FISHERS, IN / ACCESSWIRE / November 18, 2019 / American Resources Corporation (NASDAQ:AREC) (the 'Company'), a supplier of raw materials to the rapidly growing global infrastructure marketplace, with a primary focus on the extraction, processing, transportation and distribution of metallurgical carbon to the steel industry, today reported a net loss from operations of $7.08 million, or a loss of $0.30 per share, in the third quarter of 2019, compared with a net loss from operations of $4.13 million, or a loss of $3.44 per share, in the prior-year period. The Company earned adjusted earnings before interest, taxes, depreciation, amortization, accretion on asset retirement obligations, non-operating expenses, and development costs (‘adjusted EBITDA') of a loss of $2.67 million in the third quarter of 2019, as compared with adjusted EBITDA loss of $0.99 million for the third quarter of 2018. Revenues totaled $1.85 million for the three months ended September 30, 2019 versus $9.04 million in the prior-year quarter.

'We are extremely excited about how our platform is set up to perform in 2020 and beyond. The third quarter of 2019 proved to be a challenging quarter for our industry, highlighted by a number of market participants liquidating assets through the bankruptcy process in the face of the seasonal steel slowdown and general macro uncertainties in the global economy. During this period, we were able to execute on both organic opportunities as well as opportunities to further consolidate quality metallurgical carbon assets,' stated Mark Jensen, Chairman and CEO of American Resources Corporation. 'Organically, we took the opportunity to further develop some of our existing mines around our McCoy Elkhorn complex including commencing the final development stage to bring our Carnegie 2 mine into production. The capital investments and development of our mines meant that we needed to take some production offline. We feel that this was done at an opportune time and has put us in a better position in terms of volume and quality metrics. We were also very active in the bankruptcy processes of assets within our operating region. As a result, we were able to acquire our previously announces, fifth operating complex, Perry County Resources this past September. The addition of Perry County to our portfolio of assets is already proving to be a valuable assets as we are executing on our restructuring plan while serving the existing customer base. Overall, the market for our products remains very promising as the world's need for carbon, steel and infrastructure continues to be healthy, and our platform remains in a unique position of bringing a robust pipeline of growth to the market and to our investors.'

Operational Results

The Company produced and sold 25,969 short tons of coal in the third quarter of 2019.

The exhibit below summarizes some of the key sales, production and financial metrics:

(c) Cash cost per ton is based on reported cost of sales and includes items such as production taxes, royalties, labor, fuel, and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Statement of Operations as costs other than cost of sales, but relate directly to the cost incurred to produce coal. Our cash cost of sales per short ton is calculated as cash cost of sales divided by short tons sold, and our cash margin per ton is calculated by subtracting cash cost per ton from revenue per ton. Cash cost of sales per short ton and average cash margin per ton are non-GAAP financial measure which are calculated in conformity with U.S. GAAP and should be considered supplemental to, and not as a substitute or superior to financial measures calculated in conformity with GAAP. We believe cash cost of sales per ton and average cash margin per ton are useful measurse of performance as it aides some investors and analysts in comparing us against other companies. Cash cost of sales per ton and margin per ton may not be comparable to similarly titled measures used by other companies.

Mark Jensen added, 'Throughout the third quarter of 2019, where we idled some production during a time of market softness, we also continued to make progress on our growth objectives to position ourselves for advancement in 2020. Most notably, was the acquisition of Perry County Resources, as it represents our fifth carbon processing and logistics hub in the Central Appalachian basin and broadens our footprint in the metallurgical carbon market. Additionally, we continued to position our metallurgical mines at McCoy Elkhorn to provide expanded output with greater efficiencies. Over the past five months, we have seen a meaningful amount of U.S. carbon supply come offline given market participants idling assets plus several participants entering into bankruptcy. Our unique business model has allowed us to be opportunistic during this time and strengthen our position in the market. We expect markets to firm up sometime next year as it digests a tighter supply outlook, while our outlook on demand remains healthy. We feel that we are in as good of a position as we have ever been to deliver attractive growth to our customers, employees and shareholders, and we maintain a sanguine outlook on carbon and steel markets given infrastructure development world-wide.'

Additional Financial Results

Total revenues were $1,847,969 for the third quarter of 2019. Cost of sales (includes mining, transportation, , and processing costs,) for the third quarter of 2019 were $2,956,305, or 160 percent of total revenues, compared to $7,116,009, or 78.7% of total revenue in the same period of 2018.

General and administrative expenses for the third quarter of 2019 were $1,434,544 for the third quarter of 2019, or 77.7 percent of total revenue. Depreciation for the third quarter of 2019 was $1,414,942, or 76.6 percent of total revenue. American Resources incurred interest expense of $901,810 during the third quarter of 2019 compared to $305,655 during the third quarter of 2018. Development costs during the quarter were $1,425,024, compared to $2,887,448 in the second quarter of 2019.

The Company did not incur any income tax expense as it was able to utilize its available net operating losses ('NOL') carried forward from prior periods of approximately $2,027,765 as of December 31, 2018.

Company Outlook

Based on American Resources' organic growth from its already owned infrastructure, controlled mining permits and its capital investment schedule, the Company expects its 2020 production forecast to be in the range of 2.0 to 2.2 million tons.

AMERICAN RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

		Three Months September 30, 2019				Three Months September 30, 2018 As Restated				Nine Months September 30, 2019				Nine Months September 30, 2018 As Restated
Coal Sales		$	1,847,279			$	8,890,322			$	18,162,805			$	23,219,222
Processing Services Income			-				147,946				20,876				167,462
Total Revenue			1,847,279				9,038,268				18,183,681				23,386,684
Cost of Coal Sales and Processing			(2,956,306	)			(7,116,009	)			(15,254,961	)			(18,214,195	)
Accretion Expense			(320,900	)			(433,589	)			(962,699	)			(1,116,751	)
Depreciation			(1,414,942	)			(700,595	)			(3,036,747	)			(1,931,374	)
Amortization of mining rights			(252,729	)			(181,385	)			(1,592,110	)			(181,385	)
General and Administrative			(1,434,545	)			(2,320,287	)			(3,798,051	)			(3,892,596	)
Professional Fees			(170,937	)			(707,735	)			(5,136,767	)			(1,106,864	)
Production Taxes and Royalties			(948,148	)			(759,269	)			(2,811,691	)			(2,217,156	)
Development Costs			(1,425,024	)			(945,341	)			(5,912,589	)			(3,429,512	)
Total Operating Expenses			(8,923,531	)			(13,164,210	)			(38,505,615	)			(32,089,833	)
Net Loss from Operations			(7,076,252	)			(4,125,942	)			(20,321,934	)			(8,703,149	)
Other Income			770,405				875,942				1,251,359				1,295,065
Gain on cancelation of debt			-				-				-				315,000
Loss on settlement of payable			-				-				(22,660	)			Share article: Shares Share Tweet Share Flip Email Watch latest videos Subscribe and Follow Get a daily dose of Dallas Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well. Subscribe Now News RELEASES Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Dallas Sun. More Information null in null International Section Turkey, France battle wildfires amid early Europe heatwave ISTANBUL/PARIS/BRUSSELS: As searing temperatures blanket much of Europe, wildfires are erupting and evacuation orders are being issued... Venetians protest Bezos wedding with march through the town VENICE, Italy: Over the weekend, hundreds of protesters marched through the narrow streets of Venice to voice their opposition to billionaire... New French law targets smoking near schools, public spaces PARIS, France: France is taking stronger steps to reduce smoking. A new health rule announced on Saturday will soon ban smoking in... Trump hints at DOGE investigation of Musk subsidies WASHINGTON, DC - U.S. President Donald Trump on Tuesday claimed Elon Musk's success has been built on government subsidies. Without... Native leaders, activists oppose detention site on Florida wetlands EVERGLADES, Florida: Over the weekend, a diverse coalition of environmental activists, Native American leaders, and residents gathered... Beijing crowds cheer AI-powered robots over real soccer players BEIJING, China: China's national soccer team may struggle to stir excitement, but its humanoid robots are drawing cheers — and not... Business Section Wall Street diverges, but techs advance Wednesday NEW YORK, New York - U.S. stocks diverged on Wednesday for the second day in a row. The Standard and Poor's 500 hit a new all-time... Greenback slides amid tax bill fears, trade deal uncertainty NEW YORK CITY, New York: The U.S. dollar continues to lose ground, weighed down by growing concerns over Washington's fiscal outlook... Taliban seeks tourism revival despite safety, rights concerns KABUL, Afghanistan: Afghanistan, long associated with war and instability, is quietly trying to rebrand itself as a destination for... Nvidia execs sell $1 billion in stock as AI boom drives record prices SANTA CLARA, California: Executives at Nvidia have quietly been cashing in on the AI frenzy. According to a report by the Financial... Tech stocks slide, industrials surge on Wall Street NEW YORK, New York - Global stock indices closed with divergent performances on Tuesday, as investors weighed corporate earnings, central... Canada-US trade talks resume after Carney rescinds tech tax TORONTO, Canada: Canadian Prime Minister Mark Carney announced late on June 29 that trade negotiations with the U.S. have recommenced... Movie Review The Red Shoes (4K UHD) [Blu-Ray]