Initial Public Offering January 2018 A preliminary prospectus and - - PowerPoint PPT Presentation

A preliminary prospectus and an amended and restated preliminary prospectus containing important information relating to the securities described in this presentation has been filed with the securities regulatory authorities in each

• f the provinces and territories of Canada. A copy of the amended and restated preliminary prospectus, and any amendment, is required to be delivered with this presentation. The amended and restated preliminary prospectus is

still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. This presentation does not provide full disclosure of all material facts relating to the securities offered. Investors should read the amended and restated preliminary prospectus and the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities

• ffered, before making an investment decision.

Initial Public Offering

January 2018

A preliminary prospectus and an amended and restated preliminary prospectus containing important information relating to the securities described in this presentation has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A copy of the amended and restated preliminary prospectus, and any amendment, is required to be delivered with this presentation. The amended and restated preliminary prospectus is still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued. This presentation does not provide full disclosure of all material facts relating to the securities offered. Investors should read the amended and restated preliminary prospectus and the final prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

1

Disclaimer

GENERAL Prospective investors should rely only on the information contained in the amended and restated preliminary prospectus dated January 8, 2018 (the “prospectus”). This presentation is qualified in its entirety by reference to, and must be read in conjunction with, the information contained in the prospectus. A prospective investor is not entitled to rely on parts of the information contained in this presentation to the exclusion of others. Pinnacle Renewable Holdings Inc. (the “Company”, “Pinnacle”, “us” or “we”), the Selling Shareholders and the Underwriters have not authorized anyone to provide prospective purchasers with additional or different information. The Selling Shareholders and the Underwriters are not offering to sell the common shares in any jurisdiction where the offer or sale of such securities is not permitted. For prospective purchasers outside Canada, neither we, the Selling Shareholders nor any of the Underwriters has done anything that would permit this offering or possession or distribution of the prospectus in any jurisdiction where action for that purpose is required, other than in Canada. Prospective purchasers are required to inform themselves about, and to observe any restrictions relating to, this offering and the possession or distribution of the prospectus. Capitalized terms that are not defined in this presentation have the meanings ascribed to them in the prospectus. Any graphs, tables or other information in this presentation demonstrating the historical performance of Pinnacle or any other entity contained in this presentation are intended only to illustrate past performance of such entities and are not necessarily indicative of future performance of Pinnacle or such entities. FORWARD-LOOKING INFORMATION This presentation contains “forward-looking information” within the meaning of applicable securities laws in Canada. Forward-looking information may relate to our future outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategies, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operates is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “an opportunity exists”, “outlook”, “prospects”, “strategy”, “intends”, “believes”,

• r variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to

expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Forward-looking information contained in this presentation and other forward-looking information are based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. For further details on the forward-looking information included in this presentation, see “Forward-Looking Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Financial Outlook” in the prospectus. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information in this presentation, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information in this presentation. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this presentation represents our expectations as of the date of this presentation or the date indicated, regardless of the time of delivery of the presentation. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. An investment in our common shares is subject to a number of risks that should be considered by a prospective purchaser. Prospective purchasers should carefully consider the risk factors described under “Risk Factors” in the prospectus before purchasing common shares. All of the forward-looking information contained in this presentation is expressly qualified by the foregoing cautionary statements. Investors should read the entire prospectus and consult their own professional advisors to ascertain and assess the income tax, legal, risk factors and other aspects of their investment in the common shares. NON-IFRS MEASURES This presentation makes reference to certain non-IFRS measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA per Metric Ton”, “Adjusted EBITDA Percentage”, “Adjusted Gross Margin”, “Adjusted Gross Margin per Metric Ton”, “Adjusted Gross Margin Percentage”, “FCF Payout Ratio” and “Free Cash Flow”. Non-IFRS measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. For further details on these non-IFRS measures, including relevant definitions and reconciliations, see “Non-IFRS Measures” in the prospectus. CURRENCIES In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. For reference, as of January 5, 2018 the CAD/USD, CAD/GBP and CAD/EUR exchange rates were $0.8067, £0.5948 and €0.65702, respectively.

2

Agenda

Overview Investment Highlights Financial Overview and Outlook Growth Strategies Summary of the Offering Appendix

1 2 3 4 5 6

3

Management Team

Rob McCurdy, Chief Executive Officer *

• International career in chemical, construction materials and mining industries in Canada, the U.S., Asia and Europe
• Most recently with Lafarge as Managing Director for India, overseeing 80 manufacturing plants nationwide in a fast growing

market

Leroy Reitsma, President & Chief Operating Officer *

• 10 years experience at Pinnacle leading the development of Houston, Meadowbank, Burns Lake, Westview, Lavington, and

Entwistle

• 18 years of experience in forest industry prior to joining Pinnacle

Andrea Johnston, Chief Financial Officer *

• 20 years in CFO, CEO or senior finance positions
• Experience in utilities, renewable energy, energy technology and resource software

Scott Bax, Senior Vice President of Operations

• Over 20 years of forestry experience throughout Canada and the U.S.
• Recognized as a leader in safety and included by Argus Media in the Top 36 Most Influential Leaders in the Biomass Industry in

2016

Vaughan Bassett, Senior Vice President of Sales & Logistics

• Almost 20 years in global sales with Sappi Trading, including 10 years in Hong Kong
• Leads development of Asian market, logistics (including the Westview Terminal) and sustainability

* Presenting today

Erin Strong, Director of Human Resources

• Over 15 years of leadership experience in the HR field, most recently as a Director of Human Resources at the Mark Anthony

Group

4

Overview 1

5

British Columbia Alberta Rail line Pellet Plant Expansion Facility Port Office Westview Houston Burns Lake Williams Lake Vancouver Richmond Armstrong Lavington Entwistle Meadowbank Prince George Smithers

Our mission is to be the world’s most reliable producer and supplier of bioenergy products

Our Company

6 operating facilities with 2 under development and a wholly-owned port terminal $3.1 billion of contracted backlog under long term contracts with large utilities Lowest quartile cost supplier

Facility Network

Management team that drives continuous improvements and delivers industry-leading safety

3rd largest industrial pellet producer in a rapidly growing global market

Annual capacity3 of approximately 1,947,000 MTPA and 2019E Adjusted EBITDA of $77 to $81 million

1 The Houston Facility, Lavington Facility and Smithers Facility are partially-owned facilities. 2 Pinnacle is not the owner of the Fibreco Terminal. 3 Includes wholly-owned, partially-owned and in-development facilities (please refer to the description of "Summary

• f Operating and In Development Facilities" in the Amended and Restated Prospectus for further detail)

(1) (1) (1) (2)

6

End Customers Rail, Port & Shipping

Low-cost | Sustainable | Reliable | Renewable Energy

Our Company

Fibre & Conversion

Westview

Highly Integrated Logistics Chain Stakeholders

Differentiated through vertically integrated operations and strong alignment with stakeholders

7

Wood pellets are used to stabilize the electrical grid

Industrial wood pellets are a renewable fuel used for baseload dispatchable power generation

• Biomass energy can be turned on or off to meet demand and is not generally affected by weather or resource conditions

Solar Wind

Select Renewable Energy Options

Intermittent Renewables

Co-Fired Generation Biomass

Baseload Dispatchable Renewables

Our Industry

8

Regulatory frameworks driving continued industrial pellet demand

Our Industry

Industrial wood pellets help countries and regions meet decarbonisation targets

• Frameworks and policies have been put in place to facilitate a shift to a cleaner energy mix

Global Regulatory Frameworks

South Korea EU (excl. U.K.) U.K.

• Largest pellet market in the world
• Continued growth in next 5 years of ~3.2

million MT, driven by investment from EPH and MGT Power

• Netherlands demand expected to increase

to 3.5 million MT by 2021

• Continued growth from RWE, Uniper and

ENGIE’s investments in the Netherlands and Belgium where coal facilities are being converted to co-firing

Japan

• Compelling feed-in-tariff (¥21 – ¥24 / kWh)
• Over ten projects currently in late stage

development

• Anticipated growth of 2.4 million MT by

2021 and an additional 0.9 million MT by 2026

Source: Hawkins Wright —The Outlook for Wood Pellets, No. 13, Quarter 3 2017.

9

0.4 3 6 9.4 10.8 12.7 12.9 16 21 24 27 29 36

• 5

10 15 20 25 30 35 40 45 50 2013A 2014A 2015A 2016A 2017E 2018E 2019E 2020E 2021E 2026E

Potential demand is significantly higher than current operating capacity

Global Industrial Wood Pellet Demand (millions of MT per annum)

Source: Hawkins Wright —The Outlook for Wood Pellets, No. 13, Quarter 3 2017.

• Potential demand for pellets is expected to more than double from 2016 to 2021
• European potential demand expected to be primary growth driver through 2021; Asia forecast to drive potential demand growth

beyond 2021, largely driven by Japan

• By 2026, Hawkins Wright believes that global production capacity of pellets will need to almost double to meet expected potential

demand, requiring 18.6 million MTPA of additional production capacity

The industrial wood pellet industry is experiencing an extended period of rapid demand growth

20.9M MT Current Capacity

Our Industry

Japan

10

Investment Highlights 2

11

Investment Highlights

Leading Producer and Global Supplier of Bioenergy Products in a Rapidly Growing Global Market

1

Vertical Integration and Operational Efficiencies Result in an Attractive Cost Position

2

Long Term Contracted Revenue with Stable Free Cash Flow Characteristics

3

Proven Project Development Capabilities and Attractive Project Pipeline

4

Experienced Management Team Driving Operational Efficiencies

5

12

One of three global enterprise suppliers expected to supply approximately 33% of global demand by 2019

Leading Producer and Global Supplier of Bioenergy Products in a Rapidly Growing Global Market

1

Nameplate Production Capacity of Global Industrial Wood Pellet Suppliers

(2019, 000s of MT per annum) 1

We are one of only three global enterprise suppliers in a fragmented market

✓

Major utilities demand reliable, long term supply from counterparties with established operational capabilities

✓

Trusted supplier to the global utility market

✓

Source: Hawkins Wright —The Outlook for Wood Pellets, No. 13, Quarter 3 2017, publicly available disclosure.

1 Nameplate capacity includes capacity under construction or financed for completion by 2019. 2 Excludes capacity associated with Enviva’s pending acquisition of The Navigator Company’s Greenwood Facility (460,000 MTPA). 3 Companies provide pellets for industrial & heating end markets.

Industry consolidating around three global suppliers with scale and capabilities required to service major global utilities

• Growth in potential demand expected to be driven by major utilities, concentrating procurement around global enterprise suppliers
• 1,200

2,400 3,600 Enviva Graanul Pinnacle Drax Biomass RWE (Georgia Biomass) FRAM Highland Pellets German Pellets (Texas) The Navigator Company Tanac SA (Brazil) Pacific BioEnergy Westervelt Zilkha Biomass Plantation Energy Global Enterprise Suppliers Captive Utility Suppliers Smaller Regional & Merchant Suppliers

Denotes capacity under construction

# of Facilities 7 12 8 3 1 3 1 1 1 1 1 1 1

3

Represents Entwistle and Smithers facilities

1

2

13

Vancouver Richmond Prince George Calgary Edmonton

Integrated network and scale create significant barriers to entry

Pellet Facility Expansion Facility Port Office

Vertical Integration and Operational Efficiencies Result in an Attractive Cost Position

2

Strategically located production facilities

8 1 2 B 5 6 4 3 7

British Columbia Alberta Fibreco 2 Entwistle Smithers1

8 7 B

1 Houston, Lavington and Smithers are partially owned facilities. 2 Pinnacle is not the owner of the Fibreco Terminal.

Westview

A

Houston1

1

Burns Lake

2

Williams Lake

4

Lavington1

5

Armstrong

6

Meadowbank

3

Illustrative Cost to Transport One GJ Energy 100 km Truck (Raw Fibre) $2.00 Rail (Pellets) $0.14 Sea (Pellets) $0.01

A

14 $185 $90 $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Cumulative Global Industrial Wood Pellet Supply, Thousand MT per Annum (80% Operating Rate) 2016 Average Cost: $1282 Lowest Quartile $161 $90 $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 2,000 4,000 6,000 8,000 10,000 12,000 Cumulative Global Industrial Wood Pellet Supply, Thousand MT per Annum (80% Operating Rate) 2016 Average Cost: $1262 Lowest Quartile

Cost advantage in supplying global markets

Vertical Integration and Operational Efficiencies Result in an Attractive Cost Position

2

Lowest-quartile cost supplier to rapidly growing markets in both Europe and Asia

EUROPE Supply Cost Curve to CIF ARA1 (Q4 2016; US$ / tonne) JAPAN Supply Cost Curve to CIF Tokyo Bay1 (Q4 2016; US$ / tonne)

Source: Hawkins Wright.

1 Represents the short run marginal cost curve to each specified location, excluding capex recovery. ARA represents Amsterdam-Rotterdam-Antwerp area, a generic term for the area encompassing the three ports in the

Netherlands and Belgium.

2 Our costs have been converted to USD at an exchange rate of 1.32 CAD/USD which represents the average 2016 exchange rate. No other foreign exchange adjustments have been made to the supply curves.

Substantial wood fibre basket and operating flexibility

✓

Strategically located production facilities

✓

Terminal operations

✓

Operational efficiencies

✓

15

In 2017, $421 million has been added to the backlog, one third coming from Japanese customers

Contracted Production Profile

3

Highly contracted revenue and backlog momentum

Long Term Contracted Revenue

• 100% of our production capacity is fully contracted through 2021 and nearly 80% through to 2026 (on

an aggregated basis) − Contracted backlog of $3.1 billion − Sales momentum evidenced by $421 million of current backlog being contracted in 2017

• We continue to advance contract negotiations with additional counterparties focused on long term

supply

104% 110% 102% 100% 92% 67% 62% 62% 56% 56% 23% 27% 27% 26% 26% 8% 9% 10% 11% 17% 18% 2017B 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E Contracted Production Contracts Subject to Extension Option Uncontracted Production

16

Proven Project Development Capabilities and Attractive Project Pipeline

4

Note: Run-Rate EBITDA is the incremental annual earnings, before depreciation and amortization, finance expense and provision for income taxes, the Company expects to generate from the project.

1 Represents total cost of project (100% share). 2 Represents Pinnacle’s proportionate share of Lavington project cost (75% share, remaining 25% owned by Tolko). 3 Represents Pinnacle’s proportionate share of the midpoint of Smithers project cost estimate of $21 to $23 million (70% share, remaining 30% owned by West Fraser). 4 Includes wholly-owned, partially-owned and in-development facilities (please refer to the description of "Summary of Operating and In Development Facilities" in the Amended and Restated Prospectus for further detail).

Key Project Facts Completed (under budget) In Construction Final Development Entwistle, AB

Capital Costs

• $92 million (4.4 to 4.8x Run-Rate EBITDA)

Run-Rate EBITDA

• $19 to $21 million

Status

• Under construction; production

commencement Q1 2018

Smithers, BC

Capital Costs

• $22 million3 (4.2 to 5.1x Run-Rate EBITDA)

Run-Rate EBITDA

• Approximately $4.5 to $5.0 million (our

share) Status

• Production commencement Q3 2018

Lavington, BC

Capital Costs

• $43.7 million1 (Our share: $32.8 million2)

Run-Rate EBITDA Construction Multiple

• At the bottom end of our target range
• f 4.0 to 5.5x

Status

• Commissioned in Q4 2015
• Construction period of 10 months
• Safely completed under budget

1,374 210 230 72 230 380 300 400 125

• 200.0

LTM 2019E Annual Capacity 1,750 - 1,800 1,947

Historical & Forecast Tons Sold (000 MT)

Facility Year Operation Commenced or Acquired Smithers Q3 18 Entwistle Q1 18 Lavington 2015 Westview 2013 Burns Lake 2011 Meadowbank 2008 Armstrong 2007 Houston 2006 Williams Lake 2004 LTM Q317

Strong track record of successful project development

4

17

Experienced Management Team Driving Operational Efficiencies

5

Same-facility production growth of 19% from Fiscal 2014 to LTM Q3 2017

✓

Awards

“Owning safety” culture with 87% MIR improvement since Fiscal 2014

✓

Delivered significant growth projects on time and on budget, including Lavington and to-date progress with Entwistle

✓

Revenue and Adjusted EBITDA CAGRs of 14% and 49% from Fiscal 2014 to LTM Q3 2017

✓

Contracted revenue backlog of $3.1 billion as of September 29, 2017

✓

Exporter of the Year 2013 Export Award Manufacturing MVP Award 2016 Rob McCurdy Pacific Region 2017 Scott Bax Top 36 Most Influential Leaders in the Biomass Industry in 2016

Key accomplishments of the management team

18

Financial Overview and Outlook 3

19

Our organic revenue growth has outpaced the industry

Production1 (millions of MT per annum) Revenue (C$ millions)

Greenfield projects

✓

995 1,137 1,320 1,360 2014 2015 2016 LTM Q317

1 Includes 100% of production from Houston facility.

Strong Historical Financial Performance

Same-facility continuous improvement (+19%)

✓

$201 $226 $266 $291 2014 2015 2016 LTM Q317

New customers

✓

Price escalation

✓

Pinnacle has delivered strong growth since 2014

20

Productivity improvements

✓

Cost optimization

✓

Strong Historical Financial Performance

Profitability growth exceeding top line growth as we scale our business

$26.9 $44.8 $53.1 $64.5 13.4% 19.9% 19.9% 22.2%

2014 2015 2016 LTM Q317 Adusted Gross Margin Percentage $18.0 $34.1 $43.9 $54.3 9.0% 15.1% 16.5% 18.7%

2014 2015 2016 LTM Q317 Adjusted EBITDA Percentage

Adjusted Gross Margin (C$ millions) Adjusted EBITDA (C$ millions)

21

Annual investment in maintenance and safety capital ▪ Maintain safety and maximize uptime and reliability of facilities Meaningful tax assets; we do not anticipate paying income tax before 2020 ▪ Non-capital loss carryforwards at end of 2016

• f $115M

▪ Undepreciated capital cost allowance at end of 2016 of $80M ▪ Additional tax depreciation driven by ongoing growth and maintenance capital

Strong and Predictable Free Cash Flow

For the 12-Month Period Ended Sept 29, 2017 (In thousands of Canadian dollars, unless noted) Adjusted EBITDA 54,316 Maintenance capital expenditures (5,050) Interest and finance costs, net1 (7,605) Distribution to non-controlling interest (600) Public company administrative costs (2,500) Cash taxes paid

• Mandatory amortization1
• Free Cash Flow

38,561 Estimated annual dividend 19,010 FCF Payout Ratio 49.3%

Highly contracted, predictable cash flows ▪ Off-take sales agreements weighted-average remaining life of 7 years ▪ New fibre supply contracts with terms of 5 – 15 years

✓ ✓ ✓

LTM Pro Forma Free Cash Flow

Free cash flow growth underpinned by long term contracts

1 Interest and finance costs and mandatory amortization will be payable in future periods in accordance with the Company’s Credit Facility.

22

$18 $34 $44 $54 $61 - $65 $77 - $81 2014 2015 2016 LTM Q317 2018E 2019E

Significant Adjusted EBITDA Growth

Adjusted EBITDA Highlights and Growth Estimates (C$ millions)

• Adjusted EBITDA to grow from $54 million in LTM Q3 2017 to $61 – $65 million and $77 – $81 million by the end of Fiscal 2018 and

Fiscal 2019, respectively

• Significant growth to 2019 driven by:

− Incremental EBITDA of approximately $7 million driven by a higher average FOB sales price on all volumes in accordance with the terms of our existing off-take contracts and increased production; − Approximately 337,000 MT of additional production from the Entwistle Facility, and approximately $17 million of EBITDA from that production as a result of our existing off-take contracts; − Approximately 89,000 MT of additional production from the Smithers Facility, and approximately $4 million of EBITDA from that production as a result of our existing off-take contracts; and − Reduction of EBITDA of approximately $2.5 million of costs related to public company administration

Future growth will be generated by continued production expansion, cost efficiencies and increased pricing

23

Growth Strategy 4

24

Selecting logistically advantageous locations

2

Identified Growth Projects

1 2 3

Project Identification and Initial Evaluation 1.0 – 1.5 million MTPA Conceptual Design and Engineering 300,000 – 400,000 MTPA 3 Projects Final Development and Construction 525,000 MTPA Entwistle and Smithers Strategic Fit Financial Attractiveness Capacity to Execute

Development Blueprint Development Funnel Phase Qualifications Before a Capital Project is Undertaken

Securing long term sales agreements for our production output

1

Obtaining all permits and authorizations

4

Utilizing proven engineering, design, construction, and commissioning program

5

Securing a sustainable long term supply of wood fibre

3 Customer demand driving development funnel

25

Significant room to grow

Future Growth

BC AB QC GA AL MS LA TX OR WA SC NC NL NB NS PEI FL

Satisfy end market demand

✓

Leverage development and

• perational expertise

✓

Enhance geographic, customer and wood fibre supply diversity

✓

• We have identified and intend to pursue several new production development opportunities in geographies such as Western Canada,

Eastern Canada, U.S. Southeast, and the U.S. Pacific Northwest, as indicated below

• Strategic acquisition targets are assessed based on the quality of the asset, price and ability to integrate within our network of

production facilities

Proven ability to exploit growth opportunities

Support fibre suppliers

✓

26

Investment Highlights

Leading Producer and Global Supplier of Bioenergy Products in a Rapidly Growing Global Market

1

Vertical Integration and Operational Efficiencies Result in an Attractive Cost Position

2

Long Term Contracted Revenue with Stable Free Cash Flow Characteristics

3

Proven Project Development Capabilities and Attractive Project Pipeline

4

Experienced Management Team Driving Operational Efficiencies

5

27

Summary of the Offering 5

28

Pro Forma Capitalization & Ownership

(millions of shares)2 Common Shares Owned % of Basic Shares ONCAP Entities 11.7 37.1% Other Shareholders 7.4 23.5% IPO Shareholders 12.5 39.5% Basic Shares Outstanding 31.7 Stock Options 1.6 Fully Diluted Shares Outstanding3 32.3 (C$ 000s) As at Sept. 29, 2017 Actual Adjusted1 Cash and cash equivalents $11,595 $46,595 Debt Revolving loan $19,000 $19,000 Term debt $160,499 $160,499 Shareholders’ debentures payable $85,954 $0 Common and Preferred Shares classified as liabilities $25,846 $0 Total Debt $291,299 $179,499 Net Debt $279,704 $132,904 LTM Adjusted EBITDA $54,316 $54,316 Debt / LTM Adjusted EBITDA 5.4x 3.3x Net Debt / LTM Adjusted EBITDA 5.1x 2.4x

1

After giving effect to the Pre-Closing Capital Changes and the Offering.

2

Based on the mid-point of the marketing range of $13.00 to $15.00 and a base deal size of 12.5 million shares.

3

Fully diluted Common Shares outstanding assumes the treasury stock method. Upon completion of the Offering, the Company will have 1.63 million options outstanding, of which 1.63 million are in-the-money. The in-the-money options have a weighted-average exercise price of $8.48. The treasury stock method assumes these options are exercised and the $13.8 million of proceeds are used to repurchase 1.0 million Common Shares, assuming the midpoint of the offering range.

29

Terms of the Offering

Issuer

• Pinnacle Renewable Holdings Inc. (“Pinnacle” or the “Company”).

Selling Shareholders

• ONCAP II L.P., ONCAP US (II) L.P., ONCAP (US) II-A L.P., ONEX Parallel Investment (ONCAP) L.P. and Biomass EI Ltd. (collectively, the “ONCAP Entities”) and Rob Swaan Holdings Inc.,

Jim Swaan Holdings Inc., Beckman Holdings Inc., Leroy Reitsma, Lodge Family Trust and Rick Davis. Offering

• 11.67 million to 13.46 million common shares (“Common Shares”), of which 4.67 million to 5.38 million will be offered via treasury offering by the Company (the “Treasury

Offering”) and 7.00 million to 8.08 million will be offered via secondary offering by the Selling Shareholders (the “Secondary Offering”). Offering Price

• $13.00 to $15.00 per Common Share.

Offering Size

• Approximately $175 million (approximately $201 million assuming the Over-Allotment Option is exercised in full).

Over-Allotment Option ▪ The Selling Shareholders have granted to the Underwriters an option, exercisable in whole or in part, at any time for a period of 30 days after the Closing Date, to purchase from the Selling Shareholders up to an additional 15% of the aggregate number of the Common Shares issued under the Offering at the Offering Price solely to cover over-allotments, if any, and for market stabilization purposes. Use of Proceeds ▪ Pinnacle intends to use the net proceeds of the Treasury Offering to fund the construction of the Entwistle Facility and the Smithers Facility, to repay certain existing shareholder debt and for general corporate expenses. ▪ Pinnacle will not receive any of the proceeds from the Secondary Offering. Shares Outstanding ▪ Based on the midpoint of the Offering Price range, upon completion of the Offering, an aggregate of 31.68 million Common Shares will be issued and outstanding. On a fully diluted basis1, based on the midpoint of the Offering Price range, upon completion of the Offering, 32.33 million Common Shares will be outstanding, assuming no exercise of the Over-Allotment Option. Shares held by the ONCAP Entities Following Closing ▪ Based on the midpoint of the Offering Price range, upon completion of the Offering, the ONCAP Entities will, collectively, directly or indirectly own or control approximately 11.75 million Common Shares, representing approximately 37.1% of the issued and outstanding Common Shares (approximately 33.1%, if the Over-Allotment Option is exercised in full). Offering Procedure ▪ Initial public offering under a long-form prospectus filed in all provinces and territories of Canada. Private placement in the U.S. to “qualified institutional buyers” pursuant to Rule 144A of the United States Securities Act of 1933. A copy of the long form prospectus will be available on www.sedar.com. Dividend Policy ▪ Pinnacle anticipates paying quarterly cash dividends, with annualized aggregate dividend payments of approximately $19 million, with an anticipated dividend yield of approximately 4.3% at the midpoint of the Offering Price range. The first dividend that would be payable to investors in the Offering would be the dividend for the period beginning on the Closing Date and ending on March 30, 2018. The Company expects the first dividend would be equal to an aggregate amount of approximately $3 million (or approximately $0.09 per Common Share). Subsequent payments are expected to equal an aggregate of $4.75 million per quarter (or approximately $0.15 per Common Share). Lock-Up Agreements ▪ Each of the Company, its executive officers and directors, and the Selling Shareholders have agreed that he, she or it will not, directly or indirectly, without the prior written consent of CIBC Capital Markets and RBC Capital Markets, on behalf of the Underwriters, such consent not to be unreasonably withheld, issue, offer or sell or grant any option, warrant or other right to purchase or agree to issue or sell or otherwise lend, transfer, assign or dispose of any of Pinnacle’s equity securities, or other securities convertible or exchangeable into or otherwise exercisable into Pinnacle’s equity securities or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Company’s equity securities, or agree or publicly announce any intention to do any of the foregoing for a period commencing on the date hereof and ending 180 days after the Closing Date, subject to certain limited exceptions, including the sale of securities pursuant to the exercise of the Over-Allotment Option, or the issuance of securities pursuant to or in connection with the Company’s equity incentive compensation plans. Holders of approximately 100% of the Company’s issued and outstanding shares prior to the completion of the Offering will be subject to these Lock-Up Arrangements. Eligibility ▪ Eligible for RDSPs, RRSPs, RRIFs, RESPs, TFSAs and DPSPs. Listing ▪ The Company has applied to have the Common Shares listed on the TSX under the symbol “PL”. Listing will be subject to the Company fulfilling all the listing requirements of the TSX. Pricing Date ▪ Expected the week of January 22, 2018. Closing Date ▪ Expected the week of January 29, 2018.

1

Fully diluted Common Shares outstanding assumes the treasury stock method. Upon completion of the Offering, the Company will have 1.63 million options outstanding, of which 1.63 million are in-the-money. The in-the-money

• ptions have a weighted-average exercise price of $8.48. The treasury stock method assumes these options are exercised and the $13.8 million of proceeds are used to repurchase 1.0 million Common Shares, assuming the

midpoint of the offering range.

30

In accordance with Section 13.7(4) of National Instrument 41-101 – General Prospectus Requirements, all the information relating to Pinnacle’s comparables and any disclosure relating to the comparables, which is contained in the presentation to be provided to potential investors, has been removed from this template version for purposes of its filing on the System for Electronic Document Analysis and Retrieval (SEDAR).

Comparable Companies

31

Appendix 6

32

Pelletizing Process

• Raw fibre is delivered to the production facility, either from nearby sawmills, or directly from the forest block
• We strategically allocate raw fibre amongst our facilities, to optimize the wood fibre input mix across our network

Sourcing & Logistics

• In order to achieve the industrial wood pellet quality standard, larger fibre particles must be reduced in size and filtered
• We target 95% fibre reduced to fewer than two millimetres, of which 65% is less than one millimeter

Grinding & Hammering

• For a pellet to achieve the optimal energy density and combustion rate, it needs to have a moisture content that is approximately 5%
• We achieve optimal moisture content by utilizing either bed drying or a rotary drum drying technology

Drying

• Pellets are created by taking the previously ground, hammered and dried fibre and putting it through a roll and die system
• The pelletizing machines form a pellet through a combination of temperature and pressure created as the fibre is forced through holes

in the die

Pelletizing

• Pellets are air-cooled in order to allow for the pellets to solidify and strengthen
• We use a vibrating screen to remove any fine material (particles less than 3 millimetres)

Cooling & Screening

• We have developed, along with our logistical partners, loading systems to maintain the pellet quality
• Gentle pellet loading, storage and transport systems are essential to minimize the amount of dust or fine material generated during

the handling operations

Storage & Load to Rail

33

Directors and Executive Officers

Management Team Name Position Notable Prior Experience

Rob McCurdy Chief Executive Officer, Director

• LafargeHolcim Ltd.

Leroy Reitsma Chief Operating Officer, President and Director

• Canfor Corporation

Andrea Johnston Chief Financial Officer

• Dassault Systèmes GEOVIA, Natural Resources Industry, NGRAIN, BC Hydro

Scott Bax Senior Vice President, Operations

• Interfor Corporation

Vaughan Bassett Senior Vice President, Sales & Logistics

• Sappi Trading, VP of the Wood Pellet Association of Canada

Erin Strong Director of Human Resources

• Mark Anthony Group, Tolko Industries

Board of Directors Name Position Notable Prior Experience

Gregory Baylin* Director, Chair of the Board

• Managing Director at ONCAP

Pat Bell* Director, Vice Chair of the Board

• Former Minister of Forests for the Province of British Columbia; Director of Conifex Timber Inc.

Rob McCurdy Director

• CEO of the Company

Leroy Reitsma Director

• President and COO of the Company

Michael Lay* Director

• Managing Partner of ONCAP

Hugh MacDiarmid* Director

• Former President and CEO of Atomic Energy of Canada; Former President and CEO of Laidlaw

Transit Inc.; Director of SeaCube Container Leasing Limited, Terrestrial Energy Inc. and BWXT Canada Inc. Jane O’Hagan* Director

• Former Chief Marketing Officer and EVP of Canadian Pacific Railway; Director of USD Partners

GP LLC, the general partner of USD Partners LP based in Houston, Texas and Descartes Systems Group of Waterloo, Ontario

* Denotes independent board member

34

Summary Financial Overview

For the 39-Week Periods Ended For the Fiscal Years Ended Sep 29, 2017 Sep 23, 2016 Dec 30, 2016 Dec 25, 2015 Dec 26, 2014 Statement of Operations Data (In thousands of Canadian dollars, unless noted) Revenue 219,769 195,403 266,338 225,591 201,115 Costs and expenses: Production 141,037 127,415 173,693 140,327 127,396 Distribution 28,496 28,395 39,474 42,053 48,477 Selling, general and administration 10,921 8,215 12,331 10,419 10,595 Amortization of equipment and intangible assets 16,539 15,654 21,211 17,605 17,847 Profit (loss) before finance costs and other (income) expenses 22,776 15,724 19,629 15,187 (3,200) Finance Cost 18,131 16,004 1,000 22,366 24,259 Other (income) expense 9,270 (3,799) 7,796 (4,189) 2,564 Net profit (loss) before income taxes (4,625) 3,519 10,833 (2,990) (30,023) Income tax (expense) recovery: Current

• 10

(2) 1 289 Deferred (363) (853) (5,569) 1,097 4,794 Net profit (loss) and comprehensive profit (loss) (4,988) 2,676 5,262 (1,892) (24,940)

35

Non-IFRS Reconciliations

For the 39-Week Periods Ended For the Fiscal Years Ended Sept 29, 2017 Sept 23, 2016 Dec 30, 2016 Dec 25, 2015 Dec 26, 2014 (In thousands of Canadian dollars, unless noted) Net profit (loss) and comprehensive profit (loss) (4,988) 2,676 5,262 (1,892) (24,940) Income tax expense (recovery) 363 843 5,571 (1,098) (5,083) Finance costs excluding shareholders debentures 8,925 6,659 9,618 9,248 11,476 Finance costs (income) on shareholders debentures 9,118 9,589 (8,244) 11,368 11,460 Amortization of equipment and intangible assets 16,306 15,666 21,031 17,806 18,258 EBITDA 29,724 35,433 33,238 35,432 11,171 EBITDA Adjustments Stock-based compensation expense 65 47 138 558 564 Pinnacle’s share of HPLP legal settlement

• (4,875)

(4,875)

• Gain (loss) on disposal of property, plant and equipment

571 666 2,353 383 1,018 Plant impairment loss and curtailment costs 4,573 904 1,591

• Revaluation gain (loss) on class B and D common shares

6,025

• 10,278

(2,520) 3,752 Other non-operational adjustments 2,388 777 1,199 256 1,517 Adjusted EBITDA 43,346 32,952 43,922 34,109 18,022 Metric tons of industrial wood pellets sold (000s) 1,039 969 1,304 1,054 964 Adjusted EBITDA per Metric Ton (C$) $41.72 $34.01 $33.68 $32.36 $18.70 Profit (loss) before finance costs and other (income) expense 22,776 15,724 19,629 15,187 (3,200) Selling, general and administration 10,921 8,215 12,331 10,419 10,595 Amortization 16,539 15,654 21,211 17,605 17,847 Gross Margin 50,236 39,593 53,171 43,211 25,242 Gross Margin Percentage 22.9% 20.3% 20.0% 19.2% 12.6% Equity earnings in HPLP 1,126 5,503 5,675 1,510 1,660 Pinnacle's share of income in HPLP legal settlement

• (4,875)

(4,875)

• Non-controlling interests

(373) (659) (866) 77

• Adjusted Gross Margin

50,989 39,562 53,105 44,798 26,902 Adjusted Gross Margin per Metric Ton (C$) $49.08 $40.83 $40.72 $42.50 $27.91 Adjusted Gross Margin Percentage 23.2% 20.2% 19.9% 19.9% 13.4%