Petro Matad (LSE:MATD) — Renewable Energy joint venture investor Presentation

0:01 Good morning, and welcome to the PETRO MATAD Limited Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO, Mike Buck. Good morning to you. Good morning. Thank you, and thank you to all attendees. Good morning, good afternoon, good evening, wherever you're dialing in from,

0:31 and welcome to this presentation on, our renewables, renewable energy initiative in Mongolia. We advertised this, a while ago. We were planning to do it during the third quarter of the year, but things have been a bit busy on all fronts. So apologies for the slight delay. But, hopefully, you will, get a lot out of the presentation today. If I can firstly introduce the people that you can see on screen, we have... From Sunstep, we have Zula, who who you've seen before. We have Anand, who's our business development director. He's gonna be making the presentation. And we have Inkbatter, who's our technical manager for for Sunstep. And we'll involve ourselves in the... All of us in the q and a, but as I say, Anand will will handle the the the presentation.

1:23 Hopefully, you've seen the RNS we issued yesterday, which gave an update on, the signing of a memorandum of understanding with Aqua of Saudi Arabia. We're very pleased to have have got that done. We are, as you will hear, involved in quite a lot of projects now on the renewables front, and our goal is to get two of these at least to ready to build status very, very quickly. And in that, we are helped by the government encouraging us to do so and really pushing hard to make sure that we that we can. And we have many other projects following on behind, and we are delighted to have signed the MOU on export projects even though they're potentially a little longer term.

2:13 Having a partner like Aqua involved with Sunstep is a real feather in our cap, we think. So I will hand over to Anand to go through the presentation, and then we will deal with questions. So, Anand, please take it away. Yeah. Thank you, Mike. So, good morning, good afternoon, good evening, and thank you for joining us. Is my voice clear? I hope my voice clear. Right? Yeah. I'm Anand from Sunstep Power, the Mongolian development company within the Sunstep Renewable Energy joint venture. Today, I hope to give you a summary of why Mongolia has so much renewable energy resource potential and what the country has done to date to exploit this and why the situation is now changing with the renewables becoming an important part of Mongolia's energy plans.

3:04 And, also, I, of course, I will take you through which projects we have and how this can create value for shareholders. So, yeah, first of all, I would like to start with the quick... Very brief introduction on who we are. Right? So Sunstep Power is the Mongolian subsidiary of, Sunstep Renewable Energy. Sunstep Power, we are... Sunstep is focusing on to develop and invest in renewable energy projects in Mongolia as well as including the solar, wind, battery storage, and green hydrogen as well. So our mission is to speed up Mongolians energy transition and support the country's net zero goal and also to create value through developing ready to build projects, which is attractive to large scale investors and where possible, stay involved in projects through construction into operation and revenue generation.

4:02 So we have secured a sizable portfolio of domestic projects, and we see the potential for many more. So we think we are well positioned to be a key local player in Mongolia becoming a regional exporter of clean power. So to achieve our goal, we use our extensive knowledge and network to secure and develop projects to international standards, including international bankability. Right? So to help attract internationally internationally recognized investors and lenders. And about our team, our team has more than a hundred and eighty years of combined experience in energy sector, including Mongolia specific experience on national grid operations, energy tariff regulation, and utility scale battery storage, and some of Mongolia's earliest wind development. So, basically, we're... We are a really experienced team here... Working here.

5:04 So to jump into the resource, so... Because this is where everything begins. Right? So as you might know, the Mongolia has some of the best sun and wind resource potential in the world. So studies estimate about 4,774 terawatt hours a year of solar potential and about 2,550 terawatt hours of wind potential. To put that simply, so, basically, it means far more than the country could ever use itself. So Mongolia is a country two and a half times the area of France with only 3,500,000 inhabitants. So domestic power demand has been low historically, but that's now changing.

5:51 Added to which, the Mongolia has some energy hungry neighbors such as China, which is our direct neighbors. So, yeah, for solar, we have more than two hundred and sixty cloud free days here, and our cold climate also helps because solar panels actually work better when it's cold. And snow cover helps by reflecting extra light onto the panels, right, which... Yep. So for wind, the Mongolia's West Grass Desert step has strong and steady wind. So in some of Mongolia's strongest wind locations, the projects can achieve capacity factors exceeding 40% compared with the more typical onshore wind performance of around 25 to 30% in parts of Europe.

6:41 And most importantly... And the price on offer to pay for renewable power in Mongolia is quite attractive. So tariff in Mongolia is now now around 10¢ US cents per kilowatt hour. It's a USDT nominated. That compares with about eight cents in Europe and 8.5¢ in US and the Mongolias. And, also, additionally, Mongolia solar irradiance is much better, so which gives us the better solar energy yield. Right? And... Yeah. So with such a great resource, so why is there so little renewable power in Mongolian mix today? So as of now, the Mongolia has only about 335 megawatts of renewables online out of 1.9 gigawatts total installed capacity.

7:35 So it's mostly wind and solar, and this number is a small number. The the reasons are simple. The country has always run on coal because in Mongolia, the coal is plentiful and at surface, and it... It's easy to mine. And the country's population is also small around... Like I mentioned before, it's 3,500,000 people. So because of this, so domestic demand has been very limited, and the idea of exploring clean power... Exporting clean power has been talked about for years, but never actually done escape. At the same time, the Mongolia's aging Soviet era coal fired stations, now it's a... Its power grid have real problems.

8:21 During winter, the system faces a serious supply constraints, including brownouts and peak capacity shortage, which are politically very sensitive as as well. And also in the morning and the evening peaks, there isn't enough domestic supply. So Mongolia imports extensive from... Extensive power from Russia. So during periods of low demand, excess power is sold cheaply to neighbor... Sold back to neighboring Russia. And, also, the sum of the small renewable generation gets curtailed because the system still has limited energy storage and flexibility. And the Soviet power stations are now well past the best. So these are the the problems we're committed to help by solving and accelerating renewable energy development and battery storage capacity in Mongolia.

9:17 Let me jump to the next slide. Yeah. So so the next slide is... So why now? So I would say five things have changed these last two two or three years. So first, stopping winter brownouts is now top government priority with major political incentives to do something quickly. So it will be a big political win to do so and major failure... It will be a major failure if not achieved. And secondly, the many of Mongolia's... Like I mentioned before, many of Mongolia's coal fired power plants are now more than 40 years old and increasingly face reliability and maintenance challenges.

10:03 It's also new. It's it's also now very hard to get financing for coal fired power generation projects. So, third, third reason is Mongolia is developing a strong environmental awareness, and the government has committed to 30% of renewables within the power mix by 2030, so up from under 9% today and to net zero by 2050. And fourth, the grid stabilization through an increase in battery storage capacity has now become a viable goal as as we all know that... We might all know that battery costs have fallen significant... Significantly over the past decade.

10:48 And the fifth and last exporting power to China and on... Onto other power hungry Asian nations is now being targeted as an achievable goal. So with the move away from coal, the government imperative to quickly stabilize the grid and meet demand without high priced power import from Russia and give away priced x... You know, give away priced export to Russia at the immediate domestic focus is on solar plus battery projects. So Sunstep is targeting this market, and the Ministry of Energy is supporting this solar plus best projects. So Sunstep has secured now two sizable projects in which speed of delivery is key.

11:37 In simple terms, these projects are designed to capture cheap solar power solar power during day and store it in batteries and deliver it in the evening when the country needs it most during the peak time. And on the projects we have secured, we're now working towards a long term US dollar index PPA with target tariffs around 10¢ per kilowatt hour and contractual provisions are designed to manage any curtailment risk. But given the grid stablage... Stabilization is most read... Readily achieved through increasing battery storage capacity incorporated into our plants plants. So curtailment risk that has impacted some of the earlier projects in Mongolia is now much reduced.

12:33 Yeah. So now let's have a look at the Sunstep portfolio. So this slide shows our current project pipeline in one table. It summarizes the... Each current projects and targets and provides details of capacities which are significant. It gives an indication of total capital expenditure needs to complete each project and the time frame in which we see this being achievable. So I would draw your attention to three groups on the left. The first group... So the first group is our core development portfolio where we are currently the most active and have the strongest project development positions. Mandal Gobi and are our two high priority solar plus battery projects.

13:22 We also have city where we ranked first in the recent public tender as a consortium, and there is the solar and wind hybrid project. And these projects are all exclusively helped by Sunstep to offer our... Offering our fastest route to ready to build status in twenty twenty seven to twenty twenty nine time frame. So I'll give you some more project specific details in the following slides. And back to the presentation, the second group is growth growth portfolio. This includes in upcoming upcoming IFC wind project auction and off grid mining power solution to mining sector, including our green hydrogen project.

14:10 The mining sector in Mongolia offers significant growth potential for off grid power solutions as there are many remote mines still relying heavily on diesel generators and fuel imports from Russia. And recent fuel supply and price disruptions have shown that diesel is not a reliable reliable or cheap source of power for for them, the minings. Right? And solar, wind, and batteries can give these mines cleaner, more stable, and lower cost power. And on this mining solutions, we see more than 500 megawatts of potential demand here, and it's a clear target for us in the near future.

14:56 And below that, the third group third group is export, potentially a longer term opportunity as it requires go... Governments to reach and execute agreements, but discussions are ongoing between Mongolia and China, and power export will be a real game changer for Mongolia. And as, you know, as was announced yesterday, Sunstep has just signed an export MOU with Aqua of Saudi Arabia targeting a first pace of 4.5 gigawatts of... Supported by 500 megawatt hours of battery storage. And AQUA's entry into Mongolia is now big deal for the country given their technical and financial capabilities, and Sunstep is delighted to have an association with them.

15:44 And AQUA's knowledge, of course, AQUA's knowledge of the Chinese market coupled with our Mongolian expertise, we believe that the ideal partnership in which to pursue the massive potential of power disruption into the rest of the Asia. So now for this slide, I would like... So let me focus on on our two most important projects for early delivery. So Mandal Gobi and which are our most advanced projects, the government is delivering delivering on its promise of supporting these solar plus battery projects. And as a result, the feasibility studies are approved and the construction licenses issued.

16:32 And now we're we're now negotiating the tariff and the PPA and the long term contracts to sell the electricity. The government is pushing our... Is pushing for significant progress in 2026, and now we're keen to achieve this and realize the value as soon as possible. So each project, Mantal Gobi and Arbakir two project, each project combines a 135 megawatts peak of solar panels with a 100 megawatt battery capable of storing four four hundred megawatt hours of electricity, which means we have a capacity to store four hours of need during the peak hours, and it's...

17:18 And together, that's it. So together, these two projects, it's a total 270 megawatts megawatts of solar and 800 megawatts hours of storage.

17:29 And, also, please note that these projects are each twice the size of Mongolia's largest existing solar project and will be the third and fourth battery storage facilities installed in country, and it's larger than both the existing battery storage facilities. And they were chosen by government as high priority projects because they will help solve the peak hours power shortage problems that currently visit the central grid. The key the key steps in our work here are already done. The key milestones have achieved. Like I mentioned before, the feasibility studies were approved in June 2026, and the construction license were issued in August 2026.

18:18 And the land arrangements and grid connection planning have also progressed significantly. So for these two projects, the target tariff for... Target tariff is 9.9¢ per kilowatt hour, and it's linked to US dollar, and the PPA duration is twenty to twenty five years. And that's an important point for investors. The tariffs in Mongolia are higher than Europe and at about... Europe at 8¢ and The US at about 8.5¢. And our sun is stronger like I keep mentioning. So that's why we target an equity return of 15 or more, well above what similar projects typically earn in more mature markets.

19:06 So Mandal Gobi is targeted to start operating in 2027 and in next year, which is 2028. We're developing these two projects alongside a large international investor, and Sunstep can earn a earn a development fee when the projects reach financial close, the point at which the financing is signed and construction can start. And we also have the also have the option to keep up to 30% of... 30% in each of these projects.

19:51 Yeah. And, in addition to, these two high priority projects, we also have, two exclusively held held large capacity opportunities. And the first, the the Hundu City is... Hundu City project. It's a 100 megawatt solar plus battery project near Ulaanbaatar City, which is the capital city of Mongolia. We racked first in the municipality's tender, and the neck... Now the next step is to conclude the private partner... Private public partnership agreement. And the protest project is designed to power more than 32,000 homes and airport economic zone. And the next project is the project, which is a hybrid project to be built next to an existing newly built privately funded coal fired power plant.

20:44 And this PACE one... This project has a two two phases, and PACE one is 100 megawatts of solar, and the PACE two adds another 100 megawatts of wind. So this project also has a potential to share existing infrastructure with the currently operating coal fired power plant, which could significantly reduce construction costs. And, yeah, together, these two projects add... Projects add 300 megawatts of exclusive capacity to our portfolio and the 200 megawatts of solar and 100 megawatts of wind and plus 170 megawatts of battery storage.

21:34 Yeah. So looking further ahead, there are three big growth areas. So the first step is the IFC wind auction. This is a 100 megawatt wind project under a World Bank program. We are preparing to participate in this competitive process in cooperation with an experienced... Really experienced international wind power developer. And the second is the cross border cross border export project. So this is our export initiative with Aqua starting with 4.5 gigawatt first base and which I will cover in mid... More detail shortly in separate slates... Slides. And the third, it's a Mongolian mining. The mining is the backbone of Mongolia's economy, and mines are big users of electricity.

22:24 Then many mines have historically relied on imported power from Russia and or locally generated power using the power using diesel. So there is a growing government and commercial interest in encouraging major mining operations to source more electricity domestically. So we identify a market of more than 500 of... 500 megawatts of demand from mines that could be served directly with dedicated solar, wind, and battery projects. And they also offer the chance to deploy green hydrogen as a fuel as well. Yep. And within this framework, our first project here is the of the green hydrogen project, which we hold exclusively.

23:12 It was developed around the opportunity to supply green hydrogen to major copper mining operation, replacing coal boilers and provide... Providing clean fuel for their hauling... Trucks. The the progress... The feasibility study has completed. Now we're now working on securing commercial of tech arrangements with them. And as we... As you might know, we have a Japanese government grant funding for part of this project as well. Yeah. So now let's talk about how and when Sunstep's portfolio can crystallize value, and I I think this is the key slide.

24:00 Our primary business model is to develop projects through their permitting, commercial, and financing stage with the aim of earning development fees when agreed milestones are achieved, typically around financial close. So this... The... For this, the industry benchmark in Mongolia for development premium is around 30 thousands to $50,000 per megawatt and potentially higher for projects with large battery storage, like Mandal Gobi, Erbahir, and the Hunu City project. And this is our primary business model because the cost of doing this is a relatively low compare... Comprising staffing costs, studies, permitting, legal input, etcetera, and is within SunStep's financial capability.

24:53 And, yeah, the the rewards are also significant. And based on our current assumptions assumptions, we estimate total development fee opportunity in the 20,000,000 to 30,000,000 range from our four exclusively held projects, and this is achievable within the next three years. And, obviously, the actual amounts and timing will depend on the the final agreements and on reaching successful financial close, but we are focused on this as a priority. And under the development fee model, SSP, Sunstep would not be required to invest equity into the completed projects to receive these fees. And, however, in negotiations with partners for these projects, we are also keeping the option to... Option open for Sunstep to retain a working interest in the projects through construction and into operation.

25:52 So with the target returns of 15% or more, these projects are valuable and produce sizable annual revenue once in a production. So there is economic advantage to staying involved. We recognize that these sizable projects are capital intensive, and so we would only stay involved at a significant level of working interest if funding is available at the time required and economically attractive and corporately acceptable manner. Now, yeah, that... Now the big long term opportunity... Export opportunity, exporting clean power to China and beyond... With beyond.

26:40 And Mongolia's domestic market was growing. It's still relatively small compared to the markets of nearby East Asian countries. Historically, a lot of domestic demand is why projects in Mongolia have stayed at 10 to 50 megawatts to date. But as of ex... As as I have explained before, the domestic demand is now growing and growing and wrap... And it's very grow... Growing very rapidly, but the Northern China needs a large amounts of clean power. And the South Gobi, the southern side of Mongolia is only about 600 kilometers from Beijing, Tianjin, Hebei region where demand is really huge and time points to China if we are closer still.

27:31 And last week, Sunstep, yeah, like I mentioned before, Sunstep signed an export MOU with Aqua following the energy cooperation MOU signed between the governments of Mongolia and Saudi Arabia. The MOU targets the first phase of 4.5 gigawatts of renewable export capacity supported by 500 megawatt hours of battery storage. And under an illustrative scenario, this first phase could generate around 17 terawatt hours of electricity a year or roughly 900,000,000 of gross annual electricity sales at the assumed export tariff. And these projects... These project level figures give an idea of the scale of such projects.

28:21 And this cooperation builds on the... This MOU cooperation builds on the pre feasibility study Sunstep co authored and delivered to the government in September 2025, and our role locally in an export project will be routing permits and government coordination. And the next step in the export initiative is a government to government framework between Mongolia and China targeted for 2026 and 2027 followed by transmission planning of take arrangements and paced project development. And we see will on the Mongolian side. We see significant interest on the China side as well, and there are some major players in global global renewables very keen to get involved.

29:15 And timing remains uncertain, but this could be a huge game changer, and we want to be we want to be involved in this great opportunity. And as a summary, to sum up, first, we have a market that needs us. The resource is world class, and the country urgently needs solar plus batteries to solve this domestic brownouts and peak hour shortage. And secondly, license it high priority. We have already licensed it high priority assets, and it's... We're already secured debt. And the Mandal Gobi and projects have approved the feasibility studies and construction license.

30:03 It's progressing really well, and the PPAs are now under negotiation. And third, the the renewable energy project development is capital light value creation with the estimated 20,000,000 to 30,000,000 development fee opportunity exists for Sunset over the next few years, conditional on the projects reaching their commercial and financing milestones. And the fourth upside option... Optionality is retained. We have the option to keep significant working interest in our core projects up to 30%, which have a 570 megawatt peak potential. So we have a growth pipeline of 24 megawatt exclusively held, 100 megawatt potentially available, and five... More than 500 megawatt of identified projects for mining.

31:00 And, of course, there's a 4.5 gigawatt first phase export initiated with Aqua. So in numbers, four exclusive projects with 517 megawatts of generation, more than 600 megawatts of growth opportunities, and this 4.5 gigawatt first phase of export upside. And now our next milestones are signing the PPAs for this first two high priority projects, which is and reaching financial close in 2027, which is when the first development fees can come in. And, yeah, there is a lot of work still to do, but the environment is now much improved, and some big names are keen to get involved, and Sunstep is very well positioned to get involved and create some serious value in the next few years.

31:55 So this is the end of my slides, and thank you for your attention. Thank you, Anand. You did you did well. Thirty minutes more or less on the dot, which was the kind of the target. So I I hope all attendees got decent briefing out of that on the status of our portfolio and why we think right now is a good time to be involved in renewables in Mongolia when it has in the past had a bit of a checkered history. We see that,

32:28 well, as Anand summarized, the the the Mongolian sector needs companies like ours, and there is a lot of opportunity being generated particularly under the current government that has really moved hard to solve the domestic problems that have been created over the last few years and start bringing the renewables truly into the energy mix rather than being peripheral to them. And and obviously, the export picture is is is significant. So we're we're we're very happy to be involved in that. Okay. So as usual, ahead of the presentation, we did ask for pre submitted questions, and we've had quite a lot. As none of you will be surprised, some of those relate to the oil side of PETRO MATAD's business, so I will deal with those once we've gone through the renewables questions.

33:21 And on all of the questions submitted, if we don't get to them all during the presentation, then we will post through the IMC platform. We will post written answers to those, at least the... All of the ones that we are able to to answer. So if we kick off with the renewables questions, submitted, prior, first one is, can you confirm how much PETRO MATAD has invested into Sunstep so far and how much income this has generated? Okay. Well, I'll I'll take that one. The the terms of our agreement, as as you're aware, this is a fifty fifty joint venture. And under the terms of the agreement, PETRO MATAD funds 100% of the... Effectively, running costs of the company, and then the partners put in their 50% share of development costs.

34:09 That... That's the way this works. To date, with some of the setup costs and and PETRO MATAD effectively farming into a couple of projects that were preexisting, We spent a little over $3,000,000. How much income has this generated? Well, as Ananda summarized, income is now tantalizingly close. It hasn't generated any income so far, but we have confidence that it soon will. Next question. I have found it hard to determine how many employees Sunstep has and any information on staff costs. Can you provide some details when shareholders can expect to see an income from our renewables? Anand, can you, can you take that one for me? Yeah. Sure, Mike. Yeah. So, yeah, so Sunstep Sunstep operates with a very lean team of seven employees and one international specialist specialist adviser who is based in Thailand.

35:07 And using additional external expertise when required. We use additional ex... External expertise when required. And our team covers project development, engineering, and grade and regulatory matters, permitting and

35:22 finance with additional specialist advisers engaged as needed. And in terms of the running cost... Costs, the run... Running costs are kept very lean at approximately 500,000 per year. And in addition to employee salaries, operating expenses include fees for two Sunstep Renewable Energy board members and consolidated financial report... Reporting. And Sunset Renewable Energy Singapore audit costs and software subscriptions and other administrative expenses. And so in terms of the employee salary, the costs accounts for approximately 70 to 80% of total running costs.

36:09 So in terms of the first income, like I explained in the presentation, we expect our first income from the renewables business from 2027 from our high priority projects. And the priority project... This priority is to maintain the cost discipline while progressing projects towards transactions capable of generating development income. Currently, so it's targeted from 2027. Thanks, Allan. Next question. It appears the ownership of Sunstep has changed over the summer. Can you tell us more about these changes? Well, somebody's quite eagle eyed there. There have been some, let's say, cosmetic changes at SPV level for one reason or another, but overall, the ownership of Sunset has not changed. It's still the fifty fifty joint venture that it always has been, and that's the way we'd like to keep it.

37:04 Next question. The company has suggested before that it would consider dividends on the back of sales on renewables. With these two ready to build projects, will the company consider a special dividend to shareholders? Yeah. PETRO MATAD has said this has said this in the past, and we would definitely consider it. It's... As I think I've mentioned before, companies of PETRO MATAD's size weren't really expected to pay dividends. But these days, it... It's a it's a very nice thing to have, and it's something that shareholders are are keen to to to get. We would like to be able to do this. Obviously, the oil side of our business is a bit more expensive day to day than the renewable side, but we're looking at generating some quite significant sums from the renewables over the next few years. So the board of PETRO MATAD will definitely consider dividends as we go along.

37:59 Next one. Now Sunstep is generating revenue. Will Sunstep become self sufficient?

38:05 Does it require further investment? And will that come from all owners, not just PETRO MATAD? I think I summarized in the previous answer how the setup works, for development costs, basically $50.50. And we've got an agreement on the joint venture that runs for twenty six, twenty seven, twenty eight whereby PETRO MATAD is funding the running costs. But under the terms of the agreement, it says PETRO MATAD will fund until Sunstep can fund itself. So once revenue starts being generated by Sunstep and it becomes self funding for its running cost, then there there should be no further input from PETRO MATAD in that respect. But, obviously, its share of development costs will will potentially have to be added to if some step hasn't got all it needs for that. But we are targeting a self sustaining, self funding entity as soon as possible.

38:55 Next question. You've said PETRO MATAD is focused on crystallizing value. Can you explain the most likely monetization routes for the current portfolio, whether you expect develop... Project sales development, premium, partial sell down, retained equity, and give investors some indication of potential value attributable to PETRO MATAD's 50% interest. Well, I think you've had all that in the, in the presentation, itself. Plan a, because it's the thing we can... We have line on... Of sight on how we can easily fund is the development premium route whereby we get to financial close and we bring money through the door as we bring in investors. But as Anand has told you, we're retaining the option to keep to keep a working interest.

39:45 These projects are large, so, obviously, their equity tickets can be quite large, but they do generate quite significant annual revenue once they're up and running, particularly once debts have been have been paid off. So there is an attraction to that, but we'll only be able to do it if we can fund it in a sensible way. And at the moment, we don't... We certainly don't see that as using PETRO MATAD equity to fund equity shares in these large in these large projects. But it's nice to keep that option available. It gives us optionality, and it makes the... I think the the the joint venture, the company we're forming here, it makes it quite an attractive entity. Next one. Can you provide more detail on the major international renewable energy company that has agreed commercial terms? Well, obviously, we've mentioned the signature with Aqua on exports, and that's great.

40:38 We are talking to and cooperating with major international renewable energy companies. But at the moment, they they prefer to remain anonymous, and I think so they should. As soon as we are able to announce signed agreements or projects that are in our hands that we are going to do jointly, then we certainly will. But at the moment, we'll have to keep that confidential. Next question. Have the owners considered listing Sunstep as an IPO on AIM or another market? IPO is an option that we we consider may actually be something that we could that we could do in the future until... Effectively until this year, I think our projects will consider to be a little bit too early stage for an IPO to to extract the value that we really would like it to do.

41:33 But now with these high priority projects, I think that moves things forward. So long as these can actually be delivered, and as I've been working in Mongolia for a long time, I know that things can move slowly. But on these high priority projects, you can see the incentive the government has to bring them on stream quickly, and you can actually see them not only talking the talk, but walking the walk in in that feasibility studies have been approved immediately.

42:06 License to constructs, they've been issued, and the PPA negotiations are are ongoing. Everybody has a target to get these done quickly. So so that that that is why we have some confidence that that this can happen. And it's that... It's those kind of projects that are approaching final flow... Financial close or actually starting construction whereby you can actually show a, would be investors that actually this... It's it's not just you saying that it's gonna happen. It's actually happening. Okay. Next one. Does Zula post on the LSE chat board as hot kitty? No. She doesn't. No members of Sunstep nor nor nor PETRO MATAD posts on the... On on the chat boards.

42:54 It would contravene rules, would result in severe disciplinary action from the company. So, no, we don't do that. Next question. Can you confirm that Sunstep strategy is still to not carry long term construction debt on its balance sheet, but to farm down, sell down equity stakes to strategic developments like Aqua upon reaching project milestones? What are some of the key milestones we can expect for the aforementioned?

43:22 Anand, do wanna take that one? Yeah. Yeah. Sure, Mike. So, yep, our proposed model, is to originate and develop projects and then bring in strategic investors like Aqua Power to finance construction at project company level. So, basically, the debt finance is on the SPV level, project level. And with Sunstep for earning the development premium that we explained. So this is intend... Intended to limit direct exposure to long term construction borrowing at the developer level, and the ultimate funding structure remains subject to negotiation depending on the investors. And Sunset Renewable Energy may consider a retained equity stake up to 30% where funding and project returns justify it. Right? And the strategic investors monitor tariff approvals, execution of bankable PPAs, and ready to build milestones and financial close with the first priority projects currently targeted...

44:26 Targeting 2027. So, basically, what are the sum of the key milestones we can expect for the mission? So, basically, we now... For two most priority projects, now we we have to, you know, successfully concludes the PPA, and then it's, yeah, in the... And our... We expect our first development premium 2027. Okay, Alan. Thank you very much. Next question. The latest RNS stated 4.5 gigawatts as a first phase. How large is the potential involvement of Sunstep here and the rollout generally if 4.5 gigawatts is just the first phase? Perhaps you can take that one for us.

45:19 Hello?

45:22 I think, but are you there? Nope. You seem to have seem to have lost ink better. Hi,. Can you hear us? Hello? Hello. Can you hear us? We can hear you. We can hear you. Okay. Mhmm. So, yeah, in regards of the 4.5 gigabaud, whether it's in just the phase... The first phase, so we'd like to respond it. 4.5 gigawatt figures refers to propose the initial phase of the export corporation, power export corporation with Aqua Power with the longer term concept potentially reaching up

46:10 to 10 gigawatts. So role as a local develop... Developer, including land, permitting, road development, and stakeholders coordination, and with potential development of premia and and an option to consider equity participation also. This figures describes the scale of proposed initiative, no capacity under construction or contracted revenues. Progress depends on the cross border government arrangement, commercial offtake, transmission infrastructure, financing, and definitive arrangement. No project level evaluation has been done yet. Okay. I'm glad to thank thank you. And maybe this one for you as well. And the next question was, how is the green hydrogen strategy progressing, and what further involvement is Japan expected to make in that?

47:07 Yes. So in regards of the green hydrogen, the green hydrogen opportunity remains at at early development stage. The feasibility study work has been completed, and that discussion continues regarding to a long term offtake arrangement with mine operator, securing bankable offtake as the key commercial next step. Access to Japanese grant finance continued in... Continued as the project matures. Currently, however, since the power is fully focusing on the solar and best project, which are our high priority to reach revenue generation by 2027. And Aqua is one of the world's first mover in the green hydrogen scale, has a substantial green hydrogen experience, but the existing export MOU could extend by Aqua to finance or develop specific hydrogen project with Sunstep in the future, subject to, you know, further project maturing and discussion.

48:14 No specific hydrogen has been agreed with at this stage. So for information, the Mongolia has significant potential of developing green hydrogen using abundant solar and winter resources. And the government government's energy transition strategy for 2026 to 2015 recognizes that hydrogen is the future energy source creating a long term policy foundation for the industry. And government of Mongolia has faced the development of hydrogen in three phases. So from 2026 to 2030, the plan to launch hydrogen demonstration project in mining, transportation, and industrial facilities.

49:06 Between 2030 to 2040 to scale successful projects into commercial hydrogen product... Production supported by renewable electricity and contracted offtakers. And the next third phase is twenty forty to twenty fifty is to integrate the hydrogen and evaluate the large scale industrial export market. So this our goal of our government, which is we are in line. Thank you. Okay. PETRO MATAD, thank you. Right. I've I've gone through the rest of the presubmitted questions on renewables, and I think largely, they they they... They've been answered. But as we go through and and submit any written answers to questions, we'll just make sure there's no bits we've we've missed.

49:56 I'll have... Now have a look at some of the questions submitted live and deal with the renewable ones first. Here's a question on the export. When can we expect the first major milestone for cash realization from the energy export mega project, and what are... What sort of sums are we looking at? In terms of sums, as as was mentioned in the presentation, we have not as yet made an estimation of what what this could generate. We we don't want to excite people too early, but, obviously, they are they are massive projects. And as to the timing, we've we've suggested a kind of a three year timeline to get this moving because it's government to government involvement. But those discussions we know are are going on between Mongolia and China at the moment and have been for a little while.

50:45 So we're we're confident there there is an enthusiasm on both sides of the border. When I was talking to Aqua last week, their president for China said to me that his experience with the Chinese energy market was these things can happen in six weeks or six years. It just depends on what what the, what the circumstances prevailing at the time, exactly are. But, obviously, we are keen as is Aqua to get the, export projects moving because they are game changers for Mongolia, and they're also gonna help out dramatically with the the Chinese energy mix. So, yeah, we hope it's we hope it's the the the shorter time frame, and we're certainly doing everything to make sure it it can be.

51:34 Next question. Have the renewables been of any interest to any potential farm in e partner on the oil? No. Actually, it's not been not been raised by any of the potential farm in East today. It doesn't mean to say it won't be, but not so far. Here's another one. Who is paying for the 220 kV planned transmission lines that need to be built, and how long will they take to to be built? I think for the the high priority projects, and and... But correct me if I'm wrong, but those are very short tie ins to the grid and already factored into the into the projects. So they're they're they're not critical path items.

52:16 The the 220 kV line from over here, who's building that? I think, but we can't hear you. Yeah. In regards of the power line, yes, you're right. It's not a, it's not a big, we don't have a very... We don't have a long transmission line. Our project land is very, close to the existing substations, which give us small numbers of the power transmission lines. And the power transmission lines and to be involved within this project package together with this solar and battery.

52:58 Okay. Alright. Thanks. What is the projected revenue from the renewable energy in the short, medium, and long term? I I I guess we've only we've only kind of fleshed out for the moment the short slash medium term. The the fact that we could generate premia in the range of 20 to $30,000,000 over the next few years has got us quite excited. Obviously, longer term, it depends how we finance ourselves. If we just keep being a developer, certainly, there's no shortage of projects coming to to to us these days to look at. So we could keep doing the same thing and perhaps generating the same amount of revenue year on year as we move forward. If we take the option to stay involved in some of these projects, then then that would be different. But at the appropriate moment, we'll at giving a bit more detail on that. But for now, we'll keep our powder dry and just focus on the... On on plan a.

53:57 Next one. If we're looking at selling down an equity component on some of these projects, when is the earliest we can expect cash inflows from that? Well, I think as Anand has explained, 2027 is our target on the on the first... On the fastest moving projects. If SSP can take up to its 30% working interest in the two projects, can it sell it on in part to infrastructure investors and take a fee there? Obviously, once you've got your, interest in a project, then you're you're largely free to do whatever you want with it. We're keen to make sure that if we do do that, we've kept a significant stake. We don't want it just to be a tiny carried interest in general. I mean, we wouldn't say no to a tiny carried interest.

54:43 But we we want to be a... We wanna have a seat at the table, and we think it's more marketable if we do. How much does SSP need to invest to reach financial close on its first four projects and earn the 20 to $30,000,000 of development premium? It... It's a couple of million dollars more to, to spend on these. As Anand said, this is relatively low CapEx to get to ready to build status on on these things, not no CapEx, but low CapEx. So we're we're we're not... We don't see ourselves being financially stressed for that. Obviously, moving into the development... Into the construction phase where we to choose to do that, that's a different matter. There are ways of funding that that don't... You could even use equity bridge financing.

55:33 And if it were to be economically attractive, then potentially we could consider doing that, but we don't wanna get ahead of ourselves on this. Can you confirm that financial close and receipt of fees, MATD's portion will be paid immediately to them and not subject to further discussions or agreements? Well, under the under the agreement we have for our joint venture, once Sunstep becomes self funding and can fund all the things that the board approves that it wants it to do, then extra money can be returned to shareholders. There's nothing to stand in the way of that. Okay. For the moment, that seems to answer all the renewable related questions. So as we got a few minutes before the hour is up, let me turn to everybody else's favorite subject, which is the oil side of things.

56:24 PETROCHINA. Yeah. There's a there's a subject we like talking about. Is there a plan to totally remove petrol... Reliance on PETROCHINA? As everybody knows, I think we've been we've been producing oil all year, and it's been stored by PETROCHINA, but not sold for various internal reasons. That remains the same. It has not yet... The the the resolution internally has not yet been reached. Of course, we would have said by RNS if it had been. In the background, we are told that progress is being made, but we've been told in the background quite a lot of stuff over the months. So rest assured, we will, be telling people when... Once the problem is is resolved, and we've seen con... Concrete evidence to that effect. We are in parallel looking at ways of independent sale of our of our oil.

57:17 One of the problems we face is the infrastructure. The oil infrastructure in Northern China is largely owned by PETRO China. So the traders we're talking to struggle to get access to that infrastructure, and therefore, their delivery points are further south and not necessarily commercially viable for us to truck to. And that's the problem we are having. As I think we said to... In an answer to somebody who sent a direct, question in some weeks ago, why haven't you done it yet? You can be sure if it was easy, we would have. It's turned out not to be as easy as we had hoped it would be. But effectively, with this now coming to a head where, you know, PETRO China shut us in because their storage was full, They are struggling to manage their own production because the storage is full, so they have an incentive to fix this quickly.

58:09 I use the word quickly. They have an incentive to fix this, and we are hoping that they do. Pressure is on from all sides, to make sure that that happens. Farm out. Is PETRO MATAD any closer to a farm out deal? Well, we're certainly still talking to the parties we've been talking to for a little while. We are pushing them, to make offers. No firm offers through the door as yet, but we still... We are still engaged, and we've had a new entry recently that we're also talking to. So, yeah, things are still quite quite active compared to how they were, say, a year ago, and that's probably for global supply reasons. On the oil side, we have read the refinery is due online in December 2027.

58:58 When can PETRO MATAD start to send oil to the pipeline, to move away from PetroChina? Well, obviously, once the refinery is ready, then the Mongolian government will want and insist that domestic production goes directly to it, and that would be the time at which we would be able to start up the pipeline from the Block 19 fields to the refinery is largely complete. The refinery has said maybe late twenty seven, maybe 2028 that they will be ready. We hope so. We have visited. We've had a look around. We know they're building storage tanks at the refinery site. Not complete yet, and the refinery is not complete. But as soon as they are, then we would be able to put our oil in the pipeline.

59:48 And in a follow-up to that, how will we get our oil from our wells to the pipeline? We're about 25 kilometers away from one of the transfer points on the pipeline build, is in Block 19 right next to PETRO China's facilities. They have oil storage tanks that they are building there as well as part of the pipeline infrastructure. So, potentially, we can deliver there. We would probably do it... Whilst we have just a few wells on stream, we would probably continue to do it by truck rather than build a pipeline ourselves. But depending on the level... The ramp up of production, then we could consider piping our our oil into the pipeline infrastructure. Another question. With PETRO MATAD's low market price, is the company at risk of takeover?

1:00:39 Yep. Yep. Potentially, but there haven't been any there haven't been any approaches in that regard. Let's see. Any other oily questions?

1:00:52 Has PETRO MATAD now got a backup to bypass PETRO MATAD? Right now, no, but we're still we're still fighting hard. We're still talking to a couple of Chinese traders to find a, to find a, an independent route, because, as we've said before, we can't go on, as we have been. And here's another one. Is the Mongolian government helping out with this impasse? Yes. They absolutely are. Back in June, the Mongolian government fixed a long running problem that PETRO MATAD was having within Mongolia, nothing associated with PETRO MATAD. But they did it they did it very, very quickly and very, very efficiently. And PETRO China, I I know, was very, very grateful. And the Mongolian government has reminded PETRO MATAD's problem as large as the one that Mongolia fixed for PETRO China, Mongolia would like this one fixed as well.

1:01:48 So we've had input from the level of the deputy prime minister, the minister of of of of mining and and the regulator and from the Mongolian embassy in Beijing, everybody pushing hard along with ourselves, of course, to try and get PETROMA to resolve all issues. So we're working hard on that, and be rest assured, we will announce that as progress on that or any alternative we've, we've come up with, as soon as we can. I think that goes through all of the questions that, we can deal with for now. We'll look at all of the submissions, after the event, and we will answer anything we've missed if we are able to do so.

1:02:34 So I think with that, I'll hand back to our host. That's great. Thank you very much indeed for addressing all those questions for investors today. But, Mike, before we direct investors to provide you with a feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments? Yes. Absolutely. Well, I'd like to thank the members of the Sunstep team for making their debut on this on this platform. You did a good job, lads. Hopefully, the the audience has got a lot out of that. All attendees, thank you for attending. We we are quite excited about the renewable side of the of the business here. We see we we do finally see the chance for revenue to start being generated from this with the push the government is making to fix some of the immediate domestic problems, and we think we're really well placed now for a participation in what could be as a a game changer for East Asia, never mind Mongolia, with the export of power.

1:03:31 So we're very, very glad to be involved with this. We think this has been, up until now, a very, very good investment. We've got a fantastic team working on this, and we're pushing hard on the projects we hold exclusively, the upside that we see, and many, many other projects that are continuously coming our way that we are we are vetting and and and reviewing as quickly as possible. So we see a lot of potential for this, and it's certainly nice to have it in the mix. And we will, keep everybody, updated as we make progress. So thank you for your attendance. Fantastic. Thank you all once again for updating investors today. Could I please ask investors not to close the session as you now get automatically redirected to provide your feedback, which help the company better understand your views and expectations.

1:04:22 On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.