Excellent. Well, everybody, welcome to the 2022 Northstar Clean Technologies full year results. I'm joined today by Rosemary Pritchard, our CFO, and Carson Sedun, our Director of Corporate Development. As always, thank you very much to Kin Communications for hosting and helping us with this. The process is the same. As you know, we are trying every quarter to provide the financials and kind of an investor update. Rosemary is gonna take us through the financials. I'm gonna take the investors through the kind of the corporate update. Carson's gonna cover the Q&A at the end, you know, and capturing any questions that are gonna be asked. As always, please submit the questions during the presentation.
Carson will get those just to answer at the end. I guess we do a little bit of apology. There's been an absolute flurry of press release and information this week. Our results have been published on SEDAR, was on the close of business today. Obviously, we had the announcement on the PP, that PR yesterday. We had the PR today as well, updating the Calgary economics, and the Calgary capital estimate. All of that I will talk through in this investor update, so lots and lots to cover. Usual disclosures with respect to the financial statements and forward-looking statements and disclaimers. With that, I will hand it over to Rosemary.
Good afternoon, everybody. To start with, I will take you through our balance sheet. We ended the year with CAD 1.1 million remaining in cash. A lot of this was due to the convertible debenture of CAD 1.144 million that we closed on December 15th. Due to that debt that got added to our balance sheet, it did increase our debt-to-asset ratio to 0.59 from 0.39, but that's still reasonably good numbers. Other major items to note on the balance sheet, we had a GST receivable of CAD 207,000. This entire balance was received in Q1 of this year. We had CAD 624,000 of deposits on the books.
This relates to the deposit, the lease deposits for the Delta pilot plant and our sublease, also includes a large deposit on equipment, processing equipment for our upcoming Calgary plant and a deposit for Metro Vancouver for our collection license. We made equipment purchases of CAD 797,000 this year, we did get a CAD 100,000 Alberta Innovates grant against that, netted out at CAD 697,000. A new item this year is the intangible assets. This relates to the capitalization of legal fees for the patent applications. These costs will be capitalized and then amortized over the 20-year life of the patent. Another new item on the balance sheet would be the convertible debentures, this relates to the raise we did in December.
This was valued using market rates of interest. It was then split into equity and debt components. That's why if you look at our balance sheet, you'll see that the liability is less than the face value of the actual convertible debt. The equity portion would sit in the reserves section in the equity. Next slide, please. On our income statement, we had research and development expenses of just under CAD 1.6 million compared to just over CAD 600,000 in the prior year. Just a reminder that we only just started ramping up our R&D activities in the second half of 2021. That's why 2022 is much higher. Most of that relates to increased supplies used in processing and also equipment rentals.
G&A expenses were approximately CAD 6.8 million. CAD 1.7 million of that are non-cash related items. Some of the major categories are marketing costs of just over CAD 600,000. This includes all the IR costs and publication costs required for being public and a few other various marketing activities. Consulting fees, CAD 227,000. That mostly relates to government relations and HR work. Depreciation, this was a large increase this year. As I mentioned in prior presentations, we started amortizing our processing equipment in February this year, so there's a large increase due to that. Rent and utilities, there was an increase in this category, and that's mainly due to the utilities that were required as we ramped up production in Delta.
Share-based compensation, this was actually a large decrease. In 2021, we had a large amount of stock options that were issued relating to going public and the amalgamation. We didn't have that reoccurring this year. Wages and benefits, this increase is mostly the hiring of the staff for the Northstar and for the Delta plant. Next slide, please. Overall, the total cash used in the year was CAD 4.8 million. This was made up of approximately CAD 5.7 million of cash related operating and R&D expenses, as we just discussed. Major categories being R&D, marketing, consulting, professional fees, rent and utilities and wages. The purchase of PPE, CAD 717,000, that was offset by the grant.
The CAD 26,000 of intangible assets that were for the legal fees for the patent. We received proceeds of CAD 1.4 million for the convertible debentures. We repaid equipment loans of CAD 90,000, made lease payments of CAD 558,000, and then we had an equity subscription that we received of CAD 750,000, and that relates to the purchase of shares by Renewable U. I believe that sums it up.
Excellent, Rosemary. Thanks. Look, when we went through these financials, they don't really mean that much at the development stage of a company as to where we are, apart from year-end cash, which is of course important. I think it's important to continue the rigor that we've had of presenting the financials, you know, giving transparency over everything we've done and where costs sit from a high level and kind of having, you know, Rosemary, the CFO, available to answer any questions that come up from investors. Okay. Let's now cover the kind of the investor update and kind of the corporate update. I'm going to cover number one, the milestones.
I'm gonna talk a little bit about Delta and where we are with that. I'm gonna talk about the Calgary CapEx, which is part of the press release we had on close today. I'll talk about the Calgary economics, and I'll also talk about funding of the Calgary facility. Lots of things that we've had investor questions about and that I've talked to investors about over the last little while. Kind of four things from the top of this slide to kind of think about. Number one is, you know, the progress that we've made on customers, a little bit about patents. We'll chat about Calgary and where we are and also chat about funding in this slide.
If you look at the first one, you know, on the customer perspective, the Calgary facility is completely underpinned by the offtake agreement. We signed the binding offtake agreement with McAsphalt in Q4, then the definitive contracts, the definitive agreement, you know, this quarter. Now we have a definitive offtake agreement for 100% of the asphalt coming out of Calgary for five years. At, you know, mark market-based pricing with some, with some price risk management in there as well, that is, of course, a phenomenal part of the Calgary project. Also, as you see in the very top there, the Calgary, we've secured the site. We have a long-term 15-year lease at that site with two single-sided renewal options for us.
Potentially 25 years worth of site occupancy there contractually. You can see from the very top, we'll appoint that in Q1, the landlord ought to receive conditional approval, the conditional development permit. The conditions in there are things like parking spaces, trees, you know, the ground gets cleared, et cetera. They're not those conditions are classic site management conditions rather than anything to do with our facility. We're very comfortable that that's that is a site now secured and ready to go for the project. The patent thing you know, we did a press release on that. I've talked to a number of people about it.
One of the interesting things about the patent is you know that our technology is essentially in three stages. You know, first stage is removal is, you know, aggregate separation, the second stage is fiber separation, the last third stage is asphalt separation. When we submitted our patent to the U.S. Patent Office, which had all kind of three stages plus the asphalt which came out the back end in, they said just, "Well, actually it's a better idea to split these up and submit them separately." That's what we did. We submitted the, you know, the three stages or actually the first stage as the first submission. That got patent approved by the U.S. Patent Office in November.
The feedback on that is, I mean, that was an, you know, approximately eight-month process. I can tell you that our patent lawyer said it's one of the fastest that they have ever seen. The thing that's really interesting about that for me is that that actually broadly describes the fact that nobody else is using this technology. Otherwise if there was any other prior art out there, we would have had to clarify exactly where we stood versus that prior art. That is an incredibly fast patent.
What we've done, and you can see on the, on the other side, what we've done is we've now filed the follow-on patents in the U.S. for stage two and stage three of our process, and we have filed exactly the same with the Canadian patent office as well. They've given us a green technology overview with respect to the application process that will be fast-tracked in Canada as well. We've also, it's not on this slide, but I think in the press release, we've also filed for international, which is PCT. That process is underway too. Good from a patent perspective. Then lastly, we'll talk a little bit about something later.
You know, we've kind of outlined the ventures and the private placement, and I'll talk about that in the context of funding Calgary a little bit later. Okay. Let's talk about Delta. The first thing, I mean, and I think I mentioned this on the last call, but what I'm gonna tackle this thing head on now too. There's a chunk of investor sentiment that feels that Delta is a science experiment, right? My view and my hard contention is this is not a science experiment. No science experiments are in 20,000 square foot buildings.
No science experiments have columns at the back end that are 35 feet tall. You don't need to put a science experiment on a four acre, on a four-acre site. You need to put it in a lab, which is where a science experiment is done. The important thing about Delta is it is a pilot plant. It is not Calgary, it is not fully engineered. It's an entrepreneurial plan. Nobody has built one of these before. When I hear investor concern around, you know, we're not publishing the tons that come out of Delta. Delta is there to do one thing and one thing only, and that is to de-risk the technology that goes into the first commercial facility that we build.
This company success is absolutely defined by how Calgary is delivered and how that first commercial plant works. Delta is there to de-risk that technology as much as we possibly can. The other question around the run rate and the burn rate, etc, of Delta in 2022 was all to achieve three main goals, right? The first one is Delta fully proved the technology. We know with this technology, we can now put shingles into the front end, and out the back end will come aggregate fiber and asphalt. Aggregate fiber and asphalt. We know the technology works. The second thing is the output that's coming out the back end has secured a five-year long-term offtake agreement with McAsphalt.
When people say, "Does the technology work?" I mean, I can tell you what I think McAsphalt and Colas's the EUR 4 billion company's R&D looks like, but I would not be able to do it justice. It's exactly the same as if the time that I spent at BP. If I had a producer that was going to send me oil, I would unleash BP's R&D process on that, and it's immense. Multi-billion-dollar companies cannot get this kind of thing wrong. When Colas comes back and signs up for five years worth of offtake, that's a significant amount of risk that their R&D guys are taking by actually signing that off.
When anybody asks the question, "Do you think the asphalt out of the Northstar process works?" Point them to that. That's the best proof we have. Similarly, the first major U.S. facility anchored with an LOI with a major international, potential international customer in the U.S., that's another major proof point that actually we believe this works. As you know, when we press released it, you know, both the shingle and the flat roof manufacturing customers that we could possibly have, you know, some of the again, multi-billion dollar companies have looked at this and said, you know, have said, "Okay, let's move to the next step of detailed product testing.
Let's move to manufacturing of this to see if it fits our products. That's a significant step as well. Because as you can imagine, if you're providing 35 year guarantees for shingle tiles, you have a very sophisticated process to step through to make sure that the feedstock works. We are moving through that process. We're not at the end yet, but actually we're moving through that process. That's a very solid piece of evidence with respect to my view. Again, it's a company view that the three target market sectors for this business: paving, flat roofing, and shingle manufacturing all work. The third thing was the de-risking for Calgary. I mean, I've said it before, like, you don't know how a process is going to work until you run that process.
Having run the process for one year, we can stand back and look at the process flow diagram for Calgary and say, sorry, for Calgary, informed by Delta that says, "Okay, this needs to change, or this needs a slight redesign, or the efficiency from this is not producing exactly what it should produce." That's what running a facility does. Of course, we didn't do that in a vacuum. We did that with customers, and we did that with vendors. Now in the next slide, when I go to talk about the estimate for Calgary and why it's changed. It's exactly because of this. We are one year and one year's worth of production better informed. As everybody in this call knows, you know, we weren't producing at the beginning of 2021.
We weren't producing at the end of 2021. We were commissioning the units, we've only produced over the last year. All of that has de-risked the Calgary design from production, from customers, and from vendors. As we think about 2023, what are we gonna do with Delta? Delta will produce volumes for manufacturing testing. As I talked about above, a number of the manufacturers would like to move through testing volumes, it will continue to support that process in the first half of the year. In the second half of the year, again, if manufacturers need test volumes, that's what it's going to, that's what it's gonna provide. Delta has de-risked Calgary. We don't need to run it anymore to de-risk Calgary.
2023 needs to be focused on Calgary. Now, I'll be absolutely clear. This, no doubt, in quarterly calls you could replay where I've talked about moving Delta to cash flow breakeven and then moving Delta to commercial production. This sounds like a backtrack, but I will tell you that the word that I would use is the word that every single CEO was using in this market and in this inflationary environment and everything else, it's a pivot. It's a pivot to say, if you think about the market raises that we can do, if you think about the funding that's available in this market for new technologies, we have to be exceptionally careful on our resources. That's, in my opinion, it's kind of...
it's working capital resources, it's people resources, and it's capital resources to deploy the capital. Whilst I do believe Delta can get to cash flow breakeven, I will repeat exactly what I've said in calls before, I do not think this is the time to spend the money. We've identified roughly what the capital figure would look like to intervene and solve the inefficiencies that we find in 2022. I want to spend every dollar that we have on Calgary. That's the focus for the company. That is the major catalyst for Northstar as a company, is the commercial production out of Calgary. That's where we're going to spend the resource. So again, I joke that it's a pivot, not a back trade.
We can get Delta to cash flow breakeven. It is not worth spending the money on doing that to get it to full profitability in 2023. It's absolutely worth spending the, you know, limited and very focused resource dollars that we have on Calgary. All right. Let's talk about Calgary. So the first thing I wanna talk about Calgary is the engineering and the capital estimate. Now, let's be clear, the capital estimate that was done in 2022 was a FEED estimate. It was done by BBA, the engineering company, and so it was independent. This is a management estimate. We have not completed detailed design, as everybody knows. This is not a verified estimate in terms of third party. This is a management estimate.
I will tell you, this has one year's worth of input into it. If you look on the... The capital estimate adding up to CAD 50 million is on the left-hand side, and the comparison is on the right-hand side. Probably best just kind of looking at the comparison. If you look at the first two, so equipment cost changes and scope changes, those are essentially grouped together and have the impact mostly on the mechanical figure on the plant equipment on the left-hand side. Like, roughly kinda, you know, three-ish million CAD. That number is because that's all the vendor work that we've done. That's working on vendors by saying, "Okay, this is the unit that we've got.
Here's the performance we're getting out of Delta. What do you think for Calgary? They're like, "Actually, you probably wanna do this," or, "My unit size changes to this," or, "Actually, the instrumentation needs to do this." That's the whole way through the system. When I say we've de-risked Calgary, it's not just we, it's this, it's working with the vendors. The surety of the number with the vendors is recognized in this cost increase. It's exactly the same with respect to customer scope increases, the next one down, so the CAD 500K. As originally designed, out of the back of our plant came asphalt and came the asphalt that we're producing at the back end of Delta.
As we work with McAsphalt on the Calgary engineering, we now need a blending system, because what they want to do is they want to bring in another product, blend it, and go out with a final product. That CAD 500K is in the engineering estimate, but actually will be part of their pricing, part of their pricing as well. That's a very clear scope change that's come from the customers. Other indirect charges are engineering. USD impact is obviously, you know, strengthening USD versus CAD. The reduction in contingency, I mean, people could say, "Well, you shouldn't be reducing the contingency.
You should have kept it at the CAD 2 million that you have. Given the equipment cost changes above and the scope changes above, and given the clarity of the pricing we've now got from, you know, the major vendors, we're very comfortable bringing that down by CAD 700K. In theory, you can imagine that CAD 700K has literally just gone into the number above. It's not. It really hasn't gone anywhere. It's just that we have much more certainty on what the equipment number looks like. CAD 15 million and, you know, CAD 1.3 million worth of contingencies. Slightly under 10%.
Again, this will be verified during the FEED study, but worth kind of running through what we were thinking as we got to these numbers. Okay, project economics. Look, Delta has enabled us to do two things. Sorry. I mean, I kind of outlined the three milestones we covered, but it's not only has it enabled us to de-risk and understand the equipment and work with the vendors on a very tight design for Calgary, and almost we've done the detailed design, and really the next step of detailed design is just like putting this all together. It also enabled us to understand how we should run this facility. That is reflected in these economics.
We believe that the Calgary operation should be six days a week, with the kind of a Sunday shutdown for maintenance. Actually, the hydrocarbon units, the flow, et cetera, they actually don't like being turned off. It may be that we have, you know, six and a half day a week operation and kinda slow cool down of the unit at the back that gets brought back up again, brought back up again on a Monday. Today, we've been conservative when we said we are absolutely fully comfortable with six days a week. This also has, the McAsphalt, contract pricing in it. It has the... It also has the...
Because of the indices in the McAsphalt contract, it has the fundamentals from a number of banks who are looking at, you know, heavy oil differentials that's not included in the economics. This is realistic and it's conservative. If you look at the press release, you look at the table, the original model in 2022 had an asphalt yield of 25%. This has an asphalt yield of 22.5%.
That's not that we're saying, "Hey, we think the yield will reduce on every single shingle that we get in." Being conservative, as we look at the fiberglass shingles, which have slightly less oil on them than the organic shingles, and we look at the collection that's happening in Delta, which is almost 99% fiberglass, we've adjusted the balance to take that down. This isn't just, we've run Delta and now we're convincing ourselves that all the numbers have gone up. This is actually we've run Delta, and now we've got tighter numbers in our model. Again, this is a management estimate. This is not independently verified. This is our management estimate. Then this is a base case.
I believe this case is realistic, but if you look on the right-hand side, we still believe there is significant upside to this $5.3 million worth of EBITDA. Number one, supply-demand balancing, supply-demand balance of hydrocarbons. I mean, all our pricing will be hydrocarbon based. The starting point for all of that, whether it's a product or at the back end or whatever, is either heavy oil or heavy oil with tighter differentials or WTI, you know, in the U.S. Our view is, my view is kinda it shares, you know, time I've spent in oil and gas, my view is that that is supportive from a price perspective. The operational upside, this is all run at 150 tons per day.
The design capacity has the ability to potentially stretch to 200 tons a day, but we're running it at the base case of 150 tons a day. The operating assumptions are our hours per day is operating 10 hours per day. There is no 24/7 in this model at this minute in time until we actually get to being able to stretch the operation for the operational hours as we move forward, but we've been relatively conservative in this. I encourage you all to go and look at for point number four, I encourage you all to go and look at Ron Vertes' comments from McAsphalt. He said that in their process, when they analyze this fee, that he thinks this will save them 15,000 tons per year of CO2 equivalent emissions.
That's not our number. That's Ron's number. If you look at the offtake agreement that's on SEDAR, you'll see that we've committed to work with McAsphalt and understand their process, how our asphalt feeds into their process, and what the benefit is. We share those benefits. It's way better us using the Colas global carbon team to help us understand how to realize the value of carbon credits than it is for us necessarily to do it ourselves. Every single one of our contracts I envisage that to be the same, that we will work together with the offtaker to secure carbon credits. Carbon credits are at zero in this model. This CAD 5.3 million has no carbon credits in it.
Anybody who's been looking at our financial models from a debt or project equity perspective has often said, "Wait a minute. Throughout the whole project, you've zeroed the revenue." I'm like, "Yeah, we can't have an IRR that depends on carbon credits. There are too many green businesses that do that. We need to have zero the carbon credits so people have got a clear view this is a business that stands alone without carbon credits." Lastly, you know, conservative landfill tipping fees. Look, I mean, I think even if you went to our model today, it would have an incorrect number in it for Vancouver. Vancouver literally just did a 10%, second 10% increase in two years for the landfill, the landfill in Metro. Landfill tipping fees are not going down.
You know, GTA are sending their shingles to Michigan. You know, landfills are not becoming freer. They are under constraint and the ability for us to walk into your municipality and tell them you can divert 40,000 tons of shingles away from your landfill every year, which is the equivalent of 60,000 barrels of oil, I think remains very compelling and I think we will benefit from shingle diversion fees going or shingle diversion prices going up when we can actually prove this technology works. Lastly, let's talk about, okay, looks brilliant. How do we fund it, and how do we build it? Look, I'll be honest with you. The financials, of course, at the year-end, look worse than they should otherwise have been.
In October 4, we announced the Renewable U deal. Now we've been pretty clear in the press release that we put out today that that deal will not proceed. That's not proceeding because of Renewable U's not wanting to do the deal with Northstar. It's not proceeding because of the market and the funding that Renewable U weren't able to get to support the deal. As we came through Q4, towards the end of Q4, we decided, you know. My decision was essentially to do two things. We needed to proactively support the treasury, and so that's why we proceeded with the, that's why we proceeded with both the debenture and, you know, most recently the PP. That's the first thing we did.
The second thing we did is, as in Q3, we focused on a chunk of cost-cutting, and we focused on G&A even more as we were going through Q4. That was all for treasury support, to make sure the treasury worked through to the full funding of Calgary. 2023 is all about the full funding of Calgary. It's exactly the reason why we're minimizing the spend around Delta. It's all about, you know, pulling together the funding for Calgary. I always describe this as a kind of a three-legged stool. First one is the government grants, second one is the debt, third one is the project equity.
Government grants has been announced CAD 7.1 million non-dilutive funding, Emissions Reduction Alberta, absolutely outstanding award for us, very supportive. That's in place. That's one leg of the stool. Second leg of the stool is debt, and we're working, and of course, debt non-dilutive, we're working hard on the debt side of the equation. The third one is equity and project equity. Firstly, on the equity side, I would like to say thank you to everybody who's on the call who either supported the debenture or the private placement. That has been a huge contributor to the treasury and driving this business forward for Northstar. I would like to thank everybody who contributed towards that.
Let me talk about what equity I think looks like going forward. My view and I, you know, Rosemary mentioned it earlier, you know, the CAD 750,000 that we did as the first part of the Renewable U deal. I mean, that was priced at CAD 0.40 when our share price was less than half that. That wasn't to do with kind of Renewable U not having their eyes open, you know, with respect to the deal. That was to do with our drive to minimize the dilution for this company. What we are pushing very hard on is project equity, i.e.
for Calgary investment in the sub-level, in the project level of the company, and not diluting at the Northstar level and dropping that equity down into the project. Now, you know, waving my magic wand and making that happen is all good to be on the investor call and say that, but I can tell you that's what we're driving towards. The funding from the debentures and the private placement, that's exactly why we did this. It's to drive as hard as we possibly can to the middle of the year, both on the debt side and the project equity side and not have to worry about balance sheet. There is no change in our cost control policy.
The G&A, we will run this G&A as tightly as we possibly can for this business. That fundraising will be delivered towards Calgary. Listen, my summary, that was a lot to go through. Here's my summary. 2022 was all about de-risking, and I think we have done that with Delta. I have real confidence in the Calgary design and I think that's through experience and it's through customer feedback, vendor feedback, and actually running a plant for a year. 2023 is all about Calgary. There's a superb offtake agreement in place. The land is secure.
We have CAD 7 million of non-dilutive government funding, we have the drive now and engagement to deliver the focus on debt and project equity. As I said, the debenture and the PR, and its contribution to the treasury is a strong way to deliver that funding for Calgary. Once again, thank you to all of you who supported us and continue to support us. It feels to be we're in a spectacularly privileged position to, in this brutal market, to be able to raise that kind of funding over the last few months has been very, very good and testimony specifically to our strength of support from our investors. I would like to thank you for that.
Last slide, of course, as always, Kin Communications, who help us with this, and are awesome on the IR side. Carson obviously is the Director of Corp Dev, yeah, that's how to get in contact with us. Carson, you wanna fire up the questions?
Yeah. Thanks, Aidan. Please type. If you have any questions, feel free to throw it in the Q&A box there. I guess first question is, any updates on the status of the Canadian patent or U.S. patent, follow-on applications?
I think Canada is similar to the U.S. in that the patent office feedback is the patent follow-ons for the U.S. are in motion, so they've been filed, and they're under consideration. Canadian was filed and was awarded Canadian fast track or green technology and a fast look at or whatever that term is. Canada, I think has also recommended in exactly the same way that the U.S. did, that we need to split the patents up and kind of resubmit them. That refiling will happen in May. Is that good?
Yeah. Thank you. Next question. How has McAsphalt helped with the design and the process engineering?
Well, I can tell you, we have a. There's kinda three things that they've helped with. The first thing they helped with was the feedback on the product that was coming out the back end, so the asphalt. They've also looked at the sand. They also have a technology which may be able to use the fiber. When the fiberglass is available in a month or so, they'll be also looking at that. From an R&D perspective, their feedback's been fantastic. Anytime we have done a process improvement, as we went through the year in Delta, we've sent it to McAsphalt, and they're like, "Okay, that's really good. Okay, can you have a think about that?" They've been able to do their R&D analysis on our products.
That's the first way that they've helped us. The second way they've helped us is, look, McAsphalt are, I mean, their business is mixing and blending. They've literally sent us a detailed design of the mixing at the back end. In theory, I'm not saying we don't have to do anything. Obviously, we need to incorporate it into our design. They've helped all with the back-end engineering. That's pretty fair because what they've said is, "Look, the box inside the plant is all yours. We have, you know, we have real experience, you know, outside the plant and how to blend and mix." That's where they've supported on an engineering perspective.
The third thing I think, you know, they've also committed to be available as we go through our design. If we're doing a HAZOP or we're doing anything from an engineering perspective that needs, you know, peer support, they're also up for doing that. I think, yeah, phenomenal partner.
Okay. Thank you. Next question. Does the company have physical access to the Calgary site at this time? On the back of that, when does shingle collection start?
The contractor is working on the site now, and that's doing kind of clearance, topsoil, all that kind of stuff. I suspect, you know, I think we have access to the site likely in July. I don't think we'll have equipment arriving on site for a while, but we are aiming likely to launch the campaign for shingle collection in August into September and then be collecting the feedstock for the commissioning process kind of September, October time, would be my high level numbers. We've got a detailed project plan that's got that all laid out. Yeah, September, October I think would be our first collection.
Again, a bit like I did with the radio interview in Calgary, I think when Calgary is fully funded and ready to go, and, you know, and all those three legs of this and we have a stool that is standing firm with the three legs of funding in place, that's when we will go aggressively out to homeowners. You know, we'll try to get back on the radio. We'll, you know, start to very proactively market the Northstar facility.
Okay. Thank you. Next question. Just on cost savings, could you touch on the steps that the company's taken to reduce ongoing costs?
Well, look, I mean, I'm not gonna get into the detail of any kind of individual things, but I will say that, you know, when people look at Delta or people look at run rate, our run rate's got three things in it. It's got the Northstar costs, it has the Delta costs, and it has the Calgary capital costs. What we've done for the most part is defer Calgary capital costs until we have full funding in. We've had some things that we've had to do. Lease deposit's one of them, as an example. There's some things that we've maintained. We've maintained the timing, and not lost a piece of land because we didn't make a deposit.
Stuff that really need to get done for Calgary, we've pulled the trigger on. One of the long lead items which could have been two years, we pulled the trigger on one year ago, right? We've been very judicious about that. On Delta, we really didn't pull back on R&D costs at Delta at all because we need to de-risk Calgary, and we needed to spend that money. I mean, people will look at it and go, "You're burn rate's crazy." And I'm like, "Well, if it's an R&D facility, that's the way that it works." High utilities, you know, inefficient processes, you know, manned up fully.
All of those kind of things were by we looked, you know, as a leadership team, we said, "Well, do we need to should we be cutting that back?" The answer to that is no. Because there's no point in trying to restart a de-risking process when you're right in the middle of it. A lot of the costs where we were able to pull the trigger on were the Northstar costs, so that's reducing consultants back, asking consultants to cut their budgets, deferring salaries.
You know, people will see it in last year's numbers and this year's numbers, and people say, "Well, look, deferring salaries and deferring bonuses is, I mean, that's just a liability for the future." It is, but it's not a cash impact. You know, no 2021 bonuses paid out, no 2022 bonuses paid out, you know, and appropriately not, managing cash as much as we can. We have a look, everybody, you know, small companies do this, but I'm involved in the accounts payable meeting every week. I will be involved in the accounts payable and project cost meeting for Calgary every week. Because this business in this market needs to be run with clear cost focus.
That's what we're doing.
Thank you. Next question was, have there been any discussions on the GTA market regarding possible locations?
Yes. The GTA market locations are going to be a little bit dependent on two things. Actually three things. One is supply. The GTA is different from Calgary, and the Calgary supply of shingles is very diverse. There's like, you know, we've engaged with roofers and bin collectors and manufacturers and guys who've got shingles all around Calgary and municipality, et cetera. It's a very diverse supply base. Toronto is pretty consolidated, there are a number of major players in Toronto that not only have sites that we could co-locate on, but actually in one or two or three contracts could supply potentially two or three sites. GTA shingles today are going to Michigan.
That's the landfill destination of choice, versus us, versus us in the city. I can tell you that with the offtake demand and the potential supply, you know, we could have two to three facilities in Toronto, actually almost as a starting point. The size of the Toronto market is probably four facilities, but we could easily do two, either co-located or back to back, or one in the south, one in the east, you know, there's a good potential. One of the catalysts, in my opinion, for this, for the company is to secure Toronto supply and offtake by the end of the year. I think that then enables us to do a couple of things.
Number one, it enables us to start the permitting process, which is important 'cause even if you're on a permitted site, it probably takes about a year through the Ontario Ministry of Environment to get signed off. Then the second thing is to start with the government funding process. Whether that's, you know, Ontario or federal, et cetera. Exactly the same as kind of Emissions Reduction Alberta, we would start to seek provincial funding. Those processes generally take about a year. I think that fits very well with the process from Calgary being commissioned. If Calgary is detailed design starts in August, we'll have, you know, production, you know, kind of July, August next week or next year, so middle of the year.
That allows, you know, some period of time before we go into detailed design for Toronto, which would be fourth quarter, and then for us ready to construct in first quarter 2025 with the permitting in place. All of that really says that we need to have the Toronto offtake secured and land secured by the end of this year, and that's what we're aiming for. With the people that we've been talking to, they are aware of kind of that being the high-level timing. Essentially the same for Pacific Northwest as well. If we want to have, you know, constructed facilities in 2025, whether it's Seattle or Portland, exactly the same thing has to happen.
We need to have secured offtake by the end of this year, and hopefully supply, and be ready to move into permitting in early June.
Okay, thank you. Next question: Is there any potential revenue from the fiber, and what are your thoughts on that market?
Fiber is interesting. We are starting to get representative samples. It's an interesting market because initially when we looked at this, we thought that the Canadian market. Sorry. Two very different markets for fiber. Organic fiber, which is the paper-based tile, which comes from the older tiles and more recent fiberglass tiles. In the U.S., all the U.S. shingle manufacturers have said, "You're literally not going to come across any paper here. It's 99% fiberglass." In Canada, because of our heritage collection at Delta, we were kind of like, "Oh, it could be, you know, kind of 25%, 75%." Sorry, 25% paper, 75% fiberglass. Actually, the collection that's now going on at Delta is kind of showing it's 90%-95% fiberglass. Very little organic.
We have started, you know, fairly deep engagement on fiberglass fiber. Shingle manufacturers in general are very interested in it. Flat roofing manufacturers are very interested in it. In actual fact, there's also a paving application for fiberglass strands, which you could think would be very helpful if they have, you know, you don't need brand-new manufactured fiberglass. If you had recycled fiberglass that's been through a national facility for a paving application, that could be very, very strong. Lots of work ongoing. I, that work will be done by the end of the year. Is there still a question mark over Delta's fiber revenue number? Probably.
I mean, I think that's at CAD 5 a ton, so we've been very clear that there could be a lot of upside in fiberglass if it starts to price like manufactured fiberglass, of course.
Okay, thank you. Next question. Outside of Calgary, what are the long-term plans for the company? How many plants can you build over the next five years? Can you touch on any plans for licensing versus building, owning, and operating?
In the Emissions Reduction Alberta submission, I think they asked for a growth to 2030. What could that look like? I think that growth plan says that we could have I think it's actually 31, but approximately 30. Let's just take the number of 30 plants by 2030. Of those, 18 would be constructed, so build, own, and operate, and 12 would be licensed. The thinking there is, as you know, as we look at markets, the valuation of our market attractiveness is asphalt price, which is 60% of the revenue. Because obviously, as we said earlier, carbon's 0, fiber's low, et cetera. Asphalt price versus tipping fee.
We've done the review of all the cities in the U.S., we believe that once we get to 2025, after Pacific Northwest is built and Toronto is built, we could probably build three a year. We won't start licensing until 2026 because you can't license a facility without having built three because your technology has not matured enough for a licensee to really trust it. I think you need to build three to five plants, and then we think we can probably license two plants a year. When you ramp that up, it gets you to about 30 plants by 2030, and then a steady run rate of three plants per year building and two plants per year licensing.
Let's just go back to the market size context again. If you look at Canada, if you look at last year's figures from the U.S., 15 million tons into landfill, and you look at Canada's figure, 1.5 million tons into landfill, that's 16.5 million tons into landfill. If you take our plant size for Calgary, and as we said before, we're not scaling that up or scaling that down. Whenever you get a Northstar plant, it's exactly the same. That's 40,000 tons a year. That's 450 Northstar plants to solve the problem. Remember, go back to the other thing that was announced last year in 2022 by ARMA, who are all the major shingle manufacturers.
They said by 2035, they wanted to divert 50% of shingles away from landfill and 100% by 2050. That is Owens Corning, CertainTeed, IKO, SOPREMA, you know, all the big manufacturers. That essentially was a shingle manufacturer's view of their carbon neutral statement. 100% diverted by 2050. Across North America, you could build 450 Northstar plants to solve this problem. By 2030, we will be less than 10%. That gives you a view of the even if we went as fast as we could to build 30 plants by 2030, that kind of gives you a view of the untapped market that would be left to deliver 450 plants.
Other people are thinking about technologies. Other people are coming up with solutions. We are not the only solution to solve this problem. At the end of the day, we're the only one that's splitting stuff into its individual component parts, so it can go back as base product.
Okay. Thanks, Aidan. Next question. How does the McAsphalt/Colas agreement make financing Calgary and accessing non-dilutive capital easier?
Well, I mean, no debt provider will provide. If we built a merchant plant and we ideally by merchant, you know, no supply agreement on the front end and no supply agreement on the back end, we said, "Trust us, we can make money on this." No, no debt provider will provide that. I can tell you know, You know, at BP, at Daelim, at, you know, the roles that I've had, you're not getting any debt provision whatsoever without security of the offtake. This is a phenomenal contract in that it's market-based, it's 100% of the asphalt offtake, it's five years, but also it has risk management with a price floor in it that's been designed at a good level.
In terms of financeable, that means that the risk that the financer takes is limited. I mean, it's not zero, but it's limited because there's surety on the most valuable product out the back end. Now, in a perfect world. If we did this in Toronto and we were able to secure the front end as well, with a price for shingles, I mean, or the price we got paid for shingles, that would be phenomenal. Calgary can't do that because the market's too disparate. So we will have likely rolling one-year or two-year spot agreements with people, based on the tipping fee.
Yeah, that's why I think the most important thing that we've always focused on is the offtake agreement. That's where the most valuable part of the plant is and that's the thing that we want most surety on. That's why I think it provides great support for the debt side. Oh, the project equity side obviously as well, but, you know.
Okay, thank you. Next question. Once Calgary gets financed, what are the next major steps to get it into commercial operation?
Well, I think we go into detail design. I mean, I think we just get into classic engineering steps. We go into detail design. We place the long lead items, probably pretty quickly. We go into detail design. Look, the detail design here, as we've talked about, you know, where we are with the vendor estimates, the vendor work that's done on Delta, the detail design by the vendors is already done. I mean, they need to run through the engineering, the detail design that we need to do is the BPA detail design to integrate all these processes and fabricate anything that's not been fabricated by the vendors.
It's not, it's not a, Okay, let's go out and, you know, go to all. I mean, you know, there's three or four major pieces of equipment. We've already talked to those people. That's why the costs have changed in the estimate, because we've got real clarity on what that looks like, and they know exactly what they're building. It's procurement, it's detail design, procurement, construction, and then commissioning. You know, I think commissioning would, if we were to call it now, I think commissioning would be kind of June, July, 2024.
Okay, thank you. We'll do one more question and end it at 3:00 P.M. there. Just a last question just on manufacturing testing and how does it fit into Northstar's business plan?
Manufacturing testing is. When you're a shingle manufacturer and you have, you know, you're giving out a 35-year warranty or whatever the warranty is on your shingle, you need to make sure that all the components that go into there work. If they change, I'm actually probably better talking about it from a refinery perspective. When we have a new oil that comes on and people think that it's good from a refinery perspective, either from a yield or a pricing perspective, we have to test it. Number one, we test it in the lab. You generally test it in the pilot plant. You test it in the, then you test it in the refinery.
There's a very clear set of steps that you've gotta pass to get, you know, to the next step. We're on that process. And we're on slightly different places with each kind of manufacturer and some manufacturers have more... Sorry. Some, yeah, manufacturers have got a lot more risk appetite than others and, you know, lots of different companies to deal with in this. With all of these people, we're on the process. What happens when we get to the end of that process, if we're successful, it basically means that the specification of the asphalt coming out of the Northstar plant is suitable for shingle manufacturing. Now, we believe it is. We believe, yeah, that.
You know, we're pretty convinced that because it was in a shingle tile to start with, that it should come out the back end if we do our processing properly so that it can be reused. That's the next step, is to do that either advanced testing, running it through the pilot plants, or running it through the actual plants to produce product and then having that product R&D tested. That's where we are. Out the back end of that process will come a flurry of activity. It could become strategic partners. You know, offtake partners for plants in the U.S. You know, there's a myriad of stuff that we can, that we will be able to do with those partners once we get through the testing process.
That's the objective. That's another big catalyst for me for 2023, is to get that secured.
All right, Aidan. Well, that concludes the questions and the Q&A period.
Perfect. Well, listen, I'll just wrap up. Thank you all for attending. Great call and, yeah, a lot to digest. You've got as well, as always, you've got our contact details through Ken or through Parsons for follow on questions. As always more than happy to follow up with any of the questions. Once again, especially for the people, you know, on the call, with respect to the last PP and the convert, thank you very much for your support of the company.