What changed in this filing

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Item 1. Business

2023-03-31 compared with 2022-03-30 · 54 added, 18 removed, 508 unchanged (12% of the section changed)

9 unchanged sentences

American Carbon currently has seven coal mining and processing operating subsidiaries:

McCoy Elkhorn Coal LLC (doing business as McCoy Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott County Coal), Deane Mining, LLC (Deane Mining) and Wyoming County Coal LLC (Wyoming County), Quest Processing LLC (Quest Processing), Perry County Resources (Perry County) located in eastern Kentucky and western West Virginia within the Central Appalachian coal basin, and ERC Mining Indiana Corporation (ERC) located in southwest Indiana within the Illinois coal basin.

McCoy Elkhorn Coal LLC (doing business as McCoy Elkhorn Coal Company) (McCoy Elkhorn), Knott County Coal LLC (Knott County Coal), Deane Mining, LLC (Deane Mining), Wyoming County Coal LLC (Wyoming County), Quest Processing LLC (Quest Processing), Perry County Resources (Perry County) located in eastern Kentucky and western West Virginia within the Central Appalachian coal basin, and ERC Mining Indiana Corporation (ERC) located in southwest Indiana within the Illinois coal basin.

The coal deposits under control by the Company are generally comprise of metallurgical coal (used for steel making), pulverized coal injections (used in the steel making process) and high-BTU, low sulfur, low moisture bituminous coal used for a variety of uses within several industries, including industrial customers and specialty products.

1 unchanged sentence

American Metals LLC (AM) which is focused on the recovery and sale of recovered metal and steel and American Rare Earth LLC (ARE) which is focused on the aggregation and monetization of critical and rare earth element deposits and end of life magnets and batteries.

We have not classified, and as a result, do not have any “proven” or “probable” reserves as defined in United States Securities and Exchange Commission Industry Guide 7, and as a result, our company and its business activities are deemed to be in the exploration stage until mineral reserves are defined on our properties.

During 2022, American Rare Earth LLC changed its name to ReElement Technologies, LLC.

We have not classified, and as a result, do not have any “proven” or “probable” reserves as defined in United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, our company and its business activities are deemed to be in the exploration stage until mineral reserves are defined on our properties.

Since mid-2019, we have not mined or sold coal which is sold into the thermal coal markets.

6 unchanged sentences

McCoy Elkhorn Coal LLC

Located primarily within Pike County, Kentucky, McCoy Elkhorn is currently comprised of two active mines (Mine #15 and the Carnegie 1 Mine), one mine in “hot idle” status (the PointRock Mine), two coal preparation facilities (Bevins #1 and Bevins #2), and other mines in various stages of development or reclamation.

Located primarily within Pike County, Kentucky, McCoy Elkhorn is currently comprised of one active mine (the Carnegie 1 Mine), one mine in “idle” status (the Mine#15 Mine), two coal preparation facilities (Bevins #1 and Bevins #2), and other mines and permits in various stages of development or reclamation.

The address for the Bevins #1 and #2 preparation facilities is 2069 Highway 194 E Meta, KY 41501.

The address for Mine #15 is 2560 Highway194 E Meta, KY 41501.

The address for Carnegie 1 is 209 Meathouse Fork Kimper, KY 41502.

McCoy Elkhorn sells its coal to a variety of customers, both domestically and internationally, primarily to the steel making industry as a high-vol “B” coal or blended coal.

The coal controlled at McCoy Elkhorn (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

The coal controlled at McCoy Elkhorn (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.

Approximate coal deposits owned is 0 tons and leased by McCoy Elkhorn totals 11,287,904 tons.

The current leases contain minimum annual payments of $20,000 and production royalty payments of 7% of gross sales price.

Within the McCoy Elkhorn subsidiary, Carnegie 1 is deemed material under Items 1304 of Regulation S-K.

Mine #15 is an underground mine in the Millard (also known as Glamorgan) coal seam and located near Meta, Kentucky.

6 unchanged sentences

In 2022, Mine #15 produced approximately 0 tons.

In 2020, Mine #15 produced approximately 5,568.65 tons and sold the coal at an average price of $59.09 per ton.

In 2021, Mine #15 produced approximately 0 tons.

During 2022 and 2021, 100% and 100%, respectively, of the coal extracted from Mine #15 was high-vol “B” metallurgical coal quality, of which 100% was sold into the PCI market and 100% was sold into the metallurgical market, respectively.

The mineral available through Mine #15 is leased from various 3 rd party mineral holders.

Coal mined from the lease requires a payment of greater of $2.50 per ton or 5% of gross sales price.

The Carnegie 1 Mine is an underground mine in the Alma and Upper Alma coal seams and located near Kimper, Kentucky.

7 unchanged sentences

In 2022, the Carnegie 1 Mine produced approximately 105,607 tons and sold at an average of $233.11 per ton.

In 2021, the Carnegie 1 Mine produced approximately 7,889.63 tons and sold at an average of $138.00 per ton.

During 2021 100% of the coal extracted from the Carnegie 1 Mine was high-vol “B” metallurgical coal quality, of which 100% was sold into the metallurgical market.

The mineral being mined through Carnegie 1 is leased from a 3 rd party professional mineral company.

Coal mined from the lease requires a payment of greater of $1.75 per ton or 6% of gross sales price.

The Carnegie 2 Mine is an underground mine in the Alma and Upper Alma coal seams and located near Kimper, Kentucky.

In 2021, mine development began and operations at the Carnegie 2 Mine started in August 2022 and is currently being mined via room-and-pillar mining methods utilizing a continuous miner.

The coal is stockpiled on-site and trucked approximately 7 miles to McCoy Elkhorn’s preparation facilities.

The Carnegie 2 Mine is currently a “company run” mine, whereby the Company manages the workforce at the mine and pays all expenses of the mine.

The Carnegie 2.

Mine has the estimated capacity to produce up to approximately 10,000 tons per month of coal.

In 2022, the Carnegie 2 Mine produced approximately 6,200 tons and sold at an average of $233.11 per ton.

In 2021, the Carnegie 2 Mine produced approximately 0 tons.

During 2022 100% of the coal extracted from the Carnegie 2 Mine was high-vol “B” metallurgical coal quality, of which 100% was sold into the metallurgical market.

The mineral being mined through Carnegie 1 is leased from a 3 rd party professional mineral company.

Coal mined from the lease requires a payment of greater of $1.75 per ton or 6% of gross sales price.

American Carbon acquired the PointRock Mine in April 2018.

2 unchanged sentences

The Carnegie 1 mine restarted during October 2021.

The Carnegie 2 mine commenced operations in August 2022.

Processing & Transportation:

24 unchanged sentences

The idled mines at Knott County Coal are primarily underground mines that utilize room-and-pillar mining.

The coal controlled at Knott County Coal (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

The coal controlled at Knott County Coal (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.

Approximate coal deposits owned by Knott County is 0 tons and leased by Knott County totals 3,206,713 tons.

The current leases contain minimum annual payments of $0 and production royalty payments of the great of $1.50 per clean ton or 6% of gross sales price.

The Wayland Surface Mine is a surface waste-rock reprocessing mine in a variety of coal seams (primarily the Upper Elkhorn 1 coal seam) located near Wayland, Kentucky.

25 unchanged sentences

The idled mining permits are either in various stages of development, reclamation or being maintained as idled, pending any changes to the coal market that may warrant re-starting production.

The coal controlled at Deane Mining (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

The coal controlled at Deane Mining (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.

Approximate coal deposits owned by Deane Mining is 0 tons and leased by Deane Mining totals 0 tons.

Access Energy is a deep mine in the Elkhorn 3 coal seam and located in Deane, Kentucky.

29 unchanged sentences

The two idled mining permits are undisturbed underground mines that are anticipated to utilize room-and-pillar mining.

The coal controlled at Wyoming County Coal (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

The coal controlled at Wyoming County Coal (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.

Approximate coal deposits owned by Wyoming County is 5,668,115 tons and leased by Knott County totals 0 tons.

The mining permits held by Wyoming County Coal are in various stages of planning with no mines currently in production.

22 unchanged sentences

Located primarily within Perry County, Kentucky, Perry County Resources LLC is comprised of one active underground mine (the E4-2 mine) and one active coal processing facility called the Davidson Branch Preparation Plant, along with two additional idled underground mining permits.

The E4-2 mine and Davidson Branch Preparation Plan are located at 1845 KY-15 Hazard, KY 41701.

The two idled mining permits are for underground mines and have been actively mined in the past and being maintained as idled, pending any changes to the coal market that may warrant re-starting production.

The coal controlled at Perry County Resources (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Industry Guide 7, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Industry Guide 7.

The coal controlled at Perry County Resources (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.

Approximate coal deposits owned by Perry County is 0 tons and leased by Perry County totals 58,108,612 tons.

The current leases contain minimum annual payments of $12,000 and production royalty payments ranging from 6% to 7% of gross sales price.

Within the Perry County subsidiary, E4-2 mine is deemed material under Items 1304 of Regulation S-K.

The E4-2 mine is an underground mine in the Elkhorn 4 (aka the Amburgy) coal seam located near the town of Hazard, Kentucky.

3 unchanged sentences

The E4-2 mine has the estimated capacity to produce up to approximately 80,000 tons per month of coal.

The mineral available through the E4-2 mine is partially owned by the Company and partially leased from various mineral holders.

The lease terms are the greater of $1.50 per ton or 6% of gross sales price.

In 2022, the E4-2 mine produced approximately 105,577.11 tons and sold the coal at an average price of $153.43.

4 unchanged sentences

The E4-2 Mine was restarted during March 2021.

During 2022, the E4-2 Mine was idled due to regional historic flooding and the declared national emergency.

Processing and Transportation:

14 unchanged sentences

Should the state regulators believe that the Company is not in the process of abating or correcting the currently outstanding issues associated with their currently held permits they may choose not to issue the Company any new permits until such issues are properly rectified.

Below is a map showing the location of the Davidson Prep Plant, Bluegrass 4 rail Loadout, and E4-2 Mine at Perry County Resources:

Quest Processing LLC

8 unchanged sentences

The Company does not plan to mine the property and purchased it for monetization of infrastructure assets and to reclaim the property which was in process during 2021.

The coal controlled at ERC (along with our other subsidiaries) has not been classified as either “proven” or “probable” as defined in the United States Securities and Exchange Commission Items 1300 through 1305 of Regulation S-K, and as a result, do not have any “proven” or “probable” reserves under such definition and are classified as an “Exploration Stage” pursuant to Items 1300 through 1305 of Regulation S-K.

Approximate coal deposits owned by ERC is 4,383,298 tons and leased by ERC totals 0 tons.

All of the deposits are in reclamation.

The Gold Star Mine is an underground mine in the Indiana IV (aka the Survant) coal seam located near the town of Jasonville, Indiana.

6 unchanged sentences

The allocated cost of for the property at Gold Star paid by the Company is $-.

ERC holds one permit that covers the Gold Star Mine, processing plant, rail loadout, and related infrastructure.

ERC holds one permit that covers the Gold Star Mine, processing plant, rail loadout, and related infrastructure which are in reclamation status.

Mineral and Surface Leases

5 unchanged sentences

ARC sells its coal to domestic and international customers, some which blend ARC’s coal at east coast ports with other qualities of coal for export.

During the year ended December 31, 2021, coal sales came from the Company’s Perry’ E4-2 mine and McCoy’s Carnegie mine.

During the year ended December 31, 2022, coal sales came from the Company’s Perry’ E4-2 mine and McCoy’s Carnegie 1 and 2 mines.

The Company may, at times, purchase coal from other regional producers to sell on its contracts.

103 unchanged sentences

As of December 31, 2022, and 2021, we had outstanding surety bonds at all of our mining operations totaling approximately $30.94 million and $31.28 million, respectively.

While we anticipate reducing the outstanding surety bonds through continued reclamation of many of our permits, that number may increase should we acquire additional mining permits, acquire additional mining operations, expand our mining operations that result in additional reclamation bonds, or if any of our sites encounters additional environmental liability that may require additional reclamation bonding.

While we anticipate reducing the outstanding surety bonds through continued reclamation of any of our permits, that number may increase should we acquire additional mining permits, acquire additional mining operations, expand our mining operations that result in additional reclamation bonds, or if any of our sites encounters additional environmental liability that may require additional reclamation bonding.

While we intend to maintain a credit profile that eliminates the need to post collateral for our surety bonds, our surety has the right to demand additional collateral at its discretion.

184 unchanged sentences

We pay $5,869 per month in rent for the office space and the rental lease expires December 2032.

On January 1, 2022, the Company entered into an expansion lease for the site.

The amended lease has a ten year term and $5,869 per month rate.

We also rent office space from an affiliated entity, LRR, at 11000 Highway 7 South, Kite, Kentucky 41828 and pay $1,702 per month rent and the rental lease expires January 1, 2030.

On August 17, 2021, American Rare Earth entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility.

On August 17, 2021, ReElement entered into a Commercial Land Lease sublease agreement with Land Betterment for nearly 7 acres of land for the purpose of building a commercial grade critical element purification facility.

The sublease is for the period of 5 years with a rate of $3,500 a month.

On October 8, 2021, American Rare Earth entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility.

The is for the period of 2 years with a rate of $4,745.83 a month.

On October 8, 2021, ReElement entered into a Commercial Lease for 6,700 square feet of warehouse space for the purpose of building a commercial grade critical element purification facility.

This for the period of 2 years with a rate of $4,745.83 a month.

The Company also utilizes various office spaces on-site at its coal mining operations and coal preparation plant locations in eastern Kentucky, with such rental payments covered under any surface lease contracts with any of the surface land owners.

1 unchanged sentence

The Company is continually evaluating the use of company employees and contract labor to determine the optimal mix of each, given the needs of the Company.

Currently, McCoy Elkhorn’s Carnegie 1 Mine and Perry’s E4-1 mine and are primarily run by contract labor, and the Company’s various coal preparation facilities are run by contract labor.

Currently, McCoy Elkhorn’s Carnegie 1 and 2 Mines and Perry’s E4-1 mine and are primarily run by contract labor under Company management and direction, and the Company’s various coal preparation facilities are run by contract labor.

The Company currently has approximately 17 direct employees.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business