TSX : PIF APRIL 2016 WWW.POLARISINFRASTRUCTURE.COM IMPORTANT - - PowerPoint PPT Presentation

POLARIS INFRASTRUCTURE INC. TSX : PIF

APRIL 2016

WWW.POLARISINFRASTRUCTURE.COM

IMPORTANT NOTICE

This Presentation includes general background information with respect Polaris Infrastructure Inc. (“Polaris”) and does not purport to be complete. It has been prepared solely for informational purposes and is not to be considered a solicitation or an offer to buy or sell any securities and should not be treated as investment advice. The information contained in this Presentation is confidential and the property of

• Polaris. It is made available strictly for the purposes referred to above. This

Presentation must not be disclosed, copied, published, reproduced or distributed in whole or in part at any time without the prior written consent of Polaris and, by accepting this Presentation, you agree not to do so. You also agree to return any written copy of this Presentation to Polaris at the request of Polaris.

SNAPSHOT

3

 Plant completed in January 2013 at a Total Cost (including drilling)

• f US $421mm.

 Operating Geothermal power plant – producing approx. net 50-52 MW today.  Above ground turbine capacity of 72 MW.  PPA in US$ for up to 72MW to 2029

 US$115/MWh in 2015 WITH 3% per annum price escalator for 8 years; 1.5% per annum thereafter (TO 2029)

 Current annual EBITDA at plant approximately US$41mm  Drilling program commenced in October 2015 to increase capacity of plant

CAPITAL MARKETS SNAPSHOT

4

* as of April 4, 2016

S y m b o l :

P I F

Price (C$): C$8.24 Shares Outstanding (FD): 15.6 mm Market Cap. (C$): 129 mm Market Cap (US$): 98 mm Cash On Hand - March 31 (US$): 44 mm Debt March 31 (US$): 187 mm Enterprise Value (US$) 241 mm Run Rate EBITDA (US$) ~ 39mm EV to Run Rate EBITDA ~ 6.2x

SHAREHOLDER SUMMARY

5

Goodwood Inc.

11.5%

Barometer Capital Management Inc.

9.9%

Sentry

8.6%

Sprott Inc.

7.0%

Harrington Global

6.0%

Vertex

5.2%

Impex Enterprises Limited

5.1%

Earlston Investments Corp.

4.2%

Pender Funds

4.1%

Polar Capital

4.1%

MANAGEMENT/BOARD CHANGES

6

 CEO – Marc Murnaghan

 20+ years Investment banking/renewable experience

 CFO – Shane Downey, CPA, CA

 12+ years accounting, M&A and corporate banking

 New Board Members:

 Jaime Guillen: Faros Partners - 25+ years in development/financing of infrastructure projects in Latin American; fluent in Spanish  Jorge Bernhard: ex-CEO Sherritt Metals Marketing, fluent in Spanish  Retained Jim Lawless (Geothermal expertise) and Tony Mitchell (Chairman)

 Approx. 115 employees in Nicaragua including Plant Manager, Reservoir Manager, CFO, etc.

CORPORATE STRUCTURE

Alexis Osorno

Finance

Julio Guidos

Reservoir

Juan Escalante

Plant Operations

Antonio Duarte

Special Projects

Johnny Bendaña

HR & Admin

• Manages all

matters related to O&M.

• 53 direct

employees

• Manages all

matters related to the geothermal resource

• 10 direct

employees

• Oversees

accounting, accounts payable, procurement & IT

• 26 direct

employees

• Oversees human

resources, general services, medic and health & safety

• 26 direct

employees

• Manages

drilling project

• 56 direct

employees

• 40 indirect

employees

Polaris Energy Nicaragua, S.A. P o l a r i s I n f r a s t r u c t u r e I n c .

Gustavo Molina

Legal & Govt Relations

• Manages all legal

matters, govt relations, CSR and environmental compliance

• 04 direct

employees

7

PLANT OVERVIEW

8

 2 x 36 MW fuji turbines “above ground” – BOTH ONLINE SINCE JAN 2013  8 production wells producing approximately:

 425-450 tph of steam and  1000-1200 tph of hot brine.  Production wells 500M-2,500m in depth

 CURRENT steam results in power production of 55-57 MWs “gross”

• r 50-52 MWs “net”

 5 Injection wells re-inject the hot brine into the reservoir to create a “closed loop”

 RENEWABLE ENERGY IN LITERAL SENSE

 Plant re-certified for CO2 credits - ~250,000 tons per year available

HISTORICAL KEY PARAMETERS

9

Year Gross MW Hourly Production (1) Net MW Hourly Production (1) Average Steam Mass Unplanned Downtime (%) Planned Downtime (%) Turbine Availability (%)

2012

35.7 33.2 276 0.70 2.6 99.3

2013

53.3 48.4 416 0.19 1.8 99.8

2014

54.1 49.1 434 0.20 5.9 99.8

2015

54.6 49.5 428 0.22 3.1 99.8

2016(2)

53.5 49.3 424 0.00 0.43 100.0

(1) Net of Planned / Unplanned Downtime (2) Thru March 2016

MONTHLY PRODUCTION

10

* After backing out planned maintenance , production has been quite stable since Mar/14 and is not exhibiting large declines

5000 10000 15000 20000 25000 30000 35000 40000 45000

Scheduled Plant Maintenaince

SAN JACINTO – WELL SUMMARY

11

# Well Name Depth (m) Date Gross MW

1

SJ4-1 729 1994 9

2

SJ5-1 2339 1994 3

3

SJ6-1 1881 1994 2

4

SJ9-1 1200 2007 7

5

SJ6-2 2000 2008 8

6

SJ9-3* 1975 2010/3 4-5

7

SJ12-2* 2296 2011 14

8

SJ12-3* 2465 2011/3 8-9 *Fork/Sidetrack TOTAL 55-57 # Well Name Depth (m) Date TPH (injection)

1

SJ1-1 2326 1993 360

2

SJ9-2* 1725 2007/08 200

3

SJ10-1 1200 2008 250

4

SJ12-1* 2383 2010/11 250

5

SJ11-1* 2186 2011 70

*Fork/Sidetrack

TOTAL 1,130

PRODUCTION WELLS INJECTION WELLS

SJT STEAM FIELD LAYOUT

12

Pad 4

Production Wells SJ4-1 Vertical – 729m SJ5-1 Vertical – 2339m SJ6-1 Vertical – 1881m SJ6-2 Deviated (E) – 2000m SJ9-1 Deviated (NW) – 1200m SJ9-3* Deviated (E/SE) – 1975m SJ12-2* Deviated (SW) – 2296m SJ12-3* Deviated (E/SE) – 2465m

Pad 5 Pad 6 Pad 9 Pad 12

2015/16 DRILLING PROJECT

WELL SJ6-3

14

Update

 SJ6-3: Oct 12 to Dec 30, 2015.  Standard diameter deviated well (1918mMD / 1676mVD).  Achieve production from shallow reservoir and modest step out to the west.  Utilize exisiting infrastructure to tie-in for production.  Currently undergoing thermal recovery.

WELL SJ14-1

15

Update

 Spudded on January 09, 2016.  @1996mMD / 2339mMD (target depth).  Well was sidetracked to change direction and inclination.  Looking for confirmation of temperature and permeability.  Well targeting deep reservoir (BT Fault).  If well successful for production, will commence procurement and construction

• f a High Pressure Steam separation

station.

SJ9-4 (THIRD NEW WELL)

9C 9A

Option 9C – preferred

 Depth: ~1200m  Direction: NNW  Target: Shallow reservoir between SJ6 and SJ5

Option 9A

 Depth: ~2000m  Direction: SE  Target: BT Fault (Deep)

• Area of known temperature, permeability and

proven production

• Estimated 5 MWe based on other wells drilled

to same part of resource (80% POS)

16

PROJECT SCHEDULE

17

SJ6-3

 Completed on Dec 30, 2015  Thermal recovery to be completed in June 2016  Expected tie-in in July 2016

SJ14-1

 ~10 days to complete (if drilling conditions allow)  Thermal recovery approximately 75 days  Expected tie-in in Q1 2017

Workovers (SJ11-1, SJ12-1, SJ10-1 & SJ1-1)

 To commence in Apr 2016  Expected duration ~70 days

SJ9-4

 Spud date end of June 2016  Expected duration ~50 to 60 days  Expected tie-in in Q4 2016

DRILLING CAMPAIGN FINANCIAL IMPACT

18

 Each new MW will provide ~$1 mm per year in additional EBITDA / Free Cash Flow  Current PIF RUN RATE EBITDA of $39mm  Given 2016 debt service of $22-23mm and MMRA contributions of $5 - $6mm the free cash flow to equity holders is $11 mm.  Approximately US$0.70 per share  Given debt service is “fixed” the impact on free cash flow to equity holders is significant  Each additional MW added would increase FCF per share by approximately US$0.06 per share annually  10 year tax holiday (with a likely extension) enables tax free “distributions” to Canada  Recently announced initial quarterly dividend of US$0.10 per share

FUTURE GROWTH OPTIONS

 Drilling of new wells to increase power generation  9-2 “Option”  Binary Unit  Plant Output Optimization Projects  Carbon Credits  Western Sector  Casita – San Cristobal Geothermal Field Feasibility and Development Project 19

FUTURE WELL OPTIONS

20

Ref Depth (m) Direction

9C 1200 NNW 9C 9A 2000 SE 9A PP 1200 SW PP 6A 2000 SW 6B 1200 SSE 6C 1200 ESE 6D 4-500 Vertical 6A 6B 6C 6D 8A 1000 Vertical 8A 9B 2000 ENE 9D 1200 W 9B 9D Deep Shallow

BINARY UNIT

Binary Unit Options

 Polaris is currently assessing binary unit feasibility  Need to know approximate brine flow after dully program  Cost - $25 - $30mm  Additional MW - ~6 – 10 MW

 Equates to approx. $6 - $10mm additional revenue and cash flow

 Need to incorporate silica solution 21

CASITA PROJECT

22

 $11 million invested to date

 Geophysics  Access road  “Slim” hole drilled to 850 m in 2011

 Confirmed geophysics and potential “DRY STEAM” resource of 100 MW+  In government’s plan to come online in 2019  Working with World Bank to access “drilling” capital to de-risk  SYNERGIES AVAILABLE:

 Use same rig from San Jacinto drilling campaign  In-place administrative and operations personnel

23

NICARAGUA OVERVIEW

 Democratic elections – Daniel Ortega President – re-elected in 2007  Election in 2016 – Ortega expected to win  Highest growth rate and safest country in central America  “Left Leaning” politically but open economically  Polaris project is a showcase project for the country

 One of the largest foreign investments in country to date  Renewable energy  World bank and other global development banks as lenders

SUMMARY

24  Current EBITDA of US$39 mm  Complete drilling program in Q3 2016

 3 New production wells  Injection workovers

 Commence dividend Q2 2016  Pursue other growth options:

 CO2 Credits  9.2 option  Binary cycle unit - +6/7 MWs  Casita partnership  Acquisitions  Other well targets