Q1 2022 Alpha Metallurgical Resources Inc Earnings Call
And the importance of deleveraging.
And transparent about our attention to take the debt down to zero.
Some may find this approach and Orthodox and I understand why it likely would not be appropriate for many other businesses. However.
Firm, who believe it's in the best for Alpha at this time.
Due to the cyclical nature of our business and the increasingly scarce and expensive financing opportunities available to companies like ours, having no debt allows for greater self sufficiency.
Resilience.
Flexibility to weather the inevitable challenges a market trough.
I am excited for the day, when we can announce that our debt has been paid off.
But until then I am very pleased to share the significant progress we've made toward that end.
Another top priority is to return value to our shareholders.
In March we announced a $150 million share repurchase program that would allow us to buy back our common stock in the open market we.
We are already actively engaged with approximately $40 million in purchases so far.
As we forecast how the balance of the year may unfold.
We believe there's great opportunity to continue this positive momentum.
On a much larger scale.
Therefore, our board has increased the authorization of the share buyback program.
Giving us the ability to purchase up to $600 million.
Of our common stock.
With the elimination of our debt within reach and with expected cash generation levels like we see in the first quarter. We are in a position to simultaneously achieved multiple goals with our free cash flow.
Our board of Directors is also instituted a dividend at an annualized rate of $1 50 per share.
Pay it on a quarterly basis.
With the first quarterly dividend payment of $37.05 per share being paid out on July the <unk> two alpha stockholders of record as of June 15th.
Together the share repurchase program.
And the dividend program established a multifaceted strategy for returning capital to Alpha shareholders.
It's great to have such positive news to share about outflows near term accomplishments.
However.
As you've heard me consistently discussed on prior calls I'm interested in the long term strength and resilience of our company.
Not only for the many customers across the world, who depend on our products to build their societies, but also for the thousands of employees, who make up our dedicated team and of course our investors.
In March I mentioned that the company's senior leadership was wrapping up a strategic planning exercise to chart out. This next 15 years.
While we obviously have reserves extending well beyond this time horizon.
A decade, and a half as a period lithia enough to require long range planning into development.
Permitting.
And capital needs, yet still tangibly close enough to yield meaningful projections.
And actual information we can use in our current operational decision making.
Given the size and scope of our portfolio. It was not a simple exercise and a demand in a lot of the team. Both in terms of the volume of data that was compiled and analyzed but also in the invaluable discussions to help clarify the path ahead, we want and what we want alpha to look like over the next decade and a half.
I want to thank Andy.
Jason.
Dan and Roger and their entire teams for their work and producing a high caliber final product that far exceeded my expectations. We recently presented the long term plan to our board of directors and I have asked Andy to provide some of the high level takeaways on today's call before he covers the financial for the firm.
Quarter.
With that I'd like to hand, the call over to Andy.
Thanks, David and good morning, everyone I want to start by echoing Davids comments about what a team effort. This truly was and there's a long list of people who contributed to the work of refining our long term strategic plan.
A massive amount of data was analyzed these details are proprietary we dug down demand specific information for the next 15 years related to Cole ranked reserve life geological challenges market opportunities and pricing projections.
We obviously don't want to get into any kind of granular details on the call, but I do believe a quick look from 30000 feet will provide some insight to illustrate where we see alpha heading over the next decade and a half.
With regard to anticipated production levels, we've always been proud of our high performing portfolio of existing operations and strong well located reserve basis.
We believe these assets should allow the company to maintain a consistent level of production similar to alpha as recent average production rates across the next 15 years without any need for inorganic growth.
Not only does this structure serve as a solid foundation for our long term operations planning, but it also offers longevity inconsistency in our shipment volumes.
Another takeaway from this planning process is that we expect the Companys Cole ranked <unk> in quality to gradually improve while maintaining the flexibility and optionality provided by a diverse product mix.
Aside from our excellent record of reliably delivering coal to our customers part of what set of assets.
Apart is our ability to provide a wide menu of products to meet very specific customer needs.
As we've said before we don't just sell what we produce we produce what the customer wants.
This is a hallmark that we expect will continue as time goes on but our analysis also shows the capacity to further refine the quality mix and increase the availability of our high quality coking coal to our customers.
The next highlight is one we've already previewed in recent quarters.
We see strategic opportunities over the next decade, and a half to build on existing customer bases and develop new relationships by expanding our sales and marketing efforts.
This is especially true in regions, where the highest growth in demand for met coal is expected to occur.
Andy is one such location, where we have long standing and now expanding relationships.
We're also very optimistic about the possibility for new shipments into Asia. This year, while we are already actively cultivating relationships in markets. We hope to serve within the next decade, we plan to intend to intensify. These efforts in the coming years, while remaining nimble and ready to respond as global macroeconomic circumstances shifts.
I'll wrap up with my personal opinion about <unk> prospects for the next 15 years is this exercise highlighted many opportunities we're eager to pursue.
Ah firmly believe we are well positioned to continue as a leader in the global metallurgical coal space for many years to come.
With our thermal exposure now dwindling to well under 10% of our total production Alpha is the met coal franchise in the United States.
<unk> are the best in the industry and our leadership team is excited about what lies ahead for the company our employees, our investors and our many other stakeholders.
Especially as we are nearing completion of our deleveraging efforts I believe alpha is poised to become an even stronger company with the ability to both succeed and be resilient in the near and long term.
Turning now to our results for the quarter Alpha posted our second record quarter in a row.
First quarter, adjusted EBITDA was $504 million, 60% more than our fourth quarter adjusted EBITDA of $316 million.
Alfa sold 4 million tons in the first quarter was $3 8 million tons of that coming from our met segment consistent with volumes in the prior period.
Realizations on export tonnage continued to improve quarter over quarter with an average of $278 per tonne realized an export business for the first quarter compared with $246 in the fourth quarter.
Coal price on Australian indices, led our quarter realizations of $315, while tonnage linked to the Atlantic indices and other pricing mechanisms realized $247 59 per ton in the first quarter.
For the segment as a whole we realized $254 per ton an increase of 41% over the prior quarter was $181 per ton.
Realizations in the all other category were down to $57 30, non stance as compared to 60 to $62 50 to 66 excuse me in the prior quarter due to a contract reallocation from the thermal byproduct section of the met segment to the all other category.
On the cost side, we continue to see higher royalties and severance taxes, which are a result of higher sales prices persistent inflationary pressure and increasing material costs have also played a role.
All of which contributed to our decision make decision to change the 2022 met cost of coal sales guidance.
For the first quarter met segment cost of coal sales increased to $103 61 per ton due.
Due to the aforementioned reallocation of a small amount of contract tons in the all other category cost of coal sales dropped to $49 81 in the first quarter.
SG&A, excluding noncash stock comp and nonrecurring items decrease from fourth quarter as elevated level of $18 $1 million down.
Down to a more normalized $14 million in the first quarter of 2022.
Capex for Q1 was $28 1 million up from $22 9 million in the prior quarter.
Turning to the balance sheet and cash flows we ended the first quarter was $159 four.
$4 million in unrestricted.
Unrestricted cash and $34 million in unused availability on the ABL for total liquidity of $193 $4 million.
Total liquidity is up 68% quarter over quarter and the levels I. Just mentioned are net of our term loan payments within the quarter.
Together with payments made subsequent to quarter close we are now at a negative net debt level.
Cash provided by operating activities of $336 million for the first quarter was more than triple the prior period level of $104 million as.
As of March 31.
<unk> facility had $121 million of letters of credit outstanding and no borrowings.
Our committed in price business for 2022 continues to solidify with 53% of our met tonnage.
And the met segment committed and priced at the midpoint of guidance at.
At an average price of $243 88.
Another 40% of our 2022 net tonnage at the midpoint as committed but not yet price.
The thermal byproduct portion of the met segment is 96% committed and priced at an average price of just over $53 and we're now fully committed in price for 'twenty two in our all other category on an average price of $57 70.
As David mentioned earlier, we expect to eliminate the approximately $100 million of remaining term loan borrowings before the close of the second quarter.
As a result, we're lowering our guidance expectations for cash interest expense from a range of 40 million to.
To $45 million down to a new range of 18 million to $22 million in 2022.
The share repurchase program is also up and running with $44 million spent as of.
Fourth to acquire 300 to approximately 302000 shares of <unk> common stock at a volume weighted average price of approximately $134 per share. The programmatic approach, we're utilizing for our share repurchases allows for opportunistic buying that helps to maximize the efficiency of the dollars being spent.
I'll now turn the call over to Jason for some details on our operational performance.
Sandy and good morning, everyone I want to kick off my remarks by congratulating our teams on two more records.
Achieved in the first quarter.
With regard to safety our operations had the lowest.
Early accident rates of any quarter in the company's history.
We also completed our best ever Q1, and water quality compliance.
There were some additional context from a water quality compliance perspective.
For the first quarter each year tends to be the most challenging of the floor due to the weather and usual prevalence of snow and rain. During the period I think it speaks highly of our employees that they achieved new records in both of these critically significant areas of safety and environmental compliance.
In addition to the internal accolades for this job well done our workforce has recently been recognized by external organizations for their outstanding achievements in 2021.
On the safety side five Alpha operations were awarded the prestigious Mountaineer Guardian Award and 11 operations received West Virginia Home Safety Association Awards.
Additionally, our Black Castle Mountain Group earned top honors in West, Virginia, Cdp's Environmental Excellence award for the reclamation work.
It's important to recognize exceptional performance and celebrate when a new milestone is achieved.
And I congratulate all the alpha employees, who made these well deserved honor as possible.
But also want to point out the building a record quarter for.
We're earning an annual award is only possible through the hard work and the daily commitment to focusing on our core values.
I am proud to say that I will see that kind of dedication all across our operations.
In recognition of the significant significant contributions of our employees and their continued daily work ethic, we've instituted an additional financial incentive bonus to thank our employees for all they do to fuel our success.
Shifting gears to look at our operational update for the quarter, our mines are running well.
And our projects are advancing on schedule.
The most immediate benchmark on the horizon with our Glen Alum mid Vol mine that will feed into the <unk> preparation plant.
Development production is on pace to beginning in the coming weeks as planned.
And we expect the first production unit to take its initial cuts this summer.
Progress also remains on track for other Capex projects, we announced late last year.
As you might expect we've encountered some challenges in connection with the supply chain disruptions that are occurring across the world.
While it hasnt been easy our sourcing teams have worked hard to overcome these obstacles to keep alpha running with the materials and supplies that we need.
The global met coal markets remained strong and as we've mentioned before our cost of wholesale numbers of elevated.
Higher royalties and severance taxes due to higher sales prices make up a large part of that increase.
But inflationary pressure and increased labor costs are also contributing to the elevated levels.
And budgeting exercises in late 2021, we established 2000 2000, Tony to guidance based on several internal estimates as well as then the current forward curve pricing estimate.
However, as coal markets have carried more pricing strength than previously expected and other geopolitical factors have further constrained in already tight supply we have adjusted our expectations for the rest of 2022 accordingly.
Today, we raised our met coal cost of sales guidance to a range of $101 to $107 per ton as we believe this will appropriately account for the current market dynamics and updated projections about the rest of the year.
I will now hand, the call over to Dan for some additional information on the markets and our sales efforts.
Thanks, Jason and good morning, everyone.
As we've discussed in prior quarters colon disease have maintained strength in the first several months of the year several macroeconomic factors influence metallurgical coal markets in the first quarter, including pandemic related supply.
Labor and supply chain challenges that persisted in many areas alongside rising inflationary pressure.
Supply tightness from prior quarters continued into the early months of 2022 and in late February Russia's invasion of Ukraine created far reaching global geopolitical implications.
The war has also further constrained availability of metallurgical coal.
Various sanctions imposed as a result of the conflict have had additional impacts on trade flows market dynamics and index pricing, which experienced significant volatility within the quarter.
Global indices saw the biggest wins during the quarter with the Australian premium low vol, and ex jumping from $357 per metric ton on January one to 515 per metric ton on March 31, and reached $518 per metric ton recently.
The U S East Coast Global indices started the quarter at $320 per metric ton and ended the quarter at $535 per metric ton as recently settled back down to around $475 per ton.
Finally U S East coast Highboy indices moved from $340 per metric ton at the start of the quarter up to $479 per metric ton in the quarter close and it's now at a level of around $470 per metric ton.
We believe alpha is well positioned to continue benefiting from this robust pricing environment and 53% of our metallurgical coal at the midpoint of guidance is committed and already price with another 40% of our metallurgical coal that is committed for 2022.
But not yet price.
In an environment with this much volatility it is especially hard to know where things may be headed there are signs of slowing growth within some of the data that we fall.
For example, the latest steel production statistics from the World Steel Association show, a five 8% drop in global crude steel production against the year ago period of March 2020.
North American production in March 2022 was down by two 8% from a year ago, while the EBIT level dropped from eight dropped eight 5% year over year.
However to evolve is key markets, India, and South America stood out positive contrast, with an uptick in crude steel production against their respective year ago periods.
Because of the volatility and change in trade flows we are seeing solid demand for metallurgical coke in European and South American markets.
Opportunities for Alpha has met coal have also opened up in Asia, and the far east alongside our growing presence in India.
All in all we are still seeing robust demand for office export business and closer to home. We continue to receive inquiries from domestic customers to investigate the possibility of incremental tonnage on top of their existing contracts.
Before we open up the call for questions I will briefly reiterate our prior comments around the transportation problems within the coal industry.
While these issues are well known and have received an outsider outside.
Outsized amount of attention in recent weeks our position remains the same.
We've encountered delays in challenging circumstances at the time, we issues have been more pronounced than others.
Certainly we will continue to look forward to a time when these issues are resolved, but in the meantime, our teams will keep navigating through these challenges in close cooperation with our transportation partners.
That concludes our prepared remarks for this morning's call. Operator, we are now ready to open the call for questions.
Absolutely.
We will now begin the Q&A session.
The first question is from Nathan Martin with the benchmark company.
Your line is now open.
Hey, good morning, guys, congrats on the quarter and thanks for taking my questions.
Thanks, Nick.
Great to see the progress made on the debt pay down additional shareholder returns announced.
Looking ahead, assuming the term loan was paid in the fourth quarter as you guys are shooting for.
Do you think about as a management team and the board capital allocation going forward from there is it is it additional share buybacks you guys announced you consider.
Dividends, whether it's a special et cetera, how do you balance your approach your changes too. Thanks.
Well I'll take a shot at it and let Andy.
His input so right now we are focused on as we said we're focused on reducing our debt, which is under $100 million, we just announced a $600 million share repurchase program that will be executed on as we continue to execute on the 150, we we announced earlier.
So from our perspective is currently that's where our focus is we will obviously be able to be back in front of the board and.
At the end of the second quarter numbers and then obviously in November again to discuss with them, where we stand from a financial perspective right now our focus is purely on getting our debt repaid and executing on the $600 million share repurchase program. Andy did you want to add anything to that.
All I would say is a good start to unite.
When you look around the options available to us in the discussions with the board.
The current market levels, where futures are currently sitting.
The valuation of the company.
A little bit off and so it is hard to argue that there is any better investment right. Now then taking up our own shares and as that develops in the coming quarters. We will continue to have these conversations with the board.
If a pivot is called for we can go that direction, but for right. Now that was that was the board's decision and I think it makes a lot of sense.
Got it I appreciate it could stall skies.
Andrew maybe I'll have your cost side I know you spoke about this last go around.
Possibility of cost guidance could move up with the markets and prices remained elevated.
And then you mentioned the scale sensitive piece of royalties the big driver behind the increase in guidance today.
But you also called out again continued inflationary pressures.
To parse out the two there just trying to figure out how much of the increase could be and maybe sticking there related to labor and inflationary pressures versus.
The cost sensitive.
I mean at some point that prices begin to retract.
Hi, Nate this is Jason and I'll try to fill that one but I think I think you can basically break the bridge up into thirds. The bridge if you will between former guidance.
Guidance.
First start would be sales related royalties severance taxes.
The second and third would be purchased calls that we're buying into our <unk> segment, and then selling into the market and then the last <unk> would be divided between <unk>.
Labor and consumables pricing on the supplies and repair side.
That's very helpful. Jason.
Is it reasonable to assume guys given the big step up in net prices, we've seen quarter to date.
Likely that costs also up quarter over quarter.
That's.
As a hard one to gauge again just to Vince we're so volume driven.
In a in a static environment, you might see a little bit more of a spot, but again looking at the futures, where they stand we still feel pretty good that things will hold in the current range.
The remainder of the year.
Okay, That's fair Andy.
Maybe on the cadence of shipments and Dan touched on this on the transportation side of things.
I have been getting a lot of attention in the railroad private STB recently.
From a shipment perspective as we look ahead. The next three quarters anything we should be thinking about from a cadence on the <unk> side.
Trying to get towards your full year guidance range.
Well, let me hit this a really high level.
Nate.
We like a lot of our colleagues in the industry.
First quarter experienced some issues associated with our transportation partners. However, in our private and public comments from them, we realize that their issues were created.
Primarily by shortage of labor and this isn't unique to them its unique across the entire industries in America.
As we listen to their comments and what we've seen is we are hoping that as we move forward.
Services will improve as they bring on more employees to the system, but I'll, let I'll, let Dan who has to deal with this on a daily basis.
Provide his commentary.
Hey, Nick.
Our team has done a really good job of managing through this we've had some good weeks we've had some bad weeks.
We definitely see some progress the service levels from the growers is improving.
Also has the advantage of shipping on both eastern rail carriers and our team has done a good job of use them.
Using that flexibility to to keep getting shipments out on time to our customers. So we're working through it.
We're we're optimistic it's going to continue to improve like I said, we're starting to get back to where we feel like we have reasonable shipping levels. As you can see from our Q1 numbers.
Great very helpful and then maybe finally just.
Looking at the Capex side of things.
I realize it's still pretty early in the year, but any early thoughts on what spending could look like next year, obviously, you've got some projects investments going on.
And 'twenty two.
Expect to see any spending on growth next year at this point and would you expect.
Maintenance capex kind of scope remain around that $120 million level.
Yes.
Nate Youre, putting me in a corner man, it's only may I'm barely making through Q1 right now so it's hard to look into 2023 just yet.
I don't know that we can really have too much.
The comment on that we do obviously, we talked about the 15 year.
Production plan, we do have projects in there that we're not quite ready to discuss with everyone. Just yet we're still doing some work behind the scene. So.
There'll be some capital phasing in over the next few years, but as far as far as specifics for.
When things are facing in 2023 or any guidance there probably a good bit too early to go too far with that.
No I understand Andy sorry, it's hard to put you on the spot is.
Like I said, considering we've got a lot of the work you guys can just figured I'd check in so.
Very helpful guys I appreciate all the integration and the extra time.
Thanks, Nick.
Thank you.
Next question comes from Lucas pipes Raleigh Securities. Please proceed.
Thank you so much and good morning, everyone and congratulations to the entire team on.
Terrific work.
I I want to ask ask about.
The capital allocation plan as well.
With the term loan eliminated before quarter, Ed as you as you noted in your prepared remarks.
Is there any reason to think why not all capital.
After that event is.
Use for share buybacks kind of quarter in quarter out.
I don't really see another need for capital outside of that I would appreciate your perspective on that.
Shouldnt Shouldnt the peso.
Share buybacks accelerate pretty dramatically here.
This term loan elimination. Thank you.
Well this is David I know Andy.
And he's anxious to talk with you about that as well Lucas, but I'll stand by what I said originally.
And I made in my comments I used the word that the pace and the cadence of our share.
Repurchase will will accelerate as we move forward with the new $600 million.
The incremental $450 million increase in what the board has authorized so we will increase that cadence as the year moves forward, but but again, we're going to what we do is we check the boxes Lucas.
We check the box or we will hope to checkbox shortly on paying our debt off.
As Andy said, we believe our shares are woefully undervalued. So therefore, we will pick the cadence up or buying our shares and then as we proceed into the.
Our August .
In November Board meetings, we will go back to the board given the update on where we stand on the share repurchase program, we will see where the world is and where where our capital is that point in time, and then we'll be able to.
They provide the board some guidance and get their insights Andy did you want to.
Respond anymore than that.
Perfect.
Thank you Dave.
A quick follow up question on this.
From a modeling perspective is there a minimum.
Cash and liquidity target that you have.
That's a great one for Andy if you have that.
Kind of felt that once we get passed off.
Hey, Lucas.
Yes, we do have internally and we bounce around a good bit.
Their thoughts.
On.
We want to talk about $200 million you want to talk about $300 million, we don't really have a number nailed down at this point.
That's not really a pressing issue with them up the cash flow generation that we see coming in this particular market.
That is more of a long term.
Part of the 15 year plan that we've considered as we look at capital programs as we look at potential downside scenarios for any kind of market reversion and so while I don't really want to tag a number right now simply because we want to remain dynamic and conservative as we always are we've talked historically in the past around the 200 million.
<unk>.
Cash or liquidity kind of numbers. So we will be in some some neighborhood of that likely going forward, but again don't want to stick a pin in a specific number at the moment.
Mhm alright.
Alright.
Helpful. Thank you for the color.
And then on the strategic plan.
Really great to hear that.
We're not just looking to generate all this cash here in the short term, but you've talked through the long term.
I wanted to maybe just try to Peel the onion on this a bit should we think about.
$14 15 million tons of met coal.
Sustainable over that outlook period, or kind of and higher markets that range of output in a lower market, maybe drops down to 12 13 million tonnes like what's the what's kind of the volume.
Rejection.
You've come up with over this over this extended time period. Thank you for your perspective on that.
Well.
Throw this over to.
Jason but as we looked at our plan.
Hello, Jason Bandel due on an operational perspective.
As we've talked before the ability to flex and this company has tremendous ability to flex up when we see.
Market demand, we've been able to flex down we see it.
Market is moving away from us so that's what we built into our system, we like what we built.
But Jason I'll turn it over to you for your commentary on.
I think.
I think I think when you think about the 15 year plan you need to think about it as kind of a static status quo.
Like you said, 14% to 15 million ton run rate.
But as David alluded to we do have the ability and under certain market conditions.
We would we would really evaluate hard some of the higher cost coal operations.
See if we can scale those back and then try to flex on the lower cost operations to spread out fixed cost more efficiently if that makes sense.
So, we shouldnt think of $14 million to $15 million.
At the at the upper end.
Well, it's a number it's a number of internally as we look at it again as you know it's really.
Really a complex questions. We can't give you a simple answer to it.
It's dependent on demand it's dependent on the built to transport stability of supply and other matters that go into play there.
When we did our 15 year plan.
We just for purposes.
We have visibility like for everybody else, we probably have visibility of the market for a short period of time, but this is a 15 year plan and the reason the 15 year plan was devised so thats about as far out and some people argue that plays beyond next year, I'll, probably meaningless, but we did it out 15 years and we left it basically static at the 15.
<unk> level only for that purpose, we have the ability to flex up or down as we proceed forward.
We have availability to bring on new mindset, if we see demand.
If transportation allows the ability to move more coal markets are it's a complex question.
But for the purpose of our planning weightless left it fairly static in that $15 million range.
And again with the ability to flex up or down depending on multiple conditions.
Very helpful.
Now im going to ask a half serious question I can't help myself, but.
Did you use the $189 domestic pricing for 15 years, so the $297 export pricing for the next 15 years.
Got it.
Alright.
Yes.
[laughter].
Let me go back to the previous.
Previous questioner secondly to us.
It's also as we looked at that 15 years.
Theres two components to that $15 million, we also look at increasing the quality of our coals.
Throughout that period of time, we did a very very sensitive proprietary view of where we were from a quality of calls too. So as we proceed through that 15 years are our coal qualities will will be modified as well and obviously our pricing models.
Are what they are we do not share those.
We obviously are very confident in our ability to perform for $50 million almost in any markets were good.
Yes, no no.
And I think that the.
The high level takeaway here is that as Jason mentioned, we did looked at this with a static picture of the world, including all the constraints that we're dealing with today from.
From any perspective, we looked at it and varying price ranges upside cases downside cases, we're stress testing it we're testing not only the the ability to.
Some outsize returns, but also the ability to be resilient through some challenging markets. If in windows those come back into play, but the big picture is that 15 years from now we still have reserves, we don't need to acquire anything to access those reserves were still the alpha.
15 years from now that you see today, producing the same high quality coal servicing the high growth markets and providing.
Providing as much valuable as we possibly can to our investors and all of our stakeholders and so.
As David said is we don't want to get into any details. The goal was really just to look and say.
Some some companies like to look at a 10 year plan, we were kind of asking the question what happens in year 11.
Because.
Reserves deplete and then you get to what happened the year 12, So we can take it out to 15.
Just to give some degree of comfort that we have a very very long term proposition for this company and I think Jason Jason.
To just add a little bit a little bit of color to what Andy said building a 15 year plan I.
I guess, probably the first step is is it is it or can it be permitted.
So you have to have a plan for that and there is a timeline and as everyone knows is sometimes it takes several years to actually come to fruition.
After its permitted well, what's what's the geology look like I was just going to be a challenging mine can we is it can be a productive mine is going to be a safe mine with respect to mining conditions. So all those things are under evaluation.
What's the recovery look like can we process. It can we get it through our plant after we get into a client can we get it to market either be a railcar barge.
The plan has I.
I guess a lot of details that we're not really speaking about but what makes us feel good is that we know that we're able to be sustainable able to be flexible as we are today.
The next 15 years, and as I think David and Andy both mentioned produce a higher quality product generally.
What we are today.
Yes, Lucas just a follow up one more time on that at that point.
This is part of the planning process I'm, so proud of that.
Team on.
And we do this on a regular basis, but usually in a little shorter timeframe than the 15 years that we went out and again it started off to be seven years, and then they said well why don't we do 10, and then in our heart, let's do a lab and then it finally, we finally cut it off at 15, but.
The work that Jason is doing.
Right now for let's say just take let's take the example, Jason.
Year, and a half ago came to us on various projects in the Glen Allen mind that we've mentioned in previous calls.
Jason gave you an update on it it's a mid vol.
Property, its a solid <unk> property.
I believe Jason you are should be bringing it into production this summer, but you're getting very close to net correct. Jason that's correct as we mentioned in the in the remarks that will start in the coming weeks.
And it will be up to full production with its first unit this summer.
And that will be more to come on on new mines timely.
Sure.
Very helpful really appreciate this.
Steroid discussion.
One final question for now.
I understand it right there is a russell rebalancing approaching next month.
Do you have a view on whether you might be a candidate to be added to the index.
Yes, Lucas it's Andy.
We we won't know until we know, but it looks like on the various metrics that are considered for inclusion it seems like we check all of those boxes as far as I can tell so.
I don't know how that will turn out but it feels like.
We should if we're not.
Okay.
<unk>.
I need to bite my tongue because.
Attempted to make another half serious common that has stopped by to back too many shares before that but again.
I'm just.
Jessica Mace tower.
You've done a terrific job and I want to congratulate the entire team. Thank you very much for the war for your time.
Thank you.
There are no questions waiting at this time I will now pass the conference back to David Stetson.
Thank you let me close my remarks by thanking our shareholders for their faith and confidence they've had an alpha and our entire team we are United at Alpha envision and purpose and focus.
We're a safety first company with one of the best operating teams in the industry I want to thank everyone again for your interest now and for joining the call. This morning have a great rest of your day. Thank you so much.
This concludes the Alpha metallurgical Resources' first quarter 2022 results conference call.
Thank you for your participation you may now disconnect your line.