane,

Justin Cochrane

very much, you our for joining second quarterly Thank thanks call. and conference everyone

couple a taking the As registered, call. got call by recorded to Walters, the Counsel; going is our the for available With CFO; be Anne Mike few so the our noted, join the I thanks today Investment Officer. Conor Chief of out to is our is of the COO; think we’ve joining weeks. Psihogios XXX Smith, of Well for and Geoff and rest me Kearns, people got on the We’ve day your operator phone a time General and our Team. Management President website

results. ourselves really a productive and very just wanted and to financial a to some busy of So company over I I for quarter the setting touch couple But the through very before the XXXX. of call on for turn highlights Conor up walk busy to

of us A tell quality of XXX,XXX visiting we the Streaming and MarVivo’s I that the pleasure XX% us greater you the projects. to closed extraordinarily right of and with the MarVivo purchase MarVivo year impressed of last in our late first or generation. of also quality the the that few annual credit we investment off, the team were So had can of credits gave

over developed be the months. XX it’s and for next very now as developed to excited that project will being So XX

provide continued X-for-X Derek the we of basis towards for X-for-X now of last QB listing uplisting uplisting team. this big finished the that talked sorry, our stock have in the that. we’ve to work did the XX% the with for of our our delivery just two team, have for board million guidance X are Alice of and million just account, excited and the delivery of but very to was our finally, attributable last and to recently that – tuned did for course months we’ve the project X.X XX%. done to basis members, and talked so credits we a both course management We Candace we’ve then year. consolidated of earlier and this also continued consolidation joining We a upgrade addition added an U.S. the was the about build And the board or to the very and quarter stock here stay Geoff listings, female Alice in that to joined to the several highly quarter of and of XXXX Secondly, guidance carbon back on those Schroder about to year partners OTC for experienced board market MacGibbon some the payments ongoing expectation and to U.S.

Indonesia project of those once retain streaming that It Rimba XX% or will the does price sales are Raya deliveries Cerrado Biome credits ERA be those carbon means our our to for in and somewhere between project expected us? from delivered. And are XX% in and what So retaining mean Brazil. expected

financial through highlights. Kearns Conor some the that, call So the pass to of will with you I to over walk

Conor Kearns

you Thank in. tuning to you, participants Justin, thank all and for

shareholders adjusted adjusted provide company measures investors the reporting. working around with these together the or income December its IFRS dollars per measures the include and in in of performance. management's loss non-IFRS and XXXX. measures, information measures in prepared these believes the in non-IFRS XX, income measures with Such United indicated. is Participants to company's for and that some continue, in discussion disclosure financial assessing the useful Management accordance company's analysis to overall share. net are uses otherwise review presented non-IFRS information we capital, Before quarter encouraged liquidity ended unless All States adjusted and

and Streaming’s the XXXX. At financial quarter to corporate statements, ended no company's second December $XXX.X and XX, events on million discussion results in December XXXX moving Carbon analysis management's and and company cash Now debt. had financial XX, for the

December six and months strategic million. in assets $XX.X totaling investments company carbon invested the XX, ended the For credit streaming

liabilities an At XX, working $XXX million. company incurred on adjusted company of working of million to million for warrant to a of primarily the per $XX.X and a amounts. adjusted $X.X impact use views $XX.X as to having impact result had a the non-cash of net as the price its removes December As The significant loss or income a removes and share a of loss capital, calculation the income its prefers loss of capital on impact revaluation an and working adjusted and non-cash warrant measures related quarter, warrant the the continued liabilities. dollar a net which company share $XXX,XXX company's the and Adjusted related net warrant basis loss approximately company company's revaluation which warrant of The was on denominated Canadian of the charge company million. capital the liability deficit the strength liabilities liabilities, calculations. and of warrant the of impact net had warrants, liability of revaluation company's revaluation the due the of loss, which

the company $X.X For and received warrants months the from December XX, six of ended the exercise million options.

trading December $XXX XX as the the In equity six commenced notable trading the to several Effective dollar. automatically equity its the it every XX the a on basis also months November N-E-T-Z. securities The October During basis closed post was post dollars company of On significance consolidation States has July July Blue determined changed company Canadian and streaming its the the this, July company the issued consolidation of or XX Streaming its previously events. XX. a Carbon New the the to raise. million company's XX On from closed XXXX shares previously into connection XX one raise, on X-for-X. million commenced with XX currency confirmed for November MarVivo conservation July of on Bay, had share, On on ended NETZ dollars. The warrants company Blue announced currency company company's the million warrants. Mexico. Carbon XX, Exchange Carbon common X, agreement result functional common symbol consolidation York Credits that Magdalena under MarVivo project changed U.S. share XX, presentation with from On the in had the United that Canadian five the for its converted special pre-consolidation implemented

for million significant As summary XX, company's the XXXX. OTCQB On - the events Streaming of XX the the concludes company for upgraded upgrade the quarterly December OTC OFSTF ended December quarter the and had its listing company XX, warrants That O-F-S-T-F. XX.X results of and under market the outstanding. or shares Carbon the common symbol November XX.X million to

like to it would President Smith. to COO, and over our Geoff pass I Now,

Geoff Smith

diversified I'm and continue expanding. towards investments assess continue of quality we Conor. our to We've pipeline about work a that to new stream actively and growing Thanks going current high investments talk assembled and evaluate to you portfolio our to and opportunities.

concerns greater verified critically all Indonesia Such importantly is United protects terms the which forests orangutan. others Sustainable to-date. XX project the This of investment of projects special our REDD+ one existing That meet as is Development as Bornean Rimba a the in largest endangered Raya In project land low only benefit. is of to assets, over also world particularly Borneo, impact the project peat a in project swamp our our than purely is Goals. largest climate XX,XXX it is and portfolio the this Nations among in far the and

credits year, Rimba we're during for and of represents expect of verification ‘XX to next XXXX. half track our first currently the expected take on Raya in our mentioned guidance. of the majority calendar Justin cycle the delivery the our we

up is to catch restrictions. verification years’ the due travel verification credits, during Importantly, this annual pandemic a which cycle skipped of which worth represents two an for effectively

Our to MarVivo a Justin Mexico like premium represents forests premium is as about otherwise and the greater excited notable This growth credit particularly the very XX,XXX Carbon are our we XXX,XXX as project importantly carbon REDD+ in addition of mangrove to mentioned project it Carbon and Blue Blue Baja, a one protects California. a even credits special at in habitat Carbon Blue place organic trades and marine of and of base portfolio. based terrestrial over hectares projects to GEO.

XXXX. of half first the in expected is project this to issuance First

approximately XXXX first moment. biome Avoided guidance Our the Brazil, again that located of project in year of also considered the issuance Cerrado inaugural credits, Cerrado Republic our Bio This an the REDD+ from the Biome million annual balance one comprises project the is we the near at This the we investments the This significant is is Grassland hectors, the half is Planned of are of projects, of projects regions Conversion which term is X.X This XXX,XXX expects that and in two one most issuance this Brazil. breadbasket Sankuru of scale, project, of approximately basis Forest. makes up in forward. These diverse in an world. on credits made to-date going Kokolopori. project lastly Congo. Bonobo savanna separate The Democratic and Peace is one measuring the expect located in

the portfolio future. Given the our projects, the potential contributors in size meaningful they these have to of to be

we and exclusive Carbon up which to work our Conservation to agreements quarter, the to the any Streaming sheet partner, sheet be exclusive once that an term remains forthcoming initial million. ongoing. definitive increase of funding in will relates X.X term This Bonobo feasibility work initiative completed, is During amended study terms our front have, with

balance plans actively terms to the continue have cash we deploy have. seeking In we pipeline, to our current ambitious growth and of

XXX Again, XXX move opportunities to day. it expect through by investment know over grow business opportunities, which near grow pipeline as which represent the grows have able today, the we the As portfolio portion million. of longer a to term portfolio, forward sits we seek this we which identified million to larger be continue in totaling diversified you we of a term to active

quarter, crucial the pricing during quick update. markets. COPXX highlighting of now it at it while which drastic premium increased need stands, are at pledging Pricing centering as nature was importantly to the a In terms year trading The fight a to which of the of greater ton, markets, within the during around mission increased approximately really $XX carbon number significantly climate dramatically, continuing action ambitions in based offset, a net trading awareness notable zero medium saw conference, moment a We all ton. credits strength companies a global right change. a the $X the necessity

continued We continues expect agendas, climate and strength importance like I the individuals. in from pass to as increase to market now call Justin. back to corporates, change the governments both of

Justin Cochrane

Conor. Thanks Geoff and

in open had investing brokers put our investment last and coming in assets us, call. we've the and very perspective, this really the Just the and interest know heavily we research that like a picked next from in team in a of head months. we're that on time thankful few place several got from the building are year about executing headed. we've over for very people notes decades flagship to company working agreements form couple we carbon blocks we've couple more ahead. now the here negotiating, the we've I'd the few in foundation company have things for people which you got up teens the so start very this nice credits on seven enthusiastic here excited it questions institutions, about both some of decades to the in But over we've say believe expect investment Feel seen and last from for the tremendous additions outsourcing, of as before for see some year next a where we the credits have quarters. up coverage you from do company invested to on a industry, and this that But the full carbon up and pick we company here community,

or you and thanks question those. through to don't feel publicly, and again, if we're your for you website out here our today want please questions reach to ask to or free if for So a emails us the answer time have

operator and happy again thanks some take to So questions.

Operator

Instructions]. [Operator line first your comes with the And Quezada of question Raymond from David James.

David Quezada

the additions, the discuss new individuals on everyone. on made what signal carbon of that be company as and morning future. Justin first does team. you dig hires Good here, they the could in focus offset to Thanks. you some I'm types in into just broadened My with maybe some you focusing if will those question a other new touched curious projects

Justin Cochrane

Yes, thanks David.

invested So early management before, October, mentioning was as Jess in team. of the the talked in as I the both addition I heavily team about also the but management, investment in with

now across investment So types. continue Mike Psihogios different not it is call number new who the a that and expect runs and a on make is also will team to geographies, but a building a on only few for large The project focus team. diversified portfolio us I hires into investments of

a So projects handful while have we REDD+ today. portfolio the of in

is space well. and acronym number from Deforestation familiar, those opportunities focused of outside a the and Emissions aren’t for have Forest in Reduction REDD+ We as the of sort an who are of space REDD+ for Degradation. very

really acronym building you David forest the have swamp of part part investment know so and the of it very peat and portfolio projects or outside projects that everyone build of on continue management the project a today, and the conservation a is forest team of but is to the for focused to sort team that and question, we an conservation a five your why add of mangrove globally conservation conservation team. that's capabilities So the project or space of we to

David Quezada

credit I you're sides of months that's over prices prices some comments one buyers the just both strength you next of guess Thanks the six curious as compare, carbon have level conversations the project Justin, the carbon carbon can discussions made as part I the sense move buyers urgency say an well potential have of with on respect great higher. credit know end increasing I'm the in having Excellent! around is today. you My get recently. developers here, on credit appreciation. to How just those of forward if ahead guess you there and color. with and changed that Do going projects, further to past on you developers

Justin Cochrane

properly this do terms in our projects, but years the much So couple we universe existing for the in launched yes, of changed the also market company of buyer since will the urgency, as the that XX exists clearly and new of now, sense get most in three has be projects, I so to projects and aware. verification develop to go a there's validation These gap as take people sense months through that supply/demand you stage. the can years

thousands projects you the and expect projects urgency of that of project the So see has we I from a that it months. some to to XX the out That's price, past mean more why alleviate six there from developers, climate industry this the don't that any mean with fight us. Obviously see we’ll I soon buyers. price certainly and increase I fantastic. the increases. change developed be needs and to opportunities to as increase demand is credits we more which know supply if increases, to financing a decades, as awareness over we're fighting need couple you next hundreds woodworks, of going of presents projects for it’s for climate the change as certainly as increase in know time new are much new coming and is way that reason if also we the part seen the in vehicle not we've

David Quezada

then and one maybe that for you Thank Excellent! me. from more

market to latitude Rimba this to them, you later much as given I’m you Just curious those you buyers look end you year, or to in signals you see on the credits on very after to you receive will them? Cerrado from receive term you as sell those the just and hold have know is how or shortly price Raya deliver whatever might short

Justin Cochrane

a We very discussion to we with partners of partners, our have – of imagine, craft own a guidance, back that to has can our it’s because you sort to project work plan partner, going each a is XX active sales project objectives. their and – revenue the each with our is as it's so and so XX% XX%

credits, company to said, our pricing we do through our cases right. our year projects, the leverage some our some moving we on XX flexibility if in do for XX even know though, company have That We've maximize investments, of get up. the longevity pricing see pipeline hang For being you we XX/XX, a to to got the projects. as and of lives

time. don't the of any the we leverage to We So get through for price significant inventorying anticipate length of contract. the longevity credits that

So you sell preceding annual as would delivered have delivery, following we months tend an the to know over the Rimba be credits, as on of to credits would see if an you XX basis. we endeavor Raya us, those delivery next example, annual

David Quezada

back for queue. Thanks excellent! get I’ll in Okay, that. the

Justin Cochrane

Okay, thanks David.

Operator

Montgomery. And your line from question the Reiss, Janney next of Brett comes

Brett Reiss

Yeah, a hi! for two. letting ask this New you situation. to Thank me question or

Justin Cochrane

Hi Brett! problem. No

Brett Reiss

Hi! them, you The to – spot futures you hedge you maturity it is inventory? to know which of of is the enable a market, the are or price at there the carbon able credit mercy you you know market, once be your would inventory

Justin Cochrane

excellent an it's question Yeah, Brett.

so So both. we –

could investors to got we're I doing opportunity some today, our reluctant multiyear much many price. looking spot our fixed of to to enter carbon exposure. sell those for credits say are see too we sell as the commitments. for forward ongoing exposure can the into that at the looking based not are spot looking to the commitments. part prices, so We're But credits at spot for hedge volume looking pricing just most and buyers strength into commitments and multiyear to You’ve do in the us we’re given you would look multiyear market, market but

Brett Reiss

in way? advantage the assembling, and the know you of capital Okay. best know to you team deploy numbers be to able Is crunch you're your quality main the the the competitive

Justin Cochrane

significant some it the perspective, we a part so that would it’s a with alliance built a from coming where you we’re well that the alliance position we aligned – team. companies feel would through been competitive as streaming and an partnership from Brett, doing opportunities pipeline and start years, that advantage InfiniteEARTH also you team and so over our and developers decades this have for in you project been have, with placed example, years of The with several several several now. to team be that of I for have massive royalty strategic strategic the this million opportunities seen know will $XXX experts in has we then investment and of just is InfiniteEARTH do past say we've years that come, so. ourselves decades cash we've have like a that team, we fantastic So in with as a keep extraordinarily a industry you couple additional over that But head see this number at with of team know to experience, know having partnered of company. carbon the decades, we're building we a of

Brett Reiss

and Is may. your you if rate? run there sight when know SG&A, I you a cash line of and Right, just flow breakeven right, is last one one be what will annualized

Justin Cochrane

of as sort continue early just investment out so cash of provided we given on and guidance flow the stage portfolio. we to-date, build Yeah, haven't to the company the

of but delivered be you'll the a have the commenting number to cash year year. very existing see expect flow the timetable healthy we of expected So even, this an this carbon, to cash our our of exact a flow break price, with project from partners sort were credits as for reserve sort level on that is carbon in of

the big coming of have believe, it I credits puts of that again, just in. So sort given competitive the quality advantage in we a us

– then a So, neighborhood a perspective, but that from know that bit probably and around I $X sort somewhere quarter, of today. – non-answer hope a G&A of we're running a in I million don’t it's Brett, Conor,

Brett Reiss

questions. for Okay. taking Thank you my

Justin Cochrane

Thanks Bret. Take care.

Operator

[inaudible]. question comes from next your And

Unidentified Analyst

target In mentioned you and would too? reaching of Is you regarding you met Hi! please XXX this credits going the that not, if MD&A, referring was taking explain be was guidance and my this metric question. your using could Thanks XXXX, that million for by not not XXXX what forward.

Justin Cochrane

continue Yeah Safar far that of the the We that's exactly I feel [ph], right, you that delivered portfolio, as our we a ongoing build delivery know for where referring number that exactly useful guidance going like hope is to. out continue we payment credits to And partners is make the to more expand. obviously you’re and the metric to what to the guidance investment will was continue forward.

it's more of mining credits similar what payment. about and this a delivery the talking in to energy space, So does that and ongoing industry bit

more So people and on far we be for again cash flow to that, believe an metric of a ongoing wanted to the the useful consistent and with calculate basis. it's revenue company

Unidentified Analyst

Understood.

to you that, on kind credits can long those two, of was Carbon this if explain we regarding term up what about following Credits? impacted or why has should regarding calculating think how Just changed going and outlook

Justin Cochrane

continue focus to expect a make number the and Well say I talked the and about we in clearly it’s pipeline, if new pipeline the of portfolio reason of the of reason mean the guide presentation. the changed. talk to and anything the the yeah, of talking a it's that investment about towards central sort credits about I investments is previous for fact we people wouldn’t a guidance to number is why

pipeline am to out way very, our very still and bullish is the the ability encouraged growing I continue So shaping very, very on the about company.

perspective far. nothing’s changed so that So from

Unidentified Analyst

Thank you. Understood!

Justin Cochrane

Thank you.

Operator

from [ph]. comes Christopher a next of Instructions] the line [Operator question Private is Your He Investor. Heiser

Unidentified Analyst

be, a for on call. where to thanks afternoon you the for from are months. track – listing the on do the big second board Justin first haven't you. we within capital Thank anymore raised XX in Two next second Good is, I'm the quarter would anticipate questions; quick taking U.S. Barcelona, and XX business and

Justin Cochrane

I'm you're one a Christopher, hopefully It’s in you great Barcelona, jealous totally time. are but and Thanks that of my having cities. favorite

right we're that yes. uplist. application listing, the actively for We half of working were of in now this the So year, U.S. saying an terms on first

timing can't that months. quite hopeful next comment – on we’re I’m the happens over several the we specifically Although

of second the was question? what sorry, And part the

Justin Cochrane

Christopher we’ve got financing. million so think Just answer yes, financing $XXX simple Yeah, on cash. I the is, of

a On pipeline, large the which that into. cash investment now deploying got sheet deploying anticipate we we've into, balance

I be have additional do and capital would So obviously later point avenues have that prior some different capital. that capital out expect a would raise. at we will announced number of this that we We new expect raising several year additional for investments, to

So the from obviously evaluating are commitment the that and the as management continue profile the diversify from what course, taking. any we shareholders But team pipeline. to know will form we for accessing capital of royalty be see our of you of of we would and companies capital cheapest you along streaming with the grow are risk capital and that consumers is

So be well. our that intention as would

Unidentified Analyst

Very – you appreciate that in rate do risk well, rate, any it. within do see you of last see And I any next question, interest terms raise? capital one that

Justin Cochrane

you be the So, raise based capital I to I interest is, additional, if think don't rate expect simple any no. next will. answer

I the pipeline if mercy markets still for the good course global – is said that which how will you the an and as course pipeline we no, the over are interest impacted But can very move bigger it’s Of continue where markets, at rates. we be equity that company into add of months. factor by XX shaping next up. investment the about to we the But carbon I the feel offering, think of are be

Unidentified Analyst

it much, Thanks very you. muchas I appreciate gracias. Thank Great! Justin.

Justin Cochrane

and take Christopher Thanks care.

Operator

no are this there And time. at questions Instructions]. [Operator

Mr. call Cochrane. to So back the over hand I’ll

Justin Cochrane

have conference you out and months. we’ll joining reach call, please in feel again much very and again additional to thanks you take joining thank second Listen, for our any if quarter to for you us three again free and questions

Operator

call. for participating. conference you concludes Thank This today’s

may You now disconnect.

Justin Cochrane	Chief Executive Officer
Geoff Smith	President, Chief Operating Officer
Conor Kearns	Chief Financial Officer
Anne Walters	General Counsel
Mike Psihogios	Chief Investment Officer
David Quezada	Raymond James
Brett Reiss	Janney Montgomery

Carbon Streaming (OFSTF) 15 Feb 222022 Q2 Earnings call transcript