Q4 2020 Alpha Metallurgical Resources Inc Earnings Call
Good day and welcome to the Alpha Metallurgical Resources' fourth quarter 'twenty 'twenty earnings Conference call all participants will be.
And only mode should you need assistance. Please signal a conference specialist by pressing Star then zero. After today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on a touchtone phone to withdraw your question Press Star then two please note.
They listened to is being recorded I would now like to turn the conference over debt Emily O'quinn Senior Vice President of corporate Communications. Please go ahead.
Thanks, Tom and good morning, everyone before.
Before we get started let me remind you that during our prepared remarks on the Q&A period, our comments related to expected business and financial.
This is the perform it contained forward looking statements and actual results may differ materially from the sky for more information regarding forward looking statements and some of the factors that can affect them. Please refer to the company's fourth quarter 2020 earnings release and the associated SEC filing. Please also see those.
Financial net for information about our use of non-GAAP measures and their reconciliation to GAAP measures participating.
Participating on the call today, our Alpha <unk>, Chairman and Chief Executive Officer, David Stetson, and President and Chief Financial Officer, Andy Edson also participating on the call is Jason Whitehead, our chief operating.
Document there with that I'll turn the call over to David.
Thanks Emily.
Good morning to everyone on the call and thank you for joining us today.
Part of the typical year end reporting process for the fourth quarter results is also to consider the prior year as a whole the challenges and opportunities that presented.
Hi.
<unk> leadership team responded.
And what might be learned from the past 12 months to help us improve the path ahead.
2020 was anything but normal and unfortunately, it was a year marked by disruption.
Uncertainty and in many cases extremely difficult circumstances due to the global pandemic.
Both our industry and our company experienced tremendous adversity.
Despite the headwinds we weathered the uncertainty and ended the year with a strong sales book.
A new record low in cost performance and a clear foundation for leading the business forward.
In fact, 2020 ended up being extremely productive.
Nick.
And transformational year for Alpha.
We set some big goals for ourselves at the end of 2019 and I'm proud to say, we accomplished nearly all of them even during a global pandemic.
This is truly a situation, where we put our heads down and did the work to deliver on our stated goals.
Before we dive into.
<unk> sales in the fourth quarter I want to touch on some of the accomplishments of the last year to put these achievements and perspective.
I also want to point out that we have a new investor presentation on our website and we invite investors to view our new presentation. As it contains additional details which include a number of the points that I'm going.
I'll be discussing this morning.
As you heard me say many times before we are working to become a pure play metallurgical producer in the middle of the last year, we completed our exit from the powder River basin.
Idled Kelty thermal mine.
And the adjacent Dell Barton preparation plant.
In December we.
We divested our largest thermal property debt.
<unk> mine.
Thereby reducing our bonding collateral requirements and eliminating most thermal production from our portfolio.
As a result of these moves away from thermal production, we executed a rebranding effort to better reflect our strategic vision for the future. While also returning to our.
<unk> routes and our brand's rich heritage.
We're now proudly hosting our first earnings call under our new name of Alpha Metallurgical resources.
We were already the largest and most diverse metallurgical coal company in the United States before these actions, but now I believe we're even better positioned to capitalize.
Alpha on a market turnaround the investments we made in building out low cost development minds are beginning to pay dividends as these capital expenditures are largely complete and our minds are now producing.
In a few minutes, Jason will provide an update on our black Eagle.
Road Fork 52.
And Lynn branch.
Minds.
And our expectations are that these mines will have a cost profile of $70 per ton or less.
Our asset base was already favorably positioned relative to our peers, but with a past years fine tuning I believe we are even better positioned for success.
In the last year, we've also built on the.
<unk> changes, we made in 2019 that being a flatter more nimble organizational structure that facilitates decision making.
This philosophy yielded the record setting cost performance that we enjoyed over the last several quarters and reduced our overhead and SG&A by more than $10 million.
We.
Found day and played a routine succession planning process towards the end of the year and as a result announced three important promotions among the executive team with Andy Edson being named President and CFO.
Roger Nicholson was promoted to chief administrative officer, alongside his existing duties and day on Horn was elevated to executive VP.
Also calls.
Additionally, we have strengthen and diversify the company's leadership at the board level with four new directors Ken Curtis.
<unk> Deniz Smith and Mike Quillen.
As many of you know Mike balance Alpha natural resources back in 2003.
Together with our prior directors on proud.
A SaaS such a highly qualified group of individuals and their vast breadth of knowledge and experience in place to help guide the company.
In addition to the strides we've made in transitioning to a pure play metallurgical coal company.
And and so solidifying our leadership and vision for the company.
We also executed on improvement of one of our core tenets.
Tacking safely and responsibly.
In a few minutes, Jason will share some details about our safety environmental performance and Andy will take us through the financial results of the fourth quarter.
Before I hand, the call over I want to take a moment to address the market fluctuations we've seen in the last several months we have been pleased.
Where increased demand for our products along with improved pricing, but we continue to focus on cash preservation, while we await the impacts of higher pricing flowing through our sales contracts and ultimately into our accounts receivable.
And looking ahead for what the next several years will hold on Im optimistic about the need for metallurgical coal.
To see in the national and global economic recoveries with.
With growing consensus building around the likelihood of a significant infrastructure spending met coal will be a critical element of these efforts.
And as the largest coal producer in the country. We are poised to play an important role in network and look forward to doing so with.
We'll I'll ask Jason to provide an operational update for us.
Thank you David and good morning, everyone as you've already heard this morning, 2020 was a busy year for us and we've accomplished a lot over the last several quarters.
Despite enduring a global pandemic and challenges within our markets our employees were able to stifle.
With that focus and achieve safety and regulatory compliance rates that are lower than the national average.
Of this while maintaining 99, 9% compliance with water quality standards.
Each year of the West Virginia office of monitors health safety and training along with West Virginia Coal Association Award Mountaineer Guardian.
Day forward to operations that show excellence in safety and compliance performance.
For 2020, we're pleased to share that six alpha operations were recipients of that award on.
On the environmental side, our Republic team.
They won two awards jointly given by the West Virginia, DDP in West, Virginia Coal Association.
And Im just like to point out very proud of the outstanding work that has been recognized and its shown by these awards and I congratulate everyone at our operations for what they've done two to contribute to this.
Referencing our 99, 9% compliance with water quality standards.
I'm pleased to report to you that we have successfully.
At the commitments within our EPA consent decree.
Which was officially terminated at the end of January you May recall on prior earnings calls that we received a partial termination back in February of 2020.
And now thanks to the continued diligent work of our ops from environmental crews, we fully satisfy those.
Fully minutes.
We continue to focus on operating safely and responsibly each day.
And build on that daily performance into another successful year.
As David mentioned, we're going to provide a update on our portfolio optimization efforts.
Over the last 18 months, we've taken nearly $50 million.
Some of the costs out of our operations structure.
And we redeployed capital to projects with lower cost profiles.
We're now at a point, where the bulk of our capital expenditures for our new low cost met mines have been spent.
And those investments are providing important optionality for us as we plan for the future.
In addition.
For <unk> as replacement mines for higher cost bonds that we have and will continue to take offline.
There is room for growth in each of these projects.
In the fourth quarter of 2019 and throughout 2020, we operated 22 deep months across our GAAP portfolio.
Those deep mines had an annual run rate of approximately <unk> <unk>.
<unk> tons.
As of 12 31, 2020, we were operating 15 deep minds.
And by the end of Q1 of this year will be fully streamlined.
And operating 12 to eight months in central App.
While maintaining net annual run rate of approximately 10 million tonnes.
These efforts coupled.
10 million ongoing continuous improvement initiatives at the section of our spread level have yielded record low cost structures that Andy will speak to shortly.
Bringing you up to speed on the three significant development Capex projects.
That we've discussed in the past I'm pleased to announce that road Fork 52.
With our complete.
And they are operating with three dual continuous monitor sections.
The third and final section came online in late January.
With all three sections now operating together in February for the first time.
We're seeing preliminary cost of production south of $60 a ton.
Who is now as of today are Lynn branch mine is now operating with total to dual continuous monitor sections.
And with the depletion of reserves at our Arkoma album on crews and equipment for myeloma will be redeployed to lend branch.
And bolted on as a third and final plan dual continuous monitor section.
This last.
That will complete our transformation around the <unk> mill complex.
This week at <unk> from a black Eagle mine is operating all three planned dual continuous minor sections.
Two of these three sections have enjoyed.
Steadily improving coal thickness, and we will declare them on the thickest part of the reserve on the back half.
Pierre.
The other section there will continue development throughout 2021 to sustain long term ventilation for the other two sections.
In 2022, all three sections are expected demand and the highest clean tons per foot area.
So with that update on on operations and capital projects.
Half of that is turn the call over to Andy from additional detail on our cost.
Thanks, Jason.
By any measure 2020 was a uniquely challenging year.
But as David mentioned it was also very productive year for alpha as we accomplished many worthy goals.
Loosing operating SG&A and overhead costs divest.
<unk> on the <unk> properties as part of our strategic shift away from thermal production.
Shaving high standards of safety and environmental performance and enhancing our board composition.
Going back to.
This past December we closed the transaction to divest <unk> and the related assets and an.
In addition, transferring ownership of the mine coal reserves permits on infrastructure.
Closing of this transaction also released alpha from all reclamation obligations associated with those Pennsylvania entities.
That number is estimated to be around $169 million on an on on discounted basis.
At closing Alpha.
<unk> provided $20 million on cash to iron synergy, the acquirer and transferred $30 million on existing cash bonding collateral the iron synergy surety provider.
There are three.
Three real reasons, we were extremely excited about this transaction.
First.
It got us dramatically closer to our goal of becoming.
A pure play net company again this strategy goes back really to when David came back on board back in 2019.
Our stated strategy and the ability to move forward on that particularly with Commvault has been.
A real sea change for us.
Second it saves us from having to close them on.
On at the end of 'twenty, two and we as we announced we would.
Barring any transaction and then we would have to begin climbing them on and its multiple impoundments, which as we mentioned earlier $169 million of on discounted reclamation spin would have been a significant weight from the company to carry.
And finally divesting the Cumberland mine did.
It allows us to avoid potential collateral increases on our our northern App bonds.
Those increases could've been tens of millions of dollars.
It's really the.
We've talked in the past about how tough the surety markets are generally speaking both thermal markets.
Been very very challenging so avoiding that.
<unk> was a real benefit to the company.
Moving on to the balance sheet and cash flows we ended the year with approximately $139 million in unrestricted cash.
No additional availability on our ABL.
Cash provided by operations for the quarter was $56 million that does include <unk>.
Zero.
Tolerated AMC tax refund of $66 million.
During the quarter, we also reduced our long term debt by $50 million down to $583 million.
We continue to manage our working capital, which provided a total of $25 million of cash in the fourth quarter.
As previously mentioned.
And we did have the cash outflows associated with the combo on deal, which was a total of roughly $50 million.
The ABL facility was down to $3 $4 million and.
<unk> borrowings as of year end and had on.
$123 million of Lcs outstanding.
Subsequent to year end, we repaid the remaining $3 $4 million of the principle currently have no borrowings outstanding under the ABL.
Also of note on the ABL and January we saw the continued impact of lower sales realizations from Q4, rolling through our AR balances, which required us to post 22 million.
On cash to meet minimum availability requirements.
We have reported this $25 million of cash which was posted but that includes the $3 $4 million, we used to pay off our last outstanding borrowings.
As of the end of February our borrowing base is growing back to more normalized levels and we just received.
At $22 million of cash so the ABL is back to under normal support with AAR on inventory.
However, well.
Our balance is real time are recovering from the very tough pricing environment, we saw in fourth quarter of last year.
Received cash receipts on export sales do tend to lag by 60 to 90 days, depending on customer terms. So throughout the first quarter. Our cash balance has reflected the receipts of the trough pricing than we experienced in that fourth quarter.
We are also seeing some additional pressure from the disconnect of USA East coast pricing and Australian.
Premium low.
Pricing with our our sales into India being tied to the growth much lower Aussie index.
One more important 2021 cash related item of note.
NOL carry back tax refund, we still expect that to receive around $70 million sometime in the latter part of the year It seems like.
<unk>.
First stage.
The artist Slash approval process has been completed so now we're simply waiting on.
On Congress to wrap up the issuing of that which I would probably conservatively put early fourth quarter, but again, the timing could shift on us with.
Mark.
As the financial results Alpha reported fourth quarter EBITDA of $7 4 million down from $12 $4 million on the third quarter, primarily due to lower.
Slightly lower volumes and increased cost of coal sales on our mis segment.
Our net costs were up slightly from our record.
With that low third quarter levels, but that wasn't.
Unexpected fourth.
Fourth quarter every year includes holidays, and vacation time, which does tend to pull back.
Productivity and increased costs, so that was.
As planned.
But in spite of debt.
We.
Record excellent cost performance on both of the business segments.
Our segment previously known as the Capp met segment now simply called the mass segment reported a second consecutive quarter of costs under $70 a ton with the fourth quarter cost of coal sales per ton of $69 25.
On a full year 2020 cost of 70.
Continued as a 19.
Down from nearly $88 in 2019.
Sure.
That is a 20% reduction.
Year over year, even while including the impact of a nearly month long furlough in April so just again phenomenal results from.
$90 <unk> team.
Based on the team continue to deliver incredible incredible performance there.
In the Capp thermal segment, we also experienced solid cost performance with the fourth quarter calls coming in at $44 15.
While the full year.
2020, Capp thermal costs declined approximately two.
With year over year to $47 20.
I do often get the question more so now that we've got four year.
On the comparison 19 to 20, but how how these cost reductions possible.
So here's a little bit more color.
On that first.
And I think we do a pretty solid job of laying this out on our Investor day. When you have a chance to look at it but we pruned our portfolio to focus on the more productive mines, increasing on average production per <unk> by 6%.
If you exclude the impact of the furlough on April that's a 12% increase.
As a result of the reduced my accounts, we were able to rationalize our operations workforce needs and lower both our overhead and labor accounts.
We were able to implement these reductions in my account on workforce without affecting our production levels.
So the math on that is really simple, but the execution on such a plan is not is very difficult in fact.
Fact, and disapproved she'll rod heavily on the on the leadership with Jason on the operations Vps.
For implementation.
In spite of the all of those improvements.
The cleaning up the continued cleaning up on the portfolio optimization activities we.
We still think there are some further gains to be made so naturally we will continue to pursue all the improvements that we can.
As for segment contribution overall, the net segment generated $19 million of coal margin during the quarter down from $24 million on the prior quarter, while the Capp thermal segment contributed 8 million.
On margin, which is roughly flat with third quarter.
On the revenue from our met shipments remained strong in the fourth quarter with total volume of $3 2 million tons shipped down about 100000 tons Q over Q.
On the positive side.
Our net early pricing improved with net average realizations up.
Approximately $1 $5 <unk>.
$70 a ton.
Capp thermal volumes were also down about 100000 tons to 500000 tons in the fourth quarter.
While pricing improved $2 a ton on approximately $60.
SG&A, excluding noncash stock comp and one time items was $14.
$4 million on the fourth quarter compared with $13 five in the third quarter and our Capex for the quarter was $35 1 million versus 27 eight in the prior quarter.
For the full year 2020, our year over year SG&A declined by nearly $10 million to $51 million and as we show in our.
Our guidance, we expect additional cost reduction in 2021 further highlighting the effectiveness of our cost reduction initiatives.
Shifting to 2021 guidance.
We are reiterating our updated operating guidance that was issued on December 10th.
We expect to ship a total of $14 eight to $16 2 million.
And 21 <unk>.
Consisting of 12, 5% to 13 millions of pure met in our <unk> segment, and one to one 5 million tons of thermal byproduct within the med segment.
For the all other segment, we are guiding to one three to $1 7 million tons of thermal coal sales.
Just to give some additional perspective on the Mac.
<unk> of our strategic shift away from thermal <unk>.
Nearly 11 million tons of thermal in 2019, and Furthermore, we expect to have thermal shipments only as net byproducts starting in 2023.
On our last remaining Standalone thermal mine slab camp.
We expect it to deplete near the end of 2022, so going into 'twenty three.
There will be no no more standalone thermal production.
Based on the midpoint of our met guidance. The med only portion is 53% committed in price to $85 47.
With an additional 30.
32% committed without firm pricing.
Some of that is priced based on index. Some of it is price without.
True price attached to it but regardless, it's still fluctuating pricing on that 32%. The thermal byproduct portion of the met segment is 86% committed and priced at an average price of $50.
<unk>.
The all other segment, we are fully committed and priced for 'twenty, one at an average price of $57 57.
On.
On the cost side, our 'twenty, one net cost per ton is anticipated to be in the range of 68 to $74 with our all other segment expected to come from $45 40.
$9 per ton.
SG&A, excluding noncash stock comp on onetime items is forecast to be on the range of $44 million to $49 million.
Representing a $1 million declined from our initial guidance as a result of the combo on divestiture.
We expect our 'twenty, one capex to be near maintenance level of $80 million to $100 million as.
As most of our growth Capex was spent in the past two years on the projects Jason highlighted earlier.
The 'twenty one capex guidance represents a $5 million reduction from our initial guidance for this year again, reflecting reduction in numbers due to the combo on divestiture.
On the operations expense expenses are expected to be about three.
$3 million lower than the initial guidance now between 24 and $30 million.
Cash interest, we expect to come in roughly between $51 million to $55 million. While DD&A is now expected to be on the range of $125 million to $145 million for 'twenty, one and lastly, the cash tax rate should.
Should be near zero.
So with that operator, I believe we're ready to open the line for questions.
We will now begin the question and answer session to ask a question Press Star then one on your Touchtone phone.
If youre using a speakerphone pick up your handset before pressing.
Pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question Press Star then two.
At this time, we will pause momentarily to assemble our roster.
And the first question comes from Lucas pipes with B Riley Securities. Please go ahead.
Hey, good morning, everyone and thanks, so much for all the detail. This is very helpful and also congratulations on managing really.
Incredibly uncertain time very well.
My first question is on the market.
We've had a few of your peers report results.
Thus far and.
Frankly, there has been a bit of a mixed message as to the strength of the metro market today and I wondered if you can.
Provide a little bit more color as to what Youre seeing do you expect to be able to sell all your product. This year on the met coal side and then on on pricing.
<unk>.
Obviously, we can look at the SaaS assessments from platts et cetera, but but what would be really great to kind of hear other discounts versus those assessments and then.
On a net back basis.
The pricing coming in in today's environment. Thank you very much.
Okay.
Hi, This is Dan horn.
There's a lot to unpack there, but I'll start.
The demand we're seeing for our products is really good.
Both here in the North American markets and abroad.
Steel plants are rebounded surprisingly well from.
Last year's global pandemic levels.
The demand for Coke and for coking coal is really good.
I guess the mixed messages that youre, referring to is we are there.
There is a disconnect between the Aussie low vol indices in the U S East coast indices.
<unk>.
We're dealing with that in India.
India, we ship as we've indicated we ship coal in the.
India based on those indices, but at the same time to counteract that U S indices have been quite strong and as far as the demand we expect to hit our numbers. In fact, we are shipping all we can and we are turning down some business here.
We're not able to even chase every opportunity right now.
That we see.
Does that.
Very very helpful any color you'd be able to provide kind of on a blended basis, what we could expect in today's environment for.
For your unpriced tons.
I'll just say that.
Yeah, I'll, just say that in this strong environment, we're not seeing much discounting at all if debt to the indices in a weaker market you tend to see discounts to the index.
Here of late.
We're selling at or in some cases.
Cases slightly above the index generally speaking.
Very helpful really appreciate that color again.
My My second question.
Maybe more from Andy, but when I kind of look at your balance sheet. There is.
Now on unrestricted cash balance there that's that's quite sizable.
And how should investors think about that and maybe if you could take that to kind of comment on liquidity more broadly and what other waste there may be two to enhance liquidity outside of course and recovering market and generating cash. Thank you.
Sure Hey, Lukas its Andy.
Yes.
<unk> unrestricted cash balance on our balance sheet is that's really.
I would say the vast lion's share of that money is.
Being held to support surety.
As cash collateral for different surety and some instances and this goes for our ABL as well 120 to 123 million.
A L sees that.
That combined with the unrestricted.
On.
You are asking about unrestricted and restricted cash.
I was asking about on risk sorry.
Understood I'm sorry on <unk>.
Victor I meant restricted sorry about that okay.
That's what I was thinking so I'll stick with the restricted cash discussion.
<unk>, so between restricted cash and the ABL Lcs that covers.
Surety collateral as collateral for workers' comp collateral for FBL.
Some instances, we've got regular property assurance collateral, but the vast majority of the.
Actual restricted cash is on bonding.
Surety collateral.
Yeah.
So that cash is basically tied up until end of mine life into reclamation and complete.
Complete phase release.
From the different regulatory agencies, so that cash will be seen again for quite a while.
Similar story on workers' comparable.
Comparable black lung those are basically end of life.
Collateral arrangements.
As far as other sources of liquidity again under our on.
Under our debt documents.
We don't have a whole lot of flexibility, but we do have a $50 million basket that we could raise additional.
Period to suit debt, if we wanted to.
<unk>.
We do have after.
Getting through the trough pricing in Q4, our ABL is.
Is trending upward as of today, which today is just anecdotally one data point, we're probably looking at around $50 million of them.
Available.
<unk>.
On the ABL.
And thats after receiving our $22 million of cash back last week. So we're trending in the right direction.
That being said, it's still it's still pretty tough as I mentioned earlier the.
The impact on our working capital of the low pricing in.
Q4 is.
Just something that we're having to manage through as I would imagine.
All of our peers are also dealing with them.
The links to this this.
We'll call it a malaise on the Aussie low vol pricing and how it impacts relatively significant amount of sales going into India.
Continues.
Use to create some pressure for us so.
We can always we always want more liquidity.
But I think we're doing pretty pretty good managing things right now and it is helpful to see our ABL.
Pushing back on the right direction, and giving us a lot more liquidity than it has the past couple of quarters.
Very helpful color Andy team, everyone really appreciate the update and continued best of luck. Thank you.
Thanks, Lucas Thanks Lucas.
Again, if you have a question press Star then one to be joined into the queue. The next question comes from Nathan Martin.
With benchmark company. Please go ahead.
Hey, guys good morning, and congrats on another great cost quarter.
Hum.
Okay. Thanks, two quick questions kind of related to the mix within your business first I guess from a sales standpoint.
I do.
At times, you guys might expect to tell on the domestic market. This year and if you are you seeing any of those domestic steel producers back in the market looking for additional tons and if so can you give us maybe an idea of what pricing might look like there.
Jordan This is Dan.
I think.
What percentage of our domestic seaborne split it's about one third two third 4 million plus or minus into the domestic market. The other $8 million to $9 million go seaborne.
As far as the answer to your question did we see some domestic people on the market. The answer is yes.
And those tons are essentially.
Spot tons and they would move at a price reflective of the indices. So.
If a netback for.
<unk> was 110 or so.
That would be the ballpark, where you'd be selling those times.
Got it thanks, Thanks, Dan and then.
When you look export side, then and you guys made the comment specific on India I know there from core customer for you guys.
Obviously with the <unk>.
China is still the ban on Australia, and Kohls I know you guys don't traditionally fell on a coal into China, but have you seen any changes in your typical customer base.
Global.
I guess on the kind of altered.
Yes.
Just when you think you've seen everything.
Something like this comes along we actually did move a cargo into China, we literally last week. So we are participating in that we have the opportunities there.
We will do that but.
Certainly the.
We'll follow the price if the markets.
Right now our our strategy is to continue to ship to our core customers in the Atlantic Basin and in India.
They are the customers that were with us all last year.
We stayed with them they stayed with us.
But we'll certainly.
Look for new opportunities, if they arise which they did here in the last two months.
Got it thanks, Dan that cargo to China.
Quality I'm, assuming obviously that would be price, obviously, if our China index correct.
Yes, and it was a mix of a few different product actually.
Got it got it.
And then and then it kind of just shifting.
When you guys look at production.
Mix on the met side, obviously, we've had from shifts around.
If you guys have moved towards more productive mines and you know we've got road Fork 52, Lynn branch Black Eagle ramping up how should we think about.
Youre quality mix this year and even going forward.
Yes, Nate this is David Stetson, we've put out on investor deck. This morning.
On page 14 of that Youll see our view of where our quality mix is.
Going forward.
Which as Brian Davis.
Yes.
So it's all.
About 39.
B and mid vol. Both be right. The 25, and then low vol around 13.
Okay got it yeah I saw that in 2020 I was just wondering if that was going to change much. During the fact that you guys are bringing on those three this morning.
I think Nate as we ramp up road Fork.
Two we have an opportunity to put more level into the market. This year.
Perfect. That's for sure Yeah got it thank you guys.
Alright, Yes. This is Andy just to add one more piece to that puzzle.
We did add some material to the Investor day.
Jos kind of on an illustrative.
Five year production profile and really when you lay that out compared to.
In concert with the quality mix on what Dan just mentioned you can see that we're actually in really good shape.
For basically the next decade as far as production numbers without having to spend any any kind of growth capital.
Can you maintain this 12 to 13 million ton run rate of met coal.
So again.
The.
All the pieces have fallen into place to implement David strategy than we are.
Really really happy to be where we've gotten it to.
Got it thanks for that color and I appreciate.
I guess, just one one more.
And you kind of went through the puts and takes on the $25 million you guys had to post I think just to recap on me.
$3 4 million paid back that went tortured borrowing the $22 million. It sounded like you just said you've already got back on.
Last week I guess I just wanted to get your final thoughts on.
Got it and then future bonding requirements may be for your business or industry, maybe if you could give us an update.
On your total kind of post the Cumberland sale. Thanks.
Sure sure.
Yes, I mean, the bonding market is still kind of tough for coal across the board.
As I mentioned thermal is really tough.
Yeah just.
Everything ebbs and flows with the market the broader coal market. So as the met markets went into the trough the surety providers got a little bit more nervous and we're looking for extra collateral now that we're training the other direction.
It feels like things are on a goods in a good place.
Even EBIT.
Tough times, we continue to maintain really good relationships with our surety providers. So.
<unk>.
We're pretty pretty solid shape right now and we do continue to pursue some smaller transactions.
To exit some.
Some potential reclamation items.
Transactional.
That can get us even more.
I guess you'd call it headroom or extra capacity from a bonding perspective.
A couple of one offs in the hopper nothing that really moves the needle a lot, but again it just gives us some extra headroom on on the bonding but.
I think post.
Post Cumberland transaction Undisc.
On discounted amount of our our bond exposure.
Our arrow exposure with kind of kind of equivalent case to a bond is basically.
$210 million.
Down from about $370 million.
Year over year.
Perfect.
Alright, well. Thank you guys for all the information on the time and take care.
Thanks, Nate Thank you Nate.
Okay.
This concludes our question and answer session I would now like to turn the conference back over to David Stetson for any closing remarks.
I just wanted to thank everyone for getting on the call today.
Day I encourage.
Our stockholders and others to review our Investor presentation that we put on our website. This morning.
So thank you all very much and have a wonderful day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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