Overview

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia. Our development portfolio primarily includes the Elk Creek, Berwind, Knox Creek, and Maben properties, which we believe possess geologic and logistical advantages that make our coal among the lowest delivered-cost U.S. metallurgical coal to our domestic and international customers.

We are a pure-play metallurgical coal company with 59 million reserve tons and 1,119 million measured and indicated resource tons. Our plan is to continue developing our existing properties and grow annual production to approximately seven million clean tons of metallurgical coal over the next few years, subject to market conditions, permitting, and additional capital deployment.

The overall outlook of the metallurgical coal business is dependent on factors like pricing, regulatory uncertainties, and global economic conditions. Coal consumption and production in the U.S. is driven by the U.S. and global economies, the U.S. dollar’s strength, and accelerating production cuts. Blast furnace steelmaking is more prevalent outside the U.S., creating demand for metallurgical coal exports.

Global metallurgical coal markets have softened in 2024 due to constrained economic growth and continued conflict overseas, leading to slower global steel growth, especially in China. These conditions have reduced steel companies’ willingness to pay for metallurgical coal. Longer term, the Company believes limited global investment in new coking coal production capacity and an eventual return to economic growth will support coking coal markets.

During the first nine months of 2024, we sold 2.9 million tons of coal and recognized $495.4 million of revenue, with 67% from export markets. This compares to 2.5 million tons sold and $490.8 million in revenue in the same period of 2023, with 66% from exports. The Company’s exports have not been materially affected by recent weather events or labor disputes.

The Company continues to assess its potential rare earth and critical minerals deposit in Wyoming and is making progress on initial mine development and related testing. Analysis indicates elevated levels of rare earth elements and significant concentrations of critical minerals Gallium and Germanium. The Company expects to complete its techno-economic analysis and begin construction of a demonstration processing facility in 2025.

Results of Operations

The table below summarizes the Company’s financial results for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023:

• Revenue decreased 10% to $167.4 million, driven by a 13% decrease in revenue per ton sold, partially offset by a 3% increase in tons sold.
• Cost of sales decreased 7% to $134.7 million, with cost per ton sold decreasing 9%.
• Adjusted EBITDA decreased 48% to $23.6 million, primarily due to the negative impact of pricing.

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023:

• Revenue increased 1% to $495.4 million, with a 16% increase in tons sold mostly offset by a 13% decrease in revenue per ton.
• Cost of sales increased 12% to $397.2 million, with cost per ton sold decreasing 3%.
• Adjusted EBITDA decreased 38% to $76.6 million, primarily due to the negative impact of pricing.

The decreases in revenue per ton and Adjusted EBITDA were driven by the softening of global metallurgical coal markets and lower coal price indices, due to factors like slower global economic growth and Chinese steel oversupply.

Liquidity and Capital Resources

The Company prioritizes managing its financial position and liquidity, while controlling costs and capital expenditures and returning value to shareholders. Key points:

• On May 3, 2024, the Company amended its Revolving Credit Facility, extending the maturity to 2029 and increasing the size to $200 million with a $75 million accordion feature.
• As of September 30, 2024, the Company had $22.9 million in cash and $57.9 million of remaining availability under the Revolving Credit Facility.
• Cash flows from operations were $97.0 million in the first nine months of 2024, funding $57.9 million in capital expenditures and $58.0 million in financing activities, including $24.5 million in dividends.
• The Company anticipates funding future liquidity and capital requirements with cash on hand, the Revolving Credit Facility, projected cash flows, and potential capital raises under its shelf registration.

Outlook

The Company expects metallurgical coal prices to remain volatile in the near term due to the current macroeconomic conditions. However, it believes limited global investment in new coking coal production capacity and an eventual return to economic growth will support coking coal markets longer-term.

The Company continues to advance its rare earth and critical minerals project in Wyoming, with plans to complete a techno-economic analysis and begin construction of a demonstration processing facility in 2025. It also continues work to commercialize new coal-based carbon products.

Overall, the Company remains focused on managing its financial position, controlling costs, and returning value to shareholders, while pursuing growth opportunities in both its core metallurgical coal business and emerging alternative mineral and carbon product initiatives.