Q4 2021 American Resources Corp Earnings Call

Okay.

[music].

Greetings, welcome to American Resources Corporation's 4th Quarter 2021 conference call. At this time, all participants are in listen-only mode. Any questions or answers?

Greetings and welcome to American Resources Corporation's fourth quarter 2021 conference call.

At this time all participants are in a listen only mode.

Question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference

If anyone should require operator assistance during the conference. Please press star zero from your telephone keypad.

Please note this conference is being recorded.

At this time, I'll now turn the conference over to Mark LaVargetta, Vice President, Corporate Finance and Communications. Mr. LaVargetta.

At this time I'll now turn the conference over to Mark while I forget Huh, Vice President corporate Finance and communications.

Mr will ever get it you may now begin.

Thank you Rob.

Mark LaVargetta: Good afternoon, everyone. On behalf of American Resources Corporation, I'd like to welcome everyone to our fourth quarter and full year 2021 Conference Call and Business Update.

Good afternoon, everyone.

On behalf of American Resources Corporation, I would like to welcome everyone to our fourth quarter and full year 2021 conference call and business update.

Mark LaVargetta: We welcome this opportunity to not only discuss our accomplishments over the past year but also on how we have positioned ourselves and where we have our site set as we embark on this exciting time.

We welcome this opportunity to not only discuss our accomplishments over the past year, but also on how we have positioned ourselves and where we have our sights set as we embark on this exciting time.

Speaker Change: Also on the call today is Mark Jensen, American Resources Chairman and CEO , Kirk Taylor, Chief Financial Officer, and Tom Sauve, our President.

Also on the call today is Mark Jensen American Resources', Chairman and CEO , Kirk Taylor, Chief Financial Officer, and Tom <unk>, Our president.

Before we kick it off I'd like to remind everyone that this call is being recorded and up our normal cautionary statement.

Speaker Change: Before we kick it off, I'd like to remind everyone that this call is being recorded and of our normal cautionary statement.

Speaker Change: Certain statements discussed on today's call constitute forward-looking statements within the meaning of the Private Security's Litigation Reform Act.

Certain statements discussed on today's call constitute forward looking statements within the meaning of the private Securities Litigation Reform Act.

Speaker Change: If forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from the results discussed in the forward-looking statement.

These forward looking statements are subjects to risks uncertainties and other factors would you call out which could cause actual results to differ materially from the results discussed in the forward looking statements when considering forward looking statements you should keep in mind, the risk factors uncertainties and other cautionary statements, which are laid out in our press releases and SEC filings.

Speaker Change: When considering forward-looking statements, you should keep in mind the risk factors, uncertainties and other cautionary statements which are laid out in our press releases and SEC filing.

Speaker Change: We also do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

We also do not undertake any obligation to update or revise any forward looking statements whether as a result of new information.

Future events or otherwise.

Speaker Change: Lastly, we'll be holding a question and answer session following our prepared marks and for anyone wanting to ask a question, you will need to dial in by phone to get into the queue.

Lastly, we'll be holding a question and answer session. Following our prepared remarks and for any one wanted to ask a question you will need to dial in by phone to get into the queue.

With that said I'd like to turn the call over to Mark.

Yeah.

Speaker Change: Thanks Mark. Thanks everyone for joining today. All of that, my voice is a little bit raspy as we get going. But excited about having the opportunity to speak to you and walk through what we did last year, but also focus on where we're at today and where the business is going.

Thanks, Mark and thank you.

Everyone for joining today, well apologize my voice is a little bit raspy, let's get going.

Uh huh.

Talking about having the opportunity to speak to you.

Well walk through what we did last year, but also focus on where we're at today and where the business is going well.

Speaker Change: Overall, the fourth quarter of 2021 continued to show ongoing execution and growth of execution in terms of conditioning American resources as a low-cost and most innovative supplier of raw materials to the infrastructure, metals, and electrification market.

Overall, the fourth quarter of 2021 continue to show ongoing execution and growth of execution in terms of positioning American resources that have a low cost and most innovative supplier of raw materials to the infrastructure metals and electrification market.

Speaker Change: Given our strategic positioning, we remain extremely well aligned with our national priorities in terms of providing steel-making carbon to traditional and modern infrastructure initiatives worldwide, as well as being the first domestic supplier of isolated and purified critical and rareth elements to the domestic supply chain to support the rapid growth and advancement of electrification, clean tech, and national security.

Given our strategic positioning we remain extremely well aligned with our national priorities in terms of providing steelmaking carbon.

And modern infrastructure initiatives worldwide.

As well as being the first domestic supplier of isolated and purified critical rare earth element to the domestic supply chain to support the rapid growth and advancement of electrification Cleantech and national security.

Speaker Change: Our innovative processes allow us to not only bring these solutions to the domestic marketplace, but also to accomplish it through a low cost and the most environmentally safe and scalable method.

Our innovative processes allow us to not only bring these solutions in the domestic marketplace, but also to accomplish it through a low cost.

And the most environmentally safe and scalable methods.

Speaker Change: Last year, we defined our critical and rare earth element technology chain, specific to capture, process, and purifying critical and rare earth elements.

Last year, we defined our critical rare Earth element technology chain.

Vic to capture process and purifying critical in rare Earth elements.

Speaker Change: More recently, we have had the opportunity to begin introducing our strategic partnerships that enable us to leverage our leverage expertise and networks.

More recently, we have had the opportunity to begin introducing our strategic partnerships that enable us to leverage our leverage expertise and networks.

Speaker Change: that we feel will ensure our success in synthesizing the domestic and circular supply chain.

That we feel will ensure our success and synthesizing the domestic and circular supply chain.

As of today.

Speaker Change: We are just a handful of weeks away from the commercially producing domestic sourced and sustainable purified critical and rare earth elements, which as far as we know will be the first in the country to be able to do this within the domestic supply chain of producing purified and isolated rare earth and critical elements for the 99.5 to greater percent period.

We are just a handful of weeks away from that commercially producing domestic sourced and sustainable purified critical in rare earth elements, which adds up.

As far as we know we will be the first in this in the country to be able to do this within the domestic supply chain of producing purified.

Isolate the rare Earth and critical element for the 99.5 to greater percent purity.

Speaker Change: As we embark on this very important milestone, it's worth noting that this is occurring as we are hitting a higher and more consistent level of metallurgical carbon production in one of the strongest markets we've ever seen.

As we embark on this very important milestone it's worth noting that this is occurring as we are hitting.

A higher and more consistent level of metallurgical carbon production and one of the strongest markets, we've ever seen which puts us in a much stronger position to fulfill our 2022 order book backlog of approximately $110 million.

Speaker Change: which puts us in a much stronger position to fulfill our 2022 order book backlog of approximately $110 million.

Speaker Change: With the confluence of these factors, we are both confident and excited about our ability to deliver our best year in our history.

With the confluence of these factors we are both confident and excited about our ability to deliver our best year in our history.

Speaker Change: As we go through and talk about where we're at today, I want to take a brief reminder for those that are just joining us on our history and why we position ourselves within the marketplace that we have.

As we go through and talk about where we're at today I want to take a brief reminder, for those that are joining us on our history and why we position ourselves within the market place that we have done.

Speaker Change: Over the course of, since 2015, we closed on over eight acquisitions, where what we did was we lasered in focusing on acquiring an asset base with a very substantial discount to replacement value. More importantly, an asset base that could be repositioned and drive innovation on that to drive not only revenue growth, but also utilizing our high value technologies on these properties to eliminate the legacy of high abilities, but also drive future value from what these assets can generate.

Over the course of 2015, we closed on over eight acquisitions well, what we did was we laser and focusing on acquiring an asset base at a very substantial discount to replacement value more importantly, an asset base that can be repositioned and drive innovation on that to drive not only revenue growth, but also utilizing.

Our high value technologies on these properties.

Lemonade eliminate the legacy liabilities, but also drive future value from what these assets can generate.

Speaker Change: We are leveraging that asset base using a streamlined, efficient operational platform across several business lines and positioning these assets to be able to capitalize on current and future markets at a very low cost because of the efforts we put forth over the last

We are leveraging that asset base using a streamlined efficient operational platform across several business lines.

Positioning these assets to be able to capitalize on current and future markets and a very low cost because of the efforts we put forth over the last few years.

Speaker Change: Additionally, we've acquired a suite of patents and technologies that allow us to drive innovation and expand the resources we produce and how we produce them.

Additionally, we've acquired a suite of patents and technologies and allow us to drive innovation and expand the resources, we produce and how we produce them.

Speaker Change: Subsequently, we've been strategically aligning ourselves with best-in-class partners to efficiently synthesize our technologies and processes to be more efficiently established in domestic supply chain, as we announced with the Heritage Group and additional partnerships we are currently working on as well.

Subsequently, we've been strategically aligning ourselves with best in class partners to efficiently sympathize, our technologies and processes to be more efficiently establish the domestics through our supply chain as we announced with the heritage group and additional partnerships and we are currently working on as well.

Speaker Change: What I'd like to do now is take a quick moment to walk you through the carbon market strength and walk you through where we're currently at within the business line.

What I'd like to do now lets take a quick moment to walk you through the carbon market strength and walk you through where we're currently out within the business line.

Speaker Change: Carbon demand for steel production remains very strong and supply remains very constrained.

Carbon demand for steel production remains very strong and supply remains very constrained.

Speaker Change: As we've heard over the past several months, the vast majority of our industry in 2022, production is largely sold out. And we continue to corroborate that assessment.

As we've heard over the past several months the vast majority of our industry. In 2022 production is largely sold out and we continue to collaborate that assessment.

Speaker Change: More importantly, obviously, the labor markets are tight, and so are the supply chains for getting parts and materials, and getting the equipment needed to grow the existing marketplace. And due to that, you're seeing a strength in metallurgical carbon pricing. And we anticipate that pricing to actually be more stable than what we've seen in the peaks and valleys of the industry in its prior years.

More importantly, obviously the labor markets are tight and so are the supply chain or getting parts or materials and getting the equipment needed to grow the existing marketplace and due to that youre seeing a strength in metallurgical carbon pricing and we anticipate that pricing to actually be more stable than what we've seen in the peaks and valleys of the industry.

Prior years.

Overall.

Speaker Change: demand for metallurgical coal, like most commodities, is being driven by the broad economic and infrastructure growth worldwide. And as a world emerges from COVID-19 pandemic, along with also

For metallurgical coal like most commodities is being driven by the broad economic and infrastructure growth worldwide and as the world emergence from COVID-19 pandemic along with also the.

Speaker Change: the craziness taking place within the world today, we see a significant amount of demand taking place on the infrastructure side of the world, as well as the increased government stimulus to continue to drive economies out of this pandemic.

The craziness, taking places in the world today, we see a significant amount of demand taking place in the infrastructure side of the world as well as the increased government stimulus to continue to drive economies out of this pandemic.

Speaker Change: The infrastructure bill, in our opinion, will keep a higher floor under carbon prices, and as federally funded infrastructure projects require U.S. produced steel, that'll help drive the demand for products such as ours that we produce out of our complexes today.

The infrastructure build in our opinion will keep a higher floor under carbon prices and has federally funded infrastructure projects require U S pretty steel that'll help drive the demand for products such as ours that we produce out of our complex is today.

Speaker Change: Unlike past cycles, the industry remains more constrained with its ability to bring incremental supply online due to a number of factors, but more importantly than most importantly, we're seeing a lack of invested capital over the years for growth projects, an extremely tight labor market, and an aging of existing industry and existing infrastructure at existing mines that are operating today, and a number of mines being close to being mined out.

Unlike past cycles, the industry remains more constrained with its ability to bring incremental supply online due to a number of factors, but more importantly, and most importantly, we're seeing a lack of invested capital over the years for growth projects and extremely tight labor market.

And aging of the existing industry and existing <unk>.

Infrastructure at existing mines that are operating today in a number of mines being close to be mined out.

Speaker Change: Overall supply issues can remain for parts, supplies, and equipment.

Overall supply issues to remain for parts supplies and equipment.

Speaker Change: as we go through this call, we'll discuss how we are handling those issues and how we are currently positioned within the marketplace to be in a much better position than our peers.

As we go through this call will discuss how we are handling those issues and how we are currently position within the marketplace to be in a much better position than our peers.

Speaker Change: Even though we are not immune to these issues though, we do have a platform of assets and a strong asset base that we can draw upon to position ourselves in a better position than our peers and others entering the market today. And the investment we've made over the course of the last two years, the position that puts us in puts us in a very strong position to continually ramp up our revenue on a monthly basis as we will showcase and talk about here further.

Even though we are not immune to these issues, though we do have a platform of assets and a strong asset base that we can draw upon to position ourselves in a better position than our peers and that and others entering the market today.

The investment we've made over the course of the last two years.

The way the position that puts us and puts us in a very strong position to continually ramp up our revenue on a monthly basis as we will showcase and talk about your further.

[laughter].

Speaker Change: I'll give you a quick update on where we're at there, but what we continue to see is a higher realization and a more consistent output from the complex. We started this mine last year and we were struck with challenges of the labor market where we were competing against federal stimulus and other factors that delayed our ramp up of production.

Although every county I'll give you a quick update on where we're at there, but we continue to see us as a higher realization and a more consistent output from the complex. We started this mine last year and we were.

We're struggled challenges of a labor market, where we're competing against the federal stimulus and another another factors that delayed our ramp up of production.

Speaker Change: What we see today though is strength. We have a strong labor force here, an extremely talented team of individuals that are hitting their stride in terms of what we're needing to produce and hitting our stride in terms of producing the product, processing the product and getting that product shipped to our customer base.

What we see today, though is strength, we have a strong labor force here an extremely talented team.

Individuals that.

Are hitting their stride in terms of what we're needing to produce and hitting our stride in terms of producing the product.

Product and getting that product shipped to our customer base.

Speaker Change: Of note, at the end of 2021, we're operating one section of our Perry County mine, utilizing two continuous

Of note at the end of 'twenty 'twenty. One we're operating one section that are very county mine utilizing two continuous miners.

Speaker Change: As of mid-February, we've been able to expand our production to where we are now, currently operating out of two sections utilizing four continuous miners, one super section and one walking section, so that we have the redundancy of operations to continue to hit our stride, essentially doubling our production.

As of mid February we have been able to expand our production to where we are now currently operating out of two sections utilizing for continuous miners one super section in one blocking section.

So that we have the redundancy of operations to continue to hit our stride essentially doubling our production.

Speaker Change: Like we've said, we've seen a stronger and more consistent rate of output at Perry County and as a result of getting our second section properly equipped and staffed and efficiently operating, we applaud our team for its hard work and execution and applaud the workforce that we've been able to attract that are looking at a long-term, stable place of operation, given the mine plan that we're executing upon.

Like we've said, we've seen a stronger and more consistent rate of I'll put it very county, and as a result of getting our second infection properly equipped and staffed.

And efficiently operating we applaud our team for its hard work and execution and a part of the workforce that we've been able to attract that are looking at a long term stable place of operation given the mine plan that were executing upon.

Speaker Change: Our mind plan at Perry County is a testament to our restructuring efforts to where we'll be accessing our reserves more efficiently and more foreseeable for the future.

Our mine plan at parity County is a testament to our restructuring efforts to where we will be accessing our reserves more efficiently and more foreseeable in the future.

Speaker Change: Our near-term plan includes adding a fifth continuous minor that will be running in a pillar section that we are currently developing with the anticipation that will be running over the next 60 days.

Our near term plan includes adding a fifth continuous miner that will be running in a pillar section that were currently developing with the anticipation that we'll be running over the next 60 days.

Speaker Change: Then our second growth update at the complex is also adding a sixth continuous miner that will be approximately 120 days out from today where we'll be accessing another boundary of gold.

Then our second growth outdated complex is also adding a sixth continuous miner that will be approximately 120 days out from today, where we'll be accessing another boundary of coal.

Speaker Change: What's unique about this mine plan is the cost structure. And one thing I'd like to delve into a little bit here is the plan that we put in place when we acquire this complex is to pull the mine back to a much more accessible boundary of carbon that we have available to us. And we're executing upon that today. Over the course of the next two years, we will be pilloring.

What's unique about this mine plan as is the cost structure and one thing I'd like to delve into a little bit here is that the plan that we put in place. When we acquired this complex is the pull the mine back to a much more accessible boundary of of carbon that we have available to us and we're executing upon that today over the course of the next two years, we will be pilloried.

Speaker Change: a vast majority of our mining. Now what pillaring enables us to do is combat the current supply chain issues that we see today, where we're not out there trying to buy waterline, which is very challenging to do. We're not out there paying a very high price for roof bolts because of our mining.

A vast majority of our mining now what pillars enables us to do is combat the current supply chain issues that we see today, where we're not out there trying to buy water line, which is very challenging we're not out there paying very high prices for roof bolts because of our mine plan, we're not out there trying to buy belton structure, we're able to utilize our existing infrastructure to continue to expand them.

Speaker Change: We're not out there trying to buy belt and structure. We're able to utilize our existing infrastructure to continue to expand the mine through our development sections and the lower boundaries, but at the same point,

Through our development sections on the lower boundaries, but at the same point.

Speaker Change: access the current boundaries by pilloring and retreat mining for the next two years, which will significantly improve the yield of what we're producing, but also drop our cost structure dramatically.

Access the current boundaries by pillory and retreat mining for the next two years, which will significantly improve the yield of the of what we're producing but also drop our cost structure dramatically.

Speaker Change: That puts us in a very different position than a lot of our peers in the industry that are constantly out there fighting the supply chain issues for parts and materials. And by doing so, we're going to be able to reuse those materials, those belt lines and reuse that infrastructure that we already bought at not only our Perry County operation, but also at our McCoy Elkhorn operation as well as as we continue to develop our Wyoming County

That puts us in a very different position than a lot about peers in the industry that are constantly out there fighting the supply chain issues for parts and materials and by doing so we're gonna be able to reuse those materials those belt lines and reuse that infrastructure that we already bought at not only our Perry County operation, but also at our Mcquay Elkhorn operation as well as as we continue to do.

Our Wyoming County operation.

Speaker Change: At our McCoy-Oquant complex, we are currently operating with one continuous miner at our Carnegie One mine since its restart. Most recently we announced we've expanded that by delivering our second continuous miner. What that provides us is the ability to effectively double our production and expand our mine plan there to hit a more consistent production and expanded production. And we'll start to reap the benefits of that going into the April mine.

I don't know quite how Oakland complex. We're currently operating with one continuous miner at our Carnegie one mine since its restart.

Most recently, we announced we've expanded that by delivering our second continuous miner, what that provides us is the ability to effectively double our production and expand our mine plan there to hit a more consistent production and expanded production and will start to reap the benefits of that going into the April month.

Speaker Change: Similarly at PGR, we are now essentially double interproduction and looking at additional expansion opportunities at the McCoy Elkhorn Complex, more importantly also at the Carnegie One Complex where we can add an additional miner for three miners and add additional production out of that existing portal while also having to rely upon a smaller labor force by doing so.

Similarly, a P. C. R. We are now essentially doubling our production and looking at additional expansion opportunities at the Mcquay Elkhorn complex more importantly, also at the Carnegie One complex, where we can add an additional minor for three miners.

And add additional production out of that existing portal, while also having to rely upon a smaller labor force by doing so.

Speaker Change: With these production enhancements, we feel that we are in a better position and a strong position to fulfill our stated order backlog. As you can see through our press release and an announcement of the March number that puts us in not only a strong revenue generation and a strong growth of revenue, but also in an operating profitable status from our operations, which puts us in a strong cash position to continue to expand our business and continue to execute.

With these production enhancements, we feel we're in a better position in a strong position to fulfill our stated order backlog and as you can see through our <unk>.

Releasing an announcement.

The March number that puts us in not only a strong revenue generation and a strong growth of revenue, but also in an operating profit operating profitable status from our operations, which puts us in a strong cash position to continue to expand our business and continue to execute.

[laughter].

Speaker Change: And to provide that further visibility, with the additional section operating at Perry County, we expect to end the month of March with Met Carbon production reflecting a $5.25 to $6 million revenue number for the month of March, which we believe we're executing upon and hitting a higher end of March.

It's a preferred to provide that further visibility with the additional section operating at Perry County, We expect then that the month of March with met carbon production, reflecting a $5.25 million to $6 million revenue number for the month of March which we believe we are executing upon it and theyre hitting a higher end up.

Speaker Change: With these advancements, we are now able to begin to realize an operating profit in March and continue to drive the business forward without having to rely on the capital markets to grow this business. We can execute out of cash flow and continue to put additional cash back on the balance sheet given the profitable numbers we're putting forth today.

With these advancements we are now able to begin to realize an operating profit in March and continue to drive the business forward without having to rely on the capital markets to grow. This business, we can execute out of cash flow and continue to put additional cash back on the balance sheet given the profitable numbers, we're putting up putting forth today.

Speaker Change: Furthermore, we're confident that we have implemented the mind plans, the structure, and the team to capitalize on the current and future market prices. And as we continue to ramp up our production, we'll be able to take advantage of the current spot market prices, which is extremely strong, while also fulfilling our existing backlog of orders for existing customers, which we're thankful for.

Furthermore, we're confident that we have the we have implemented the mine plans the structure and the team to capitalize on the current and future market prices and as we continue to ramp up our production will be able to take advantage of the current spot market prices, which is extremely strong while also fulfilling our existing backlog of orders for our existing customers, which we're thankful for.

Yeah.

Speaker Change: On the recent announcement of acquiring the operating rights of a service operation to feed our McCoy Elkhorn complex, it highlights our ability to be nimble, but also to utilize our existing infrastructure to bring incremental supply online in the strong market to feed additional customers and take advantage of current market environments.

On the recent announcement of acquiring the operating rates of our service operation to feed our mcquay Oakland complex highlights our ability to be nimble, but also to utilize our existing infrastructure to bring income incremental supply online and the strong market to feed additional customers and take advantage of current market environment.

Speaker Change: Our Wyoming County update I'd like to provide here is about our $45 million tax exempt bond that we've been preliminary approved from the state of West Virginia.

Our Wyoming County update I'd like to provide yours is about a $45 million tax exempt bond that we've been preliminary approved from the state of West Virginia.

Speaker Change: This is an innovative capital source for what we're looking at doing in Wyoming County where we can not only produce mid-vol metallurgical carbon to the steel industry and the steel industry that desperately needs that product today, but also to be able to utilize our rare earth and advanced carbon technologies that we were able to license from the state of Ohio to produce rare earth concentrates in a very low cost form.

This is an innovative capital source for what we're looking at doing a Wyoming County, where we can not only produce mid vol. Metallurgical carbon to the steel industry in the steel industry that desperately need that product today, but also to be able to utilize our rare earth and advanced carbon technologies that we were able to license from the state of Ohio.

These rare produce railroad concentrates in a very low cost form.

Speaker Change: What we're utilizing at our Wyoming County Complex is our electrolysis technology. Electrolysis is a unique technology to produce high-value concentrates in a very low-cost format because of the ability to create byproduct economics, which you've heard us talk about.

What we're really utilizing it in Wyoming County complex as our electrolysis technology electrolysis, the unique technology to produce high value concentrates in a very low cost format because of the ability to create byproduct economics, which you've heard us talk about.

Speaker Change: The byproduct economics from electrolysis is by processing coal-based waste material coming out of the processing plant, we're able to produce hydrogen from the facilities because of the high iron and water content coming out of the slurry, but also in that electrolysis within the anode, we're able to separate out and produce a rare earth concentrate that we can then send to our Indiana facility to be further purified and isolated out of our chromatography facility from the technology license from Purdue University.

The byproducts economics from electrolysis is by processing coal based waste material coming out of the processing plant, we're able to produce hydrogen from the facilities because of the high iron and water content coming out of a flurry, but also in that electrolysis within the anode, we're able to separate out and produce a rare earth concentrate that we can then send to our end.

Indiana facility to be further purified and isolated out of our chromatography facility from the technology license at that.

From Purdue University.

Speaker Change: Overall we're going through that process on the tax exempt bond issuance and we anticipate in the first quarter of 2023 looking at the Wyoming County complex and there's some things that could pull that forward but we are currently developing there currently moving the infrastructure that we have from idle mines and idle facilities to lower that cost of implementing and lower that and increase reduce the time frame of getting that complex back into production.

Overall, we're going through that process on the tax exempt bond issuance and we anticipate in the first quarter of 2023 and looking at the Wyoming County complex and there are some things that could pull that forward but.

But we are currently developing there are currently moving infrastructure that we have from idle minds and idle facilities.

Lower that cost of implementing and lower that and.

Reduce the timeframe of getting that complex back into production.

Speaker Change: What I'd like to do now is turn it over to Mark Lover, get it and discuss some of our updates on our rare earth and battery metals division, American Rare Earth.

What I'd like to do now is to turn it over to Mark to discuss some of our updates on our rare Earth in battery metals Division American Railroad.

Thanks Mark.

Yeah.

Mar Ber: Our American Railroad Division represents a very strategic opportunity for us to provide the domestic supply chain.

American rare Earth Division represents a very strategic opportunity for us to provide the domestic supply chain.

Mar Ber: with not only domestically sourced, critical, and rareth metals, but ones that are truly sustainable, being produced from recycled end-of-life products and waste sources.

With not only domestically sourced critical and rare earth metals, but ones that are truly sustainable being produced from recycled end of life products and waste streams.

Mar Ber: We believe that this is a critically important component in establishing ourselves and our great country.

We believe that this is a critically important component in establishing ourselves and our great country.

Mar Ber: as a competitive leader while also making a whole lot of strategic sense.

As a competitive leader, while also making a whole lot of strategic sense.

Mar Ber: Addressing our domestic supply chain and sustainability challenges, in our opinion, makes the largest impact throughout our economy.

Addressing our domestic supply chain and sustainability challenges in our opinion it.

It makes the largest impacts throughout our economy.

Mar Ber: As a reminder and as a point of reference, last year at this time we were still unveiling and defining our suite of IP that we acquired.

As a reminder, and as a point of reference last year. At this time, we were still unveiling and defining our suite of IP.

We acquired.

Mar Ber: Today, and as Mark just mentioned, we're only a short time away from having our first commercial production line operate.

Today, and as Mark just mentioned, where only a short time away from having our first commercial production line operator.

Mar Ber: This first production train will be focused on producing isolated and high purity rare earth magnet metals, such as neodymium, praseodymium, and dysprosium from recycled rare earth permanent magnets.

This first production train will be focused on producing isolated and high purity rare Earth magnet metals, such as near Dinny impressed you didn't am and dysprosium from recycled rare earth permanent magnets.

Mar Ber: Shortly thereafter, our second production crane will be operating, which will isolate and purify battery metals, such as lithium, cobalt, nickel, and manganese from end-of-life recycled lithium-ion battery.

Shortly thereafter, our second production train will be operating which will isolate and purified battery metals, such as lithium cobalt nickel and manganese from end of life recycled lithium ion batteries.

Mar Ber: These high-purity critical and rareth metals will have the ability to be sold and used in manufacturing new high-growth products and applications such as electric vehicles, defense, green energy, and tech devices.

These high purity critical and rare Earth metals will have the ability to be sold and used in manufacturing new high growth products in applications, such as electric vehicles Defence Green energy and tech devices.

Mar Ber: I think it is important to mention and highlight our execution, sense of urgency, strategic positioning, and incredible team and partners.

I think it is important to mention and highlight our execution sense of urgency strategic positioning and incredible team and partnerships.

Mar Ber: With that being said, we'd briefly like to tout some of our strategic partnerships and explain what we feel we are collectively leading the way in addressing these challenges.

With that being said, we briefly like to tout some of our strategic partnerships and explain why we feel we are collectively leading the way in addressing these challenges.

Mar Ber: Purdue University and their Davidson School of Chemical Engineering, along with Texas Tech and their Department of Chemical Engineering, contribute science and laboratory excellence in applying processing technology and chromatography expertise to the process of isolating and purifying critical and rare elements.

Purdue University and their Davidson school in chemical engineering, along with Texas Tech in their department of Chemical Engineering contribute science and laboratory excellence and applying processing technology and chromatography expertise to the process of isolating and purifying critical in rare Earth elements.

Mar Ber: worth noting that while chromatography is a proven and commercial technology which is largely used in the pharmaceutical industry, food and beverage and chemical industries as well, it is not a plug-and-play or off-the-shelf type of process.

It's worth noting that walk from Autography is a proven and commercial technology, which is largely used in the pharmaceutical industry food and beverage and chemical industries as well it is not a plug and play or off the shelf type of process.

Our team from Purdue combined with our partners at CMI D or the leading experts in applying chromatography for the separation and purification of a of a variety of critical and merit element feedstocks.

Mar Ber: Our team from Purdue, combined with our partners at CMID, are the leading expert in applying chromatography for the separation and purification of a variety of critical and rareth element feedstock.

Mar Ber: It's worth noting as well, our partners from CMID bring decades of experience in chromatography design, expertise, build and operations from Eli Lilly.

Worth, noting as well our partners from CMI deep bring decades of experience in chromatography design expertise build in operations from Eli Lilly.

Mar Ber: and they're the perfect partner to efficiently bring this process from lab or bench scale to our commercial scale facility congruent with the growth of the market.

And they are the perfect partner to efficiently bring this process from lab bench scale tomorrow to our commercial scale facility could grow with the growth of the market.

Mar Ber: Again, I'll highlight our partnership with the Heritage Group and their investment arm, HG Ventures, is a highly strategic relationship for us.

Again, I'll highlight our partnership with the Heritage group.

And there are investment arm H two ventures is a highly strategic relationship for us.

Mar Ber: Given their longstanding success in environmental services, material science, and sustainability, as well as their pioneering and leadership position in battery recycling, this helps us ensure our execution and further synthesize our upstream and downstream partners.

Given their long standing success in environmental services material science, and sustainability as well as their pioneering and leadership position in battery recycling. This helps us ensure execution and further synthesize our upstream and downstream partners.

Mar Ber: These are obviously a few of our top partnerships that we've discussed publicly and highlight our ability and willingness to work with industry leaders and bring real solutions to fruition.

These are obviously a few of our top partnerships that we've discussed publicly and highlight our ability and willingness to work with industry leaders and bring real solutions to fruition.

Mar Ber: We look forward to communicating additional relationships in the near future.

And we look forward to communicating additional relationships in the near future.

Lastly, with a high degree of federal government attention to these matters with the passing of the infrastructure Bill which includes funding for supply chain.

Mar Ber: Lastly, with a high degree of federal government attention to these matters, and with the passing of the infrastructure bill, which includes funding for supply chain for clean energy technologies, we believe we're in a great position and aligned very, very well with our national priorities, whether it's traditional infrastructure for roads and bridges or ports, or the advancements of green energy or clean tech infrastructure.

Clean energy technologies, we believe we're in a great position and aligned very very well with our national priorities, whether it's traditional infrastructure for roads and bridges ports or the advancements of green energy or clean tech infrastructure.

Mar Ber: As we embark on this exciting time in being the first domestic commercial supplier of domestically sourced and truly sustainable, high purity critical and rare earth elements, we believe the market will better reflect the value of our highly important and high growth initiatives.

As we embark on this exciting time and being the first domestic commercial supplier of domestically sourced and truly sustainable high purity critical rare Earth elements. We believe the market will better reflect the value of our high important highly important and high growth initiatives.

Mar Ber: I'd like now to turn the call over to our Chief Financial Officer, Kirk Taylor, for some additional comments.

I'd like now to turn the call over to our Chief Financial Officer, Kirk Taylor for some additional comments.

Kirk Taylor: Thanks, Mark. I'd like to begin by mentioning our entrepreneurial, innovative, and shareholder-focused culture, and so our additional value-creating initiatives.

Thanks, Mark like to begin by mentioning our entrepreneurial innovative and shareholder focused culture and silver additional value creating initiatives.

Speaker Change: Novostera Inc., as a reminder, was a company that we licensed on a non-exclusive basis, two of our exclusive licenses and patents for the production of carbon nanostructures and graphics.

No Mr Inc. As a reminder, was a couple of years, but we we license our nonexclusive basis two of our exclusive licenses.

And patterns for the production and carbon carbon nail structures and graphics.

Speaker Change: Additionally, as we discussed previously, American Acquisition Opportunity, Inc.

Additionally, as we've discussed previously American acquisition opportunity Inc.

Speaker Change: which is a SPAC that America Resources sponsored, and where America Resources has the opportunity to participate in the value creation of feature acquisitions in a non-diluted basis.

Which is a spec that American resources' sponsored and where American resources has the opportunity to participate in the value creation of future acquisitions in a non dilutive basis.

Speaker Change: Just to reiterate, as the largest shareholder of American resources, approximately 30% of shares outstanding, our management team is focused and committed on maximizing the value for all of our shareholders in every possible way.

Just to reiterate is the largest shareholder of American resources, approximately 30% of shares outstanding our management team is focused and committed and maximize the value for all of our shareholders in every possible way.

Speaker Change: Also, as we've previously discussed, we have a strong desire to dividend out a portion of these online shares to all of our shareholders that everybody can participate in this value creation.

Also as we've previously discussed we have a strong desire to dividend out a portion of these are one shares to all of our.

Shareholders. So everybody can participate in this value creation.

Speaker Change: From a progress standpoint, I would point you in the direction of each of the respective companies, Novostera and American Acquisition Opportunity, Inc., for their latest current updates. Let me go over a few financial highlights.

From a progress standpoint, I would point you in the direction of each of the respective companies No Mistero American acquisition opportunity Inc. For their latest current updates.

Let me go over a few financial highlights of both this past quarter past year over.

Speaker Change: of the course of 2021, we materially improved our balance sheet to position us to best capitalize on the strength of the modern infrastructure and raw material markets as time has emerged from COVID-19.

Over the course of 2021 we materially improved our balance sheet to position us to best capitalize on the strength of the modern infrastructure and raw material markets.

These emerge from COVID-19, disruptions by having a strong and nimble balance sheet, we're able to navigate labor shortages as well as supply chain shortages to make sure the suppliers that we critically need.

Speaker Change: By having a strong and nimble balance sheet, we're able to navigate labor shortages as well as supply chain shortages and make sure the suppliers that we critically need.

Speaker Change: are well-benefited and able to supply us with what we need.

Our well benefited.

Table to supply us with what we need.

Speaker Change: We were able to eliminate approximately 15.6 million of debt and payables while adding approximately $30 million of cash through an offering of common stock during 2021.

We were able to eliminate approximately $15 6 million of debt and payables, well, adding approximately $30 million of cash through an offering of common stock during 2021.

Speaker Change: Both of these items allowed us to remove the going concern disclosure that had been in our financial statements. Proving our long.

Both of these items has allowed us to remove the going concern disclosure they had been in our furniture to.

Proving our long term viability and strength.

Speaker Change: Again, coupling all three of these together have opened up new non-dilutive capital sources for our growth. The first that we established an equipment line of credit with a leading equipment lender to allow us to strategically and nimbly capitalize on equipment that becomes available.

Again coupling all three of these together have opened up new non dilutive capital sources for our growth. The first is that we establish a equipment a lot of credit for the leading equipment lender to allow us to strategically and nimbly capitalize on equipment that becomes available.

Speaker Change: In this day and age, if you do not have cash or a very liquid source to purchase equipment, it is gone before you can acquire it. In our rapid growth, equipment is vital. Securing proper equipment is vital for securing that rapid growth.

In this day and age if you don't have cash or very liquid source to purchase equipment has gone before you can acquire.

And our rapid growth equipment is vital security and proper equipment is vital for security that rapid growth.

Speaker Change: In addition, as Mark talked about, we're able to secure an initial funding commitment of $45 million of tax and bond finance out of the state of West Virginia. Again, this is a solid, non-dilutive method of financing our growth into West Virginia, which again, as Mark described, will be the highest quality.

In addition, as Mark talked about we're able to secure initial funding commitment of $45 million of taxes and bond point is.

The state of West Virginia again, this is solid non dilutive method of financing our growth.

West, Virginia, which again as Mark described will be the highest quality.

Speaker Change: carbon that the metallurgical coal market desires.

Carbon the metallurgical coal market desires.

We also had our success during 2021, we successfully navigated our new market tax credit program, which we entered into in 2016 as a refresher. This is a jobs program. The first outside capital we secured as a company.

Speaker Change: We also had a success during 2021. We successfully navigated our new market tax credit program, which we entered into in 2016. As a refresher, this is a jobs program, the first outside capital that we secured as a company.

Speaker Change: The net benefit to American resources was over $1 million.

The net benefit to Merck resources was over $1 million.

It was the.

Speaker Change: the initial impetus for us creating 40 direct jobs in 2016, which over the years has been the platform for creating hundreds of well-paying jobs, both directly and through our

The initial impetus for us.

Creating 40 direct jobs in 2016, which over the years.

As the platform for creating hundreds of well paying jobs, both directly and through our.

Contractor partners.

Speaker Change: During 2021, we continue to invest in our operations, most notably $18.1 million in expense development costs to improve equipment and infrastructure at American Carbon, both in the Perry County and Carnegie operations, as well as our processing and purification equipment with the development of our American Rare Earth process.

During 2021 and we continue to industrial operations, most notably the $18 $1 million of expense development costs to prove it equipment and infrastructure.

American carbon both in Perry County, and Carnegie operations, as well as our processing of purification equipment with the development of our mercury or a process change.

Speaker Change: These investments have positioned our metallurgical carbon assets to scale at a time when the industry has very little incremental supply growth, which is providing us with a certain degree of pricing power as we bring

These investments have positioned our metallurgical carbon as a scale at a time when the industry has very little incremental supply growth, which is providing us with a certain degree of pricing power as we.

Bring more production online.

Speaker Change: As other industry participants locked in contract pricing last year to a market that has largely sold out, we were able to provide this increasingly tight market with incremental supply at opportune time based upon our investments we have made.

There's other industry participants locked in contract pricing last year to market that is largely sold out we're able to provide us increasingly tightened mark with incremental supply. The opportune time based part of investments we have made.

Upon recommencement of our American carbon operations and sales of private plus year tour steelmaking customers.

Speaker Change: Upon recommencement of our American carbon operations and sales of products last year to our steelmaking customers, we have seen this quality.

You have seen some sequential pricing increases, albeit at a slower initial rate do it variables discussed supply chain labor tightness, but we're now seeing this rate axe celebrate.

Speaker Change: albeit at a slower initial rate due to variables discussed, supply chain, labor tightness, but we are now seeing this rate accelerate.

Speaker Change: Our debt balance currently sits at approximately $15 million in total, of which $2.6 million is equipment financing, $9.1 million is in the form of convertible notes with long-term partners, and $2.7 million is in the form of outstanding PPP loans.

Our debt balance currently sits at approximately $15 million in total of which $2 6 million of equipment financing nine 1 million in the form of convertible notes with long term partners and $2 7 million as a form of outstanding P. P. P loves.

Speaker Change: Currently, our share is outstanding, so it's just at 65.7 million, class A common.

Currently our shares outstanding since just at $65 7 million class a common.

Speaker Change: We ended the year 2021 with approximately 11.5 million cash on hand. Our balance sheet.

We ended the year 2021 with approximately $11 5 million cash on hand.

Our balance sheet, our capital structure.

Speaker Change: development and growth plans to their strongest position is the most flexibility to execute our innovation and growth plans across all divisions.

Our development and growth playing through their strongest position as the most flexibility to execute.

Our innovation and growth plans across all divisions.

Speaker Change: With that, I'd like to turn it over to call back the moderator for some Q&A.

With that I'd like to turn it over the call back to the moderator for some Q&A.

Moderator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question at this time, please press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your line.

Thank you well now be conducting a question and answer session.

I'd like to ask a question at this time. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

You May press Star two if you like to remove your question from the queue.

Moderator: participants that are using speaker equipment may be necessary to pick up your handset before pressing the star key.

For participants that are using speaker equipment may be necessary to pick up your handset before pressing the star keys.

Moderator: One moment, please, while we poll for questions. Once again, it's star 1 from your telephone keypad. Thank you.

One moment, please pull for questions once again star one from your telephone keypad. Thank you.

HEICO Aisle: Thank you. And our first question is from the line of Heiko Eil with HC Wainwright. Please receive your questions. Hey, there. Thank you guys for taking my questions.

Thank you and our first question is from the line of Heiko I don't with H C. Wainwright. Please proceed with your question.

Hey, there. Thank you guys for taking my questions.

Great. Thank you for joining.

HEICO Aisle: Just a clarification, your backlog, $110 million, obviously an extremely meaningful number. Can you walk us through what you've been seeing with pricing, then versus now, and also if there are timelines to delivery, please?

Hey, just a clarification your basketball counter 10 million, obviously extremely meaningful number can you walk us through what you've been seeing with pricing done versus now and also if there are timelines to delivery. Please.

Speaker Change: Yeah, that's a good question. So pricing, when we built this backlog of $110 million, we actually.

Yeah, that's a good question so.

So pricing, where when we looked at.

This backlog.

$110 million, we actually built it and where.

Speaker Change: with a fixed band, so we had downside protection on that given, I mean, at the end of the day, it's kind of a crazy market, so you don't know if it was going to go up or down, but what we also wanted, we wanted to protect ourselves from the downside, but also enable us to take advantage of the upside.

With fixed band. So we had we had downside protection on that given I mean at the end of the day, it's kind of a crazy market. So you don't know if it was going to go up and down but what we also wanted to protect yourself on the downside, but also <unk>.

Enable us to take advantage of the upside.

Speaker Change: And so we're currently selling at the peak of that out of Perry County or.

And so where we're currently selling at the peak of that out of Marion County are.

Speaker Change: who are realizing the high end of that realization on the

We're realizing the high end of that realization on the.

Speaker Change: On the McCoy Elkhorn complex, our pricing over there was very similar, but it's quarterly pricing adjustment based on it, and that adjustment was based on the next pricing. So we're starting to realize the, we're also realizing the higher end of that. Each quarter, we experience a higher realization than the previous quarter, given the market environment today.

On the Mcquay, Oakland complex, our pricing over there.

Very similar but its quarterly pricing adjustment based on it and that adjustment was based on index pricing. So we're starting to realize the we're also driving the higher end of that each quarter, we we experienced a higher realization.

Than the previous quarter, given the market environment today.

Speaker Change: what we're doing. I mean, right now, as you can see, from the month of March, we provided guidance of

What we're doing I mean, right now as you can see from the month of March we provided guidance of.

Speaker Change: We provided an update, I would say 5.25 million to 6 million, we're on the higher end of that.

Provided an update I would say at $5 5 million to 6 million where were on the higher end of that.

Speaker Change: And we anticipate that growth to continue to be experienced and continue to benefit from it. As no different than Perry County, we just added that super section in there. We're adding another minor section. And more importantly, also, we're adding a minor section.

And and we anticipate that growth to continue to be experiencing and continue to benefit from it as a no different in Bergen County, we just added that the Super section in there and we're adding another minor section and more importantly also.

Speaker Change: As much as revenue growth is important, also the profitability, which we stated we were realizing in the month of March being profitable and we expect that to continue year on.

As much as revenue gross important also the profitability, which we stated we were realizing in the month of March being profitable and we continue we expect that to continue you're on.

Speaker Change: but also with the new mine plan, it's really important. Running a pillar section or two pillar sections within the next 60 days, that drops our mining costs by about 25 to 30%, which is a big deal. And we'll be able to run these pillar sections for the next two years, which will enable us to build a strong cash flow generation machine as we continue to expand elsewhere.

But also with the new mine plan, its really important running a pillar section a two pillar sections.

Within the next 60 days that drops our mining costs by about 25% to 30%, which is a big deal and we'll be able to run. These pillar sections for the next two years, which will enable us to build a strong cash flow generation machine as we continue to expand elsewhere.

Speaker Change: But that backlog, we're realizing that backlog each month and we're growing our production each month to continue to benefit from the higher prices, but also to fulfill that backlog. And we'll continue to ramp up production each month out of our existing operations to fulfill that backlog. So you'll see that continued growth.

But that backlog, we start to realize in that back on each month and we're growing our production each month to continue to benefit from the higher prices, but also to fulfill that backlog in and it'll be we'll continue to ramp up production each month out of our existing operations to fulfill that back on so you'll see that continued growth.

Yeah.

Speaker Change: Makes a lot of sense. Thank you for that. Can you walk us through what you're seeing with market demand from geopolitically safe sources for anything, but especially rare earth metals?

It makes it makes them a lot of sense. Thank you for that and then I guess this is the a little touchy Feely question can you just sort of walk us through what you're seeing with end market demand from you know geopolitically safe sources for really anything, but especially railroad metals I mean, given what's been happening in the world over the last month I just.

Speaker Change: I mean, given what's been happening in the world over the last month, I assume you're getting calls from people that had never called you before and never really cared to reach out and make sure that they can source some longer, longer, longer term supply for the out years for what they might need.

Assume you're getting calls from people that have never called you before never really care to reach out and make sure that they can source. Some you know longer longer longer term supply for the old years for what they what they might need.

Thank you.

Speaker Change: Yeah. I mean, so rare earth elements as well as battery metals. I mean, rare earth elements are obviously extremely important for the electrification economy, wind turbines, electric vehicles, anything that needs that strength of motor, but also U.S. government, Department of Defense.

Yeah, I mean, so rare earth elements as well as battery metals in the rare Earth elements, obviously extremely important for the electrification economy, a wind turbine electric vehicles anything that needs that that strength the motor but also U S government department of defense.

Speaker Change: toward high-end drones and stuff of that nature and use permanent magnets, which you need rare elements from. Over 85% to 90% of rare elements are isolated and purified in China.

Sure.

High end drones and stuff of that nature, you use permanent magnets, which you need rare earth elements from eat over 85 to 90 per cent of Earth elements are isolated and purified in China.

Speaker Change: using solvent-based extraction. So one, people are obviously concerned about where they're getting their materials nowadays, but more importantly, they're also starting to care about how they're produced.

I'm using solvent based extraction. So one people are obviously concerned about where theyre getting their materials nowadays, but more importantly, they're also considered they're also starting to care about how did their produce and utilizing chromatography is an extremely environmentally friendly process compared to solvent based extraction, but more importantly, also very cost effective.

Speaker Change: and utilizing chromatography is an extremely environmentally friendly process compared to solvent based extraction, but more importantly also very cost effective where we can go head to head against the Asian markets and be able to produce them at a price point that's important.

We can go head to head against against the Asian markets and be able to produce them at a price point that is important.

Speaker Change: And we're starting to see that, you're correct, and we haven't announced any of our strategic partnerships yet, but we're in talks on that front and having a lot of success now. What we're very focused on today is getting the facility up and running and showcasing the cost structure and showcasing the quality and consistency of our product, and we're having some really good conversations on the end-users of those products for Magnet.

And we're starting to see that your craft and we Havent announced any of our strategic partnerships yet, but we're in talks on that front and having a lot of success now what we're very focused on today is getting that facility up and running and showcasing the cost structure and showcasing the quality and consistency of our product and we're having some really good conversations on.

On the end users of those products for rare Earth magnets, and then battery metals is a huge market. There's very few if any lithium or cobalt or nickel producers domestically.

Speaker Change: then battery metals is a huge market. There's very few, if any, lithium or cobalt or nickel producers domestically that

Speaker Change: are recycling batteries to battery grade material. Our technology and our multimodal chromatography enables us to do that, producing a 99.99% purity or greater of battery metal that can go directly back into the battery marketplace. And there's a lot more battery manufacturing taking place in the domestic market than there is in the global marketplace.

That.

Our recycling batteries to battery grade material, our technology and our Muslim multimodal chromatography enables us to do that producing a $99, 99% purity or greater of battery metals that can go directly back into the battery marketplace and there's a lot more battery manufacturing taking place in the domestic market than there is.

Speaker Change: electric motors. So the ability to scale that division is very real and the ability to scale our revenue rapidly post this first initial facility getting up and running is very real. Because of the already present, the presence of the battery market here at domestic gain, I mean you look at cobalt produced mostly out of the Congo. Lithium is, there's not a lot of actual lithium production taking place in the domestic market. So

Electric Motors.

So the ability to scale that division is very real and the ability to scale. Our revenue rapidly posted its first initial facility getting up and running is very real.

Because of the already present, the presence of the battery market here domestically I mean, okay. Cobalts produced mostly out of out of the Congo lithium is theres not a lot of actual lithium production taking place in the domestic market. So.

Speaker Change: We're excited to showcase this and we're excited to provide a real solution to the domestic marketplace and do it with best-of-class personnel, Jeff Peterson, Dave Chave, Bill Smith, and the team at Purdue, Christian Bugalesi at Texas Tech, and Dr. Vati on our board. We have a team that we built that knows how to operate this facility, knows how to build these facilities and scale them rapidly.

We're excited to showcase this and we're excited to see.

To provide a real solution to the domestic marketplace in and do it with best in class personnel, Jeff Peterson Dave.

Bill Smith and the team at Purdue Christian Bruch, Lafayette at Texas Tech and Dr body on our board we have a team that we built that that knows how to operate this vote. He knows how to build these facilities and scale up rapidly.

Yeah.

Speaker Change: Well, that's good. I appreciate that. Thank you guys a lot and we'll stay in touch.

Oh no. That's good I appreciate that thank you guys a lot and we'll stay in touch.

Thank you I appreciate you joining the call.

Thank you.

Speaker Change: Our next question is from the line of Steven Siegel with KBB Asset Management. Please receive a thank you.

Next question is from the line of Steven Segal with Kb asset management. Please proceed with your questions.

Stephen Seagal: Hi, Mark. How are you? Great job on all the advancements you're making.

Hey, Mark how are you great job.

All of the advancements you're making.

Speaker Change: I was just wondering, I heard you mentioned, sorry, I heard you mentioned the pillar mining. And can you just explain that a little bit as far as the cost and current, how that helps the company with costs and current supply issues? Does it make it more efficient to make new productions?

Was just wondering I heard you mentioned I'm, sorry, I heard you mentioned the pillar mining and.

Can you just explain that a little bit.

As far as the cost and current how that helps the company with cost and current supply issues does it.

Make it more efficient to.

New production.

Yeah.

Speaker Change: Yeah, thanks, Stephen. Thanks for joining as well, and our team has worked pretty hard to get us in a position where we're able to reap the benefits of the current market environment. And one thing that we looked at when we bought this complex was the ability to

Yeah. Thanks Steven.

This vote and then our team has worked pretty hard to get us in a position, where we're able to reap the benefits of the current market environment.

And one thing that we looked at when we bought this complex was the ability to.

Speaker Change: the pull back the mine and be more efficient and honestly produce out of a safe way.

The pullback of the mine and be more efficient and honestly, we're deciding on a favorite of mine and and the pillar strategy was developed two years ago and now we're executing upon that today, which was we knew was going to take time to get into a position to be able to do this but.

Speaker Change: And the pillar strategy was developed two years ago, and now we're executing upon that today, which was, we knew it was going to take time to get into a position to be able to do this, but with the developments we're putting in today, the current section is pillaring method this week.

The developments, we're putting in today the current section is blurring.

Speaker Change: The next section that we're putting into production, which would be additional production, will be going into the next 60 days.

This week. The next section that we're putting into production, which would be additional production will be going into the next 60 days.

Speaker Change: What's unique about that is you're pulling all your infrastructure back. So right now, if you go out in the world today, including the Starbucks by my house, you can't get labor and they're running out of raw materials to actually sell, we're in a unique position compared to our peers. Because we're not buying infrastructure, we're actually taking it back out of the mine to reuse that. This mine and our other mining complexes.

What's unique about that as you point all your infrastructure back so right now if you go out in the world today, including the Starbucks by My House, you couldn't you can't get labor and they're running out of raw materials actually sell.

We're in a unique position compared to our peers, because we're not buying infrastructure, we're actually taking it back out at the mine to reuse at this mine and our other mining complexes, which will enable us to show a really strong gross profit margin from the operations and operating profit margin from the operation at a time, where other operators are struggling to biodiesel.

Speaker Change: which will enable us to show a really strong gross profit margin from the operations and operating profit margin from the operations at a time where other operators are struggling to buy these components to keep producing work.

It's good to keep producing we're actually.

Speaker Change: effectively not only mining the carbon out of the mine, but we're also remining our infrastructure and taking our infrastructure back out to be reutilized.

Not only mining the carbon out of the mine, but we're also reminding our infrastructure and taking our infrastructure back out to be realized in a in a way that enables us to continue to expand the mine elsewhere and or expand our other mines. So it'll drop our cost by about 30%, but it puts us in a really unique position within our peers to take advantage of the current pricing because you'll produce more coal through the pillar mining.

Speaker Change: in a way that enables us to continue to expand the mine elsewhere and or expand our other mines. So it will drop our cost by about 30%, but it puts us in a really unique position within our peers to take advantage of not the current pricing because you'll produce more coal through the pillar mining than you do driving a section, but also at the same point we're able to continue to utilize our infrastructure in a much more cost-effective way.

Driving affection, but also at the same point, we're able to continue to utilize our infrastructure in a much more cost effective way so.

Speaker Change: We're excited about the cash flows that it will generate for us. We're excited about what it's doing in March. We're really excited about the April month and the second quarter we're going into given this will be the first quarter that we're experiencing this higher revenue generation as well as higher operating profit margins. Okay, great. Well, thank you for that. Thank you. Thanks.

We're excited about the cash flows that it'll generate for US. We're excited about what it's doing in March and we're really excited about the April month end and in the second quarter, we're going into given this will be the first quarter that were experiencing is higher higher revenue generation as well as higher operating profit margins.

Okay, great well, thank you for that.

Well, we appreciate it so thanks for joining.

Appreciate you and your team.

Great job.

Thank you.

Qunar precursor.

Thank you.

Speaker Change: As a reminder, to ask a question, you may press star one. Our next question is coming from the line of Kyle Gallagher with Merrill Lynch. Please see if there are questions.

As a reminder to ask a question you May Press Star One. Our next question is coming from the line of Kyle Gallagher with Merrill Lynch. Please proceed with your questions.

Kyle Galler: Yeah, hey, thanks, Mark, for the call and grind him through this with the voice issues. I think you probably earned yourself a cold one after that, after this call, but just a question. I want to make sure I'm kind of wrapping my head around this correctly.

Yeah, Hey, thanks, Mark for the the call and grind them through this with the the voice issues.

You can find yourself a cold one after that after this call but.

I'm.

Just a question.

Want to make sure I'm kind of wrapping my head around this correctly.

Kyle Galler: You had a tweet come out, I think it was like March 1st, if I believe, correctly, and it said something in effect of

You had a tweet come out.

I think it was like March 1st if I believe.

Correct.

He said something this sect of.

Kyle Galler: You know, this is our mini Stoker, it's 22% of our daily output that represents about 110,000 of daily sellable revenues from Stoker. So, just back of napkin mathing this here,

You know this is our mini stoker, it's 22% of our daily output that represents about 110000 of daily Sellable revenues.

From Stoker, so it just back of a napkin math English here.

Kyle Galler: Am I to expect that you guys are able to sell about $500,000 a day in Stoker? Am I reading?

Oh my to expect that you guys are able to sell about 500000, a day and stoker has that.

Am I reading that correctly.

Kyle Galler: and the stoker represents. So we pull

Mr. OCA represents so we poll.

Kyle Galler: on the high end, about 22% of our production out of our Perry County operation gets pulled to the stone.

On the high end about 22% of our of our production out of our Perry County Operation gets pulled two stronger.

Kyle Galler: So it's not the, it's not, that doesn't represent.

So it's not the.

It's not.

That doesn't represent.

Kyle Galler: That doesn't represent all, our stoker production is not a half a million tons, it's the stoker production that's a half, it's not 22% of that, it's 22% of our overall production pool that are generated, we pull a stoker product. Does that make sense?

That doesn't represent all our stoker production not a half a million tons of stoker production does that happened is not 22% of that 22% of our overall production cold or generated we paused over product that makes sense.

Speaker Change: Okay, yeah, so you're saying, okay, 600 tons of stoker represents about 22% of your daily product output.

Okay, Yeah, so you're saying, Okay 600 tonnes of Stoker represents about 22% of your daily product output.

Speaker Change: And so you're going to realize different costs, you know, pricing for different types of products you're pulling out, right? And so I presume that this.

And so youre going to realize in different Pos you know pricing for different types of products, you're calling out right and so I presume that this.

Uh huh.

Speaker Change: Stoker is probably a higher value.

Stokers, probably a higher a higher value.

Product.

Speaker Change: Yeah, I mean, our stoker is definitely the highest margin product. It's a very specialized, very specialized size and very specialized ash product. It actually goes.

Yeah.

Stokers definitely the highest margin product, it's a very specialized very very specialized size and very specialized dash product it actually goes.

Speaker Change: kind of a cool product. It goes towards, they get shipped overseas to the Nordic market where they actually produce it into, use it for the silica value. It actually goes into gorilla glass. The carbon we're producing at Perry County goes into iPhone screens and other high value applications like screens.

It's kind of a cool product that goes towards get shipped overseas to the Nordic market, where they actually produce it into so use it but the silica value that actually goes into gorilla glass selection or the carbon we're producing at parity county goes into iPhone screen.

Other high value applications like screens.

Speaker Change: So it's not burned. It's not utilized for that purpose, but it's because of that it drives high profit margin now

So it is not burdened it's not utilized for that purpose, but it's because of that it drives high profit margins I will say that we're starting to see some strength in pricing across the board not only on our stoker, but also across all of our products that.

Speaker Change: I will say that we're starting to see some strength in pricing across the board, not only on our stoker, but also across all of our products.

Speaker Change: It starts to get really interesting for the current market environment given the strength of the market in general.

It starts to get really interesting.

The current market environment, given the strength of the market in general.

But it's definitely the highest margin product we produce.

Speaker Change: Okay, so for simplification purposes, is there like, do you think there's like an easier way I should think about like

Okay. So for simplification purposes is there like do you think there was like an easier way I should think about like you.

Okay.

Your revenues are going to look at I mean, obviously I know you guys are ramping things up and theres market fluctuations.

That go into all of this.

But.

Speaker Change: just kind of thinking through it, like, how should I think about that revenue ramp for the remainder of the year? Like, what would be sort of a basic, you know, a dumbed-down version of that?

Just kind of thinking thinking through it like how should I think about that revenue ramp for the remainder of the year.

What would be sort of a basic.

Dumbed down version of that.

Yes, I mean, it's probably one I mean.

We think our revenue is going to continue to show strength for the month of March we provided an update of the five one to $5 million to $6 million I think it's going to be on the high end.

We would that we're adding in additional section we just added an additional minor a comedy.

We're looking at adding an additional section and.

Speaker Change: that period beyond that, so two additional sections there, which will effectively increase our production here by about 60%, but also we're, I mean, we're not going to be able

Beyond that so two additional sections, there, which will effectively increase our production here by about 60%, but also.

Speaker Change: As we continue to ramp up, and obviously March was our strongest month by far, but we anticipate to continue to see that growth, and we're seeing stability of operations. We invested heavily into the mining infrastructure, we invested heavily into our people.

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As we continue to ramp up I mean, it's and obviously March was our strongest month by far.

But what we anticipate to continue to see that growth and we're seeing stability of operations, we invested heavily into the to the mining infrastructure, we invested heavily into our people.

Speaker Change: And now we're seeing a lot more stability, so we think April just stand-alone will see better performance. And we're building inventory right now for our April month out of all of our operations. And so we're in the month of March still of how we time the realization of our revenues.

And now we have we're seeing a lot more a lot more stability. So we think April just standalone will be.

We'll see better performance and we are building inventory right now for April month out of all of our operators and so it's a and we're in the month of March though how we time the realization of our revenues.

Speaker Change: And so I think you'll start to see that continued growth of revenue going into April just from our core business, let alone the advancement of the sections. We obviously have been developing our Carnegie 2 mine as well, which is something that we'll bring online later this year, or later this year.

So I think you'll start to see that continued growth of revenue going into April just from our core business, let alone the advancement of the sections.

We obviously have been developing our Carnegie two mine as well, which.

Which is something that will bring online later this year or later.

Speaker Change: in the summer time frame, which will provide additional revenue, and then the additional section over Carnegie 1. So you'll continue to see that revenue growth on a monthly basis.

Probably in the summer time frame.

So what you'll provide additional revenue and then the additional section over our Carnegie Kent hurting you. One so you'll see you'll continue to see that revenue growth on a monthly basis.

Speaker Change: I mean, we don't anticipate any major factors that would prohibit us from doing that, given the workforce that we have at the mines and the ability – we've been able to attract a good team. We've been able to attract a good workforce because of the investment we made, because of the advancement that we made, and not only our equipment, but also the safety and the reliability of our equipment and how it runs for the workforce that want to be productive.

I mean, I don't we don't anticipate any major factors that would prohibit us from doing that given the workforce that we have at the mines and the ability we've been able to attract a good team we've been able to attract a good work force because of the investment we made because of the advancements we've made in not only our equipment, but also the safety and the reliability of our equipment of how it runs for the workforce that wont be productive.

Speaker Change: Got it. Yeah, I appreciate the extra color there. I think in some of my notes here, I just misunderstood something you said earlier, but much appreciated that just refreshing me on the March numbers and what to consider moving forward. Thanks again for everything, guys.

Got it yeah I appreciate the extra color there I think in some of my notes here I just misunderstood something you said earlier, but much appreciated kind of that just refresh me on the the March.

<unk> numbers and kind of what to do.

Consider moving forward.

Thanks again for everything guys.

Thank you and thanks for joining us.

Thank you at this time, we've reached the end of our question and answer session and I'll turn the call back to Mark Jensen for closing remarks.

Speaker Change: Thank you. At this time we've reached the end of a question and answer session and I'll turn the call back to Mark Jensen for closing remarks.

Yeah.

Mark LaVargetta: I want to say thank you for everybody joining the call today. Sorry, my voice is a little bit rascal and maybe a little bit hard to understand.

I want to say, thank you for everybody joining the call today, sorry, My voice is a little bit we're asking them, maybe a little bit hard to understand.

Mark LaVargetta: My little boy pulled something home and got me a little sick and thankfully my wife, who's a rock of our family, is at home taking care of him while I'm able to go out and do what we do. But at the end of the day, it was...

Yeah, My Little Boy, something home and got me, a little thick and thankfully my wife, Who's a rock of our families at home taking care of him I'll, maybe I'll do I'll go out and do what we do.

But at the end of the day it was.

Mark LaVargetta: 2021 was a development year. Things kicked off slower than we anticipated. And at the end of the day, we understand we have to perform and we have to hit our numbers. And we take that seriously. We put our money back in.

2021 was a development year things kicked off slower than we anticipated and at the end of the day. We we understand we have to perform and we have to hit our numbers and we take that seriously we put our money where our mouth is we're.

Mark LaVargetta: We're hitting our stride, we're executing upon the business plan from a revenue generation perspective and also an operational profitability perspective.

We're hitting our stride, we're executing upon the business plan from a revenue generation perspective, and also an operational profitability perspective.

Mark LaVargetta: Management continues to invest into the operation and continue to invest into the company. We're buying stock personally. We believe we're undervalued based on our peers and we believe we're undervalued based on our current performance.

Management continues to invest into the operation continued to invest in.

The company, we were buying stock personally we believe were undervalued based on our peers, where I believe were undervalued based on our current performance.

Mark LaVargetta: Ultimately, the value and the technology that we have in our critical and rare earth element component tied in with our revenue generation and operational profits that we're generating from the carbon side of our business puts us in a really unique position to execute and execute without having to go back to

Ultimately the value and the technology that we have in our critical rare Earth element component tied in with our revenue generation and operational profits that we're generating from the carbon side of our business puts us in a really unique position to execute and execute without having to go back to.

Mark LaVargetta: the investment community to raise additional capital, which we do believe unfortunately does put pressure on the stock. We don't have to do that with our current cash that we're generating from a business and at the end of the day, positioning the business to continue to grow, utilizing our core assets that we own as a business today.

The investment community to raise additional capital, which we do believe.

Fortunately does put pressure on the stock we don't have to do that with our current cash that we're generating from our business and at the end of the day positioning the business to continue to grow utilizing our core assets that we own as a business today.

Mark LaVargetta: We're excited about the current market environment that we see as – we see duration in that. We see that the market is strong today and we see the future of the market being strong for a number of years, given the demand – for the demand of our products. We're excited about getting our first rare earth processing facility up and running and we think it's going to be a great year for us in terms of the rare earth business as well as the carbon side of our business.

We're excited about the current market environment that we see is we see durations that we see that the market is strong today and we see.

The way, we see the future of the market being strong for a number of years given the demand for the demand of our products.

Excited about getting our first rare earth processing facility up and running and we think it's going to be.

A great year for us in terms of the rare earth business as well as the carbon side of our business.

Mark LaVargetta: We don't take it lightly that you've chosen to listen to what we're doing and to be involved in our company and be an investor in our company. And we thank you for that. And I can assure you that our team is dedicated to succeeding and putting forth the effort to hit our numbers, to achieve growth as a business, and to generate shareholder value for all of our shareholders. So that at the end of the day, we can all be rewarded in the long term.

We don't take it lightly that you've chosen to listen to what we're doing and to be involved in our company and be an investor in our company and we thank you for that and I can assure you that our team is dedicated to succeeding in that putting forth the effort.

To hit our numbers.

To achieve growth as a business and to generating shareholder value for all of our shareholders.

At the end of the day, we can all be rewarded in the long term.

I can't say enough and we look forward to the next quarter, we look forward to continually providing updates to our investors as we continue to hit additional milestones within our business and thank you for joining us.

This concludes today's conference you may disconnect your lines at this time and thank you for your participation.

Yeah.