TULSA, Okla.–(BUSINESS WIRE)– Alliance Resource Partners, L.P. (NASDAQ: ARLP) (“ARLP”) announced today that Alliance Resource Operating Partners, L.P. (“AROP”), the intermediate partnership of ARLP, and AROP’s wholly owned subsidiary, Alliance Resource Finance Corporation, subject to market conditions, intend to offer $400 million in aggregate principal amount of senior unsecured notes due 2029 (the “New Notes”) in a private placement to eligible purchasers.
AROP expects to use a portion of the net proceeds from the offering of the New Notes to fund the redemption of its outstanding 7.5% Senior Notes due 2025 (the “2025 Notes”) and the remaining for general corporate purposes. On May 29, 2024, AROP delivered a conditional notice of redemption, subject to consummation of the offering of the New Notes, for all of the outstanding 2025 Notes. The redemption price for the 2025 Notes is 100% of the principal amount of the 2025 Notes outstanding, plus accrued and unpaid interest to the redemption date, which is expected to be June 28, 2024. This communication shall not constitute a notice of redemption under the indenture governing the 2025 Notes.
The New Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any other jurisdiction. Thus, the New Notes may be offered only in transactions that are exempt from registration under the Securities Act and applicable state securities laws. The New Notes are offered only to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S of the Securities Act. The New Notes will not be listed on any securities exchange or automated quotation system.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the New Notes, nor shall there be any sale of the New Notes in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Alliance Resource Partners, L.P.
ARLP is a diversified energy company that is currently the largest coal producer in the eastern United States, supplying reliable, affordable energy domestically and internationally to major utilities, metallurgical and industrial users. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is evolving and positioning itself as a reliable energy partner for the future by pursuing opportunities that support the advancement of energy and related infrastructure.
Certain statements and information in this news release constitute “forward-looking statements,” including statements regarding the intended use of proceeds. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements represent ARLP’s expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of ARLP’s control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, ARLP does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for ARLP to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in ARLP’s filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, ARLP’s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in ARLP’s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Raising our rating to Outperform. With two tranches of its recently announced equity financing closed, Aurania is well positioned to execute its 2024 exploration program and secure a joint venture or strategic partner to advance its project in Ecuador. To date, Aurania’s exploration and drilling activities have underscored the project’s rich mineral potential for epithermal gold, porphyry copper, sediment-hosted copper-silver and silver-zinc mineralization.
Private placement financing. Aurania Resources closed the first and second tranches of its private placement of up to 20,000,000 units for gross proceeds of up to C$4,000,000. In aggregate, 15,094,112 units were sold at a price of C$0.20 per unit for total gross proceeds of C$3,018,822.40. The company expects to close the third and final tranche soon. The proceeds will fund exploration and target refinement at the Kuri-Yawi target area in Ecuador, along with general working capital needs.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Drilling to resume later in the year. Maple Gold has been undertaking a systematic compilation and review of its technical database associated with its 400 square kilometer property package. Maple Gold’s technical team is nearing completion of a new three-dimensional litho-structural model to support a focused ranking and prioritization of property-wide drill targets to be tested later this year. Maple also initiated high resolution drone magnetic surveys in selected areas which will be completed in the second quarter of 2024.
Significant depth potential at Douay. The 2022 Douay mineral resource estimate addressed optimizing complementary open-pit and underground scenarios. Resources below the pit have significant potential for expansion given the limited amount of drilling below approximately 300 meters vertical depth. Deep drilling in 2023 confirmed continuity of the mineralized system at depth. Maple Gold intends to increase the underground gold resource to two million ounces largely by drilling near and below the base of the pit.
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ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Location, location. Alliance is the largest coal producer in the eastern U.S. with operations in the Illinois Basin and Appalachia. The partnership produces a diverse range of thermal coals with high heat content and benefits from access to both domestic and export markets. With demand for electricity expected to grow, Alliance is well-positioned to increase its market share despite efforts to curb coal-fired generation and coal’s declining share of the electricity generation market. Closure dates for coal-fired power plants are being delayed due to growing energy demand and reliability concerns.
Trouble brewing in the Powder River Basin (PRB)? Last week the Bureau of Land Management (BLM) proposed ending federal coal leasing in the Powder River Basin. The PRB includes Wyoming and Montana and accounted for 44% of the coal produced in the United States in 2022. The Bureau expects coal production in Wyoming to continue through 2041 under existing leases. While we expect the ruling to be challenged, it underscores the uncertainty and challenges facing coal mining operations on federally leased lands. The BLM manages public land in the western United States. In our view, coal could turn into an increasingly scarce resource in the United States which could be supportive of pricing.
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Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Results of the Clayton Valley feasibility study. Century released the results of a feasibility study (FS) for its Clayton Valley lithium project in Nevada. A phased approach was adopted. Phase I and II mining rates of 7,500 tonnes per day and 15,000 tonnes per day, respectively, are maintained over five years each, while the Phase III mining rate of 22,500 tonnes per day is maintained for 30 years. The production plan reflects a life-of-mine average of 34,000 tonnes per year of battery grade lithium carbonate or 13,000 tonnes and 27,000 tonnes per year during Phase I and II, respectively, and 41,000 tonnes per year during Phase III.
Updating our financial model. We have assumed the mine begins commercial production in 2029. Our mining model is for the years 2029 through 2069. While our financial assumptions are detailed in the body of this report, our valuation is based on the present value of free cash flows, and we have used a discount rate of 8.0%. Our price target for the equity is C$3.25 per share or US$2.35 per share. In our view, the project’s low operating cost after sales of surplus sodium hydroxide is a key differentiator relative to other lithium projects.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Noble Capital Markets, a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving emerging growth companies, is pleased to present the Basic Industries Virtual Equity Conference Emerging Growth Virtual Equity Conference, taking place September 25th and 26th, 2024. This virtual gathering is set to be an immersive experience, bringing together a unique blend of investors, industry leaders, and experts in various sectors surrounding the natural resources, energy, industrials, and transportation spaces.
Part of Noble’s Robust 2024 Events Calendar
The Natural Resources, Energy, Industrials, and Transportation Emerging Growth Virtual Equity Conference is part of Noble’s 2024 event programming, featuring a range of c-suite interviews, in-person non-deal roadshows throughout the United States, two other sector-specific virtual equity conferences, and culminating in Noble’s preeminent in-person investor conference, NobleCon20, to be held at Florida Atlantic University in Boca Raton, Florida December 3-4. Learn more about NobleCon20 here.
The Natural Resources, Energy, Industrials, and Transportation Emerging Growth Virtual Equity Conference will feature 2 days of corporate presentations from up to 50 innovative public companies, showcasing their latest advancements and investment opportunities. Each presentation will be followed by a fireside-style Q&A session proctored by one of Noble’s analysts or bankers, with questions taken from the audience during the presentation. Panel presentations are planned, featuring key opinion leaders in these sectors, providing valuable insights on emerging trends. Scheduled one-on-one meetings with public company executives, coordinated by Noble’s dedicated Investor Outreach team, are also available to qualified investors.
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Looking to increase awareness in your company and increase liquidity? Paid participation in Noble’s investor conferences, both virtual and in-person, provides that opportunity, with a tailored experience aimed at delivering substantial value. After 40 years of serving emerging growth companies, and the investors who follow them, Noble has built an investor base eager to discover where the next success story lies.
Noble’s investor base is relevant and, in many cases, new to your company. Noble’s dedicated Investor Outreach team provides unmatched exposure to investors that can invest in your company, including small money managers, family offices, RIAs, wealth managers, self-directed investors, and institutions. Most of Noble’s investors specifically seek undervalued, overlooked, emerging investment opportunities.
The cost to present includes your corporate presentation with a Q&A session proctored by one of Noble’s analysts or bankers, a webcast recording, scheduled 1×1 meetings with qualified investors, and marketing on Channelchek.
Benefits for Investors
Hear directly from the c-suite of the next innovators in natural resources, energy, industrials, and transportation and learn about new investment opportunities. The Q&A portion of each presentation gives you the opportunity to have your questions answered during or after the proctored session. The planned panel presentations are sure to provide expert insight on growing trends in these spaces. And, for qualified investors, one-on-one meetings are available with company executives; scheduled by Noble’s dedicated Investor Outreach team. All from the comfort of your own desk, and at no cost.
Comstock (NYSE: LODE) innovates technologies that contribute to global decarbonization and circularity by efficiently converting under-utilized natural resources into renewable fuels and electrification products that contribute to balancing global uses and emissions of carbon. The Company intends to achieve exponential growth and extraordinary financial, natural, and social gains by building, owning, and operating a fleet of advanced carbon neutral extraction and refining facilities, by selling an array of complimentary process solutions and related services, and by licensing selected technologies to qualified strategic partners. To learn more, please visit www.comstock.inc.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Rating changed to a Market Perform. We have lowered our investment rating to Market Perform from Outperform pending significant improvement in the company’s liquidity position and a visible path toward net income and cash flow growth from operations. Outside of its mining assets, the company operates much as a start-up within its Fuels and Metals businesses. We think those segments may require significant capital investment and we would like to see a clearer funding path. Additionally, we would like more details such as the components that drive the economics of the business models for each segment (i.e. terms of licensing agreements, royalties, and fees for engineering services).
First quarter 2024 achievements. Comstock achieved significant milestones during the first quarter, including securing all required operating permits and the commencement of production at its photovoltaic recycling facility in Nevada. Comstock Fuels commenced sample production of commercially available hydro-deoxygenated bioleum oil (HBO) and executed agreements for up to a $3 million investment in RenFuel K2B AB. Lastly, Comstock Mining updated its internal Dayton-Spring Valley economic assessment and expects to complete a mine plan by year-end 2024.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Comprehensive technical review. Since late 2023, Maple Gold has been undertaking a systematic compilation and review of its technical database associated with its 400 square kilometer property package. The company is integrating all geological, geophysical, geochemical, and drilling data to improve target generation and drive successful exploration outcomes.
New structural model to inform the drilling program. Maple Gold’s technical team is nearing completion of a new three-dimensional litho-structural model to support a focused ranking and prioritization of property-wide drill targets to be tested later this year. A high-resolution drone magnetic survey of select areas will be completed in the next few weeks.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First quarter financial results. Alliance reported first quarter EBITDA and earnings per unit (EPU) of $235.0 million and $1.21, respectively, compared to $270.9 million and $1.45 during the prior year period. We had forecast EBITDA and EPU of $209.7 million and $0.97. Coal sales price realizations were above the high end of the partnership’s annual guidance range, while the oil & gas royalty segment experienced record volumes. Additionally, operating expenses were lower than expected and the company benefited from an $11.9 million mark-to-market change in the value of digital assets.
Updating estimates. We have increased our 2024 EBITDA and EPU estimates to $871.3 million and $4.14 from $841.1 million and $3.90, respectively. We think our forward estimates could be conservative based on the potential for higher average coal sales price realizations and stronger than expected performance from the partnership’s oil and gas royalty segment.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Vancouver, British Columbia–(Newsfile Corp. – April 30, 2024) – Maple Gold Mines Ltd. (TSXV: MGM) (OTCQB: MGMLF) (FSE: M3G) (“Maple Gold” or the “Company“) is pleased to provide an operational update related to the advancement of the Company’s gold projects located in Québec, Canada. Consistent with the Company’s value-oriented exploration strategy, the ongoing synthesis and reinterpretation of multiple exploration datasets by the Company’s revamped technical team is nearing completion, while management continues to significantly reduce costs and preserve capital as demonstrated in the Company’s audited financial results for the year ended December 31, 2023. The Company also announces that its Board of Directors has approved the issuance of annual equity incentive grants to certain employees, officers, directors and consultants.
Operational Update
Since late 2023, Maple Gold has been engaged in a systematic review and compilation of the extensive technical database on its entire ~400 km2 property package that straddles the fertile Casa Berardi Break and contains an established near-surface, multi-million ounce gold mineral resource as well as a past-producing high-grade gold mine complex. This critical re-evaluation is aimed at integrating all available geological, geophysical, geochemical and drilling data to improve target generation and drive exploration results. The Company’s technical team is nearing completion of a new 3D litho-structural model based on selective core relogging within mineralized zones, updated level plans, longitudinal and cross-sections, and detailed geophysical and geochemical data analysis that will support the focused ranking and prioritization of property-wide drill targets to be tested later this year. As part of this exercise, the Company has also initiated high-resolution drone magnetic surveys in selected areas, which will be completed in the next following weeks.
“With the support of our partner and key stakeholders, we have seized this golden opportunity to reposition the Company for future success by delivering a high-quality exploration model supported by a wealth of technical data while simultaneously right-sizing our business,” stated Kiran Patankar, President and CEO of Maple Gold. “We believe as strongly as ever in the compelling discovery potential offered by our strategically located district-scale gold projects. The culmination of these efforts is well-timed amid surging gold prices and increasing investment focus on organic growth through the drill bit.”
The Company has engaged with notable geological, geophysical and geochemical specialists to assist with the ongoing interpretation of the vast amount of exploration data that has been collected by Maple Gold and others over the past 50 years. This includes current members of the Company’s Technical Committee: Dr. Gérald Riverin, Mr. Maurice Tagami, P.Eng. and Mr. Paul Harbidge. The results of the geologic reinterpretation are being finalized and will be reported shortly. Drilling is expected to recommence later this year with full details to be provided in subsequent announcements.
Annual Equity Incentive Plan Grants
Pursuant to its Equity Incentive Plan (the “Plan”) dated December 17, 2020, as amended, and the policies of the TSX Venture Exchange, the Company’s Board of Directors granted stock options (“Options”), Restricted Share Units (“RSUs”) and Deferred Share Units (“DSUs”) to certain employees, officers, directors and consultants. The Company granted Options to purchase an aggregate of 4,000,000 common shares of the Company (each, a “Common Share”), with an exercise price of $0.08 per Common Share. Each Option grant vests in three equal tranches over a 24-month period. Once vested, each Option is exercisable into one Common Share for a period of five years from the date of the grant. The Company also granted a total of 3,250,000 RSUs and 725,000 DSUs. Each RSU grant vests in three equal tranches over a 24-month period. Once vested, each RSU and DSU entitles the holder thereof to receive either one Common Share, the cash equivalent of one Common Share or a combination of cash and Common Shares, as determined by the Company, net of applicable withholdings. DSUs may not be exercised until a director ceases to serve on the Company’s Board of Directors.
Further details regarding the Plan are set out in the Company’s Management Information Circular filed on May 15, 2023, which is available on SEDAR.
Qualified Person
The scientific and technical data contained in this press release was reviewed and prepared under the supervision of Jocelyn Pelletier, M.Sc., P.geo., Chief Geologist of Maple Gold. Mr. Pelletier has verified the data related to the exploration information disclosed in this press release through his direct participation in the work performed. Mr. Pelletier is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects.
About Maple Gold
Maple Gold Mines Ltd. is a Canadian advanced exploration company in a 50/50 joint venture with Agnico Eagle Mines Limited to jointly advance the district-scale Douay and Joutel gold projects located in Québec’s prolific Abitibi Greenstone Gold Belt. The projects benefit from exceptional infrastructure access and boast ~400 km2 of highly prospective ground including an established gold resource at Douay (SLR 2022) that holds significant expansion potential as well as the past-producing Telbel and Eagle West mines at Joutel. In addition, the Company holds an exclusive option to acquire 100% of the Eagle Mine Property, a key part of the historical Joutel mining complex.
The district-scale property package also hosts a significant number of regional exploration targets along a 55-km strike length of the Casa Berardi Deformation Zone that have yet to be tested through drilling, making the project ripe for new gold and polymetallic discoveries. The Company is well capitalized and is currently focused on carrying out exploration and drill programs to grow resources and make new discoveries to establish an exciting new gold district in the heart of the Abitibi. For more information, please visit www.maplegoldmines.com.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.
Forward Looking Statements:
This press release contains “forward-looking information” and “forward-looking statements” (collectively referred to as “forward-looking statements”) within the meaning of applicable Canadian securities legislation in Canada, including statements about exploration work and results from current and future work programs. Forward-looking statements are based on assumptions, uncertainties and management’s best estimate of future events. Actual events or results could differ materially from the Company’s expectations and projections. Investors are cautioned that forward-looking statements involve risks and uncertainties. Accordingly, readers should not place undue reliance on forward-looking statements. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to Maple Gold Mines Ltd.’s filings with Canadian securities regulators available on www.sedarplus.ca or the Company’s website at www.maplegoldmines.com. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Results of the Clayton Valley feasibility study. Century released the results of a feasibility study (FS) for its Clayton Valley lithium project in Nevada. A phased approach was adopted. Phase I and II mining rates of 7,500 tonnes per day and 15,000 tonnes per day, respectively, are maintained over five years each, while the Phase III mining rate of 22,500 tonnes per day is maintained for 30 years. The production plan reflects a life-of-mine average of 34,000 tonnes per year of battery-grade lithium carbonate or 13,000 tonnes and 27,000 tonnes per year during Phases I and II, respectively, and 41,000 tonnes per year during Phase III.
Key assumptions and net present value. Key assumptions include: 1) initial capital expenditures of $1.5 billion, $651 million for Phase II, and $1.3 billion for Phase III, 2) a lithium carbonate price of $24,000 per tonne, 3) average operating cost of $8,223 per tonne of lithium carbonate produced, or $2,766 per tonne after sales of surplus sodium hydroxide, 4) a lithium recovery rate of 78%, and 5) sustaining capital of $315 million over the life of the project. Based on an 8% discount rate, the project is expected to generate an after-tax net present value of $3.01 billion and 17.1% internal rate of return.
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Large-Scale Nevada-based Lithium Project: three-phase production plan will generate a life-of-mine average of 34,000 tonnes per annum (tpa) of battery-quality lithium carbonate (Li2CO3)
Innovative Approach in Processing: patent-pending chloride leaching process combined with Direct Lithium Extraction (DLE), the Feasibility Study is supported by 2+ years of testing at the Company’s Pilot Plant
Mineral Resource Estimate: Measured and Indicated resources totaling 1,207.33 million tonnes (Mt) at an average grade of 957 parts per million (ppm) lithium (Li) containing 1.155 Mt of Li or 6.148 Mt of lithium carbonate equivalent (LCE)
Long 40-Year Mine Life: Proven and Probable Mineral Reserve Estimate totaling 287.65 Mt at an average grade of 1,149 ppm Li containing 0.330 Mt of lithium or 1.759 Mt of LCE
Initial Project: Phase 1 Capital Cost $1.537 billion for production capacity of 13,000 tpa LCE
Designed for Expansion: Phase 2 $0.651 billion for 28,000 tpa LCE, and Phase 3 $1.336 billion for 41,000 tpa LCE; Project expansions are capitalized with Project cash flow
Low Operating Cost: average operating cost $8,223/t of Li2CO3 produced, or $2,766/t after sales of surplus sodium hydroxide (NaOH)
After-tax IRR of 17.1% at $24,000/t Li2CO3: $3.01 billion after-tax net present value (NPV) at 8% discount rate and a 17.1% after-tax internal rate of return (IRR), using price assumptions of $24,000/t for Li2CO3 and $600/dry metric tonne (dmt) for NaOH
April 29, 2024 – Vancouver, Canada – Century Lithium Corp. (TSXV:LCE) (OTCQX: CYDVF) (Frankfurt: C1Z) (Century Lithium or the Company) is pleased to announce the results of a National Instrument 43-101 (NI 43-101) feasibility study (Feasibility Study, FS or Study) completed on its 100% owned Clayton Valley Lithium Project (Project) in Nevada, USA. The Feasibility Study was prepared by Wood Group USA, Inc. (Wood) and Global Resource Engineering, Ltd. (GRE). All currency amounts in this news release are presented in U.S. dollars.
“Century Lithium is proud to present our Feasibility Study. The Study indicates our Project has robust economics, made possible with our unique chlor-alkali and DLE processes” commented Bill Willoughby, President, and CEO. “Completion of the Study marks a major milestone for the Company and is the result of the dedicated work and efforts of our team of employees and consultants.”
“Our process technology was developed by way of many trials and successes at our Pilot Plant in Amargosa Valley. As one of the few lithium-focused Pilot Plants in North America, we continue to operate safely and recently passed two years of testing. The data generated to date supports the Feasibility Study, and we continue to test various conditions and ideas to improve our process flow sheet,” said Bill Willoughby.
With the Feasibility Study completed, the Company will now direct its focus on engineering and permitting. The Company is concurrently advancing discussions with government agencies, strategic partners, and other interested parties to provide funding to advance the Project and maximize the value to the Company’s shareholders that is reflected in the FS.
FEASIBILITY STUDY SUMMARY
The information in the following tables highlight the Project’s production and economic summaries.
Production Summary
Phase
Years
Mine tonnes per day (tpd)
Li2CO3 (tpa)
Capital Cost (B$)
1
1-5
7,500
13,000
$1.537
2
6-10
15,000
28,000
$0.651
3
11+
22,500
41,000
$1.336
Economic Summary
Units
Amount
Operating Costs (average)
$/t
8,223
Operating Costs (average w/NaOH credit)
$/t
2,766
After-tax NPV @ 8% Discount Rate
$ billion
3.01
After-tax IRR
%
17.1
RESOURCE AND RESERVES
The Mineral Resource and Reserve Estimates for the Project were updated for the Feasibility Study and built using geologic data and 1,318 lithium assays from 45 core holes drilled between 2017 and 2022. The constrained Measured and Indicated Resource Estimate is 1,207.33 Mt with an average grade of 957 ppm lithium and contains 1.155 Mt of Li or 6.148 Mt of LCE. The Proven and Probable Mineral Reserve Estimate was derived from the constrained Mineral Resources and contains 287.65 Mt with an average grade of 1,149 ppm lithium and contains 0.330 Mt of Li or 1.759 Mt of LCE and reflects an increase of 74.6 Mt and 0.48 Mt LCE compared to the 2021 Mineral Reserve Estimate. The Mineral Resources were generated with a pit shell that encompasses all mineralized material within the Property excluding all areas that will be used for Project infrastructure and placement of tailings, waste, and low-grade material.
Mineral Resource Estimate
Domain
Tonnes Above Cut-off (millions)
Li Grade (ppm)
Li Contained (million t)
LCE (million t)
Measured
858.38
990
0.849
4.524
Indicated
348.95
875
0.305
1.625
Measured & Indicated
1,207.33
957
1.155
6.148
Inferred
119.03
827
0.098
0.524
The effective date of the Mineral Resource Estimate is December 15, 2022. The QP for the estimate is Ms. Terre Lane, MMSA, an employee of GRE and independent of Century. The Mineral Resources are constrained by a pit shell with a 200 ppm Li cut-off and density of 1.505 g/cm3. The cut-off grade considers an operating cost of $16.90/t mill feed, process recovery of 83% and a long-term lithium carbonate price of $20,000/t. The Mineral Resource estimate was prepared in accordance with CIM Definition Standards (CIM, 2014) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (CIM, 2019). Mineral Resource figures were rounded. One tonne of lithium = 5.323 tonnes lithium carbonate. Mineral Resources are inclusive of Mineral Reserves.
Mineral Reserve Estimate
Domain
Tonnes Above Cut-off (millions)
Li Grade (ppm)
Li Contained (million t)
LCE (million t)
Proven
266.39
1,147
0.306
1.626
Probable
21.26
1,174
0.025
0.133
Proven & Probable
287.65
1,149
0.330
1.759
The effective date of the Mineral Reserve Estimate is December 15, 2022. The QP for the estimate is Ms. Terre Lane, MMSA, an employee of GRE and independent of Century. The Mineral Reserve estimate was prepared in accordance with CIM) Definition Standards (CIM, 2014) and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (CIM, 2019). Mineral Reserves are reported within the final pit design at a mining cut-off of 900 ppm. The cut-off grade considers a mine operating cost of $1.98/t, a process operating cost of $14.27/t milled, a G&A cost of $0.65/t milled, process recovery of 83% and a long-term lithium carbonate price of $20,000/t. The cut-off of 900 ppm is an elevated cut-off selected for the mine production schedule as the elevated cutoff is 4.5 times higher than the break-even cut-off grade. Mineral Reserve figures have been rounded. One tonne of lithium = 5.323 tonnes lithium carbonate. Mineral Resources are inclusive of Mineral Reserves.
PROCESS METALLURGY & CHLOR-ALKALI PLANT
Metallurgical testing through 2020 focused on using sulfuric acid (H2SO4) to extract lithium from the clay. In late 2020, testing shifted to hydrochloric acid (HCl) for its improved compatibility with the deposit’s chemistry. These benefits included higher lithium extractions, lower reagent consumptions, significantly better filtration of solids, and the ability to utilize certain DLE technologies in the recovery and concentration of lithium from the leach solutions.
A key component of the Project with chloride-based leaching is a chlor-alkali plant. The chlor-alkali plant provides the ability to produce the key reagents HCl and NaOH on-site from the electrolysis of a sodium chloride (NaCl) solution. A chlor-alkali plant represents a greater capital investment relative to that of a sulfuric acid plant but has important environmental and economic benefits for the sustainability of the Project. These benefits include replacing the purchase and transportation of sulfur with regionally sourced salt, and a reduction in emissions and the physical footprint of the operation with dryer, non-sulfate tailings.
Additionally, the chlor-alkali plant will generate significant quantities of NaOH surplus to the Project’s operational needs and therefore available for sale. The chlor-alkali plant will utilize modern electrochemical cell technology thereby producing membrane grade sodium hydroxide without the energy consumption and environmental problems of older technologies. The surplus amounts of NaOH are inherent to the operation of the plant and the sales represent a significant offset to the Project’s operating costs.
PILOT PLANT
In 2021, Century Lithium constructed a Pilot Plant in Nevada to leach one tonne per day of lithium clay and produce a high-grade lithium chloride solution which is processed off-site at Saltworks Technologies, Inc. (Saltworks), at their Richmond, British Columbia processing plant to make battery-quality Li2CO3. To maximize lithium recovery, the Company purchased the license rights and pilot-stage equipment to DLE an ion-exchange-based process and incorporated it into the Pilot Plant. The DLE license is held in perpetuity and royalty free by the Project.
Throughout its Pilot Plant program, the Company has sought improvement in its process methods. The Company obtained a provisional patent in 2023 with the U.S. Patent and Trademark Office, U.S. Department of Commerce. The provisional patent is titled System and Method for Extracting Lithium from Clay and Other Materials in a Chloride Solution Using Individualized Pretreatments. The patent pending process encompasses the Company’s flowsheet and protects its methods of leaching lithium-bearing solids and handling solutions, precipitates, and residues.
LITHIUM EXTRACTION, RECOVERY & Li2CO3 PRODUCTION
A lithium recovery of 78% is used in the Feasibility Study, based on the data collected in over two years of operations at the Pilot Pant.
Feed material grades averaged 1,100 ppm
Leach solution samples varied from 200 to 320 ppm Li
Lithium extractions averaged 88% and varied from 80 to 95%
DLE lithium recoveries were typically above 90%
10% of the lithium in solution is retained in the moisture remaining in the tailings
Extraction rates do not account for losses downstream and are only indicative of the potential overall recovery. Work at the Pilot Plant continues to focus on reducing losses of lithium to tailings. A small loss of lithium from processing the DLE product solutions into Li2CO3, and the recycling of process solutions to the DLE and leach areas is anticipated.
During 2022 and 2023, Saltworks processed the DLE product solutions from the Pilot Plant and made battery-quality Li2CO3 at greater than 99.5% purity. Modifications at the Pilot Plant in mid-2023 increased lithium solution grades to over 14 grams per liter which simplified the flowsheet and eliminated the evaporation stage for production of Li2CO3.
PRODUCTION PLAN
The Project’s production plan comprises three equal phases of production rate increases, Phase 1 and Phase 2 production rates are maintained over five years each and Phase 3 is maintained for 30 years. This approach was selected to reduce capital exposure and risk by dividing the Project’s production schedule into realistic phases of construction and equipment installation. The plan fully utilizes the Project’s Mineral Reserve.
Phase 1 includes all work required to implement the Initial Project Plan including all necessary mining and processing infrastructure. The Phase 2 cost estimate focuses on an expansion within the footprint of Phase 1. Phase 3 development includes an additional processing plant and facilities not built in the previous phases and allows for a fourth phase of expansion.
LITHIUM CARBONATE AND SODIUM HYDROXIDE SALES PRICES
A price of $24,000/t of Li2CO3 is used in the Feasibility Study as the Project base case. This price is selected as a conservative mid-point between current market prices which are under $20,000/t Li2CO3 and forecast prices obtained from Benchmark Mineral Intelligence which are in the range of $23,000 to $39,000/t Li2CO3 during Phase 1 and $29,000 to $31,000/t Li2CO3 thereafter (Benchmark Mineral Intelligence, Lithium Forecast Q1 2024). The sales price is free on board (FOB) the Project site for battery quality Li2CO3.
NaOH is a product of the chlor-alkali process and a sales price of $600/dmt FOB the Project is used in the Feasibility Study as the Project base case. Based on the material mass balance, it is expected that surplus NaOH will be available for sale at rates of 120,000 to 360,000 dmt per annum, depending on Project Phase. This price is based on a February 2023 market study by Global Exchange and Trading, Inc. where it was determined the Project’s surplus NaOH can be readily sold in the western U.S. which currently relies heavily on imports arriving at west coast ports.
CAPITAL COST ESTIMATE
The basis for the capital cost estimate follows AACE Class 3 for feasibility studies. Contributors to the estimates are GRE (mining), Wood (process plant and infrastructure), ThyssenKrupp Nucera (chlor-alkali plant) and Century Lithium (property information and owners’ costs). The capital cost estimates by phase are summarized as follows.
Installed Capital Costs
Initial Phase 1 ($M)
Expansion Phase 2 ($M)
Expansion Phase 3 ($M)
Mining & Site Preparation
$64
$7
$27
Process Facilities
$517
$205
$477
Chlor-Alkali Plant
$496
$336
$496
Buildings, Services & Infrastructure
$130
$5
$42
Indirect & Owners Costs
$234
$72
$190
Contingency
$96
$27
$105
Total Capital Cost
$1,537
$651
$1,336
Notes: Totals may not sum due to rounding, Contingency and site Indirects for chlor-alkali plant is included in the Chlor-Alkali Plant line item, contingency for mining is included in the Contingency line item, indirect costs for mining are not included in the Indirects and Owner’s Costs line item
The Phase 2 capital costs represent the expansion of the process facilities and infrastructure established in Phase 1. The Phase 3 capital costs support an additional processing plant and facilities not built in the previous phases. In the Project schedule, a 2-year period is allocated for the time to construct and commission each phase.
Sustaining capital over the life of the Project is estimated at $315 million for tailings facility expansion and equipment replacements. These costs are in addition to the expansion capital costs shown above.
OPERATING COST ESTIMATES
The following information highlights the operating cost estimates for each phase in dollars per tonne of Li2CO3, before and after deducting sales of surplus NaOH.
Initial Phase 1 (7,500 tpd mill feed)
$ (000s)/y
$/t mill feed
$/t LCE
Mining
$13,754
$5.43
$1,205
Processing and G&A
$57,515
$21.01
$4,428
Chlor-Alkali Plant
$61,787
$22.57
$4,757
Total Operating Cost
$133,056
$49.01
$10,390
Less NaOH Sales (FOB mine)
$78,272
$28.95
$6,026
Net Operating Cost
$54,784
$20.06
$4,364
Note: Totals may not sum due to rounding
Expansion Phase 2 (15,000 tpd mill feed)
$ (000s)/y
$/t mill feed
$/t LCE
Mining
$24,901
$4.26
$766
Processing and G&A
$82,018
$14.98
$3,157
Chlor-Alkali Plant
$105,138
$19.20
$4,047
Total Operating Cost
$212,057
$38.44
$7,970
Less NaOH Sales (FOB mine)
$142,350
$26.00
$5,479
Net Operating Cost
$69,707
$12.44
$2,491
Note: Totals may not sum due to rounding
Expansion Phase 3 (22,500 tpd mill feed)
$ (000s)/y
$/t mill feed
$/t LCE
Mining
$22,064
$2.70
$561
Processing and G&A
$119,945
$14.60
$3,078
Chlor-Alkali Plant
$151,325
$18.43
$3,884
Total Operating Cost
$293,334
$35.73
$7,523
Less NaOH Sales (FOB mine)
$213,525
$25.99
$5,479
Net Operating Cost
$79,809
$9.74
$2,044
Note: Totals may not sum due to rounding
ECONOMIC MODEL AND SENSITIVITY
The cash flow model is developed using base prices of $24,000/t for Li2CO3 and $600/dmt for NaOH.
Average Annual Values
Units
Initial Phase 1
Expansion Phase 2
Expansion Phase 3
Li2CO3 Sales
t
11,885
26,753
39,098
NaOH Sales
dmt
130,488
237,250
355,875
Gross Sales
$ million
$282.4
$635.7
$929.0
Before-tax Cash Flow
$ million
$231.3
$553.3
$825.3
Lithium carbonate sales are the average over each Phase including ramp up to the stated production rate. Gross sales are revenues from Li2CO3 and NaOH sales are before operating costs and after royalty. Before-tax Cash Flow is gross sales minus operating costs. Taxes are applied at federal, state and county rates after allowances for amortization, depletion, and depreciation only. Possible tax credits under the U.S. Inflation Reduction Act or other programs are not included.
The Project base case generates a 17.1% after-tax IRR and NPV-8% of $3.01 billion. These results are sensitive to changes in operating assumptions including the sales price of Li2CO3.
At 75% of the base case, or $18,000/t LCE, the after-tax NPV@ 8% is $1.52 billion, and the after-tax IRR is 12.9%.
At 125% of the base case, or $30,000/t LCE, the after-tax NPV@ 8% is $4.47 billion, and the after-tax IRR is 20.9%.
For every $1,000/t change in the price of lithium carbonate, the after-tax NPV@8% changes by about $250 million.
Project Sensitivity
Units
75%
Base Case
125%
Lithium Price
$/t LCE
$18,000
$24,000
$30,000
NPV-8%
$ billion
$1.52
$3.01
$4.47
IRR
%
12.9
17.1
20.9
PROJECT ADVANCEMENT
The Company has completed multiple environmental studies in advance of permitting and is examining ways to optimize power requirements and incorporate alternative energy solutions.
The recommendations of the FS include continuing the permitting process, engaging with governmental agencies and other parties, and proceeding with detailed engineering to further advance the Project.
Among these steps, the Company has contacted the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) and plans to initiate the pre-application process under the Title Seven Clean Energy Financing program when the Feasibility Study report is complete.
CONFERENCE CALL
Century Lithium will host a live webcast and conference call for analysts and investors on Monday, April 29, 2024, at 11:00 am ET (8:00 am PT), followed by a question-and-answer session.
A replay of the webcast will be available on our website shortly following the conclusion of the conference call.
QUALITY ASSURANCE
The data in this news release was prepared in accordance with NI 43-101 standards by the following Qualified Persons (QP).
Terre Lane, Principal Mining Engineer, GRE, is an independent QP as defined by NI 43-101 and has reviewed and approved the contents of this news release and verified by site visits and personal examination the information and original documents that relate to preparation of the Mineral Resource Estimate, Mineral Reserve Estimate, mine plan, mine capital and operating cost estimation, economic analysis, and marketing.
Hamid Samari, Principal Geologist, GRE, is an independent QP as defined by NI43-101 and has reviewed and approved the contents of this news release and verified by site visits and personal examination the information and original documents that relate to preparation of the description of the deposit, geological setting, and mineralization, deposit type, exploration, drilling, sample preparation, analyses and security, and data verification.
Todd Fayram, Senior Vice President Metallurgy, Century Lithium, is a non-independent QP as defined by NI 43-101 and has reviewed and approved the contents of this news release and verified by site visits and personal examination the information and original documents that relate to preparation of the description of metallurgical testing, lithium recovery, and design operation and results of the Pilot Plant.
Alan Drake, Manager – Process Engineering, Wood, is an independent QP as defined by NI 43-101 and has reviewed and approved the contents of this news release and verified by site visits and personal examination the information and original documents that relate to preparation of the description and estimates related to recovery methods.
Haiming (Peter) Yuan, PE, PhD, Principal Geotechnical Engineer, WSP USA Environment & Infrastructure Inc., is an independent QP as defined by NI 43-101 and has reviewed and approved the contents of this news release and verified by site visits and personal examination the information and original documents that relate to preparation of the description related to infrastructure, environment and permitting.
Paul Baluch, Technical Director, Civil, Wood, is an independent QP as defined by NI 43-101 and has reviewed and approved the contents of this news release and verified by personal examination the information and original documents that relate to preparation of the description and estimates of infrastructure.
Farzad Kossari, Cost Estimating Manager, Wood, is an independent QP as defined by NI 43-101 and has reviewed and approved the contents of this news release and verified by personal examination the information and original documents that relate to preparation of the description and summary of capital and operating cost estimates.
Further information about the Project, including a description of the key assumptions, parameters, description of sampling methods, data verification and quality assurance (QA) / quality control (QC) programs, methods relating to Mineral Resources and Mineral Reserves and factors that may affect those estimates will be contained in a NI 43-101 Technical Report on the Feasibility Study of the Clayton Valley Lithium Project. Following Section 3.4 of NI 43-101 the report will be available on SEDAR+ and on the Company’s website within 45 days of the date of this news release.
ABOUT CENTURY LITHIUM CORP.
Century Lithium Corp. is an advanced stage lithium company, focused on developing its 100%-owned Clayton Valley Lithium Project in west-central Nevada, USA. Century Lithium recently completed a Feasibility Study on its Clayton Valley Lithium Project and is currently in the permitting stage, with the goal of becoming a domestic producer of lithium for the growing electric vehicle and battery storage market.
ON BEHALF OF CENTURY LITHIUM CORP. WILLIAM WILLOUGHBY, PhD., PE President & Chief Executive Officer
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.
This release contains certain forward-looking statements within the meaning of applicable Canadian securities legislation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” and similar expressions suggesting future outcomes or statements regarding an outlook.
Forward-looking statements relate to any matters that are not historical facts and statements of our beliefs, intentions and expectations about developments, results and events which will or may occur in the future, without limitation, statements with respect to the potential development and value of the Project and benefits associated therewith, statements with respect to the expected project economics for the Project, such as estimates of life of mine, lithium prices, production and recoveries, capital and operating costs, IRR, NPV and cash flows, any projections outlined in the Feasibility Study in respect of the Project, the permitting status of the Project and the Company’s future development plans.
These and other forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of the Company to control or predict, that may cause their actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein. These risks include those described under the heading “Risk Factors” in the Company’s most recent annual information form and its other public filings, copies of which can be under the Company’s profile at www.sedarplus.com. The Company expressly disclaims any obligation to update-forward-looking information except as required by applicable law. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place reliance on forward-looking statements or information. Furthermore, Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Increased coal sales volumes to 8.7 million tons, up 2.4% year-over-year
Record oil & gas royalty volumes of 898 MBOE, up 18.3% year-over-year and 11.0% sequentially
First quarter 2024 total revenue of $651.7 million, net income of $158.1 million, and EBITDA of $235.0 million
Enhanced liquidity position to $551.3 million, which included $134.0 million in cash and $417.3 million of borrowings available under credit facilities
In April 2024, declared quarterly cash distribution of $0.70 per unit, or $2.80 per unit annualized
TULSA, Okla.–(BUSINESS WIRE)– Alliance Resource Partners, L.P. (NASDAQ: ARLP) (“ARLP” or the “Partnership”) today reported financial and operating results for the quarter ended March 31, 2024 (the “2024 Quarter”). This release includes comparisons of results to the quarter ended March 31, 2023 (the “2023 Quarter”) and to the quarter ended December 31, 2023 (the “Sequential Quarter”). All references in the text of this release to “net income” refer to “net income attributable to ARLP.” For a definition of EBITDA and related reconciliation to its comparable GAAP financial measure, please see the end of this release.
Total revenues in the 2024 Quarter decreased slightly to $651.7 million compared to $662.9 million for the 2023 Quarter primarily as a result of lower average coal sales prices, partially offset by higher oil & gas royalties and other revenues. Net income for the 2024 Quarter was $158.1 million, or $1.21 per basic and diluted limited partner unit, compared to $191.2 million, or $1.45 per basic and diluted limited partner unit, for the 2023 Quarter as a result of lower revenues and increased total operating expenses. EBITDA for the 2024 Quarter was $235.0 million compared to $270.9 million in the 2023 Quarter.
Compared to the Sequential Quarter, total revenues in the 2024 Quarter increased 4.2% primarily as a result of higher average coal sales prices, which increased 6.9% to $64.78 per ton sold compared to $60.60 per ton sold in the Sequential Quarter. Net income and EBITDA in the 2024 Quarter increased 36.9% and 28.6%, respectively, compared to the Sequential Quarter.
CEO Commentary
“We had a solid start to the year operationally, with all our mines running as expected and strong volumes coming from our Oil & Gas Royalties segment,” commented Joseph W. Craft III, Chairman, President and Chief Executive Officer. “Our contracted coal position also contributed to our performance for the 2024 Quarter mitigating the impact of mild winter weather and low natural gas prices. On the strength of our heavily contracted coal order book and continued growth in our Oil & Gas Royalties business, we are pleased to reiterate full-year guidance.”
Segment Results and Analysis
% Change
2024 First
2023 First
Quarter /
2023 Fourth
% Change
(in millions, except per ton and per BOE data)
Quarter
Quarter
Quarter
Quarter
Sequential
Coal Operations (1)
Illinois Basin Coal Operations
Tons sold
6.437
6.190
4.0
%
6.419
0.3
%
Coal sales price per ton sold
$
57.58
$
54.43
5.8
%
$
55.06
4.6
%
Segment Adjusted EBITDA Expense per ton
$
36.21
$
33.45
8.3
%
$
35.26
2.7
%
Segment Adjusted EBITDA
$
140.3
$
132.0
6.3
%
$
130.1
7.8
%
Appalachia Coal Operations
Tons sold
2.237
2.279
(1.8
)%
2.194
2.0
%
Coal sales price per ton sold
$
85.49
$
106.13
(19.4
)%
$
76.82
11.3
%
Segment Adjusted EBITDA Expense per ton
$
52.53
$
55.20
(4.8
)%
$
63.52
(17.3
)%
Segment Adjusted EBITDA
$
74.2
$
116.6
(36.3
)%
$
29.8
149.4
%
Total Coal Operations
Tons sold
8.674
8.469
2.4
%
8.613
0.7
%
Coal sales price per ton sold
$
64.78
$
68.34
(5.2
)%
$
60.60
6.9
%
Segment Adjusted EBITDA Expense per ton
$
40.85
$
39.66
3.0
%
$
42.91
(4.8
)%
Segment Adjusted EBITDA
$
210.9
$
245.7
(14.2
)%
$
156.2
35.0
%
Royalties (1)
Oil & Gas Royalties
BOE sold (2)
0.898
0.759
18.3
%
0.809
11.0
%
Oil percentage of BOE
44.2
%
47.3
%
(6.6
)%
46.3
%
(4.5
)%
Average sales price per BOE (3)
$
41.22
$
45.42
(9.2
)%
$
44.60
(7.6
)%
Segment Adjusted EBITDA Expense
$
4.9
$
4.4
11.7
%
$
4.7
5.7
%
Segment Adjusted EBITDA
$
31.4
$
30.0
4.5
%
$
31.0
1.1
%
Coal Royalties
Royalty tons sold
5.512
5.057
9.0
%
5.018
9.8
%
Revenue per royalty ton sold
$
3.39
$
3.07
10.4
%
$
3.33
1.8
%
Segment Adjusted EBITDA Expense
$
6.3
$
5.4
16.3
%
$
6.6
(5.3
)%
Segment Adjusted EBITDA
$
12.4
$
10.1
22.9
%
$
10.2
22.5
%
Total Royalties
Total royalty revenues
$
56.1
$
51.1
9.8
%
$
53.0
5.7
%
Segment Adjusted EBITDA Expense
$
11.2
$
9.8
14.2
%
$
11.3
(0.7
)%
Segment Adjusted EBITDA
$
43.8
$
40.2
9.2
%
$
41.2
6.4
%
Consolidated Total
Total revenues
$
651.7
$
662.9
(1.7
)%
$
625.4
4.2
%
Segment Adjusted EBITDA Expense
$
358.3
$
339.3
5.6
%
$
376.6
(4.9
)%
Segment Adjusted EBITDA
$
260.6
$
291.9
(10.7
)%
$
203.2
28.2
%
_______________________
(1)
For definitions of Segment Adjusted EBITDA Expense and Segment Adjusted EBITDA and related reconciliations to comparable GAAP financial measures, please see the end of this release. Segment Adjusted EBITDA Expense per ton is defined as Segment Adjusted EBITDA Expense – Coal Operations (as reflected in the reconciliation table at the end of this release) divided by total tons sold.
(2)
Barrels of oil equivalent (“BOE”) for natural gas volumes is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).
(3)
Average sales price per BOE is defined as oil & gas royalty revenues excluding lease bonus revenue divided by total BOE sold.
Coal Operations
In the Illinois Basin, coal sales prices increased by 5.8% and 4.6% compared to the 2023 Quarter and Sequential Quarter, respectively, as a result of improved domestic price realizations. In Appalachia, coal sales price per ton decreased by 19.4% compared to the 2023 Quarter due primarily to reduced domestic pricing from our Tunnel Ridge mine, which benefited from significantly elevated pricing during the 2023 Quarter. Compared to the Sequential Quarter, Appalachian coal sales prices were higher by 11.3% as a result of improved domestic price realizations across the region. Tons sold increased by 4.0% in the Illinois Basin compared to the 2023 Quarter due primarily to increased sales volumes from our Hamilton and Warrior mines. Appalachian coal sales volumes decreased by 1.8% compared to the 2023 Quarter primarily due to fewer operating units at our MC Mining operation. Compared to the Sequential Quarter, tons sold in Appalachia increased by 2.0% as a result of increased volumes from our Mettiki operation, which experienced challenging geologic conditions in the Sequential Quarter. ARLP ended the 2024 Quarter with total coal inventory of 1.9 million tons, representing an increase of 0.6 million tons and 0.5 million tons compared to the end of the 2023 Quarter and Sequential Quarter, respectively.
Segment Adjusted EBITDA Expense per ton for the 2024 Quarter increased by 8.3% in the Illinois Basin compared to the 2023 Quarter, due primarily to reduced production and recoveries at our River View mine. Compared to the Sequential Quarter, Segment Adjusted EBITDA Expense per ton in the Illinois Basin increased by 2.7% due to higher inventory charges at several mines. In Appalachia, Segment Adjusted EBITDA Expense per ton decreased by 4.8% and 17.3% compared to the 2023 Quarter and Sequential Quarter, respectively, due to increased production and recoveries at our Mettiki mine during the 2024 Quarter.
Royalties
Segment Adjusted EBITDA for the Oil & Gas Royalties segment increased to $31.4 million in the 2024 Quarter compared to $30.0 million and $31.0 million in the 2023 Quarter and Sequential Quarter, respectively. Improved Segment Adjusted EBITDA in the 2024 Quarter was due to record oil & gas volumes, which rose to 898 MBOE sold in the 2024 Quarter, representing increases of 18.3% and 11.0% compared to the 2023 Quarter and Sequential Quarter, respectively, as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests.
Segment Adjusted EBITDA for the Coal Royalties segment increased to $12.4 million for the 2024 Quarter compared to $10.1 million and $10.2 million for the 2023 Quarter and Sequential Quarter, respectively. Higher average royalty rates per ton and increased royalty tons sold contributed to improved results for the 2024 Quarter.
Balance Sheet and Liquidity
As of March 31, 2024, total debt and finance leases outstanding were $441.0 million, including $284.6 million in ARLP’s 2025 senior notes. The Partnership’s total and net leverage ratios were 0.49 times and 0.34 times debt to trailing twelve months Adjusted EBITDA, respectively, as of March 31, 2024. ARLP ended the 2024 Quarter with total liquidity of $551.3 million, which included $134.0 million of cash and cash equivalents and $417.3 million of borrowings available under its revolving credit and accounts receivable securitization facilities.
During the 2024 Quarter, the Partnership increased its accounts receivable securitization facility by 50% to $90.0 million and entered into a new $54.6 million, four-year amortizing term loan maturing February 2028 to replace a prior equipment financing that matured in November 2023.
Distributions
On April 26, 2024, we announced that the Board of Directors of ARLP’s general partner (the “Board”) approved a cash distribution to unitholders for the 2024 Quarter of $0.70 per unit (an annualized rate of $2.80 per unit), payable on May 15, 2024, to all unitholders of record as of the close of trading on May 8, 2024. The announced distribution is consistent with the cash distributions for the 2023 Quarter and Sequential Quarter.
Outlook
“With our operations running as expected year-to-date and a well-contracted order book, we are reiterating our full-year guidance,” commented Mr. Craft. “We continue to maintain a small, uncontracted tonnage position that we can flex to either domestic or export markets as demand dictates, while our Oil & Gas Royalties business is off to a strong start that should set the tone for another robust year.”
“Our focus in 2024 will continue to be the safe operations of our assets, delivering the same level of reliability that our customers value so greatly, while also executing major infrastructure projects at our Tunnel Ridge, Hamilton, Warrior and River View complexes,” Mr. Craft continued. “Over the past year, grid planners nearly doubled the five-year electricity demand growth forecast (from 2.6% to 4.7%) on a nationwide basis per FERC filings. We expect this rapid growth in electricity demand will lead to delays and extensions in the premature closure of critical coal power plants in the markets we serve. We are making investments today that will position us to be the low-cost, reliable provider in a market seeking to respond to accelerated demand associated with the electrification of new industry, and rapid load growth associated with data centers and artificial intelligence. These trends represent fundamental changes to consumption patterns, reinforcing our belief that coal, and our operations in particular, will remain critical to a reliable, affordable grid for many years to come.”
ARLP is reiterating the following guidance for the full year ended December 31, 2024 (the “2024 Full Year”):
2024 Full Year Guidance
Coal Operations
Volumes (Million Short Tons)
Illinois Basin Sales Tons
24.5 — 25.8
Appalachia Sales Tons
9.5 — 10.0
Total Sales Tons
34.0 — 35.8
Committed & Priced Sales Tons
2024 — Domestic / Export / Total
28.1 / 4.5 / 32.6
2025 — Domestic / Export / Total
15.2 / 1.1 / 16.3
Coal Sales Price Per Ton Sold (1)
Illinois Basin
$54.50 — $56.00
Appalachia
$80.50 — $83.50
Total
$61.75 — $63.75
Segment Adjusted EBITDA Expense Per Ton Sold (2)
Illinois Basin
$35.25 — $37.25
Appalachia
$54.25 — $57.25
Total
$41.00 — $43.00
Royalties
Oil & Gas Royalties
Oil (000 Barrels)
1,400 — 1,500
Natural gas (000 MCF)
5,600 — 6,000
Liquids (000 Barrels)
675 — 725
Segment Adjusted EBITDA Expense (% of Oil & Gas Royalties Revenue)
~ 12.0%
Coal Royalties
Royalty tons sold (Million Short Tons)
20.4 — 22.2
Revenue per royalty ton sold
$3.15 — $3.35
Segment Adjusted EBITDA Expense per royalty ton sold
$1.15 — $1.25
Consolidated(Millions)
Depreciation, depletion and amortization
$280 — $300
General and administrative
$80 — $85
Net interest expense
$20 — $25
Income tax expense
$17 — $19
Total capital expenditures
$450 — $500
Growth capital expenditures
$25 — $30
Maintenance capital expenditures
$425 — $470
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(1)
Sales price per ton is defined as total coal sales revenue divided by total tons sold.
(2)
Segment Adjusted EBITDA Expense is defined as operating expenses, coal purchases and other expenses.
Conference Call
A conference call regarding ARLP’s 2024 Quarter financial results is scheduled for today at 10:00 a.m. Eastern. To participate in the conference call, dial (877) 407-0784 and request to be connected to the Alliance Resource Partners, L.P. earnings conference call. International callers should dial (201) 689-8560 and request to be connected to the same call. Investors may also listen to the call via the “Investors” section of ARLP’s website at www.arlp.com.
An audio replay of the conference call will be available for approximately one week. To access the audio replay, dial U.S. Toll Free (844) 512-2921; International Toll (412) 317-6671 and request to be connected to replay using access code 13745713.
About Alliance Resource Partners, L.P.
ARLP is a diversified energy company that is currently the largest coal producer in the eastern United States, supplying reliable, affordable energy domestically and internationally to major utilities, metallurgical and industrial users. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is evolving and positioning itself as a reliable energy partner for the future by pursuing opportunities that support the advancement of energy and related infrastructure.
News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission (“SEC”), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7673 or via e-mail at investorrelations@arlp.com.
The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions or other business combinations that may occur after the date of this release. We have included more information below regarding business risks that could affect our results.
FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Those forward-looking statements include expectations with respect to our future financial performance, coal and oil & gas consumption and expected future prices, our ability to increase unitholder distributions in future quarters, business plans and potential growth with respect to our energy and infrastructure transition investments, optimizing cash flows, reducing operating and capital expenditures, infrastructure projects at our existing properties, growth in domestic electricity demand, preserving liquidity and maintaining financial flexibility, and our future repurchases of units and senior notes, among others. These risks to our ability to achieve these outcomes include, but are not limited to, the following: decline in the coal industry’s share of electricity generation, including as a result of environmental concerns related to coal mining and combustion, the cost and perceived benefits of other sources of electricity and fuels, such as oil & gas, nuclear energy, and renewable fuels and the planned retirement of coal-fired power plants in the U.S.; our ability to provide fuel for growth in domestic electricity demand, should it materialize; changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position; changes in global economic and geo-political conditions or changes in industries in which our customers operate; changes in commodity prices, demand and availability which could affect our operating results and cash flows; the outcome or escalation of current hostilities in Ukraine and the Israel-Gaza conflict; the severity, magnitude and duration of any future pandemics and impacts of such pandemics and of businesses’ and governments’ responses to such pandemics on our operations and personnel, and on demand for coal, oil, and natural gas, the financial condition of our customers and suppliers and operators, available liquidity and capital sources and broader economic disruptions; actions of the major oil-producing countries with respect to oil production volumes and prices could have direct and indirect impacts over the near and long term on oil & gas exploration and production operations at the properties in which we hold mineral interests; changes in competition in domestic and international coal markets and our ability to respond to such changes; potential shut-ins of production by the operators of the properties in which we hold oil & gas mineral interests due to low commodity prices or the lack of downstream demand or storage capacity; risks associated with the expansion and investments into the infrastructure of our operations and properties; our ability to identify and complete acquisitions and to successfully integrate such acquisitions into our business and achieve the anticipated benefits therefrom; our ability to identify and invest in new energy and infrastructure transition ventures; the success of our development plans for our wholly owned subsidiary, Matrix Design Group, LLC, and our investments in emerging infrastructure and technology companies; dependence on significant customer contracts, including renewing existing contracts upon expiration; adjustments made in price, volume, or terms to existing coal supply agreements; the effects of and changes in trade, monetary and fiscal policies and laws, central bank policy actions including interest rates, bank failures and associated liquidity risks; the effects of and changes in taxes or tariffs and other trade measures adopted by the United States and foreign governments; legislation, regulations, and court decisions and interpretations thereof, both domestic and foreign, including those relating to the environment and the release of greenhouse gases, mining, miner health and safety, hydraulic fracturing, and health care; deregulation of the electric utility industry or the effects of any adverse change in the coal industry, electric utility industry, or general economic conditions; investors’ and other stakeholders’ increasing attention to environmental, social, and governance matters; liquidity constraints, including those resulting from any future unavailability of financing; customer bankruptcies, cancellations or breaches to existing contracts, or other failures to perform; customer delays, failure to take coal under contracts or defaults in making payments; our productivity levels and margins earned on our coal sales; disruptions to oil & gas exploration and production operations at the properties in which we hold mineral interests; changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures; changes in our ability to recruit, hire and maintain labor; our ability to maintain satisfactory relations with our employees; increases in labor costs including costs of health insurance and taxes resulting from the Affordable Care Act, adverse changes in work rules, or cash payments or projections associated with workers’ compensation claims; increases in transportation costs and risk of transportation delays or interruptions; operational interruptions due to geologic, permitting, labor, weather, supply chain shortage of equipment or mine supplies, or other factors; risks associated with major mine-related accidents, mine fires, mine floods or other interruptions; results of litigation, including claims not yet asserted; foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad; difficulty maintaining our surety bonds for mine reclamation as well as workers’ compensation and black lung benefits; difficulty in making accurate assumptions and projections regarding post-mine reclamation as well as pension, black lung benefits, and other post-retirement benefit liabilities; uncertainties in estimating and replacing our coal mineral reserves and resources; uncertainties in estimating and replacing our oil & gas reserves; uncertainties in the amount of oil & gas production due to the level of drilling and completion activity by the operators of our oil & gas properties; uncertainties in the future of the electric vehicle industry and the market for EV charging stations; the impact of current and potential changes to federal or state tax rules and regulations, including a loss or reduction of benefits from certain tax deductions and credits; difficulty obtaining commercial property insurance, and risks associated with our participation in the commercial insurance property program; evolving cybersecurity risks, such as those involving unauthorized access, denial-of-service attacks, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing-attacks, ransomware, malware, social engineering, physical breaches, or other actions; and difficulty in making accurate assumptions and projections regarding future revenues and costs associated with equity investments in companies we do not control.
Additional information concerning these, and other factors can be found in ARLP’s public periodic filings with the SEC, including ARLP’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 23, 2024. Except as required by applicable securities laws, ARLP does not intend to update its forward-looking statements.
