Everybody, welcome to the Q4 2024 and full year 2024 financial results and investor update. As usual, same kind of admin as we've done over the last few quarters. Please put your questions in, and we'll pick those up as we go along, and then we will have the team ask the questions at the end. The plan, of course, is to take you through where we are with the financials and the results, obviously, that came out with the press release this morning, and do an investor update. Without any further ado, and obviously, of course, forward-looking statements, we will be making forward-looking statements, and this is obviously the disclaimer with respect to that. Now I'll hand it over to Greg Phaneuf to take us through the financials.
Greg.
Thanks, Aidan. Good afternoon, everyone. This represents my first Northstar earnings call with the markets. I'm honored and privileged to be part of the team, and I look forward to many, many more of these calls with you as we begin to post operational results. Just a few financial highlights for me that occurred during the 2024 fiscal year prior to handing it back over to Aidan. 2024 represented a significant year in the capitalization and funding of the company, the proceeds of which served a multifold purpose. One, funding construction efforts on the inaugural Calgary facility. Two, providing capital dedicated to sourcing, analyzing, and securing future sites as part of the exciting growth plan for the company. Three, funding the operations of Northstar itself. Cash balances at the end of fiscal 2024 were CAD 10.2 million compared to CAD 7.6 million at the end of fiscal 2023.
During 2024, Northstar, through various vehicles, raised over CAD 28 million, the majority of which were non-dilutive to existing shareholders. Together with receipts from government agencies, the company received nearly CAD 30 million in cash to fund the business. The majority of these funds were dedicated to the construction during 2024, as I mentioned, of the Calgary facility. The company recorded CAD 19 million in capital expenditures and CAD 1.5 million in deposits paid for existing facilities during fiscal 2024. 2024 also represented an important year from the perspective of generating increased revenues from tipping fees. Revenue for 2024 was CAD 640,000 compared to just CAD 206,000 for fiscal 2023. As has been communicated in various press releases, we anticipate commencing full operations in mid-2025, and as such, quarterly results will reflect material increases in revenue and operations.
From a cost perspective, cash expenses for the year totaled CAD 4.8 million as compared to CAD 4.1 million for the prior year. The increase is due to additional personnel and a broader scope in operations for the business. Research and development expenses were nil for the period compared to CAD 778,000 for fiscal year 2023. As the company evolved from pilot operations to full commercial operations, requirements for R&D diminished. Having said that, we would anticipate only minor amounts to be spent on R&D going forward as we fine-tune operations and perform product testing for specific future markets. Comprehensive loss for the period was CAD 9.3 million compared to CAD 6.67 million for fiscal 2023. As the company moves to full-fledged operations and anticipated profitability, these losses will be used to significantly shelter income from taxes.
We forecast our tax payable horizon, assuming our stated growth plans for plants to be several years into the future, thereby leaving more cash in the business itself to fund growth and, in turn, minimize dilution to existing shareholders. One final note for me, we included a more detailed analysis of our issued and outstanding and fully diluted share capitalization in our management discussion and analysis to aid current and potential shareholders understand the somewhat complex capitalization of the company. Assuming all existing securities that are issued and that could be issued upon conversion of certain debentures are in fact converted, Northstar would have an outstanding share base of 274 million shares but would bring in an additional CAD 20 million in proceeds upon various securities being exercised. I would welcome any questions as part of the Q&A, but for now, Aidan, back over to you.
Great. Thanks, Greg. That's great. Great to have Greg on board and, you know, great performances we got through the audit, which is always a heavy lift for the finance team. Great to have that team here delivering that. Okay, investor update. We chatted about this as we came into the year, that there were kind of three objectives that we had for 2025. The first one was to deliver the Calgary facility, and ensure we were up and operating by kind of middle of the year. The second was to develop the 2026 site such that we could start construction in 2026.
The last thing was obviously to develop the portfolio, such that we could really identify, you know, at least the next 10 facilities or next 10 locations for us to start the development work in it. Because obviously, you know, permitting, you know, the earlier you can identify areas, start to secure supply, and start the permitting process, the better. Look, the key deliverables, I'm gonna talk through most of these in the next slides, but obviously all of them align with those three objectives. I think it's also worth reflecting just at the end of the year, kind of like what we actually delivered in kind of 2024.
You know, the left-hand side are all the things that we think are important with respect to, you know, where are we with the strategic off-take customers, where are we with the strategic investors, et cetera. If you look at the highlights that we had for 2024, it was a fairly barnstorming year. You know, obviously discussions ongoing with Hamilton and U.S. One, you know, secured CAD 14 million from our partners at CVW. You know, CAD 1.8 million came in from TAMKO and the completion of one of the, you know, one of the ERA funding stages. We had ERA come in for the first milestone, we delivered on milestone one. We had CAD 2.25 million come in from strategic Calgary investors, including the Chiu family with Patrick joining the board. You know, we secured feedstock supply for Calgary.
We started, you know, we identified exactly where the first TAMKO facility to be, to, to be supplied was. And remember with that, with the TAMKO investment as well. We extended the number of, of sites that TAMKO will take from three to four with the extension of the MOU. All of that, you know, lays a phenomenal foundation for, for, for stepping into the U.S. I'm actually at the, at the, at the Planet Microcap investor conference in Las Vegas, you know, today. One of the key points that I've been making to investors here is this is, you know, this, if you think about the 16.5 million tons going into landfills or destined for landfills across North America, you know, about one and a half of that is in, in Canada and, and, you know, 15 in the U.S.
Really understanding as we develop this portfolio, what the U.S. options look like is absolutely critical. You know, we started to draw on the BDC loan. We had the, as I said, milestone one payment come in from ERA. Most importantly, we started construction during 2024 on the Calgary facility. You know, we've been putting out the construction videos and we'll talk about that in a little bit more detail later. Yeah, obviously a very important milestone for the company. You know, technology continues to go. R&D work is continuing, is continuing to develop. The IP, you saw most recently that we added another patent for Canada.
With respect to emissions, the measurement and monitoring protocol that we have to adhere to with the Emissions Reduction Alberta work has already been kicked off, and we've been doing measurements through commissioning. You know, like we always talk about what are the fundamentals of the business and what are the foundation. I think, you know, that's one of the things that we've been building as we've gone over the last three or four years. I think we come out of 2024 with a very, very solid foundation. Clearly one of the most important things, and again, ruthless focus from the company, is the Calgary facility.
We collected the feedstock for commissioning, we constructed it, you know, completed construction in, in kind of March, and then we started commissioning. As you'll have seen from the video at the beginning of this week, commissioning on the, on the front end, on the kind of the, on the aggregate separation is actually complete. You know, one of the things that happens with construction projects and that I've seen through my time in, you know, in BP and the like is that construction hands the plant to commissioning to commission it and commissioning hands it to operations to operate it. That's the ultimate, kind of destination is when it, when it gets to operations and the front section of this plant that does the, that does the, you know, aggregate separation, and, and the production of aggregates.
Our first product has actually been handed from commissioning to operations. As the commissioning guys are focusing on the back half of the plant, you know, the operations guys are now running the front half to give them the feedstock to process and commission in the second half. That's a phenomenal place for us to get to. You know, we continue, as I said in the video on Monday, we continue to expect the plant to be operating, to be operational by mid-year. That has not changed. We've got great confidence in that. You know, the first stage, the water stage, which obviously, you know, provides aggregate, that first product, but also provides the fiberglass covered in asphalt to go onto the hydrocarbon side, is working really well.
We're very, very happy with the progress of that. You know, the expansion plan, you know, we've looked at 2026, we've always had kind of, you know, kind of been chatting about three options. Hamilton, U.S. One, and Vancouver. Kind of in reverse order, as you saw the press release, we were able to extend the lease agreement in Vancouver, an extension from five years to 15 years, which obviously can work, you know, the economic life of a facility. That's obviously, you know, an expansion option. Hamilton, we have kicked off the permitting process. The consultation or the pre-consultation process has started. We've been working with HOPA on the lease agreement.
As you saw already in Q1, we had the LOI with York1 for our first tranche of supply. All those things are important to make sure that we have this pulled together to be able to sanction it in the second half of the year. U.S. One, again, in 2024, we identified the Frederick site in Maryland to supply for TAMKO. Now it is all about site selection. We have been going through pretty rigorous site selection all the way from Philadelphia down to Baltimore, and Delaware in the middle. Lots of work is being done on that.
We're hope, you know, hopefully gonna have something to kind of announce here in Q2 with the site selection. Obviously important because then we, you know, that kicks off the permitting process as well. Good progress on all those three. I don't, I'm not gonna go through in detail, either the Mid-Atlantic or Hamilton. It's in the slide pack and it's also on the deck, on the web. Look, the last thing I would say is, you know, you people have heard me talk a number of different times that this isn't, we are absolutely at the tipping point of the stock here. I chatted with, you know, when we were chatting investors down here at the Microcap conference.
My point has been, look, up until this point, this has been a technology story. Like this has been a technology stock. It's kind of like, can they take this idea and make it commercial? We're literally, in my opinion, you know, six to eight weeks away from demonstrating that, you know, middle of the year. I think this story will pivot rapidly to be not a technology story anymore, but to actually be a deployment story. We are not gonna be measured, we're not gonna be measured about, measured necessarily against the highly progressing the development of our technology here. We're going to be measured against how can we deploy this, more quickly, you know, how, when, you know, what stage do we add licensing that we've always talked about in our, in our strategic plans?
You know, how do we, how do we develop the 10 next sites and actually have the resourcing to start working those straight away? If you think about the 10,000 foot number and you think about, you know, 10 sites all delivering, all having the potential to deliver something like, you know, CAD 5 million-CAD 10 million, depending on what the volume that goes through that, that gets us to a completely different conversation with respect to, you know, as Greg says, the earnings calls, we'll be talking about how we're deploying plants, what are those plants delivering, what is the EBITDA, you know, difference between kind of plant one, plant three, plant five, et cetera. It will be a completely different conversation.
When I say that I believe we're at a tipping point, those are the fundamentals that I can hang on to as we chat about how we expect the stock to do. I mean, great. We got awarded the, you know, the Venture 50 for TSX performance last year. And I'm expecting, hopefully, to do exactly the same again this year. Yeah, I think, lots of upside. I feel, and I think from the business perspective, I think we're in great shape. We've got an excellent facility that's literally, you know, commissioning as we speak, and by mid-year, we're expecting to be supplying some product. Guys, I think that, I think that's, those are my remarks.
Thank you, Aidan. We can move on to some Q & A now.
Our first question is related to tariffs. How do you foresee the Donald Trump tariffs impacting the fundamentals of the business?
I think, you know, I think I got quoted at the end of last year saying that I wanted to be the, I wanted this business to be the Tim Hortons of asphalt shingle reprocessing. Actually, down in Vegas, I've had to change that to the Dunkin' Donuts, to be fair. Yeah, you know, we have a local collection market. It doesn't matter if you're collecting in Hamilton in Canadian dollars or you're collecting in Philadelphia or Atlanta in U.S. Dollars. The collection is local. The manufacturing is local. The jobs are local and the production stays in country.
U.S. One, it's getting collected locally, produced locally, and it's going to TAMKO. You know, Calgary, it's getting collected locally, it's getting produced locally, and it's going to, it's going to McAsphalt. Now, to be fair, it's in U.S. dollars. So we have U.S. dollars exposure 'cause all commodities, as you know, from an asphalt perspective are in U.S. dollars, whereas collection in Canada would be in Canadian dollars. So there's definitely a, there's definitely an exchange rate difference.
I think the only thing where there could be any impact whatsoever is if we were buying, if we're constructing in the U.S. and buying equipment in the U.S. and the equipment was coming from Canada or vice versa, you know, there may be a tariff on the equipment, but you know, of a $20 million build, you know, it could be $250,000 or $500,000 maybe. All our suppliers have got international options too. We may be able, for example, to get a piece of equipment, which in Calgary we bought from Texas, that they may have a European division where we may buy it from France.
I mean, we, we, there's definitely supply options and I don't think the core of the business is affected really at all because we're so localized.
Thanks for the very rigorous answer there. I have a few Calgary questions here, so I'm gonna combine three or four of them.
What are some of the biggest lessons you've learned through the construction and commissioning process for the Calgary site? Also, like, what kind of, how does that carry forward as you deploy the business?
I mean, I've always used the technical term to say when you're constructing the first of its kind or you're commissioning the first of kind, it's always gonna be a bit of a shit show at times. You know, you learn a lot of lessons about, well, what would you do with your plan?
What would you do with your process? What would you do with your equipment? How do you put it together? How do you interface between the various modules that we've built? All of that provides brilliant learning. We actually, you know, we had a, the board came to decide at the beginning of April, we took them through the plan and then we went through the lessons learned, of how we think we can improve it. It was like two slides, you know. There is a lot of, and that was just as we were coming into commissioning. I suspect by the time we get to the end of commissioning, there will be another slide with bullet points on it about lessons that we've learned as we've gone through.
I definitely think, and I've always said that I believe the capital for the run rate to build new facilities will be lower than Calgary. I continue to think that. I think the speed of deployment will be quicker. One really good example of that is when we've run Calgary, we know the set points to put in the control system for the next facility. Today we do not know that. That's why we're commissioning. That's why commissioning has taken longer in Calgary because it's the first facility.
Once it's operating and you know, you know, the set point for the level on one of the mixing tanks is X, like you literally just pre-program that into the Hamilton system and the control system is literally ready to turn on and go. Now, you still have to make sure the interface works. You still have to start at the front. You still have to, you know, work your way through commissioning, but it will not take the length of time that it takes now. I think the lessons learned will provide benefit for, you know, for lower capital, and faster deployment of both construction and certainly commissioning.
Excellent. Thank you. The next question is sort of more about the Calgary site from the community perspective. How has the reception been locally?
You know, any noise complaints from the neighbors or anything of that sort?
No, no, the, I mean, the Calgary site, we've been, we've been, you know, working there since the beginning of last year when we, when we started, when we started collection. So, you know, I think, you know, truck traffic has, has been, has been pretty steady. I think some of the neighbors in the area were getting fairly excited about the parking on the street because there were, there were lots of people involved in constructing this, this, this building, as you saw. You know, we've, you know, and touch wood and, you know, great without, without a lost time incident, which was very, very, very good for, for, for, for the, for the safety for the site, which was important.
Yeah, and I think, you know, obviously one of the things as we hire workers, as you've seen, you know, we're bringing on the operations team. The key reason that we are able to operate the front end of the plant is because we have, you know, the operations team in place. Not fully resourced quite yet, but pretty close. I think that that's been good.
It has been interesting actually that, you know, the people, people that have joined from the operations team are also very excited about not just joining, not just getting a job with a company that's kind of like building, you know, has built a facility in, in Calgary, but actually are very excited about the, the, the development and growth journey that we're on with this company and that this is the first of its kind and this is number one in a line of 300 or however many we end up building. Yeah, so, so, so I think that's been, that's been really, really well received and kind of like, and it's been great to, to bring local, local work, workforce on in, in the Calgary region.
Our next question is related to, so how do you view expansion opportunities, comparing the United States and Canada?
Like how are you evaluating the different?
I mean, as we think about expansion opportunities, I mean, people who've, who've heard me talk about how we analyze sites, we kind of, we have a pretty sophisticated matrix that looks at both kind of objective and subjective, kind of subjective measures. The three big ones are, what is the local oil price or, what is the local asphalt price? Because obviously there's regional differences. Number one, number two, what is the tipping fee in the region? Because obviously we generally discount to incentivize, but the starting point of the index is the tipping fee.
More interestingly, this year we've now started, or sorry, at 2024, we've actually started to assess and what is the, what is the shingles kind of, what is the, what is the shingle size in that location? What I mean by that is if we can do a 80,000 ton for, sorry, if we spend the capital and the Calgary facility capital is spent to build a 40,000 ton facility and a 40,000 ton facility is defined by essentially you run the facility using a day shift. If the constraint to move to 80,000 tons is not capital, it's just shingle availability. Clearly an 80,000 ton facility is, you know, more efficient and twice the EBITDA of a 40,000 ton facility.
We're now looking at, you know, to start with for, and I chatted about it earlier, then the next, the portfolio of the next 10 facilities, one of the criteria will be and cannot support 80,000 tons. Now it's always really important to not go to 80,000 tons necessarily straight away to establish your operations team, to establish your processes, to establish your shipping and your customer offtake, et cetera. Ultimately, you know, within three to six months of setting that up, hiring the second shift to make it good 80,000 tons is, is, is the criteria. One of the other criteria, of course, is, is, you know, like the speed of permitting, you know, the support from the local government. Often the support from the local government will show up as kind of what is the tipping fee.
There's a kind of like a bit of a symbiosis between the objective and the subjective, but those are the three key criteria we're looking at now as we think about that. If you do think about that, then look, and if you think, if you take our 16.5 million tons and you divide it down, it's about, you know, 15 in the U.S. and one and a half in Canada. That's why we're at conferences like this one in Vegas to start to familiarize not only the market or investors, but also people in general, that the U.S. is a major target market.
And again, because of the localized nature of the business that we build, we believe we're fairly immune to the noise that's kind of going on between Canada and the U.S. Yeah. We think it's a very strong plan.
Exciting. For our last question here, what is your long-term vision for the company? Say maybe five, 10 years.
My long-term vision for the company, like we, you know, I clearly had to include some sort of a Rory McIlroy quote. We haven't, you know, we haven't had, we haven't won the Grand Slam yet. We're like, this is going to be our first major by delivering the Calgary facility.
Look, I, I, we've said repeatedly that we thought we have the capability to build, you know, three to four plants a year, organically. I think the size of this market is so huge with a potential of, you know, like 440,000 ton facilities, that licensing the technology is something that we think is a natural step. Remember, if you look at the, if you look at the ARMA statistics for, you know, their strategy to build, to divert 50% of all shingles away from landfill by 2035, that would require 240,000 ton Northstar plants, which is absolutely massive, an absolutely massive market.
I think what we need to do is I think we need to build the organization, and my vision is to have an organization that can repeatedly build three to four facilities a year under our control and three to four facilities licensed per year. I think that will give us, you know, huge financial capability, but I also think it will establish a program whereby we would have, you know, cities coming to us to build facilities. And this will be self-sustaining, not only from a no need to raise any capital perspective, you know, great, great cash flow coming in, but also in that development pipeline.
My vision is less about the numbers and more about the point where we get to where literally the phone's ringing off the hook for us to come to a municipality and divert 80,000 tons away from their landfills. That, that to me is the, that's not, that's not my kind of rise moving to the seniors tour moment, but it's certainly a vision that I'm very excited about.
Excellent. Thank you, Aidan. That's all for questions.
Excellent. Thank you as always, Natalie and Trenton and Ken, for helping us set this up as always and guiding us through. Thank you for that. Great to have Greg on board and, as he said, his first drive through the numbers.
I think these are gonna get very exciting as we go through the year and look forward to the next one where we've got some operations to tell you guys about. Yeah, we'll continue to do the commissioning videos, and you'll see those coming out regularly. Yeah, look forward to delivering on this and having this facility operating and this business generating cash by the middle of the year. Thank you.