Northstar Clean Technologies Inc. (ROOF) Earnings Call Transcript & Summary

Okay. Excellent. Well, welcome all to the 2023 annual financial results update and investor update from Northstar Clean Technologies. My name is Aidan Mills. I'm the CEO of Northstar. And today, we will cover the usual format. So we're going to walk through the financials. I'm going to give a bit of an investor update. And as I've said, a number of investors, you have chatted to me, this is one of the most important updates that we've given as a kind of quarterly presentation because it demonstrates all the progress that this business is making. And then lastly, we'll do the Q&A. And same format as before, if you have a question to ask, just put it in the question box at the bottom of your screen and then the questions will all be collated and we'll ask them at the end. So thank you very much, as always, to the [ Kin ] team for helping us set this up and hosting it for us. I'm also joined by Chris Park, our Interim CFO; and Carson Sedun will do the -- our Director of Corporate Development, will do the usual question collection and then ask me the investor questions at the end of the call. So I will -- sorry, usual disclaimer for you to read in your leisure. And I will now hand over to Chris Park, our CFO.

Thank you, Aidan. So when I look at Northstar, the most important key financial metrics that we have at this point in time are what our current cash balances are and our access to capital and what our CapEx spend profile is on a quarter-by-quarter basis. To a lesser extent, what our revenue is from tipping fees and what our corporate G&A is on a quarter-by-quarter basis. At the end of the year, NorthStar had $7.6 million in the bank which consists of the residual financing that the company entered into with TAMKO in July of 2023 and a convertible debenture financing that the company partially closed at the end of December. At the end of the year, the company also had access to $7.1 million in government grants from Emissions Reductions Alberta, and access to a senior secured loan facility with the Business Development Bank of Canada for $8.75 million. Our CapEx spend year-to-date is $2.6 million, of which $2.1 million is directly related to the construction of our facility in Calgary. And what you see is that the CapEx spend profile over the last 4 quarters has increased dramatically in Q4 of 2023, when the company entered detailed engineering and design phase of its development of the Calgary facility here in Calgary. What you can expect to see from Northstar in the next quarter or two is we have already drawn on our government grants with Emissions Reduction Alberta for $1.3 million in April of 2024. And what we expect to draw down -- we expect to draw down our BDC senior loan facility starting in Q2 of 2024. What you can also see is that the company was collecting tipping fees at its Delta site and has steadily increased quarter-by-quarter. Tipping fees and the amount of revenue collected from it is not, at this point in time, a very important part of our revenue and financing stream, but towards the latter stages of 2024, it will be. The last metric I just wanted to quickly touch upon are our corporate G&A and research and development expenses. And what you can see is that our research and development expenses have decreased from Q4 2022 towards Q3 2023 and then none in Q4 2023 as the company entered into its development phase. One last point I'd like to make is that our corporate G&A has remained reasonably consistent quarter-by-quarter and also includes for the year-end -- for the year -- for the [ programs ] ended 2023 includes $1.6 million in noncash expenditures. So our actual cash expenditures for the financial year 2023 is approximately $5 million. And then we have an additional charge of $1.6 million that relates to depreciation and stock-based compensation. And at this point, I'm going to turn it over to Aidan for the rest of the presentation.

Excellent. Thanks Chris for walking that through. I mean these financials are pretty indicative of what I'm just going to talk about, which is, of course, the cash that's funding the Calgary project at Northstar but also the commencement of the capital spend. And we'll also talk a little bit about Calgary's tipping fees and what's going to happen there. So let me just go to the next slide. Okay. So one of the things that I'm going to touch on is -- we'll talk through where we've got to in Q3 and Q4 and 2024. And I'll go through all of these points in detail. I am not necessarily going to kind of go through each one here and then just repeat it. But what I am going to do, and this is why I think this is one of our critical call for us, and that is to address, the 4 of the big questions that we were asked kind of coming out of the last presentation, but also as we come into 2024. And these are the 4 big questions from shareholders, which is, #1, you're building your Calgary facility, so what's happening with feedstock? Because up to the end of 2023, nothing had been discussed apart from kind of like the strategic discussions we were in, where are you in feedstock agreements and how you're going to see -- how you're going to provide feedstock to this plant, number 1. Number two, what's actually happening with the project. So we had these milestones with Emissions Reduction Alberta. You have -- you talked about equipment being ordered. So what's actually happening with that. So I'll talk about that. Number 3, what's happening with funding. So where are you in Emissions Reduction Alberta? Where are you in BDC? What's happening with the TAMKO cash, et cetera? Number 3. And number 4, what's happening with the expansion options. So as we came into 2024, those were the questions that were being asked. So let me take you through those one by one on this presentation. So firstly, feedstock supply. So the first agreement that we press released in the beginning of the year was the feedstock supply with IKO. So IKO has a significant North American shingle manufacturer, have got a major shingle production facility in Calgary, literally 5 kilometers away from our street. So we've entered a 5-year agreement with IKO. They will supply all of their shingle waste from their manufacturing facility and that we will get that all delivered by IKO to our site. So it's -- it comes to us delivered from IKO. And just to be clear, what happens with shingle manufacturing facility. So waste is always comes on a shingle manufacturing facilities in general because as they change lines, they change types of shingles that they're manufacturing. As one line switches over another line, it's like a steady production line, and that creates waste and also sometimes from a specification perspective, that can also provide rejects. So of course, we didn't disclose the volume, and we didn't disclose the price in that agreement, and that's something that we don't, of course, disclose in any of our agreements. But I will say that it is the first strategic supply agreement from a major shingle manufacturer. I mean, of course, as we talk to TAMKO about what's happening in the U.S., part of the agreement with them is not only supply of asphalt, but also their supply of shingle starts from their facilities. But this is the first signed contract with a major shingle manufacturer for us to reprocess the waste. And as we've always said, there are two types of supply for Northstar facility. Number one, manufactured waste; and number two, the waste that comes from roads and our other channels. And that's the second deal we've just done with Ecco Recycling. So Calgary-based industrial company and they get around about 20,000 tonnes per year of operating volume that comes from roofers in the Calgary region. And so they act like almost like a municipal facility whereby they're getting shingles brought into their landfill facility in Southern Calgary. And again, like 5 kilometers away from our site. So the deal with Ecco Recycling is really important because it has 3 legs. So the first leg is -- and Ecco have got great flexibility on their ability to divert tonne -- process and divert tonnes best. And so in the first year of 2024, they are going to help us to secure our full commissioning volume. That's around about a 1,000 tonnes a month. So that will have feedstock when it's added to IKO plus Ecco, that will have feedstock ready. And if we add additional suppliers, Ecco can also back that number down a little bit, just to make sure we're hitting our commissioning volume target. But then when a plant is fully operational, they will be able to divert 20,000 tons per year to our facility. And then the last thing it offers huge potential upside. And again, and that is the supply study that we're looking at for Ecco's landfill. So Ecco recycling have a landfill in Southern Calgary and it's being developed over approximately 20 years or longer, and they've been working with the city of Calgary and with the government in Alberta to actually weekly in the land, it's in the landfill and take the segregated streams that are in there and use them for enhanced fuel and alternative recycling. So Ecco have approximate or more than 0.5 million tonnes of shingles in that landfill. And that offers, of course, a phenomenal supply volume to the Calgary facility. Now, that is a study. So lots and lots of work has to be done before that supply can be secured, both with the provincial government, with the city. And we'll have to test it, of course, to make sure that as it comes on, it can meet with our production and it can meet with our specifications, et cetera. So that -- this is by no means a guarantee. But it is the potential that exists that could enable us to significantly debottleneck the Calgary facility, should all the testing prove to be -- prove to look. And so those 2, as we think about feedstock supply, those are very material agreements for us to supply the Calgary facility. And that doesn't even include our discussion with municipalities, other industrials, roofers in the Calgary region. This is relatively just the first 2 facilities that we are -- our first 2 contracts that we've completed. Okay. So then let's talk about the project. Look, lots of CEOs get stand up on arm wave by completing their milestones in the project. And I could easily jump on a call and tell you guys we've completed detailed engineering and you'd be like, okay, congrats you have completed detailed engineering. But this is very different in the fact that, as you know, Emissions Reduction Alberta, we went through a significant process for Emissions Reduction Alberta when we were awarded the first -- firstly, to apply for the grant for the circular economy, and secondly, to be awarded and the award agreement that we negotiated with them. Each one of the milestones have significant milestones to hit -- sorry, criteria to hit to meet that milestone. And as a bit of a reminder, 4 milestones of Emissions Reduction Alberta. So Number one, detailed design. Number two, fabrication and construction. Number three, commissioning and number four, operations. So that makes up not only the milestones but also the payment schedule for Emissions Reduction Alberta. So, to successfully go through detailed design, this is the list of the stuff that we had to do. So we had to show all our process flow diagrams, our more than 30 P&IDs, the heat material balance. We had to provide the assurance that show that 75% of all our drawings data sheets and specifications were either at IFC or IFP stage. That we had carried out the MMV, which is the definition of how we were going to measure the emissions from the facility. Whenever we supply, whenever we made the presentation, did the application for ERA, we had to describe what -- how you're going to commercialize this technology. Now for us, that's relatively simple to do because we can say, the plant gets built in Calgary. And then here's the rollout program across North America to address this problem. So the market is good. We have a great advantage in the technology, and here is the plan. But they asked as part of this stage, they wanted us to repeat that in a specific commercialization plan. And we provided them with a 50-page document of what that plan actually look like. So that was part of the stage to get through detailed engineering design. And then as important was what are all the procurement packages and how many of those are the awarded. And we had to have the long -- project long lead items, equipment items that we identified, we already had, had to place the deposit in those and that's some of the CapEx numbers that Chris reflected earlier were the 4Q deposits on that equipment. So all of that to say, when we come back to you as investors to say we've completed this, the amount of due diligence that is behind us is absolutely huge under this ERA program. So all of those steps that we will have are absolutely for all in terms of due diligence. So then the next question I talked about was, okay, so where are we in the project and where are we on kind of fabrication, et cetera. So the first thing that's really important about this is we've now moved out of detailed design into procurement and fabrication. But remember, this is not like a refinery where you will see units go up piece by piece by piece by piece and stick build. This is a facility whereby all of our equipment will come in skids. So today, we PR'ed an incredibly important piece of news, which is the first skid, the first long lead item piece of equipment has arrived on site, arrived, last week. But it will be the same as everything else that we order and will come in at the skid. So actually, it is quite funny some of the investors are taking some shots of this, I saw as it arrived. So that was good to see but it will be the same. So you will not see a site that kind of starts to build up step by step by step, you will literally see the delivery program for this is fabrication and construction that is occurring in all our vendor facilities to then come in. And the way I describe the Calgary delivery is assembly, not construction. But super good to see the rotochopper in this week, and that was obviously an exciting piece of news for everybody. And Okay. So then let's talk about funding. We've been through this before as I talked about it, the TAMKO dollars have been received. Emissions Reduction Alberta, the $1.34 million -- sorry. And I should have reflected with respect to detailed design. When we passed all of that due diligence that we did with the Emissions Reduction Alberta, that triggered the $1.34 million from and the ERA and the $100,000 from Alberta Innovates. So that, as Chris says, as the funds came in, in Q1 that's paid by the government, that was because of passing that due diligence for details. So TAMKO is in, BDC is ready to draw, Emissions Reduction Alberta, partially in. And one of the things that's really important about this slide is that the CapEx for Calgary has changed from an initial view of $15 million to $17.5 million. So we went to the Board in early January and had that improved as the budget for the facility. Now that also includes $1.7 million worth of contingency. And the reason that we went to that is as we've been coming out of detailed design and obviously, that involves not only the equipment, but it also involves as you're going out with drawing packages, RFPs, et cetera, you start to get a much clearer view of exactly what the CapEx looks like. So the certainty around this number is pretty high and it has a $1.7 million contingency unit. And the change was scope where we added items or when we were talking to vendors and they're like, "Oh, actually that'd be really good for your production if you added this, okay?" So a scope change, a scale change where we actually increased the sizing of some units. And then the last thing, of course, everybody in Canada's been suffering from, which is a currency exposure to USD. I will be absolutely clear, though, when we've done the analysis, that if you assume the engineering costs that are used for this first facility. If you understand when you go to these vendors to order equipment that is not off the shelf, they also have to do engineering for that and so the equipment cost is higher. We are fully -- sorry, we have reestimated it and we're very clear that the follow-up plants will have a CapEx cost of $50 million. So when I've talked about a $50 million capital cost to roll facilities across North America and the expansion program, we continue to believe that's the number. And the $17.5 million for capital is essentially engineering costs and higher equipment costs that needs to be engineered from the vendors that we have. We expect that to be way more efficient in lower engineering and $15 million for moving forward. And then the last thing on this slide is the corporate funding. So obviously, by the end of Q1, we had oversubscribed the debenture. And again, that goes to working capital for the corporation and it goes to the Toronto and U.S. One expansion and development costs there. So that's the last question that we will talk about, which is U.S. expansion. So let's we be completely clear about what the objective for 2024 for this company. And that is the delivery of the Calgary facility. But we can't get to Calgary operation early next year and then step back and go, okay, what are we doing next? We want to come out of this with Calgary full tilted operation and then be in a position whereby we can do the front-to-back analysis on the engineering the cost, et cetera, et cetera, so we can be even more efficient when we build the next facilities. And so to do that, you need to have a location permitting in place, et cetera, et cetera, for the next facilities. And I've been pretty open in all of these calls to say, we have U.S. One, we were starting U.S. One, and we were also looking at Toronto to understand the timing for that. And in my opinion, those both go in parallel and we just announced the U.S. One first, but we will continue to progress with the Toronto plant as we launched. But the selection criteria for this is important, as you can see from the kind of box on the right-hand side, proximity to the TAMKO facility. So this selection criteria and the selection was done in conjunction with TAMKO. So of course, what we want to be doing is locating close to one of our facilities because they've got the offtake -- we've got the supply of the shingles, they've got the offtake of asphalt. And the potential to send us their waste shingles and potential to offtake aggregate from us too depending on testing. So we obviously wanted a region that had significant shingle supply availability, heat transport considerations where we were close to major centers, good landfill proximity as we chatted about for all the partners that we have, IKO, Ecowaste, Calgary municipality all within 5,000 of our current facility in Calgary, permitting capability in terms of -- permitting for waste collection and recycling and similarly supportive government support. So as we think about what next, it's the same with the facilities that we think about, now we need to work with TAMKO to the site selection to ensure that proximity works and we have the proximity to landfills. We will have to work on permitting in the jurisdiction, and we will start the work on the engagement for government funding. And again, as I laid out the strategic plans with the aim of starting construction in 2025. So one of the things I think we covered on the last call was our accomplishments from 2021 to today. And this is where this really comes down and way -- talking about the 4 things or the 4 questions that we did. So talking about where we are, with feedstock, where we are with the project of milestones and equipment. What's happening with funding and where we are with expansion options. We're now in a kind of an unparalleled position in for Northstar in where we are. So this is not a speculative technology 2027 future-gazing play. This is going to be delivered in 2024. And what we're going to deliver in 2024 is a patented technology, a technology that is 2 multibillion dollar strategic off-takers for our main products for asphalt that can go into road, asphalt that can go into shingles. We have a facility that's moved from detailed design and is now in fabrication and procurement and we'll construct this year and we'll be running in 2024. So it may be commissioning as we come out of 2024, but this facility is -- this is a 2024 story. We have economics that are based on 10 hours a day and 6 days a week which are all limited by feedstock. So that is the base of the operation of this facility. And now we have the potential in Calgary. And again, it's the potential, a lot of work to be done to potentially double our throughput. If we access the Ecco Recycling facility. We have full funding in place for that. So with ERA, BDC and TAMKO, and now we have the delivery of all of our first supply location in the U.S. So as you step down this list and you think about where we are in 2024. This is -- and we answered the questions that we had coming into the year. I think we're in a phenomenal position. And again, the focus this year is on delivering that first commercial facility, and I think we're well positioned from a funding and a technology position in particular. So Carson, my arm waving finished. Over to you for any questions.

Okay. Thanks, Aidan. I guess first question, can you speak to the company's plans regarding developing the next facilities? And how do you see balancing Northstar's growth opportunities in the U.S. compared to Canada?

Well, I mean, I think it comes back to prioritization. I think the biggest priority for this company. The most important thing to this market, the most important thing to our customers, the most important thing to our financiers, the most important thing to the people who talked to us about financing their best plans and all of that is delivering Calgary. So I think we have to be restlessly focused in that. However, we can't ignore permitting -- just the duration that it takes to secure sites, permit, work with government funding, et cetera. So I think -- and I think if we try to go any faster than one more plant in Canada and our plant in the U.S., we would get over skews a bit too much, and we would also distract from what we really need to do in '24, which is delivered at Calgary. So I kind of feel that that's enough delivering Calgary and understanding the development -- the permitting and development of the next Canadian facility and the kind of the facility in the U.S. to supply TAMKO and [indiscernible]. And then I think -- Yes. And I think we'll be in a great position at that point in time to then say, based on the back of Calgary's success, to say how fast is this way program look like. As we've always said, these facilities are 40,000-tonne facilities that run 10 hours a day, 6 days a week, and you can plant them in any city that's over 1 million people across North America. So -- and remember, the Asphalt Manufacturing Association came out with the fact that they want to divert 50% of all shingles away from landfill by 2035 and 100% by 2050. So if you think about -- if you look at our investor deck that says our aspiration is to deliver 30 plants by 2030. If we try to hit the ARMA target, the industry target by 2035, we have to build over 200. So after we built this first plant in the U.S. when we think about North America, we'd only have 199 to go between them and 2035. And I like waving my arms being very aspirational, but even I don't think we're not good. So I think the market is absolutely huge, but I think we also have to be very judicious about how we deploy our resources. Calgary is the most important thing, and then let's do the follow-ons with where we have permitting in place to deploy this really successful technology very quickly into both the Maryland area and the next Canadian plant trial.

Okay. Thanks Aidan. Next question. Now that the rotochopper has arrived, what other long-lead equipment items are expected next?

And -- we have -- as you know, we have patented technology, but as you also know I'm very, very reluctant to talk about specific items of equipment because I always think it gives away how we're building this facility. So I would like to decline to answer that question.

Okay, no worries. What's the determining factor for whether Ecco Recycling will supply Northstar with shingles from its 500,000-tonne shingle landfill. And I guess, part two of that question is regarding Ecco and if they're -- if we are the only taker of their shingles. And if yes, will they have incentive to increase the yearly volume?

So if you think about Ecco supply to us, the volume it's really it-- sorry, the volume that's really easy for them to supply is the volume that comes in from all the roofers except that use Ecco as a land. So they process that, clean it up and send it back to us. So that's essentially like diversion of all the tonnes that are coming in today. And as we said, that is roughly, roughly 20,000 tonnes a day. So that can come in day 1, day in, day out, and they are an industrial collector. I bet like we're an industrial collector. We just have a very effective contact for them to divert to us. And of course, diversion to us means that they add less to their landfill as well. So the landfill is a completely separate question, and they are doing all the analysis on -- and so when they set that landfill up, that was segregated. So they could love get a drive wheel in one way, we went another way. shingles went another way. So that's how they are very -- it's very accurate as to how much they understand that they have in that landfill, which was essentially shingles deposited over the last 20 years. So essentially, what they do is they take that out, they process it and then it's ready to come to us. Now yes, they have other alternatives for that, but we are the most material handler they could really benefit from their supply and therefore, offer them the biggest kind of volume off-taker for that. But it's a plan currently being developed by Ecco. They're working, as I said, with the Calgary Government, they are working with Alberta to develop -- to get the permitting to do that. But of course, that needs rigorous testing from us, a rigorous testing on specification as they take it out of the landfill, how does that look because they grounded up processes, how does that look, et cetera, et cetera. And so all of that needs -- that's why we put it in the PR, and we've touched on it about today as a study. So there's a number of determining steps, but all about to say, if you think about Calgary from a processing perspective sorry. You think about Northstar Calgary as a processing perspective, the impact could be huge. So facility gets built in 2024 facilities up to full operation in 2025. And then in theory, if all of this aligns with the Ecco development plan, we could move to 24/7 in 2026. No, that is -- just to be clear, that is not guaranteed at all. But what we do have now is the potential where there is a resource that could enable us to move the facility to full operation. And importantly to that, to Carson and you and I have chatted about this last. When we look at the Toronto facility, when we look at the facility in the U.S., et cetera, our facilities are sized at 40,000 tonnes a year. So that's sized at operating 15 tonnes a hour, 10 hours a day, 6 days a week. But there is no reason for our facilities not to run 24/7. The only constraint is feedstock. It is not a constraint on anything with that is inherently technical within the facility. If you can run a facility for 15 hours a day, you can run it for 8, 10, 16, 20 hours, whatever you want to do.

A follow-up question just on feedstock. What is the approach other than IKO and Ecco for targeting additional Calgary feedstock supply?

So one of the things that I think I chatted about in the past is our engagement with municipalities. So that includes Calgary, it includes surrounding municipalities to actually divert everything that's going into the landfill to us. So there's two ways to do that. You can work with people like Ecco. You can work with people like sorry, IKO. As a shingle manufacturer, they're bringing it to a landfill, you can work with Ecco, you can work with roofers that are at Calgary, and you can work with the municipalities as well to divert tonnes that have already arrived. And so that's one conversation that's going on. And then the second pool is the roofers in the local area and some of the other industrial collectors in local area. So still significant upside potential from those conversations. A number of them ongoing, but not yet contractually signed.

Last question is just on the vision. If you could speak a little bit more broadly about your 3- to 5-year vision for the company.

I mean, I think this year is completely pivotal to our vision, and that's why this call is so important because I think -- if you think of how far we've come from 2021. And now we have -- we have -- we're within touching distance of the first commercial facility. We have feedstock for that facility. We are funding for that facility. We have offtake for that facility. And now we need to do this build -- first of its kind. So always a little bit easier said than done when my arm moving but that's what we have to do is we have to build it and operate it and demonstrate that this technology is absolutely viable. I think we'll be astonished as to what happens when this feedstock is demonstrated as viable. Because a bit like Calgary, this time last year, we had no idea when there was 0.5 million tonnes of shingles, 5 kilometers away from our facility. It's only by building this facility -- that's only by the development work in Calgary and engaging with Ecowaste president owner like did this conversation ever start. And it will only happen because we were like, okay, now we're going to Calgary. My vision is that those conversations will happen in every city that we go. They might have reached out now because we're going to Frederick to supply TAMKO and Frederick. They might have reached out from that U.S. region and it's significant. 2, 3, 5 calls a day are coming in as to our e-mails to connect us to the people in that region. And so I think the only limiting factor -- I actually believe if you think about -- as I talk about the kind of steps for ESG, the first step is to prove that the technology actually works, and we've done that. We have McAsphalt and TAMKO counting us for their industries this work. So we know their works. The second is to scale it up. And that's what we're doing in Calgary with the first commercial facility. And then the next one is to roll it out. And each one of those steps get smaller as we go because I believe a number of people that have talked to us about multi-plant funding about come to our city if Calgary works by shingle supply agreements -- with offtake agreements has been huge, but everybody is waiting for Calgary to demonstrate the first commercial facility. And then I think it's just -- it comes down to I mean permitting can't be done over right. So it comes down to a very good permitting plan and a very good locational development plan. And then it just comes down to resource. And how many people do we deploy to focus on the Southeast U.S. to focus on the Midwest, to focus on delivering the 3 TAMKO plants to focus on the Canadian GoWide. It really just becomes -- once Calgary is done, it really just becomes resource of people and speed approval. And in the Investor Relations deck. We have, as I said, the rollout, what we would need to do to get to 30 plants by the end of 2030. I think, as I've said often, once we get to 5 or 6 plants, at that point, then you could potentially license the technology. You can't do it off for the first one because there's still a process improvement to do and process optimization. And as we go all the way through to kind of plant 5, think by the time you get to 5 or 6, you should be -- we should be in a position whereby and become -- always make [indiscernible] the first time you own one of these like an IKEA wardrobe that's like 5 screws and 3 [indiscernible]. By the time you build the tenth one, you don't have anything left maybe one of our key. But that's -- at that point in time, you can license. So the build up -- the build pathway is just about resource in terms of people and permitting, et cetera. Because I think CapEx will be very, very straightforward and the fundings that are there are huge. And then the second pathway is the licensing which I think needs 3 to 5 plants.

Okay. Thanks, Aidan. You got to love the IKEA furniture, right? Just one other -- one question just came in here. Just regarding the company's marketing plan and budget, maybe we could just touch on that as well.

Yes. I mean as we've talked about marketing plans, as you know, when we're focused on funding the Calgary facility, that was very, very focused and so there was very little kind of external marketing that went on. But this year, as we think about that, then we have started to discuss what the marketing budget looks like. But it's not just necessarily Calgary. Digital marketing budget. It's actually like a marketing budget whereby in the regions that we are thinking of deploying. What conferences are we going to. What ESG conferences are we going to go to down in the [indiscernible]. So we've been -- we're trying to be very targeted about expanding the marketing budget in terms of getting our people in front of government's decision makers, conferences that are in those regions too because that enables us to connect. I mean presented a couple of times in Toronto last year and literally had economic development people come up and say, here's my card, whenever you're ready to come here, please give me a call. And so all of that to say it's the broader marketing scope of focusing on the regions that we're going to. That's one of the things that we have targeted and funding for this year.

I would say -- yes, thanks, Aidan. Just looking at a couple of ones that have come in as well here. IKO and TAMKO production waste should be cleaner than replacement roofing waste. Would it be easier and less expensive to process?

Not so yes, when it comes in. But Ecowaste are doing free processing in our waste. So they are actually [indiscernible]. So the stuff that comes from a manufacturer absolutely. There it's literally just the shingle tiles. There's no nails, no plastic bags from new shingles, no kind of -- so it is absolutely. The stuff that would come from a roofer, if the roofer comes straight from a site and doesn't pre-process, then that can have -- that can obviously have waste in it. We talked to roofers and Ecco for example, they reprocessed the shingles. So they removed the majority of the waste. And what we really want in Calgary facility and in all our facilities is clean shingle loads coming in. Now that doesn't -- because we have nail remover in our process, that's not a problem. But that is kind of remove the plastic, remove all that kind of stuff. And so we want all our sites to have essentially preprocessed waste rather than something that just comes from our skip in the middle of the street. So we're -- but that is also a bit of an education process. So what we want to do and we price accordingly too. So what we want to do is make sure we've got the roofers working for us as they collect as well.

Okay. Last question, just with regards to the specialization of this equipment, what are the availability of parts and what's the strategy if any of the equipment breaks down?

Yes. I mean we -- that's a good question. As you know, we've put together I guess, a process that in a number of different cases uses equipment from other industries in the processing technology that we have. So I've always said there's no back to the future reactor in the middle of this thing that there's one person in the world that can design it. So -- but one of the important things, of course, is the parts philosophy for the process and kind of the backup and what happens whenever piece of equipment breaks down, which happens in operating facilities. So that is one thing we're looking at, which is what are the critical parts that would have any long lead item -- sorry, long delivery time implications and the plan would be to have those either readily available or stored I would say.

Okay. Thanks, Aidan. That's a wrap.

Perfect. Well, thanks, everybody, for listening to the call. I mean again, as we chatted about the financials, the financials are in good shape. And I think as we kind of come into chat about the questions that we had, we've got feedstock agreements in place. we've hit milestones, detailed design is done. First long lead item is right on site. Something is going well from both Calgary perspective and the oversubscription of the debenture. And we've announced our first expansion after Calgary gets built. And everybody on this call can be reassured that the absolute focus for 2024 for this company is to deliver a successfully operating facility in Calgary.