Core Natural Resources, Inc. (NYSE:CNR) Q3 2025 Earnings Call Transcript

Core Natural Resources, Inc. (NYSE:CNR) Q3 2025 Earnings Call Transcript November 6, 2025

Core Natural Resources, Inc. beats earnings expectations. Reported EPS is $0.61, expectations were $-1.4.

Operator: Good morning, ladies and gentlemen, and welcome to the Core Natural Resources, Inc. Third Quarter Earnings Call. [Operator Instructions] This call is being recorded on Thursday, November 6, 2025. I would now like to turn the conference over to Deck Slone, Senior Vice President of Strategy. Please go ahead.

Deck Slone: Good morning from Canonsburg, Pennsylvania, everyone, and thanks for joining us today. Before we begin, let me remind you that certain statements made during this call, including statements relating to our expected future business and financial performance, may be considered forward-looking statements according to the Private Securities Litigation Reform Act. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. These uncertainties, which are described in more detail in the annual and quarterly reports that we file with the SEC, may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

I’d also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss this morning at the end of our press release, a copy of which we have posted in the Investors section of our website at corenaturalresources.com. Also participating on this morning’s call will be Jimmy Brock, our Chairman and CEO; Miteshkumar Thakkar, our President and CFO; and Bob Braithwaite, our Senior Vice President of Marketing and Sales. After some formal remarks from Jimmy and Mitesh, we will be happy to take questions. With that, I’ll now turn the call over to Jimmy. Jimmy?

James Brock: Thank you, Deck, and good morning, everyone. I am pleased to report that Core Natural Resources had a solid performance in the third quarter despite some operational headwinds. During Q3 ’25, we once again generated free cash flow despite weak commodity prices, deployed cash toward our share buyback program, secured 26 million tons of future business and nearly finalized plans with MSHA to recover and reposition the longwall equipment at the Leer South mine. Furthermore, we received the first tranche of insurance recovery for the Leer South fire mitigation efforts. I am also excited to announce that we have verified the presence of noteworthy levels of rare earth elements and critical minerals at our flagship operations in both the Eastern and Western United States.

Now let me dive a little deeper into our operational results. Coal production within the High CV Thermal segment came in at 7.6 million tons in Q3 ’25 compared to 8 million tons in the prior quarter. During the quarter, our High CV Thermal segment reported realized coal revenue of $59.78 per ton and cash cost of $40.53 per ton. Segment cash costs were slightly elevated compared to Q2 ’25 due in part to operational challenges we faced at the West Elk mine as it transitioned to a new seam within the reserves. We believe these initial challenges will continue partly through Q4 ’25. However, the B-Seam at the West Elk mine will allow us to take advantage of a much thicker coal seam and better quality characteristics, which will ultimately drive more favorable productivity, realizations and cash costs.

During the quarter, the Pennsylvania Mining Complex outperformed versus expectations, which partially offset the challenges at West Elk. Moving forward to Q4, we expect 1 to 2 longwall moves at the Pennsylvania Mining Complex, depending on its level of outperformance relative to our guidance level for the rest of the year. Let’s move on to the metallurgical segment. Coal production within the segment came in at 2.3 million tons in Q3 ’25 compared to 2.4 million tons in Q2 ’25. During the quarter, our metallurgical segment reported realized coking coal revenue of $112.94 per ton and $101.60 per ton across the segment as a whole when factoring in the 372,000 tons of thermal byproduct sales. Cash costs for the quarter came in at $94.18 per ton.

Additionally, the metallurgical segment incurred $18 million of costs associated with the Leer South fire and idle-related expenses, offset by $19 million of advanced payments on the Leer South insurance claim. Although the cash margins are depressed compared to recent years, I am very proud of the Core team’s ability to manage and continually work toward reducing costs through this market downturn and to continue to realize positive cash operating margins. Now let me provide a brief update on the Leer South mine. After we temporarily resell the mine in July, we have further advanced our continuous mining sections. At the same time, we have continued to work with the federal and state agencies for reentry plans that will involve recovering, repositioning and restarting the longwall system.

As we approached our entry date in October, the government shutdown resulted in the unavailability of MSHA personnel needed for the reentry efforts, and we have been in a holding pattern ever since. Our operating team remains confident that the longwall equipment is largely unaffected and that the mine is ready for reentry into the longwall section as soon as the MSHA personnel are available to participate in the process. Now to the Powder River Basin segment. Coal production within the segment came in at 12.9 million tons in Q3 ’25 compared to 12.6 million tons in Q2 ’25. During the quarter, our PRB segment reported realized coal revenue of $14.09 per ton and cash cost of $13.04 per ton. Both were lower compared to the prior quarter, mostly due to the federal royalty rate reduction in conjunction with provisions in many of Core’s existing contracts requiring that cost savings associated with certain policy-related changes be passed along to the customer.

From a consolidated perspective, despite operational headwinds, uncertainty surrounding the timing of reentry at Leer South and weak benchmark prices, we still returned more than 60% of our Q3 ’25 free cash flow to shareholders. We deployed $19 million towards share repurchases and an additional $5 million to dividends. In addition, we announced this morning that the Board of Directors have declared a $0.10 per share dividend payable on December 15 to stockholders of record on November 28. From a year-to-date perspective, we have returned $218 million to our shareholders or approximately 100% of our free cash flow generation through our robust capital return program. As stated in prior quarters, Core will continue to follow a measured approach to shareholder returns by targeting around 75% of our free cash flow to be utilized primarily for share buybacks as well as a small sustaining dividend, leaving the potential to flex that percentage up depending upon market conditions.

With that, let me now turn to a topic that could provide potential future optionality for Core, rare earth elements and critical minerals. Over the last several months, we have completed exploration and sampling at our PRB mines and Eastern operations to analyze the concentrations of critical minerals within our reserves. We are intrigued by our findings across both our PRB mines and Eastern operations. The result in the PRB demonstrated elevated ash-basis concentration of certain rare earth elements and critical minerals, particularly at the top and bottom of the coal seam. In the East, while measured ash-basis concentration were somewhat less elevated than in the PRB operations, the very large flow rates at the PAMC, Leer and Leer South operations could offer unique opportunities for further upgrading.

As a result of these findings, we are engaging with several subject matter experts to explore feasibility in advance of potentially launching an RFP process. Now let me touch on some of the early operational successes we’ve had in integrating our 2 legacy companies and creating a stronger Core Natural Resources. We’ve executed several best practices across the operations, such as implementing more standardized production schedules to optimize our run time and labor expense, sharing equipment and resources for special projects such as longwall moves and leveraging our scale with suppliers to secure discounts on equipment and services. We continue to leverage our strong logistical network and diverse quality characteristics to create value uplift opportunities for our products through product blending.

These are just a few examples of the merger-related synergies that positively impact our bottom line and why we are confident in our ability to create value across the market cycle and to capitalize in a very substantial way when the market turns. Our focus for the fourth quarter is to execute operationally. We are prepared and ready to breach the seals at Leer South as soon as MSHA personnel are available. We have a solid plan in place and expect to have the wall up and running before year-end. However, certain aspects of the timing are out of our control. We remain in close contact with state and federal agencies. At West Elk, we continue to work through the transitions to the B-seam and are optimistic about the operational benefits that we will realize from this thicker coal seam.

We expect these efforts during the fourth quarter will set us up for a performance step change in 2026. Due to our low-cost asset base, advanced logistics network and diverse product quality, we are uniquely positioned to generate strong cash flow and shareholder value in all parts of the commodity cycle. Now let me turn the call over to Mitesh to provide the marketing and financial updates.

Mitesh Thakkar: Thank you, Jimmy, and good morning, everyone. Let me start by providing an update on our financial results for the quarter. This morning, we reported a strong third quarter 2025 financial performance despite operational challenges at 2 mines within our footprint. We achieved net income of $32 million or $0.61 per diluted share and adjusted EBITDA of $141 million. The reported adjusted EBITDA includes $19 million of insurance recovery advancements for Leer South, offsetting $18 million in Leer South fire and idle costs that were incurred in the quarter. Furthermore, we generated $88 million of operating cash flow and spent $49 million in capital expenditures to generate $39 million of free cash flow. Our operating cash flow was impacted by negative working capital changes of $52 million, mostly related to increases in our accounts receivable and coal inventory balances versus the prior quarter.

However, both of these are timing related. At the end of the third quarter, we had total liquidity of $995 million, an increase of $47 million compared to the end of the second quarter. This increase was driven by higher cash balance plus the increased availability on our combined securitization facility. As a reminder, we completed a successful refinancing transaction during the third quarter, whereby we combined the legacy AR securitization programs into one facility. This combination provides greater availability on the facility due to a broader and more diverse customer base, which in turn improves the risk profile of our overall receivables. We’d like to thank our banking partners for their continued and expanding support. Let me update you on the marketing front.

In the domestic market, recent policy shifts under the Trump administration have created more support for domestic coal by lowering production and royalty-related costs, providing a more stable regulatory environment and allocating funds to extend the life of coal-fired power plants, effectively keeping coal plants operating and reinforcing the central role of coal in the U.S. energy mix. Through September, U.S. power demand has remained robust with coal-fired generation increasing by approximately 12% year-to-date. However, some of the specific markets we serve are up even more. For example, the PJM RTO is up approximately 16% on a year-to-date basis. Not only has energy demand continued to increase this year, but it is expected to increase for years to come.

Data center build-out has been a large part of this increased power demand. And by the end of 2025, the data centers in the U.S. will require 22% more grid power than last year. Furthermore, it is estimated that U.S. data centers will consume nearly 3x as much power by 2030 than they do today. As such, U.S. data center demand is expected to rise to almost 76 gigawatts in 2026, 108 gigawatts in 2028 and 134 gigawatts in 2030. This data center demand boom has caused many electric utilities to look at their long-term load capacities, which has driven a significant shift in how they think about contracting future energy supply. We have seen a noticeable shift to longer-term deals for our thermal products and our low-cost operations allow us to proactively layer in term business cost competitively.

On the international thermal front, a prolonged monsoon season and weakness in the Indian rupee have dampened near-term demand. However, longer-term fundamentals remain unchanged. Cement demand in India is expected to grow approximately 50% by 2030 versus 2024 levels and our High CV Thermal product, coupled with our strategic logistical network while the ownership of our Baltimore terminal is well positioned to take advantage. In addition, in late September, India removed a special compensation cess tax, which will support demand growth. Looking ahead internationally for coking coal, global steel prices continue to face pressure due primarily in our view to macro conditions. However, we remain highly constructive on the longer-term fundamentals given the build-out of blast furnaces across Southeast Asia to support strong projected increases in steel demand and infrastructure build-out.

At the same time, momentum behind Europe’s green steel transition is slowing as governments face significant cost barriers, particularly related to hydrogen supply and energy infrastructure. On the supply side, we continue to believe that years of underinvestment as well as degradation and depletion of the global reserve base will act to constrain global metallurgical supply while exerting a foot pressure on prices. This market landscape lays the backdrop for our contracting progress. Due to the desirability of our products, our marketing team was able to expand our contract book for 2026. On the thermal side, we increased our High CV book by approximately 4 million tons to a sold position of nearly 17 million tons in total. For the Powder River Basin, we increased our sold position by approximately 8 million tons, raising our 2026 contracted book to more than 40 million tons.

Due to the nature of the metallurgical segment, long-term contracting is less prominent and pricing in the international arena is generally index-linked. However, our current metallurgical segment has nearly 3 million tons contracted for 2026 with approximately 500,000 of those tons slated for delivery to North American customers. Furthermore, we remain in negotiations with additional North American customers for potential contract volumes and expect to provide more color on our next earnings call regarding pricing. Now let me provide a quick update on our outlook for the remainder of 2025. For the High CV Thermal segment, we are maintaining our guidance for sales volumes while reducing our price range to $60 to $61 per ton. Additionally, we are raising our cash cost guidance by $1 to a range of $39 to $41 per ton.

This increase is primarily a result of the West Elk operational challenges that Jimmy mentioned earlier. On the metallurgical front, due to the timing of the Leer South longwall restart, we are lowering our coking coal sales volume guidance to a range of 7.4 million to 7.8 million tons. On the cash cost side, we anticipate a similar cost structure in the fourth quarter as incurred in the third quarter. Therefore, we are decreasing our cash cost guidance for the segment to a range of $93 to $97 per ton. We also anticipate spending $15 million to $25 million in idle and fire mitigation costs during the fourth quarter as we work to restart the Leer South longwall. For the PRB segment, we are again increasing our sales volume guidance to a range of 47 million to 49 million tons, and our committed and price position has increased to 48 million tons at a realized coal revenue of approximately $14.46 per ton.

We are maintaining our cash cost per ton guidance range. On the capital expenditures front, we took advantage of attractive equipment financing throughout the year and are lowering our capital expenditure guidance by $40 million to a range of $260 million to $290 million. Now let me pass it back to Jimmy for some quick closing remarks before we open the call for Q&A.

James Brock: Thank you, Mitesh. In closing, for the remainder of 2025, we will be focused on a few key areas that we believe will set us up for success moving forward. First, continue to work with MSHA and focus on the restart of the longwall at Leer South at the earliest possible date. In addition, we will drive forward with the completion of the transition at West Elk. Second, we will continue to focus on running our operations as safely and efficiently as possible. The PAMC, Leer, PRB and continuous miner operations ran very efficiently during the third quarter. Third, we will continue to focus on managing our spending levels to maximize our cash margins throughout the cycle despite the weaker benchmark prices we are experiencing today.

Fourth, we are prioritizing filling out our sales book in 2026 and beyond. We have layered in nearly 26 million tons of forward contracts, which provides significant revenue visibility as we move into 2026. Finally, let me finish by recognizing our employees. All of our employees are working well together to ensure we develop Core Natural Resources into the premier coal company we envision it to be. Despite the government shutdown, the team has continued to focus on the controllables and stands ready to execute our longwall recovery plan. The core team is adept at navigating the cyclical nature of the coal markets. And we have successfully managed our costs while focusing on our core values of safety and compliance, continuous improvement and financial performance.

With that, I will hand the call back over to the operator to begin the Q&A portion of our call. Operator, can you please provide the instructions to our callers?

Q&A Session

Operator: [Operator Instructions] First question is from Nathan Martin from Benchmark Company.

Nathan Martin: Maybe just start on West Elk. Obviously, you guys had the move to B-Seam. Just looking for a little more color there, some reports out that there may have been some elevated methane levels, should there be any ongoing cost or production impacts from that? And then how should we think about cost and production from that mine heading into 2026 at a full run rate?

James Brock: Nate, yes, it’s a good question. So West Elk, as we said earlier, we did have some methane issues there. It was not any safety concerns. We just had to keep it that way for our employees. So we — the team went out, managed some ventilation. We made a few control changes there. And we believe that we have the methane situation put behind us. We haven’t had any elevated methane reading since we did that. And then fast forward after we were running, we ran up against what we was calling our safe zone or stop margin to whereas we had to dewater the [indiscernible]. So that was overlay and the same we were mining. The team got started on that as quickly as they could. And that’s what slowed us down here [ segfort ].

The good news is, I believe by early next week, we will have West Elk back up and running, and I look forward to what we can get done there. I think it will be a low cost as we talked before. I really like the quality of the coal and excited about what we can do with that in the marketplace. So in short, very excited about the future of West Elk. And I think we’ll have most of those problems behind us for the remainder of the year. Of course, mining is mining. Some little things could come up, but those things that stopped us from mining, I think we have those under control now.

Nathan Martin: Appreciate those thoughts, Jimmy. Maybe one for Bob on the marketing side. Bob, could we get a breakdown of the now it looks like 17 million tons of committed and priced High CV for ’26? And then any commentary on the pricing of those tons as well as the 40 million tons of PRB coal you guys called out?

Robert Braithwaite: Yes, Nate, no problem. One thing I will say is I certainly am pleased with the team and their efforts in the last quarter, as Mitesh mentioned in his prepared remarks, we had 26 million tons of new sales. And what I like about that, too, is we’re looking at sales on the High CV segment alone going all the way out through 2030. So it’s certainly providing us a lot of good visibility as we move forward. And the other thing that’s very encouraging is these utilities are contracting out longer-term duration. So I think that they are seeing the benefits of the data center demand coming online and they’re contracting forward. But for 2026 alone, of the 17 million tons of High CV, 14 million of that is PAMC, about 10 million domestic, 4 million export.

Majority of that export is index-linked. So again, we have some upside there if API2 prices continue to rise as we’ve seen in the coming — or in the recent weeks and about 3 million tons of that is West Elk. From a pricing standpoint, we’re looking at upper 50s right now basis of $105 API2 price. So if we see that rise in Cal ’26, that certainly is going to afford us the ability to increase that price. And then on the PRB side, as we mentioned, approximately 41 million tons, and we’re seeing pricing in the low to mid-14s on that.

Nathan Martin: Okay. Great, Bob. And then any comments — I mean, I think what Mitesh mentioned roughly 0.5 million tons of fixed price domestic coal for ’26. Any comments around the pricing there would be helpful as well.

Robert Braithwaite: Yes. We’ll provide that on the next call, Nate. Again, we’re still in the middle of negotiations, but I’m very encouraged of what we’re seeing there. A lot of that is high-vol coal that we’ve put to bed domestically. But again, we’ll give a better update, a clear update on the next call, but I would anticipate that number increasing as when we do report next.

Nathan Martin: Okay. Great. And then maybe just one final question before I pass it on. The first tranche of insurance proceeds received, how should we kind of think about the potential range from that insurance and business interruption recoveries from Leer South, Mitesh. I think you mentioned previously maybe around $100 million, but it would just be great to get an update there.

Mitesh Thakkar: So I think, Nate, if you look at year-to-date, we have spent about $75 million on fire and idling cost, and we are guiding to another, let’s call it, $15 million to $25 million for the fourth quarter. So if you add that up, I think just from firing and idling cost, we’re approaching $100 million. And then on top of it, you have to apply the residual business interruption claim as well. So I think we are definitely in 3 digits here. So I think we’ll continue to track that. And as we submit the claims, we’ll keep you apprised. I think we are not waiting for the full claim to play out. We are starting to put advanced claims in as we incur cost as a starting point. I think our next step is to go ahead with the business interruption claim as well, and you’re going to start trickling that in as well. So we are very optimistic of where we will end up with the overall insurance claim.

Operator: Next question comes from Nick Giles of B. Riley Securities.

Nick Giles: Just wanted to follow up on the High CV cost side and really gauge your level of confidence in your PAMC Longwall operations maintaining their low costs and if there’s any room for improvement. I think I — if West Elk costs were to improve around $10 a tonne, I would back into a benefit of around $2, which would keep the segment cost maybe slightly more elevated than recent years. So just appreciate any color there.

James Brock: Nick, I think when you look at cost, it’s something, as you well know, that we work on continuously all the time. But one thing that got the High CV segment a little bit out of line was the unfortunate production shortfall we had from the West Elk mine, which obviously would be a little higher cost. I think you’re in the ballpark with the numbers. I mean, I’d like to see the Pennsylvania Mining Complex running cash costs where we ran in the past, somewhere around $37 to $39. We think we can stay there. And then when I look at the West Elk, we got to see what that mine does when we’re running it very consistently full out all the time with no delays. But I do really believe that I can get it somewhere down and somewhere we should be low 30s, somewhere in there for cost for West Elk. So obviously, that will help the overall cost structure of our operations there on the High CV side.

Deck Slone: Nick, it’s Deck. Listen, another point, I think that’s interesting is, as Bob discussed, for the 17 million tons of High CV thermal, we’ve committed, maybe a small step down in terms of average price at this point when we look at 2025 versus 2026. But the cost reduction should be with West Elk now being sort of pulling average cost down as opposed to being sort of a force to pull those costs up, sustaining that margin, maybe even improving upon that margin in 2026 is probably entirely realistic in what we’re targeting. So that contribution from the High CV thermal segment could, at a minimum, stay sideways even with a little bit of a diminution on the price and perhaps could expand a bit.

Nick Giles: I appreciate that. I wanted to ask a similar question on the met side. As we look to 2026, when Leer South is back up and running. How should we think of costs at that mine specifically? And how does that translate to the entire segment?

James Brock: Well, obviously, Leer South is really hurting us on the metallurgical side at this time. We get it back up and running. We’ve had a schedule change there, Nick, as well. I think the mine is going to run a lower cost than what’s been there. We’ll have to see how that turns out. But I would think it would be very similar to what we’re running at our Leer mine and perhaps even a little better with the schedule change that we’ve made there. So we have to wait and see on that. I really want to get that mine back up and running. We’ve got to recover the shields, get the face set up. The team there has done an outstanding job and hasn’t been in the best possible environment there where they couldn’t run the longwall, but they have advanced our mining sections, and they’ve got the new phase set up and ready. So I’m really excited what Leer South can bring to the table in 2026.

Unknown Executive: And Nick, if you think about the broader metallurgical coal portfolio, we are going to have more tonnes coming out of longwall mines compared to CM mines. So there’s going to be some tailwinds tied to that as well.

Nick Giles: Great. One last one on that, if I could. Do we have any clarification on the total number of met tonnage that will be subject to the 45x credits in ’26?

Deck Slone: So Nick, it’s Deck. And listen, I would say this, that is very clearly a capabilities test when you look at sort of how the legislation is written. So certainly, all of our metallurgical coal and metallurgical segment should qualify. But when you also consider the tons being produced at PAMC, what we’re sending into the metallurgical market and selling to steel producers is really a standard blend. So across that full 26 million tons, all of those tons are suitable for use in the production of steel. So we certainly believe that those tons should qualify. Again, it’s fairly clear that this is about capability, not end market. We would say this, if the coking coal market were large enough, we could sell all 26 million tons of PAMC into that market. So that’s our belief that we would get — we would qualify on that front. So we can talk further about it offline, but just an initial reaction.

Operator: Next question comes from George Eadie at UBS.

George Eadie: Can I firstly just ask about the rare earths. So just sort of for Core specifically and financially speaking, do you think it’s more prospective in the PRB or East Coast? And maybe also remind us what are the latest on discussions with the government. Jimmy spoke about before subject matter experts, but are the government getting involved here potentially too into underwriting financing and/or prices?

James Brock: Well, we’ve been diligently evaluating the potential to recover rare earth elements and critical minerals from our Eastern and Western mining operations, as we said in the script. That work is ongoing, but it’s still in the early stages. But I will say the question is not whether rare earth elements and critical minerals exist at these operations. It’s rather the question is, can we cost effectively segregate, upgrade and extract the feedstock that we have available. I mean our studies have shown that we have them in the coal seams out of our Western operations, and it’s very similar to what others have said out there. So we do have them. One of the key advantages that we bring to the table is the massive scale of our already permitted active operations that we have.

We run the largest underground mining complex in the U.S. at PAMC and the second largest operations in the PRB. So these operations generate huge quantities of material every day. And the angle we’re evaluating is whether we can leverage our scale and creating a business case for the rare earth elements and critical minerals. The work is being led by our innovation group, which has a team of highly competent scientists and engineers and work a lot of strong — and they work with a lot of strong technical partners. So stay tuned for more on that, but we will have everyone involved as we get out into more details about the rare earth elements and critical minerals.

George Eadie: Might we get a more material update next — the full year earnings potentially? Or is that too soon?

James Brock: I’m sorry, I didn’t understand the question. What was it?

Robert Braithwaite: We would expect to comment to some degree on it next quarter. But in coming quarters, we’ll continue to provide updates as we move forward, George, but work to do.

George Eadie: Yes. Okay. And then maybe moving to the U.S. domestic thermal picture, Mitesh and Bob, perhaps, could you help me understand better the upside here? Looking at those charts and a lot of people speak to this now, the U.S. coal fleet capacity factors are at 50%, which is climbing higher. But can you sort of help ballpark if that got to, say, 60%, given there isn’t really much volume upside in the PRB or Northeast without material CapEx. How do we triangulate 5% or 10% higher capacity factors to your margins and pricing in the PRB, PAMC? And then just lastly on that, is there potentially more upside in the PAMC given there’s more demand growth in the Northeast for that domestic market versus the PRB?

Robert Braithwaite: Yes. I would sit there and tell you, George, couple of things. First, we are encouraged, as I mentioned before, that we are seeing a lot of investment now in the coal fleet. You might not hear about it so much publicly, but we are talking to our customers, and we are seeing them invest in their coal fleet in anticipation that they are going to be running at much higher capacity factors for a period of time here. And a lot of that has to do, again, as you mentioned, with the data center and AI build-out. We think that in total, we could see domestic coal-fired generation increase by 20%, 30%. And if you look at, call it, 400 million tons of coal being burned today, your additional 60 million, 80 million tons potentially not so far in the distant future.

We can continue to invest in our operations. I think we always say 26 million tons is our base case at PAMC. We do have the ability to ramp up if the market is there. And I’ll tell you that we may get there, right? As I mentioned earlier, 26 million tons of new sales last quarter all the way out through 2030. So it is encouraging. We’re starting to get a lot of visibility on the fact that these domestic utilities are going to continue to run. We’ll see here as more data centers are committed for build-out. There’s a lot on the docket here. And if that comes to fruition, I think, yes, we will continue to invest to see if we can grow production not only at PAMC but also out in the PRB.

Mitesh Thakkar: And George, if you look at where all these data centers are getting built out, a lot of them are in the East, and I think PAMC is sitting right on top of all those, right? So I think you’re going to obviously see some competition from natural gas. But if you listen to some of the earnings call of industrial companies, they are saying like if you want a new gas turbine, you’re going to have to go back in line 2029, 2030, right? So there’s going to be this period where you’re not going to get a lot of incremental juice out of the gas plants and coal is a natural pivot here, 24/7 consistent power dispatch, and that’s what these data center and AI applications need. So I think we are very excited about it. And PAMC as well as our Western operations are going to continue to benefit. I think we’re seeing increasing interest from Eastern utilities on our West Elk coal as well. So I think that supports that trend.

Robert Braithwaite: And George, just to comment, I mean, we would say at this point, you’re already seeing this. To your point, we’re already running at 50% capacity factor, but coal consumption year-to-date of about 35 million tons could be up as much as 45 million tons depending on how weather goes for the full year. That’s a big step up. So in terms of implications for pricing, we’ll see. But obviously, another year or 2 of that is going to put some stress on supply without a doubt. So it could have positive implications there.

George Eadie: Yes. Okay. And last one, sorry, maybe Mitesh again. I think this was Nate’s question before, but can you remind us potential time lines of when these insurance proceeds will come in? Should we expect all of the funds to be in sort of middle of next year potentially? And also just remind on the Baltimore bridge proceeds, too, please?

Mitesh Thakkar: Yes. So I wish I can give you an exact time, George, but I think this is one where we are starting to submit claims as we get the receipts and everything in place as the first line of action on Leer South, which is what we have been doing. So the claim that we just received, we submitted that claim probably 3, 4 months ahead. So there’s that lag. We submitted another claim in October. I hope we can get this early next year. So we’ll continue to do that, and I think it’s going to trickle down. I wish I can give you like an end point. The business interruption claim tends to be a little bit longer gestation period, so to speak. It takes a while going back and forth on assumptions and stuff like that. So I think we are working through that. I think we have made a lot of progress on the Baltimore claim as well, we’ll see. I hate to give you like an end date, but I think we expect most of those to be collected next year.

Operator: Next question comes from Matthew Key of Texas Capital Bank.

Matthew Key: In 2Q, the guidance on merger-related synergies were increased to $150 million to $170 million. I was wondering what percentage of that target have you guys achieved kind of at the end of 3Q? And if there’s any other kind of incremental cost savings that you see kind of as you play this out?

Mitesh Thakkar: This is Mitesh here. I think we have made a lot of progress on that front, and that number is a little bit higher on an annualized run rate as well. And we’ll continue to grind it up. There are a few other things that we are working on. But just in terms of what we have actually achieved, I think if you look at our SG&A trend Q4, Q3 versus what you saw in Q1 and Q2, it kind of reflects some of it. You’re seeing that also in the byproduct sales revenue as well. I think on an aggregate, I think we are probably 50% that’s probably flowing through the current year, but a lot of that is going to flow through next year. For example, SG&A is going to have full run rate next — starting second quarter of next year. We have some systems on the IT front that are rolling off.

Some of them rolled off in September. So you haven’t even seen that impact in the September numbers yet. I think you’ll continue to see that and the final system roll-off happens, I think, sometime in April. So I think you will see those numbers flow through. So I think the way to think about full run rate, I would say, sometime second quarter next year, but we are making a lot of progress on that front.

Matthew Key: Got it. Appreciate that. That’s super helpful. And assuming work at Leer South, the restart there goes as planned. I was wondering if the company would incur any additional fire extinguishment idling costs that kind of bleed into 1Q ’26? Or would 4Q kind of be the end of that dynamic?

James Brock: I think 4Q will be the end of it, particularly if we get some help here from the government. Like I said, we’re ready. The team is ready to go recover these shields. So we don’t — we think what will be left will be the idle expense that’s left that will obviously carry through Q4 here. But if we get to recover our shields, — the longwall face is already mined and set up and ready to receive the new shields. So we’ll have all that done in Q4. And there is a possibility if we were turn loose in time and we can’t get all the sales that we could actually have production late in Q4 out of Leer South. So it’s all based on timing now, but I do think we will have this put to bed in Q4 of this year as far as the fire-related costs.

Operator: Next question comes from Nick Giles of B. Riley Securities.

Nick Giles: I just wanted to ask about High CV volumes as we look to the fourth quarter. I think your annual guide, the midpoint might imply a slight tick up. But can you just give us some color on what could take us to the higher low end of the range? Are there any longwall moves?

Mitesh Thakkar: Yes. I would say that right now, contracted wise, we’re in that 7 million to 7.5 million tonne range. PAMC is running very, very well right now. There’s a potential we could have a longwall move hit sometime in December. A lot of — we originally anticipated that in Q1 of next year. But based on the mine running very well, it could funnel in. The big driver there to get to the top end of the guidance will be the return of West Elk, which, as Jimmy mentioned earlier, we’re anticipating next week. So all goes well, longwall runs very well, you could see us creep up toward that upper end of the guidance range.

James Brock: Yes. And we do have 2 long-haul moves remaining in Q4 for PAMC.

Mitesh Thakkar: And just a minor point, too, right? Like we provide sales guidance, not production guidance, right? So we have inventory at the end of the third quarter, which you saw probably in the working capital, too. So it depends sometimes on how many boats show up in the last couple of weeks of December and destock the inventory. So that could drive a little bit of an upside, downside as well.

Nick Giles: Got it. Guys, just while I have you, I mean, in recent years, you’ve spoken about what’s the maximum number of volumes that you could send into the seaborne market. But today, just with how robust the domestic market is, what would kind of be the limitations on those volumes?

Unknown Executive: I think you just — you said it right. I mean we are now forecasting, I will tell you, for 2026, we believe our domestic volumes will increase year-on-year. Now again, then the question becomes how is the international market and if we can get more volume out of PAMC. So sitting here today, as I mentioned, 14 million tons we have contracted right now, 10 million of it is domestic. We’re still in negotiations for additional business next year. So we’ll see how that all plays out. But PAMC is running very well. So we continue to keep on that pace. We certainly could increase some more volumes and get them export. But I would say domestic is going to be year-on-year improved.

James Brock: But it works well for us, Nick, compared to — we’ve always said in the past that we run to the market. So here’s another opportunity, and we run to highest arbitrage. So wherever that may be, if it’s domestic or international, we certainly have the ability to get it there.

Unknown Executive: And Nick, you talked about the High CV thermal segment as a whole, but West Elk also selling more power gen coal today. And as the story comes to fruition, we could continue to direct more tons into the domestic power gen market from West Elk. And plus, oh, by the way, it’s in the B-Seam, we certainly have the ability to run at much higher levels in that thicker coal seam. So additional opportunity there.

Operator: There are no further questions at this time. I’d now like to turn the call back over to Jimmy Brock for final closing comments.

James Brock: Yes. Thanks, everyone, for joining our call today. We look forward to speaking with you in the future, and we’re excited about where Core Natural Resources can be.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.