American Resources Corporation

Greetings and welcome to the American Resources Corporation third quarter 2024 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I would like to turn the call over to Mark Laverghetta, Executive Vice President. Please go ahead, Mark.

Thank you. Good afternoon, everyone. On behalf of American Resources Corporation, I'd like to welcome everyone to our third quarter of 2024 conference call and business update. We always welcome these opportunities to provide an update on our business and discuss our accomplishments we've made over the past several months and how we're uniquely positioned within the markets that we serve for our American infrastructure, American metals and re-element technologies divisions. On the call today along with myself is Mark Jensen. our chairman and CEO, and Tom Salve, our president. Before we kick it off, I'd like to remind everyone of our normal cautionary statement. Certain statements discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subjects to risks, uncertainties, and other factors which could cause actual results to differ materially from the results discussed in the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors, uncertainties, and other cautionary statements which are laid out in our press releases and SEC filings. We also do not undertake any obligation to update or revise any forward-looking statement whether as a result of new information, future events, or otherwise. Lastly, for anyone wanting to ask a question on today's call, I believe you'll need to dial in by phone to get into the queue. With that, going to slightly modify the cadence of today's call. Mark Jensen will deliver a prepared letter to our shareholders that will also be released shortly this afternoon. Then we'll get into questions and answers. So with that, I'd like to now turn the call over to Mark Jensen, our chairman and CEO.

Thanks, Mark. And I want to thank you all for joining. The plan for the call, as Mark mentioned, is going to be slightly different approach to and With the focus of providing an update on the current progress of the transformation of our business, as well as the history of where we started. When it comes to the energy transition, we are confident we are ahead of the curve. We recently wrote a shareholder letter titled building the only rare and critical mineral refining platform from the depths of the metallurgical carbon business, which we define as a true energy transition. First, I want to extend my heartfelt thanks to all the shareholders and our team members. Recently, I reconnected with a mentor, friend, and someone I consider family, a person of great wisdom who has overcome immense challenges and always emerged stronger. He shared many insights, but one stood out, the importance of expressing empathy and acknowledging the struggles of our shareholders in challenging markets. This resonates deeply with me and our team. We understand the frustrations and the pain that come with declining stock prices. We recognize that people in our company We recognize that people invest in our company for its potential, and it is our responsibility to deliver. Our focus as a team has been to stay committed, work harder, push ourselves and dig deeper to drive business success, which we believe will ultimately be reflected in market value. While some of these efforts may be visible externally, and which some of these efforts may not be visible externally and cannot be shared on a daily basis, I want to assure you that we are fully committed and confident in our trajectory we feel the same urgency for our execution and we're dedicated to achieving the fundamental value for our share that our shareholders deserve our team is ready to go the distance to make this reality and we have the steps in motion to unlock this value historically our shareholder base has been predominantly consisted of management and over 25 000 retail shareholders since management was a primary funding source for the business when we started and initially funded the company, we have not traditionally had a large institutional shareholder base. Fortunately, as the business has expanded, we have started to attract the attention from larger investors, and we believe that the support from these institutional investors is continuing to grow and will continue to grow as we execute as a business. As both shareholders and management, we share the frustration over the current market value. We are fully committed to fighting for our shareholders, to bring fundamental value into ensuring that our stock reflects the value for everyone, from those with 10 million shares to those with 10. While we acknowledge that we haven't always met our goals due to factors both within and beyond our control, we believe strongly in our exceptional portfolio of assets, which are strategically positioned to create substantial value. We are proud of the steps and the progress we've made to reach this point and are committed to working tirelessly toward the success so that all shareholders benefit equally. The operating teams have demonstrated remarkable innovation and adaptability. I'm proud to report significant progress across Realment Technologies, American Metals, American Infrastructure, as well as our holdings in Royalty Management Holding Corporation and Novasteria Inc. These achievements showcase our dedication, not only to our business goals, but also to the core values of the community and our responsibilities. Realment Technologies Corporation is an amazing opportunity and amazing business. As we look to the highest value denominator of our business, I'd like to provide some background on Realment Technologies. Realment was born out of the efforts to address environmental cleanup from legacy mining operations associated with our carbon assets. When we acquired eight companies, five of them through bankruptcies, we inherited significant environmental liabilities from previous operators. Unlike many companies that defer these issues, We took a proactive approach to address and clean up the environmental impact, challenging industry norms, frustrating landowners that wanted to leave these legacy liabilities outstanding, and facing resistance for doing the things differently. Through this process, we remediated over 7,000 acres of land and secured more than 20 million in environmental bond releases. Most importantly, we laid the foundation for Realment Technologies, prioritizing innovation and technology over dumping chemicals into waterways and transforming our approach to environmental stewardship. Realment was initially founded to focus on the separation and purification of the metals extracted from acid mine drainage sites and mine waste. At the time, China dominated 95% of the refining market for rare earth elements and critical minerals, creating a challenging single source economy. We faced a choice. Either send our concentrates to China at a loss, or innovate to create a viable domestic solution. Our team spent years evaluating technologies for potential application in the U.S. market and quickly realized that traditional solvent-based or hydrometallurgical extraction methods were neither economically nor environmentally sustainable for domestic use. These methods are capital intensive, have high operating costs, and are environmentally harmful, and lack versatility of varying feedstocks, whether recycled or naturally sourced. Furthermore, We recognize that competing against China's low labor costs and relaxed environmental standards using similar processes would not be viable for the rest of the world. Re-element prioritized innovation and partnered with Purdue University, who is well ahead of the development of the electrified economy. Today, we have developed a versatile, multi-mineral, multi-feedstock platform technology capable of separating and purifying high-value critical minerals, including lithium, cobalt, nickel, dysprosium, terbium, neodymium, prussodymium, as well as work on niobium, high purity alumina, or HPA, silica, and copper. Not only can we separate and purify these elements, but we can do so at a cost that is competitive or even lower than China's. Realiment is disrupting the monopoly by delivering higher quality products at a lower cost, establishing a natural hedge in the market. We achieved this using our own capital with a focus on creating a platform that can catalyze and synthesize a robust critical mineral supply chain outside of China. Although we have been approached with funding offers from Chinese nationals, we have consistently declined, choosing instead to protect long-term value for our shareholders. Today, we are producing rare earth elements and battery materials for our customers out of our customer qualification plant in Noblesville, Indiana. We are also in the process of ordering equipment for our Marion Advanced Technology Center in Marion, Indiana, which spans 400,000 square feet on 42 acres. We are confident that this facility will become the largest producer of separated and purified rare earth oxides, including dysprosium, terbium, neodymium, and presidium outside of China. Additionally, it is poised to be a major, if not the largest producer of lithium carbonate equivalent in the United States. We have also We have also begun dismantling our Knott County coal processing plant, which we acquired from Arch Coal. This facility was previously owned and operated by Wilbur Ross's International Coal Group. Our plan is to repurpose this site for a lithium refinery, sourcing ores both domestically and internationally. We take pride in the Genuine Energy Transition Project, which leverages American ingenuity and builds on the region's rich history in commodity processing in Eastern Kentucky. We continue to make daily progress on our goals, all while being mindful of minimizing shareholder dilution by grinding forward every day. And when the right opportunity arises, we act decisively to capture them. In this regards, we utilize alternative and flexible capital strategies such as bond offerings and incentives to drive our growth. We are proud of the work we're accomplishing behind the scenes and look forward to sharing more positive developments as our domestic supply chain evolves and our partners permit us to announce them. As a team of individuals with direct military service or family members who have served, I can confidently say that we are 100% committed to fulfilling our mission to establish a critical rare element supply chain. Our goal is to catalyze the reshoring of our defense industrial base to strengthen national security for the United States and our allied nations. We are the solution that can provide ultra pure rare earth elements for F-35 fighter jets, nuclear submarines, drones, and lithium for battery for military communication units. This challenge cannot and will not be solved by traditional hydrometer solvent-based refining methods, a fact that is being proven today and will be evident over the next five years. Our path forward is driven by innovation and entrepreneurship, not legacy practices. We firmly believe that Rielemann's refining solution is leading the market. Any alternative spending will ultimately prove to be wasted, cap on. We are also excited that we have recently completed our initial closing of our financing at the re-element level and announced our record date and distribution date for re-element separation as a standalone company. We are confident this will help us drive shareholder value and help re-element to grow at a faster clip. I'd like to touch briefly on American Infrastructure Corporation, formerly known as American Carbon Corporation. This business line is the focus of our metallurgical carbon and iron ore production. Through its growth, the company has consolidated valuable assets and has been restructured to solely focus on high value, high margin products. As we expanded, we built an independent team capable of driving the value and our shareholders as a separate entity. Our focus for this division is for our contractors to start production eminently with the focus of turning this effectively into a royalty-based company, capturing top line revenue royalty streams from the high quality assets that we have with a focus on our McCoy Elkhorn complex and Wyoming County complex. We are making significant developments and growth towards that plan and are confident in the plan that our CEO, Carlos Thompson, has developed for our metallurgical carbon division. American Metals has advanced as a business and now developing innovative strategies to pre-process rare earth elements and critical minerals, as well as continue with the steel recycling component of its business. The legacy business leveraged reclamation from previously acquired coal mine operations, primarily scrapping and recovering ferrous metals through the affiliation with Rielement, has garnered knowledge and know-how of optimal and efficient processing methods to produce products that can be efficiently refined back to ultra-pure critical minerals. Recently, we have partnered with Loham Cleantech, India's leading battery recycling and reuse company, to pre-process batteries, creating materials that can serve as feedstock for realme technologies in a cost-effective, environmentally conscious way. We are pushing to progress on our merger with AI Transportation Acquisition Corp. The company has received comments from the SEC on its S4 registration, which we believe can be addressed with minimal effort, and we are pushing the team to be responsive to such questions to get this project, to get American Metal spun out and as a standalone public company. One of our holdings, Royalty Management Holding Corporation, we believe has substantial opportunity and substantial value based on the growth and development of its platform. Royalty Management is an innovative royalty company and streaming company with a highly attractive portfolio of holdings. At the time of the D-SPAC merger, as with most SPACs, the majority of the capital was not retained by the company. SPACs have largely become a mechanism for hedge funds to temporarily park money and retain warrants, with little intent from investors to remain in the transaction. Due to these redemptions, the company now has a significantly smaller float and less capital to deploy than initially anticipated. Nonetheless, the company has an exciting business model focusing on creating value, increasing cash flow, and growing equity stakes in its holdings. Since the merger, it has made several notable investments and has repurchased its stock, retiring those shares. We believe the company is currently undervalued, but as it expands its communication, we expect that value to be reflected in the markets. American Resources is a major holder of Royalty Management Corporation, including warrants and stock of over 3 million shares. Another holding we have is Novastera Inc. We are extremely excited about the progress of Novastera. The company is collaborating with Kenai Defense in partnership with the United States Air Force and the Army to develop high-value applications for graphene and carbon nanostructures. The company recently The company has recently and had its selling shareholder S-1 approved by the SEC and will soon file a new issuance S-1 aiming to use an underwriter to raise capital and list on a national exchange. Novastera plans to submit this S-1 in the near future and we are enthusiastic about the continued progress. In closing, we remain committed to keeping you informed and engaged as we navigate this journey together. Your feedback is invaluable and I encourage you to share your thoughts and questions. Our relationship with you is fundamental to our success, and we are dedicated to ensuring your voice is heard and valued. Thank you for your continued trust and partnership. Together, I am confident we can capitalize on these opportunities and build a brighter future for American resources, Rielma Technologies, American Metals, American Infrastructure, Royalty Management Holding Corporation, and Novus Area Inc. With that, I'd like to turn the call back over to the moderator for some Q&A.