Q1 2023 American Resources Corp Earnings Call
Speaker 1: Good day ladies and gentlemen and welcome to American Resources Corporation first quarter 2023 conference call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. If you should require assistance throughout the conference please press star 0 on your telephone keypad.
Speaker 2: Order of 2023 Conference Call and Business Update.
Speaker 2: Even though we conducted our last conference call update just about six weeks ago, we always welcome this opportunity to provide an update on our business and discuss our accomplishments and also discuss how we're uniquely positioned within the markets we serve for our American Carbon, American Metals and Railman Technologies divisions.
Speaker 2: That being said, we will provide some incremental updates since our last call and then get into a question and answer as part of the call. Also on the call with me today is Mark Jensen, American Resources Chairman and CEO , and Kirk Taylor, our Chief Financial Officer.
Speaker 2: Before we kick it off, I'd like to remind everyone of our normal cautionary statement. Certain statements discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These 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 statements.
Speaker 2: future events or otherwise.
Speaker 2: Lastly, for anyone wanting to ask a question today, I believe you'll need a dial in by phone to get in the queue. We're going to start today with a few comments from Kirk Taylor. Kirk. Thank you, Mark. Thank you, everyone, for spending a couple minutes here with us this afternoon.
Speaker 2: First, I'll start with some financial highlights. The first several months of 2023 have continued to showcase our focus and executions, solidifying our strategic positioning within our addressable markets, which we believe position our company for long-term value creation. As Mark just mentioned, we recently just had our year-end earnings call.
Speaker 2: where I commented on our PACS execution and highlighted our accomplishments on all fronts. Today I'll focus on some comments pertaining to certain value-creating issues that we have had in the works.
Speaker 2: First, I'll update on our tax demand offering in Wyoming County, West Virginia. As previously mentioned, we are positioning our Wyoming County coal mining complex as a driver of incremental growth with a federally and state committed.
Speaker 2: state commitment in the form of $4.9 million in new market tax credits, as well as a $45 million volume cap allocation from the state of West Virginia for private activity, solid waste disposal, facility revenue bonds. These non-dilutive capital sources will fund the expansion and technological improvements of the state of West Virginia.
Speaker 2: to the existing processing facility.
Speaker 2: The development of two underground deep mines, as well as the new construction of the critical mineral processing facility utilizing our pathogen, electrolysis technology to capture certain elements such as lithium and cobalt from our carbon waste streams before they lay in
Speaker 2: We believe this will be the first fully integrated mining and critical element processing facility in the United States, but showcase everybody to learn from.
Speaker 2: This issuance was delayed due to aggressive interest rate policy enacted by the Federal Reserve to combat multi-decade high inflation
Speaker 2: With the recent stabilization interest rates our advisors feel that the municipal amount of markets have reopened And again are receptive to our type of a project we continue to work with our advisors on executing the above allocation
Speaker 3: Next, we'll talk about the spin-out of realment technologies.
Speaker 3: We've also previously discussed our intention to spin off our Holy Ode, the Realment Technologies Division, into a standalone public company, given its evolution and strategic position as a world-leading, refining technology platform.
Speaker 3: On this past January 24th, we filed our initial form 10 registration statement with the United States Securities Exchange Commission. This past Friday, May 12th, we filed our amended form 10
Speaker 3: registration statements update for both 20 or 1231, 2023 numbers and to address comments and questions raised by the SEC. The amended filing is currently under review.
Speaker 3: And all timing is subject to their review process. Next I'll comment on American acquisition opportunity. When we IPOed AMAO as this main sponsor, we sought out to merge with a dynamic cash selling company that did not require a complicated, highly diluted, financials part of this de-stack process.
Speaker 3: Last June , AMAO announced the definitive merger agreement to merge with royalty-major corporation, whereas RMC would become a public company. Last December , AMAO filed its first form S4 registry statement with the SEC in conjunction with the plain merger between AMAO and RMC.
Speaker 3: and have since been working through the comments provided by the SEC. On May 4th, AML filed its amended form S4 to again update for December 31st, 2023 numbers, and to address questions and comments raised by the SEC. Again, the timing is subject to their review, and we will update and respond accordingly.
Speaker 3: Our unique platform of assets is in a great position to deliver and will be believed in the track to return and value to our shareholders, including our mining assets.
Speaker 3: our Realmet Technology Division, as well as American Metals Division, which we are in the process of strategically position within the Electropod economy.
Speaker 3: On some highlights of the last quarter, on January 31st, 2023, the remaining amounts of our convertible note in the amount of $9.8 million was converted into 9.4 million common shares of the company. This is the thing which is all future liabilities and obligations under the existing convertible note.
Speaker 3: As a March 31, 2023, our traditional debt balance totaled approximately $839,000, in which...
Speaker 3: A little bit less than 300,000 as equipment financing and 550,000 or 550,000 is in the form of a mind development road from one of our top customers.
Speaker 3: Our balance sheet has never been stronger than it is today. As the March 31, 2023, our current shares outstanding total just over 78.2 million of all class, they common shares.
Speaker 3: Cash on the hand of the end of first quarter was approximately $2.4 million.
Speaker 3: plus a large inventory level of Met carbon that we continue to sell into the marketplace on contracted to our contracted customers. Lastly, it is probably worth reiterating given the recent RISL bank events. All of our excess cash above FDIC limits are held by a top two US base bank. I now have to turn the call over to Mark Lovergett for some additional comments on a re-it.
Speaker 3: Re-element technologies division. Mark.
Speaker 3: of the LGs division. Mark. Thanks, Kurt.
Speaker 2: As we frequently state, our Realignment Technology's Division represents an incredibly exciting and very strategic opportunity for us.
As we continue to strategically position ourselves in the global supply chain for critical minerals, I think it is important to reiterate and emphasize our position within that market.
Re-element is an innovative and advanced refining platform for critical minerals.
While we believe we are a high value component within the recycling value chain, we are not solely a recycling platform.
However, we do believe our position in the recycling market and the sustainable supply of critical minerals is highly important as we move towards a highly mineral dependent electrified economy.
We also believe our refining methods hold an important position in the global value chain of processing and purifying a variety of feedstocks, including natural ores such as lithium.
Additionally, and in regards to our strategic positioning, it is worth noting that our innovative and advanced refining technology holds a critically important role for our domestic supply chain of critical minerals and our domestic manufacturing of goods here in the United States.
China's global dominance of critical minerals has a lot to do with their ability to refine products, both natural ores and in the recycling process.bot development.
where they use conventional and environmentally and socially toxic refining methods.
The low environmental and social standards allow China to produce these minerals at a lower capital cost. We believe that deploying these conventional refining methods here in the United States market is going to be very challenging.
As we put together and developed our IP, we set out to solve the biggest net bottleneck in the supply chain, which we see is economically competitive refining.
which is highly flexible to a variety of feedstocks and very environmentally safe.
are innovative and advanced refining methods using chromatographic separation and purification, displaces those toxic conventional methods used in China. And we believe is an important linchpin in making the US competitive within the electrified economy.
to depend on foreign adversaries to refine these minerals necessary to advance high-tech green energy, including electric vehicles and wind energy, as well as defense applications.
Our innovative chromatography technology is a clear differentiator in the market for several reasons, which specifically addresses the refining bottleneck within the supply chain. Our refining technology's modular structure and design enables it to scale congruently and efficiently with the needs of the market.
Meaning that we did not have to lay out a massive and disproportionate cat-dex investment and wait for the market to adapt or to catch up.
And they can be deployed either utilizing a larger aggregation and hub model, or we can co-locate customized refining capacities for certain supply chain partners that we work with, allowing them to reduce logistics and chain of custody concerns and control a portion of their critical mineral supply. Our refining technology is very flexible to the type of seed.
a variety of lithium ion batteries.
We believe the opportunities to provide low cost and environmentally safe lithium refining around the world in a collaborative manner to meet the needs of the energy storage market are abundant. Additionally, and specifically to the battery,
materials market, our technology can efficiently adapt to different and evolving battery chemistries. An important distinction for our technology is that we can economically recycle lithium iron phosphate, also known as LSP, end-of-life manufacturing scrap, and end-of-life batteries.
In fact, we are the only ones that we know of that can effectively do this economically. It's a huge difference here for us.
From our perspective, and everyone can do their own research, it appears that the ever evolving battery market is moving towards more broadly adopting LFP battery chemistry, which gives us a clear advantage in the recycling market.
As such, we feel like we hold a significant value ad position with our ability to economically refine and recycle material as battery chemistries evolve within the energy storage space, as well as defining our value ad in competitive advantage beyond just producing a black mass within the battery recycling market.
where other recycling platforms are either trying to implement high cost conventional refining methods such as solvent extraction or hydro metallurgy similar to those used in China here domestically. We do not really have a clearly defined refining solution and some material back to China for refining which only benefits China.
Given our competitive and value added refining capabilities, we are confident that we will continue to develop additional collaborative partnerships throughout the supply chain, which are cost.
which are cost competitive and keep the critical minerals here in the United States. We've had our early success in developing partnerships such as the ones we've established with our magnet partners in establishing the first complete domestic and circular life cycle for rare earth magnets in here in the United States.
And we continue to have really good success with several other pilot programs where we are fostering collaborative opportunities that we are really excited about developing into long-term partnerships.
These partnerships cover both rare earth elements and critical battery minerals from a variety of seed stocks. It is also worth reminding that as we further commercialize our advanced refining technology chromatography, that it has been around for over a century and has been utilized in large-scale commercial operations.
in industries such as pharmaceutical manufacturing and sugar purification all over the world. Our research partners and us have adapted this technology.
to be applied to critical mineral refining in a way that we believe can undercut China's cost structure. It's a huge distinction.
We also think that we can produce high throughput and performance able to produce ultra-pure minerals and mineral compounds.
And then I've stated deploying the same refining technology such as solvent extraction for hydro metallurgy here domestically and trying to be cost competitive with China is going to be a tough tough challenge in our opinion.
As investors in American resources, which I assume a lot on this call are, including us to management team, the value proposition for real-med technologies is whether you think innovation in refining technologies is necessary to lower the cost structure within the highly competitive critical mineral supply chain.
which China has been dominating, as we all know, largely due to their ability to refine. And whether that innovation will foster different, more efficient refining methods, we believe we're all leading in this mission.
We're confident as we continue to showcase our competitive distinction, including a lower cost structure
I'd like to now turn it over to Mark Jensen for some additional comments. Mark.
Thanks Mark. First, I'd like to applaud our team for the efforts this quarter and the positioning of our divisions to take advantage of the key markets of which we're focusing on, while also leveraging our processing and refining technologies into new, exciting markets. And no point in history is our business.
businesses have been better positioned to serve the markets which we operate in and to capitalize on a broad asset base, our talent and our ability to produce, process and refine raw materials that are in very high demand.
Given our execution, we're extremely excited about the opportunities for all of our endings, but also believe that the enterprise values a whole is currently at a substantial discount relative to some of the parts or comparable to pure evaluations.
I'd like to dive into it briefly on each division here.
American carbon to start. Currently, the carbon markets are still in a very strong position. There's been recently changes within the market and shifts within geographic demands of China and Australia opening back up of relations and which shifts our markets back to India, Turkey, Croatia and the markets which we've worked.
being opened up.
We do remain steadfast and focused on monetizing our carbon assets, whether through operating them ourselves, joint ventures, leases, or asset sales.
with the primary focus on the operational side being our McQuay Alchorn Complex and our Wyoming County Complex. Both McQuay and Wyoming County represent very high quality metallurgical carbon products that can be operated in a very low cost structure. The Carnegie Mines represent a high-volved carbon product, which we have recently
Shifting around our production to even drive our costs structure lower while taking advantage of the current strong markets.
We have also recently announced the restart of one of our two on-site processing plants at the McWayle corn facility. This complex can process over 1,300 tons an hour with one of the longest standing water impoundments within the state of Kentucky and through the highest quality processing plants in the region.
providing us an opportunity to further cut our costs per ton while enabling us to supplement our revenue with third-party processing and loading services. We continue to have ample inventory which will be sold into the market in the near term. That inventory represents effectively cash and ultimately at the end of the last quarter we had a substantial amount of inventory which we are selling.
We believe that represents over $40 million in value based on the asset and inventories we have on site of equipment. And we are currently in the process of monetizing that equipment, generating cash to grow the business through our either real and division and or American carbon division.
Also, recently our Dean Complex has entered production. We have been receiving cash flows from the Dean Complex and we believe that the current market for that call remains strong and the opportunity that that Lesore has to continue to drive value for themselves as well as our shareholders remain strong.
Our current focus of the balance in the year for American Carbon is to run four sections out of our Carnegie M1 and 2 mine, which should get us to roughly 40 to 44,000 tons a month of production as we continue to scale that complex up, which we will do over time.
Our platform is unique given the significant mining of the structure we own.
The quality of carbon that we produce and have access to, the restructuring efforts and investments that we've made to streamline the operations along with the organic growth we have to provide incremental quality of carbon products.
For American carbon, we remain focused on ramping production at McCoy complex. And positioning Wyoming County as our next pillar of growth given the premium mid-volve carbon that complex produces.
Lately our team is putting substantial amount of effort into the Wyoming County complex. We're progressing on it from an operational perspective and getting the processing plant in good order or electricity in place to be able to ramp up that production quickly and efficiently. As Kirk mentioned earlier, we also believe
We are in a good position to close on our 45 million-dollar taxies on bonds in the state of West Virginia and short-order. The credit markets have seen stabilization focusing on following a very aggressive industry policy from the Federal Reserve.
That complex is in a unique spot. It'll be the first fully integrated met carbon complex, which also acts as a concentrator of rare elements and critical elements, meaning lithium and cobalt that are present within coal streams.
More importantly, it's set up in a method, and we believe the only method within the core industry where you can extract these elements, profitably, produce a concentrate that can later be purified using our re-element technologies.
We're excited to get that complex in place and showcase it to the world with ultimately the goal of being able to either license that out to other coal mines in terms of the technology of adding it onto the processing plant and or monetizing it in other avenues.
get that complex in place and showcase it to the world with ultimately the goal of being able to either license that out to other coal mines in terms of the technology of adding it on to the processing plant and or monetizing it in other avenues.
With the closing of this non-deludive capital source, we're excited to showcase this complex within the industry and be able to scale it up aggressively from a revenue position, as well as from a value perspective.
Within the real and the technologies to expand upon what Mark has already made, the same as Mark has already made, we have never been involved in ND that has a higher ceiling.
The opportunities that are present within the refining space for lithium, for cobalt, for rare earth elements within not only the domestic market, but also the international market has never been needed more. We rely on a solvent extraction hydro metallurgical process, which is an old legacy process, which we believe can only truly be utilized within China.
We look to disrupt the space by providing not only a lower cost method and more environmentally sensitive method to refining critical and rare elements, but also being able to do it in a highly scalable manner and showcasing that to the world here very shortly.
The number of opportunities we are seeing to provide our next generation advanced refining capacity as a value added service, continue to accelerate.
We are seeing more and more opportunities across different portions of the supply chain, which showcases the performance, the cost structure, and the flexibility of our refining platform.
and also our ability to move quickly in terms of adding additional production capacity. As we evaluate these opportunities, we are continually entering into pilot programs for different feed stocks.
Currently, our partnership and pilot programs are focused on end of life recycle magnets, end of life recycling of various battery types, end chemistries, and battery manufacturing waste and scrap, as well as naturally occurring lithium spodgeming ores for the lithium refining market.
As we continue to showcase our refining performance, including our ability to supply high-through capacity through producing also pure critical mineral products, we are confident in incremental collaborative partnerships we will enter into.
We're also excited about the performance of our technology, most recently announcing a 99.986% pure lithium carbonate, which can be used directly in the battery manufacturing process. The purity of which we produce and that and the consistency of size and quality is a key to how our product will be completely adopted within the battery manufacturing work.
a significant driver or value to that industry.
Recycling ultimately means breaking products down and using them into new forms and products. What's key about our real-time technology is we can reuse those forms back into batteries, back into magnets, where most of the battery recyclers today within the domestic market are selling that recycled material to China to be either smelted or recycled over in China. We're one of the few players within the domestic market that can recycle that back to battery grade or magnet grade.
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We have also most recently commenced several pilot programs to recycle these critical minerals from feedstock sources such as power tools.
ED motors from OEMs, wind turbines from large wind manufacturing companies or operators, black mass producers, battery manufacturers, and a variety of industrial battery sources, large and small from tool manufacturers to others.
We're also into discussions with several auto OEMs as they continue to plan, develop, and stand up the infrastructure needed to support their well-held line plans to transition to more of a broader electric fleet, including their battery manufacturing space. But in terms of recycling, I think it's worth reiterating how we are strategically positioning to be a value added partner.
to build a refining complex using solvent extraction that will take 10 years to ramp up to that production capacity. We can expand our production capacity as the feedstock availability grows. Instead of waiting for manufacturing scrap or end-of-life battery scrap to grow, which ultimately means we can make money in the process today.
Several recycling programs, several recycling programs do not have the innovative and economically competitive refining capacity other than ours. And as we mentioned earlier, it's the biggest bottleneck in the global supply chain, meaning the refining capacity.
And we believe conventional refining methods such as solvent extraction or hydro metallurgical as used in China will be a challenge to deploy or will not be cost effective being operated in the United States.
Our ability to refine a variety of feedstocks, natural and recycling, and handle rapidly evolving battery chemistries with the ability to quickly adapt the differentiator and competitive advantage. I'd like to touch briefly on international opportunities, including Africa.
With regards to naturally occurring lithium refining, we continue to see some very attractive opportunities to produce meaningful quantities of lithium products such as high-peer to lithium carbonate or hydroxide to the battery market.
As we have recently mentioned, we have evaluated several opportunities for our technology to be used in refining with them from the core-based materials, produced from different regions, including AFIPM. And we have been very selective in our evaluation process.
to partner with operations that meet the standards of the United States. Upon review of our strategic committee, we believe American resources best interest is to leverage our advanced processing, meaning heavy media separation of which we've operated in the carbon industry for over 20 years.
meaning currently American resources as well as our team's experience, and our refining technology and other natural resources, such as lithium and other critical minerals. They're by broadening our natural resource base to the American resources.
It is worth reiterating and emphasizing the partnerships.
procurement and initial processing of a broader more diversified natural resource base will take place at the American resources level, which will feed into the real mid division as feedstock.
Again, to reiterate, real men is an advanced refining platform.
And our intention is to keep to focus and keep clean and streamline as a value added refiner of critical minerals and advanced materials, especially as we continue to position real and for its plan spin off. As we currently pursuing a long-term refining partnership to refine lithium produced in the West African region, as well as in South Africa, we are also working with the long-term and dependent director to leverage his network and his-
Opportunities like this further exemplify the unique attributes of our Re-Element Re-Fining Platform in terms of flexibility to feed stocks and chemistry.
Ability to be efficiently deployed due to its modular design and environmental sensitivity and to produce pure products needed for our technology, energy, and defense sectors with high, high and scalable capacity.
Now this will be done either through a partnership and or internally using our technologies and our capabilities as a company.
I'd like to give a shout out and recognize the Re-Element team for the groundbreaking success that we've achieved with a quick timeframe that they've achieved it. We do not believe time is of the essence. We believe we have put together the best team and continue to drive this revolutionary refining technology and that we will continue to add top talent to deploy it around the world. Additionally, and from a technical perspective, we believe that
We have the world's best chromatography experts and team behind our real-time division, whether if it's our university partners at Purdue, our engineering team that is a longstanding success developing commercialized in the foundation of this technology, the dot-lility, as well as the team members that we continually add and most recently adding a number of team members at the real-time division.
We have and continue to add top talent to further execute upon this vision, as well as position ReElement as a standalone company. Some of these recent additions that I've just mentioned, Bob Gallien as our Board of Directors on spinoff. Bob is one of the top battery industry experts and our technical advisor in recent addition to our Board of Directors every element post spinoff and a battery industry expert.
Steve Frankowski, our controller of re-element. Steven comes to us with several years of large accounting firm experience and two years of financial reporting at the AES Corporation, working in the clean energy segment. Daniel Archer, a process engineering lead and charge of rare earth element materials. Steve Frankowski, a process engineering lead and charge of rare earth element materials.
Israel Gomez, process engineer lead in terms of critical element materials. We continue to position realignment as a global refining leader and then.
and the entity that will deliver significant value to our shareholders. Our goal is to build realignment to a multi-billion dollar business, and we believe we have the team and the line of sight to do that.
Before we get into questions, the answer, I'd like to briefly comment on American metals. American metals is a division that we've been utilizing for generating cash flows by scrapping out ferrous metals.
As we mentioned earlier, re-element is not just a recycling platform, but rather an advanced refining platform. We are positioning the American Metal Division, which is an aggregator and processor metals to ultimately be recycled within the Electric Pide economy. Given re-element refining capacity,
We are asked if we can take entire battery packs, modulars, motors, and tools.
However, we also want realments to remain as a pure refiner materials. As such, we believe American metals is a great platform to leverage the real and refining capacity by processing and shredding the constituent high-value, battery materials in the black mass product to feed real and battery materials refining capacity. As well as the end of life motors and tools that we have developed a process in an automated way to recycle these, extract out the rare elements and be able to
foresee the need of issuing equity to raise cash, especially with some of the sources of non-dilutive capital we have available. Just to reiterate, as the largest shareholder of American resource, our management team is committed on maximizing the value for all of our shareholders. We believe our continued execution and the splitting of the re-element division are the key steps in doing so.
need to vision equity to raise cash, especially with some of the sources of non-delutive capital we have available. Just re-entry, as the largest shareholder of American resource our management team is committed on maximizing the value for all of our shareholders. We believe our continued execution and the splitting of the re-element division are the key and steps in doing so. One thing I'm proud about of our company
is the individuals that we're bringing in, the team that we've built are focused on equity value. We're not hired guns. Nobody in this business is joining our company for high salaries. They're focused on driving equity value, being a part of something that's innovative, and ultimately being proud of the business that we build. I'm excited about the team we've been able to build and the team that we're currently recruiting to add on to our company.
And ultimately, excited that everybody is focused and aligning their interests with our shareholders of making sure driving the equity value of the company versus being hired guns. We believe that's a key differentiator of our business and why our business has been able to succeed through both good and bad markets. For tonight's questions about investment, choosing dementia, driving, digital vision.
I thank all of you for joining the call today, and I would like to turn it over to the moderator for some Q&A. Thank you. If you have a question, please press star one on your telephone keypad at this time. If at any time your question has been answered, you can remove yourself from the queue by pressing one. Again, ladies and gentlemen, if you do have a question or a comment, please press star one on your telephone.
Badly, multiples in the green energy space are for obvious reasons pretty high right now, obviously higher than your legacy business. You got the spin co coming up, but I mean, how can one move the firm to get more of a clean-tech multiple across the board.
or phrase differently, are you concerned with the multiple you get in the market?
for legacy co once the spinoff is completed. I mean, overall, it feels like you're doing a good job positioning the company for this, but the overall company thus far hasn't even really had all the impact it would have expected to see.
Yeah, that's a great question. And I think I touched on that briefly, but maybe didn't make it as clear just trying to get through the call in a timely manner for all of our listeners. But one real man is sitting off, and we believe that'll drive a significant amount of value based on feedback we've had from large mutual funds that have an interest in investing, post-binoff in the open market.
but also including
some of the regions of ASCA that we've been working on and I personally visited and had the opportunity to to evaluate and analyze the minds over there. We are in conversations to not only in Africa, but also domestically expand our mining base as well.
take advantage of the skill set that our team has in terms of heavy media processing, fraud flotation, dense media processing to leverage that skill set not only just in the cool industry or the carbon industry, but also across the critical mineral opportunities as well. Some of the individuals like Tarles Thompson have decades of experience in the mining sector and there's no reason...
We shouldn't be exploring that opportunity within the American resources umbrella, the mining division, to capitalize and utilize that skill set that we're being asked to be a part of today. So I do think that I think people are mistaken in terms of what happened post-reumatic then off. I believe...
American Resources Proper, the mining division, has a significant amount of opportunity in front of it, and being approached with a significant amount of opportunity to utilize our processing skill set, and our technology skill set, to drive value at the core business post-realismists that are on.
Oops. That didn't make sense.
And then just one more please. Can you walk us through the quarter by quarter of expectations for free cash flow from McCoy Elhorn, please?
And then just one more please. Can you walk us through the quarter by quarter of expectations for free cash flow from a coil car, please? Yeah, absolutely.
We have been looking at where the most value-added component of our business could be. As you've seen over the last year, we've adjusted and pivoted based on natural disasters and other events to monetize certain assets and focus on cash flow. McCoy in Wyoming, why we're focusing on those two complexes from an operational perspective is one, they're very low-cost to operate, and two, they're very high quality. We're going to find those Item
We were starting to see that shift transition of the geographic distribution of carbon across the world. And as that plays out, we think we're in a very good position to generate substantial cash flow from those divisions. While also monetizing the dean complex, either continue leasing it, or we've been approached by a few different parties.
focusing on the two complexes because of the cost structure and because the ability to generate cash from them, make them a steady, stable business while we evaluate some of these other opportunities that are being presented to us.
They don't need a lot of cases at this point. They don't need CAPEX. McQuay is set up. We spent the money there. Tarles, the head of that division has done an absolutely phenomenal job of lowering cost and reducing environmental liability. And we just got another $1.3 million released.
That's why we paid off $2 million of a loan that one of our investors, customers gave us to restart that mine and we also had our $9 million of debt that's long standing debt on our balance sheet converted.
which the investor wanted to. Ultimately, he probably wanted to benefit from the realmen that spin off and the AMIO process that we've done. So it's a very streamlined low cost operation now and we'll be able to take advantage of the current market environment. And you'll see the online market for the next two days when in 2021, you have the materials we have designed to own in two different ways. We have the materials we have designed to own in two different ways.
Very good. Well, that's it for me. Thank you very much. I'll get back to you.
All right, thanks. Appreciate it. Thank you. Our next question is from Mark Stone. Please go ahead.
As a comment thing on the current cash, I see from end of Q4 last year to the end of Q1, it went from over 8.8 million down to 300,000. So I'll in light of that, can we comment on the past projections for Q2, Q3, etc. And also how that's impacted by the time.
still had about five million dollars of inventory of current market, not production cost, but at current market value. So from a cash position, it's just the timing of how quarterly reports are filed. But ultimately it's...
We also have about two and a half million dollars of equipment that has been contracted to sell and and we'll continue to monetize Equipment from the Perry County complex did I mean which either to put on a cash balance sheet or continue to grow the business with it
But we don't need to raise equity capital that's not the focus of the business. The goal of the real estate spin-off is to unlock value. We believe that today, the investor base that may want to invest in the mining division, which is currently carbon, but...
in advanced discussions to expand beyond carbon are different than the investors that will invest in real. And our focus is to unlock that value with the establish strategic committee to do. So we're pushing that as quickly as we possibly can. We are being advised by a bold record investment making the process.
in part of that process. And ultimately our goal is to get that done for the investors because the board and the strategic committee believe that we'll unlock the most amount of value for the investors in the board. We also believe getting a SPAC done will create substantial value. Currently, AMAO trades that around $10 a share, I believe we have approximately a million acres to hold about 1.5 million shares in that SPAC.
and through its partnership with Canai Defense, also in another process of being awarded another contract, we hope very shortly, and then finalizing its audits for the hiring of its new CFO with the goal of refiling that S1 and advancing that process forward as well to unlock additional value for the shareholders.
Can you tell me which side American Metals is going to with the re-element spinoff? Yes, that's a good question. The strategic committee and the board is currently evaluating that. American Metals is in the final stages of procuring its first two shredding lines, one for batteries...
Does that need to be addressed in the ES1 filing?
And the, they would have to be separate form 10 filing if we spend it off, but it, uh, yeah. So right now, as of today, it's being held at the American Resources level post three on the spin off.
And the, it would have to be separate form 10 filing if we spin it off, but it, yeah. So right now, as of today, it's being held at the American Resources level, post three on this been off. All right, thank you.
There are no further questions at this time. Excellent. Well, one, I'd like to thank all of you for joining. We appreciate your time. We took time out of your day for you to join us and listen to us. We don't take that lightly. We're excited about what we have in front of us. We're excited about the opportunities for all of our divisions.
We are focused on continually driving value as management and the largest shareholders of the company. We're dead set on creating that value across all of our platforms and we're excited about how the market environment is currently playing out in the outskings in front of us.
Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a great day.
Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a great day.