Q2 2025 Warrior Met Coal Inc Earnings Call

At this time all lines are in listen only mode.

Speaker #1: Good afternoon. My name is Wyatt, and I will be your conference call operator today. At this time, I would like welcome everyone to the WARRIOR second quarter 2025 financial results conference call.

Following the presentation, we will conduct a question and answer session.

This call is being recorded and will be available for replay on the company's website.

Speaker #1: At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded and will be available for replay on the company's website.

I would like to turn the call over to Brian Chauvin, Chief Accounting Officer and controller. Please go ahead.

Good afternoon, and welcome everyone to Warriors second quarter 2025 earnings Conference call.

Speaker #1: I would like to turn the call over to Brian Chopin, Chief Accounting Officer and Controller. Please go head.

Before we begin let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance.

Speaker #3: Good afternoon, and welcome, everyone, to WARRIOR second quarter 2025 earnings conference call. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the private securities litigation reform act.

May be considered forward looking statements. According to the private Securities Litigation Reform Act.

Forward looking statements by their nature address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in the company's annual and quarterly reports filed with the SEC may cause our actual future results to be materially different from those expected in our forward looking statements.

Speaker #3: Forward-looking statements by their nature address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in the company's annual and quarterly reports filed with the SEC, may cause our actual future results to be materially different from those expected in our forward-looking statements.

We do not undertake to update our forward looking statements, whether as a result of new information future events or otherwise, except as may be required by law.

For more information regarding forward looking statements. Please refer to the company's press releases and SEC filings.

Speaker #3: We do not undertake to update our forward-looking statements whether as a result of new information future events or otherwise. Except, as may be required by law.

We'll also be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our second quarter press release furnished to the SEC on form 8-K, which is also posted on our website.

Speaker #3: For more information regarding forward-looking statements, please refer to the company's press releases and SEC filings. We also will be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our second quarter press release furnished to the SEC on Form 8-K, which is also posted on our website.

Additionally, we will be filing our Form 10-Q for the second quarter ended June 32025, with the SEC. This afternoon.

You can find additional information regarding the company on our website at Www Dot warrior met coal Dot Com, which also includes a second quarter supplemental slide deck that was posted this afternoon.

Speaker #3: Additionally, we will be filing our Form 10Q for the second quarter ended June 30th, 2025, with the SEC this afternoon. You can find additional information regarding the company on our website at www.warriormetcoal.com, which also includes a second quarter supplemental slide deck that was posted this afternoon.

Today on the call with me are Mr. Schiller, Chief Executive Officer, Mr. Dale Boyles, Chief Financial Officer.

After our formal remarks, we will be happy to answer any questions.

Speaker #3: Today on the call with me are Mr. Walt Scheller, Chief Executive Officer; and Mr. Dale Boyles, Chief Financial Officer. After our formal remarks, we will be happy to answer any questions.

With that I will now turn the call over to Walt.

Thanks, Brian Hello, everyone and thank you for taking the time to join US today to discuss our second quarter 2025 results.

Speaker #3: With that, I will now turn the call over to Walt.

After my remarks, Bill will review our results in additional detail and then you'll have the opportunity to ask questions.

Speaker #4: Thanks, Brian. Hello, everyone, and thank you for taking the time to join us today to discuss our second quarter 2025 results. After my remarks, Dale will review our results in additional detail, and then you'll have the opportunity to ask questions.

I am pleased that we delivered strong operational results maintained positive cash margins and generated positive operating cash flows during the second quarter.

These outcomes reflect the strength of our cost discipline, the flexibility of our variable cost structure and the resilience of our team in managing volatile market conditions.

Speaker #4: I'm pleased that we delivered strong operational results maintained positive cash margins and generated positive operating cash flows during the second quarter. These outcomes reflect the strength of our cost discipline, the flexibility of our variable cost structure, and the resilience of our team in managing volatile market conditions.

I'm also excited to announce the acceleration of the Blue Creek Longwall startup to early first quarter 2026.

During the second quarter, we achieved the first commercial sales of steelmaking coal from Blue Creek.

Speaker #4: I'm also excited to announce the acceleration of the BlueClick Longwell startup to early first quarter 2026. During the second quarter, we achieved the first commercial sales of steelmaking coal from BlueClick, which was one quarter ahead of schedule.

Which was one quarter ahead of schedule.

We also achieved other critical milestones in the development of the mine that allowed us to accelerate the lone Wolf startup.

More about this in a few moments.

Our markets remained under significant pressure this quarter, explaining the weakness that has been firmly set for the past several quarters.

Speaker #4: We also achieved other critical milestones in the ment of the mine that allowed us to accelerate the Longwell startup. More this in a few moments.

The drivers underlying the weakness or the same.

Excess Chinese steel exports.

Speaker #4: Our markets remained under significant pressure this quarter, extending the weakness that has been firmly set for the past several quarters. The drivers underlying the weakness are the same: excess Chinese steel exports, lackluster global steel demand, and a well-supplied steelmaking coal market.

Lackluster global steel demand and a well supplied steelmaking coal market.

First exports of low priced Chinese steel are up over 9% for the first five months of the year compared to 2024, which was already a record year for Chinese steel exports.

Speaker #4: First, exports of low-priced Chinese steel are up over 9% for the first five months of the year, compared to 2024. This was already a record year for Chinese steel exports.

Second with the exception of India forecast of global demand.

Demand for steel has been revised downward as a result of trade uncertainty and tepid global economic activity.

Speaker #4: Second, with the exception India, forecasted global demand for steel has been revised downwards as a result of trade uncertainty and tepid global economic activity.

And third the seaborne steelmaking coal markets remained under pressure due to strong supply.

Especially in the second tier segment as demonstrated by strong Chinese domestic steelmaking coal production and the slowdown in Chinese imports.

Speaker #4: And third, the seaborne steelmaking coal markets remained under pressure due to a ong supply. Especially in the second-tier segment, as demonstrated by strong Chinese domestic steelmaking coal production and the slowdown in Chinese imports.

Pricing per segment was also impacted by the continued resale of previously sold cargoes as well as healthy inventory levels across most of the global supply chain.

Speaker #4: Pricing for our segment was also impacted by the continued resale of previously sold cargoes as well as healthy inventory levels across most of the global supply chain.

The continued market weakness, which I just described resulted in average premium low vol. Steelmaking coal index prices declining 24% compared to the second quarter last year and declining 33% year over year through June.

Speaker #4: The continued market weakness, which I just described, resulted in an average premium low-ball steelmaking coal index prices declining 24% compared to the second quarter last year and declining 33% year over year through June.

Our primary index the <unk>, Australia stayed above the low points observed during the first quarter of 2025 and averaged $167 per short ton.

Speaker #4: Our primary index, the PLVFOB Australia, stayed above the low points observed during the first quarter of 2025 and averaged 167 dollars per short ton.

Which is nearly the same as the first quarter this year.

Contrary to <unk>, Australia pricing the main second tier indices, which are the Australian Lv HCC and U S. HVA price indices, both established there year to date low points in the second quarter.

Speaker #4: Which is nearly the same as the first quarter this year. Contrary to PLVFOB Australia pricing, the main second-tier indices which are the Australian LVHCC and US HVA price indices both established their year-to-date low points in the second quarter.

And averaged $131 and $154 per short ton respectively.

The relative price of the Lv HCC index price compared to the <unk> index continues to be a major story.

Speaker #4: An average of 131 dollars and 154 dollars per short ton respectively. The relative price of the LVHCC index price compared to the PLV index continues to be a major story.

With value is significantly lower than historical values.

The relative price for the second quarter averaged 78%.

Which was well below the 88% average for the past three five years.

Speaker #4: With values significantly lower than historical values. The relative price for the second quarter averaged 78%. Which was well below the 88% average for the past three and a half years and reached a multi-year low point of 76% during the second quarter.

We reached a multi year low point of 76% during the second quarter.

In addition, the <unk> CFO, China recorded a new low price point near the end of June of $143 per short ton.

While averaging $151 per short ton for the second quarter.

Speaker #4: In addition, the PLV CFR China recorded a new low price point near the end of June of 143 dollars per short ton. While averaging 151 dollars per short ton for the second quarter.

The arbitrage between the Australian F O B and China CFR indices remain closed for almost the entire quarter on the backdrop of an extremely low Chinese domestic pricing.

Speaker #4: The arbitrage between the Australian FOB and China CFR indices remained close for almost the entire quarter, on the back of an extremely low Chinese domestic pricing, this fact combined with the retaliatory tariff by China on US imports made for sales from the US into China on economical and therefore was not sold any volume into China this year.

This fact combined with the retaliatory tariffs by China on U S imports made for sales from the U S into China, an economical and therefore, we've not sold any volume into China. This year.

We achieved a gross price realization of 80% for the second quarter, which was a function of relative index pricing product mix geography tariffs and freight rates.

This result was lower than our annual target range of 85% to 90% primarily due to three things.

Speaker #4: We achieved a gross price realization of 80% for the second quarter, which was a function of relative index pricing, price mix, geography, tariffs, and trade rates.

First the <unk> HCC index price relative to the PLD index price.

Speaker #4: This result was lower than our annual target range of 85 to 90 percent, primarily due to three things: first, the LVHCC index price relative to the PLV index price has widened as I previously mentioned.

Has widened as I previously mentioned.

Second we sold a higher mix of high vol, a product versus premium low vol product.

Third.

The higher high Vol. A volume has been sold primarily into the Pacific basin on a CFR basis and net of freight costs.

Speaker #4: Second, we sold a higher mix of high-volume product versus premium low-ball product. And third, the higher high-volume volume has been sold primarily into the Pacific basin on a CFR basis.

According to the World Steel Association monthly report global Pig Iron production decreased by one 3% for the first six months of 2025 as compared to the prior year period.

Speaker #4: And net of freight costs. According to the World Steel Association monthly report, global pig iron production decreased by 1.3% for the first six months 2025.

Pig iron production in China, which is the world's largest production region decreased by <unk>, 8% for the same period.

The rest of the world's pig iron production experienced a decline of two 3% for the first six months of 2025.

Speaker #4: As compared to the prior year period, pig iron production in China which is the world's largest production region decreased by 0.8% for the same period.

India remains a bright spot with a growth rate of seven 1% and is expected to continue growing with new blast furnace capacity expected to come online this year.

Speaker #4: The rest of the world's pig iron production experienced a decline of 2.3% for the first six months 2025. India remains a bright spot with a growth rate of 7.1% and is expected to continue growing with new blast furnace capacity expected to come online this year.

Now, let me turn to our second quarter results in detail our strong sales volume was driven by the first commercial sales from our Blue Creek mine occurring earlier than anticipated.

Our second quarter sales volume was $2 2 million short tons compared to $2 1 million in last year's same quarter, representing a 6% increase.

Speaker #4: Now let me turn to our second quarter results in detail. Our strong sales volume was driven by the first commercial sales from our BlueClick mine occurring earlier than anticipated.

We sold 239000 tons of Blue Creek development steelmaking coal during the second quarter.

Speaker #4: Our second quarter sales volume was 2.2 million short tons compared to 2.1 million in last year's same quarter, representing a 6% increase. We sold 239,000 tons of BlueClick development steelmaking coal during the second quarter.

This is a quarter earlier than anticipated and already included in our annual volume guidance.

The Blue Creek tons.

Actual volumes sold primarily into Asia.

Speaker #4: Which is a quarter earlier than anticipated and already included in our annual volume guidance. The BlueClick tons were contractual volumes sold primarily into Asia.

Our sales by geography for the second quarter breakdown as follows.

52% into Asia, 37% in the Europe, and 11% into South America.

The second quarter marks the first time in our history, where sales into Asia were greater than 50% of total sales volume and did not include any sales into China.

Speaker #4: Our sales by geography for the second quarter breakdown as follows. 52% into Asia, 37% into Europe, and 11% into South America. The second quarter marks the first time in our history where sales into Asia were greater than 50% of total sales volume and did not include any sales into China.

Our spot volume was 4% for the second quarter of 2025.

This was primarily sold into Europe.

For the full year, our spot volume is expected to be approximately 15% or less of total sales volume.

Speaker #4: Our spot volume was 4% for the second quarter 2025. Which was primarily sold into Europe. For the full year, our spot volume is expected to be approximately 15% or less of total sales volume.

Production volume in the second quarter, 2025 was $2 3 million short tons compared to $2 2 million in the same quarter of last year, representing a 6% increase.

Our existing loans continued to perform well and the continuous miner units in our Blue Creek mine produced 348000 short tons during the second quarter and drove the overall increase in production volume.

Speaker #4: Production volume in the second quarter 2025 was 2.3 million short tons compared to 2.2 million in the same quarter of last year. Representing a 6% increase.

Speaker #4: Our existing mines continue to perform well and the continuous miner units at our BlueClick mine produced 348 thousand short tons during the second quarter and drove the overall increase in production volume.

Our coal inventory levels remained consistent at $1 1 million tons at the end of the second quarter compared to the end of the first quarter 2025.

During the second quarter, we spent $94 million on Capex and mine development of <unk>.

Speaker #4: Our coal inventory levels remain consistent at 1.1 million tons at the end of the second quarter compared to the end of the first quarter 2025.

That amount in capex spending totaled $75 million.

Mine development costs for Blue Creek project for $19 million during the second quarter and continued to be below budget as we focused on cost control.

Speaker #4: During the second quarter, we spent 94 million dollars on CapEx and mine development. Of that amount, CapEx spending totaled 75 million dollars. Mine development costs for BlueClick projects were 19 million dollars during the second quarter and continue to be below budget as we focused on cost control.

As we ramp up operations toward the longwall start up we expect our Blue Creek mine development costs to increase in the second half of 2025.

Apart from the $52 million in Blue Creek capital expenditures, we tightly manage our capital expenditures at the existing mines to $23 million.

Speaker #4: As we ramp up operations toward Longwell startup, we expect our BlueClick mine development costs to increase in the second half of 2025. Apart the 52 million dollars in BlueClick capital expenditures, we tightly manage our capital expenditures at the existing mines to 23 million dollars.

Now let me provide you with an exciting update on our transformational Blue Creek growth project, which is ahead of schedule and on budget.

The project team continue to make excellent progress during the second quarter with overall development and achieved certain milestones earlier than planned.

Speaker #4: Now let me provide you an exciting update on our transformational BlueClick growth project. Which is ahead of schedule and on budget. The project team continue to make excellent progress during the second quarter with overall development and achieved certain milestones earlier than planned.

If you allow me a moment to give our team credit that is unheard of with large scale projects in this industry.

As a result of those achievements, we've accelerated the longwall start up of Blue Creek to early first quarter of 2026.

Speaker #4: If ou allow me a moment to give our team credit, that is unheard of with large-scale projects in this industry. As a result of those achievements, we've accelerated the Longwell startup at BlueClick to early first quarter 2026.

As previously mentioned, we achieved another milestone in the development of Blue Creek by selling 239000 tons of steelmaking coal during the second quarter.

These were the first commercial sales from this project and we're also ahead of schedule.

Speaker #4: As previously mentioned, we achieved another milestone in the development of BlueClick by selling 239,000 tons of steelmaking coal during the second quarter. These were the first commercial sales from this project and were also ahead of schedule.

Since most of the critical inflection point in the development of this premier asset representing the beginning of a transition in capital investment to revenue generation.

The development of the first loan wall panel during the second quarter produced 348000 short tons of steelmaking coal and remain on track to produce 1 million short tons for the full year 2025.

Speaker #4: This marks critical inflection point in the development of this premier asset, representing the beginning of a transition from capital investment to revenue generation. The development of the first Longwell panel during the second quarter produced 348 thousand short tons of steelmaking coal and remained on track to produce 1 million short tons for the full year 2025.

We are pleased with the progress thus far in the development and the effective management of costs.

We received the final delivery of the remaining loan loss yields during the second quarter.

We're already to be set up underground in the next few months.

Speaker #4: We are pleased the progress thus far in the development and our effective management of costs. We've the final delivery of the remaining Longwell shields during the second quarter.

In addition, our recruiting and hiring efforts for this new mine continue to be on track.

We also continued to make excellent progress as we completed the installation of the truck dump railroad out and modulate the preparation plant.

Speaker #4: Which are already to be set up underground in the xt few months. In addition, our recruiting and hiring efforts this new mine continue to be on track.

Which allowed us the ability to send the first train of loads of steelmaking coal to the port of mobile for our first shipments to customers.

Speaker #4: We also continue to make excellent progress as we completed the installation of the truck dump, rail loadout, and module A of the preparation plant.

We continue to ramp module BMC at the preparation plant with a full commissioning expected in the fourth quarter of this year.

Speaker #4: Which allowed us the ability to send the first train of loads of steelmaking coal to the port of Mobile for our first shipments to customers.

We strategically invested another $52 million of capital expenditures in the second quarter were $107 million year to date and the Blue Creek development.

Speaker #4: We continue to ramp modules B and C at the preparation plant with a full commissioning expected in the fourth quarter of this year. We strategically invested another 52 million dollars capital expenditures in second quarter and 107 million dollars year to date in the BlueClick development.

That brings the total project capital expenditures to date to $823 million, which remains on budget.

Our baseline total project estimate remains unchanged ranging from $995 million to $1 billion and $75 million I'll now ask Gail to address our second quarter results in greater detail.

Speaker #4: That brings the total project capital expenditures to date to 823 million dollars, which remains on budget. Our baseline total project estimate remains unchanged, ranging from 995 million dollars to 1 billion and 75 million dollars.

Thanks, Paul.

As noted earlier, our second quarter results demonstrate the strength of our business model, especially during adverse market conditions, we have high quality assets strong customer demand and a variable cost structure that allows us to navigate volatile market conditions.

Speaker #4: I'll now ask Dale to address our second quarter results in greater detail.

Speaker #5: Thanks, Walt. As Walt noted earlier, our second quarter results demonstrate the strength of our business model, especially during adverse market conditions. We have high-quality assets, strong customer demand, and a variable cost structure that allows us to navigate volatile market conditions.

In addition to a variable cost structure, especially for transportation and royalty cost we have a strong and disciplined approach to managing all costs, including our SG&A and capital spending.

Speaker #5: In addition to a variable cost structure, especially for transportation and royalty cost, we have a strong and disciplined approach to managing all costs, including our SG&A and capital spending.

We continue to make efforts to control what we can control despite adverse market conditions to generate positive financial results and outperformed expectations.

Speaker #5: We continue make efforts to control what we could control, despite adverse market conditions, to generate positive financial results and outperform expectations. For the second quarter, WARRIOR ed net income on a GAAP basis of about 6 million dollars or 11 cents diluted share, compared to net income of 71 million dollars or 1 dollar and 35 cents per diluted share in the same quarter of 2024.

For the second quarter, we recorded net income on a GAAP basis of about $6 million or <unk> 11 per diluted share compared to net income of $71 million.

A $1 35 per diluted share in the same quarter of 2024.

These decreases in quarterly results were primarily driven by 30% lower average net selling prices and a weak market price environment.

Partially offset by higher sales volume and a strong focus on controlling our costs as evidenced by our ability to drive down our cash cost of sales per ton by 18% from last year.

Speaker #5: These decreases in quarterly results were primarily driven by 30% lower average net selling prices and a weak market price environment, partially offset by higher sales volume and a strong focus on controlling our costs, as evidenced by our ability to drive down our cash cost of sales per ton by 18% from last year.

We reported adjusted EBITDA of $54 million in the second quarter of 2025 compared to $116 million in the same quarter of last year.

Adjusted EBITDA margin was 18% in the second quarter of 2025% compared to 29% from the same quarter of last year.

Speaker #5: We reported adjusted EBITDA of 54 million dollars in the second quarter of 2025, compared to 116 million dollars in the same quarter of last year.

On a per ton basis, our adjusted EBITDA margin was $24 per short ton for the second quarter of this year compared to 55.

Speaker #5: Adjusted EBITDA margin was 18% in the second quarter of 2025, compared to 29% in the same quarter of last year. On a per ton basis, our adjusted EBITDA margin was 24 dollars per short ton for the second quarter of this year, compared to 55 dollars in the last year's second quarter.

And the last year's second quarter.

The decrease in quarterly results was primarily driven by 30% lower average net selling prices and a 13% higher mix of high vol. A coal sold versus premium low vol coal.

Speaker #5: The decrease in quarterly results was primarily driven by 30% lower average net selling prices and a 13% higher mix of high-volume coal sold versus premium low-ball coal.

This was partially offset by lower production costs, lower variable cost for transportation and royalties and 6% higher sales volume.

Okay.

Total revenues were $298 million in the second quarter of this year compared to $397 million in the second quarter of 2024.

Speaker #5: This was partially offset by lower production costs, lower variable costs for transportation and royalties, and 6% higher sales volume. Total revenues were 298 million dollars in second quarter of this year, compared to 397 million dollars in the second quarter of 2024.

The total decrease of $99 million was primarily due to a decrease in average gross selling prices of $120 million.

And a higher mix of high vol, a volume sold of $12 million par.

Speaker #5: The total decrease of 99 million dollars was primarily due to the decrease in average gross selling prices of 120 million dollars and a higher mix of high-volume volume sold of 12 million dollars, partially offset by the impact of higher sales volumes of 22 million dollars.

Partially offset by the impact of higher sales volumes of $22 million.

In addition, demurrage and other charges were $7 million lower compared to the second quarter of 2020.

This resulted in an average net selling price of $130 per short ton in the second quarter of 2025 compared to $186 per short ton in the same quarter of last year.

Speaker #5: In addition, the merge and other charges were 7 million dollars lower compared to the second quarter 2024. This resulted in an average net selling price of 130 dollars per short ton in the second quarter of 2025, compared to 186 dollars per short ton in the same quarter of last year.

Cash cost of sales in the second quarter 2025 was $225 million.

Or 78% of mining revenues.

<unk> $260 million or 67% of mining revenues in the second quarter of last year.

Speaker #5: Cash cost of sales in the second quarter of 2025 was 225 million dollars, or 78% of mining revenues, compared 260 million dollars, or 67% of mining revenues in the second quarter last year.

Of the $35 million net decrease in cash cost of sales.

$50 million of the decrease was driven primarily by the lower variable transportation and royalty cost on 24% lower average steelmaking coal price indices.

Speaker #5: Of the 35 million dollar net decrease in cash cost of sales, 50 million dollars of the decrease was driven primarily by the lower variable transportation and royalty cost, on 24% lower average steelmaking coal price indices.

In addition, we rationalized and tightly manage our spending on supplies repairs and maintenance expenses.

These decreases were partially offset by $15 million increase in costs associated with the 6% increase in sales volumes.

Speaker #5: In addition, we rationalized and tightly managed our spending on supplies, repairs, and maintenance expenses. These decreases were partially offset by 15 million dollar increase in cost associated with a 6% increase in sales volumes.

Cash cost of sales per short ton Fob port was approximately $101 in the second quarter of this year compared to $124 in the second quarter of 2024.

The decrease was primarily related to the lower variable transportation and royalty cost of $15 per ton on lower steelmaking coal prices.

Speaker #5: Cash cost of sales per short ton, FOB port, was approximately $101 in the second quarter of this year, compared to $124 in the second quarter of 2024.

$5 per ton of tightly managing our overall spending at the legacy mines and a further $3 per ton from the initial sales of low cost Blue Creek tons.

Speaker #5: The decrease was primarily related to the lower variable transportation and royalty cost of 15 dollars per ton, on lower steelmaking coal prices, 5 dollars per ton of tightly managing our overall spending at the legacy mines, and a further 3 dollars per ton from the initial sales of low-cost BlueClick tons.

While we were able to tightly manage our spending during the second quarter some costs such as repairs and maintenance may be higher in the second half of the year.

Underground mining places a significant strain on machinery and equipment.

Speaker #5: While we were able to tightly manage our spending during the second quarter, some costs, such as repairs and maintenance, may be higher in the second half of the year.

Often resulting in unexpected breakdowns that require investment and repairs and maintenance to restore their operational status.

Speaker #5: Underground mining places a significant strain on machinery and ment. Often, resulting in unexpected breakdowns that require investment in repairs and maintenance to restore their operational status.

Our cash cost of production for the second quarter of 2025 was 67% of our total cash cost per short ton.

Compared to 61% in the same quarter last year.

Speaker #5: Our cash cost of production for the second quarter of 2025 was 67% of our total cash cost per short ton. Compared to 61% in the same quarter last year.

Overall transportation and royalty cost for 33% of our cash cost of sales per short ton in the second quarter of this year on lower average net selling prices.

Compared to 39% in the same quarter last year.

Speaker #5: Overall, transportation and royalty costs were 33% of our cash cost of sales per short ton, in the second quarter of this year, on lower average net selling prices, compared to 39% in the same quarter last year.

As a result of the lower average net selling price our cash margin per short ton was $29 in the second quarter this year compared to $62 in the same quarter of last year.

Speaker #5: As a result of the lower average net selling price, our cash margin per short ton was 29 dollars in the second quarter of this year, compared to 62 dollars in the same quarter of last year.

SG&A expenses were $12 million in the second quarter of 2025 and were about $4 million lower than the second quarter of last year as we continued to manage our overall spending.

This decrease was primarily due to lower employee related expenses and professional fees.

Speaker #5: SG&A expenses were 12 million dollars in the second quarter 2025 and were about 4 million dollars lower than the second quarter of last year.

Depreciation and depletion expenses were $43 million in the second quarter of 2025 and were higher than the same quarter last year.

Speaker #5: As we continue to manage our overall spending, this decrease was primarily due to lower employee-related expenses and professional fees. Appreciation and depletion expenses were 43 million dollars in the second quarter of 2025, and were higher than the same quarter last year, primarily due to the additional assets placed into service at BlueClick.

Primarily due to the additional assets placed into service at Blue Creek.

Our net interest income earned from cash investments was lower in the second quarter of this year due to lower average cash balances and lower rates of return combined with higher interest expense on newly leased equipment.

Speaker #5: Our net interest income earned from cash investments was lower in the second quarter of this year, due to lower average cash balances and lower rates of return combined with higher interest expense on newly leased equipment.

Okay.

Turning to cash flow during the second quarter of 2025 free cash flow was negative $57 million.

This was the result of cash flows generated by operating activities of $37 million less cash used for capital expenditures and mine development of $94 million.

Speaker #5: Turning to cash flow, during the second quarter 2025, free cash flow was negative 57 million dollars. This was a result of cash flows generated by operating activities, of 37 million dollars, thus cash used for capital expenditures and mine development of 94 million dollars.

Working capital increased by $14 million during the second quarter and was heavily influenced by higher inventory of Blue Creek supplies.

This was partially offset by lower accounts receivable.

Speaker #5: Working capital increased by 14 million dollars during the second quarter, and was heavily influenced by higher inventory of BlueClick supplies. This was partially offset by lower accounts receivable.

It is important to understand that while our total free cash flow was negative for the second quarter and year to date. The underlying business is generating positive free cash flow. If you exclude the strategic investments, we are making into Blue Creek.

Speaker #5: It's important to understand that while our total free cash flow was negative for the second quarter and year to date, the underlying business has generated positive free cash flow if you exclude the strategic investments we're making into BlueClick.

The underlying business generate approximately $40 million of free cash flow in the second quarter exclude.

Excluding the Blue Creek, Capex spending mine development and working capital impact.

Speaker #5: The underlying business generated approximately 40 million dollars of ree cash flow in the second quarter, excluding the BlueClick CapEx spending, mine development, and working capital impact.

This demonstrates the strength of the underlying business during these challenging market conditions and low pricing environment.

Okay.

Our total available liquidity at the end of the second quarter of 2025 was $545 million and consisted of cash and cash equivalents of $383 million short and long term investments of $48 million and $114 million available under our ABL facility.

Speaker #5: This demonstrates the strength of the underlying business during these challenging market conditions and low pricing environment. Our total available liquidity at the end of the second quarter 2025 was $545 million and consisted of cash and cash equivalents of $383 million, short and long-term investments of $48 million, and $114 million available under our L facility.

Now I'll have discussed the second quarter results compared to last year, Let me highlight some of the achievements compared to the first quarter of 2025.

Our second quarter, adjusted EBITDA of $54 million was $14 million higher than the first quarter of 2025.

Speaker #5: Now that I've discussed the second quarter results compared to last year, let me highlight some of the achievements compared to first quarter 2025. Our second quarter adjusted EBITDA of 54 million dollars, with 14 million dollars higher than the first quarter of 2025, primarily due to 2% higher sales and volumes, and 11 dollars per ton lower cash cost.

Primarily due to 2% higher sales and production volumes and $11 per ton lower cash cost.

This improvement was partially offset by $5 per ton of lower average net selling prices, which I addressed in my earlier comments.

Approximately two thirds of the cost reductions came from our highly focused and disciplined approach to cost control operational efficiencies and the sales mix of blueprint coal with its inherently lower cost structure.

Speaker #5: This improvement was partially offset by $5 per ton of lower average net selling prices, which I addressed in my earlier comments. Approximately two-thirds of the cost reductions came from our highly focused and disciplined approach to cost control, operational efficiencies, and the sales mix of BlueClick coal with its inherently lower cost structure.

The remaining one third of cost reductions came from lower variable transportation and royalty cost.

Let me turn to our outlook and guidance for the full year 2025.

As outlined in our earnings release, we have updated our guidance for the full year 2025 to better reflect the challenging market conditions and pricing environment, we expect for the remainder of this year.

Speaker #5: The remaining one-third of cost reductions came from lower variable transportation and royalty cost. Let me turn to our outlook and guidance for the full year 2025.

Speaker #5: As outlined in ur earnings release, we have updated our guidance for the full year 2025 to better reflect the challenging market conditions and pricing environment we expect for the remainder of this year.

We believe our customers markets will continue to be challenged from a demand standpoint over the next several quarters.

From a supply standpoint, we believe that current pricing levels are making a substantial portion of global supply uneconomical and that supply rationalization is needed to better balance the overall market.

Speaker #5: We believe our customers' markets will continue to be challenged from a demand standpoint over the next several quarters. From a supply standpoint, we believe that current pricing levels are making a substantial portion of global supply uneconomical and that supply rationalization is needed to better balance the overall market.

In addition, there continues to be uncertainty surrounding global trade and tariffs that could put additional pressure on seaborne pricing.

And finally, one last note on the one Big Beautiful Bill Act that was enacted into law in July 4th of this year.

Speaker #5: In addition, there continues to be uncertainty surrounding global trade and tariffs that could put additional pressure on seaborne pricing. And finally, one last note on the one big beautiful bill act that was enacted into law on July 4th of this year.

The act contains some provisions that we expect will be beneficial to warrior.

Such as the permanent extension of certain expiring provisions of the tax cuts and jobs Act.

And making a permanent deduction of approximately 33% on our foreign derived income.

Speaker #5: The act contains some provisions that we expect will be beneficial to WARRIOR. Such as the permanent extension of certain expiring provisions of the tax cuts and jobs a permanent deduction of approximately 33% on our foreign-derived income.

In addition, the AG classifies metallurgical coal is a critical mineral eligible for the tax credit under the section 45 ex of the internal revenue code.

With 45 ex tax credit is based upon the two 5% credit a defined eligible production costs from 2026 through 2029 and.

Speaker #5: In addition, the act classifies metallurgical coal as a critical mineral. Eligible for the tax credit under the Section 45 acts of Internal Revenue Code.

And will vary per year, depending upon variable production costs during those periods.

Speaker #5: The 45 acts tax credit is based upon a 2.5% credit of defined eligible production costs from 2026 through 2029. And will vary per year depending upon variable production costs during those periods.

We are currently assessing the bill's impact on our financial statements, but we do expect it to impact us positively.

I'll now turn it back to Walt for his final comments.

Thanks Dale.

Speaker #5: We are currently assessing the bill's impact on our financial statements, but we do expect it to impact us positively. I'll now turn it back to Walt for his final comments.

Our forward looking view remains intact, we believe our customers markets will continue to face headwinds due to the persistence of excess Chinese steel exports admitted backdrop of weaker global economic activity.

Speaker #6: Thanks, Dale. Our forward-looking view remains intact. We believe our customers' markets will continue to face headwinds due to the persistence of excess Chinese steel exports emitted by a drop of weaker global economic activity.

Although we are watching closely for the potential of capacity rationalization in Chinese steel production. It is not clear how or when that will occur.

We are optimistic about the possibility of new trade agreements with key global partners.

Speaker #6: Although we're ching closely for the potential of capacity rationalization and Chinese steel production, it is not clear how and when that will occur. We're optimistic about the possibility of new trade agreements with key global partners, yet we'll proceed with caution until these agreements are officially secured.

We will proceed with caution until these agreements are officially secured.

While we recognize that we're operating in an uncertain environment, we're confident that our world class asset base.

Early principal cost structure, and a high performing workforce will allow us to navigate successfully through the remainder of this year and beyond.

Speaker #6: While we recognize that we're operating in an uncertain environment, we're confident that our world-class asset base, highly flexible cost structure, and a high-performing workforce will allow us to navigate successfully through the remainder of this year and beyond.

With that we would like to open the call for questions operator.

At this time I would like to remind everyone to ask a question. Please press Star then the number one on your telephone keypad.

Speaker #6: With that, we would like to open the call for questions. Operator.

We'll pause for just a moment to compile the Q&A roster.

Speaker #7: At this time, I would like to remind everyone that to k a question, please press star, then the number one on your telephone keypad.

And your first question comes from the line of Nick <unk> with B Riley Securities. Please go ahead.

Speaker #7: We will pause for just a moment to compile the Q&A roster. And your first question comes from the line of Nick Giles with BRiley Securities.

Thank you operator.

Good afternoon, everyone.

Congratulations on such a strong quarter and for the pull forward of Blue Creek.

Speaker #7: Please go ahead.

My first question your updated cost guidance of 110 to $120 per ton.

Speaker #8: Thank ou, Operator. good afternoon, everyone. Guys, congratulations on such a strong quarter and for the pull forward of BlueClick. my, my first question, you're updated cost guidance of 110 to 120 dollars per ton.

Despite the downward revision I think still it implies that costs would be towards the higher end of that range.

In the second half to reach the mid point.

<unk> and.

Speaker #8: despite a downward implies that costs would be towards the higher end of that range. in the second half to reach the midpoint. to me, this seems somewhat unlikely based on the strong performance year to date.

And somewhat unlikely based on the strong performance year to date. So my question is.

Should we think about cost cadence between here and the end of the year. Thank you very much.

Hi, Nick Thanks for the question.

Speaker #8: So my, my question is, how should we think cost cadence between here and the end of the year? Thank you very much.

Yes, it's that count for unit, we had a strong quarter, where we really managed our costs, but as I said in my prepared remarks, but things happen and you've got a plan for those we have planned for that in the back half that it may happen.

Speaker #9: Hey, Nick. thanks for the question. yeah, if the account were, you ow, we had a strong quarter where we really managed our costs, but as I said in my prepared remarks, look, things happen.

But we're going to continually continue to tightly manage all of our cost and have the mines perform at their optimal capacity, but yeah.

Speaker #9: And you gotta plan for those. So we, we have planned for that in the back half that it may happen. but we're gonna continually continue to tightly manage all of our

Also just planning for things to swing the other way if things break and you have to repair them. So.

Speaker #9: costs. And have revision, I think still the mines perform at their optimal capacity. But, you know, we are, also just planning for things to swing the other way.

We're averaging year to date about $107, a ton, which is near the bottom end of our year.

Full year guidance so.

Speaker #9: We have things break and you have to repair them. So, you know, we're averaging year to date about 107 dollars a ton, which is near the bottom end of our year.

For just a little upside or I'm, sorry, low downside on the rest of the year.

Got it okay. Thanks for that Joe.

Speaker #9: full year guidance. So, plan for just a little upside. Or I'm sorry, a little downside on the rest of the year.

My second question was.

With Brazilian tariffs being implemented.

I believe that market has historically been around 20% with volumes.

Speaker #8: Got it. Okay, thanks for that, Dale. My second question was, would Brazilian tariffs be implemented? I believe the market has historically been around 20% of volumes.

Should we think about the potential for diversion, which markets would you favor.

If there was a need for diversion and how could that impact realizations.

Speaker #8: How should we think the potential for diversion and which markets would you favor? if there was a need for diversion and, and how could that impact, realizations?

Well I think what's really going on is its the additional.

High Vol, a tons that are coming into the market.

That typically do not flow into South America, South America with a larger part of our market. When we were moving more of a mid vol product online for down into <unk>.

Speaker #9: And this is Walt. I, I think what's, what's really going on is it's the additional, high-volume tons that are coming into the market. that typically do not flow into South America.

South America now that's a high vol. So we saw some coal flowing there, but not what used to and if you back out the Blue Creek tons, we're probably at about the same level in terms of the number of Tom's going.

Speaker #9: South America was a larger part of our market. When we were moving more of a mid-volume product, item line for down into, South America.

Speaker #9: And now that's, a high-volume. So we still have some coal flowing there, but not what used to. And if you back out the BlueClick tons, we're ably at about the same level in terms of the number of tons going, to South America.

South America is just on a percentage basis number.

As dropdown.

I think that will pretty much continue and as we've said before the high vol. A tons right now, especially.

Speaker #9: It's just on a percentage basis, the number, has dropped down. And that's, I think that'll pretty much continue. And as we've id before, the high-volume tons right now, especially, are, moving heavily into Asia.

Moving heavily into Asia.

Got it so maybe.

Maybe just a quick follow up on that I mean.

What is your dialogue with Brazilian steel steelmakers look like to date I mean has there been a need to divert those tons or are they still willing to take them today.

Speaker #8: Got it. So Walt, maybe just a quick follow-up on that. I an, is, what is your dialogue with Brazilians? Steelmakers look like to date?

While they're still taking them.

Alright, well I appreciate the perspective.

Speaker #8: mean, has there been a need to divert those tons or are they still willing to take them today?

Guys keep up the good work.

Thank you thanks, Dan.

Speaker #9: No, they're still taking them.

Your next question will come from George <unk> with UBS. Please go ahead.

Speaker #8: Got . Well, I appreciate the perspective. And, guys, keep up the good .

Yes, good evening, while dial and Brian Hatfield, well can I ask about blue crank plays well.

Speaker #9: Thank ou. Thanks, Nick.

Speaker #7: Your next question will come from George Edie with UBS. Please go head.

Well done on bringing this forward that's a clean win.

Two questions page, especially on costs on looking back at the Blue Creek project out that from SAB rates your cash cost of SaaS guidance here with 90 to one five I short ton can I ask where does that steadfastly kenai in light of the.

Speaker #10: Yeah. Good evening, Walt, Dale, and Brian. Hope you're well. Can I ask about BlueClick, please? So, well done firstly on bringing this forward. That's a clear win.

Speaker #10: I have two questions here. Just firstly on costs, I'm looking back at the BlueClick project update from February. Your cash cost for sales guidance here was 90 to 105.

Pretty good key K cash performance as well and is there potential for this new guy Laurence how much of that is depends on the denominator getting 10 6 million tons.

Speaker #10: A short time. Can I ask where does that sit firstly today? In light of the, you know, pretty good Q2 cash performance as well.

Yes.

George.

Speaker #10: And is there potential for this to go lower? And how much of that is dependent on the denominator getting to 6 million tons?

That guidance was based on <unk> price of $2 50, with a price relativity to that's closer to the 10 year average, which is not where we are today. So that's going to be a little higher than where we are today and we're just coming out of the gate just ramping up so I don't want to really give you.

Speaker #9: Yeah. Well, thanks, George. That guidance was based on a PLV price of 250. With a price relativity to that's closer to the 10-year average, which is not where we are today.

A separate number for Blue Creek, and then it positively impacted the quarter as we start to ramp the full benefit of that will be seen next year when the longwall comes up and we.

Speaker #9: So, that's gonna be a little higher than where we are today. And we're just coming out of the gate just ramping up. So I don't wanna really give you a, a, a separate number for BlueClick other than it positively impacted the quarter.

We haven't we don't have all of this cost in there yet.

Right, Okay. Thanks for that.

Speaker #9: as we start to ramp, you know, the full benefit of that we've seen next year when the Longwell comes up and, you ow, we haven't we don't have all this cost in there yet.

I was just on the volume side can you talk to 6 million tons.

Standard capacity option would be dependent on market conditions can I ask just how you're thinking about that it can I at least levels of 9000 to Asia right now either half as a great.

Speaker #10: Right. Okay. I'm thanks for that. Dale, just on the volume piece though, so you talked to 6 million tons though of the expanded capacity option would be dependent on market conditions.

<unk> said before selling into the Pacific Basin is a drag on my couch at the moment spot less fright into India is sort of like yes. It.

Speaker #10: Can I ask just how you're thinking about that at today's levels? I an, sales into Asia are now over half as a group. well, I think said before, selling into the Pacific basin is a drag.

<unk> taken a lot of $110 short ton.

How do you sort of looking at that given the pretty weak price environment.

Speaker #10: On my calcs at the moment, spotless freight into India is sort of like, you know, it's even low 110s a short ton. how do you sort of looking that given it's a pretty weak price environment?

Well I think I think what we are.

What we're really doing with those tons is knowing that they're going to move into Asia.

<unk>.

And they are as we've said there are much lower cost tons and thats based on the.

Speaker #9: Well, I, I, I think, I think what we're, what we're really doing with, with those tons is knowing that they're gonna move into Asia.

<unk>.

The mine reserve the thicker coal.

And our expectations and what we've seen are consistent with what we had.

Speaker #9: you know, a-and they are a, a, as we've said, they're much lower cost tons. And that's based on the, the mine reserve, the thicker coal.

Projected so we haven't seen anything that would cause us.

To believe that that's not doable on the 6 million tons and when will we do that what we've said is that that's going to be dependent on our placement of those tons into contractual agreements and as we start to get ourselves to the point where.

Speaker #9: And our expectations and what we've seen are consistent with what we had, projected. So we haven't seen anything that would cause us, to believe that, that that's not doable.

Speaker #9: On the 6 million tons and, when will we do that? What we've said is that that's gonna be dependent on our placement of those tons into contractual agreements.

We're contracted to the.

The same as we are at the other mines, let's say up to 80% then we will expand volume.

Speaker #9: And is that we start to get ourselves to the point where, we're contracted, you know, to, to the same as we are at the mines.

What we're not going to do is flood the spot market.

With a bunch of tons and destroy the market, but as we put those tons to bed, we're going to bring additional tons on.

Speaker #9: Let's say up to 80%. Then we'll expand volume. what we're not going to do is flood the spot market, with a bunch of tons and destroy the market.

Yeah, Okay. Thanks.

Can you give us some idea of what crossing was locked in the quarter for Blue Creek, I mean compared to the average of 130 I'm guessing was a bit lower like was it sort of 120, we're thinking I guess more sort of questioning is you called out three drags price realization.

Speaker #9: but as we put those tons to bed, we're gonna bring additional tons on.

Speaker #10: Yeah. Okay. Thanks, Walt. And so can you ive us sort of an idea of what pricing was like in the quarter for BlueClick? I mean, compared to the average of 130, I'm guessing was a bit lower?

<unk> has gone through more highball I'd gone forward and more sales into the Pacific Basin. So I guess is there a risk to that 85% to 90% target price realizations Council with now.

Speaker #10: Like, was it sort of 120 we're thinking? guess my sort of questioning is you called out three drags for gross realization. And there's going to be more high-volume going forward and more sales into the Pacific basin.

Yes, George this is Dale yes, there is as you know what happened in the quarter right. Our gross price realization was 80%, but the biggest driver of those three factors was the price relativity.

Speaker #10: So I guess is there risk to that 85 to 90 percent target gross realization going forward now?

Speaker #9: Yeah. George, this is Dale. yes, there is. As, as you ow, what happened in the quarter, right? Our gross price realization was 80%. But the biggest driver of those three factors was the price relativity.

That spread widened and got as low as 76% during the quarter, which is significantly lower than the last three and a half year average of 88% so while the <unk> didnt move much.

Speaker #9: that spread widened and got as low as 76% during the quarter. Which is significantly lower than the last three and a half year average of 88%.

The Lv HCC dropped during the quarter so that.

Right there has a big drag on our net realized prices as well as freight rates right.

Speaker #9: So while the PLV didn't move much, the, the LVHCC dropped, during the quarter. So that, right there has a big drag on our net realized prices as well as freight rates, right?

So.

But we feel good about what we're doing and developing these markets in Asia that we've never sold into it.

Blue Creek is the perfect.

Speaker #9: so you ow, we feel good about, what we're doing, you ow, developing these markets in Asia that we've never sold into. And, BlueClick is the perfect, product to go into those markets, especially with low cost, in this part of the cycle.

Product to go into those markets, especially with low cost.

And this part of the cycle.

Okay. Thanks for that got us for the vessels.

Thank you thanks.

Your next question will come from catcher <unk> with BMO capital markets. Please go ahead.

Speaker #10: Okay. Thanks for that, guys. All the .

Hi, Thank you for taking my questions, maybe staying on Blue Creek given that the longwall is ahead of schedule, how should we think about overall production and sales volume next year.

Speaker #9: Thank ou. Thanks.

Speaker #7: Your next question will come from Katya Jansik with BMO Capital Markets. Please go head.

Speaker #11: Hi. Thank you for taking my questions. Maybe staying on BlueClick, given that the Longwell is ahead of schedule, how should we think about overall production and sales volume next year?

In the past.

Around 3 million tons, if im not mistaken.

Yes, I think this is walter thanks.

Thanks for the question I think we can probably safely assume before starting a quarter earlier than we had said that the <unk>.

Speaker #11: I ink in the past it was, around 3 million tons, if I'm not mistaken.

Hans will go up accordingly, and.

Speaker #9: Yeah. Yeah, I think this is Walt. I, thanks for the estion. I, I think we can probably safely assume if we're ing a quarter earlier, than we had said that the, the tons will go up accordingly.

We haven't put a number out there, but I think we're approaching four.

Next year given.

What we're looking at and the fact that that longwall comes online more quickly.

Speaker #9: And I, you know, we haven't put a number out there, but I think we're approaching four. next year given, you know, where what we're looking at and the fact that that Longwell comes online more quickly.

Yes, depending on the timing katia.

When it comes on next.

Next year, we said early first quarter, which can be anywhere from January one to the middle of February kind of our thought process there.

Speaker #8: Yeah. And depending on the timing, Katya, when it comes on, you know, next year, we said early first quarter, which could be anywhere from January 1st to the middle of February, sounds like thought process there.

So really going to be dependent on.

That timing so when we do release guidance for 2026, we will hopefully have a little more accurate number.

And I think you mentioned most of the at least right now Blue Creek volume goes to Asia, and I'm, assuming that's going to be the same trend going forward.

Speaker #8: So, really gonna be dependent on, you know, that timing. So when we do release guidance for 2026, we'll, 'll hopefully have a little more, a-accurate number.

Our dos contract Mod.

Speaker #11: And I think you mentioned most of the, at least right now, BlueClick volume goes to Asia. And I'm uming that's gonna be the same trend going forward.

More tied to CFR or <unk> basis.

Right now as CFR, primarily.

Speaker #11: Are those contracts more tied to CFR or FOB basis?

And longer term is it.

Are you planning to or is there a probability that youre going to tie it more to applebee.

Speaker #9: right it's, CFR primarily.

<unk>.

I think that I think that will happen over time.

Speaker #11: And, and longer term, i-is it, are you planning to, or is there, a, a probability that you're gonna tie it more to FOB? Essentially?

When we look at where we are in the market right now.

I think we're at the low point and where the.

The customer has quite a bit of leverage so I think when youre looking at.

Speaker #9: I think that, I think that will happen over time. You know, just, you know, when we look at where we are in market right now, you know, I, I think we're at, at the low point.

Sure.

Both the average pricing in the transportation.

Speaker #9: And where the, the customer has quite bit of leverage. So I think when you're looking at, both the average pricing and the transportation, right now, we're kind of the, I would say that the tougher part of the market from our standpoint.

Right now we're at <unk>.

On the.

Let's say the tougher part of the market from our standpoint.

Yeah, especially based over the life of the mine and at 40 50 years.

We do think that things will change in the next part of the cycle.

And maybe one last one if I may on the 45 is there any preliminary estimate that you could give us how much it could impact your.

Speaker #8: Yeah. Especially based over the life of a mine, you know, 40, 50 years. You know, we do think that, you know, things will change in the next part of the cycle.

How much you can get impacted by it.

Speaker #11: And maybe one more last one, if I may. On the 45X, is there any preliminary estimates that you could give us regarding how much it could impact your operations? How much you can be impacted by it?

Alright.

Yes, we're still looking at all the details of that build.

And to calculate on a lot of us are costs.

Variable so it's going to depend on met coal pricing so.

Speaker #9: Yeah. We're still looking at, all the details of that build. and to calculate and a lot of us, our costs will, or variables, so it's gonna depend on net coal pricing.

It could be a somewhat of a larger range you know it could be 30% to $40 million per year, it could be a little higher than that just depending on.

Met coal prices are transportation and royalty cost. So that's just a rough rough estimate but.

Speaker #9: So, you know, it, it could be a somewhat a larger range. You know, it could be 30 to 40 million per year. could be a little higher than that, just depending on, where net coal prices go and our transportation and royalty costs.

We will be digging into the details and have a better idea as we get into 'twenty six.

Perfect. Thank you.

Speaker #9: So, that's just a rough, rough estimate. But, you know, we'll be digging into the details and have a better idea as we get into 2026.

Thank you again.

Have a question. Please press Star then one.

Your next question will come from Nathan Martin with the Benchmark Company. Please go ahead.

Speaker #11: Perfect. Thank ou.

Speaker #9: Thank ou.

Speaker #7: Again. If you a question, please press star, then one. Your next question will come from Nathan Martin with the Benchmark Company. Please go head.

Thanks, operator, good afternoon, guys just wanted to touch on the updated cash cost guidance real quick on the 110 to 120 per ton.

I think you previously assumed $200 per metric ton average premium low vol price for your prior guidance range.

Speaker #12: Thanks, Operator. good afternoon, guys. just wanna touch on the updated cash cost guidance real quick, down to 110 to 120 per ton. Dale, I think you previously assumed, you know, $200 per metric ton, average premium low-ball price for your prior guidance range.

Incorporate in that new range.

Yes.

Okay.

Follow up question, there because earlier I didn't factor in as I said, there might be some additional cost to come back later in the second half of.

Speaker #12: What's, incorporated in that new range, please?

Speaker #9: Yeah. Nate, good follow-up question there because earlier I didn't factor in, as I said, there might be some additional costs that come back later in the second half.

If prices average a little bit higher in the second half that's kind of factored into that range. So we're still in a battle.

175 to 200 range price.

Speaker #9: But, you ow, if prices do re average a little higher in the second half, it's kind of factored into that range. So we're still at about a 175 to 200 range, price.

Okay I appreciate that Thats helpful.

And then maybe.

Just taking a step back for a second and looking at the markets. In General you guys noted many of the challenges that we've been seeing kind of persist are negatively impacting customer demand and pricing clearly.

Speaker #12: Okay, Dale. Appreciate that. That's pful. and then maybe, just taking a step back for second and, and looking at the, the markets in general, you guys noted, you know, many of the challenges that we've been seeing kind of persist and are negatively impacting customer demand and, pricing clearly.

So against that backdrop, just curious what's driving the increase in production sales guidance that you guys are sitting now for the full year.

Speaker #12: So I, I guess that backdrop, just curious, you ow, what's, what's driving, you ow, the increase in production and sales guidance that you guys are seeing now for the full year?

Our increased sales volume and production well, what's driving what's driving those numbers as are our minds are running very very well and for us the best way to maintain our low cost structure and maintaining a high volume number.

Speaker #9: Our, our increased sales volume and, and production? Well, what's

Speaker #12: Yeah.

Speaker #9: driving, what's driving those numbers is, you know, our, our mines are running very, very well. And for us, the best way to maintain a low-cost structure is to maintain a high-volume number.

Blue Creek is.

It has a lot of inventory and we have a high contracted volumes and we're going to push.

Speaker #9: and BlueClick is, has a lot of inventory and, you know, we, we have a high contracted volumes and we're gonna push.

Okay got it.

And then maybe just one final question.

It would be great maybe get your thoughts on the recently announced specific Norfolk southern merger.

Speaker #12: Okay. Got it. Well, and then maybe just one final question, you ow, it'd be great maybe to get your thoughts on the recently announced, you know, Pacific Norfolk Southern merger.

Given you're now shipping Accelerant Blue Creek.

Curious if you guys have any thoughts about that combination how it could impact your business.

Speaker #12: Just given ou're now shipping, you know, with Norfolk Southern at BlueClick, just curious if you guys have any thoughts about that combination, how it could impact your .

I think interestingly.

The.

The area, where we will be shipping from and two is I'm not going to say, it's a closed loop, but it's a relatively.

Closed loop, where a railroad is able to dedicate a certain number of sets and they just basically run on the FERC <unk> and theres not a lot of interference for them from spot to spot. So it's very good business for us.

The rail provider and it's very good business for us.

So I don't think we will see a lot of impact from that but also don't forget. We also have the new barge load out that's growing in that will come online and if we see more of a struggle in terms of rail performance.

We can shift to better barge performance.

Got it I'll leave it there I appreciate the time guys.

Best of luck in the second half.

Thank you thanks, Dave.

Your next question will come from once again, George EDI with UBS. Please go ahead.

Hi, sorry, just a quick on the cost can you just remind us the cost base roughly how much is variable versus fixed and old Navy as well as royalties how to best think about what sort of percent of the variable cost side, that's averaged three cycles.

Yes, George I would just suggest looking at the percentages, we provided in our press release cost of production and 67% year to date transportation royalties a third of our.

Our cash cost.

We don't go into the variability, we can't get into that detail of the transportation and royalties.

Hi, guys just one another as well SG&A was down 34% Q on Q and sort of tracking thoughts of <unk> 8 million.

Yeah, George. I would just suggest looking at the percentage as we provide in our press release cost of production, 67% year to date, Transportation royalties, a third of uh our cash cost.

<unk> any sort of raising that would jump in half two of any reason you, Brian <unk> guidance I guess.

Um, you know, we don't go into the variability. We can't get into that detail of the transportation role, please.

Well as we ramp up Blue Creek, we do have some additional needs. There that may come online later this year to kind of get to that higher end of that range. So.

Okay, I just want to know as well, sdna was down. 35% Q on Q and sort of tracking 5 to 15 million below the guide and range. Any sort of reason that would jump in half too or any reason um, you won't be below guidance, I guess.

That's what's built into the guidance.

Yes, Thanks Scott.

At this time there are no further questions I will now turn the call over to Mr. Schiller for any comments.

That concludes our call. This afternoon. Thank you again for joining US today, we appreciate criticism warrior.

Well, as we ramp up Blue Creek, we do have some additional needs there that, you know, may come online a little later this year to kind of get to that higher end of that range. So um you know that's that's what's built into the guidance.

Thank you and that concludes today's conference. Thank you all for participating you may now disconnect.

Hello, this is any for the questions.

Sorry. No yeah, thanks guys, that's all.

All right, perfect.

At this time, there are no further questions. I will now turn the call over to Mr. Scheller for any comments.

That concludes our call this afternoon. Thank you again for joining us today. We appreciate your assistance and Warrior

Thank you and that concludes today's conference. Thank you all for participating. You may now. Disconnect