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spk04: Good day and welcome to the Romaco Resource Incorporated third quarter 2022 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Jeremy Sussman. Please go ahead, sir.
spk06: Thank you. On behalf of Ramico Resources, I'd like to welcome all of you to our third quarter 2022 earnings conference call. With me this morning is Randy Atkins, our chairman and CEO, Chris Blanchard, our chief operating officer, and Jason Fanning, our chief commercial officer. Before we start, I'd like to share our normal cautionary statements. Certain items discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramico's expectations concerning future events. These statements are subject to risks, uncertainties, and other factors, many of which are outside of Ramico'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, Ramico does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I'd like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss today in our press release. Lastly, I'd encourage everyone on this call to go onto our website, ramicoresources.com, and download today's investor presentation under the events calendar. With that said, let me introduce our Chairman and CEO, Randy Atkins.
spk07: Thanks, Jeremy, and good morning to all. Q3 was another record quarter for us. In fact, the first three quarters of 22, we generated almost as much adjusted EBITDA as we did in the previous five years combined. With that said, our Q3 results came in below what we hoped. Headwinds were due to the Berwyn Ignition event in July, 45% decline in seaboard coal pricing in the past two quarters, and continued logistical rail and trucking challenges in shipping our coal. With that said, we are positioned for both a record fourth quarter and full year 2022. Here is a quick look at some of our accomplishments over the past quarter. We recently completed the rehab of our Berwyn preparation plant. This will immediately lower our cash costs moving forward as we no longer need to truck coal over 25 miles to our Knox Creek plant. On the sales front, we are now fully sold out for 22 at an average price of $211 per ton. We have also successfully placed a good portion of our anticipated fourth quarter coal in the European thermal markets. For 2022-23, We have placed roughly 1.8 million tons, or about 45% of expected production, for sale at an average price of $210 per ton. Next year, we project that over 60% of production will sell into export markets, much of that at index-based pricing. Lastly, in September, we closed on the Maven acquisitions. We are beginning to bring that mind online and anticipate it being a meaningful earnings contributor in 2023. As we look down the road, 2023 indeed looks to be more of a transformational year for us than even 2022. Among other reasons, we anticipate doubling production next year to roughly 4 million tons as compared to 2021 levels. That should also reflect itself in a commensurate increase in our cash generation. We previously guided that we would tailor our 2023 sales strategy to whatever markets would yield the best net back pricing. We have done that. We committed a meaningfully lower amount of coal to traditional domestic steel mills in 2023 and a meaningful portion into Europe at fixed prices well above our domestic business. On the back of these milestones, we would like to provide an initial framework on our planned 2023 shareholder return program. To understand our progression, I would remind everyone that Q1-22 was the first time we even paid a dividend on our stock, which we doubled before the first payment had been made. It remains our intention to each year progressively increase dividends on all our stock. This summer, we announced the second leg of shareholder return by filing to register a Class B tracking stock. This stock is now in SEC registration, and once it is effective, we will be able to communicate more about this security. Today, we are articulating a framework for the third leg of the stool, which is our future share buyback program, which we will address next month at our board meeting. We're expecting to generate increasing amounts of free cash flow next year as our production ramps. Accordingly, in 23, we hope to commit a return of free cash flow toward share buybacks in addition to our regular cash dividends. We will continue to grow organic production from internal funds, pay off the relatively limited debt we have, and pivot to execute on new production from the reserve acquisitions we have made over the past year. We now have a sufficient number of in-house reserve projects that we can internally grow without looking to new M&A opportunities. We anticipate sufficient cash flow later in 23 that will allow us to meet all our CapEx requirements for both normal maintenance and planned production CapEx, as well as for full debt repayment. We also want to maintain a cash cushion of roughly $100 million And beyond that, we anticipate allocating capital return to share repurchases after payment for regular cash dividends. Specifically, we will propose taking the sum of the cash dividends paid on our shares and invest a radical amount towards share repurchases. This would, of course, be subject to meeting our performance objectives and to approval by our board. At today's stock price, We regard buybacks of our stock as an attractive financial proposition. Importantly, as we return shareholder capital, we want to strike a strategic balance with long-term plans for low-cost organic production growth. Our goal is to increase Ramico's production substantially over what it is now. We feel there will be a continuing profitable future demand for high-quality medical for many years. yet we see a constrained growth in supply. Our production growth as a relative new company will generate increasing amounts of cash flow available for capital return. While Jason is going to talk in more detail, I want to give some brief color as to what we are seeing in the markets today. The ongoing events in Ukraine created an unusual dynamic where historic pricing between thermal and met coal inverted late this summer. Over the past few months, this relationship has since largely moderated, with met coal prices moving higher and API2 European thermal prices lower. We recently spent time in London with several of our European customers and investors. Our main takeaway is that in terms of having to replace Russian coal, European utilities are covered through year-end, but 2023 is a different story. Many customers have focused on securing near-term tons and have large open positions for next year. Even with a drop in gas prices, given global supply constraints, we struggle to see where the replacement tons will come from. We anticipate an upward move in European thermal coal pricing, perhaps in early 2023. And I would also like to point out that pricing for our main MET product, U.S. Hyval-A, has remained resilient with current net back pricing around $225 per ton. In closing, we remain on track to have a record year in 22. This is despite a host of challenges so far, such as labor tightness, inflationary pressures, logistical rail and trucking constraints, and the Berwyn ignition event. We anticipate 2023 to be meaningfully more profitable than 22, with greater production and cash generation. And we also look forward to returning increasing amounts of cash to our shareholders. Now, with that, I would like to turn the floor over to the rest of the team to discuss more detail on finances, operations, and the market. So, Jeremy, please run down our financial metrics.
spk06: Thank you, Randy. I'll start by going over our third quarter 2022 financial highlights. Adjusted EBITDA of $51 million was 185% higher than our previous Q3 record. Net income of $27 million was 282% above our previous Q3 record. Diluted EPS was $0.60 versus just $0.16 in the third quarter of 2021. Adjusted EBITDA was negatively impacted by $5 million due to idle costs at our Berwyn mine post the July admission event. Net income and EPS were negatively affected by $4 million and 9 cents respectively. I would like to take a moment to note that we have now generated almost as much net income and adjusted EBITDA through the first three quarters of 2022 as the prior five years combined. Importantly, we anticipate 2023 results to be even better due to roughly 50% volume growth with almost half of our 2023 coal already sold at very strong margins, as Randy noted. Unfortunately, in the third quarter, we built another 56,000 tons of inventory, largely on the back of continued logistical issues, bringing the year-to-date inventory build to 235,000 tons. We anticipate the bulk of this inventory buildup to unwind in 2023 as logistical challenges hopefully ease. Now turning to our full year 2022 outlook, I would like to touch on a few of the key areas in our guidance tables. First, we are lowering production guidance from 2.8 to 3.1 million tons to 2.7 to 2.9 million tons. We expect sales to come in roughly 200,000 tons below production due largely to the aforementioned logistical challenges. Midpoint of production guidance is down modestly at each of our three complexes, as we have experienced a bit slower than anticipated production ramp at our new mine. This is due to a number of factors, such as labor and equipment availability. However, I am pleased to report that we are now at over 700 employees compared to around just 400 employees this time last year. We anticipate that our recent hiring success will yield meaningful increases in production as we move into 2023. Second, we're increasing our cost guidance from $89 to $97 per ton to $98 to $102 per ton. The increase is the result of industry-wide inflationary pressures, such as continued high sales-related and raw material costs. However, we did start to see some of these pressures ease in the third quarter, with overall costs down $8 per ton from the second quarter to $98 per ton. Looking out across the landscape, I believe our third quarter costs of $93 per ton at Elk Creek were among the lowest of the peer group, which is ultimately where we expect our costs to remain on a relative basis. We continue to anticipate costs moving lower on stronger production, moderating raw material prices, and the positive impact from the startup of the Berwyn preparation plant. Lastly, on the 2022 guidance front, we are increasing our CapEx guidance from $125 million to $120 million to $130 million. This $10 million increase at the midpoint is reflective of a switch from a contractor to an owner-operator model in a couple of our smaller mines, as well as general inflationary pressure on things like equipment. Turning to our growth outlook, We are maintaining our medium-term target of 6.5 million tons of production. I'd like to point you to slides six and seven in our presentation. We continue to show our multi-year production growth in detail with an expectation of producing 4 million tons in 2023, reflective of an early spring restart at our Berwyn mine, though we of course hope this occurs sooner. I would note that some of this growth is still subject to board approval, which is dependent on market conditions. As a reminder, slide 7 details that we believe we can get to 6.5 million tons of production in 2025 at a very favorable CapEx intensity. Specifically, for a total of $95 million in growth capital, split between 2023 and 2024, we anticipate completing our full build-out of 6.5 million tons of annual production. This is almost triple 2021 production of 2.2 million tons. Importantly, as Randy detailed, in addition to our industry-leading production growth profile, we continue to anticipate returning increasing amounts of cash to shareholders while also maintaining a conservative balance sheet. In short, we view Ramico as both a growth story and a capital return story, which we believe positions us uniquely among our peers. I'd now like to turn the call over to our Chief Operating Officer, Chris Blanchard. Chris?
spk02: Thank you, Jeremy. Before delving into the discussion of the operations, I want to recognize and congratulate the employees at our Elk Creek Preparation Plant for their continued excellence in safety performance. Later this week, they will be receiving the National Sentinel Safety Award for outstanding safety performance in the large preparation plant category. This is the second Sentinel Award awarded to the Ramico operations in the past three years. These awards reflect Ramico's commitment to excellence in safety performance and the attitude and safety culture that our employees have developed as they strive to work every day accident-free and in full compliance. Now, turning to some of our operational milestones, at Elk Creek, we are beginning our upgrade and expansion of the Elk Creek prep plant. Ultimately, this will raise the processing and shipping capacity of the Elk Creek complex by 50% annually to approximately 3 million tons per year. We expect the work to be completed late in the first quarter of 2023. We are budgeting a conservative ramp of the processing rate, reaching full capacity at the plant by the end of the second quarter next year. With that preparation plant work underway, we have also started ramping additional underground and surface production at our High Vol Elk Creek complex to support the new capacity at the plant. Because of the scarcity of skilled labor in the central Appalachian coal fields, in advance of the completion of the plant upgrade, we initiated staffing and production at the new underground sections. This excess production began in the third quarter and will continue until the Elk Creek plant is commissioned at its fully upgraded operational processing rate. This mine expansion, in addition to the continued rail challenges, is what will lead to overall production being higher than sales in 2022. With that said, we expect all of the additional inventory to be worked through by the end of 2023. We had another material milestone recently as the newly refurbished Berlin preparation plant processed its first raw coal. While numerous delays pushed the startup of the plant out of the third quarter, we expect the plant in full operation two shifts per day later in November. Equally important, we expect to load our first unit train from the complex in the next several days. We started two additional mines at the Berwyn complex during the quarter, and both the Triple S surface mine and the Triad No. 2 underground mine are fully ramped and currently producing at budgeted levels in the fourth quarter. Triple S will add to our growth, while Triad No. 2 replaces our original triad mine. We expect both operations to have multiple years of operation to complement the base Pocahontas No. 4 tons when the Berwyn mine resumes operation. Perhaps the biggest benefit of the plant startup at Berlin is the relief on trucking logistics and moving the raw tons from these operations to our Knox Creek preparation plant. Now, the mines at this complex will either belt directly to the Berlin plant or the truck haul will be shortened by over two hours per round trip versus the Knox Creek plant. Depending on each mine's particular haul distance and washing recovery, The trucking savings will benefit these operations from between $15 to $30 per clean ton. Additionally, this allows us to shift a scarce resource, that of coal trucks and coal truck drivers, to the shorter hauls into Knox Creek. Finally, an update on our MAVEN project. I'm pleased to report that we have mobilized our new high-wall minor unit to MAVEN and are in the process of assembling it on site. We expect to begin moving rock and clearing highwalls for the highwall miner in the first quarter, with production to follow shortly thereafter. With that high-level review of the new operations and projects, I would like to now turn the call over to our Chief Commercial Officer, Jason Fannin, for a discussion on our view of the current and forward coal markets. Jason?
spk03: Thanks, Chris, and good morning, everyone. I will share what we are seeing in the markets and our current and forward sales outlook. Even though the coal markets pulled back during Q3, met coal prices, as well as thermal coal prices, remain elevated compared to historical levels. The forward curves from both also project continued high pricing throughout 2023. While steel production and capacity utilization have eased on the back of a slower global macroeconomic environment, Met coal supply continues to lag demand even in this environment. We still have persistently low spot met coal availability following years of underinvestment in the met space. We have also recently seen significant volumes of met coal crossing over to thermal and industrial applications that have provided strong price support to coking coal spot pricing. The Australian premium lowball spot price is now at over $320 per metric ton while the U.S. Hyval A spot price is currently assessed at $300 per metric ton, up nearly 25% from its low point during August. During much of Q3, U.S. Hyval met coal pricing was strongly supported by the seaborne thermal market as Europe sought additional sources of thermal coal to replace banned Russian supply. While Europe appears to be covered in terms of coal supply for the winter, we believe Europe remains underbought for 2023, Expect return to the market during early next year, driving continued supply tightness and additional pricing support in the met coal space. We are now fully sold out for 2022, and for the remainder of this year, we'll focus on meeting delivery requirements in what remains a challenging logistics environment. During Q3, we executed on our plan to diversify Ramico's sales portfolio to include additional industrial and niche specialty coal consumers. We delivered several test shipments during Q3 with excellent results that have now translated into additional sales during Q4 as well as term business for 2023. We expect these types of industrial and niche sales to become a significant part of our portfolio. Looking closer at 2023, we have locked in committed sales of 1.8 million tons with 1.4 million tons fixed at an average price of over $200 per tonne. Our committed volumes are a mix of domestic and seaborne sales to metallurgical, thermal, and industrial customers. Additionally, 2023 will be our biggest year on a percentage basis in terms of seaborne sales, which will comprise at least 60% of our sales versus about one-third of our sales being seaborne this year. Overall, we like the current market conditions as they apply to Ramico. We continue to see a protracted imbalance of cooking coal supply and demand, which is supportive of a protracted period of elevated cooking coal pricing levels. We also now see a European thermal market lacking supply certainty and looking to the U.S. for solutions. With that said, I would now like to return the call to the operator for the Q&A portion of the call. Operator?
spk04: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star then two. And at this time, we'll pause momentarily to assemble our roster.
spk08: And the first question will come from Kurt Woodworth with Credit Suisse. Please go ahead.
spk05: Yeah, Ty, good morning.
spk08: Morning, Kurt.
spk05: First question is just on, I guess, the capital return progression. And you made a comment about how you wanted to have consistent increases in the dividend and then, you know, I guess a radical level of buybacks. Can you, I know you have obviously board level approval required, but, you know, what are you thinking on that? Like, do you plan to have kind of formulaic system where you want to pay out 30, 40% of net income in capital return? Or can you give any color on what the potential framework could look like going forward?
spk07: Yeah, I think when we get to the board level, obviously we'll tweak it perhaps somewhat. But the way we're looking at it right now is we, as I mentioned, have registered a tracking stock, which will be paid out in addition to our regular dividend on our Class A stock. So we've got really two dividend payments we're looking at. And what we're thinking about right now is that when you would take both those two dividend payments and add them up, you'd have X number. And then we would think about paying an equal amount toward buybacks, you know, once we meet those relative gating issues that I laid forth. So that's how we're looking at it right now. It's not a formulomatic X percent, because I'm not sure that we can calculate that without, you know, better understanding pricing and things of that nature.
spk05: Okay. That's fair. And then with respect to the fixed price volume for next year, can you break that out in any more detail between how much thermal would be in there and then what is the mix of that? I think you said 1.4 between domestic and seaborne.
spk07: I'm going to let Jeremy take that one. Go ahead, Jeremy.
spk06: Yeah. So for the fixed price business, Kurt, it's It's a good mix of domestic steel business plus some domestic industrial and actually some export thermal business in there. That's about 1.4 million tons, and then we've got about 400,000 tons that's indexed. I'd say that's mostly your traditional export steel business, although there is a little bit of export in there as well, but that's pretty small for 23.
spk07: I think the interesting thing, Kurt, for us for 23, as I highlighted, is that the domestic steel business is lower than we historically have done in the past. We just felt we could get a lot better realizations in other markets.
spk05: No, that makes sense. And then just a final one for me. In terms of thinking about your production cadence for next year, how do you think about how your production would look first half versus second half? and what you kind of think your exit rate in production would be going into 2024. Thanks, guys, and best of luck.
spk07: Sure. Well, I think I'll do the simple one first and then turn it over to Chris. So the exit rate is going to be at about a 4 million ton run rate, or actually probably a little bit higher than that. But, Chris, go ahead and break it down.
spk02: So by the end of the year, we'll probably be at an exit run rate of about – $4.4 million. The first half will be a little bit slower while we wait on the Elk Creek preparation plant to upgrade. So Elk Creek will be at, in the year, at 3 million tons of high vol run rate. And presuming a lot of assumptions on the Berlin restart, be over a million there and a little less than a million at Knox Creek run rate.
spk06: Kurt, I would say for modeling purposes, I mean, obviously you can back into our Q4 number and see that it's the highest, you know, production figure for the year, but certainly, you know, below the, you know, the kind of the full year number for next year, which makes sense given we're not including Berwind in there. So I would just say simplistically speaking, you know, if you model production increases, you know, over the next, you know, X number of quarters, that's probably the right way of thinking about it.
spk05: All right, great. Thanks very much.
spk07: And lastly, Kirk, not to belabor the point, but we've got a slide in our investor deck, I think it's slide six, which has got a pretty decent layout of where we view production over the next, let's call it 36 months, which gives you the cadence there per year.
spk05: Understood.
spk04: Thank you. The next question will come from Lucas Pipes with B. Reilly SBR. Please go ahead.
spk00: Thank you, Operator, and good morning, everyone. My first question is on the cost side in Q3. Nice step into the right direction. I wondered, does this fully reflect the royalty benefits from the Ramico coal acquisition and then into Q4 and into 2023? Could you provide some color on what your cost expectations are? Thank you very much.
spk06: Thanks, Lucas. I'll start with this. So, yeah, short answer is Q3 does reflect the full benefit of the royalty business as its savings as it exists today. But remember, you know, we're ramping our Elk Creek plant from, you know, call it 2 million tons to 3 million tons. So as we produce more coal at Elk Creek, uh, incrementally, we should see more royalty savings, uh, moving forward. So I I'd answer it both, both of those, uh, you know, both of those ways. Secondly, you know, Elk Creek cash costs of $93 per ton. Um, I mean, I'd focus on that obviously more than, than Berwyn and Knox where we're, where we're ramping up. And, you know, I, uh, you know, I think we're one of the last to report, you know, I think you can kind of go through the others and I, I'd put that up against, um, you know, anyone on a relative basis. So I think Chris and the team did a fabulous job of, you know, of kind of getting us back to where we think we fit in the overall cadence. Yeah, and then for 23, I guess, you know, look, we're going through our budgeting process right now, but certainly, you know, 23 should be below 2022 levels. Even at current prices, you know, we'll have a full year of trucking savings with Berwyn plant operational and economies of scale. I mean, as I said, we've got, you know, 700 employees today versus about 400 this time last year. And obviously the mines are in ramp mode, so you didn't get that full incremental benefit, you know, on a produce ton for produce ton basis. So all in all, I like the way our cadence looked in Q3, and I like where it looks heading into next year.
spk00: That's helpful. Thank you. Then another question on the commercial side. In terms of the index tons for 2023, is that a met coal index or API 2? And then I recall you sold some thermal coal here for the balance of the year, if I remember right. And I just wondered if that is fixed or floating with API 2 and how this might flow through in Q4. Thank you very much for your call.
spk03: Sure.
spk00: This is Jason.
spk03: Yeah, on the The thermal sales for the balance of this year, they are mixed. Primarily, they are tied to the index, the back half of this year. For 23, those export steel customer sales are tied to medical pricing indices. Very, very small amount tied to the API2. The vast majority of that are tied to the U.S.
spk00: medical indices. Very helpful. Thank you. Then for the balance of this year, Can you remind us what quantum should we be thinking about for Q4? Again, just to confirm, those would all still be floating with where API 2 is today. Thanks for that follow-up.
spk06: Yeah, Lucas. It's Jeremy here. The majority of our thermal puns in Q4, as Jason said, are floating with the API 2 index. We've got almost next to no API 2 floating exposure in in 2023. The majority of the thermal business for next year is fixed.
spk00: All right. I will leave it here. Really appreciate your color and best of luck. Thank you.
spk04: The next question will come from Nathan Martin with Benchmark Company. Please go ahead.
spk01: Hi. Good morning, guys. Thanks for taking my questions. I mean, first, maybe just a modeling question. Could you please share the split between domestic and export sales in the quarter and then maybe what that might look like in the fourth quarter as we kind of back into the four-year expectation?
spk06: Yeah, I mean, so we were a bit more domestic in Q3. Call it 70-30, Nate. And, you know, Q4, probably a little bit less than that. So, you know, again... This will be kind of Randy noted in his remarks. This will kind of be, at least for the next five quarters, Q4 will be the last one where we're heavier on the domestic side for the most part. Certainly next year will be at least 60% export, and most of that ultimately will be tied to index pricing.
spk01: Appreciate that, Jeremy. And then looking at the full-year sales guidance, obviously a little bit of decrease there. I just wonder for some more color on there. Anything on the operational side to consider? Is it really still mainly challenging logistics? Is that mostly rail, mostly trucking? Is it both? Why do you think those are persisting? When do you guys see that improving?
spk02: This is Chris. A little bit of both on the trucking and the rail. We have had a buildup of clean tons on both railroads on the hauling it to our customers. But we've also had challenges moving raw coal, particularly at our Knox Creek and Berwyn operations before the startup of the Berwyn plant, trucking it to our Knox Creek plant to get it processed. So it's not all on the railroad, some of it's other logistics. And frankly, there's a limited amount of coal trucks and coal truck drivers and labor is scarce. So That's been a big challenge in the third quarter, and the startup of the Berwyn plant largely eliminates that exposure to that constraint.
spk01: Got it, Chris. Yeah, that sounds like that's coming on very timely. And then maybe next, just kind of looking at the Berwyn mine, I think you guys mentioned hope for a spring restart at the latest level. Again, I think full year 23 production was pulled down a little bit. I think it was roughly 4.3 million before now. We're at roughly 4 million tons. Is that mainly Berwyn and the delay there? And then in regards to the idling costs that we saw, $5 million in the quarter, is that kind of a good run rate to assume for now?
spk02: So I'll take the first. So most of the pull down in the production for next year is related to the late restart of Berwyn, as opposed to having two full sections, full year. We've got the first section coming on late and then a very conservative ramp as we get back in there. And then I would say the $5 million per quarter is a little bit light. I think the fourth quarter will be a little bit higher. And presuming we go into full rehab mode, those numbers should increase a little bit until we restart the month.
spk01: I appreciate that color Chris and then maybe just a final one and I know it's a little early but thinking about capex first maybe how do we think about what maintenance capex looks like today you know given some of the recent inflationary pressures and really just trying to think about you know early thoughts on what full year 23 capex could look like I know you guys have flagged around 55 million dollars in the presentation for a potential growth spending It would be great just to get any early thoughts there. Appreciate it.
spk06: Thanks, Nate. Yeah, so you're correct about next year. So if we go ahead with all the projects that we've got laid out, it's about $55 million of growth capital, I think we kind of listed on slide seven, plus maintenance capital. I mean, I guess the way I look at maintenance capital, and I'll let Chris kind of touch upon inflation, is in a normal environment, it's about $7 or $8 a ton. But again, some years, it's much lower than that. Some years, it's higher than that. It depends on whether you've got more rebuilds and things of that nature. So I think that's a safe number to use over the cycle. But Chris, you want to touch on what you're seeing on inflation?
spk02: All right. So obviously, everything that we do on maintenance, CapEx and not directly linked, but it's tied to steel pricing and there's a lag, so we have seen those prices increase this year and probably won't see as much decrease as we'd like even next year. But then as we ramp the company every year, it just depends on the timing of equipment rebuilds and how they fall. As we get larger and larger, those variations will smooth out and we'll get more to a you know, routinely $7 to $8 a ton, but when we've been sort of the smaller size, some years it's $12, some years it's $5, but overall you'll average to that $7, $8 range.
spk01: Got it. Very helpful, guys. Thanks for those thoughts. I'll leave it there. Appreciate the time, and best of luck in the fourth quarter.
spk00: Thanks, Nate.
spk04: This concludes our question and answer session. I would like to turn the conference back over to Mr. Randall Atkins for any closing remarks. Please go ahead, sir.
spk07: All right. I just want to thank everybody for joining us today, and we'll look forward to speaking to you, I guess, next year. So take care. Thank you.
spk04: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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