Q3 2024 American Resources Corp Earnings Call
Greetings and welcome to the American Resources Corporation third quarter 2024 conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded at this time I would like to turn the call over to Mark Love or getting executive Vice President. Please go ahead Marc.
Mark Love: Thank you good afternoon, everyone on behalf of American Resources Corporation I'd like to welcome everyone to our third quarter of 2024 conference call and business update we always welcome these opportunities to provide an update on our business and discuss our accomplishments we've made over the past several months and how we're uniquely positioned within the <unk>.
Mark Love: Markets that we serve for our American infrastructure American metals and relevant technologies divisions.
Mark Love: On the call today, along with myself as Mark Jensen.
Mark Love: Our chairman and CEO and Tom Solvay, our president.
Speaker Change: 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 subjects to risks uncertainties and other factors, which could cause actual results to differ materially from the results discussed in the forward looking statement.
Speaker Change: When considering forward looking statements you should keep in mind, the risk factors uncertainties and other cautionary statements, which are laid out in our press releases and SEC filings.
Speaker Change: We do not undertake any obligation to update or revise any forward looking statement why that whether as a result of new information future events or otherwise lastly for anyone wanting to ask a question on today's call I believe you'll need to dial in by phone to get into the queue.
Speaker Change: With that.
Speaker Change: We're going to slightly modify the cadence of todays call Mark Jensen I will deliver a prepared letter to our shareholders that we will also be released shortly this afternoon. Then we'll get into a question and answer so with that I'd like to now turn the call over due.
Speaker Change: Mark Jensen, our chairman and CEO.
Speaker Change: Okay.
Speaker Change: Thanks, Mark and I want to thank you all for joining.
Speaker Change: The plan for the call as Mark mentioned is gonna be slightly different approach to and with a focus on providing an update on the current progress of the transformation of our business as well as the history of where we started.
Speaker Change: When it comes to the energy transition. We are confident we are ahead of the curve.
Speaker Change: We recently wrote a shareholder letter titled building, the only rare Earth and critical mineral refining platform.
Speaker Change: Depths in the metallurgical carbon business, which we define as a true energy transition.
First I want to extend my heartfelt thanks to all the shareholders and our team members recently I reconnected with mentor friend and someone I consider family a person of great wisdom, whose overcome immense challenges and always emerged stronger.
Speaker Change: He shared many insights, but once it out the importance of expressing empathy and acknowledging the struggles of our shareholders in challenging markets. This resonates deeply with me and our team we understand the frustration and the pain that come with declining stock prices, we recognize that people in our in our company.
Speaker Change: We recognize that people invest in our company for its potential.
Speaker Change: And it is our responsibility to deliver.
Speaker Change: Our focus as a team has been to stay committed work harder push ourselves and dig deeper to drive business success, which.
Speaker Change: Which we believe will ultimately be reflected in market value. While some of these efforts may be visible externally.
Speaker Change: And with some of these efforts may not be visible externally cannot be shared on a daily basis I want to assure you that we are fully committed and confident in our trajectory. We feel the same urgency for execution and we're dedicated to achieving the fundamental value for our shareholders that our shareholders deserve.
Speaker Change: [laughter].
Speaker Change: R.
Speaker Change: Our team is ready to go the distance to make this a reality and we have the steps in motion to unlock this value.
Speaker Change: Historically, our shareholder base has been predominantly consisted of management and over 25000 retail shareholders.
Management was the primary funding source for the business. When we started and initially funded the company. We have not had we've not traditionally had a large institutional shareholder base.
Speaker Change: Fortunately as a business and expanded we are starting to attract attention from larger investors and we believe that the support from these institutional investors is continuing to grow and will continue to grow as we execute as a business.
Speaker Change: [laughter] as both shareholders and management, we share the frustration over the current market value. We are fully committed to fighting for our shareholders to bring fundamental value and are ensuring that our stock reflects the value for everyone from those with 10 million shares to those with.
Speaker Change: While we acknowledge that we havent always met our goals due to factors both within and beyond our control. We believe strongly in our exceptional portfolio of assets, which we which are strategically positioned to create substantial value.
We are proud of the steps in the progress we've made to reach this point and are committed to working tirelessly toward the success, so that all shareholders benefit equally.
Speaker Change: The operating teams have demonstrated remarkable innovation and adaptability I'm proud to report significant progress across reality technologies American metals American infrastructure as well as our holdings in royalty management holding Corporation and <unk>, Inc.
Speaker Change: These achievements showcase our dedication.
Speaker Change: Not only to our business schools, but also to the core values of the community and our responsibilities.
Speaker Change: We all know technologies Corporation.
Speaker Change: <unk> is an amazing opportunity an amazing business.
Speaker Change: As we look to the highest value denominator of our business I'd like to provide some background on reality technologies.
We all know it was born out of the efforts to address environmental cleanup from legacy mining operations associated with our carbon assets. When we acquired eight companies five of them through bankruptcies.
Speaker Change: We inherited significant environmental liabilities from previous operators. Unlike many companies that defer. These issues, we took a proactive approach to address and clean up the environmental impact challenging industry norms.
Speaker Change: Frustrating landowners that wanted to leave these legacy liabilities outstanding and facing resistance for doing the things differently.
Speaker Change: This process, we remediated over 7000 acres of land in secured more than $20 million in environmental bond releases. Most importantly, we laid the foundation for reality technologies, prioritizing innovation and technology over dumping chemicals into waterways and transforming our approach to environmental stewardship.
Speaker Change: Three element was initially.
Speaker Change: [laughter] element was initially founded to focus on the separation and purification of the metals extracted for massive.
Speaker Change: Extracted from acid mine drainage fights and mine waste at the tie in China dominated 95% of the refining market for rare earth elements and critical minerals, creating a challenging single source economy, we faced a choice.
Speaker Change: Either send our concentrates to China at a loss or innovate to create a viable domestic solution. Our team spent years evaluating technologies for potential application in the U S market I quickly realized that traditional solvent based or hydro metallurgical extraction method, where neither economically nor environmentally sustainable for domestic use.
These message methods are capital intensive I have high operating cost and our environmentally harmful and lack versatility of varying feedstocks, whether recycled or naturally sourced.
Speaker Change: Furthermore.
We recognize that competing against China, low labor cost and relaxed environmental standards using similar processes would not be viable for the rest of the world.
Speaker Change: Re element prioritized innovation and partner with Purdue University, who is well ahead of the development of the electrified economy. Today, we have developed a versatile multi mineral multi feedstock platform technology capable of separating and purifying high value critical minerals, including lithium cobalt nickel dysprosium terbium near day.
Speaker Change: M precedent M as well as work on the OBL high purity aluminum, where HPA celica and copper.
Speaker Change: Not only can we separate and purify these elements, but we can do so at a cost that is competitive or even lower than China.
Speaker Change: Government is disrupting the monopoly by develop delivering higher quality products and lower cost establishing a natural hedge in the market.
Speaker Change: We achieved this using our own capital with a focus on creating a platform that can catalyze and synthesize a robust critical mineral supply chain outside of China, although.
Speaker Change: We have been approached with funding offers from Chinese nationals, we have consistently declined choosing instead to protect long term value for our shareholders.
Today, we are producing rare earth elements in battery materials for our customers out of our customer qualification plant in Noblesville, Indiana. We're also in the process of ordering equipment for our Marion Advanced Technology Center in Marion, Indiana, which spans 400000 square feet on 42 acres.
Speaker Change: We are confident that this facility will become the largest producer of separated and purified rare earth oxides, including dysprosium terbium near damn impressive deem outside of China. Additionally, it is poised to be a major if not the largest producer of lithium carbonate equivalent in the United States.
Speaker Change: We have also.
[laughter] Oh. This we have also begun dismantling or not county coal processing plant, which we acquired from Art School. This facility was previously owned and operated by Wilbur Ross is international coal group. Our plan is to repurpose the site for our lithium refinery sourcing or as both domestically and internationally, we take pride in the genuine energy transition.
Speaker Change: Check, which Leverages American ingenuity and builds on the region's rich history and commodity processing in eastern Kentucky.
Speaker Change: We continue to make daily progress on our goals, all while being mindful of minimizing shareholder dilution by grinding forward everyday and when the right opportunity arises we act decisively to capture that in this regards we utilized alternative and flexible capital strategies, such as bond offerings and incentives to drive our growth. We are proud of the work we're accomplishing behind the scene.
Speaker Change: And look forward to sharing.
Speaker Change: I'm more positive developments as our domestic supply chain evolves and our partners permit us to announce them.
Speaker Change: As a team of individuals with direct military military service or family members, who have served I cannot confidently say that we are 100% committed to fulfilling our mission to establish a critical rare earth element supply chain. Our goal is to catalyze the re shoring of our defense industrial base to strengthen national security for the United States.
Speaker Change: Allied Nations, we are the solution that can provide ultra pure rare earth elements for F 35 fighter Jets nuclear submarines drones and Murphy M for battery for military communication units.
Speaker Change: This challenge cannot and will not be solved by traditional hydro matter solvent base refining methods. A fact that is being proven today and will be evident over the next five years. Our path forward is driven by innovation and entrepreneurship not legacy practices. We firmly believe that re elements refining solutions is leading the market any alternative spending.
Will ultimately prove to be wasted capital.
Speaker Change: We are also excited that we have recently completed our initial closing of our financing at the relevant level and announced a record date and distribution date for elements separation on a stand alone company. We are confident this will help us drive shareholder value and help re element to grow at a faster clip.
Speaker Change: I'd like to touch briefly on American infrastructure preparation or formerly known as American Carbon Corporation. This business line is the focus of our metallurgical carbon in iron ore production Bruce growth. The company has consolidated valuable assets and can be restrict and.
Speaker Change: Has been restructured to solely focus on high value.
Speaker Change: High margin products as we expanded we built an independent team capable of driving the value and our shareholders as a separate entity. Our focus for this division is for our contractors to start production in Italy with a focus on turning this effectively into a royalty based company capturing topline revenue royalty streams from the high quality assets.
Speaker Change: With a focus on our mcquay Elkhorn complex in Wyoming County complex, we are making significant developments and growth towards that plan and are confident in the plan that our CEO tireless Thompson has developed for our metallurgical carbon division.
Speaker Change: American metals.
Speaker Change: <unk> has advanced as a business and now developing innovative strategies to pre process rare earth elements and critical minerals as well as continue with the steel recycling component of its business.
Speaker Change: The legacy business levers reclamation from previously acquired coal mine operations, primarily scrapping and recovering ferrous metals through the affiliation with reality as garnered knowledge and know how of ophthalmology efficient processing methods to produce products that can be.
Speaker Change: [laughter] efficiently refine back to ultra pure critical minerals.
Speaker Change: Recently, we have partnered with low harm Cleantech, India's leading battery recycling and reuse company to pre process batteries, creating materials that can serve as feedstock for element technologies in a cost effective environmentally conscious way.
Speaker Change: We are pushing to progress on our merger with AI Transportation acquisition Corp. The company has received comments from the C. O S. S. Four registration, which we believe can be addressed with minimal effort and we're pushing the team to be responsive to such questions to get this project to get American metal spun out and as a standalone public company.
Speaker Change: One of our holdings royalty management holding corporation, we believe has substantial opportunity and substantial value based on the growth and development of its platform royalty management as an innovative royalty company in streaming company with a highly attractive portfolio of holdings at the time of the leaseback merger as with most acts the majority of the capital was not regained.
Speaker Change: The company expects.
Speaker Change: Backs of largely become a mechanism for hedge funds to temporarily parked money and retain warrants with little intent from investors to remain in the transaction due to these redemptions. The company has now has a significantly smaller float and less capital to deploy than initially anticipated.
Speaker Change: Nonetheless, the company has an exciting business model, focusing on creating value increasing cash flow and growing equity Stakes at holdings since the merger it hasn't it.
Speaker Change: It has made several notable investments and has repurchased stock retiring those shares we believe the company is currently undervalued, but it's as it expands its communication, we expect that value to be reflected in the market American resources, a major holder of royalty management corporation, including warrants and and.
Speaker Change: Stock of over 3 million shares.
Speaker Change: Yeah.
Speaker Change: Another holding we haven't noticed Steri, Inc. We are extremely excited about the progress progress another stirrer company collaborating with can Idefense and partnership in the United States Air Force and the army to develop high value applications for graphene carbon nanotubes. Dr. <unk>. The company recently the company has recently and had in selling shareholder S. One approved by the SEC and will suit soon.
Speaker Change: While a new issuance, that's one aiming to use an underwriter to raise capital and listed on a national exchange.
Speaker Change: There are plans to submit this that's one in the near future and we are enthusiastic about the continued progress.
Speaker Change: In closing we remain committed to keeping you informed and engaged as we navigate this journey together the feedback to the valuable and I encourage you to share your thoughts and questions. Our relationship with you is fundamental to our access and weird suite to our success and we are dedicated to ensure your voice is heard and valued.
Speaker Change: Thank you for your continued trust and partnership together I am confident we can capitalize on these opportunities and build a brighter future for American Resources' three element technologies American metals American infrastructure royalty management, holding corporation and Novus area.
Speaker Change: With that I'd like to turn the call back over to the moderator for some Q&A.
Speaker Change: Thank you well now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: Impressive.
Speaker Change: Two if he like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Speaker Change: Our first question is from Kyle Gallagher with Merrill Lynch. Please proceed with your question.
Speaker Change: Yeah, Hey, Mark.
Speaker Change: I just wanted to kind of circle back in a previous conference call.
Speaker Change: On the re element side.
Speaker Change: I had asked you about some rare Earth sales and you said you had one customer that was willing to take everything that you could produce.
Speaker Change: But you didn't want to go down that path.
Speaker Change: I just kind of curious if.
Speaker Change: If you could give a color as to two why and you know give some thoughts or some some commentary on.
Speaker Change: What you see like the ramp in in.
Speaker Change: Revenue for re element looking like you know I know I know you got the AR facility.
In Noblesville, where your next to the kids gymnasium.
Speaker Change: That's that's producing some stuff can you kind of give some color on how that's going and how that process is ramping and from a sales perspective, there because I mean to my mind from the stock that's kind of the real sizzle in the story.
Speaker Change: Yeah, one we we have been building a diversified customer base at re element both for our lithium products and battery materials as well as our rare Earth oxides.
Speaker Change: There's some exciting news coming out over the next few weeks about partners and some pretty substantial companies that that were working with.
Speaker Change: Within this space on Magna manufacturing.
Speaker Change: As well as some battery materials customers no never built it was built to get our products qualified with customers and so we produce today with him carbonate on the daily basis, and we produce rare earth oxides on a daily basis, and then we ship those products to customers to be qualified the battery market getting qualified for lithium carbonate takes about a year.
Speaker Change: And so we've been through that process. We're currently producing product for one of our customers out of there right now in the quarter I think we booked about $150000 in revenue from re element relatively small its a relatively small facility with pretty low cost.
But we have been proven with that we've been proven we've had we've had visitors in that facility on a weekly basis over the last six months, including next week, we have a number of substantial partners coming through including members of the U S government on the defense side.
Speaker Change: But the scale of our revenue growth will continue at another state or out of the notice noblesville facility, but most importantly, it comes out of our Marion facility Marion was a complete rehab building that we acquired about over a year ago and we finished that renovations were installing all the electrical and they're now 113000 square feet us receive temporary.
Speaker Change: Occupancy and we are starting to move equipment up to Marion with a goal of scaling up our Marion preprocessing to feed the noblesville facility until we get processing up in Maryland, but we had a we are making substantial progress on that and there's a couple of customers coming in that we're negotiating with right now that that could enable us to scale substantially faster.
Speaker Change: Just given their timelines are meeting product, but if you look at the market.
Speaker Change: We're focused on making sure we spend our money in the appropriate way versus just getting ahead of our skis and thankfully the the demand we're seeing from very large customers. Because we were one of the few players that can actually produce magnetic battery grade materials today is substantial and we will start to showcase that large revenue growth in 2010.
Speaker Change: 25, as we continue to scale up over the next few months.
Speaker Change: Or do you feel like you're at capacity as far as what you can produce.
In Noblesville, a right now and that really to get any sort of meaningful scale, you're gonna, it's gonna have to move to Marion.
Speaker Change: We're gonna have to move preprocessing to Marian from a criminal graphic separation, which is really the heart of what we do from separation purification, we have the ability to expand I mean really honestly, even a 7000 square foot facility. We can produce a lot of product on the separation purification step it's really the pre processing that we're moving to maryann to start and that'll enable us to grow and that can happen pretty.
Speaker Change:
Speaker Change: We had to get over the get the electrical and water installed which we've done so.
Speaker Change: So getting that preprocessing step moved to Varian will enable us to continue to grow production as we get full scale production up and Marion.
Speaker Change: Got it and do you have like all of the the columns in the production trains in Marion ready to go so when that preprocessing.
Speaker Change: Or excuse me in.
Speaker Change: I'm getting I'm confused but in noblesville.
Speaker Change: So when you get the preprocessing done and Marianne.
Speaker Change: It's ready to kind of rock'n'roll, so to say.
Speaker Change: Yeah, I mean, we have we have columns for both rare earth oxides, and lithium carbonate and in Noblesville that we can continue to push volumes through there.
Speaker Change: The good thing about our technology is that the call the separation and purification component is really not the most expensive component of our process.
Speaker Change: And scaling that is building that out it is pretty easy and the relative nature of of where installment extraction. That's the hardest part and the most expensive part for us and it's actually one of the lowest cost components of our process.
Speaker Change: But yeah, if we as we continue to build out preprocessing and Maryann, we can put a lot more volume through our columns.
Speaker Change: In Noblesville as we build out columns for noblesville as well, but I mean, if you look at it we havent spent.
Speaker Change: We were very conscious of how we spend money because we're not going to dilute shareholders. We set it for over a year now probably two or three years now and so we are working with two large investment banks.
Speaker Change: Hilltop Securities, who we work with in the past and we publicly shared and then a bulge bracket bank that we are doing a bond offering for our marine facility and.
Speaker Change: That's launching very quickly they're doing a phenomenal job with the goal of closing that expeditiously and our team has already been scoping equipment that we can order very very quickly none none of the items in our process. Our long lead where if you look at Sullivan or trying to buy stuff from Chinese manufacturers that takes forever or our products are made here in America and our <unk>.
Speaker Change: <unk> made here in America. So we can scale very very quickly as we close this bond offering.
Let alone the convertible debt round that we've that we've just closed part of it.
Speaker Change: So so if I'm understanding you correctly I just forgive me I mean, even another cup of coffee here, but I just want to make sure I understand correctly, what you're saying effectively is that right now one of the main bottlenecks as preprocessing. So the existing columns and production trains that you have.
Speaker Change: In noblesville could handle more throughput.
Speaker Change: It's just you don't have the pre processing capacity right now to Max out the throughput that you currently have on lines that.
I kind of reading that correctly.
Speaker Change: Yep, Okay, Yep, and we can expand I mean, adding additional columns, we can continue that too as well, but that's a weekly thing not a year thing.
Speaker Change: Got it and my last my last question is just can.
Speaker Change: Can you.
Speaker Change: Help us understand and I think you know us.
Speaker Change: As a shareholder base.
Speaker Change: And especially you know if you get an NDA delve into any of the online forums right that can be an interesting space to go to.
Speaker Change: But can you maybe do some myth busting here on like what would be some of your partners main objections to having their name disclosed.
Speaker Change: For being in like a pilot program or some sort of joint venture with you.
Speaker Change: If you could just shine a little light on that I think that would help quite a bit.
Speaker Change: Yeah, I mean, I would say so the auto OEM. We work with is I mean, you can imagine its quite volatile in the in the auto space through the union negotiations as well as.
Speaker Change: Adjustments in volume production.
Speaker Change: Of the auto industry in general.
Speaker Change:
Speaker Change: I mean, they have not let anybody use their name in the last couple of years and I know.
Speaker Change: And so it's it's more of just them.
Speaker Change: Wanting to focus on their business and not not be out there.
Speaker Change: Having third parties mentioned their name as they are trying to also navigate the volatility in the marketplace.
Speaker Change: We have some we have some nice a nice partners that we should be rolling out here in the next couple of weeks.
Speaker Change: That we are that we have signed partnerships with that we will be able to disclose here shortly.
But it's I mean this if you look at this industry, it's quite volatile right now and a lot of people.
Speaker Change:
Speaker Change: I'm, not saying our partners, but a lot of people in the industry. You got way ahead of their skis and trying to build something that wasn't proven yet where we're doing quite the opposite we are actually proving and scaling our technology on a daily basis and so it's.
Speaker Change: And then a lot of people are always trying to attract government money, we're not overly inclined to do that but we think it would slow us down.
Speaker Change: And so there's the wanton to pretend they can do the whole thing in their own way when they can't I mean, there's I think you'll see that come out and you're starting to see it already in the public domain, but then on the private demand you're going to see that as well. So it's we work with a lot of groups behind the scenes right now and empowered by re element will continue to work with a lot of groups to help other players in the industry, but also.
Speaker Change: <unk> enable us to generate revenues, where they capex our equipment.
Speaker Change: It's just a it's.
Speaker Change: There's a lot of movement within the space right now and a lot of volatility in the space right now, which and from the Oems perspective. They just they don't want to be out there in front of it.
Understood Hey, as always appreciate your candor and I will jump back in queue. Thanks Mark.
Mark Love: Thank you.
Mark Love: Okay.
Speaker Change: Thank you. Our next question is from Michael Allen Castro with paradigm investors. Please proceed with your question.
Speaker Change: Hey, Mark Thanks for taking the question a couple of them actually did you if you're if you mentioned this already I apologize, but do you have a target date for screening of America.
American REIT and will it be public from the from the beginning.
Speaker Change: Poor spinning off re element or spitting off American infrastructure.
Speaker Change: Hum.
Well I'm American re I thought you'd be spinning off the American infrastructure, you don't see changing the name.
Speaker Change: So American resources at the holding company were spinning off re element right knowledge as we own them.
Speaker Change: Yes, yes, yes, yes.
Speaker Change: <unk> is a is the record date is I believe its December 30th our December 31st and then the.
Speaker Change: The record date is February 15th.
Speaker Change:
That was in the press release this morning, and so that that has been determined I mean, obviously the goal is to be in a liquid security.
Speaker Change: So you plan on being public from day one.
Speaker Change: We intend to we're working through and the audits and all that good stuff as we speak.
Speaker Change: So when you switched on his way to re audit all of our subs.
Speaker Change: Yes.
Speaker Change: Understood.
Speaker Change: So going forward, you'll American read will be the holding company.
Speaker Change: Revenue will be generated by the other companies that it's that it's.
Under its umbrella.
Speaker Change: As far as coal goes it's still in the coal business.
Speaker Change: So there's still owns roughly 80, roughly 80% of American infrastructure, which is our core business. The goal is to spin that off and separate platform American resources owns a a division of each of these entities post distribution, but the goal is for American infrastructure to continue to expand within the commodity.
<unk> in place and within our critical minerals space from more on the mining side and investment side into feedstock partners that could feed into re element and.
Speaker Change: And we have a we have a team member that will drop down as CEO of American resources. When I go to the CEO of Rio on the technologies and I'll stay as chairman of American resources.
Speaker Change: And the last question then for 'twenty to 'twenty five.
Speaker Change:
Speaker Change: Luke do you see real I mean.
Speaker Change: Starting to ask.
Accelerate maybe even have a hockey stick look to it when it comes to revenue.
Speaker Change: We do I mean, that's the beauty of I mean, if you look at our technology at re element. If if we were going to build a greenfield facility over half of our Capex would be in the building thankfully we have a fully renovated building with all the infrastructure in place now. So now it's just about ordering equipment, which our team is working on on a daily basis.
Speaker Change: The.
Speaker Change: Our ability to drive value wasn't where I think we're the only player in the space. They can produce heavy rare earth oxides today in the United States, let alone be able to do that in concert with producing battery materials in the same facility. There's nobody else that can do that I don't think there's anybody in China that does that so we were super excited about getting this equipment into Marianne now that it's renovated and ready to go and our team.
Speaker Change: Marion team has actually been training in our Noblesville facility.
Speaker Change: So we do believe this could be a substantial growth obviously, it's about getting the equipment getting the equipment installed and ramping up production as aggressively as we possibly can and yeah. We're we're confident that in 2025 are going to see I mean, it'll be probably the middle of the later 2025, as we get married and fully producing let alone the initial pre <unk>.
And that we're doing there.
Speaker Change: As early as this year that we can continue to expand production, but getting married and fully producing will generate substantial revenue.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question is from Steve Cingal with a B B asset management. Please proceed with your question.
Speaker Change: Hey, Mark how are you.
Speaker Change: So I was just wondering.
Speaker Change: Probably kind of answered this already but hum.
Speaker Change: Is there anything.
Speaker Change: That would be stopping getting marion going more as far as the financing or the feedstock is there any.
Speaker Change: And also like if everything goes according to plan do you think you'll be generating a.
Speaker Change: Substantial revenue or.
Speaker Change: Good revenue like sometime in the third quarter next year.
Speaker Change: Mhm, yeah absolutely.
Speaker Change: We feel extremely good about I mean, when the feedstock is built been building dramatically. Our sales teams are doing a great job of sourcing feedstock for sourcing feedstock partners.
Speaker Change: And so now it's just about getting the equipment and getting it installed.
Speaker Change: Especially now that we've got some of the initial closings on the convertible debt round as well as the bond offering that we're doing that really likes a fire under the production I mean, it's you need equipment to be able to produce product and or equipments about a third of the cost of a traditional hydro matter solvent extraction facility, but it still cost money and so we want to use non dilutive financing to do that which is what we're doing.
Speaker Change: And now it's about getting all of that equipment installed and continually ramping up production between the two facilities and then moving all that production too.
Speaker Change: To Maryann, which will show substantial growth in third quarter of next year is is Oh I feel highly confident in that.
Speaker Change: Great and also just curious how you feel about I know you see a lot of tower deals for.
Speaker Change: The Hyperscale is to use clean energy Amazon using nuclear all this stuff.
Speaker Change: Eventually you can play that card to get more business into re element because.
Speaker Change: Your process does not involve hurting the economy.
Speaker Change: The environment is much like the chemical stuff.
Yeah.
Speaker Change: The hydro matter, it's not good for the economy right yet you still have.
Speaker Change: You know some companies trying to.
Speaker Change: Raise money in and become hydro met recyclers in the U S.
Speaker Change: Yeah, I mean hydro might use a lot of chemical its not very cost effective it's not versatile and the recovery rates of their materials are quite low we're recovering greater than 95% of the material that goes into our facilities.
Speaker Change: <unk>.
Speaker Change: The nice thing about our technology as its chemical light, which makes it environmental.
Speaker Change: Mentally sensitive.
So one which also makes it cost effective the people care about those things, but I mean, but really people care about cost and when it comes down to it we got to produce an affordable product that people can actually buy and there is no but no hydro for no hydro facility in the United States and honestly I would say throughout the world can compete against our cost structure now, we gotta get or facilities.
Speaker Change: That's the focus and and that will drive production now the demand side of what we're seeing is one it's either either a profit gets processed and reopened facilities, where it gets processed in China or Korea.
Speaker Change: And as you start to see the domestic supply chain and we think the new administration coming in is going to be a laser focus on national security supply chain. That's a that's a great thing for us and it's a great thing for our country.
Speaker Change: So we're extremely excited about the the evolution of this marketplace and what we can bring to the table in terms of producing rare earth as well as critical minerals for the military but also for our commercial customers that need a product that they can afford.
Mark Love: Hey, Steve It's Mark will ever got a just to just to add to that too on.
Speaker Change: And Mark mentioned it in some of the prepared comments on the Atlanta letter when we talk about.
Speaker Change: The challenges around traditional solvent or hydro based refining.
Speaker Change: That will continue to manifest in this challenge of a manifest over the next five years, and really where what you and the rest of our shareholder base. It's important to continue to reiterate and understand is the powered by re element solution that we have as other participants meaning other processors other refiners other recyclers other miners in the in the market.
Speaker Change: That can extract can aggregate material, but don't have that final stage separation purification for finding.
Speaker Change: We can we can efficiently be be deployed into their flow sheets to to basically achieve their objectives achieved their vehicles to produce high quality high high purity products for the downstream manufacturing here as it continues to develop in North America.
Speaker Change: Great great.
Speaker Change: Thank you thank.
Speaker Change: Thank you for all the work you guys do appreciate it.
Steve Cingal: Thank you Steve.
Speaker Change: Thank you. Our next question is from Michael Samuels with vessel Fischer. Please proceed with your question.
Speaker Change: Hey, Mark how are you guys doing a great presentation, just two quick questions.
Speaker Change: Do you foresee the Novus, Darren and the American carbon going public.
Speaker Change: First part of next year I know originally we were looking at the end of this year, but.
Speaker Change: I was just curious I mean, yeah, we were I mean, one I mean, just sort of a stereo has got the first S. One approved.
Speaker Change: <unk> met with the team yesterday on that they there imminently within the next few weeks is what I've been told is getting ready to to get try to get the and excess one approved the focus was initially to get it lifted.
Now the focus is to get it listed on to a national exchange one they've had great success with their military based partners and think there's a lot of growth potential in that business line and I would agree.
Speaker Change: So they've been working on the selling shareholder S. One with a underwriter to listed onto a national exchange and that's taken a little bit of extra time due to that process versus just doing a self directed under lifting.
But yeah, we do think I think the S. One should be.
I mean, one the FCC just approved they're selling shoulder S. One which enables it to qualify for the NASDAQ or the New York and now working on the new issuance one will enable it to with the underwriter will enable it to set the valuation for the for the senior exchange listing and that just takes it took a little bit extra time, but we're <unk>.
Speaker Change: And what they're doing and where they're going and they're processing, obviously and.
As I wish I wish everything will go faster, but clambering American farm.
Speaker Change: American carbon yet so American carbon we distribute a part of it we're actually working we're actually talking to a few underwriters. We've been approached by a couple of different specs I think we're leaning away from this back route I'm just.
Speaker Change: Honestly, it's kind of a broken market right now and so working with an underwriter, we actually had a couple of investors that that propose.
Speaker Change: Offerings to us and so we're evaluating those as we speak we also had to re audit all of our subs. So we are we are pursuing litigation against our previous auditor.
Speaker Change: Because it's cost us money to re audit all the subsidiaries as well as obviously, our holding company, which we've done.
Speaker Change: But it's it's slowed us down substantially we had an approved form 10 or.
Speaker Change: Or one comment away from the Peru form 10 for a listing American carbon which is now American infrastructure before our auditor got disbarred because they took on like 300 clients start telling us which is frustrating.
Speaker Change: And so we are one we're pursuing damages for that but then to has slowed the process down because we had to re audit all of these subs that we were spinning out again, which is frustrating and thanks to the hard work of our financial team for getting that done but yeah. The goal is in the early part of next year to get that done and we're still being approached by people with Abbvie.
The Trump administration doesn't hurt the fact that we are a metallurgical carbon producer in the United States and now.
Speaker Change: Now I've had interest from investors and potential acquirers again, we'll see where those go right.
Speaker Change: Alright, and then the second question is I Didnt hear anything about Africa, or we still pursuing Africa.
Speaker Change: Yeah, absolutely we had a sovereign wealth fund from one of the African nations within our facilities last week was presenting at Purdue University last week.
Speaker Change: Ben Kincaid, leading the charge. We also have an individual in Africa that look is looking to join the team that'll be in our facilities next week.
Speaker Change: We bring a very very valuable technology. After we're the only players that can deploy technology locally in China won't do it back in the United States and ability to compete head to head is that we're bringing something to the table versus just throwing money at problems, which is what China does we were able to bring in technology to enable local refining and creating jobs in the middle class within Africa.
Speaker Change: So we.
Speaker Change: Were absolutely 100% focused on that we have some investors that are looking at the relevant African division and our facilities here in the next couple of weeks as well.
Speaker Change: Okay, great. Thanks, a lot.
Absolutely. Thank you.
Speaker Change: Thank you. Our next question is from Mark Stone private Investor. Please proceed with your question.
What portion of the re element distribution.
Speaker Change: Gonna be retained by American resources after the special dividend.
Speaker Change: Yeah, it's approximately the target amount is 19%.
Speaker Change: So it'll be every every investor will get their proportional share of what the percentage ownership in what they own and American resources and re element.
Speaker Change: But American resources is targeted to retain 19 per cent every element.
Speaker Change: Alright, then cause that rigor.
Regarding the American infrastructure and <unk>.
Speaker Change: Alright.
Speaker Change: A major exchange listings.
You expect to meet the minimum share price requirement for supposed to listening.
Speaker Change: Yeah, you'd have to to get listed so we do.
Speaker Change: And what would that share price because it looks a little bit.
Speaker Change: Relative to the number of shares are distributed in the value of American be sources, it seems kind of.
Speaker Change: Difficult to see how that's going to work.
Speaker Change: Which company you're referring to.
Speaker Change: Well, both Novus novus thorough and perhaps also American infrastructure, given the number of shares.
Speaker Change: Nobody started they were distributed.
Yes, we haven't I mean, there was roughly six.
Speaker Change: There's roughly 16 million shares approximately I'm estimating at all but in front of me have noticed are outstanding.
Speaker Change: It would have to be a minimum to list on anything you're changing out to be a minimum of $4 a share.
Speaker Change: American infrastructure.
Speaker Change: Raleigh, we may do a reverse stock split of American infrastructure out American resources, but American infrastructure.
Speaker Change: The goal of having a higher stock price, which will open it up to more institutional investors as well and that we're targeting that with them with the investor base as we speak.
Speaker Change: But we also do you believe that American resources does not reflect the fundamental value of our subsidiaries that just doesn't.
Speaker Change: I mean, we just closed an initial tranche of capital with three elements at $150 million evaluation, which is almost two extra current market price of American resources.
Speaker Change: We think we think our stock is being held down by algorithms and hedge funds. We've reported one of them to the SEC, We believe theyre looking into it as we speak and we think there's a lot of gamesmanship, taking place with these algorithms as we speak across the entire market environment now.
Speaker Change: Now.
Speaker Change: We'll leave that to the hands of the regulators to do to do what they're doing and I think they'll do a great job at that but we don't believe American resources is being out of it.
Speaker Change: Being fundamentally valued and that's why we're unlocking it by distributing to.
The underlying subsidiaries.
Speaker Change: So just to make sure I got the strategy, you're looking at a potential reverse split prior.
Speaker Change: There are sort of out there.
Speaker Change: Its thing on the American infrastructure, but not meeting reverse split.
On the <unk>.
That's correct.
Speaker Change: Alright. Thank you that's what that's what we're looking at yes, that's correct.
We want we wanted to have we want them to have a higher stock price, which I'll open it up to more institutional investors right now I'm gonna grow our gaming stocks below $3 because institutions don't invest in companies below $3. Now we think we are confident in our transition and growth of American resources that will get to a fundamental value in and.
Speaker Change: And ultimately anybody that short the stock will eventually have to cover.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question is from Steve Martin Private Investor. Please proceed with your question.
Afternoon, I'm wondering if you intend or does the American resources intended to keep 90% of every one of your spin off.
It won't be exactly 19% of everyone of their spin offs, but it does it's still holds Nova cerus shares it'll hold roughly 19% of re element, we haven't determined the appropriate amount.
Speaker Change: Of American infrastructure, we will be distributing it to sugar there have been announcements haven't determined how much.
Speaker Change: So there will be an announcement whenever you spin off any one of them how many shares you will retain.
Speaker Change: That's correct.
Speaker Change: How do you food and then each one of your spin off they will be part of your royalty stream each one of them.
Speaker Change: Hmm.
Speaker Change: No not necessarily in the American infrastructure American resources has always had a.
Speaker Change: A royalty owed back to it it owns the assets of the mining divisions of the underlying subsidiaries of American infrastructure.
And so that's that's different in terms of how the clicks royalties down the road as mining commences, but that's been in place since day, one it doesn't American a relevant technologies will not oh royalties back to American resources.
Speaker Change: Nor does Nova stirrer or any of the other divisions.
Speaker Change: So how will American resources.
Speaker Change: Any money then.
Yeah, it'll make money from the royalty stream from American infrastructure as well as in our own equity interest in these different divisions plus it's also.
Speaker Change: Our board has been working with the individual that wasn't dropping down as the CEO. We have he has a strategic business plan in place on the commodity markets on on the future growth of the business focusing on critical minerals and rare earth elements, but more on the mining side of it and are.
Speaker Change: Partnering with on the commodity trading component of the business.
Speaker Change: So where do you see American resources looking for any other companies or any other opportunities or it's just going to be what you spin off.
Speaker Change: Always looking for other opportunities always always looking for attractive ways to create value for our shareholders.
Speaker Change: So at this point I Wonder, which is once you get them all spun off.
Speaker Change: We are the re element seem to be the.
Spin off that's going to.
Speaker Change: See most of the.
Speaker Change: Stock appreciation.
Speaker Change: Would the would that not be what you think.
Speaker Change: I think real meant is that you know.
Speaker Change: Corn.
Speaker Change: I mean, I think the potential of it is.
Speaker Change: I've never been involved in a business that I've seen has greater potential than what we all have in house, we do something that nobody else in the world can do.
Speaker Change: And at a cost point that we can do it out.
Speaker Change: From refining both critical minerals, and rare earth oxides, especially doing being able to process heavy rare earth as well as looking at the HVA market copper market.
Speaker Change: The network that we're building and the partnerships that we're building at re element will unlock substantial value in and yeah. I do I do believe that re element is probably the most valuable component of our business, but I, but I that doesn't degrade the value of the other divisions, either I think they have tremendous value and opportunity as a as they get positioned in as they they continued X.
Upon their business plans.
Speaker Change: So is there any estimate of a timeline.
Speaker Change: American resources itself is going to be cash flow positive or.
Speaker Change: Even make them even make some money.
Speaker Change: Yeah, we I mean, we think when the mining business to start up the royalties that are owed to it and then I've always been in place. There. We think will make it a cash flow positive upper operation won the cost of them they overhead of American resources.
Speaker Change: One three element is spun off as well as American infrastructure spend off it basically has no overhead so it'll use the cash flow then it gets to buy back stock.
Speaker Change: And to make new investments.
Speaker Change: And all of that depends on.
Speaker Change: Getting the mining business got up and running.
Speaker Change: As well as the business model that we're putting that are the new CEO is putting in place.
Speaker Change: The direction that he's taking it and you've got some really nice relationships on the commodity side.
Speaker Change: And then one last question when do you think the mining business is going to get going.
Speaker Change: Are we think pretty soon and negotiating with customers as we speak and working through if you're if you have issues, but they are they are progressing on that and we think we think it's eminently I talked to a CEO of the division and our contract are at Macquarie is ready to get going as we speak and they're trying to button up last few items.
Speaker Change: So do you think the mining business is going to going forward is going to be a profitable business.
Speaker Change: I do.
Speaker Change: Because it seems like it's and at this point in time is it.
Speaker Change: Profitable to be in it.
Speaker Change: Based on the current commodity I mean, so the structures, we have a place, especially at like Mccoy is we get plenty of topline revenue. So our cost he takes over most of our labor cost as he starts commencing mining and then we get paid topline revenue royalty streams from him. So we have while the very very low cost cost structure and and I will.
Speaker Change: Say that I think the the met market for metallurgical carbon is pretty decent right now, especially on the Wyoming County side, which is the mid wall product.
So and I think you'll see strength in that I think youre going to start to see quite a bit of an investment in domestic infrastructure as well as in the international market with China stimulating.
Speaker Change: In a heavy way that I think there's I think youre going to see some strength going into the mining market and to the met coal prices.
Speaker Change: I think we're in we're in a good spot.
Speaker Change: Well, thank you very much.
Speaker Change: Nothing works as you're planning it.
Speaker Change: Well. Thank you were working hard to make it happen.
Speaker Change: Thank you. Our next question is from Mark.
Speaker Change: Excuse me there are no further questions at this time I'd like to hand, the floor back over to Mark Jensen for any closing comments.
Mark Jensen: I want to thank everyone for joining Tonight management is laser focused as we have been on making sure that we get the value unlocked that we protect shareholder value that we drive the business forward.
Mark Jensen: I want to thank our team for the hard work and dedication they are putting forth in terms of all of our divisions of making sure that we're positioned to capitalize on the markets as they continue to develop and continue to find their way.
Mark Jensen: We are well suited to be able to accomplish that we have.
Mark Jensen: Strong team in place, we have a lot of opportunity in front of us and we're thankful for the opportunity we have to take this business to the next level and we thank all of you for your support and look forward to talking to you in the future.
Speaker Change: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Okay.