George Eadie

George Eadie asked for clarification on whether the updated three-year production guidance for Manitoba would include new drilling results and when the next technical report for Manitoba, potentially incorporating Talbot and other satellite deposits, would be released. He also inquired about the timeline for the Mason project's pre-feasibility study (PFS) and any updates on potential partnerships.

Answer

President and CEO Peter Kukielski stated that a Manitoba technical report is not yet determined, as current reports are valid, and future reports would incorporate new drilling. COO Andre Lauzon detailed extensive ongoing work in Manitoba, including drilling at Lalor, Talbot, and New Britannia, and optimization efforts, expressing confidence in sustaining 185,000 ounces of gold annually. CFO Eugene Lei added that the three-year guidance would be released with the reserve and resource update in late March. Peter Kukielski then noted that the Mason PFS is expected later next year, with no partnering contemplated at this early stage, and Andre Lauzon highlighted recent clarity on federal land use as a catalyst for accelerating the project.

George Eadie asked for clarification on whether the updated three-year production guidance for Manitoba would incorporate new drilling results and when a new technical report, potentially including Talbot and other satellite deposits, might be released. He also sought updates on the Mason project's pre-feasibility study (PFS) timeline, expected outcomes, and any potential partnership discussions.

Answer

President and CEO Peter Kukielski, COO Andre Lauzon, and CFO Eugene Lei stated that a new technical report for Manitoba is not yet decided, but the 3-year guidance (end of March) will show extended gold production. They detailed ongoing exploration at Lalor and Talbot, and optimization at New Britannia. For Mason, Peter Kukielski and Andre Lauzon confirmed PFS work is starting, expected to complete late next year, with no partnership contemplated at this early stage.

George Eadie inquired about the Marigold mine's 2026 production guidance, specifically questioning potential conservatism given stacking rates, and sought clarification on expected stacking grades for future years compared to the 2024 TRS. He also asked about the silver price required for Puna to extend its mine life beyond 2028, potentially into the 2030s, and its dependence on Cordilleras.

Answer

Executive Chairman Rod Antal and EVP of Operations and Sustainability Bill MacNevin explained that Marigold's guidance incorporates updated blending requirements for durable and non-durable ore, and a new technical report (TRS) will provide updated profiles, including growth opportunities like Buffalo Valley and New Millennium. For Puna, they highlighted opportunities at Chinchillas (pit step-backs) and Molina, with Cordilleras as a longer-term prospect, noting that current silver prices support these extensions.

George Eadie asked about the Marigold production guidance for 2026, questioning if there was conservatism given his calculations, and sought clarification on expected stacking grades for future years compared to the 2024 TRS. He then inquired about the minimum silver prices required for Puna to extend operations beyond 2028 and the impact of Cordilleras' success.

Answer

Bill MacNevin (EVP, Operations and Sustainability) explained that Marigold's guidance reflects updated planning for ore blending and pit expansions due to higher metal prices, which has rescheduled production but maintains total ounces over the life of mine. Rod Antal (Executive Chairman) added that a new technical report incorporating Buffalo Valley and New Millennium projects will provide updated profiles. For Puna, Bill MacNevin expressed excitement about its potential, citing opportunities at Chinchillas (additional step-backs) and Molina, noting that current silver prices support these extensions. Rod Antal prioritized Chinchillas, Molina, then Cordilleras, confirming a bright future for Puna.

George Eadie questioned the conservative nature of Warrior's 2026 guidance, particularly regarding production, sales, and cash flow, given the company's history of outperforming. He also asked about the likelihood of being free cash flow positive in Q2 2026 and the company's strategy for returning cash to shareholders, including the potential for early share buybacks.

Answer

Dale Boyles (CFO, Warrior) attributed the conservative guidance to potential downward price reversion and the disconnect in the U.S. East Coast Index relativity. He acknowledged that strong Q1 prices could lead to a break-even Q2 for free cash flow, with significant cash generation expected in the second half. Boyles stated that future cash returns would likely involve a higher fixed quarterly dividend, special cash dividends, and selective stock buybacks, but did not commit to immediate buybacks, emphasizing the need to assess business cash needs.

George Eadie questioned the conservative nature of Warrior's 2026 guidance, particularly regarding cash flow, given the strong 2025 performance. He also asked about the timing of becoming free cash flow positive and the company's strategy for returning cash to shareholders, including the forms of return and the rationale for not initiating share buybacks sooner.

Answer

CFO Dale Boyles acknowledged the conservatism in the guidance, hoping price assumptions prove low, and highlighted the impact of varying relativities, especially the U.S. East Coast Index, on overall realization. He suggested that while the second half of 2026 is expected to be free cash flow positive, the second quarter could potentially break even depending on prices. Dale Boyles confirmed that the current cash level of $300 million (plus investments) is within the desired long-term range, and the company expects to start returning cash to shareholders in the near future, potentially in the second half of 2026. He outlined a strategy involving a higher fixed quarterly dividend, special cash dividends, and selective stock buybacks. Regarding immediate buybacks, Dale Boyles stated the company would assess cash needs and the best distribution method rather than committing to a specific stock price.

George Eadie from UBS Group AG inquired about the current cost profile for the Blue Creek project versus prior guidance and its potential trajectory. He also asked about the strategy for ramping up Blue Creek volumes in a weak price environment and the consequent impact on gross price realization, later following up on the overall cost structure and SG&A spending.

Answer

CFO Dale Boyles stated that previous Blue Creek cost guidance was based on a higher price environment and it's too early for a new specific number, but confirmed its positive impact. CEO Walter Scheller added that volume expansion depends on securing contracts, not flooding the spot market. Boyles acknowledged the risk to the 85-90% realization target in the current market, attributing the recent 80% realization to the wide index spread, and noted SG&A guidance accounts for future Blue Creek ramp-up needs.

George Eadie of UBS questioned the specifics of the remaining CapEx for the Blue Creek project, the reason for the Q1 working capital build, and the met coal price assumption used for the company's annual guidance.

Answer

CFO Dale Boyles and CEO Walter Scheller clarified that remaining CapEx is primarily for final construction labor on the prep plant modules, the overland belt, and the barge loadout. Boyles attributed the working capital build to Blue Creek inventory and expects it to continue in Q2 before reversing as sales commence. He also stated the annual guidance was based on a $200/metric ton met coal price.

George Eadie asked for confirmation on the eligibility of all PAMC and West Elk coal for the 45X credit, and the expected timing of the $100 million in additional insurance proceeds. He then questioned what tangible actions Core Natural Resources has taken to instill confidence in 2026 operational delivery after the challenges of 2025, and if any other operations face challenging mine plans besides Leer. He also inquired about the U.S. coal fleet capacity factor, asking if a sustainable 60% capacity factor is a fair assumption for the second half of 2026 or first half of 2027. Following up, he asked if U.S. power coal demand in the high 400s in 2027 is reasonable with high gas prices, and if West Elk's potential to reach 6 million tons is the only volume lever Core can pull.

Answer

Mitesh Thakkar, President and CFO, confirmed that both the metallurgical and High CV Thermal segments will benefit from the 45X credit. He stated that insurance claims will be filed in the first half of the year, with proceeds expected to be more weighted towards Q2-Q4, though some are coming in Q1. Jimmy Brock, Chairman and CEO, expressed excitement for 2026, noting all assets are fully operational, with schedule changes and production optimizations implemented. He highlighted great conditions at West Elk and Leer South's strong return, emphasizing a laser focus on unit costs and no other challenging mine plans besides Leer's district move. Deck Slone, Senior Vice President of Strategy and Public Policy, explained that the U.S. coal fleet's current 49% capacity factor has historically been 70-72%, and while 61% was seen in early 2025, a sustainable 60% is likely over several years, not as quickly as H2 2026 or H1 2027. Bob Braithwaite, Senior Vice President of Marketing and Sales, added that utilities are investing in their coal fleets. Mr. Slone also noted the Trump administration's efforts to preserve coal-fired plants. Mitesh Thakkar cautioned that achieving high 400s in U.S. power coal demand depends on coal production ramp-up, which requires stronger pricing signals. Jimmy Brock affirmed West Elk's capability to produce 6 million tons if market, customers, and rails support it, stating they will run to the market.

George Eadie asked for confirmation on the eligibility of PAMC and West Elk for the 45X credit and the expected timing of the $100 million insurance proceeds. He also sought tangible evidence of operational improvements for 2026, given the challenges of 2025, and inquired about any other challenging mine plan areas. Finally, he asked about the sustainability of the U.S. coal fleet capacity factor, specifically if 60% is a fair assumption for the second half of 2026 or first half of 2027, and if high 400s in U.S. power coal demand for 2027 is realistic.

Answer

Mitesh Thakkar, President and CFO, confirmed that both the metallurgical and High CV Thermal segments are eligible for the 45X credit. He expects the $100 million insurance proceeds to be more weighted towards the second to fourth quarters of 2026, following first-half claim filings. Jimmy Brock, Chairman and CEO, expressed strong confidence in 2026 operational delivery, citing all assets being fully operational, schedule changes, and a laser focus on unit costs. He noted excellent conditions at West Elk and anticipated strong performance from Leer South, with no other challenging mine plan areas besides Leer moving into a new district with potentially less yield. Deck Slone, Senior Vice President of Strategy and Public Policy, stated that while the U.S. coal fleet has historically run at 70-72% capacity factors and saw 61% in early 2025, reaching 60% sustainably would take longer than H2 2026. He highlighted the Trump administration's efforts to preserve coal plants and the potential for significant consumption increases. Bob Braithwaite, Senior Vice President of Marketing and Sales, added that utilities are investing in their coal fleets. Jimmy Brock and Mitesh Thakkar cautioned that reaching higher capacity factors and demand levels depends on gas prices, overall demand, and strong pricing signals to incentivize industry production ramp-up.

George Eadie asked about the percentage of PRB coal prices that are cost-linked, the exact depletion timeline for the Moorvale mine, and an update on the operational status and future capital expenditure plans for the Lupe mine, specifically regarding pit sequencing.

Answer

Malcolm Roberts, EVP and Chief Commercial Officer, clarified that PRB contracts are generally not cost-plus, but government policies, impositions, and taxes can account for 20-25% of price upside. Mark Spurbeck, Chief Financial Officer, stated that Moorvale mining will wind down by mid-2026, transitioning to Coppabella. For Lupe, he noted sustaining capital for the next 2-3 years, with a material capital slug of approximately $100 million expected around 2029 for pit 8, 9, and 10 extensions, including fleet and equipment.

George Eadie from UBS asked about the percentage of Peabody's PRB prices that are cost-linked and if a $5/short ton margin could be fully captured on 2027 contracts at $17/short ton if costs remain flat. He also inquired about the impact of taxes and rebates on price upside, the depletion timeline for Moorvale Mine and its effect on CMJV volumes, and the operational status and future capital expenditure for Wilpinjong Mine.

Answer

Malcolm Roberts, Peabody's Chief Commercial Officer, explained that PRB contracts generally do not have cost-linked pricing, except for government policy or taxes, and pricing is based on market levels. He agreed that royalties, taxes, and similar factors could account for 20-25% of the book, offsetting some price increases. Mark Spurbeck, Chief Financial Officer, stated that Moorvale Mine would wind down in the second half of 2026, transitioning production to Coppabella, expecting a slight year-over-year decline for the combined CMJV entity. For Wilpinjong, Mr. Spurbeck noted sustaining capital for the next 2-3 years, with a significant capital expenditure (around $100 million for fleet and equipment) anticipated around 2029 for pit extensions.

George Eady of UBS asked about the potential financial liability for Peabody if it terminates the Anglo American deal under the Material Adverse Change (MAC) clause and is later found liable. He also inquired about the timing for a potential sell-down of the Centurion mine and whether any sale contract might include clauses related to production hurdles.

Answer

President and CEO Jim Grech expressed high confidence in the company's MAC position, stating they would not set aside a reserve for a hypothetical negative arbitration ruling and that the shareholder return program would not change. Regarding Centurion, Mr. Grech clarified that a sell-down is a possibility, not a commitment, and declined to comment on potential terms or a specific timeline, noting there is no hurry to make a decision.

George Eady of UBS questioned Peabody's confidence in its Material Adverse Change (MAC) position regarding the Anglo American asset acquisition, asking about potential liabilities and the impact on cash returns during a possible arbitration period. He also inquired about the timing for a potential sell-down of the Centurion mine and whether any sale contract might include production-related clauses.

Answer

President and CEO Jim Grech expressed high confidence in the company's MAC position, stating they are prepared for arbitration and see no need to reserve for hypothetical damages. He affirmed that the shareholder return policy of returning at least 65% of adjusted free cash flow remains unchanged. Regarding the Centurion mine, Mr. Grech clarified that a sell-down is a possibility, not a commitment, and declined to provide a timeline or comment on potential terms, noting there is no hurry to make a decision.

George Eady of UBS asked about Peabody's potential liability in the Moranbah North MAC dispute, how the company would handle a negative outcome, and its impact on cash returns. He also inquired about the timing of a potential sell-down of the Centurion project and whether a sale contract might include production-related clauses.

Answer

President and CEO Jim Grech expressed high confidence in the company's MAC position, stating they are prepared for arbitration and will not change the shareholder return program. Regarding Centurion, Mr. Grech noted a sell-down is a possibility but not a commitment, and he declined to comment on hypothetical contract terms or provide a specific timeline, stating there is no hurry to make a decision.

George Eady of UBS inquired about Peabody's potential liability and financial strategy if the Moranbah North MAC dispute results in an unfavorable arbitration ruling. He also asked about the timing for a potential sell-down of the Centurion project and whether the sale contract might include performance-based clauses.

Answer

President and CEO Jim Grech expressed high confidence in the company's MAC position, stating they are prepared for arbitration and do not see the need for a financial reserve for a negative outcome. He affirmed the shareholder return program is not expected to change. Regarding Centurion, Grech noted a sell-down is a possibility, not a commitment, and declined to provide a timeline or comment on hypothetical contract terms.

George Eadie of CLSA inquired about the long-term sustainability of cost reductions at the Curragh mine after removing five contractor fleets and asked for quantification of the expected yield improvements at the Buchanan mine's new Northern District panel.

Answer

Managing Director and CEO Douglas Thompson explained that the operational changes at Curragh are designed to create a long-term sustainable stripping ratio geared towards draglines, mitigating the risk of needing to bring back fleets. For Buchanan, he stated the new panel will be ready in Q3 and is expected to deliver a yield improvement of approximately 6%, with a target in the mid-50s percentage range.

George Eadie from UBS asked for quantification of elevated stockpiles at Curragh and questioned the impact of increased dragline waste movement on rehandle and potential bottlenecks.

Answer

CEO Douglas Thompson declined to provide specific stockpile volumes but confirmed healthy inventories across in-pit, ROM, and product stockpiles. He clarified that the improved dragline productivity (44% of waste vs. 37% previously) is for prime waste movement, resulting from past investments in pit geometry that optimize dragline performance. Thompson stated that rehandle assumptions in the current plan remain the same, though opportunities for improvement exist.

Asked for quantification of Curragh's elevated stockpiles and inquired about dragline rehandle assumptions and potential bottlenecks given the increased proportion of waste moved by draglines.

Answer

The company declined to quantify stockpiles but confirmed they are healthy across all stages. The increased dragline productivity is from more efficient prime digging due to better pit geometry, not from taking on more rehandle, which is planned to remain the same. New equipment is also improving pre-strip productivity.