Overview

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia. Our primary source of revenue is the sale of metallurgical coal. We are a pure-play metallurgical coal company with 66 million reserve tons and 1,352 million measured and indicated resource tons of high-quality metallurgical coal.

The overall outlook of the metallurgical coal business is dependent on a variety of factors such as pricing, regulatory uncertainties, and global economic conditions. Global metallurgical coal markets softened in 2024 due to constrained economic growth in some regions of the world and continued conflict overseas. The global steel market experienced slower growth, especially in China, resulting in elevated levels of Chinese steel exports. These conditions have led steel companies to both cut back on their own production and to reduce the price they are willing to pay for their metallurgical coal feedstock.

During the first three months of 2025, we sold 0.9 million tons of coal and recognized $134.7 million of revenue. Of this amount, 33% of our revenue was from sales into North American markets, including Canada, and 67% of our revenue was from sales into export markets. As of March 31, 2025, the Company had outstanding performance obligations of approximately 1.5 million tons for contracts with fixed sales prices averaging $154 per ton, excluding freight, as well as 2.6 million tons for contracts with index-based pricing mechanisms.

The Company continues to assess its potential rare earth elements and critical minerals deposit in Wyoming. Analysis performed to date indicates elevated levels of rare earth elements along with significant concentrations of critical minerals gallium and germanium. The Company hopes to complete its techno-economic analysis of the overall commercial aspects of the potential opportunity and begin construction of a pilot processing facility in mid to late 2025.

Results of Operations

The table below summarizes the key financial results for the first three months of 2025 and 2024:

Revenue for the first three months of 2025 was $134.7 million, approximately 22% lower than the same period in 2024, driven by the negative impact of pricing offset partially by the 2% increase in tons sold. Revenue per ton sold decreased 24% from $186 per ton in Q1 2024 to $142 per ton in Q1 2025, due to the decrease in metallurgical coal prices as U.S. metallurgical coal price indices continued to fall.

Cost of coal sales for Q1 2025 was $114.1 million, approximately 18% lower than the same period in 2024 despite the 2% increase in tons sold. Cost of sales per ton sold decreased 19% from $150 per ton in Q1 2024 to $121 per ton in Q1 2025. Cash cost per ton sold (FOB mine), a non-GAAP measure, decreased 17% from $118 per ton in Q1 2024 to $98 per ton in Q1 2025, benefiting from efficiencies gained from increased production.

Depreciation, depletion, and amortization expense increased from $15.2 million in Q1 2024 to $17.5 million in Q1 2025, related to general increases in plant and equipment and production. Selling, general, and administrative expenses increased from $14.1 million in Q1 2024 to $14.6 million in Q1 2025, primarily due to an increase in stock-based compensation expense.

Net loss for the first three months of 2025 was $9.5 million, compared to net income of $2.0 million in the same period of 2024. Adjusted EBITDA, a non-GAAP measure, decreased from $24.2 million in Q1 2024 to $9.8 million in Q1 2025, negatively impacted by the softening of global metallurgical coal markets and the decrease in metallurgical coal price indices.

Liquidity and Capital Resources

As of March 31, 2025, the Company had $43.5 million of cash and cash equivalents and $74.9 million of remaining availability under its Revolving Credit Facility. The Company’s total current assets were $164.0 million and were in excess of total current liabilities by $39.6 million.

Cash flows provided by operating activities were $26.0 million during the first three months of 2025, driven primarily by net earnings adjusted for non-cash expenses. Capital expenditures totaled $20.3 million, including expenditures related to the preparation plant and expansion of the Maben complex.

The Company anticipates declaring similar quarterly dividends on its Class B common stock in future periods, subject to Board of Directors’ approval. The dividends are calculated based on 20% of the previous quarter’s CORE royalty and infrastructure fees.

If future cash flows were to become insufficient to meet the Company’s liquidity needs or capital requirements, it may reduce its expected level of capital expenditures and/or fund a portion of its capital expenditures through the issuance of debt or equity securities, new debt arrangements, or from other sources such as asset sales.

Outlook

The overall outlook for the metallurgical coal business remains uncertain in the near term due to the softening of global markets and continued economic challenges. However, the Company believes that limited global investment in new coking coal production capacity, the industrialization of emerging economies, expansion of urbanization globally, and an eventual return to economic growth will support coking coal markets in the longer term.

The Company expects full-year production volumes in 2025 between 3.9 and 4.3 million tons, with the ability to vary production dependent on market conditions. It also plans to continue the development of its existing properties and grow annual production over the next few years to approximately seven million clean tons of metallurgical coal, subject to market conditions, permitting, and additional capital deployment.

The Company’s initiatives regarding the potential recovery of rare earth elements and critical minerals, as well as the potential commercialization of coal-to-carbon-based products and materials, represent additional opportunities for the business. However, no revenues have been recognized from these initiatives to date.