Alpha Metallurgical Resources - Earnings Call - Q4 2020

Transcript

Speaker 0

Good day and welcome to the Alpha Metallurgical Resources Fourth Quarter twenty twenty Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Emily O'Quinn, Senior Vice President of Corporate Communications.

Please go ahead.

Speaker 1

Thanks, Tom, and good morning, everyone. Before we get started, let me remind you that during our prepared remarks and the Q and A period, our comments related to expected business and financial performance contain forward looking statements and actual results may differ materially from those discussed. For more information regarding forward looking statements and some of the factors that can affect them, please refer to the company's fourth quarter twenty twenty earnings release and the associated SEC filings. Please also see those documents for information about our use of non GAAP measures and their reconciliation to GAAP measures. Participating on the call today are Alpha's Chairman and Chief Executive Officer, David Stetson and President and Chief Financial Officer, Andy Edson.

Also participating on the call is Jason Whitehead, our Chief Operating Officer. With that, I'll turn the call over to David.

Speaker 2

Thanks, Emily. Good morning to everyone on the call and thank you for joining us today. Part of the typical year end reporting process for the fourth quarter results is also to consider the prior year as a whole, the challenges and opportunities it presented, how the leadership team responded, and what might be learned from the past twelve months to help us improve the path ahead. 2020 was anything but normal and unfortunately was a year marked by disruption, uncertainty, and in many cases, extremely difficult circumstances due to the global pandemic. Both our industry and our company experienced tremendous adversity.

Despite the headwinds, we weathered the uncertainty and ended the year with a strong sales book, a new record low in cost performance and a clear foundation for leading the business forward. In fact, 2020 ended up being extremely productive and transformational year for Alpha. We set some big goals for ourselves at the 2019 And I'm proud to say we accomplished nearly all of them, even during a global pandemic. This is truly a situation where we put our heads down and did the work to deliver on our stated goals. Before we dive into the details of the fourth quarter, I want to touch on some of the accomplishments of the last year to put these achievements in perspective.

I also want to point out that we have a new investor presentation on our website and we invite investors to view our new presentation as it contains additional details, which include a number of the points that I'm going to be discussing this morning. As you heard me say many times before, we are working to become a pure play metallurgical producer. In the middle of the last year, we completed our exit from the Powder River Basin, idled the Kelty Thermal Mine and the adjacent Del Barden preparation plant. In December, we divested our largest thermal property, the Cumberland Mine, thereby reducing our bonding collateral requirements and eliminating most thermal production from our portfolio. As a result of these moves away from thermal production, we executed a rebranding effort to better reflect our strategic vision for the future while also returning to our alpha roots and our brand's rich heritage.

We're now proudly hosting our first earnings call under our new name of Alpha Metallurgical Resources. We were already the largest and most diverse metallurgical coal company in The United States before these actions. But now I believe we're even better positioned to capitalize on a market turnaround. The investments we made in building out low cost development mines are beginning to pay dividends as these capital expenditures are largely complete and the mines are now producing. In a few minutes, Jason will provide an update on our Black Eagle, Roe Fork 52, and Lynn Branch mines.

Our expectations are that these mines will have a cost profile of $70 per ton or less. Our asset base was already favorably positioned relative to our peers, but with the past year's fine tuning, I believe we are even better positioned for success. In the last year, we've also built on the foundational changes we made in 2019, that being a flatter, more nimble organizational structure that facilitates decision making. This philosophy yielded the record setting cost performance that we enjoyed over the last several quarters and reduced our overhead and SG and A by more than $10,000,000 We also completed routine succession planning process toward the end of the year and as a result announced three important promotions among the executive team, with Andy Edson being named President and CFO, Roger Nicholson was promoted to Chief Administrative Officer alongside his existing duties, And Dan Horn was elevated to Executive VP of Sales. Additionally, we have strengthened and diversified the company's leadership at the Board level with four new directors, Ken Curtis, Liz Bessiden, Danny Smith, and Mike Quillen.

As many of you know, Mike founded Alpha Natural Resources back in 02/2003. Together with our prior directors, I'm proud to have such a high qualified group of individuals and their vast breadth of knowledge and experience in place to help guide the company. In addition to the strides we made in transitioning to a pure play metallurgical coal company and in solidifying our leadership and vision for the company, we also executed on improvement of one of our core tenets, working safely and responsibly. In a few minutes, Jason will share some details about our safety environmental performance and Andy will take us through the financial results of the fourth quarter. Before I hand the call over, I want to take a moment to address the market fluctuations we've seen in the last several months.

We have been pleased to see increased demand for our products along with improved pricing. But we continue to focus on cash preservation while we await the impacts of higher pricing flowing through our sales contracts and ultimately into our accounts receivable. Looking ahead for what the next several years will hold, I'm optimistic about the need for metallurgical coal in the national and global economic recoveries. With growing consensus building around the likelihood of a significant infrastructure spending, met coal will be a critical element of these efforts. And as the largest coal producer in the country, we are poised to play an important role in that work and look forward to doing so.

With that, I will ask Jason to provide an operational update for us.

Speaker 3

Thank you, David, and good morning, everyone. As you've already heard this morning, 2020 was a busy year for us and we've accomplished a lot over the last several quarters. Despite enduring a global pandemic and challenges within our markets, our employees were able to stay focused and achieve safety and regulatory compliance rates that are lower than the national average. All this while maintaining 99.9% compliance with water quality standards. Each year, the West Virginia Office of Miners Health, Safety and Training, along with West Virginia Coal Association, award Mountaineer Guardian awards to operations that show excellence in safety and compliance performance.

For 2020, we're pleased to share that six Alpha operations were recipients of that award. On the environmental side, our Republic team, who won two awards jointly given by the West Virginia DEP and the West Virginia Coal Association. And I'd just like to point out I'm very proud of the outstanding work that's been recognized and that's shown by these awards. And I congratulate everyone at our operations for what they've done to contribute to this. Referencing our 99.9% compliance with water quality standards, I'm pleased to report to you that we've successfully met the commitments within our EPA consent decree, which was officially terminated at the January.

You may recall in prior earnings calls that we received a partial termination back in February 2020. And now, thanks to the continued diligent work of our ops and environmental crews, we fully satisfied those commitments. We continue to focus on operating safely and responsibly each day and build on that daily performance into another successful year. As David mentioned, we're going to provide an update on our portfolio optimization efforts. Over the last eighteen months, we've taken nearly $50,000,000 worth of cost out of our operations structure.

And we've redeployed capital to projects with lower cost profiles. We're now at a point where the bulk of our capital expenditures for our new low cost met mines have been spent. And those investments are providing important optionality for us as we plan for the future. In addition to serving replacement mines for higher cost mines that we have and will continue to take offline, there's room for growth in each of these projects. In the 2019 and throughout 2020, we operated 22 deep mines across our CAP portfolio.

Those deep mines had an annual run rate of approximately 10,000,000 tons. As of twelvethirty onetwenty twenty, we were operating 15 deep mines. And by the end of Q1 of this year, we'll be fully streamlined and operating 12 deep mines in Central App, while maintaining that annual run rate of approximately 10,000,000 tonnes. These efforts, coupled with our ongoing continuous improvement initiatives at the section or spread level, have yielded record low cost structures that Andy will speak to shortly. Bringing you up to speed on the three significant development CapEx projects that we've discussed in the past, I'm pleased to announce that Road Fork 52 is now complete.

And they are operating with three dual continuous miner sections. The third and final section came online in late January. With all three sections now operating together in February for the first time, we're seeing preliminary cost of production south of $60 a ton. As of today, our Lindbranch mine is now operating with two dual continuous miner sections. And with the depletion of reserves at our AracomaAlma mine, crews and equipment from Alma will be redeployed to Lynn Branch and bolted on as the third and final planned dual continuous miner section.

This last step will complete our transformation around the Bandmill Complex. This week at Marport, our Black Eagle Mine is operating all three planned dual continuous miner sections. Two of these three sections have enjoyed steadily improving coal thickness and will declare them in the thickest part of the reserve in the back half of this year. The other section there will continue development throughout 2021 to sustain long term ventilation for the other two sections. In 2022, all three sections are expected to mine in the highest clean tons per foot area.

So with that update on operations and capital projects, I'll turn the call over to Andy for additional detail on our cost. Thanks, Jason. By any measure, 2020 was a uniquely challenging year. But as David mentioned, it was also a very productive year for Alpha as we accomplished many worthy goals reducing operating SG and A and overhead costs, divesting the Cumberland properties as part of our strategic shift away from thermal production, achieving high standards of safety and environmental performance, and enhancing our board composition. Going back to this past December, we closed the transaction to divest Cumberland and the related assets.

And in addition to transferring ownership of the mine, coal reserves, permits, infrastructure, the closing of this transaction also released Alpha from all reclamation obligations associated with those Pennsylvania entities. That number is estimated to be around $169,000,000 on an undiscounted basis. At closing, Alpha provided $20,000,000 in cash to Iron Synergy, the acquirer, and transferred $30,000,000 in existing cash bonding collateral to Iron Synergy's surety provider. Now there are three real reasons we were extremely excited about this transaction. First, it got us dramatically closer to our goal of becoming a pure play met company.

Again, this strategy goes back really to when David came back on board back in 2019. The stated strategy and the ability to move forward on that, particularly with Cumberland, has been a real sea change for us. Second, it saves us having to close the mine at the '2 as we announced we would, barring any transaction. And then we would have to begin reclaiming the mine in its multiple impoundments, which as we mentioned earlier, 169,000,000 of undiscounted reclamation spend would have been a significant weight for

Speaker 4

the company to carry.

Speaker 3

And finally, divesting the Cumberland mine did allow us to avoid potential collateral increases on our Northern App bonds. Those increases could have been tens of millions of dollars. Naturally, we've talked in the past about how tough the surety markets are, generally speaking, but the thermal markets have been very, very challenging. So avoiding that situation was a real benefit to the company. Moving on to the balance sheet and cash flows.

We ended the year with approximately $139,000,000 in unrestricted cash and no additional availability on our ABL. Cash provided by operations for the quarter was $56,000,000 That does include an accelerated AMT tax refund of $66,000,000 During the quarter, we also reduced our long term debt by $15,000,000 down to $583,000,000 We continued to manage our working capital, which provided a total of $25,000,000 of cash in the fourth quarter. As previously mentioned, we did have the cash outflows associated with the Cumberland deal, which was a total of roughly $50,000,000 The ABL facility was down to $3,400,000 in outstanding borrowings as of year end and had $123,000,000 of LCEs outstanding. Subsequent to year end, we repaid the remaining $3,400,000 of the principal and currently have no borrowings outstanding under the ABL. Also of note on the ABL, in January we saw the continued impact of lower sales realizations Q4 rolling through our AR balances, which requires to post $22,000,000 of cash to meet minimum availability requirements.

We have reported this as twenty five four million dollars we used to pay off our last outstanding borrowings. As of the February, our borrowing base has grown back to more normalized levels and we just received that $22,000,000 of cash back. So the ABL is back to under normal support with AR and inventory. However, while AR balances real time are recovering from the very tough pricing environment we saw in fourth quarter of last year, Cash receipts on export sales do tend to lag by sixty to ninety days depending on customer terms. So throughout the first quarter, our cash balance has reflected the receipts of the trough products that we experienced in that fourth quarter.

We've also seen some additional pressure from the disconnect of US East Coast pricing and Australian premium low vol pricing, with our sales into India being tied to the much lower Aussie index. One more important 2021 cash related item of note, the NOL carryback tax refund. We still expect that to receive around $70,000,000 sometime in the latter part of the year. Seems like the first stage of the pauseapproval process has been completed. So now we're simply waiting on Congress to wrap up the issuing of that, which I would probably conservatively put early fourth quarter.

But again, the timing could shift on us with that. As to financial results, Alpha reported fourth quarter EBITDA of $7,400,000 down from $12,400,000 in the third quarter, primarily due to lower slightly lower volumes and increased cost of coal sales in our met segment. Our met costs were up slightly from our record low third quarter levels, but that wasn't unexpected. Fourth quarter every year includes holidays and vacation time, which does tend to pull back productivity and increase costs. So that was as planned.

But in spite of that, we continued excellent cost performance in both of the business segments. Our segment previously known as the CAPP Met segment, now simply called the Met segment, reported a second consecutive quarter of cost under $70 a ton, with the fourth quarter cost of coal sales per ton of $69.25 and a full year 2020 cost of $70.19 down from nearly $88 in 2019. That is a 20% reduction year over year, even while including the impact of a nearly month long furlough in April. So just, again, phenomenal results from the operations team. And the team continue to deliver incredible, incredible performance there.

In the CAPP Thermal segment, we also experienced solid performance with the fourth quarter cost coming in at $44.15 while the full year 2020 CAPP Thermal cost declined approximately $2 year over year to $47.2 I do often get the question, and more so now that we've got a full year of comparison, '19 to '20, but how are these cost reductions possible? So here's a little bit more color on that. First and I think we do a pretty solid job of laying this out in our investor deck when you have a chance to look at it. But we pruned our portfolio to focus on the more productive increasing our average production per met mine by 6%.

Speaker 0

If you exclude the impact of

Speaker 3

the furlough in April, that's a 12% increase. Second, and as a result of the reduced mine count, we were able to rationalize our operations work force needs and lower both our overhead and labor counts. We were able to implement these reductions in MICAH and the workforce without affecting our production levels. So the math on that is really simple, but the execution of such a plan is not. It's very difficult in fact.

And this approach will ride heavily on the leadership of Jason, the operations VPs for implementation. In spite of all of those improvements and the cleaning up the continued cleaning up of the portfolio and optimization activities, we still think there are some further gains to be made. So naturally, we will continue to pursue all the improvements that we can. As for segment contribution, overall, the Met segment generated $19,000,000 of call margin during the quarter, down from $24,000,000 in the prior quarter, while the Cat Thermal segment contributed $8,000,000 of margin, which is roughly flat with the third quarter. On the revenue front, our met shipments remained strong in the fourth quarter with total volume of 3,200,000 tonnes shipped, down about 100,000 tonnes Q over Q.

On the positive side, the or the property improved with met average realizations up approximately $1.5 to around $70 a ton. CAPP Thermal volumes were also down about 100,000 tons to 500,000 tons in the fourth quarter, while pricing improved $2 a ton to approximately $60 SG and A, excluding noncash stock comp and onetime items, was $14,400,000 in the fourth quarter compared with $13,500,000 in the third quarter. And our CapEx for the quarter was 35,100,000.0 versus $27,800,000 in the prior quarter. For the full year 2020, our year over year SG and A declined by nearly $10,000,000 to $51,000,000 And as we show in our guidance, we expect additional cost reduction in 2021, further highlighting the effectiveness of our cost reduction initiatives. Shifting to 2021 guidance.

We are reiterating our updated operating guidance that was issued on December 10. We expect to ship a total of 14,800,000 to 16,200,000 tons in 'twenty one, consisting of 12,500,000 to 13,000,000 of pure met in our met segment and 1,000,000 to 1,500,000 tons of thermal byproduct within the met segment. For the all other segment, we are guiding to 1,300,000 to 1,700,000 tons of thermal coal sales. Just to give some additional perspective on the magnitude of our strategic shift away from thermal, we shipped nearly 11,000,000 tons of thermal in 2019. And furthermore, we expect to have thermal shipments only as met byproducts starting in 2023.

Our last remaining standalone thermal mine, slab camp, we expect it to deplete near the 2022. So going into 'twenty three, there will be no more standalone thermal production. Based on the midpoint of our met guidance, the MET only portion is 53% committed and priced to $85.47 with an additional 32 percent committed without firm pricing. Some of that is priced based on index. Some of it is priced without a true price attached to it.

Regardless, it's still fluctuating pricing on that 32%. The thermal byproduct portion of the met segment is 86% committed and priced at an average price of $50.8 And the All Other segment, we are fully committed and priced for 'twenty one at an average price of $57.57 On the cost side, our 'twenty one net cost per ton is anticipated to be in the range of 68 to $74 with our all other segment expected to come in between $45 and $49 per ton. SG and A, excluding noncash stock comp and onetime items, is forecasted to be in the range of 44,000,000 to $49,000,000 representing a $1,000,000 decline from our initial guidance as a result of the Cumberland divestiture. We expect our 'twenty one CapEx to be near maintenance level of 80,000,000 to $100,000,000 as most of our growth CapEx was spent in the past two years on the project Jason highlighted earlier. The 'twenty one CapEx guidance represents a $5,000,000 reduction from our initial guidance for this year, again reflecting a reduction in numbers due to the Cumberland divestiture.

Idle operations expenses are expected to be about $3,000,000 lower than the initial guidance, now between 24,000,000 and $30,000,000 Cash interest, we expect to come in roughly between 51,000,000 and $55,000,000 while DD and A is now expected to be in the range of $125,000,000

Speaker 5

to $145,000,000

Speaker 3

for 'twenty one. And lastly, the cash tax rate should be near zero. So with that, operator, I believe we're ready to open the line for questions.

Speaker 0

We will now begin the question and answer session. And the first question comes from Lucas Pipes with B. Riley Securities. Please go ahead.

Speaker 4

Hey, good evening everyone and thanks so much for all the details. This is very helpful. Also congratulations on managing really this incredibly uncertain time very well. My first question is on the market. Know, we've had a few of your peers report results thus far.

And frankly, there's been a bit of a mixed message as to the strength of the met coal market today. And I wondered if you can provide a little bit more color as to what you're seeing. Do you expect to be able to sell all your product this year on the met coal side? And then on pricing, obviously, we can look at the assessments from Platts, etcetera, but it would be really great to kind of hear other discounts versus those assessments. And then on a netback basis, there would be pricing coming in, in today's environment.

Thank you very much.

Speaker 6

Hi, Lucas. This is Dan Horn. There's a lot to unpack there, but I'll start. The demand we're seeing for our products is really good, both here in the North American markets and abroad. Steel plants have rebounded surprisingly well from last year's low pandemic levels.

The demand for coke and for coking coal is really good. I guess the mixed messages that you're referring to is, you know, we we there is a disconnect between the Aussie low vol indices and The US East Coast indices. You know, we're dealing with that in India. We we ship, as we've indicated, we we ship coal into India based on those indices. But at the same time, to counteract that, The US indices have been quite strong.

And as far as the demand, we expect to hit our numbers. In fact, we're shipping all we can, and we're turning down some business here. We're not able to even chase every opportunity right now that that that we see.

Speaker 4

Is that It's very, very helpful. Any color you'd be able to provide kind of on a blended basis what we could expect in today's environment for your unpriced tons?

Speaker 6

Just say that I'll I'll just say that, you know, in this strong environment, we're not seeing much discounting at all if that to the indices. In a weaker market, you tend to see discounts to the index, but here of late, selling out or in some cases slightly above the index, generally speaking.

Speaker 4

Very helpful. Really appreciate that color, Dan. My second question, maybe more for Andy, but when I kind of look at your balance sheet, there is an unrestricted cash balance there that's quite sizable. How investors think about that? And maybe if you could take that to kind of comment on liquidity more broadly and what other ways there may be to enhance liquidity outside, of course, the recovering market and generating cash?

Thank you.

Speaker 3

Sure. Hey, Lucas. It's Andy. Yes, so the unrestricted cash balance on our balance sheet is that's really, I would say, the vast lion's share of that money is being held to support surety. It's cash collateral for different surety.

In some instances and this goes for our ABL as well, 123,000,000 of LCs. That combined with the unrestricted or

Speaker 6

the

Speaker 3

I'm sorry. You're asking about unrestricted or restricted cash?

Speaker 4

I was asking about sorry.

Speaker 3

Unrestricted. I'm sorry.

Speaker 4

I'm I think I said unrestricted. I meant restricted. Sorry about that.

Speaker 3

Okay. That's what I was thinking. So I'll stick with the restricted cash discussion. So between restricted cash and the ABL LCs, that covers surety collateral. It's collateral for workers' comp.

It's collateral for FBL. In some instances, we've got regular property insurance collateral. But the vast majority of the actual restricted cash is all embodied surety collateral. So that cash is basically tied up until end of mine life, end of reclamation, and complete phase release from the different regulatory agencies. So that cash won't be seen again for quite

Speaker 4

a while.

Speaker 3

A similar story on workers' comp and Black Lawn, those are basically end of life type collateral arrangements. As far as other sources of liquidity, again, under our debt documents, we don't have a whole lot of flexibility, but we do have a $50,000,000 basket that we could raise additional period to suit debt if we wanted to. We do have, after getting through the trough pricing in Q4, our ABL is trending upward as of today, which today is just anecdotally one data point. We're probably looking at around $50,000,000 of availability on the ABL. And that's after receiving our $22,000,000 of cash back last week.

So we're training in the right direction. That being said, it's still pretty tough. As I mentioned earlier, the impact on our working capital of the low pricing in Q4 is just something that we're having to manage through, as I would imagine all of our peers are also dealing with. And the length of this we'll call it a malaise on the Aussie low vol pricing and how it impacts a relatively significant amount of sales going into India continues to create some pressure for us. So we always want more liquidity.

But I think we're doing pretty good managing things right now. And it is helpful to see our ABL pushing back in the right direction and giving us a lot more liquidity than it has the past couple of quarters.

Speaker 4

Very helpful color. Andy, team, everyone, really appreciate the update and continued best of luck. Thank you.

Speaker 2

Thanks, Lucas. Thanks, Lucas.

Speaker 0

The next question comes from Nathan Martin with Benchmark Company. Please go ahead.

Speaker 5

Congrats on another great cost quarter.

Speaker 3

Two

Speaker 5

quick questions kind of related to the mix within your net business. First, I guess, from a sales standpoint, any idea what percentage of tonnes you guys might expect to sell in the domestic market this year? And have you seen any of those domestic steel producers back in the market looking for additional tonnes? And if so, can you give us maybe an idea of what pricing might look like there?

Speaker 6

Sure, Nate. Hey, this is Dan. I think when you look at our domestic seaborne split, it's about onethree, twothree, 4,000,000, plus or minus, into the domestic market. The other eight to 9,000,000 will go seaboard. As far as the answer to your question, did we see some domestic people in the market?

The answer is yes. And those tons are essentially spot tons, and they would move at a price reflective of the indices. So, you know, if a knockback for High Vol B was 110 or so, that would be the ballpark where you'd be selling those tons.

Speaker 5

Got it. And then I guess on the export side, Dan, you guys made the comment specifically on India. I know they're an important customer for you. But, obviously, with the with China still, the ban on Australian coals, I know you guys don't traditionally sell any coal to China. But have you seen any changes in your typical customer base as, you know, the global trade flows have kind of altered?

Speaker 6

Yeah, Nate. It's you know, just when you think you've seen everything,

Speaker 3

you

Speaker 6

know, something like this comes along. We actually did move a cargo into China. We were there last week. So we are participating in that. If the opportunity is there, we'll do that.

But certainly, we'll follow the price if the markets right now, our strategy is to continue to ship to our core customers in Atlantic Basin and in India. That's they're the customers that were with us all last year. We stayed with them. They stayed with us. But we'll certainly look for new opportunities if they arise, which they did here in the last two months.

Speaker 5

Got it. Thanks. And that corridor to China, what quality? And I'm assuming, obviously, that would be priced off the CFR China index.

Speaker 6

Yes. And it was a mix of of a few different products, actually.

Speaker 4

Got it. Got it.

Speaker 5

And then and then kind of just shifting. When when you guys look at production, you know, mix on the Met side, obviously, we've had some shifts around, as you guys have moved towards more productive lines. And, you know, we've got Road Fork fifty two, the Lynn Branch, Black Eagle ramping up. How should we think about, your quality mix this year and even going forward?

Speaker 2

Nate. This is David Stetson. We put out an investor deck this morning. And on Page 14 of that, you'll see our view of where our quality mix is going forward.

Speaker 5

Yep. So

Speaker 2

it's high vol A is about 39. B and mid vol both be right at 25. And then low vol around 13.

Speaker 5

Okay. Got it. Yes. Saw that in there. It was twenty twenty.

I was just wondering if that was gonna change much due to the fact that you guys are bringing on those those three in line.

Speaker 6

Yeah. I think, Nate, as we ramp up Road 452, we'll have an opportunity to put more low vol into the market this year.

Speaker 3

Perfect. That's for sure.

Speaker 5

Got it. Thank you, guys. Then just

Speaker 3

Sorry, Naeus. This is Andy. Just to add one more piece of that puzzle. We did add some material to the investor deck that shows kind of an illustrative ten year production profile. And really, you lay that out compared to or in concert with the quality mix and what Dan just mentioned, you can see that we're actually in really good shape for basically the next decade as far as production numbers without having to spend any kind of growth capital to maintain this 12,000,000 to 13,000,000 ton run rate of met coal.

So again, all the pieces have fallen into place to implement David's strategy. And we're really happy to be where we've gotten it to.

Speaker 5

Got it. For that color, Andy. Appreciate it. And then I guess just one more. And Andy, you kind of went through the puts and takes of the $25,000,000 you guys had imposed.

I think just to recap, the $3,400,000 you paid back that went towards your borrowing, the $22,000,000 it sounds like you just said you've already got back last week. I guess just wanted to get your final thoughts on future bonding requirements maybe for your business or the industry. Maybe even you could give us an update on your totals post the Cumberland Sale. Thanks.

Speaker 3

Sure, sure. Yeah, I mean, the bonding market's still kind of tough for coal across the board. As I mentioned, thermal is really tough. I think just everything ebbs and flows with the market, the broader coal market. So as the met markets went into the trough, the surety providers got a little bit more nervous and were looking for extra collateral.

Now that we're trending the other direction. It feels like things are in a good place. Even in tough times, we continue to maintain really good relationships with our surety providers. So I think we're in pretty solid shape right now. And we do continue to pursue some smaller transactions to exit some potential reclamation items transactionally that can get us even more, I guess you call it, headroom or extra capacity from a bonding perspective.

A couple of one offs in the hopper, nothing that really moves the needle a lot, but again, it just gives us some extra headroom on the bonding.

Speaker 4

I think

Speaker 3

post Cumberland transaction, the undiscounted amount of our bond exposure, our ARO exposure, which kind of equivocates to our bond, is basically, want say, $210,000,000, down from about $370,000,000 year over year.

Speaker 5

Perfect. All right. Well, thank you guys for all the information and the time. And take care.

Speaker 3

Thanks, Nate. Thank you, Nate.

Speaker 0

This concludes our question and answer session. I would now like to turn the conference back over to David Stetson for any closing remarks.

Speaker 2

I just want to thank everyone for getting on the call today. I encourage our stockholders and others to review our investor presentation that we put on our website this morning. Thank you all very much and have a wonderful day.

Speaker 0

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.