Cielo Waste Solutions Corp. (CMC.V) Earnings Call Transcript & Summary

Hi, everyone, welcome to Cielo Waste Solutions Live Corporate webinar. This is Will Maze from RB Milestone. Cielo Waste Solutions is a waste-to-fuel environmental technology company, whose goal is to transform waste materials into fuel without harmful emissions. Cielo shares are listed on the TSXV under the symbol CMC and on the OTCQB under the symbol, CWSFF. Joining us today is the company's CEO, Ryan Jackson; CFO Jasdeep Dhaliwal; and Ryan Carruthers, Executive Vice President of Operations. We'll be discussing current operations and an update on the R&D facility as well as upcoming milestones. At the end of the presentation, we'll open it up for questions for management to address. And if you are interested in asking a question or logged in the Zoom app or web platform, you could submit your question to us directly in the chat in the Q&A module. Please note that this presentation is being recorded today, April 26, 2023, and will soon be made available on the company's website at cielo.s.com. Today's call may contain forward-looking statements that are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements and are not guarantees of future performance of the company. No assurance can be given that any of the events anticipated by forward-looking statements will occur or if they do occur, what benefits the company will obtain from them. Also, some risks and uncertainties may be out of the control of the company. Cielo has a full disclaimer contained in their presentation. Lastly, RBMG is not a registered investment adviser or a broker-dealer. For more information, please visit rbmilestone.com. And now it's my pleasure to introduce Mr. Ryan Jackson, Ms. Jasdeep Dhaliwal and Mr. Ryan Carruthers. Ryan, the stage is yours.

Thanks, Will. And welcome, everyone. Good afternoon or good morning, depending on which time zone you're joining us from. Will stole some of my thunder already by telling you who it is that Cielo Waste Solutions are. And if you actually don't know who Cielo Waste Solutions are, clearly, you click the wrong link, and you're in the wrong room. But aside from that, we want to continue to move forward with our presentation, and it's going to be somewhat brief but yet informative to ensure that we have enough time to get to a lot of the questions that you are presenting today. So moving forward, I certainly want to let everyone know that we have commissioned the full-scale -- or commission the R&D facility rather, and we'll be providing some additional information as we press released from it on Monday. Next slide, Kim, please. So as I mentioned, the commissioning was completed at our research and development facility in Aldersyde, Alberta and is ready for operations. While we continue to build out the capability at the R&D facility, we are engaged in discussions with third parties such as renewable energy, and Crestmont investments regarding the full-scale facility that we're going to be looking at building in Dunmore, Alberta. Throughout, of course, the last little while, we've also had the ability to work with First Choice Capital on First Choice, converting some of their debt to equity and in exchange for the indebtedness of the mortgage loan, and Jasdeep will be reviewing that as well as she presents the financial update. And of course, a lot of questions are coming at us around the Crestmont financing. And of course, all of these things happen at their own time, unfortunately, but we are continuing to work with. We also have listed the Fort Saskatchewan property for sale, and we have had a number of inquiries and interest with respect to the Fort Saskatchewan property A lot of that is driven, quite frankly, by the fact that we have a significant expansion that's going to be occurring with one of the petrochemical companies up in the area, announcing a tripling of their operations. So the Fort Saskatchewan property has certainly been looked at with -- from a lot of companies in favor. And of course, probably one of the things that you noticed the most in the last quarterly financial report was -- or the quarterly financial statements was the fact that we've rightsized the organization to ensure that we were able to meet our initiatives and we're positioning, of course, the company for sustainable, manageable growth going forward. So that's the high-level update with respect to the corporate. There's, of course, a lot of other things that we've got on our plate, but continuing to move the ball down the field to use the football metaphor. And with that, I'll turn it over to Jasdeep for the financial picture. Jasdeep?

Thank you, Ryan. Good morning, everyone, or afternoon, depending on where you're located. Thank you for taking the time to be with us today. As Ryan mentioned, I'll be providing a brief financial update on the milestones achieved. You will be seeing a more fulsome discussion on -- in sometime in June. This will be based off our annual financial statements that we hope to file in June. And subsequent to that, we would like to provide an annual report or annual review to shareholders at that time. At this time, I'd just like to touch on some of the significant transactions as I mentioned. So the first one was we'd like to touch on is the distillate sale. Distillate was completed in December 2022. 80,000 liters were sold for $46,000. And for those questions that have come from shareholders, "Why is there not a revenue line," because this is not reoccurring revenue. It sits in other income or expenses in the financial statements. The second transaction that I'd like to speak to is a debt-to-equity conversion. Grateful for our long-term lenders, First Choice Financial. What -- this was an opportunity for us to convert debt that was set to mature in September 2023 for $4.5 million, and it was converted to equity. With that, we also issued warrants for $4.5 million. If these warrants are exercised, this would will result in $8 million of cash flow into Cielo. The third piece, which is a significant achievement for Cielo is the commissioning completion of the R&D facility and the fabrication. Thank you to Mr. Ryan Carruthers' leadership and his team of Brian Graham, Jason Gilbertson, [ Norman Mulkinsen ] and others, who work diligently to meet the time lines to get this commissioned. Thank you, Ryan. We really appreciate your hard work on this one. As far as the budget and the cost coming in, those are trickling in. They will be announced as part of the annual financial statements. And the last piece that we are getting consistent questions on, understandably, is the Crestmont debt placement. It's an iterative process. It takes time for it to find a good fit when it comes for both sides. And for Crestmont and for Cielo, Cielo's big concern is the dilutive impact. So that's where the conversation and the changes are ongoing, but we are confident in closing this in the coming weeks. That being said, brevity is the soul of wit, so I'd like to wrap up the financial update there. I welcome the questions at the tail end of my presentation. But I know shareholders are more curious about Mr. Ryan Carruthers' team and the work they're working on. That being said, Ryan, the floor is yours.

Thank you, Jas. Good morning, everybody. February 28 was an exciting day for all of us in Cielo as we took delivery of the R&D skid due to some procurement issues, delivery schedules slipped by approximately 6 weeks. It took us a whole data to transfer the skid from the trailer and position it inside the building in other side. As soon as this gives us position, the mechanical electrical teams started their work to connect the unit. And unfortunately, it's not as simple as plugging in the unit and turning it on. A significant amount of work was required to connect the unit electrically as well as integrate with the existing systems. Thanks to the efforts of all those involved, especially our operations team, we were able to claw back 3 weeks from that delayed delivery, and we declared commissioning complete Monday, April 24. So here, we just got a couple of pictures of the skid landed inside the building. Here, you get also a picture of the biomass and catalyst conveyance systems. Next slide, please. Everything you see, this is our electrical MCC. None of this equipment existed previously. So this is all new. The only existing was the electrical feed into the actual site. So everything you see here, this construction was started once the skid actually arrived. So every one of those cable runs is no shorter than 100 feet so you can understand there's a significant amount of work that happened in that period of time. As we've mentioned before, primary focus will be railroad tie testing subsequently plastics, rubber organics, pending our EPA permit amendments for each one of those specific commodities for feedstocks. So the piece that everybody is very interested in, judging by some of the questions that have come in, the EPA update. So the big piece I want to stress here is the second part of this very first sentence. So I'm going to read an excerpt directly from the letter from the EPA. "Application is rejected based on deficiencies and not the proposed project. " So really, the EPA requires some additional information, which we're working with, and they're maintaining an open dialogue. They've invited us to reapply. We've had discussions ongoing to understand what comprises a complete application. There has been several request for information during the application amendment process. And from that, the RFI response from Cielo to the EPA, more questions came to us. So really, the requirements did evolve throughout the process. So in February 6, following the rejection letter, we had a discussion with the EPA. And it was decided that a new application as opposed to a permanent amendment would be a cleaner way forward, so significantly shorter review time and just a cleaner application overall. We have engaged an expert EPA consulting firm as we PR-ed on Monday. So matrix solution has been involved as well as a third-party lab to help us streamline the application process. We appreciate the fact that the EPA is working with us, and they seem optimistic and being able to move this forward in a tightly manner.

Thanks, Ryan. So working through the expectation that Cielo will receive EPA approval with respect to the tied trial and evolving that into the full-scale facility that we have planned in the Dunmore area, which we've obviously press released and been publicly made aware to everyone involved. We certainly want to provide, I guess, contextually anyways an understanding to the audience and to the broader market, which will, obviously, this will hit from our website, the opportunity that is in front of Cielo with respect to the CP Rail agreement for their railroad ties. So we do have and have mentioned the existing agreement with CP Rail and the up to 1 million railroad ties annually, which is a significant volume of railroad ties. Each tie was, and Ryan Carruthers can correct me, but around 100 kilos each, 100 kilograms each, which is a significant weight for one. And so one can appreciate the scope of what it is that Cielo is planning to do here. Also, the site that we do have through our friends at Renewable U, of course, was the Dunmore site located strategically to CP Rail's Dunmore yard. And this was something that CP Rail has reviewed and approved as it relates to the Dunmore yard location relative to the site that has been selected. And of course, throughout the whole course of this, there's been a number of questions. We've said in the past that we have and continue to prepare for doing dirt work in the later part of 2023 site preparation, if you will. And that's going to, of course, provide Cielo with a clearer line of sight as it relates to the full-scale facility completion later on down the road. Next slide. So a lot of questions around why railroad ties. Why not plastics? Why not rubber? Why not? Well, to take a step back, we actually understand -- Cielo understands wood waste extremely well, and this is something that has been going on for quite a number of years. And guess what railroad ties made out of? They're made out of wood. So moving this forward with respect to, of course, the [ creosote ] wood-treated ties does present an opportunity for Cielo to create this value in an industry that, quite frankly, hasn't been able to keep up with the disposal of the decommission ties that are being replaced. Every railroad company that has a hardwood railroad tie, and there's about $20 million annually that go into the marketer that are changed out every year in the Continental United States and Canada. There's still a stockpile of legacy ties that exist over and above what is annually replaced. So the methods that they have for disposal are very, very limited. There's no way for you to take them to a landfill. If you do, I think, what is it, Ryan, the maximum is 5 a day in certain jurisdictions, for example? Well, that's not going to get it done. So over the course of the time period that we've had with respect to understanding the wood waste and over the desire for CP, for example, to work with Cielo to be able to dispose of these, in a way that actually does create a saleable product, and not burning them in some sort of a cogen facility, where you're just creating essentially some sort of an off gas or something that creates limited environmental or significant environmental impact into the air. So with respect to what Cielo can do and the problem that we solve and the income that it provides to Cielo and the additional revenue that we get as a result of the tipping fees, we don't pay for our feedstock. That's critical, right? There's an understanding here that any crop-based feedstock that you have to pay for, we have the benefit of that tipping fee as a revenue stream, and that is very important to understand. So the fact that Cielo, to summarize, understands wood waste extremely well, that the railroad tie problem is systemic in the industry, creates a huge opportunity that, quite frankly, is the lowest of hanging fruit that we can get with the feedstock that we get paid to take. So that's a compelling financial model. Now Jas can explain how that happens. I'll give her the last word on this slide because I know she likes [ saying ]. You're muted, Jas.

Thank you, Ryan. Yes. We're looking at patenting from the statement or copywriting input reaction output because that defines a process, in this situation, the input being railroad ties. The railroad ties, pre-note will have a tipping fee, which is the charge provided given a charged out to CP, wherever the provider is, as a revenue stream. They review past technology to create salable fuel. It's also important to note when it comes to the revenue stream, distillate is a product, but it can also be refined further as we mentioned in previous webinars, into naphtha, kerosene and diesel. And the diesel using de-sulfurization process can also be further refined. So it's very important to note that looking at our business model, there are various revenue streams. The questions have come our way also in regards to a mention of performance. We do have preliminary current performance that were part of the due diligence work that Crestmont completed as well as extensive due diligence on our technology. It's important to note, the validation of these performance will be completed through the R&D facility, the work that Ryan Carruthers' teams will be working on with railroad ties and wood biomass.

Great. Thanks, Jas. Next slide. So the roads gallery, if you will. The beginning of it, of course, is the 3 of us that you get. Of course, that's myself and Jasdeep and, of course, Ryan Carruthers. So the 2 Ryans book-ended Jasdeep in the middle. And next slide. We can, of course, also mention that we're extremely fortunate and happy to have Sheila Leggett as the Chair of our Board. She's been a very steady hand on the pillar, if you will. And of course, Larry and Peter provide a round out the Board as well, of course, as myself that provides us with the stewardship and the governance and the oversight that we, of course, appreciate and, quite frankly, value, significantly. So next slide. So we're here for a good time, not a long time, and we want to get to your questions as quickly as we can. So just to summarize, with respect to commissioning of the Aldersyde research and development facility. This has been completed. And certainly, we want to also help people understand that when we talk about research and development, we have to also make sure that we make sure that you understand that we understand, that Cielo knows that this process works. This isn't a matter of us researching and developing whether or not this technology works. That's important for us to understand and important for the public to understand. So going forward, of course, as we round out the assumptions that we have and that we know, we're going to continue the EPA application, and that is not something that concerns us with related to approval or non approval. It's just a matter of when, not if. As well as the Dunmore commercial facility planning, which can be done in a parallel path. It's not something that we have that will -- it's not a chicken and an egg scenario. Of course, we can do those in parallel tracks. And also, of course, as Jasdeep mentioned, we have a June 22 State of the Cielo Address, if you will, as it relates to the webinar. And it's going to be a fulsome review and, of course, additional news that will be forthcoming in the coming weeks and coming months with respect to the things that we're working on that, of course, we'll be announcing in due course. So lots of exciting things. We're created a culture at Cielo of a can-do, not hope-to, attitude. And certainly, thankful and grateful with respect to the team that Ryan has put together. And of course, the support that we get from everyone here involved today, including Kim, who's driving the bus, so to speak, with respect to the slide show. So thanks, everyone, to all of our team at Cielo. We couldn't do any of this without you. So Will, I believe that would wrap it up, and we can get straight to the questions.

Great. Thanks, Ryan. And thanks, guys, for a very informative update. As Ryan said, we are now moving to the question-and-answer portion of the presentation. And if you were logged into Zoom, the Zoom app, you can ask questions directly in the Q&A module. We have had many questions submitted prior to so we can get right away. Let's see. The first question here is from an investor. It says, "Can you provide a clear time line for your R&D facility, feedstock testing and first facility?"

Sounds like a question, at least the first part of that question will be for me. So as we stated in the press release on Monday, the R&D facility has been commissioned. We're working with a consulting firm to expedite the submission of the application for railway tie testing. As far as the timing of the first facility, we expect to do some site preparation work prior to the end of 2023.

Great. Moving on. The next question. Investor asked," I find it a bit confusing that Cielo has produced distillate at Aldersyde, but for testing, requires a different permit. Is the permit for the R&D facility different from the one that must have been in place for Aldersyde? What is the perceived time line to receive this permit?"

Also a long question. The amendment application was for an existing permit. So when EPA notified Cielo, they think the existing permit does not apply to the R&D facility. So Cielo believe an amendment to the existing permit would be the most efficient path forward. But in conversations with them, they would like a new permit for the site. As well, we could the previous permit was adequate for producing distillate, but the creosote-treated railroad ties required a significant amendment. So as far as perceived time to receive the permit, I can't comment on that, but EPA is working with us. And hence, well, they can't commit to an expedited approval. But to read between the lines, they're optimistic and granting us that approval so.

Perfect. Thanks. Next question along the same line,"Has the commissioning being completed at all the side and hedge testing of wood products to produce fuel started?"

Yes. As previously mentioned, the commissioning was completed on Monday. And upon permit application or from being granted, we will be testing railroad ties.

Great. Next question, "Why did Cielo not disclose that the EPA had rejected the application?"

I mean, I guess, further to the response, I've got EPA's response in front of me. It was the application. Again, I'll read word-for-word, one more time. "Applications rejected based on deficiencies not the proposed projects. Cielo may choose to reapply. Prior rejections due to deficient information will not influence EPA's decision or any future applications. EPA is willing to have discussions with Cielo if they regard or if they have questions regarding missing information to help them -- to help inform them of what comprises a complete application." So it was missing information. It's not the fact that the project itself was rejected. So we're optimistic that we will receive permit to be granted. So it was not a material rejection. It was not a material piece of information.

Will?

Yes, Ryan?

I just wanted to add to Ryan's -- so I want to be clear. Management isn't concerned about EPA approval, right? We're working through a regulatory process that has a number of back-and-forth questions, additional information. When we provide information of digital information is sought, there are certain lab results that, quite frankly, Cielo didn't anticipate meeting in the amendment process that we now have come back to this. So this is on us, certainly as well as it is on the EPA. And we want to make sure, though, that this is part of a regulatory approval process. This isn't something that is a go or no go for launch. We're very confident and have no reason to believe that we will not receive approval from the EPA. Is it going to happen as quick as we'd like? Of course, not. It never does. But it's going to happen, in our opinion. So it's very important that everyone understands that this is something that is iterative, as Jas alluded to earlier using that word, so I'm going to use it again in a different way. But it is something that is -- it's collaborative. The EPA has been extremely generous with their opinions and with their time and with their responses. We're not concerned. So I just want to put an exclamation point behind that because everyone needs to understand that we're working on this as fast as one can as are they, but we're able to continue to do other things and plan for things while we wait. Sorry, I went off on a bit of attention.

No, you're right. EPA approval is when, not if so...

Yes, yes. Thank you.

Very good. All right. Great. This is a little different topic. So when and what videos will be posted in "Videos Coming Soon"?

We should take that up. So on the website, there's videos coming soon. And we've now come out of the darkness, I guess, if you will. We haven't had the ability to really say or show much as we waited for the R&D facility to come to it to where it's at now. And now as we go forward, yes, we'll be putting some additional videos and marketing material and whatnot into on our website. And I think we have now a YouTube channel, though I think it's maybe not anymore, but we're certainly going to be telling the story that we have been telling for a while now, now that we're able to be able to show and tell. So it's -- there will be some coming soon, just like the website says.

Very good. Potentially the video recording of this presentation. So next question, "What is all the new operational staff doing now that the commissioning is complete but can't begin the railway tie testing?"

Great question. There's a significant amount of work to be done still, building test plans, generating standard operating procedures, building LOTOs, so that's lockout/tag-out isolation packages and procedures generating maintenance plans. There's no shortage of work to be done. That's for certain. So I intend and I will keep them busy.

How many staff do we have there at the site, Ryan?

That's 4 guys. So everybody should be aware that, again, this wasn't staffed up to run 365 days a year, 24 hours a day. We intend to operate this in 4- to 5-day test windows. So we didn't staff up with full operation staff. So we've got 4 guys out there, not maybe as many as some are thinking. And that's inclusive of our maintenance guys. We've got a couple of dual ticket operators, who are both going to be operating and performing maintenance. So appreciate those guys as well.

Very good. Next question. When will the Crestmont financing close?

I can take that one, Ryan, Ryan Jackson. I guess to continue with the football example, we're very close to a touch down. And I guess with that, I should say, Fly, Eagles Fly. But it's very important to note that on Cielo's -- all the due diligence has been completed by Crestmont. That has been publicly disclosed. And so we're at a state where we're at the tail end of the process. And once the transaction is completed and we're closed, we will be press releasing that. So stay tuned for further news.

Very good. How far away are we for the new application submission?

Good question. The application will be ready for submission as soon as we receive the compositional analysis from the third-party lab. So in short, the application is compiled. It's ready to go. We've got 6 to 8 weeks before we see the data back from the lab. We've done everything in our power to expedite that, and there is a potential that it comes sooner. But a realistic time frame is 6 to 8 weeks, and we'll be submitting.

This investor is looking for plans to increase shareholder value in the mid to longer term. How does -- how is management going to accomplish this?

I think we've been pretty clear on that, Will, really as far as especially with respect to the mid- to long term. And I think whomever it is that submitted the question that wasn't asking for short-term shareholder because we're really building a business here. We're not building a story. And so that's the mid- to long-term goal is, of course, to have the input reaction output convert to cash flow. And mid- to long-term shareholder value is going to be generated by strong financial fundamentals, quite frankly. And the ability for us to execute on that is what we are focused on. So the plans are part of implementing and executing on strategy. We have a clear strategic focus, and we have a clear plan on executing that.

Next question is, please explain management's approach in settling the free cash flow, the FCF debt for shares. Why do it?

I can speak to that. There's always a larger strategy at play with any transaction. And it's important to note that we have, as previously disclosed for Saskatchewan land for Cielo for $17 million. We also have the Crestmont deal closing. And within that, we had debt that matured in September for $4.5 million. That would have been a cash outflow by Cielo. We are mindful of dilutive impact. But when we have someone at the table who's a long-term believer of Cielo, in management's opinion, if they're willing to reinvest, but also for us, it's an opportunity to look at where the 2 or 3 pieces of our financing strategy fit in together. As we previously disclosed, we are rightsizing the organization on the G&A side, but we also need to have cash flow available to Mr. Ryan Carruthers and their team to ensure we can hit operational targets. So if the EPA permit is available tomorrow, do we have the cash flow available to execute on that? And so we keep all of these things in mind when we make any type of a strategic decision, but especially when we execute. And it's also important to note that with the warrants, as I previously mentioned, that were issued to FCF as part of this deal, if FCF chooses to exercise all of these warrants, that's a cash inflow that's available to Cielo for $8 million as well. So as I mentioned, it's part of a holistic strategy that we try to apply with this transaction.

Great. And this is somewhat related. This investor would like a likely to communicate a plan and time line to profitability.

Yes, I can speak to that as well. Right now, we're waiting for EPA approval. And as Ryan Carruthers mentioned, I would like to once again reiterate the point that it's when, not if, with all the communication that's happened with them. Once that's completed, the preliminary performance that we have, the current ones that Crestmont, our new investor at the table, our new lender at the table, extensive due diligence was completed on these performance. Extensive due diligence was completed on our technology. The due diligence, that is complete. So once they railroad tie testing approval or permits are received, the railroad tie testing will confirm those values in the performance. We will be sharing those values with shareholders. In a parallel path, we are continuing because we cannot delay the construction of the Dunmore facility. But once we've validated that data and finalized it, continued with the construction, the first full-scale facility will be profitable based off of railroad ties. A million railroad ties will be processed and converted into fuel and that is our path to probability. But it's also important to note that the R&D facility itself will be producing distillate, and that is also another revenue stream. And again, want to once again touch on tipping fees. That itself will be a revenue stream as part of our full field facility.

Very good. Next question up is this investor is asking, "I understand that you are in the process of planning the Dunmore facility. Do you have an estate date of groundbreaking?" Ryan, I believe you mentioned that earlier in the presentation.

Yes, asked and answered your honor. But one would suggest that we're compiling and doing work with respect to engaging a project manager, as an example for the RFP that we've sent out already as it relates to that full-scale facility construction. And yes, as mentioned earlier, we plan on some dirt work happening in the later part of this year.

Good. Next question is regarding the MOUs. What is the status of the MOUs with Renewable U?

I can speak to that as well since I've been leading some of those conversations. Renewable U is a long-term partner and a very important supporter of Cielo. It's also important to note that when Renewable U came at the table, the strategy was a little bit different. And so where the discussions with Renewable U are ongoing, we thank them for their patience and their continued support. And once there is an update to provide, it will be provided by management.

Next question, why weren't the investors talk about the EPA rejection and the railroad ties permit back in February? Isn't that what you're based on -- your business is based on railroad tie feed stock.

Yes. I mean it's not a material event. I mean as we discussed, this is an ongoing process of regulatory approval. We have, of course, discussed and mentioned the EPA in the past or AAP is what it used to be called, and now it's called the Environment in Protected Areas rather than Alberta Environment Parks. But there's -- we felt it was a timely opportunity with respect to commissioning that. We provide that update as it relates to the EPA and the approval process. And to just expand on a little bit, I don't want to belabor the point, but it's like applying for a permit to renovate a house versus build a new one. And tearing down walls and putting up new ones and trying to understand where this, that, the other thing is going, it's, of course, a lot more complicated than that. But a clear, new construction build happens, and it's easier for any regulatory body, whether it's of any permit, of any kind to approve and review as opposed to a mixed bag of -- we took this out but replace it with that, but not really. We did this. And so it really does come back to what we certainly appreciated the opportunity to have this type of renewed focus on a new permit application, which also allows us to accelerate our amendments on the new application for plastics, which is up next as a result. And rubber to follow and then, of course, organic down the road as well. So a lot inside that, I know. But it's a bit more of a longer answer than what was asked. But I think contextually, it's important that everyone understand, we're positioning ourselves really, really well to now apply for amendments to those other feedstocks with plastics being next up.

Thanks, Ryan. Next question, "How long has Matrix been engaged with the application process?"

I'll take that one. So immediately following the receiving a notification from the EPA, that the amendment that had been rejected, we began a vendor selection process to hire an environmental consultant. So the contract was awarded -- let me look here at my notes. It's February 21 contract was awarded to Matrix. So...

Very good. Next question is along the EPA lines as well. "To prevent future downtime, are you simultaneously applying for rubber and plastics at this time?"

I'll take that one as well. So combining the applications would require significantly more lab time and would also extend the time required for the EPA to review. So further delaying the railway tie approval. Plastics and rubber will require separate and subsequent amendments to our application. But as Ryan noted, the cleaner the new permit, once granted, will be simpler and easier and will take less time for the EPA to review.

Okay. This question goes back to the Crestmont transaction. "Why hasn't Crestmont closed? And why the flip flop from debt to equity to debt?"

Thanks, Will. I guess the most important piece to mention is good strategies and good deals take time. Cielo is in a position where we're looking at the dilutive impact of the deals we've made in the last year, but also this one. It's also very important to note that, yes, this is a debt placement, we can use the language in accounting world. The debt instrument, that also, in 24 months, will be converted to equity as participation interest in the first facility. So it converts to equity within the first facility as well. So it's very important to note that, yes, it looks -- there's changes to it, but the changes reflect how fast Cielo is changing and are consistent with the due diligence where Crestmont has completed. And Crestmont is a wonderful partner, and we look forward to working with them past this debt placement, when it comes to the first facility as well.

Very good. Just last question really as we're pressing up against time. Someone is asking, "Is there any interest in the FS properties listing?"

Yes. No. Sorry, I don't want to hang you up to dry, Will. So I had mentioned it earlier in the presentation around Dow Chemicals tripling of their size. And if you do a Google Earth search as to where the Fort Saskatchewan property is relative to the Dow Chemical plant, it does add a significant amount of value as -- even from a proximity standpoint. There's a certain parasitic ability that happens when a development expands to be able to take advantage of, we'll say, complementary functions that might need to feed such an expansion as it -- even on a temporary basis, but even on a permanent basis to follow. So we've had a number of inquiries as it relates to that as well. Of course, we want to be mindful with respect to the Fort Saskatchewan facility. And the reasons for bringing it up for sale will expand a little bit and understand that when we actually focus on the railroad tie feedstock, for example, and the ability for us to locate where we're located. The Fort Saskatchewan facility, quite frankly, became, quite frankly, a redundant asset that we really couldn't see how we could leverage it in the short term or the medium term. So putting that up for sale made a tough sense because it unlocks a significant amount of equity now that we have as a result of the FCF debt conversion that we're able to allow the company to use. So that, along with, of course, our Dunmore facility, which we've done a lot of due diligence work in advance of that. We have Alberta transportation approval for access off of 41, for example. We've done a number of other types of preliminary engineering work around the rail sidings and everything else. So this is a ready for development piece of real estate. But quite frankly, Fort Saskatchewan wasn't. And so we need to understand that we need to execute on our plan, and this is the quickest way to financial return that we had, which was the Dunmore facility, which is essentially shovel-ready, sans a full development permit. We already have subdivision approval with respect to the transaction that occurred from our friends at Renewable U as well as a significant amount of due diligence work that was done even right down to heritage studies around the rest of things. So we've done a lot of work already, and it's been certainly something that we'll continue to develop. But we're ready to go at Dunmore, and we're just not in Fort Saskatchewan. So that's why it's up for sale.

Fantastic. Well, thanks, guys. Thanks, Ryan, Jas and Ryan. And thanks, everyone, for joining the webinar today. And as mentioned, today's webinar recording will soon be made available on Cielo's website. And I know there's quite a number of questions that we weren't able to get to, so please feel free to send in any questions that were not addressed to cielo@rbmilestone. Again, that's cielo@rbmilestone. Reminder that the Cielo will be hosting a State of Cielo webinar coming up on June 22. Is that right?

Yes.

Yes. June 22, so stay tuned for that. And thanks again for everybody. This does conclude the presentation. Please feel free to disconnect.