Good day, and thank you for standing by. Welcome to the HALDA Energy Conference Call. At this time, all participants are in a listen-only mode. Following all prepared remarks, we will conduct a question-and-answer session. Instructors will follow at that time. As a reminder, this call is being recorded. I would now like to send the conference over to Sean Mansour, the company's investor relations advisor with Elevate IR. Sean, please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you joining us to discuss our recently signed asset purchase agreement announced yesterday afternoon. With me today are President and CEO, Brent Bilsland, and CFO, Todd Tellez. Following prepared remarks, we will open the call to answer your questions. Before we begin, a reminder that some of our remarks today may include forward-looking statements subject to a variety of risks, uncertainties, and assumptions contained in our filings from time to time with the SEC and are also reflected in yesterday's press release. While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect, actual results may differ materially from those we projected or expected. In providing these remarks, Halidor has no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law to do so. And with the preliminaries out of the way, I'll turn the call over to President and CEO Brent Billsland. Good morning, everyone, and thank you for joining us on short notice.

Yesterday afternoon, we announced that Halidor has entered into an asset purchase agreement with Energy World Corporation to acquire approximately 460 megawatts of Siemens gas turbines, generators, a steam turbine, and other ancillary equipment for our proposed Mirum single cycle natural gas fired combustion turbine project. The total purchase price of the equipment is $350 million, or roughly $760 per kilowatt. With an additional $100 million expected in transportation, refurbishment, insurance, and logistics costs to deliver the equipment, first to Siemens Restorations Facilities in the United States, and then on to our Merrim site. Before getting into the specifics of the transaction, I wanted to spend a few minutes on how we got here. For those newer to our story, that context matters because this equipment acquisition is not happening in isolation. It's the next step in our broader evolution towards a more diversified, multi-fuel, independent power producer. Hallador is a company built to iterate. We believe companies that iterate faster than their competitors build a compounding advantage. That has been our playbook for more than two decades. Consider the last six years. In 2020, Hallador was an underground coal mining company. In 21, we acquired a 1-gigawatt interconnection to the grid, which opened an entirely new strategic option for the company. In 22, we acquired the 1-gigawatt power plant that plugs into that interconnection, transitioning from a fuel supplier into a vertically integrated independent power producer. In 2024, we began marketing long-term output of our plant directly to data center developers. At that time, the market was skeptical that data centers would ever purchase from coal assets. By 25, hyperscaler CapEx budgets were approaching half a trillion, and utilities were sold out of capacity and joining the market as buyers themselves. Late last year, we became convinced that the demand for our capacity was so robust that the market needed not only everything we had to sell from our existing plant, but much more. So we positioned ourselves to participate in MISO's Expedited Resource Addition Study, ERAS, and made a $14 million deposit and secured one of the coveted 50 slots in the study. To expand our skill set into independent power development, we needed to add more experience and talent to the company. In the first quarter of this year, we added Barbara Sugg to our board of directors. the former CEO of Southwest Power Pool, or SPP, where she operated one of the largest power grids in the country. Barbara oversaw the development of SPP's own version of the ERAS program and has helped us understand the opportunities and challenges of expanding our nation's power grid in this once-in-a-generation growth period. In March, we added Daniel Hudson to the board, who, in our opinion, is one of the most successful independent power developers in the country. Dan has been instrumental in teaching our people the ins and outs of power development. I can easily say we would not have been able to make today's announcement without Dan's help and guidance and oversight. At the executive level, we brought on Todd Tellez as our CFO in June of 25. Todd has a long and successful career in financing power generation assets, and we expect to continue bolstering our leadership team with additional senior hires in the near future. The experience and credibility of the people choosing to join Hallador reinforces our conviction that we are building a differentiated platform and an important moment in the power market. Last month, we executed a 12-year, roughly $1 billion PPA, with the utility subsidiary selling two-thirds of our accredited capacity through 2040, bringing our forward sales book to roughly $2.1 billion. Stepping back, we are operating in a market where data center capital spending is estimated to approach $2 trillion in 2027. At the same time, roughly half the states in this nation have some form of proposed data center moratorium, which is funneling that capital into the few states welcoming data centers, like Indiana, where our assets are located. Let me speak to you why we won this equipment directly, because it goes to the heart of who Halidor is. The seller of this equipment ran a competitive process. There were other bidders at the table. We believe we won because we were the fastest, the most prepared, and the most credible counterparty in the room. We convinced the seller that we could execute, and then we did. In the seller's own words, what set Halidor apart was how professional and how aggressive we were throughout the process. That is the iteration capability I was just describing, solidified in a $350 million transaction. It is the same orientation that lets us pivot from coal miner to IPP, secure an ERIS slot ahead of much larger piers, and lock in capacity sales meaningfully above historical prices. Execution speed is a strategic asset in this market, and we intend to keep using it. Here are the specifics of the transaction. We are acquiring approximately 460 megawatts of Siemens gas turbines, generators, a steam turbine, and ancillary equipment for $350 million, or roughly $760 per kilowatt. Combined with $100 million of incremental costs for delivery of the equipment, this equipment package represents more than half of the estimated total project costs. giving us much greater visibility into a major portion of the project's capital stack. Importantly, these turbines have never been fired. We are buying Siemens equipment at a price we believe is highly attractive relative to comparable alternatives, particularly when you account for how quickly this equipment is expected to come online. In today's market, securing turbines is one of the most important gaining items for any new dispatchable generation project. Equipment availability is tight. Lead times have extended meaningfully. Most companies cannot simply pick up the phone, order new turbines, and have power online within a couple of years. This equipment package can get us there. We did not purchase a slot for a new build where we might get bumped in line by a higher bidder. This equipment already exists. The strategic value of this acquisition extends well beyond the equipment itself. First, it gives us a defined equipment package as we advance through the MISO-ERES interconnection process. That specificity reduces development timing risk, sharpens the study inputs, and preserves our ability to move efficiently if the interconnection results, commercial discussions, and financing align. And given the price at which we acquired the equipment, we believe that in a worst-case scenario where we decide not to move forward with the development, we would have the ability to resell the equipment at a profit. Second, it accelerates Halidor's transition towards a diversified, multi-fuel generation platform. We will be adding long-life dispatchable natural gas CTs at Merum, assets with an expected useful life of approximately 40 years. That also means we will be bringing a natural gas pipeline to the front door of Merum, giving us the future option to dual-fuel the coal units with gas. This positions us to serve utilities and large-load customers seeking long-term, reliable power solutions across MISO Zone 6, a region where demand is real, capacity is short, and supply tightness is, if anything, getting worse. it also meaningfully reduces our operational risk profile today our largest single unit outage exposure is roughly half our fleet adding the new gas cts at merrim brings that number down to approximately one-third combined with the dual fuel optionality on the coal units we are building a more resilient generation platform. And third, this transaction reinforces what we believe is a genuinely scarce position in this market, a developer with secure turbine equipment and a proven marketing team, an advancing interconnection pathway, strategic site infrastructure, long-term contracted cash flows and the financial flexibility and balance sheet to execute. Individually, each of these elements is difficult to secure. In today's power market, assembling those pieces is awfully the hardest part of building a project. We have it all under one roof. And finally, this transaction broadens who can own Hallador stock. Today's ESG-constrained funds, generalist growth funds, infrastructure funds, and energy transition funds are all structurally unable to own a coal-only company. Each of those pools becomes available to a multi-fuel IPP. Lenders who decline to finance coal-only assets, will finance dispatchable gas. Beyond just operating earnings, this path enables Halidor to lower its cost of capital and attract a wider institutional shareholder base. We are approaching this next phase with discipline. As of March 31st, Halidor carried no outstanding bank debt and held a 120 million dollar credit facility. Our contracted sales book has grown to over 2.1 billion, including the 12-year capacity agreement valued at over 1 billion that we announced earlier this year, working its way through IURC approval. That contracted revenue base materially enhances revenue visibility and underpins our financing capacity. Our financing strategy for the project itself is considering a combination of project level and structured alternatives, including equipment financing, structured debt, and similar instruments designed deliberately to preserve flexibility with low to no equity dilution, while retaining our focus on balance sheet integrity. We have meaningful choices available to us, and we intend to choose carefully. Our roadmap from here is straightforward. We have secured the equipment. We expect the MISO era study to begin in the near term and to complete in September. In parallel, we continue to advance long-term offtake discussions and the project's financing arrangements. Following the completion of the ERA study, we expect to evaluate the generator interconnection agreement, long-term offtake opportunities, financing arrangements, permitting, engineering, and other customary project development milestones before making a final investment decision on the Merrim natural gas project. If the project advances as we currently anticipate, this equipment provides a path to bring new dispatchable capacity online and begin generating revenue and cash flow between late 28 and mid 2029. Equally importantly, we retain real optionality throughout this process. As I have mentioned earlier, if at any point we determine that a different path creates value for our shareholders, we have the ability to sell the project together with the equipment or to sell the equipment on a standalone basis. In closing, Caldor's strategic advantage is not any single asset. It's the ability of this team to iterate, move with speed, and convert opportunity into execution. That is what compounds. That is the moat we are building. We believe we have the right project in the right market at the right time led by the right team. Demand for dispatchable power of MISO Zone 6 is real and growing. Turbine supply is only getting tighter. Yesterday's announcement strengthens our position to capitalize on what we see as a generational opportunity in this region. We look forward to updating you as we advance through the next phase. With that, operator, we can now open the line for questions.

Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star 1-1 on your telephone and wait for your name to be announced. We'll send by while we compile Keanu Roster. Now, first question coming from the line of Jeff Krempp with Midland Capital Markets. Your line is now open.

Morning, guys, and congrats on the news. Thanks, Jeff. Brent, maybe for you or even for Todd, when we think about the potential funding of the project, and understanding you don't want to be too prescriptive here on a call, but is there a general, I don't know, corporate leverage feeling or LTV of the project we can think about in terms of, you know, non-dilutive sources that you guys would be comfortable putting on the balance sheet?

Yeah, thanks. Thanks, Jeff. It's Todd. You know, as we look at it, one of the two key fundamental underlying principles that we're focused on as we think about this project and just financing of how our energy and our operating companies overall, one, we want to make sure we retain our financial flexibility and optionality, and then also maintain a focus on our balance sheet integrity and liquidity. I think we have a number of different levers we can access to acquire the equipment and finance the project. We start with our existing liquidity facility that we've got from the Texas Capital Bank and our two long-term relationship lenders, Old National and First Financial. Obviously, in this market, what you've seen over the course of the last year or so has been increasingly a desire for equipment financing, turbine financing to get done. So we think that's a very viable path to execute the financing on this project at a highly levered basis at the equipment financing level. And then we have the forwards contracted sales book, the PPAs we've executed over the course of the last 60 to 90 days that we believe we can back lever as well at the Marin Power level. And then ultimately, commercialization of the AERAS project provides another avenue to debt capacity to lever those cash flows to build out the project overall. So I think we have a number of different levers we can execute on that would provide us with that flexibility and optionality and limit the dilution while maintaining balance sheet integrity.

Got it. I appreciate those details. And regarding potential commercial contracts for the natural gas side of things, is there a general, I don't know, target in terms of capacity you guys would hope or expect to enter into agreements to before reaching FIB? And I'm also wondering, given the kind of base-based plan to have this be more of a PECER plan, should we expect there to be much or any energy sales contracts, or is this more capacity contracts we should expect ahead of an FID?

Well, a PECER project is certainly a capacity first play. There will be some associated energy. I mean, these are fairly efficient units, even though it is a single cycle plant that we're going to be building. And as far as offtake, you know, again, we just kind of come back to the pinch point in AI, particularly at MISO, seems to be accredited capacity. And so, you know, that's what this is about, is about bringing more accredited capacity to the market because we think we can sell it. We see a lot of customer interest and, you know, hopefully we can execute on that at desirable prices.

Appreciate it. I'll hop back in with you. Thank you, guys.

Thanks, Jeff.

Thank you. Our next question, coming from the line of Chek Sokolski with Alliance Global Partners, Jelanis Malvin.

Hey, guys. Thanks for taking my questions, and congrats on the news. Thank you. So, just on the purchase agreement, are you able to provide any color on sort of the terms related to the payment? You know, was there a deposit required, and is it structured as a lump sum?

It is not structured as a lump sum. There's a series of payments, and with our 8K, we did file the agreement as a material agreement. And so, it's got some of those payments detailed in there. So, I'll just point everyone to that rather than go through all those, but we did structure it as a series of payments as the project, you know, as the equipment moves through its various stages of getting towards Siemens. Gotcha. Okay.

And then you mentioned the turbines have never been fired, obviously. You know, any comments on why they weren't fired by previous owners and maybe how long they've been in storage and what level of refurbishment you feel they might need?

Yeah, I mean, these turbines were purchased, put together, or somewhat put together, and they never got fuel supply hooked to them. And so, you know, they sat for a while. They've never been fired. Siemens has inspected them. They've given us a full report as to condition to the turbines. Our plan is to bring them back, run them through their refurbishment shops in potentially Charlotte and Memphis, Tennessee for the generators. And just make sure that they're in a new spec condition, obviously upgraded to the, you know, latest and greatest technology for those units. And so, you know, the point we wanted to make here is that we're not buying used equipment that's, you know, 20 years of life has been used off of it. This has never been fired. it's going to be refurbished to a new SPAC and brought to the Merrim site to be assembled. Makes sense. Okay. Thanks again. I'll hop back in queue.

Thank you. And as a reminder, if you'd like to ask a question at this time, please press star 1-1. We'll give it a moment. And we have a follow-up question from Jeff Gramp with Mildland Capital, I'll tell you, Linus Melvin.

Hey, guys. Brent, could you touch on, you know, I noted that you're getting a steam turbine, some related assets there as well. Given the plans to have this initially be a simple cycle, can you touch on any kind of optionality plans you guys are considering given the additional assets that you're getting

Yeah. I mean, their project originally was to be a combined cycle. At some point in time, they sold off some of those components, and it fits our site better as a single-cycle project. We wouldn't be able to get all the steam components in time to build it as a combined cycle plant, so we've just decided to go for it as a single-cycle unit. But so, yeah, we'll have some extra equipment that we'll have to figure out what to do with. But, you know, that's that's just what came in the package.

Understood. OK. And the CapEx kind of I guess we'll call it ceiling that you guys talked about. Does that include the cost to build the gas line to Mirum? And therefore, we should consider that as kind of a sunk cost in this project number, providing the optionality to dual-fire the existing assets, or how is that component of the cost structure embedded in some of those numbers?

Yeah, so, you know, if we're going to bring a gas line in for these CTs, we'll overbuild that so it's got the capacity to also serve Merrim as well. That's our current plan. Obviously, you know, we've got a little time before that gets built to kind of tweak things, but that's our current thinking today. Understood. We want to maintain that optionality if we decide to dual-fuel Merrim at some point in the future. All right. Thank you, guys.

I'm showing over the questions in the Q&A queue at this time. I will now turn the call back over to Mr. Brent Riesling for any closing comments.

Yeah, I want to thank everybody for their interest in joining the call, particularly at short notice today. We're excited about this project. We're excited about the contracts we announced both a month ago. So with this project coming online sometime in early 2029 as our general guidance, we think 2029 could just be an absolute breakout year for the company. So we would ask investors to look at that and consider that when investing in our company of that, hopefully, is going to be the potential big year for us. So with that, I'll end today's call and thank everybody for their participation.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.