Q2 2023 Warrior Met Coal Inc Earnings Call
Good afternoon, My name is Keith and I'll be your conference operator today at this time I would like to welcome everyone to the Warrior second quarter 2023 financial results Conference call.
How long has been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
She would like to ask a question. During this time simply press Star then the number one on your telephone keypad.
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Call is being recorded and will be available on the company's website.
Before we begin I've been asked to note that today's discussion may contain forward looking statements and actual results may differ materially from those discussed.
For more information regarding forward looking statements. Please refer to the company's press releases and SEC filings.
I've also been asked to note that the company has posted reconciliations of non-GAAP financial measures discussed during this call. The tables accompanying the company's earnings press release located in the investors section of the company's website at Www Dot warrior met coal Dot com.
In addition to the earnings release the company is supposed to have a brief supplemental slide presentation to the investors section of our site at Www Dot worrying about Taco dotcom.
Yeah.
Here today to discuss the company's results are Mr. Walt Schalow, Chief Executive Officer, Mr. Dale Boyles, Chief Financial Officer, Mr Seller, you're maybe getting my remarks.
Thanks, Operator, Hello, everyone and thank you for taking the time to join US today to discuss our second quarter 2023 results.
After my remarks, Dale will review our results in additional detail and then you'll have the opportunity to ask questions.
We were pleased to deliver another strong quarter in which we were able to leverage our operational excellence gross sales and production volumes by 15% over last year's second quarter.
Which as you may remember set record highs for several metrics, including coal pricing.
The big change to note from a year ago. At this time is it hard coking coal pricing is 46% lower which resulted in a decreased average net realized selling price for our premium coals in the second quarter a 48%.
In contrast to the softening during the quarter, we saw positive improvement in the performance of our logistics partners, including continued progress in logistic upgrades at the Mcduffie terminal.
Most importantly, the significant overhaul to ship owner number one best structure discussed last quarter, which was out of service most of the second quarter has now been completed.
So all of this and other improvements to the terminal means that most of our outbound logistics metrics are returning to normal ranges.
All of our vessels to be loaded within schedule and deliver to our customers on time.
However, the overall timing and severe weather disruptions slightly impacted our vessel loadings in the second quarter.
Nonetheless, the export terminal remains a long term work in progress and we remain committed to working with the Alabama State Port authority to achieve a beneficial outcome.
Looking at demand output from the global steel producers was largely in line with our expectations for the second quarter most.
Most steel producing regions experienced stable output, although below previous year's comparable results.
Yeah.
Global steel prices have pulled back from their highs in April indicating softer demand emerging from certain segments.
The promise of a broader economic recovery in China is you have to deliver material results.
The country has struggled to find ways to stimulate its property sector and domestic consumption.
As a result, despite strong production metrics during the quarter, we expect Chinese steel production to be lower in the second half of the year to be in La Montana stated goal, although lower year over year output.
During the second quarter, the suppliers steelmaking coal, mainly coming from Australia saw a noticeable improvement as evidenced by the increased flow of seaborne coal.
Favorable weather in Australia, and better performance is just six in the U S contributed to the improved supply of steelmaking coal.
However year to date exports from Australia continued to trail the same period last year, primarily due to a very weak first quarter. This year.
[noise] Mongolian exports continue to outperform expectations with significantly higher volumes than the previous year's results.
Yeah.
Our primary pricing index. The P. L D F O B, Australia declined by $62 per short ton over the course of the quarter.
Most of the correction occurred in April well the index remained range bound for the last two months of the quarter.
The index closed the quarter at $211 per short ton, which represents about a 22% correction from its high point in April and about a 40% correction from its highest point established in February .
Similarly, the P. L B CFR, China index corrected heavily in the first part of the quarter from $286 per short ton to approximately $203 per short ton, while it remained stable for the remainder of the quarter.
According to the World Steel Association monthly report global Pig Iron production increased by approximately 1% in the first six months of 2023 as compared to the same period last year.
The production increase was mainly driven by strong results from Chinese production, which grew by two 7% during the period.
Additionally, India continued its higher trend by growing six 8% during the period.
Our second quarter sales volume of $1 8 million short tons was 15% higher than the comparable quarter last year. The increase was driven by the improved performance of our rail transportation provider and then mcduffie terminal, which enabled us to export more product.
In addition, better than expected production drove an increase in sales volume for the quarter.
Our sales by geography in the second quarter breaks down as follows 47% in the Europe , 19% and South America, 33% into Asia, and 1% into the U S.
The increase in Asian sales were primarily driven by spot volume sold into China during the second quarter.
Production volume in the second quarter was better than I expected and totaled one 9 million short tons compared to $1 7 million short tons in the same quarter of last year, representing a 15% increase.
This was the highest quarterly production output since the first quarter of 2021.
Both mines operated at higher capacity levels in this quarter was at 54% higher head count compared to the prior year's comparable quarter.
In addition, we began to see the impact on production of the eligible employees have returned to work from the labor strike.
Although we expect the full impact of their return to show up over the second half of this year.
This should also improve our production cost per short ton.
The higher production over sales volume in the second quarter were co inventory up to 760000 short tons from 659000 at the end of the first quarter.
That's what our logistics partners and the terminal are performing better than in recent past and we expect to draw down inventory over the second half of this year.
We were pleased to welcome back the approximately 250 eligible union represented workers have returned to work during the second quarter, while we negotiate in good faith toward a new labor contract.
This addition to our workforce should also drive incremental production and sales volumes of approximately 500000 short tons.
Primarily occurring in the second half of this year as reflected in our recently revised guidance.
During the second quarter, we spent $147 million on Capex in mine development.
Capex spending was $136 million, which included $97 million on the Blue Creek project.
I'll discuss more in a moment.
At the halfway point of the year, we spent about 45% of our midpoint of our targeted capex spending for the year.
And development spending was $11 million during the second quarter, we expect development of mine for it it will be completed in the third quarter.
Turning to the development of our World Class Blue Creek asset during the second quarter, we continued to make substantial progress on the project.
And I'm pleased to share that our work remains on schedule.
As you May remember, we relaunched the development of the Blue Creek mine in May 2022.
At that time the company estimated total capital expenditures for the project to range from $650 million to $700 million over the projected five year development period.
This estimate was derived in late 2021 based on engineering feasibility studies and the best available information at the time, but do you understand the company would be able to better understand the needs of the project is development continued.
Since then based on further information the changed circumstances from the initial assumptions. The company has continued to refine and Derisk the project to enhance the value generating ability at Blue Creek.
Including making the project scope changes that should result in lower operating cost increased flexibility to manage risks and the availability of multichannel transportation methods.
These changes will require incremental capital expenditures.
<unk> investment, which we're confident will enhance the value creating potential of a completed Blue Creek.
We do not believe these changes will impact the timeline of the project.
Okay.
Let me share some details on the new scope of work, while we originally plan to transport coal from Blue Creek mine by an overland belt to a third party owner operated barge load out facility.
We now plan to build a belt conveyor system to our railroad load out to transport the majority of the coal.
Which we expect will result in lower operating costs and move volumes faster to the port.
We will also build and operate a barge load out ourselves rather than utilizing a third party provider.
This change in scope is expected to increase the total capital expenditures for the Blue Creek mine by approximately $120 million to $130 million over the remainder of the project development period.
We believe that the potential economic benefits associated with this scope change should provide warrior with an inherently robust and cost competitive outbound logistics model that will provide additional flexibility to manage multichannel transportation methods.
In addition, the company's experience inflationary cost increases ranging from 25% to 35% in both the operating expenses and capital expenditures for its existing mining operations since late 2021.
The company is also experiencing inflationary pressures of Blue Creek.
In relation to labor construction materials and certain equipment.
That is expected to continue during the remainder of the project development period.
There's a number of key material contracts are currently being negotiated and due to uncertainty regarding future inflation rates companies not providing an estimate of the impacts of inflation at this time.
However, as a company negotiates in Anderson contracts for the larger project component.
Do you expect something more information will become available to allowed to provide revised guidance.
While cost inflation is impacting the cost side of the equation of the project economics. These inflationary pressures are expected to be offset by an inflationary increase in long term price assumption for steelmaking coal.
Subject to the consideration as discussed above our revised estimate of capital expenditures in 2023 for the development of Blue Creek mine is approximately $250 million to $300 million and is subject to change.
The increase in 2023 capital expenditures estimate is primarily driven by the change in transportation scope discussed previously.
Previously.
The company currently expects development spending at Blue Creek to be the highest in 2023 and 2024.
But 2020 for being a similar amount to 2023 that is subject to change.
Do you want to address our second quarter results in greater detail.
Thanks, Paul.
The second quarter of 2023, the company recorded net income on a GAAP basis about $82 million or $1.58 per diluted share representing a significant decrease over the record setting net income of $297 million or $5.74 per diluted share in the same quarter of last year.
non-GAAP adjusted net income for the second quarter, excluding the nonrecurring business interruption expenses was $1.63 per diluted share.
This compares to an all time record high of adjusted net income of $5.87 per diluted share in the same quarter of 2022.
These decreases quarter over quarter were primarily driven by the softening steelmaking coal market since our record highs that we saw in the second quarter of 2022.
We reported adjusted EBITDA of $130 million in the second quarter of 2023 compared to an all time record setting $431 million in the second quarter of last year.
The quarterly decrease was primarily driven by the 48% lower average net realized selling prices of our steelmaking coal and a softening hallmark.
Additional employee related costs due to higher head count and the cumulative impact of inflation on supplies and electricity.
These were partially offset by the 15% increase in sales volume.
Our adjusted EBITDA margin was 34% in the second quarter of 2023 compared to 69% in the same quarter of last year.
Total revenues were $380 million in the second quarter of 2023 compared to $625 million in the second quarter of last year.
This 39% decrease was primarily due to the 48% lower average net realized selling prices of our steelmaking coal's.
I'll set partially by the 15% increase in sales volume.
Other revenues were higher in the second quarter of 2023, primarily due to the fact that the prior year included a mark to market loss of $15 million on our gas hedges.
In addition gas revenues were lower in the second quarter of this year due to a 70% decrease in natural gas prices.
The Platts premium low vol F O B Australian index price on average was $184 per short ton lower in the second quarter of 2023 compared to the same quarter of last year.
The index price averaged $220 per short ton for the second quarter.
Mortgage and other charges reduced our gross price realization to an average net selling price of $209 per short ton in the second quarter of 2023.
Paired to $404 per short ton in the same quarter of last year.
The marriage and other charges were $9 million lower compared to last year's second quarter of which tomorrow, which was the largest decrease of $6 million.
Higher demurrage and other charges in the second quarter of last year were the result of temporary delays in vessel loadings due to severe weather and port congestion.
Cash cost of sales were $229 million or 62% of mining revenues in the second quarter compared to $190 million or 30% of mining revenues in the second quarter of 2022.
Of the $39 million increase in cash cost of sales $29 million was due to the 15% increase in sales volumes and $10 million was attributed to higher production costs, primarily on higher head count plus 15% higher production volumes and the impact of inflation.
Our head count was 54% higher this second quarter compared to the last year due to a focus on high workers during the labor strike.
And partly related to the workers that return from the labor strike in the second quarter of this year.
Production costs include the wages Onboarding and training costs associated with the workers that returned over the quarter and we should see an improvement in our cost per ton later this year as we get the incremental volumes.
Inflation accounted for approximately $3 million of the higher cost or $1 50 per short ton, resulting from higher cost for supplies of electricity.
Cash cost of sales per short ton F. O B port was approximately $129 in the second quarter compared to $123 in the second quarter of 2022.
While premium steelmaking coal prices were 46% lower in the second quarter of this year compared to last year, our average net realized selling prices were 48% lower.
This resulted in lower transportation and royalty cost on a per ton basis.
Which were offset by higher wages and employee benefits of 54% higher head count that drove higher production volumes and associated production costs, such as supplies repairs and maintenance.
Transportation and royalty costs were 41% of our cash cost per ton in the second quarter compared to 54% in the same quarter last year.
Despite the higher production costs and inflation cash margins were $80 per short ton in the second quarter.
SG&A expenses were about $13 million or three 5% of total revenues in the second quarter of 2023 and were slightly higher than last year's second quarter, primarily due to an increase in employee related expenses.
The interest income earned on our cash investments well exceeded the interest expense on our outstanding notes and equipment leases during the second quarter of 2023.
Primarily due to our high cash balances, earning good investment returns.
Our second quarter income tax expense reflects an income tax benefit for depletion expense and foreign derived intangible income.
During the second quarter, we incurred incremental nonrecurring business interruption expenses of $4 million, which were lower by 44%. The last year. The decrease is primarily due to the end of the labor strike.
These nonrecurring expenses were primarily for incremental safety and security legal on labor negotiations and other expenses.
We expect to incur ongoing legal expenses associated with the ongoing labor negotiations.
Yeah.
Turning to cash flow during.
During the second quarter of 2023 free cash flow was a negative $22 million, primarily due to the higher Blue Creek Capex spending.
This was the result of cash flows generated by operating activities of $125 million less.
Less cash used for capital expenditures and mine development cost of $147 million.
Free cash flow in the second quarter of 2023 was negatively impacted by a $7 million increase in net working capital from the first quarter of 2023.
The increase in net working capital was primarily due to an increase in inventories as a result of higher production combined with lower accrued expenses.
Yeah.
Despite the higher capital spending associated with the Blue Creek project to date, we have generated free cash flow of $87 million of which $46 million was returned to stockholders in the form of a special dividend earlier this year on top of the regular quarterly dividends.
Our total available liquidity at the end of the second quarter was $951 million, representing a decrease of $35 million or 4% over the record high first quarter and consisted of cash and cash equivalents of $827 million and $123 million available under our a b.
L facility.
I need to finance a portion of the total expenditures through equipment leases.
Allows us to be opportunistic as we evaluate any additional funding options for Blue Creek with the goal of maintaining an efficient and low cost of capital.
Filing turning to our outlet and guidance for 2023, we believe we are on track to achieve a revised targets as outlined in the outlook section of our earnings release.
I'll now turn it back to work for his final comments.
Thanks do.
Before we move on to Q&A I'd like to make some final comments.
Looking ahead to the second half of 2023, our expectations remain consistent with the previous quarter. We believe steel production will remain vulnerable to the risks of contracting industrial output and we believe the world's largest producer of China will temporary production and the second half to meet its target of lower year over year production.
Still making calls supply should remain relatively stable for the same period.
As such we view our markets has been largely balanced and with the ability to absorb changes in demand or supply without resulting in large price swings.
We expect spot activity on our natural markets to remain subdued leading us to redirect more of our spud volume towards southeast Asia CFR based opportunities.
For Warrior, we expect 2023 to be a significant turning point in the development of a world Class Blue Creek mine.
Which we expect will result in the creation of significant long term stockholder value.
Over the course of the rest of the year, we expect to begin groundbreaking for the larger infrastructure components, such as the new coal preparation plant about house of mine offices and.
In overland belt compare and the rail embarks loadouts.
We are extremely excited about this organic growth project, which we expect to be transformational from warrior and allow us to build upon our proven track record of creating value for our stock holders.
As we've previously men indicated we expect the first development tons from continuous monitor units of Blue Creek in the third quarter of 2024 with the longwall scheduled to start up in the second quarter of 2026.
With that we'd like to open the call for questions operator.
Yes. Thank you at this time, we will begin the question and answer session plus a crushing you May Press Star then one on your Touchtone phone.
Speaker phone please pull up your handset before pressing the case.
Australia question. Please press star the two.
At this time, we will pause momentarily to assemble the roster.
And the first question comes from Lucas posted with a B rally Securities.
You're very much operate a good afternoon everyone.
Oh.
Well My first question is on the change of scope around Blue Creek.
To just back of the envelope.
It came up with a roughly $7 so cost reduction per ton at the port. Thanks to transportation savings is that the right way to think about it and any any any comments on on on the economics. Thank you very much.
Oh I'm not sure how you got into your $7, but yes as I said in my prepared remarks.
You know, we originally were going to use a third party to own and operate as it was billed the orange laid out so the cost associated with that really all set all the incremental capex pretty much to make it neutral on the overall project economics.
Got it okay.
So so yeah. The the seven $7 was just backing you use you know taking the mid point of that 120 to 130.
Assuming made a return similar to to Blue Creek and then it was again it did this very quickly roughly $7.
Oh, Okay, maybe switching topics.
Yep, you built inventory during the second quarter Mcduffee.
But it has has made some has made some progress.
Can you give us a status update as to where the terminal sits today when the terminal started to improve during the second quarter and the pace of Destocking on the inventory side for the second half of the year. Thank you very much.
Well the the biggest event was the the work on the number two our number one loader and that was you know as soon as they completed that work it instantaneously improve their their performance rates more than doubled their capacity to load vessels. So it was really getting that back online.
And on the on some of the other tasks a lot of the belt availability and just improvements in the general operation of the Port have also made a tremendous incremental improvements and what we're seeing is Ah load rates are that are similar to what we have seen that R. P.
Production level.
So were their back to where we think they need to be we think there are still more improvement to get there again, we're driving.
We are now driving toward the improvements necessary to bring Blue Creek online at full production. So even though they may be at rates that are okay for now we're driving toward better and better performance to allow blue creaked operate well.
Where silver cole.
That's that's helpful. Thank you then one one last one for me before I jump back into the queue you you'd noted the.
Press release that you will seek to optimize your capital structure to improve returns to stockholders.
Could you comment on what optimization you may have in mind is that reducing leverage is that.
Increasing capital returns.
Just just wanted if you could elaborate on what you meant with optimizing your capital structure. Thank you.
Yeah. Thanks to look at that I mean, that's really falling topless one of the things that you. Just mentioned you know looking at potential debt pay down as we benefited the last year and a half.
Of these really high prices.
We're well positioned to not only fun Blue Creek, but pay capital returns during the development as well as you know pay down debt. So we just kind of looking at you know what makes sense of time and make sure that we're well positioned despite blue Creek the spending there. So we're trying to accomplish a little bit of a.
All those things and.
Just being really position for the future.
Alright.
Well I really appreciate the color and best of luck I'll jump back in queue.
Yeah. Thanks.
Thank you and the next question comes from Nathan Martin with benchmark.
[noise]. Thanks operated good afternoon, guys. Thank you for taking my questions.
Sure maybe maybe a quick one to start as it relates to the new transportation. This initiative at Blue Creek, which railroad load out are you guys going to be a building or if you can bear system too.
We will be developing a railroad out.
A little ways from the mine, we really haven't given any of that public information made any of that information public yet.
Yeah.
Still under negotiation.
So we just haven't finalized the terms these agreements too little.
A little premature we have enough to know that you know the additional cost is gonna take but this is a really good opportunity Derisk. This project to have multiple transportation modes, rather than putting 5 million tons on the river. You know, we all have the ability to do both Ah now.
Yeah, I know that that makes sense I was just curious if it was gonna be C effects and center. That's serve your minds now if there is optionality, where you guys are looking to build a new load up.
Maybe the flu create mind there are existing facilities.
Okay, Great maybe looking at the quarter real quickly then realized price per ton, a little lower than anticipated seemingly lower.
Well then your historical average realization versus the quarterly benchmark any color you guys to provide their or was it a mixed thing was you know different different embassies timing demerged just any additional thoughts would be helpful.
And we had our spot volumes were above what would be considered normal and you know the CFR.
Ah sales versus Fob's sales were probably a little higher in between those two and dropped the realization with it.
Okay, great. Thanks, and then maybe along those lines I I appreciate your market comments in your prepared remarks.
Get your thoughts on the recent inks increases.
Increases, we've seen and the met prices.
Specifically that Chinese CFR, China prices up I think $30 or more of the last month did note some spot business to China. So it would seem that that market, maybe got a little more attractive or it could just be great to get your thoughts on how your balance in your excellent mix from here.
I think our export mixed I I think we've shifted a bit and we remain shifted a bit from what was traditional where we were in the mid fifties went into Europe and.
I think we'll see that number down a little bit and will continue to see Asia.
Make up a higher percentage and part of that is due to the fact that we've just moved into a new mining area at man number four which in which the quality changes a little bit so that the customer mix will change a little bit with that so for right now we expect to be moving a little more into.
South East Asia.
Could you elaborate a little bit on the quality mixed change Sir.
We've we've and we've talked about it before we moved from the what would be the.
South western or south eastern part of the coal mine up into the northwestern part of the coal mine, where the ball goes up a little bit and it's closer to a high ball a than it was previously so you know the equality, we've known where it was going and we've been working with customers on that so it's just yet.
Got a little bit.
It's more like the call quality was good.
For a cold quality was in this same area back in about 2014 I believe it was when we reminding up.
In an area similar to where we've just moved to.
Got it very helpful. And then maybe one final one it would be great to get the thoughts on possible cadence of shipments here in the back happier in three to four two I mean any expectation for for one quarter to outperform versus the other and we talked about so probably drawing down some inventory do you expect that to kind of be rateable.
And then also I know you've got a couple of long will move within two to three in one or two four.
I I think the I think it will be ready to while I think.
The only the only caveat there is whether.
We're moving into hurricane season, and it's easy to have you know some days or a week or so where the port struggles a bit ah due to adverse weather Ah so that can affect a quarter pretty easily, especially if it happens around the end of a quarter.
But I would expect it to be kind of consistent performance.
Right now.
Great very helpful guys I appreciate the time and best of luck in the second half. Thank.
Thank you thanks Nathan.
Thank you once again, please press star and then one if you would like to ask a question.
And the next question comes from Alex hacking with city.
Yeah afternoon, and thanks for the time.
On the Blue Creek, you know you talk about.
You know the Capex and up you know inflation inflationary pressure that we've seen since the project was originally scoped.
I mean should we be thinking about that original budget or yeah. I think it was 650 to 700, you know potentially being 20 to 30 per cent higher like another $150 million.
Or am I thinking what am I thinking.
Thinking about that completely wrong. Thanks.
Well you know that that stomach was what our original expectations were and that's the inflation we've seen across the board in our operations and and the the new project is not immune to it now we can't project, where it will end up with that but.
Today is we're looking at it that's where our inflationary pressures have been.
Okay got it just wanted to make sure I was kind of interpreting correctly and then.
I guess on the development tons that are gonna start coming out.
Next year I'm not sure if you've if you've quantified that for 24 and 25 and.
And it really basic question you know what you know what's the accounting treatment of those development tons. If it's the material you know amount to be sold thanks.
Well, the Townsville started coming out we should start producing tons in the middle of next year, but you have to remember we have some better preparation plant and have a way to get those tons to market and will be we're working on that to try to figure out how are we better off to just stockpile that clean it take it to market immediate.
Which will have a higher cost daughter, because transportation would be significantly different than it will be once the.
Once the transportation modes are are completed so we're still working through what is the best way to handle that call and and that'll take us a little bit of time.
Okay, what's the car and sort of expectation for the timing of the prep plant.
I'm in the prep plant I believe is.
Mid twenty-five bitcoin I think second quarter of the third quarter of 25.
We believe the plan at all.
Somewhere in my heart.
It's somewhere in twenty-five.
Alright, thanks very helpful.
Thank you.
Thank you and the next question is how far from Lucas.
[noise] Securities.
Thank you very much operator, thank you for taking my follow up question, it's it's back to Blue Creek.
Just to make sure I I I understand that 25, 35% inflationary comment right.
That is separate or or in addition to the additional scope into transportation expenditures felt like is that right.
That's correct.
Very helpful. So we kind of we we take the original estimate we can imply our range 25 75 per cent and then we add up.
Transportation costs kind of on top of that for a very rough ballpark, yes.
Yes, the scope changes on top of that yeah.
Thank you. Thank you for that and then I I I want to follow up on the.
Capital structure optimization.
Yeah.
You mentioned you made.
Reduce leverage.
Are you looking at refinancing.
The dead or is is.
Maybe you have a preferred way to to take it.
Reduce the cash balances just just pay off some debt with with cash that you have on the balance sheet, just I'm trying to see.
Get a little bit better understanding for how are you thinking about that that optimization. Thank you very much.
Well, that's certainly an option but [noise].
Look we've accumulated quite a bit of cash a as we talked about the inflation a future or Blue Creek, you know, we're trying to balance those things and we paid some additional capital returns this year. So.
You know it.
We definitely don't want to put ourselves in a bad position with the remainder of Blue Creek, where just 15 months 16 months into the project so but at the same time, we're looking at every piece of the capital structure. We're looking at that you know how do we position ourselves better so should we pay some down now.
Or pay it down later Ah so it it's a little of all of those things. So we're not leaning towards either one.
Too much but you know.
That could change where you like to keep our options open and Ah execute the best one for the company.
That's that's helpful. Thank you know are there called premiums to think about prepayment penalties things like that.
Yeah, and there are so we have to think about all those and you know where we stand with total cash into a a liquidity Ah.
You know spending you know almost a half a billion dollars in capital this year, so I'm pretty sick significant.
Concern. So you have to think about that as well.
That's that's all very helpful and then another.
Another one on on the on the balance sheet.
Can you remind us what you are targets are through the development of Blue Creek for minimum liquidity minimum cash.
Well, we haven't changed that is how I think we set a minimum liquidity $250 million. Once the project started most of that will be cash and that's.
Would stay.
And we've been well ahead of that would you have been very fortunate to.
Accumulate so much cash high prices, especially last year in such a record certain court.
Thank you very much doubt for all the additional details again best of luck bump it down.
Thank you.
Thank you.
It was a question and answer session I would like to return to Florida Mister show up for any closing comments.
That concludes our call. This afternoon. Thank you again for joining us today and we appreciate your interest and warriors.
Thank you mentioned the conferences now concluded. Thank you for attending today's presentation and we know disconnect your lines.