We are an operator and developer of high-quality, low-cost metallurgical coal
in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania.
We are a pure play metallurgical coal company with 252 million tons of high
quality metallurgical coal reserves and advantaged geology leading to lower
cash costs. Our near-term development portfolio includes four key assets: Elk
Creek, Berwind, RAM Mine and Knox Creek.
We commenced initial production of metallurgical coal at our Elk Creek mining
complex in late December 2016. During 2017, we developed and opened two deep
mines and a surface mine at Elk Creek. Development production started at a third
deep mine at Elk Creek in January 2018. Additionally, we constructed and activated
the Elk Creek preparation plant and rail loadout facility in late October 2017.
We also began development mining at our Berwind property in late 2017 and continued
our purchase coal program which augments our sales. Our production for 2017
totaled 548 thousand clean tons of metallurgical coal.
On February 8, 2017, we completed the IPO of our common stock pursuant to a
registration statement on Form S-1 (File 333-215363), as amended and declared
effective by the SEC on February 2, 2017. Pursuant to the registration statement,
we registered the sale of 6,000,000 shares of $0.01 par value common stock,
which included 3,800,000 shares of common stock sold by the Company and 2,200,000
shares of common stock sold by the selling stockholders.
Metallurgical coal is used to make metallurgical coke, a key ingredient in
the steel-making process. Coke is used as a fuel and a reducing agent in a blast
furnace during the smelting of iron ore into iron before it is converted into
steel. Demand for coking coal in the U.S. is limited by the number of coke batteries.
Annual U.S. metallurgical coal consumption is approximately 16 to 21 million
tons per year. Any supply in excess of what can be consumed domestically is
exported to buyers in North America, Africa, Europe, South America and Asia.
Developing and Operating Our Metallurgical Coal Properties. We have a 252 million
ton reserve base of high quality metallurgical coal and four long-lived projects
under development. Our initial project, Elk Creek, commenced production in late
December 2016 and produced 548 thousand clean tons of metallurgical coal during
2017. We also initiated development mining at our Berwind mine. We plan to operate
these mines at their optimum productivities and complete development of our remaining
projects. Overall, we plan to grow production to more than 4.0 million clean tons
of metallurgical coal over the next four years. We may make acquisitions of reserves
or infrastructure that continue our focus on advantaged geology and lower costs.
Enhancing Coal Purchase Opportunities. During 2017, we purchased 236 thousand
clean ton equivalents from third party producers. After washing at one of our
coal preparation plants, we sold this tonnage to customers on our own account.
We plan to grow this capability in 2018. Purchased coal is complementary from
a blending standpoint with our produced coals or it may also be sold as an independent
product.
Being a Low-Cost U.S. Producer of Metallurgical Coal. Our reserve base presents
advantaged geologic characteristics such as relatively thick coal seams at the
deep mines, a low effective mining ratio at the surface mines, and desirable
metallurgical coal quality. Furthermore, a majority of the coal seams being
developed are accessible near, or above, drainage, thereby reducing up-front
development costs. These characteristics contribute to a production profile
that we believe will have a cash cost of production that is significantly below
most U.S. metallurgical coal producers.
Maintaining a conservative capital structure and prudently managing the business
for the long term. We are committed to maintaining a conservative capital structure
with minimal debt that will afford us the financial flexibility to execute our
business strategies on an ongoing basis.
Demonstrating Excellence in Safety and Environmental Stewardship. We are committed
to complying with both regulatory and our own high standards for environmental
and employee health and safety.