Q1 2026 Core Natural Resources Inc Earnings Call

May 7, 2026

Operator: Good morning, ladies and gentlemen, welcome to the Core Natural Resources Inc. Q1 2026 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 7 May 2026. I would now like to turn the conference over to Deck Slone. Please go ahead.

Speaker #1: to Deck Slone. Please go

Speaker #2: Good morning from Cannonsburg, Pennsylvania, everyone, and thanks for joining us today. 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.

Deck Slone: Good morning from Canonsburg, Pennsylvania, everyone, and thanks for joining us today. 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 of 1995. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed 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.

Speaker #2: Forward-looking statements by their nature address matters that are to different degrees uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements.

Speaker #2: 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.

Speaker #2: I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release a copy of which we have posted in the Investors section of our website at corenaturalresources.com.

Deck Slone: I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the investor section of our website at corenaturalresources.com. Also participating on this morning's call will be Jimmy Brock, our Chairman and CEO; Mitesh Thakkar, our President and CFO; and Robert Braithwaite, our Senior Vice President of Marketing and Sales. After some formal remarks from Jimmy and Mitesh, we will be happy to take questions. With that, I'll now turn the call over to Jimmy. Jimmy?

Speaker #2: Also, participating on this morning's call will be Jimmy Brock, our chairman and CEO, Miteshkumar Thakkar, our president and CFO, and Bob Braithwaite, our senior vice president of marketing and sales.

Speaker #2: After some formal remarks from Jimmy and Mitesh, we will be happy to take questions. With that, I'll now turn the call over to Jimmy.

Speaker #2: Jimmy?

Speaker #3: Thank you, Deck, and good morning, everyone. After a challenging 2025, I am excited to report a strong start to 2026. Our results for this quarter reflect the resilience of our business model and the commitment of our team members across the company.

Jimmy Brock: Thank you, Deck. Good morning, everyone. After a challenging 2025, I am excited to report a strong start to 2026. Our results for this quarter reflect the resilience of our business model and the commitment of our team members across the company. Our operating platform delivered efficient, reliable performance throughout Q1, underpinned by our safety-driven culture. As we turned the page from the Leer South fire, the mine set the pace, achieving strong production and cash cost performance throughout the quarter. As expected, the mining conditions have been favorable, and we are now running as a premier world-class longwall mine. In addition, West Elk shifted into high gear in the B seam, where geologic conditions are favorable, capturing significant operational efficiencies with an improved cost structure. Now, let me dive a little deeper into our operational results.

Speaker #3: Our operating platform delivered efficient, reliable performance throughout the first quarter, underpinned by our safety-driven culture. As we turned the page from the Lear South fire, the mindset the pace, achieving strong production and cash-cost performance throughout the quarter.

Speaker #3: As expected, the mining conditions have been favorable, and we are now running as a premier world-class long-haul mine. In addition, West Elk shifted into high gear in the B scene, where geologic conditions are favorable, capturing significant operational efficiencies with an improved cost structure.

Speaker #3: Now, let me dive a little deeper into our operational results. Coal sales within the high-CB thermal segment came in at 7.7 million tons in Q1 '26 compared to 7.8 million tons in Q4 of '25.

Jimmy Brock: Coal sales within the High CV Thermal segment came in at 7.7 million tons in Q1 2026 compared to 7.8 million tons in Q4 2025. During the quarter, our High CV Thermal segment reported realized coal revenue of $58.86 per ton compared to $58.11 per ton in the previous quarter. In Q1 2026, cash cost came in at $42.56 per ton compared to $41.42 per ton in Q4 2025. Segment cash costs for the current quarter were elevated due in part to this winter's Arctic outbreak, which drastically increased power cost at the Pennsylvania Mining Complex, as well as a few weeks of tough mining conditions, which are now behind us at PMC.

Speaker #3: During the quarter, our high-CB thermal segment reported realized coal revenue of $58.86 per ton, compared to $58.11 per ton in the previous quarter. In Q1 '26, cash costs came in at $42.56 per ton, compared to $41.42 per ton in Q4 '25.

Speaker #3: Segment cash costs for the current quarter were elevated due in part to this winter's Arctic outbreak, which drastically increased power costs at the Pennsylvania mining complex, as well as a few weeks of tough mining conditions, which are now behind us at PMC.

Speaker #3: In the metallurgical segment, coke and coal sales came in at 2.1 million tons in Q1 '26. During the quarter, our metallurgical segment reported realized coke and coal revenue of $122.11 per ton, which represented a 7% improvement over the previous quarter.

Jimmy Brock: In the Metallurgical segment, coke and coal sales came in at 2.1 million tons in Q1 2026. During the quarter, our Metallurgical segment reported realized coke and coal revenue of $122.11 per ton, which represented a 7% improvement over the previous quarter. The segment as a whole, inclusive of the 300,000 tons of thermal byproduct sales, achieved an average selling price of $112.03 per ton. Segment realization increased $6.58 per ton compared to the previous quarter. Cash costs for the quarter came in at $92.35 per ton compared to $103.49 per ton in the previous period, reflecting a full operating quarter at Leer South Mine.

Speaker #3: The segment as a whole inclusive of the 300,000 tons of thermal byproduct sales achieved an average selling price of $112.03 per ton. Segment realization increased $6.58 per ton compared to the previous quarter.

Speaker #3: Cash costs for the quarter came in at $92.35 per ton, compared to $103.49 per ton in the previous period, reflecting a full operating quarter at Lear South mine.

Speaker #3: Adjusted EBITDA for the segment totaled $58 million which was up 79 million from the previous period. In the Powder River Basin segment, coal sales within the segment came in at $11.9 million tons in Q1 '26.

Jimmy Brock: Adjusted EBITDA for the segment totaled $58 million, which was up $79 million from the previous period. In the Powder River Basin segment, coal sales within the segment came in at 11.9 million tons in Q1 2026. During the quarter, our PRB segment reported realized coal revenue of $14.39 per ton and cash cost of $13.64 per ton, which was in line with the prior quarter's cash cost of $13.62 per ton. Due to the current conflict in the Middle East, we are seeing significant increases in diesel prices. While there was a limited impact of higher diesel prices in Q1, we expect it to weigh on our PRB margins in the future periods if these elevated prices continue. Moving to the Core Marine Terminal.

Speaker #3: During the quarter, our PRB segment reported realized coal revenue of $14.39 per ton, and cash costs of $13.64 per ton, which was in line with the prior quarter's cash costs of $13.62 per ton.

Speaker #3: Due to the current conflict in the Middle East, we are seeing significant increases in diesel prices. While there was a limited impact of higher diesel prices in Q1, we expect it to weigh on our PRB margins in the future periods if these elevated prices continue.

Speaker #3: Moving to the core marine terminal. The CMT shipped $4.8 million tons during the first quarter of 2026, compared to $5 million tons in Q4 of '25.

Jimmy Brock: The CMT shipped 4.8 million tons during Q1 2026 compared to 5 million tons in Q4 2025. CMT reported $16 million in Adjusted EBITDA in Q1 2026, which was in line with the previous quarter. As a result of our strong financial performance, we were again able to return significant value to our shareholders. As you know, our capital return framework targets the return to stockholders of around 75% of free cash flow, the majority of which will be returned via share repurchases. During Q1 2026, we returned $47 million to our shareholders or 85% of free cash flow, with $42 million invested in share repurchases and $5 million in the form of dividends. Since the program's inception in February 2025, we have deployed $292 million via the capital return program.

Speaker #3: CMT reported $16 million in adjusted EBITDA in Q1 '26, which was in line with the previous quarter. As a result of our strong financial performance, we were again able to return significant value to our shareholders.

Speaker #3: As you know, our capital return framework targets the return to stockholders of around 75% of free cash flow, the majority of which will be returned via share repurchases.

Speaker #3: During Q1 '26, we returned $47 million to our shareholders, or 85% of free cash flow, with $42 million invested in share repurchases and $5 million in the form of dividends.

Speaker #3: Since the program's inception in February of 2025, we have deployed $292 million via the capital return program. Of that total, $266 million has been used to repurchase approximately 7% of the company's shares outstanding as of the program's inception.

Jimmy Brock: Of that total, $266 million has been used to repurchase approximately 7% of the company's shares outstanding as of the program's inception. Now that the operating platform is at full strength, we expect strong shareholder returns to continue. Now let me turn the call over to Mitesh to provide the marketing and financial updates.

Speaker #3: Now that the operating platform is at full strength, we expect strong shareholder returns to continue. Now, let me turn the call over to Mitesh to provide the marketing and financial updates.

Speaker #2: Thank you, Jimmy, and good morning, everyone. Let me start by providing an update on our financial performance. This morning, we reported solid first-quarter financial results.

Mitesh Thakkar: Thank you, Jimmy. Good morning, everyone. Let me start by providing an update on our financial performance. This morning, we reported solid Q1 financial results. For Q1 2026, we reported net income of $21 million or $0.41 per diluted share and Adjusted EBITDA of $180 million compared to a net loss of $79 million and Adjusted EBITDA of $103 million in Q4 2025 due to a strong contribution from our metallurgical coal platform. In the quarter, we spent $73 million on capital expenditures and generated $56 million in free cash flow, which was impacted by -$52 million of working capital changes, including the timing impact of the 45X tax credit accrual versus cash benefit.

Speaker #2: For 2026, we reported net income of $21 million or 41 cents per diluted share and adjusted EBITDA of $180 million compared to a net loss of $79 million and adjusted EBITDA of $103 million in 4Q25 due to a strong contribution from our metallurgical coal platform.

Speaker #2: In the quarter, we spent $73 million on capital expenditures and generated $56 million in free cash flow. Which was impacted by $52 million of negative working capital changes including the timing impact of the 45X tax credit accrual versus cash benefit.

Speaker #2: At the end of the first quarter, we had total liquidity of $935 million including $413 million in unrestricted cash and cash equivalents. Now, let me update you on the marketing front.

Mitesh Thakkar: At the end of Q1, we had total liquidity of $935 million, including $413 million in unrestricted cash and cash equivalents. Let me update you on the marketing front. Global energy markets have been quite volatile in recent months given the ongoing Middle East conflict. On the metallurgical export front, the threat of a global economic downturn caused by the conflict continues to broadly weigh on demand in these markets. Counterbalancing that fact, we are also seeing some challenges on the supply side. The closure of the Strait of Hormuz is having a significant impact on diesel supplies into Australia and could lead to fuel rationing measures, potentially reducing coal supplies. Those cost pressures come on the heels of heavy rainfall-related supply disruptions in Australia earlier this year.

Speaker #2: Global energy markets have been quite volatile in recent months given the ongoing Middle East conflict. On the metallurgical export front, the threat of a global economic downturn caused by the conflict continues to broadly weigh on demand in these markets.

Speaker #2: Counterbalancing that fact, we are also seeing some challenges on the supply side. The closure of the Strait of Hormuz is having a significant impact on diesel supplies into Australia and could lead to fuel rationing measures potentially reducing coal supplies.

Speaker #2: Those cost pressures come on the heels of heavy rainfall-related supply disruptions in Australia earlier this year. As a result, Australian PLV benchmark prices have remained elevated, and we continue to position core to capitalize on that fact.

Mitesh Thakkar: As a result, Australian PLV benchmark prices have remained elevated, and we continue to position Core to capitalize on that fact. In contrast, the international thermal markets are benefiting from energy supply disruptions and fuel switching tailwinds due to disrupted oil and gas flows through the Strait of Hormuz. There is a view that European natural gas prices will remain elevated this summer to incentivize gas to coal switching to allow Europe to shore up its natural gas inventories ahead of the winter. The EU is also looking into returning legacy coal-fired power plants from capacity reserve to the wholesale markets, which could act to bolster coal demand. Pet coke prices in India have also risen significantly since the start of the year, which is benefiting the demand for our PAMC coal.

Speaker #2: In contrast, from energy supply disruptions and fuel-switching tailwinds due to disrupted oil and gas flows through the Strait of Hormuz. There is a view that European natural gas prices will remain elevated this summer to incentivize gas-to-coal switching to allow Europe to shore up its natural gas inventories ahead of the winter.

Speaker #2: The EU is also looking into returning legacy coal-fired power plants from capacity reserve to the wholesale markets, which could act to bolster coal demand.

Speaker #2: PETCO prices in India have also risen significantly since the start of the year, which is benefiting the demand for our PMC coal. In the domestic thermal market, coal consumption declined during the first quarter due to weak natural gas pricing and increased natural gas inventories.

Mitesh Thakkar: In the domestic thermal market, coal consumption declined during Q1 due to weak natural gas pricing and increased natural gas inventories. Despite the decline in consumption, power plant coal inventories have reduced since the end of 2025. Longer term, we remain bullish on the outlook for domestic thermal coal demand given the robust planned data center build-out. Recently, the State of Pennsylvania has taken steps to enable the Keystone and Conemaugh coal-fired power plants to continue operating through at least 2032 and potentially much longer. We strongly support this extension, which will boost the availability of affordable and reliable energy here in our backyard. During the quarter, we continued to build momentum on the contracting front, including further expanding our West Elk coal shipments into domestic utilities in the Eastern United States.

Mitesh Thakkar: In the domestic thermal market, coal consumption declined during Q1 due to weak natural gas pricing and increased natural gas inventories. However, despite the decline in consumption, power plant coal inventories have reduced since the end of 2025. Longer term, we remain bullish on the outlook for domestic thermal coal demand given the robust planned data center build-out. Recently, the State of Pennsylvania has taken steps to enable the Keystone and Conemaugh coal-fired power plants to continue operating through at least 2032 and potentially much longer. We strongly support this extension, which will boost the availability of affordable and reliable energy here in our backyard. During the quarter, we continued to build momentum on the contracting front, including further expanding our West Elk coal shipments into domestic utilities in the Eastern United States.

Speaker #2: However, despite the decline in consumption, power plant coal inventories have reduced since the end of 2025. Longer-term, we remain bullish on the outlook for domestic thermal coal demand given the robust planned data center buildout.

Speaker #2: Recently, the state of Pennsylvania has taken steps to enable the Keystone and Conema coal-fired power plants to continue operating through at least 2032, and potentially much longer.

Speaker #2: We strongly support this extension, which will boost the availability of affordable and reliable energy here in our backyard. During the quarter, we continue to build momentum on the contracting front, including further expanding our Vestal coal shipments into domestic utilities in the eastern United States.

Speaker #2: As a reminder, since the fourth quarter, we have had good success with test-burning Vestal coal at number of eastern power plants and have entered into a term contract.

Mitesh Thakkar: As a reminder, since the Q4, we have had good success with test burning West Elk coal at a number of eastern power plants and have entered into a term contract. We appreciate the support of our railroad partners in helping unlock this opportunity and enabling re-reliable delivery into these markets. Since year-end 2025, our marketing team has made meaningful progress broadening and extending our sales book, securing an additional 11.5 million tons of contracted volume through 2028 at attractive prices. Building on that long-term foundation, we have also strengthened our near-term position for 2026 across each of our mine segments. Now, let me provide an update on our outlook for 2026. On the guidance front, we are generally maintaining our guidance levels as indicated in the earnings release, with the exception of our segment-level sold positions.

Speaker #2: We appreciate the support of our railroad partners in helping unlock this opportunity and enabling reliable delivery into these markets. Since year-end 2025, our marketing team has made meaningful progress broadening and extending our sales book, securing an additional 11.5 million tons of contracted volume through 2028 at attractive prices.

Speaker #2: Building on that long-term foundation, we have also strengthened our near-term position for 2026 across each of our mine segments. Now, let me provide an update on our outlook for 2026.

Speaker #2: On the guidance front, we are generally maintaining our guidance levels as indicated in the earnings release with the exception of our segment-level sold positions.

Speaker #2: In the high CV thermal segment, we added 5.6 million tons to our sold position, bringing our total contracted volume to 29.1 million tons. The high CV thermal segment is now 94% contracted, at the midpoint of the guidance range, an average coal revenue on the committed and collared tons is projected to be $57.85 per ton.

Mitesh Thakkar: In the High CV thermal segment, we added 5.6 million tons to our sold position, bringing our total contracted volume to 29.1 million tons. The High CV thermal segment is now 94% contracted at the midpoint of the guidance range, and average coal revenue on the committed and colored tons is projected to be $57.85 per ton. For the Metallurgical segment, we added 1.6 million tons to our sold position, bringing the segment to 8.3 million coking tons contracted for 2026 with approximately 3.8 million tons priced at an expected average coal revenue of $122.40 per ton. For the PRB segment, our contracted position now stands at approximately 48 million tons at an expected average coal revenue of $14.20 per ton.

Speaker #2: For the metallurgical segment, we added 1.6 million tons to our sold position, bringing the segment to 8.3 million coking tons contracted for 2026, with approximately 3.8 million tons priced at an expected average coal revenue of $122.40 per ton.

Speaker #2: For the PRB segment, our contracted position now stands at approximately 48 million tons at an expected average coal revenue of $14.20 per ton. Lastly, on the cash SG&A front, we had, as expected, some residual integration-related costs in Q1.

Mitesh Thakkar: Lastly, on the cash SG&A front, we had, as expected, some residual integration-related costs in Q1, but expect those costs to phase out as we progress through the year. Finally, let me provide a quick update on our Core Innovations Group, which has been extremely busy growing our capabilities to support the aerospace and defense industries. During the first part of 2026, we completed a 30% expansion of our manufacturing facility in Triadelphia, West Virginia, and spent $8 million on acquiring Sawyer Composite in Fort Worth, Texas, to further accelerate our growth and elevate our profile in the aerospace supply chain. With these moves, we have built upon our coal-based CFOAM materials business to now become a full-service provider of high-performance materials, tooling, parts, and assemblies to meet the growing needs of our nation's aerospace and defense sector.

Speaker #2: But expect those costs to phase out as we progress through the year. Finally, let me provide a quick update on our core innovations group.

Speaker #2: Which has been extremely busy growing our capabilities to support the aerospace and defense industries. During the first part of 2026, we completed a 30% expansion of our manufacturing facility in Tridelphia, West Virginia, and spent $8 million on acquiring soil composite in Fort Worth, Texas, to further accelerate our growth and elevate our profile in the aerospace supply chain.

Speaker #2: With these moves, we have built upon our coal-based C4 materials business to now become a full-service provider of high-performance materials tooling, parts, and assemblies to meet the growing needs of our nation's aerospace and defense sector.

Speaker #2: Between our West Virginia and Texas locations, our aerospace venture now has 75,000 square feet of manufacturing space, 80 employees, and serves more than 40 customers including many of the top defense primes.

Mitesh Thakkar: Between our West Virginia and Texas locations, our aerospace venture now has 75,000 sq ft of manufacturing space, 80 employees, and serves more than 40 customers, including many of the top defense primes. We see a lot of opportunities for continued growth in this business. Now let me pass it back to Jimmy for some closing remarks before we open the call for Q&A.

Speaker #2: We see a lot of opportunities for continued growth in this business. Now, let me pass it back to Jimmy for some closing remarks before we open the call for Q&A.

Speaker #3: Thanks, Mitesh. As we head into the second quarter and beyond, there are a few key areas of focus. First, we will continue to identify best practices across our operations while sustaining our safety-driven culture.

Jimmy Brock: Thanks, Mitesh. As we head into Q2 and beyond, there are a few key areas of focus. First, we will continue to identify best practices across our operations while sustaining our safety-driven culture. Second, I am optimistic about our cost outcomes in the High CV thermal and metallurgical segments. With both PAMC longwalls out of the tough mining conditions we saw in Q1 of 2026, power prices normalizing, and Leer transitioning to the north reserves, we expect our costs to improve relative to Q1. Third, we are actively pursuing insurance recoveries from the Leer South fire event. We are pleased with the results of Q1 2026 as they mark Q1 after the merger with all our assets fully operational. I believe we have just scratched the surface with our capabilities, both operationally and financially.

Speaker #3: Second, I am optimistic about our cost outcomes in the high-CV thermal and metallurgical segments. With both PMC Longwell's out-of-the-tuff mining conditions we saw in Q1 of '26, power prices normalizing, and LEAR transitioning to the north reserves, we expect our costs to improve relative to the first quarter.

Speaker #3: Third, we are actively pursuing insurance recoveries from the LEAR South fire event. We are pleased with the results of Q1 '26 as they mark the first quarter after the merger with all our assets fully operational.

Speaker #3: I believe we have just scratched the surface with our capabilities, both operationally and financially. Going forward, we will focus on our controllables, as the markets remain dynamic.

Jimmy Brock: Going forward, we will focus on our controllables as the markets remain dynamic, given the global economic uncertainty. Our high-rank coals, however, continue to receive strong demand as we shift focus to the most advantageous market for our products. Throughout our operations, we continue to focus on cost-saving measures during this market uncertainty, we fully anticipate carrying this positive momentum throughout the rest of the year. Finally, let me finish by recognizing our employees. Throughout last year, they worked tirelessly to integrate and develop Core Natural Resources into what it is today, a premier world-class company. Throughout 2025, the teams believed in the vision as we pushed to restart the Leer South longwall and focused on identifying best practices.

Speaker #3: Given the global economic uncertainty, our high-rank coals, however, continue to receive strong demand as we shift focus to the most advantageous market for our product.

Speaker #3: Throughout our operations, we continue to focus on cost-saving measures during this market uncertainty, and we fully anticipate Canada's positive momentum throughout the rest of the year.

Speaker #3: Finally, let me finish by recognizing our employees. Throughout last year, they worked tirelessly to integrate and develop core natural resources into what it is today, a premier world-class company.

Speaker #3: Throughout 2025, the teams believed in the vision as we push to restart the LEAR South Longwell and focus on identifying best practices. We are accustomed to navigating the cyclical nature of the coal markets, and we will continue to manage our costs while focusing on our core values of safety and compliance, continuous improvement, and financial performance.

Jimmy Brock: We are accustomed to navigating the cyclical nature of the coal markets, and we will continue to manage our costs while focusing on our core values of safety and compliance, continuous improvement, and financial performance. With that, I will hand the call back over to the operator to begin the Q&A portion of our call. Operator, can you please provide the instructions to our callers?

Speaker #3: With that, I will hand the call back over to the operator to begin the Q&A portion of our call. Operator, can you please provide the instructions to our callers?

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the 1 on your touch-tone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any key. One moment please for your first question. Your first question comes from George Eadie with UBS. Please go ahead.

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the 2.

Speaker #1: If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from George Eady, with UBS.

Speaker #1: Please go ahead.

Speaker #4: Yeah, good day, gents. Thanks for the call today. Firstly, just on the high CV segment, can you remind me the sensitivity of that 28.5 to the API 2 price, given I think there was sort of 3 or 4 million tons pegged at the API 2 benchmark?

George Eadie: Yeah, good day, gents. Thanks for the call today. Firstly, just on the High CV segment, can you remind me the sensitivity of that 28.5 to the API 2 price given? I think there was sort of 3 or 4 million tons pegged at the API 2 benchmark.

Speaker #3: Sure, George. This is Bob. So for the balance of volume, we have left to sell Q2 through Q4. It's just around 3 million tons is linked to API 2.

Robert Braithwaite: Sure, George. This is Bob. For the balance of volume, we have left to sell Q2 through Q4. Just around 3 million tons is linked to API 2. We also have a little bit, call it 300,000 tons linked to High-Vol B as well. The rest is fixed price. Right now, the sensitivity is roughly about $0.07 a ton across the segment. That's assuming about a $120 API 2 price. Right now, API 2 is around $110, $115, but we expect that to continue to be volatile as you know what's going on in the Middle East.

Speaker #3: We also have a little bit call it 300,000 tons linked to high vol B as well. The rest is fixed price. And right now, the sensitivity is roughly about 7 cents a ton across a segment.

Speaker #3: And that's assuming about 120-dollar API 2 price. Right now, API 2 is around 110, 115, but we expect that to continue to be volatile as you know what's going on in the Middle East.

Speaker #4: Yes, thanks, Bob. And then just on the tons contracted for 2027, for each business segment, can you just remind me what percent of the business is contracted next year, please?

George Eadie: Yeah. Thanks, Bob. Just on the tons contracted for 2027. For each business segment, can you just remind me what percent of the business is contracted next year, please?

Speaker #3: Yeah, so on our high CV segment, we're sitting here roughly give or take around 50% of our volume contracted. And to be honest with you, if you look at PMC in West Elk, it's basically 50/50.

Robert Braithwaite: Yeah. Under High CV segment, we're sitting here roughly give or take around 50% of our volume contracted. To be honest with you, if you look at PAMC and West Elk, it's basically 50/50 in terms of where we are against what our expected production is going to be in 2027. The good news for us is, we've certainly been able to take advantage of the situation in the Middle East over the last couple months and lock in some volumes at some attractive pricing when API 2 prices were up in that 130, 140 range. You know, we're not prepared to give exactly, you know, what we're looking at pricing-wise. I can tell you the market, if you look at year-on-year, isn't gonna change.

Speaker #3: In terms of where we are against what our expected production is going to be in 2027, the good news for us is we've certainly been able to take advantage of the situation in the Middle East over the last couple of months.

Speaker #3: And lock in some volumes at some attractive pricing when API 2 prices were up in that 130, 140 range. So we're not prepared to give exactly what we're looking at pricing-wise, but I can tell you the market, if you look at year-on-year, isn't continuing.

Speaker #4: Yeah, great. Thanks, Bob. And then lastly, Mitesh, sorry if I missed this earlier, but insurance prices, can you remind us the timing and latest on dollars as well there for the rest of the year?

George Eadie: Yeah, great. Thanks, Bob. Then lastly, Mitesh, sorry if I missed this earlier, but insurance pricing, can you remind us the timing and latest on dollars as well there for rest of the year?

Speaker #3: Yeah, George, sure. So as you know, the Baltimore Bridge claim has settled on the LEAR South front. We have submitted our final claims which indicate a limit loss.

Mitesh Thakkar: Yeah, George. Sure. As you know, the Baltimore Bridge claim has settled on the Leer South front. We have submitted our final claims, which indicate a limit loss. The insurance companies are reviewing the claims and going through their internal review and approval process, which could take different times for different insurance companies. However, we are optimistic that we'll start seeing some approvals trickle here in Q2. In aggregate, I would expect to collect another $100 million in incremental proceeds from insurance.

Speaker #3: The insurance companies are reviewing the claims and going through their internal review and approval process, which could take different times for different insurance companies.

Speaker #3: However, we are optimistic that we'll start seeing some approvals trickle here into Q. In aggregate, I would expect to collect another 100 million dollars in incremental proceeds from insurance.

Speaker #4: Yeah, okay. That's super helpful. Thanks, gents.

George Eadie: Yeah. Okay. That's super helpful. Thanks a ton.

Speaker #3: Thank you, George.

Mitesh Thakkar: Thank you, George.

Nick Giles: Thanks, George.

Speaker #2: Thanks, George.

Speaker #1: The next question comes from Nick Giles, with B. Riley Securities. Please go ahead.

Operator: The next question comes from Nick Giles with B. Riley Securities. Please go ahead.

Speaker #2: Yeah, thanks, operator. Good morning, everyone. I just wanted to go back to high CV cash costs. Obviously, elevated here in one Q, but you've maintained the guide.

Nick Giles: Yeah, thanks, operator. Good morning, everyone. I just wanted to go back to, you know, High CV cash costs, obviously elevated here in Q1, but you've maintained the guide. Can you just help us understand kind of the cadence of those cost improvements throughout the year, kind of sensitivity to electricity prices and then how much West Elk is contributing today?

Speaker #2: Can you just help us understand kind of the cadence of those cost improvements throughout the year? Kind of sensitivity to electricity prices, and then how much West Elk is contributing today?

Speaker #3: Hi, Nick. It's Jimmy. Yeah, we left our guidance alone. When you look on the cost side of it, because we had some things in Q1 that I feel like it's going to normalize and we'll be back on track in Q2.

Jimmy Brock: Hi, Nick, it's Jimmy. Yeah, we left our guidance alone when you look on the cost side of it, 'cause we had some things in Q1 that I feel like it's gonna normalize and we'll be back on track in Q2 and for the remainder of the year. We had 2 of our longwalls that's in the Pennsylvania mining complex that were in sand rock intrusions. You know, we've had those before. We've been able to dive down underneath them. These were a little different. They struggled, so we don't have that. Both those longwalls are out of that now. We also had, as you stated earlier, we did have abnormal power pricing that hit us in Q1 that we think will normalize and come down here as the weather changes.

Jimmy Brock: Hi, Nick, it's Jimmy. Yeah, we left our guidance alone when you look on the cost side of it, 'cause we had some things in Q1 that I feel like it's gonna normalize and we'll be back on track in Q2 and for the remainder of the year. We had two of our longwalls that's in the Pennsylvania mining complex that were in sand rock intrusions. You know, we've had those before. We've been able to dive down underneath them. These were a little different. They struggled, so we don't have that. Both those longwalls are out of that now. We also had, as you stated earlier, we did have abnormal power pricing that hit us in Q1 that we think will normalize and come down here as the weather changes.

Speaker #3: And for the remainder of the year. So we had two of our long walls that's in the Pennsylvania mine complex that were in Sandrock intrusions.

Speaker #3: We've had those before. We've been able to dive down underneath them. These were a little different. They struggled. So we don't have that. Both those long walls are out of that now.

Speaker #3: And then we also had, as you stated earlier, we did have abnormal power pricing that hit us in Q1 that we think will normalize and come down here as the weather changes.

Speaker #3: It was mostly due to that Arctic blast, as we said in our comments. And then, of course, when you're going through those Sandrock and rolls like that, it requires more supplies to mine the coal.

Jimmy Brock: It was mostly due to that Arctic blast, as we said in our comments. Of course, when you're going through those sand rock and rolls like that, it requires more supplies to mine the coal. It's higher bit pricing. You know, you use more of those, you wear those out. We think we're gonna be in a really good spot there. Looking at West Elk, West Elk is running great. There was no fault of West Elk, it's just the trains of us moving the coal away, and that has certainly improved. We've been working with our rail partners and, you know, we improved. What happened to West Elk, they couldn't run at a 100% capacity because we didn't have the space in our inventory. We think that's gonna levelize and go away.

Speaker #3: It's higher bit pricing. You use more of those. You wear those out. So we think we're going to be in a really good spot there.

Speaker #3: Looking at West Elk, West Elk is running great. There was no fault of West Elk. It's just the trains of us moving the coal away.

Speaker #3: And that has certainly improved. We've been working with a rail partners and we're improved. But what happened to West Elk? They couldn't run at 100% capacity because we didn't have the space in our inventory.

Speaker #3: So we think that's going to levelize and go away. So I really think I didn't want to raise the cost guidance. I believe that we're going to be back on track and being at an even have some improved marks for the remainder of the year.

Jimmy Brock: I didn't wanna raise the cost guidance. I believe that we're gonna be back on track and be in that, and even have some improved marks for the remainder of the year.

Speaker #2: Yeah. And just Nick, following up on your question on sensitivity and just give you some parameters around it, right? So if you think about PJ Invest power prices, I think in months like January, we were over 100 bucks in power prices.

Mitesh Thakkar: Yeah. Just, Nick, following up on your question on sensitivity and just give you some parameters around it, right? If you think about PJM power prices, I think in months like January, we were over USD 100 in power prices. Right now, we are already sub USD 50. As you look at the curve, I think the curve is around that number. Summer months a little bit higher, then fall it comes back again. Just from a sensitivity perspective, about a $1 megawatt change could be around $750,000 for us, just to keep that in mind.

Speaker #2: Right now, we are already sub 50. And as you look at the curve, I think the curve is around that number, summer months a little bit higher, and then fall, it comes back again.

Speaker #2: But just from a sensitivity perspective, about a dollar megawatt change could be around 750,000 dollars for us just to keep that in mind.

Speaker #3: Yeah.

Nick Giles: Yeah. Thank you both. That's really helpful. Maybe, you know, along a similar vein in the PRB, you maintain, the guide. Was curious on just what enabled you to do that. Then, you know, if we were to assume that diesel prices, were to remain elevated, any sense on, how much kind of upward cost pressure that would create in the PRB? Thanks.

Speaker #2: Thank you both. That's really helpful. Maybe along a similar vein, in the PRB, you maintain the guide. I was curious on just what enabled you to do that.

Speaker #2: And then if we were to assume that diesel prices were to remain elevated, any sense on how much kind of upward cost pressure that would create in the PRB thanks?

Speaker #3: I think when you look at PRB, there are a couple of things there. Number one, we lost a couple of weeks of production out there with the connecting link that was on the dragline boom, which obviously hurt the volumes a little bit.

Jimmy Brock: I think when you look at PRB, there's a couple of things there. Number 1, we lost a couple weeks of production out there with the connecting link that was on the dragline boom, which obviously hurt the volumes a little bit. We're kind of in shoulder season out there now as well. We're also looking at other cost incentives out there, such as optimizing our truck fleet, looking at what we can do with the schedules that we're working. The team out there is working really hard to bring that back within the guidance. I think if you add those volumes back, if diesel prices do sort of normalize or reduce some, I think we'll be right back on track where our cost guidance is and even an opportunity to improve that.

Speaker #3: And then we're kind of in shoulder season out there now as well. And then we're also looking at other cost incentives out there, such as optimizing our truck fleet, looking at what we can do with the schedules that we're working.

Speaker #3: And the team out there is working really hard to bring that back within the guidance. And I think if you add those volumes back, if diesel prices do sort of normalize or reduce some, I think we'll be right back on track where our cost guidance is.

Speaker #3: And even an opportunity to improve that. So it's something we continually work on, Nick. And I have a pretty high degree of confidence that we're going to reach that.

Jimmy Brock: It's something we continually work on, Nick, and I have a pretty high degree of confidence that we're gonna reach that.

Speaker #2: Good to hear. Guys, I appreciate the update. I'll jump back in the queue, but continue best of luck.

Nick Giles: Good to hear. Guys, I appreciate the update. I'll jump back in the queue, but continued best of luck.

Speaker #3: Thanks, Nick.

Jimmy Brock: Thanks, Nick.

Speaker #2: Thanks.

Mitesh Thakkar: Thanks.

Speaker #1: You now have a question from Nathan Martin, with the Benchmark Company. Please go ahead.

Operator: You now have a question from Nathan Martin with The Benchmark Company. Please go ahead.

Speaker #2: Thanks, operator. Good morning, everyone.

Nathan Martin: Thanks, operator. Good morning, everyone.

Speaker #3: Good morning, Nathan.

Jimmy Brock: Good morning, Nathan.

Mitesh Thakkar: Morning.

Nathan Martin: Bob, maybe just going back to George's initial question. As you look at 2026 in the High CV thermal segment, you guys are at 28.5 million tons committed in price. Can we just get a breakdown of that between PAMC and West Elk and any sensitivities there? I think you said API 2 was $0.07 off a $120 base. I just wanna make sure.

Speaker #2: Bob, maybe just going back to George's initial question. As we look at 26 and high CV thermal segment, you guys are at 28 and a half, I think, million tons committed in price.

Speaker #2: Can we just get a breakdown of that between PAMC and West Elk and any sensitivities there? I think you said API 2 was 7 cents.

Speaker #2: Off of 120 base, we just want to make sure.

Speaker #3: Yeah, that's correct. And right now, of the 29.1 million tons in total, 23.4 is PAMC, 5.7 million is West Elk. West Elk contributed 1.1 million tons toward the sales line in Q1.

Robert Braithwaite: Yeah, that's correct. Right now, of the 29.1 million tons in total, you know, 23.4 is PAMC, 5.7 million is West Elk. West Elk contributed 1.1 million tons toward the sales line in Q1. We expect, as Jimmy mentioned, as our railroad partners are certainly doing better today than they were in Q1, we expect that volume to start increasing as we move forward throughout this quarter and the balance of the year to get, you know, to that 5.7 million ton level.

Speaker #3: So we expect as Jimmy mentioned, as a railroad partners are certainly doing better today than they were in Q1, we expect that volume to start increasing as we move forward throughout this quarter and the balance of the year to get to that 5.7 million ton level.

Speaker #3: I will tell you too, based on that, we're being somewhat cautious since we're only in April right now or May, I should say. But there's still certainly some opportunities out there.

Deck Slone: I will tell you too, you know, based on that, you know, we're being somewhat cautious since we're only in April right now or May, I should say. You know, there's still certainly some opportunities out there. The domestic markets certainly is remaining somewhat strong. Even though gas prices are down, we're still seeing a strong level of trains coming in and offtake. In India as well, you know, they're forecasting a strong El Niño. If that does happen, it'll delay, you know, likely delay the monsoon season. We're seeing, I'd say, more inquiries than we typically would this time of year. Very encouraging there, and we'll certainly look to place as much volume as we can and get as much volume out of PAMC as we can.

Robert Braithwaite: I will tell you too, you know, based on that, you know, we're being somewhat cautious since we're only in April right now or May, I should say. You know, there's still certainly some opportunities out there. The domestic markets certainly is remaining somewhat strong. Even though gas prices are down, we're still seeing a strong level of trains coming in and offtake. In India as well, you know, they're forecasting a strong El Niño. If that does happen, it'll delay, you know, likely delay the monsoon season. We're seeing, I'd say, more inquiries than we typically would this time of year. Very encouraging there, and we'll certainly look to place as much volume as we can and get as much volume out of PAMC as we can.

Speaker #3: The domestic markets certainly is remaining somewhat strong, even though gas prices are down. We're still seeing a strong level of trains coming in and offtake.

Speaker #3: And then in India as well, they're forecasting a strong El Niño. If that does happen, it'll delay likely delay the monsoon season. And we're seeing, I'd say, more inquiries than we typically would this time of year.

Speaker #3: So very encouraging there. And we'll certainly look to place as much volume as we can and get as much volume out of PAMC as we can.

Speaker #3: So 5.7 million tons at West Elk. We're not sold out, but we're very close. So all the balance of the volume left to sell is at PAMC.

Deck Slone: You know, 5.7 million tons at West Elk. We're not sold out, but we're very close, so all the balance of the volume left to sell is at PAMC. Again, encouraging that the fact that where our prices are today, I will tell you that those specific prices today are above where our guidance is. There's a chance that we could see some improvement as we move forward. The volume that you're seeing that is not priced is linked to Newcastle. That's some of our business we have into Asia out of our West Elk mine.

Robert Braithwaite: You know, 5.7 million tons at West Elk. We're not sold out, but we're very close, so all the balance of the volume left to sell is at PAMC. Again, encouraging that the fact that where our prices are today, I will tell you that those specific prices today are above where our guidance is. There's a chance that we could see some improvement as we move forward. The volume that you're seeing that is not priced is linked to Newcastle. That's some of our business we have into Asia out of our West Elk mine.

Speaker #3: And again, encouraging that the fact that we're prices are today. I will tell you that those specific prices today are above where our guidance is.

Speaker #3: So there's a chance that we could see some improvement as we move forward. The volume that you're seeing that is not priced is linked to Newcastle.

Speaker #3: That's some of our business we have into Asia out of our West Elk mine.

Speaker #2: Okay, great, Bob. That's helpful. And then maybe just sticking with West Elk for a second. You guys talked about it last quarter, talked about it a little bit now.

Nathan Martin: Okay. Great, Bob. That's helpful. Maybe just sticking with West Elk for a second, you guys talked about it last quarter and talked about it a little bit now, you know, moving some domestic tons to power plants in the East. Sounds like that was mainly just a transportation problem, and I think you just mentioned inventory space. Any additional thoughts there? One of your peers also talking about exporting some more tons out of the West Coast, maybe any thoughts you guys have, as far as that goes as well?

Speaker #2: Moving some domestic tons to power plants in the east. Sounds like that was mainly just a transportation problem. And I think you just mentioned inventory space.

Speaker #2: Any additional thoughts there? One of your peers also talking about exporting some more tons out of the West Coast. Maybe any thoughts you guys have as far as that goes as well?

Speaker #3: Yeah. So for West Elk, I'm very encouraged by what we've seen from our domestic customers in the east. There's a lot of overlap there with our PAMC coal as well.

Deck Slone: For West Elk, you know, I'm very encouraged by what we've seen from our domestic customers in the East. A lot of overlap there with our PAMC coal as well. I could tell you to date we have one long-term contract in place. We're working on several others. The coal has been well accepted. Traditionally it wasn't really a core market for the legacy Arch Resources, but today I'd tell you it is as we try to ramp that mine up to 6 million tons as we move forward. On the West Coast, we are moving West Elk through the West Coast out of Long Beach today. We anticipate that, you know, continuing.

Robert Braithwaite: For West Elk, you know, I'm very encouraged by what we've seen from our domestic customers in the East. A lot of overlap there with our PAMC coal as well. I could tell you to date we have one long-term contract in place. We're working on several others. The coal has been well accepted. Traditionally it wasn't really a core market for the legacy Arch Resources, but today I'd tell you it is as we try to ramp that mine up to six million tons as we move forward. On the West Coast, we are moving West Elk through the West Coast out of Long Beach today. We anticipate that, you know, continuing.

Speaker #3: So I could tell you to date, we have one long-term contract in place. We're working on several others. The coal has been well accepted.

Speaker #3: Traditionally, it wasn't really a core market for the legacy arch folks. But today, I'd tell you it is. As we try to ramp that mine up to 6 million tons as we move forward.

Speaker #3: On the West Coast, we are moving West Elk through the West Coast at a Long Beach today. We anticipate that continuing. And then in terms of additional West Coast capacity or additional export capacity off the West Coast, we're certainly looking into that.

Deck Slone: In terms of additional West Coast capacity or additional export capacity off the West Coast, we're certainly looking into that, for some opportunity to move some of our PRB coal as well. I know Oakland's been talked about by many. We're certainly in discussions there and also some potential export capacity through Canada as well.

Robert Braithwaite: In terms of additional West Coast capacity or additional export capacity off the West Coast, we're certainly looking into that, for some opportunity to move some of our PRB coal as well. I know Oakland's been talked about by many. We're certainly in discussions there and also some potential export capacity through Canada as well.

Speaker #3: For some opportunity to move some of our PRB coal as well. I know Oakland's been talked about by many. We're certainly in discussions there.

Speaker #3: And then also some potential export capacity through Canada as well.

Speaker #2: Yeah, Nate, we look at as far as exporting and moving coal, we look at all the ports. And obviously, when you have to start looking at how long the vessels sat there for the marriage, you look at the travel distance and everything else.

Jimmy Brock: Yeah. We look at, as far as exporting and moving the coal, we look at all the ports. Obviously when you have to start looking at how long the vessel sat there for demurrage, you look at the travel distance and everything else. Just like we run to the market, we try to do the same thing with the ports. We try to go out of the ones that are most economical for us. Obviously we prefer to go out of our own, but I mean, we certainly look at all those West Coast ports, you know, Long Beach as well as we even look at Vancouver and some of those. Any way we can move the coal that makes economic sense, we certainly look at all of those.

Speaker #2: We try to, just like we run to the market, we try to do the same thing with the ports. We try to go out of the ones that are most economical for us.

Speaker #2: And obviously, we prefer to go out of our own. But I mean, we certainly look at all those West Coast ports, Long Beach, as well as we even look at Vancouver and some of those.

Speaker #2: Any way we can move the coal that makes economic sense, we certainly look at all of those. Got it. Appreciate that. And then Jimmy, maybe just one more while I have you.

Nathan Martin: Got it. Appreciate that. Jimmy, maybe just one more while I have you. Any comments or thoughts on the administration's Section 303 determinations that were passed as it applies to, you know, helping the coal supply chains and baseload power gen?

Speaker #2: Any comments or thoughts on the administration's Section 303 determinations that were passed as it applies to helping the coal supply chains and base of power gen?

Speaker #3: Yeah, I'll start out with that and then turn it over to Deck to follow up on that. But we are very happy with the administration.

Jimmy Brock: Yeah. I'll start out with that and then turn it over to Deck to follow up on that. We are very happy with the administration. I mean, particularly, you know, their ability to extend the life of some of these power plants, and we think it's certainly gonna be needed. If you look at the power, which has been basically flat, you know, for many years leading up to, say, 2024. With the increase that everybody's projecting on power gen alone, we feel pretty good about what the administration has done to this point. Now, I always say they can't solve the problems for us, they certainly can give a solution to where we can work on those. They've been very positive as far as coal goes.

Speaker #3: I mean, particularly their ability to extend the life of some of these power plants and we think it's certainly going to be needed. If you look at the power, which has been basically flat for many, many years, leading up to, say, 2024.

Speaker #3: But with the increase that everybody's projecting on power gen alone, we feel pretty good about what the administration has done to this point. Now, I always say they can't solve the problems for us, but they certainly can give us solutions to where we can work on those.

Speaker #3: And they've been very, very positive as far as coal goes. I know President Trump, he brought back the National Coal Council. And a lot of positive momentum coming out of the administration.

Jimmy Brock: I know President Trump, you know, he brought back the National Coal Council, a lot of positive momentum coming out of the administration. Deck and team are working with them every day to make sure that we take full benefit of everything that we get out of there. With that, I'll let Deck add some comments.

Speaker #3: And Deck and team are working with him every day to make sure that we take full benefit of everything that we get out of there.

Speaker #3: And with that, I'll let Deck add some comments.

Speaker #2: Yeah, thanks. Yeah, thanks for that. And look, I totally agree with Jimmy. This administration is hugely supportive. And there are a whole range of areas where they're trying to be helpful.

Deck Slone: Yeah. Thanks. Yeah, thanks for that. Look, I totally agree with Jimmy. This administration is hugely supportive. You know, there are a whole, you know, range of areas where they're trying to be helpful. Look, I would say with the 202(c) authority, which is preventing some of these retirements prematurely of coal plants. We've got five 202(c) orders in place right now. In aggregate, those plants used 10 million tons of coal last year. I think really clear then that they're needed. If they were running at that level last year, you know, that capacity is needed.

Speaker #2: Look, I would say with the 202C authority, which is preventing some of these retirements prematurely of coal plants. We've got five 202C orders in place right now in aggregate.

Speaker #2: Those plants use 10 million tons of coal last year. I think really clear then that they're needed. If they were running at that level last year, that capacity is needed.

Speaker #2: And we've talked about the fact that as we look out now, suddenly there's been an inflection in terms of the outlook for US power demand.

Deck Slone: You know, we've talked about the fact that, you know, as we look out now, suddenly there's been an inflection in terms of the outlook for US power demand. You know, the numbers are They're a range of numbers, but one of the ones we've been looking at recently, Grid Strategies, is suggesting that over the next 5 years, you could see a 3.7%, you know, growth rate in US power demand. In that scenario, this administration is getting the fact that you have to have these coal plants. That's hugely helpful. I think also addressing just a raft of regulations really that were designed to drive some of these coal plants into closure. This administration is trying to unwind those and doing, you know, really a superb job.

Speaker #2: The numbers are there are a range of numbers, but one of the ones we've been looking at recently, grid strategies, is suggesting that over the next five years, you could see a 3.7% growth rate in US power demand.

Speaker #2: In that scenario, this administration is getting the fact that you have to have these coal plants. So that's hugely helpful. I think also addressing just a raft of regulations really that were designed to drive some of these coal plants into closure.

Speaker #2: This administration is trying to unwind those and doing really a superb job. And the goal there is not just to keep the plants open, but to allow for reinvestment, to make those plants young again because you can replace all the component parts.

Deck Slone: The goal there is not just to keep the plants open, but to allow for reinvestment, to make those plants young again because you can replace all the component parts. That's useful. Obviously, you know, as you know, look, the royalty rate reduction in the PRB has been helpful to us. I think, you know, bodes well for the outlook there for a healthy industry in the PRB, the 45X production credit. Look, couldn't, you know, be more pleased with where this administration is going, and we're gonna continue to work with them. You know, we talked about the unlocking of exports. That's another area where this administration is highly focused on finding ways to liberate more tons, get more tons into the seaborne market.

Speaker #2: So that's useful and obviously, as you know, look, the royalty rate reduction in the PRB has been helpful to us. And I think bodes well for the outlook there for a healthy industry in the PRB.

Speaker #2: The 45x production credit. So look, couldn't be more pleased with where this administration is going. And we're going to continue to work with them.

Speaker #2: We talked about the unlocking of exports. That's another area where this administration is highly focused on finding ways to liberate more tons, get more tons into the Seaborn market.

Speaker #2: So a range of areas where we're getting good support.

Deck Slone: A range of areas where, you know, we're getting good support.

Jimmy Brock: You know, the administration has certainly given us a lot of resources to work on our problems that we have. Very, very appreciative and very thankful and very involved, quite frankly, with the administration.

Speaker #3: The administration is certainly giving us a lot of resources to work on our problems that we have. So very, very appreciative and very thankful and very involved, quite frankly, with the administration.

Speaker #2: All right, guys, appreciate the time. I'll pass it along. Best of luck going forward.

Nathan Martin: All right, guys, appreciate the time. I'll pass it along. Best of luck going forward.

Speaker #3: Thank you.

Jimmy Brock: Thank you.

Speaker #1: You now have a question from Matthew Key with Texas Capital. Please go ahead.

Operator: You now have a question from Matthew Key with Texas Capital. Please go ahead.

Speaker #2: Good morning, everyone. And thanks for taking my questions. In regards to the inflationary toss pressures, most notably diesel, well, you obviously didn't raise your cost guidance.

Matthew Key: Good morning, everyone. Thanks for taking my questions. In regards to the inflationary cost pressures, you know, most notably diesel, while you obviously didn't raise your cost guidance, I was wondering if there's anything you could do to, you know, help manage those pressures, such as hedging diesel or something like that?

Speaker #2: I was wondering if there's anything you could do to help manage those pressures, such as hedging diesel or something like that?

Speaker #3: Yep. Matt, good question. And there's an additional disclosure in our 10-Q that we did hedge some diesel prior to the war starting in the Gulf Area.

Mitesh Thakkar: Yeah. Matt, good question. There's additional disclosure in our 10-Q that we did hedge some diesel prior to prior to the war starting in the Gulf area. I think we went on a path to hedge a significant portion of our cost on the diesel front, but there was a sudden spike and we pulled back a little bit because the volatility was just too much to justify hedging at that point. Things are settling down a little bit, we'll continue to look and evaluate it. As you can imagine, the curve is in backwardation again now, which is great.

Speaker #3: I think we were on a path to hedge a significant portion of our cost on the diesel front, but there was a sudden spike and we pulled back a little bit.

Speaker #3: Because the volatility was just too much to justify hedging at that point. Things are settling down a little bit, and we'll continue to look and evaluate it.

Speaker #3: As you can imagine, the curve is in backwardation again now, which is great. And we'll continue to evaluate how we layer in those hedges to make sure that there is enough cushion between our selling price and the cost of mining.

Mitesh Thakkar: We'll continue to evaluate how we layer in those hedges to make sure that there is enough cushion between our selling price and the cost of mining.

Speaker #2: Got it. That's helpful, Matesh. Thank you. And Metcoal Benchmark Pricing did improve at least directionally in 1Q26. Still seeing a very widespread for high vol A pricing versus premium low vol benchmark.

Matthew Key: That's helpful, Mitesh. Thank you. You know, met coal benchmark pricing did improve, at least directionally in Q1 2026. Still seeing a very wide spread for High-Vol A pricing versus premium low vol benchmark. I was wondering if you could provide, you know, just some color in what you're seeing in the met coal market, specifically as it relates to High-Vol A.

Speaker #2: I was wondering if you could provide just some color on what you're seeing in the met coal market, specifically as it relates to High Vol A.

Speaker #3: Yeah, I mean, again, we're in really good position as we announced this morning. 8.3 million tons contracted for the balance or for this year.

Robert Braithwaite: Yeah. I mean, again, we're in really good position as we announced this morning. You know, 8.3 million tons contracted for the balance for this year. You know, when you look at where we're at with what we have left to sell, majority of that is High-Vol. There's some Low-Vol as well. I'd say the most encouraging thing too is the fact that we have over 30% of our volume this year linked to PLV prices. Asia continues to grow for us, and that's where the growth and demand is. India certainly is growing, but we are seeing some opportunities back in Brazil and also into Europe right now. CBAM being one that is helping the European steel markets.

Speaker #3: And when you look at where we're at with what we have left to sell, the majority of that is high vol. There's some low vol as well.

Speaker #3: But I'd say the most encouraging thing, too, is the fact that we have over 30% of our volume this year linked to PLV prices.

Speaker #3: So Asia continues to grow. For us, and that's where the growth and demand is, India certainly is growing. But we are seeing some opportunities back in Brazil and also into Europe right now.

Speaker #3: CBAM being one that is helping the European steel markets. And we're not seeing as much steel dumping into Brazil today as we did last year.

Robert Braithwaite: We're not seeing as much steel dumping into Brazil today as we did last year. That's encouraging as well. I think those spreads will likely remain for a little bit of time here, just for the simple fact that, you know, the High-Vol is a little bit oversupplied today. I see that as, again, we start seeing some higher cost operations continue to exit the market, specifically here in the domestic, or sitting here in the United States. I think you'll start to see those spreads shrink over time. The team has done a great job, again, linking over 30% of our index volumes to PLV.

Speaker #3: So that's encouraging as well. So I think those spreads will likely remain for a little bit of time here, just for the simple fact that the high vol is a little bit oversupplied today.

Speaker #3: But I see that as, again, we start seeing some higher cost operations continue to exit the market, specifically here in the domestic or sitting here in the United States.

Speaker #3: I think you'll start to see those spreads shrink over time. But the team has done a great job, again, linking over 30% of our index volumes to PLV.

Deck Slone: You know, Matt, I would maybe just to echo those views of sort of where the market is. Look, I mean, if you look last year at US exports, they were down around 6 million tons. Australian exports of coking coal down around 6 million tons. That's 12 million tons. I think there's been a lot of focus on the production that's coming back into the market, but there had been substantial rationalization and step down. You know, look, I do think that's important. That's an important dynamic there. I would also say, look, there are, you know, indications that operational challenges are starting to sort of crop up elsewhere, as you would expect, right? That's typically what happens is 5% to 10% of global supply is, you know, experiencing some level of challenge.

Speaker #2: Matt, I would maybe just to echo those views of sort of where the market is. Look, I mean, if you look last year at US exports, they were down around 6 million tons, Australian exports of Coke and Coal down around 6 million tons.

Speaker #2: So that's 12 million tons. I think there's been a lot of focus on the production that's coming back into the market. But there had been substantial rationalization and step-down.

Speaker #2: So look, I do think that's important. That's an important dynamic there. And I would also say, look, there are indications that operational challenges are starting to sort of crop up elsewhere.

Speaker #2: As you would expect, right? That's typically what happens is 5 to 10 percent of global supply is experiencing some level of challenge. So while the market remains under pressure, I do think there are counterbalances to I think that top-line story that, oh, there's some capacity that's come back into the market after some outage.

Deck Slone: You know, while the market remains under pressure, I do think there are counterbalances to, you know, I think that, that top line story that, oh, there's some capacity that's come back into the market after, you know, after some outage.

Speaker #4: Got it. Well, I appreciate all that color and best of luck moving forward.

Matthew Key: Got it. Well, I appreciate all that color and best of luck moving forward.

Speaker #3: Thank you.

Deck Slone: Thank you.

Speaker #1: As a reminder, if you wish to ask a question, please press star one. You have another question from Nick Giles, with B. Riley Securities.

Operator: As a reminder, if you wish to ask a question, please press star one. You have another question from Nick Giles with B. Riley Securities. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Yeah, thanks, operator. Thanks for taking my follow-up. You kind of answered it there on the Met side. But maybe I could just ask, as we try to model out Met volumes throughout the course of the year, can you just remind us how many long ball moves you have scheduled, when those are scheduled in both just the Met segment and high CV?

Nick Giles: Thanks, operator. Thanks for taking my follow-up. You kind of answered it there on the met side. Maybe I could just ask, you know, as we try to model out met volumes throughout the course of the year, can you just remind us how many longwall moves you have scheduled, when those are scheduled in both just the met segment and High CV? Thanks.

Speaker #2: Thanks.

Speaker #3: Yeah, if you look at Q1, that we just finished up with four long wall moves there in Q1. In Q2, we have three. We have one at PMC.

Jimmy Brock: Yeah. If you look at Q1 that we just finished up, we had 4 longwall moves there in Q1. In Q2, we have 3. We have 1 at PMC, we have 2 at our met mines, 1 at Leer, 1 at Leer South. I think for the remainder of the year, our Q4 is kind of heavy, but we have 13 for the year. That's pretty much where we are. Nick, as I've always said, I love longwall moves because that means progress is being made.

Speaker #3: We have two at our Met mines, one at Lear, one at Lear South. And then I think for the remainder of the year, our Q4 is kind of heavy.

Speaker #3: But we have 13 for the year. So that's pretty much where we are. And Nick, as I've always said, I love long wall moves because that means progress is being made.

Speaker #2: Understood. No, I appreciate that, Jimmy. And maybe just on the synergy front, not sure if you provided an update there, but I think of 2026 as one of the first full years that we can see the benefit of the synergy.

Nick Giles: Understood. No, I appreciate that, Jimmy. Maybe just on the synergy front. Not sure if you provided an update there, but you know, I think of 2026 as one of the first full years that we can see the benefit of the synergies. What metrics should we be paying attention to, and what should we use as the denominator as we try to measure that progress?

Speaker #2: So what metrics should we be paying attention to? And what should we use as the denominator as we try to measure that progress?

Speaker #3: Yep. So Nick, again, there are a lot of ways the synergies are playing out. I will say the most obvious one for you to see is on the SGNA side.

Mitesh Thakkar: Nick, again, there are a lot of ways the synergies are playing out. I will say, the most obvious one for you to see is on the SG&A side. If you look at, I'm going back to 2024, the first full year prior to the merger for both, the last full year prior to the merger for both the companies, I think the combined company had a cash SG&A of about $153 million, excluding any merger related expenses and stock-based comp, right? Right now we are guiding to a top end of about $100. That tells you that significant progress is being made on the synergy front when it comes to cash SG&A.

Speaker #3: And if you look at I'm going back to 2024, the first full year prior to the merger for both the last full year prior to the merger, for both the companies, I think the combined company had cash SGNA of about 153 million, excluding any merger-related expenses and stock-based comp, right?

Speaker #3: And right now, we are guiding to a top end of about 100. So that tells you that significant progress is being made on the synergy front when it comes to cash SGNA.

Mitesh Thakkar: Similarly, on the marketing side, if you look at the mids where they are disclosed as thermal by-product in our release. Given where current met coal prices are on the legacy Arch side, which is mostly their product, you would have realized high 20s kind of a realization on the mids. We are blending it with some of our Pennsylvania mining complex and some of our other mines, and we are value uplifting it by almost $15 a ton, right? When you add those pieces together, I think, we are significantly ahead on the synergy achievement first achievement side.

Speaker #3: Similarly, on the marketing side, if you look at the mids, where we they are disclosed as thermal byproduct in our release, given where current Metcoal prices are, on the legacy art side, which is mostly their product, you would have realized high 20s kind of a realization on the mids.

Speaker #3: We are blending it with some of our Pennsylvania mining complex and some of our other mines. And we are value uplifting it by almost $15 a ton, right?

Speaker #3: So when you add those pieces together, I think we are significantly ahead on the synergy achievement side. I think what is clouding it a little bit on the marketing front is also overall, Metcoal prices are just lower, which reduces the value of those synergies.

Mitesh Thakkar: I think what is clouding it a little bit on the marketing front is also, overall met coal prices are just lower, which reduces the value of those synergies and we are hoping as those prices normalize, I think you will see more impactful numbers on the synergy front. Even on the High CV thermal side, as the prices improve, the value of mids go up just from blending activity as well. Those are the 2 lines that you can easily see on our financials. The other lines I would say is, we already talked about the financing synergy with the 3 bonds that we did, the rate that we got versus what each of those companies had it in the past.

Mitesh Thakkar: I think what is clouding it a little bit on the marketing front is also, overall met coal prices are just lower, which reduces the value of those synergies and we are hoping as those prices normalize, I think you will see more impactful numbers on the synergy front. Even on the High CV thermal side, as the prices improve, the value of mids go up just from blending activity as well. Those are the two lines that you can easily see on our financials. The other lines I would say is, we already talked about the financing synergy with the three bonds that we did, the rate that we got versus what each of those companies had it in the past.

Speaker #3: And we are hoping, as those prices normalize, I think you will see more impactful numbers on the synergy front. But even on the high CV thermal side, as the prices improve, the value of mids go up, just from blending activity as well.

Speaker #3: So those are the two lines that you can easily see. On our financials, the other lines I would say is, we already talked about the financing synergy with the three bonds that we did, the rate that we got versus what each of those companies had it in the past.

Mitesh Thakkar: And on the insurance side, if you put all those to items together, there was $20-plus million in synergy on an annualized basis on that front as well. Net-net, when you add all those up, I think you are looking at over $160 million in synergy run rate, which is, I think the last midpoint we provided was around 165 at the midpoint, which was higher than, I think, originally at the merger, we said $110 to 140 million and then raised it to a midpoint of 165. We are tracking towards that high end already.

Speaker #3: And on the insurance side, if you look at—put all those two items together, there was $20-plus million in synergy on an annualized basis.

Speaker #3: On that front as well. So net-net, when you add all those up, I think you are looking at over 160 million dollars in synergy run rate.

Speaker #3: Which is, I think, the last midpoint we provided was around 165 at the midpoint. Which was higher than I think originally at the merger, we said 110 to 140 and then raised it to a midpoint of 165.

Speaker #3: So we are tracking towards that high end already.

Speaker #2: Understood. Thanks for all that detail, Mitesh. Maybe one more, if I could. I think your commitment to shareholder returns seems pretty clear to me.

Nick Giles: Understood. Thanks for all that detail, Mitesh. Maybe one more, if I could. I think, you know, your commitment to shareholder returns seems pretty clear to me, but, you know, how do things stand on the M&A front? Are you seeing any opportunities across the M&A landscape, whether from a mine perspective, anything along the supply chain and/or anything, you know, from a logistics perspective that's worth looking at? Thanks.

Speaker #2: But kind of how do things stand on the M&A front? Are you seeing any opportunities across the M&A landscape, whether from a mine perspective?

Speaker #2: Anything along the supply chain or anything from a logistics perspective that's worth looking at? Thanks.

Speaker #3: Nick, it's something that we evaluate daily. I mean, we look at a lot of things that come toward us. And as I've always said, my job to allocate capital is for the highest rate of return.

Jimmy Brock: Nick, it's something that we evaluate daily. I mean, we look at a lot of things that come toward us. As I've always said, you know, my job to allocate capital is for the highest rate of return. We do look at a lot of things that come in. I will tell you currently today, we don't have anything to, you know, that we can put certainty around that we've done. We do look at every opportunity that comes to us. We owe it to our shareholders and our employees to do that, and we'll continue to do so. If something comes out there that makes sense, we certainly have the liquidity, we have the ability to do it, and we would do it.

Speaker #3: So we do look at a lot of things. They come in. I will tell you, currently today, we don't have anything to that we can put certainty around that we've done.

Speaker #3: But we do look at every opportunity that comes to us. We owe it to our shareholders and our employees to do that. And we'll continue to do so.

Speaker #3: And if something comes out there that makes sense, we certainly have the liquidity. We have the ability to do it. And we would do it.

Speaker #2: Guys, thanks again. I appreciate all the color.

Nick Giles: Guys, thanks again. I appreciate all the color.

Speaker #3: Yep. Thanks, Nick. Thanks, Nick.

Mitesh Thakkar: Yep. Thanks, Nick.

Jimmy Brock: Thanks, Nick.

Speaker #1: There are no further questions at this time. I will now turn the call over to Jimmy Brock for closing remarks. Please continue.

Operator: There are no further questions at this time. I will now turn the call over to Jimmy Brock for closing remarks. Please continue.

Speaker #3: Well, we'd like to thank everyone for joining us on the call today. And certainly look forward to the rest of the year to come.

Jimmy Brock: Well, we'd like to thank everyone for joining us on the call today, and certainly look forward to the rest of the year to come. As I said in my opening remarks, I think the best is yet to come for Core Natural Resources. Thanks for joining.

Speaker #3: And as I said in my opening remarks, I think the best is yet to come for Core Natural Resources. So thanks for joining.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.