Peabody Energy Corporation (BTU) Q3 2026 Earnings Report, Transcript and Summary

Good day and welcome to the Peabody Third Quarter 26 Earnings Conference Call. 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, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Kala Finklang, Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thanks, operator, and good morning, everyone. Appreciate you joining us for Peabody's third quarter 26 earnings call. Joining me today are Peabody's President and CEO, James C. Grech. Chief financial officer, Mark A. Spurbeck and chief commercial officer, Malcolm James Roberts. After our prepared remarks, we will open up the call for questions. Before we begin, I want to remind you that our remarks today will include forward looking statements. Please review the statement contained in our earnings release and consider the risk factors referenced there along with our filings with the SEC. I will now turn the call over to Jim.

Thanks, Kala and good morning, everyone. The third quarter marked a meaningful step forward for Peabody. We continue to advance Centurion, generated positive adjusted EBITDA across each operating segment and benefited from improved seaborne markets. Underpinning everything we do is our commitment to safety. Our teams maintain their focus on safe execution, while delivering on the strategic priorities that help position the company for stronger performance heading into year end. Our number 1 priority is Centurion, which met its third quarter sales volume target. However, late in the quarter and into October, the longwall encountered faulting across multiple locations that proved more problematic than anticipated and constrained production. October production was just over 450 thousand tons and we have revised our fourth quarter sales volume expectations to a range of 300 thousand to 500 thousand tons. The challenge is not a single fault or isolated geological event. The longwall has encountered multiple complex geological structures across the tailgate, face, and headgate areas and the combination was more complex than our mine plan assumed. Mechanical downtime while navigating these faulted zones allowed additional ground pressure and roof conditions to develop ahead of the phase. Under these circumstances, elements of the current long wall design were less effective at managing changing conditions than expected which further slowed progress. Importantly, we do not view these challenges as a resource quality reserve or long term mine plan issue. Bolting and structural complexity are common characteristics of bone Basin operations. What this first panel has shown us is where our equipment, and operating practices need to adapt to operating efficiently in these conditions. In the current panel, we have approximately 110 meters to go before the major fault structure is behind the long wall. We still expect some geological interruptions throughout the remainder of the panel. Our team has identified targeted engineering modifications and operating adjustments that will give us greater flexibility when mining through similar conditions in future panels. For each long wall shield, there are 2 key equipment upgrades being scheduled around planned downtime to limit disruption to production. The first is a baselift power increase estimated at $1.5 million to $2 million total for all shields, which we plan to complete in the current panel during scheduled maintenance. The second is improvements to the shield extension flipper estimated at $5 million to $10 million total for all shields which we plan to install during the next longwall move in 2027?. We have also worked to mitigate the risk of the next panel with an extensive preconsolidation plan for the faulted zone. Where we do encounter faulting, we will be better prepared with improved longwall positioning, both equipment upgrades in place, steps to stabilize and strengthen the ground ahead of the fault. Together, these steps are designed to deliver more consistent long haul performance at Centurion while our focus continues to be on safe execution. Beyond our current operating priorities, responsible stewardship remains central to how we manage our assets throughout their life cycle. Peabody received the Office of Surface Mining Reclamation and Enforcement's National Award for Excellence in Reclamation the highest honor in this field, for work at the former Seneca 2 West Mine in Colorado. Since the mine's closure in 2009, reclamation has transformed the site. This national recognition underscores the lasting impact of our commitment to responsible reclamation. That same focus extends to Peabody development, which is pursuing new ways to create value from our land and resources. Based on promising germanium, we are nearing agreements with a major customer and a processing partner. Through our R3 joint venture with RWE, we are advancing solar and battery storage projects on reclaimed mine land with potential success fees beginning in 2027?. We are also evaluating opportunities to pair mine mouth generation with data centers. Our approach remains capital light and partnership driven. Positioning us for new revenue streams and long term growth. Turning to The U. S. Regulatory environment, as the nation faces rising electricity demand EPA's partial repeal of the power plant carbon rule, which required unproven and uneconomical technology, and its proposal to rescind the engagement finding represent important steps toward restoring a more common sense energy policy for our country. I commend the DOE EPA, and the Trump administration for recognizing the critical role of reliable, dispatchable, and affordable energy. With that perspective on our operations and the regulatory environment, I will turn the call over to Malcolm to discuss the U.S. and global market fundamentals.

Thanks, Jim. Good morning, everyone. Building on Jim's overview, I will discuss the market conditions shaping customer demand. The third quarter featured stronger seaborne pricing driven by continued supply constraints and steady demand. China remained the primary driver of metallurgical coal pricing. Seaborne thermal coal market strengthened primarily because of healthy North Asian demand and supply constraints persisting in Indonesia, and domestically in China. In The US, thermal demand improved during the quarter. However, it remains down year over year on a year to date basis. Starting with seaborne metallurgical coal. Premium hard coking coal averaged $248 per metric ton in the third quarter. Up 35% year over year and the highest quarterly average since early 24, with spot index prices peaking at $285. As lower Chinese production resulted in Chinese mother metallurgical coal imports increasing 25%. Chinese safety inspections and production restrictions in Shanxi following the major mine accident in May have particularly affected high quality coking coal supply. An estimated 70 million tons of Chinese domestic metallurgical coal production have been removed from the market year to date. For context, the global seaborne metallurgical coal market is approximately 80 million tons per quarter. Supply is expected to remain constrained into 2027. Supporting seaborne pricing. In India, metallurgical coal buying has been steady but remains selective. Stronger steel prices following the monsoon season slowdown leaves scope for higher imports during the fourth quarter. While tighter Russian PCI supply has renewed Indian buying interest in supply from Australia Through September, premium coking coal and PCI prices were up 31, 19% respectively. versus 2025. Against this backdrop, we completed additional spot sales to major Chinese steel producers. Advanced 2027 turn discussions and delivered an initial Centurion cargo to an Indian public sector steel producer. US High Vol A coal prices have improved this year. But the price discount to Australian premium hard coking coal remains material as incremental supply and freight costs weigh on the weigh on the delivered competitiveness in Asia. Renewed Chinese access with an anticipated lower Chinese import tariffs could improve demand when implemented. Recent US China trade discussions have outlined China's commitment to at least 11 million tons of US origin imports in 2027 and 2028. This import volume is anticipated to be primarily coking coal, any resulting trade flow shifts are expected to be broadly neutral Australian pricing. Turning to seaborne thermal coal. Newcastle pricing averaged approximately $135 per ton during Q3, trending higher to finish the quarter above $145 per tonne. Price support came from several factors. Elevated LNG prices, slower Chinese production, and lower Indonesian exports. China has showed continued interest in Australian thermal coal. Particularly for mid calorific higher ash products, looking to substitute constrained Russian and Indonesian supply. As a result, API 5 pricing increased through the quarter, and October spot API 5 pricing accelerated even further, reaching $115 per ton, the highest level recorded. For the index since May 2023. Shifting to the United States. Third quarter Powder River Basin sales fell below guidance as cooler weather early in the quarter, strong renewable generation, and low natural gas prices weighed on coal demand. An unplanned extended customer plant outage also reduced shipments. This winter's demand profile will be particularly dependent on the El Nino weather pattern gas prices, and renewable output. Looking beyond the near term, data centers, manufacturing, and electrification, onto sustained electricity demand growth. That potential has yet to translate into materially higher coal purchases. Project timing will remain a risk. In summary, seaborne markets remain constructive, with supply constraints and energy security considerations supporting both metallurgical coal and thermal coal. US thermal fundamentals are more mixed, but coal continues to provide reliable supply of electricity during periods of high demand. With that, I will turn the call over to Mark for a review of the financial results and the fourth quarter outlook.

Thank you, Malcolm, and good morning, everyone. With that backdrop, let's review our financial results capital structure actions, and outlook for the remainder of the year. Peabody reported a third quarter net loss attributable to common stockholders of $32.8 million or $0.27 per diluted share, a much narrower loss compared to $90.6 million or $0.74 per diluted share in the second quarter. Adjusted EBITDA increased to $97.5 million still below the steady state mid cycle run rate as we await Centurion's full ramp up. The improved results were driven by higher production at Centurion. Higher average realized seaborne prices, and better US thermal volumes. Cost per ton were higher than anticipated due to lower than expected third quarter US thermal volume. And higher cost faulted conditions slowing production at Centurion. I will now walk through the segment results. Seaborne Thermal shipped 3.1 million tons exceeding expectations by 100 thousand. Export shipments were 2 million tons, also above guidance. And the average realized export price exceeded $100 per ton, further expanding margins. Compared to the prior year period, revenue per export ton increased nearly $24 while costs have increased about $7 per ton. The segment reported adjusted EBITDA of $65.5 million increasing 26% from the second quarter and 60% from the prior year period. We are anticipating an even stronger fourth quarter with higher production from both Wilpinjong and Wambo selling into very strong seaborne energy coal markets. Seaborne Metallurgical shipped 2.2 million tons. Exceeding company expectations, driven by higher production at Metropolitan, following a quicker than planned longwall move. Revenue per ton increased 11% from the second quarter to $165 Costs were above target at $162 per ton, primarily reflecting higher cost faulted conditions and lower production at Centurion. The segment turned in its first positive EBITDA quarter of the year, and with higher volume at Shoal Creek and Coppabella, are expecting a stronger fourth quarter. Our US thermal business generated $40.5 million of adjusted EBITDA. More than double the second quarter result. In the Powder River Basin, shipments increased to 19.6 million tons. Together with cost focused management, cost improved 8% to $12.94 per ton, but remained above target due to lower than anticipated volume as a result of lower coal burn. Segment generated adjusted EBITDA of $15 million. The other higher calorific value US thermal business shipped 3.4 million tons 300 thousand tons less than anticipated. Lower shipments at Bear Run due to lower coal burn, and a 20-mile customer had a generation unit down for an extended period. The resulting mix increased average cost per ton above expectations in the quarter partially offset by higher average realized revenue per ton. The segment generated $25.5 million of adjusted EBITDA broadly consistent with the second quarter. Turning to the balance sheet. We ended the quarter with $434 million of cash and $887 million of liquidity. In the third quarter, we repurchased $39 million of the remaining 28 convertible notes for $58 million. And issued a call for the remaining $40 million electing cash settlement with an anticipated mid November closing. The cash repurchase completed in the third quarter continued our return of capital to shareholders with a $19 million cash premium representing an additional 700 thousand shares repurchased. Bringing the year to date amount to 5.7 million shares. Together with $27.4 million of cash dividends, we have returned $192 million to shareholders in 2026 through September 30. Looking ahead to the fourth quarter, seaborne thermal volume is expected to be 3.6 million to 3.8 million tons including 2.5 million to 2.7 million export tons. Approximately 1.6 million tons of Newcastle product and 800 thousand tons of higher ash Wilpinjong product remain unpriced. Costs are expected to be between $46 and $51 per ton. Significant improvement compared to the third quarter is driven by substantially higher volume from Wambo as a result of mine sequencing improving quality mix to approximately 65% Newcastle, 35% higher ash coal. Strong performance through the first 9 months of the year has allowed us to increase full seaborne full year seaborne thermal export volume guidance by 200 thousand tons. Seaborne metallurgical volume is expected to be 2.2 million to 2.4 million tons as higher volume at Shoal Creek and Coppabella offset lower volume at Centurion. As we work through the difficult faulted conditions that Jim discussed. Realizations are expected to average approximately 70% of the premium hard coking coal index. With cost of $150 to $160 per ton. Lower fourth quarter expectations at Centurion resulted in a reduction to full year seaborne metallurgical volume of 600 thousand tons and increased costs $15 per ton. Powder River Basin shipments are expected to be 19.5 million to 21.5 million tons at an average price of approximately $13.75 per ton at cost of $13 to $13.50. Per ton. With a lower coal burn during the third quarter and modest Q4 forecast, we have lowered full year volume by 7.5 million tons, increasing full year costs by $1 per ton. Other US thermal volume which has an average calorific value greater than 11 thousand BTU, is expected to be 3.6 million to 4 million tons at an average price of approximately $59 and costs of $48 to $52 per ton. Similar to the PRB, we have lowered full year volume guidance by 200 thousand tons. due to lower anticipated coal burn. Capital expenditure guidance was reduced by $40 million primarily related to opportunistic deferral of development at Centurion North. In closing, Peabody exits the quarter in strong financial position poised to leverage our diversified assets to generate free cash flow from strong seaborne markets. With that, I will turn the call back to Jim.

Thanks, Mark. Peabody's opportunity is clear. Build on the strength of our thermal businesses, realize Centurion's long term potential, unlock additional value from our asset base. Delivering on that opportunity starts with safe, reliable operations and disciplined cost management. We recognize the work ahead at Centurion and remain focused on demonstrating improved progress. Our responsibility to translate the strength of this portfolio into lasting value for our shareholders. With that operator, we are pleased to open the call for questions.

We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. And you would like to withdraw your question. At this time, we will pause momentarily to assemble our roster. The first question comes from Christopher LaFemina with Jefferies. Please go ahead.

All right. Hey, guys. Thanks for taking my question. So I just wanna ask you about Centurion. So the plan was to initially get through the complex spalting area, which you had hoped to achieve by mid October. But now you have encountered additional faulting and these are seem to be spread throughout the mine. It sounds like this has gone from being getting through the complex fault thing and then kinda going about on your prior mine plan to now coming to figure out how to manage through this faulting because it is more likely to be a potentially permanent feature in the mine. Is my interpretation of that correct?

Christopher, not the faulting that we have is still in this localized area that we are trying to get that we are getting through. That we have talked about earlier. And once we get beyond this 110 meters in this panel, the majority of this faulting goes away. So our outlook on the faulting and geology in this panel and the rest of the mine has not changed and our outlook for the ability to mine the coal as we get to the subsequent panels has not changed. There is faulting across the mine as it is in all the mines in the Bowen Basin. And what is occurring is as we are getting through this first panel we are learning how we have to adapt our equipment to handle this faulting better in some of our operating procedures. So nothing has changed on our outlook on the mine or the faulting. This faulting was known to be there. We had it mapped out. It just turned out to be more complex than we thought it was going to be. So the faulting throughout the rest of the mine, how do we know that it is not more complex than you had initially assumed it to be? If you have had a problem with this particular area, how do we know it does not happen with other faulting areas in the longwall? Yeah. What we have what we have learned with the. Both the equipment that we have and the modifications that we have And then the pre consolidation where we have had defaulting and have done the pre consolidation. We have had a lot of better success at mining through that. This area here though we did not have the pre consolidation done to it, but we have that in the rest of the panel here where we do have halting and we will be doing it in the panels going forward. So the pre consolidation and the equipment modifications to handle the conditions when we get them. When we encounter them, that was a lot higher degree of confidence of being able to mine through them efficiently in the future. Okay. So your confidence in getting to full capacity at this mine is not changed even with these problems that you are encountering right now? that is the right question. 100%. Yeah, Christopher. We are 100% still going to get the full capacity. And, again, this first panel has been a learning experience for us. And what we need to do to get to that full capacity And with the planned equipment modifications that I outlined in my comments, the pre consolidation and the experience we are learning in this first panel we are still 100% confident we are going to get to the full output capacity of this mine. Thank you.

The next question is from Katja Jancic with BMO Capital Markets. Please go ahead.

Hi, thank you for taking my question. Maybe staying on Centurion, So, Jim, you mentioned you are confident that you can get to full capacity. But can you maybe talk a bit more about when you could get there? What the timeline is?

Yes. We. As we get through these faults, in this quarter here and early next year, while we are finishing up this panel, we will do these equipment modifications. That I talked about. Some of them we can do during this while we are in this panel, some we will do during the next longwall move. And we will be doing the preconsolidation in the next panel ahead of us getting there. So as we get through this panel, certainly as we get into the next panel, after this longwall move, will be at that full capacity potential. But we still have to work through this right now as we do these equipment modifications while we are mining through this panel. But the next panel we should be ready to go.

So if I understand correctly, when you get to. When you do the long wall move in 3Q of next year, that is when you could get to that 1 million ton run rate, or how should we think about it?

Yes. that is when we. With the modifications, we will be. We will feel like we are much more consistent consistently we will be operating consistently and getting to that run rate. Now, as we are in this panel and we get through this faulting area, we will get to those high run rate levels. Once we get past the faulting area of this 110 meters we have left. But we will not have those modifications then, Katja. So in order to consistently keep that run rate, whether there is faulting or not, we need to get these modifications done. Okay. Thank you.

The next question is from Nick Giles with B. Riley Securities. Please go ahead.

Yeah. Thanks, operator. Good morning, guys. Maybe just on 4Q specifically, I think 450 thousand tons in October still implies something around 175 thousand tons per month. So can you just kind of give us a picture of, you know, exactly where things stand today? Like, it is the long wall running? And if so, how many, , how many passes are you able to make? Given defaulting issues? And then how much of the sales volumes would come from inventory that is on the ground? Thanks.

Yeah. Right now, you know, the long wall is running, but not at the rates that we are hoping to get to once we get. Or that we will get to once we get past this faulted area here. Which expect to be out of later this week. The problematic area, and we still have to get through the 110 meters that we have left. And, you know, we had coming into the quarter about 50 thousand tons of inventory and we have got another 125 thousand tons that we know that we will get from our Centimeters units And so the remainder would be coming from the longwall and we feel pretty good about those numbers attaining that guidance range with tonnage off the longwall for the rest of the quarter. Understood.

And I was hoping you could give us a early sense for how you are going to guide that Centurion in 2027?. I mean, obviously, there is been a number of challenges. Guidance has been consistently downgraded. So seems like you are still confident you can reach full capacity, but are you willing to set the bar lower just in the case that some of these problems do persist.

Good morning, Nick. it is Mark. Yeah, we are not prepared to share what we are going to do with 2027 guidance any of our mines yet. We are going to look at it. We are going through our budgeting process Clearly, we want. We wanna see our progress here in the fourth quarter. But I think the most important point is what Jim mentioned earlier, that our long term outlook has not changed. But we will work through these modifications to the equipment that Jim mentioned, and we will come up guidance in our next call.

Thanks for that, Mark. Maybe just switching gears. I was hoping you could just give us a sense for seaborne thermal costs, of how you how you are seeing those trending. You know? What impact. What incremental impact are the higher diesel prices having here in the fourth quarter Or what kind of operational improvements have you been able to make to kind of keep those costs more range bound? Yeah.

In the in The US, I assume you are talking about in PRB. Certainly, you know, you saw us raise the expectation of cost on higher diesel and lower expected volumes. You know, it is probably, you know, maybe $0.50 a ton in the PRV. But that guidance, we are comfortable with that. Diesel's come off a little bit from where we expect it. And seaborne thermal, you have seen a pretty significant reduction in our costs quarter over quarter going into the fourth quarter. You can see by the volume, we are up significantly at Wambo and Wilpinjong. So that is really driving the lower cost. there is some diesel impact there. But not significant. So the lower cost us into that $46 to $51 range is driven by the higher volumes. Offset partially by some higher sales related costs given the better pricing environment. Got it. Okay. Thanks for that clarification, Mark. I will turn it over. Thanks, Nick.

The next question is from Nathan Martin with Stifel. Please go ahead.

Thanks, operator. Good morning, everyone. Just a clarification, I guess. The 200 thousand additional Seaborne Thermal X export tons now expected for this year, sounded like, Mark, you said those are largely expected from Wamba. So are those, you know, Newcastle quality tons that is that is right.

Higher Wamble production, higher Newcastle. You saw us move the weight there kind of 35 off of our traditional 50. Okay.

Got it. Appreciate that. And then on the production and expected USDA thermal sales for this year, I assume most of those tons just roll into next year. And then maybe can you give us an idea of how contracted you guys are for 2027 in The US thermal segments and any idea on pricing?

Yeah. Nathan, good morning. Malcolm here. Luke, we have not given go. We have not given guidance for next year. So. But we would expect that our contract position from this year to roll into next year probably with an expectation of a few additional tonnes in the PRB. And similar volumes in the other segment. But, yeah, that is still gonna come down to guidance, which we will update at the next call.

K. Appreciate that, Malcolm. You may be coming back to Centurion for a second. I think last quarter, Jim, you mentioned you guys are looking at ways to shorten the duration of the longwall move, which is now expected in the third quarter of 2027. Did you make any progress there And how long would you expect that longwall move to take?

Yeah. We are working on the timing of that Nathan, with the advancement we are doing right now. But the development is well in place for the next longwall move, the 7 panels. So we have made very good progress there. So we are actually ahead schedule on the development for the next panel. But when we give the guidance for next year, we will talk about the timing of the longwall move and when that will be occurring. Okay. Appreciate that, Jim. I will leave it there and pass it on. Best of luck. Thank you, Nathan.

Again, if you have a question, please press star then 1. The next question comes from Matthew Fields with Texas Capital. Please go ahead.

Just staying on Centurion. Well, I know the expectation is that Centurion will get back to name, or get to nameplate capacity. But just given the mine conditions that have been maybe a little bit more persistent, should we expect that Centurion will just be a higher cost producer than maybe what was originally expected for it, but as, you know, it came online. For example, like, even if mining conditions stabilized, I know you have been incorporated some equipment modifications to kind of better address those challenges. Do those modifications just inherently increase mining costs compared to what was originally expected when it you know, you broke ground on that asset?

Matthew, it is Mark. The equipment modifications you mentioned are very modest capital. They will not increase the operating cost of this mine going forward. Certainly, the geological conditions have been more problematic than we anticipated in this panel. The equipment modifications are meant to address that as well as the learnings we have had from the additional drilling and consolidation work that we have done in this panel. So we think we know how to operate this mine. Jim confirmed that we still anticipate getting to that full production So our long term view of costs have not changed. Again, that was $105 a ton in 2024 dollars. You know? You inflate that up, and we are. We should not be at that $125 range or whatever next year. We have got a lot to learn. We are still working through this. So, give us a. Give us another quarter here, and we will provide full guidance on our next call. Got it. that is that is helpful color. I appreciate that. And good to hear.

Just on Seaborne Thermal, I know we will have more guidance in the next quarter, but just at a high level, in regards to kind of the production outlook there, could you remind me, like, the big moving parts directionally from a production standpoint in seaborne thermal? Just want to make sure I am accounted for everything correctly in my model.

Yeah. I think, you know, we have we have we have shared what we think Will Pignon will do. Right? We have got a transition to a couple of pit extensions. So the production come off came off a little bit this year. It will come off a little bit more next year depending on where we finished the quarter on the domestic ton deliveries, it will depend on how much we, have to deliver next year. But, I think we are we are in that, you know, 4.4 million-ton, range again on a domestic side. So maybe you will see a drop in the export tons year over year next year, somewhere in that 500 thousand to 700 thousand range. And I would look at Wambo as being pretty consistent at 3 million-plus a year. So as we mentioned then, that domestic delivery out of Wilpinjong retreats significantly in 2028 to only, like, 2, 2.5 million tons. And goes away completely after that. So we look to ramp up those export tons out of Wilpinjong from a little over 5 million this year to over 10 million by 2030. Got it. Super helpful. Appreciate the time, and good luck. Thanks, Matthew.

Next, we have a follow-up question from Nick Jals with B. Riley Securities. Please go ahead.

Hey, thanks for taking my follow-up. I think you mentioned or you made an update on some of these opportunities outside your traditional business, let's call it, specifically on the germanium front. Can you just walk us through kind of what the gating items are to advance that and the same for the kind of mind mouth generation opportunities? Thank you.

Yeah. Nick, on the germanium as a said in the remarks, we are working to an agreement with a partner for the offtake and the processing on that. And hopefully, that announcement can be coming sometime here in the near future. And because of some of the commercial sensitivity of that nature, do not wanna give a lot of details out of that deal until we have this all buttoned up and make the announcement. But, again, we think that is very promising. The opportunity for germanium production. And the offtake and processing. On the mine mouse power plants that you are asking about, what we are looking for there is partners. The way we are going to see the revenue from that is, from either the land sales or the sale of coal to the mine mouth generation or from helping the project development fees. So we are looking for the partners to build and operate the asset. So again, we are just in early days of that. There is a lot of interest in the mind mouth generation in the state of Wyoming. And, you know, we are into those conversations in case that potential develops more. But right now, it is very early days with that. Thanks for that, Jim.

Maybe just 1 more on the kind of legacy operations. Specifically at Coppabella, low vol PCI price have been ticking up. So I think, Mark, you mentioned some higher output from that mine in 4Q. But are there any opportunities to run that mine a little harder and take advantage of some of the spot strength? Thanks.

Nick, I think, you know, we have kinda transitioned, you know, from, from a 2 mine operation with Moorvale and moved a lot of equipment into that is where our focus is in stabilizing that production going forward. We have been mining through some higher ratio coal We are getting through that as well to some lower ratio. So look forward to strong production, but there is not a step change in production that is kind of on our vision today. Understood. Okay. Thanks for clarifying. Thanks, Nick.

This concludes our question and answer session. I would like to turn the conference back over to James C. Grech, CEO, for any closing remarks.

Yes. Well, thank you to everybody for your time today and your continued support. And we look forward to updating you on our progress in future calls. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.