Hello everyone. My name is David Kratochvil.

I'm the president and chief executive officer of the company, and on behalf of our entire team, warm welcome to our conference call about Q4 and year-end results for 2025. With me here on the call today are Heman Wong, the chief financial officer of the company, and Peter Gleeson, executive chairman of the board.

We will start the call by Heman summarizing the highlights of the financial results, and I will then provide a few comments to set the financial results in a broader context on the past, present, and future expectations from the management's perspective. Then we'll open the floor for questions.

I do need to remind everyone though on the call that the discussion will contain forward-looking statements about future business and financial expectations, and the actual future results may differ from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our financial report. Furthermore, on this call, we'll refer to certain non-GAAP financial measures, such as proportional revenue and adjusted EBITDA.

Reconciliation of these measures to the closest GAAP financial measure is included in our MD&A, which is available on our website. Now I will pass the floor over to Heman.

Please go ahead.

Thank you, David. Hello everyone, my name is Heman, CFO of BQE Water.

Let me first start by walking over through our financial performance for the year end December 31st, 2025. We delivered record GAAP revenues of $35.5 million, an increase of $18.4 million, which is 107%, and also a record proportional revenue of $39.9 million, an increase of $15.1 million, which is 61% increase compared to 2024.

These results are broken down mainly by our recurring water treatment fees, which was $7.3 million. In general, Raglan with a longer season, and we started up a third SART plant in China, and also start up a Selen-IX plant in North Dakota.

Technical services was $28.3 million, and mainly the two projects in Yukon combined to $20 million, and we hope will continue the work in 2026. Included in our proportional revenue, which includes our share of income and revenue from China, our JCC joint venture, and this was roughly half of the prior year's results.

Net income for the year was $8.1 million compared to $4.8 million, an increase of $3.3 million or 68%. In our net income this year, we recorded a deferred tax recovery of $1.8 million, which further increases the recovery from last year of $1.3.

Total, we have a $3.1 recognized deferred tax asset. These asset is recognized to offset future tax expenses against the prior-year loss carryforwards from Canada.

Adjusted EBITDA was $8.2 million in 2025 compared to $5.6 million in the prior year, an increase of $2.6 million or 47%. On the cash flow side, we grew net cash and cash equivalents by $7.2 million to $19 million as of December 31st, 2025, with $5.1 million generated from operating activities.

On the balance sheet, we have increased our working capital, which we define as current assets less current liabilities, increased by $8.8 million or 70% year-over-year to a total of $21.4 million as of the year end. With that, I would like to turn the call over back to David.

Thank you, Heman. Before we start with questions, I just wanted to share a few comments and observations and thoughts on the company from my perspective.

Looking at last years, it was really, really, in many ways, transformational for the company. When I compare the company today and a year ago, I see several significant changes.

Number one is that our field operations team has grown tremendously. It's now, well, three times, maybe quadruple the size of a year ago as a result of the operations work that we've actually been doing, not just last year, but already in Q1.

As we indicated in our MD&A, we are in discussions with several other sites where we expect to provide operations services this year as well. Really, our operations group is now by far the largest group in the company.

That really bodes well for the ability of the company to generate revenue, and recurring revenue specifically. I also want to share with everyone that our new aquatic toxicity lab is approaching completion, and we expect that active testing with fish will start within the next few weeks.

We've already received interest from several existing clients who inquired and are interested in toxicology services that include not only the advisory consulting side, but also, crucially, the actual lab testing. I also see a backlog of engineering services projects that I don't think I've seen before at BQE.

I think that the size of the projects that are in the backlog is also indicative of the stage of the commodity cycle. I finally wanted to also share with everyone that I personally do see already positive results of the internal restructuring that we completed last year.

We definitely increased our business development capacity, and it's still expanding with fresh onboarding of our new Latin American lead. We have dedicated intellectual property capture and development area with the leadership in place and properly staffed.

We also onboarded new directors of EH&S and talent that will make us overall better company. Finally, I see sort of shift in the industry when I compare Q1 last year to Q1 this year.

The nature of the work's changed. Last year, we worked on a lot of small, early-stage projects on the technical services side.

This year, most of the work and proposals are really for prefeasibility, feasibility studies and for projects that are anticipated to fast-track to implementation. A major shift in the nature of the technical services work that we anticipate as we progress through the year.

Now, we are growing and will continue to grow. What is the expected growth?

It's early to say for this year for sure. I would say that we are well on our way to meeting our internal goal that we set for ourselves last year, which is to double in size in the next 3 to 4 years.

With this out of the way, I would like to now open the floor to questions that you may have for us, and back to you, Morgan.

Hi. Thanks for taking my questions.

Thanks for giving a platform for investors and analysts an opportunity to ask questions. My first question is just about the current outlook for 2026.

It seems to be quite strong, but after such a strong year in 2025, should investors be thinking that you can see revenue growth? If so, would this be more from operations revenue stepping up or a mix of both?

Okay. Hi, Robert, and thank you for your question.

I think the growth is actually going to come in balanced from all these areas. I think we're firing on all cylinders.

I think when I look at the operations services, there's undeniably growth that's going to come from there. With respect to the difficulty to overcome last year because of the revenue linked to the emergency response at Eagle, obviously, we don't need as many resources this year necessarily, but for Eagle, but we continue.

There is still water. We're there on site.

We're treating. I think that with respect to the operations revenue, there's definitely going to be a growth there.

For the rest of the company, as I alluded to, I think just the nature of the projects changed, and so I expect that these feasibility studies, prefeasibility studies that allow us to allocate resources for extended period of time rather than these small projects where you need to really quickly be reallocating and really replacing projects that move through the pipeline very quickly within 4 to 6 weeks, you need to have a replacement. These feasibility studies are typically taking months, right?

You have better opportunity to achieve higher utilization of staff. I do expect growth overall.

It's early to say how much, but I certainly, based on what we see, I would expect to do better than last year.

Great. Just maybe on a follow-up for that.

It's just around the Britannia Mill SART project. Can you maybe elaborate on the rationale for this project from the client's perspective and the prospect of this providing a reference case for other projects in North America?

Sorry, Robert. It wasn't clear.

You was asking about Britannia and [unclear]? Sorry,

just on the Britannia Mill SART project.

Oh, Britannia.

If you could elaborate on the

Britannias.

Yes.

Okay. Sorry, we now know what project you're talking about, can you repeat it?

Okay.

Yes, and can you maybe elaborate on the rationale for this project from the client's perspective and the prospect of this providing a reference case for other projects in North America?

Yeah. Obviously, I can't comment from the client's perspective.

That's up to them to comment. I think that the importance obviously for the SART technology overall is to have its first application in Canada and application that is basically in the metallurgical processing that is non-heap leach, which is a tougher application for SART and for cyanide recycling than a heap leach operation.

I think for those reasons, having that reference is really important, and I think that it sets also the tone for other companies in the way that we actually execute and implement together with Hudbay because, I think, as we discussed in the past, the notion that you can quickly implement SART without having the right people involved, relying on sort of what's publicly available without having the know-how and expertise, I think that that's a fallacy. I think that this really helps us to put the stake in the ground and say, "This is how you deliver SART in Canada safely, quickly, and achieve the metallurgical performance and safety standards that everybody's expecting."

Yeah. If I can add, David, to that, and to you, Robert.

Hello, Robert. The Hudbay's due diligence, because there was nothing in the geographical region, was extreme.

They really did do a hell of a lot of due diligence, including traveling around the sites we've got. A bit like any business you look at, you look at first-time movers to make the market.

There's also an element of that in geography, that if someone is in the geographical region, someone else says, "Where can I see it?" I think it'll be a good reference point in that way as well.

I'll just add to that.

Great. Thanks.

I'll get back in the queue. Thank you.

We know you will, Robert. It's okay.

Hey there, David and team. Thanks for answering my questions here.

Really excited for the first conference call which you guys are doing in a long time. The first question I wanted to ask was regarding two of the contracts you signed, one with Canadian Royalties, the other for Britannia.

It seems that those were signed on plants that other companies built. How did you guys land those contracts over the incumbent, and is that a future opportunity where you can go to other plants that are built around the world and insert yourselves in there?

Yeah. Hi, Nicholas, and thank you for the question.

I think your last point about is that an opportunity for us, absolutely. I think as this company grows, as much as you know well that the vast majority of our projects have been sole-sourced, we got into operations without having to compete and bid against others.

We recognize that as we grow this company and we want to continue growing, we have to go after some of these tenders and public tenders from governments as well. I think that in order for us to be successful in those, we, however, needed to build that expertise and really strong expertise and know-how, and not only on the operations side, but to have all the systems in place.

To be a really credible party to bid on a large government contract, we have to have systems in place and procedures. I think that that is really the part of the winning strategy.

For Canadian Royalties, I think that in order to be successful at a remote site in a seasonal operation where you need to discharge large volume of water very quickly, you need really good systems in place and strong team that can train, onboard, and execute with confidence. I think that that really is the winning strategy for some of these seasonal operations for us in general.

Like I said, for the government contracts, I think that really winning Britannia basically vaults the company into a different tier of a company that I imagine that, once Faro comes again on a public tender in Yukon, we will be there, and we will be one of the senior players.

Got it. That's amazing.

Then the other question I had was more for Heman, regarding the levels of the sales and development costs of $1.5 million in Q4. Is that the level that we should expect going forward, given the hiring and corporate organization you guys have done?

Regarding the sales and development cost, one thing we alluded to in Q3, we have expanding in the aquatic toxicity. I would say more of a one-time cost, and it takes time for them to build up the lab, and they will soon be revenue generating, like what David mentioned earlier.

I wouldn't expect a continual increase up, but there is components of one-time in nature in there as well. Yeah.

I would expect it to be a maximum going forward. As we don't use our capital, Nicholas, in other areas, but this is the one area that with a small bit of M&A that we did in July last year, there is some unusual expenses out there, but they're not extraordinary.

I think in general, right, there is that one-time sort of investment cost into the aquatic toxicity, but I think in general, everybody understands that that's where a lot of unallocated labor ends up. If we are not busy, it becomes sales and development expense for the company.

We expect that to be fairly minimal. Having said that, we're growing and we're onboarding a lot of new people, and so it may be fluctuating depending on how much internal time we need to spend on onboarding talent.

I think moving forward this year, it's not going to be very large number because a lot of the onboarding is happening through our existing operations, the labor is fully allocated. If we get into a situation where we're onboarding some senior talent, then that would be in that line item, yeah.

Right. Understood.

Okay. Thanks for answering my questions, guys, and I'll jump back in the queue.

Hello. I have a question.

Apart from the regional hub model where a single head office can manage a suite of local projects for your operational segment going forward, which is the strategy that you'll be using to scale, are there any other strategies that you'll be using to reduce the customer acquisition costs and retention costs, possibly through AI automation tools where the data that you collect, there is some value from all of that?

Could you repeat that again?

We had hard time actually understanding. You were not

best line. It's really not the best line, yeah.

Yeah.

My question is about the scalability from the operational segment. You said that you can use a single head office and you can gather many projects in that region, and that's how you scale to the operational segment.

I was wondering if there is implementation of some AI and automation tools as well that could help reduce customer acquisition costs and retention costs going forward.

No, very good question, and thank you for that. I'll offer a comment, and then let my colleagues comment on it as well.

It's true that we enjoy and we will continue to enjoy the economy of scale as we scale up our operations and have a centralized system for operations support for health and safety, and obviously collecting data, as you alluded to, and interpreting trends and etc., etc., basic operation support. The data also is a source of potential new IP, the analysis of the data is actually mined internally for any new potential IP and ideas for improvements and technology development.

As far as automating that, we're well on our way to do that. In our automation team, we have one person who is actually dedicated to streamlining the way that the sites reports and automatically generates different heat maps, if you will, or summaries for people involved in operations support, in intellectual property development, and actually archiving as well for ourselves.

As far as actually implementing artificial intelligence, we're very careful about it. We don't have a subscription to any AI for reasons because we are focused on intellectual property, and we're not feeling confident yet that the rules around and clarity around intellectual property are clear enough for us to be confident to engage in that sense.

As far as automation, absolutely. It's already happening inside.

All right. That's great.

Thank you so much. My second question was regarding the disciplined engineering acquisition that was talked about previously.

We did the aquatic toxicology acquisition. I just wanted to ask if there's any updates on that.

Yeah. No updates that we would be able to share on this call.

However, as we indicated, that's a natural next area for us to be pursuing, and we are in the process of identifying additional one. It's not just the disciplined engineering, but we're starting to look at new areas that we haven't looked previously, but we're looking now.

Again, fully complementary, applying the same criteria. We're looking for businesses that are already profitable, established, and that are bolting onto our existing services, specifically in water in mining, so that it's truly growing complementary to what we have.

We don't have anything specific to announce on M&A today, but those are the areas that we're looking.

That's awesome. Thank you so much, David.

Thank you, Peter.

Hi, guys. Can you hear me?

I hope I got this right.

Yeah. We can hear you, Quig.

All right.

First off, congratulations. Great job.

I'm a very happy shareholder.

Thank you.

Next, seems to be a very large focus on critical minerals, rare earths, and I just wondered if we have got any technologies or whatever, or we're looking at that area as a new source of income.

I'll certainly let David answer it, but as you're a shareholder, David's made some mentions about us in projects with rare earths now. I don't know how you'd expand on that, David.

Is it any different to

Put it this way, I think it's public knowledge that we are part and parcel of two projects that Aclara Resources are advancing in South America. One is in Chile, and one is in Brazil.

Please look up Aclara. It's really inspirational company in many ways.

They are developing projects, but they're integrating from mine all the way to the super magnets production. The uniqueness of their projects is that they are very very much focused on the heavy rare earth, it's terbium and dysprosium.

Those are the most valuable of the rare earths. We are in charge of making sure that water that's used for processing is fully reused, there's full reuse of water.

The treatment is focused on reuse, as well as making sure that tailings from the processing meet the strictest limits that are out there, including sulfate, including other impurities that would be in the pore water of the tailings produced from the metallurgical processing. At the same time, in the treatment process, we also capture some of the rare earths themselves that the metallurgical process does not recover, we recycle them back to the project.

We've run fully integrated pilot, or Aclara did, with us, with our team. We teamed up with them and ran a full pilot in Chile and in Brazil.

Those two projects, I think, are advancing. I think Aclara announced that they're building a refinery in Louisiana for purifying those metals and separating them, and most recently with CAP on a large iron producer on actually producing from the pure metals producing super magnets.

That's one. Then, this I can't disclose the name, but we are involved in a rare earths project where we're looking in very early stage at basically doing best available technology assessment for water treatment.

Our involvement is not on the recovery of these, but on making sure that these processes are environmentally acceptable and basically meet the highest standards of regulatory approvals.

Sounds quite exciting.

I presume, David, for the layman out there, hard rock mining is hard rock mining, it doesn't matter if it's rare earth or

That's actually the unique thing, and a plug for Aclara, is that they're developing ionic clays. Unlike the hard rock, this is where I think their projects are probably the most advanced out there because the nature of ionic clays that you literally just need to wash the metals off the clay instead of hammering them.

They don't need grinding, milling, acids, nothing of that sort. It's really the most environmentally friendly process, if you will, for getting rare earth.

No undue complications by the time it gets to our end. Water is water.

The water is basically recycled around, right, it's really zero liquid discharge situation,

yeah. Okay.

Thank you, Quig. Oh,

Thanks for taking my call. I was just wondering how investors should be thinking about your margins going forward, given the nature of the new operations contracts that you've signed and that are going to be part of results for 2026.

Should we expect that some of these come at a blended lower margin going forward? Maybe help us understand what the go-forward looks like for margins.

Thanks. With

the new operations in 2026, there is a blend. There's a spectrum of various margins, but together in aggregate, it will be similar to what we have in 2025.

Yeah.

Great. Just to follow up, I wanted to ask about Centerra's Kemess project.

They put out a more compelling PEA recently. Do you continue to have involvement with this project while it's on care and maintenance?

What's the likelihood that if this project were to come back online, you would be engaged here again?

Just to clarify, we've always had engagement and involvement since they put the project on care and maintenance, our team would go to site once a year, inspect the equipment, maintain the resin, etc. We've maintained that involvement under contract since it was put on care and maintenance.

I think we mentioned it previously that we're in discussions with Centerra about the next steps in basically putting that treatment plant back into operation. The discussions are ongoing, and again, as part of our technical services that we will report on in Q1, we've done some work on that project specifically.

Just be patient and you'll learn more. Thank you for your question.

Great. Thank you.

Yeah. Thank you, Morgan, and thank you everybody for listening and everybody that joined.

We do appreciate our shareholders and the support over the years, and we hope to keep performing for you. If anybody didn't have a chance to ask a question or whatever or want to dig further into what we've already answered, please feel free to email me.

I'll definitely respond within 24 hours. Happy to answer anything that we can answer.

Thank you very much, Morgan, and I'll hand it back to you.