CNR

Good morning, ladies and gentlemen, welcome to the Core Natural Resources Inc. Q1 2026 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, May 7th, 2026. I would now like to turn the conference over to Deck Slone. Please go ahead.

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 investor section of our website at corenaturalresources.com. Also participating on this morning's call will be Jimmy Brock, our Chairman and CEO, Mitesh 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?

Thank you, Deck. Good morning, everyone. After a challenging 2025, I am excited to report a strong start to 2026. Our results for this quarter reflect the resilience of our business model and the commitment of our team members across the company. Our operating platform delivered efficient, reliable performance throughout the Q1, underpinned by our safety-driven culture. As we turn the page from the Leer South fire, the mine set the pace, achieving strong production and cash cost performance throughout the quarter. As expected, the mining conditions have been favorable, and we are now running as a premier world-class longwall mine. In addition, West Elk shifted into high gear in the B seam, where geologic conditions are favorable, capturing significant operational efficiencies with an improved cost structure. Now, let me dive a little deeper into our operational results.

Coal sales within the High CV Thermal segment came in at 7.7 million tons in Q1 2026 compared to 7.8 million tons in Q4 2025. During the quarter, our High CV Thermal segment reported realized coal revenue of $58.86 per ton compared to $58.11 per ton in the previous quarter. In Q1 2026, cash cost came in at $42.56 per ton compared to $41.42 per ton in Q4 2025. Segment cash costs for the current quarter were elevated due in part to this winter's Arctic outbreak, which drastically increased power cost at the Pennsylvania Mining Complex, as well as a few weeks of tough mining conditions, which are now behind us at PMC.

In the Metallurgical segment, cooking coal sales came in at 2.1 million tons in Q1 2026. During the quarter, our Metallurgical segment reported realized coking coal revenue of $122.11 per ton, which represented a 7% improvement over the previous quarter. The segment as a whole, inclusive of the 300,000 tons of thermal byproduct sales, achieved an average selling price of $112.03 per ton. Segment realization increased $6.58 per ton compared to the previous quarter. Cash costs for the quarter came in at $92.35 per ton compared to $103.49 per ton in the previous period, reflecting a full operating quarter at Leer South mine.

Adjusted EBITDA for the segment totaled $58 million, which was up $79 million from the previous period. In the Powder River Basin segment, coal sales within the segment came in at 11.9 million tons in Q1 2026. During the quarter, our PRB segment reported realized coal revenue of $14.39 per ton and cash cost of $13.64 per ton, which was in line with the prior quarter's cash cost of $13.62 per ton. Due to the current conflict in the Middle East, we are seeing significant increases in diesel prices. While there was a limited impact of higher diesel prices in Q1, we expect it to weigh on our PRB margins in the future periods if these elevated prices continue. Moving to the Core Marine Terminal.

The CMT shipped 4.8 million tons during the Q1 of 2026 compared to 5 million tons in Q4 2025. CMT reported $16 million in Adjusted EBITDA in Q1 2026, which was in line with the previous quarter. As a result of our strong financial performance, we were again able to return significant value to our shareholders. As you know, our capital return framework targets the return to stockholders of around 75% of free cash flow, the majority of which will be returned via share repurchases. During Q1 2026, we returned $47 million to our shareholders or 85% of free cash flow, with $42 million invested in share repurchases and $5 million in the form of dividends. Since the program's inception in February 2025, we have deployed $292 million via the capital return program.

Of that total, $266 million has been used to repurchase approximately 7% of the company's shares outstanding as of the program's inception. Now that the operating platform is at full strength, we expect strong shareholder returns to continue. Now, let me turn the call over to Mitesh to provide the marketing and financial updates.

Thank you, Jimmy, and good morning, everyone. Let me start by providing an update on our financial performance. This morning, we reported solid Q1 financial results. For 1Q 2026, we reported net income of $21 million or $0.41 per diluted share and Adjusted EBITDA of $180 million compared to a net loss of $79 million and Adjusted EBITDA of $103 million in Q4 2025 due to a strong contribution from our metallurgical coal platform. In the quarter, we spent $73 million on capital expenditures and generated $56 million in free cash flow, which was impacted by $52 million of negative working capital changes, including the timing impact of the 45X tax credit accrual versus cash benefit.

At the end of the Q1, we had total liquidity of $935 million, including $413 million in unrestricted cash and cash equivalents. Now, let me update you on the marketing front. Global energy markets have been quite volatile in recent months given the ongoing Middle East conflict. On the metallurgical export front, the threat of a global economic downturn caused by the conflict continues to broadly weigh on demand in these markets. Counterbalancing that fact, we are also seeing some challenges on the supply side. The closure of the Strait of Hormuz is having a significant impact on diesel supplies into Australia and could lead to fuel rationing measures, potentially reducing coal supplies. Those cost pressures come on the heels of heavy rainfall-related supply disruption in Australia earlier this year.

As a result, Australian PLV benchmark prices have remained elevated, and we continue to position Core to capitalize on that fact. In contrast, the international thermal markets are benefiting from energy supply disruptions and fuel switching tailwinds due to disrupted oil and gas flows through the Strait of Hormuz. There is a view that European natural gas prices will remain elevated this summer to incentivize gas to coal switching to allow Europe to shore up its natural gas inventories ahead of the winter. The EU is also looking into returning legacy coal-fired power plants from capacity reserve to the wholesale markets, which could act to bolster coal demand. Pet coke prices in India have also risen significantly since the start of the year, which is benefiting the demand for our PAMC coal.

In the domestic thermal market, coal consumption declined during the Q1 due to weak natural gas pricing and increased natural gas inventories. However, despite the decline in consumption, power plant coal inventories have reduced since the end of 2025. Longer term, we remain bullish on the outlook for domestic thermal coal demand given the robust planned data center build-out. Recently, the State of Pennsylvania has taken steps to enable the Keystone and Conemaugh coal-fired power plants to continue operating through at least 2032 and potentially much longer. We strongly support this extension, which will boost the availability of affordable and reliable energy here in our backyard. During the quarter, we continued to build momentum on the contracting front, including further expanding our West Elk coal shipments into domestic utilities in the Eastern United States.

As a reminder, since the Q4, we have had good success with test burning West Elk coal at a number of eastern power plants and have entered into a term contract. We appreciate the support of our railroad partners in helping unlock this opportunity and enabling reliable delivery into these markets. Since year-end 2025, our marketing team has made meaningful progress broadening and extending our sales book, securing an additional 11.5 million tons of contracted volume through 2028 at attractive prices. Building on that long-term foundation, we have also strengthened our near-term position for 2026 across each of our mine segments. Now, let me provide an update on our outlook for 2026. On the guidance front, we are generally maintaining our guidance levels as indicated in the earnings release, with the exception of our segment-level sold positions.

In the High CV Thermal segment, we added 5.6 million tons to our sold position, bringing our total contracted volume to 29.1 million tons. The High CV Thermal segment is now 94% contracted at the midpoint of the guidance range, and average coal revenue on the committed and collared tons is projected to be $57.85 per ton. For the Metallurgical segment, we added 1.6 million tons to our sold position, bringing the segment to 8.3 million coking tons contracted for 2026, with approximately 3.8 million tons priced at an expected average coal revenue of $122.40 per ton.

For the PRB segment, our contracted position now stands at approximately 48 million tons at an expected average coal revenue of $14.20 per ton. On the cash SG&A front, we had, as expected, some residual integration-related costs in Q1, but expect those costs to phase out as we progress through the year. Let me provide a quick update on our Core Innovations Group, which has been extremely busy growing our capabilities to support the aerospace and defense industries. During the first part of 2026, we completed a 30% expansion of our manufacturing facility in Triadelphia, West Virginia, and spent $8 million on acquiring Sawyer Composite in Fort Worth, Texas, to further accelerate our growth and elevate our profile in the aerospace supply chain.

With these moves, we have built upon our coal-based CFOAM materials business to now become a full service provider of high-performance materials, tooling, parts, and assemblies to meet the growing needs of our nation's aerospace and defense sector. Between our West Virginia and Texas locations, our aerospace venture now has 75,000 sq ft of manufacturing space, 80 employees, and serves more than 40 customers, including many of the top defense primes. We see a lot of opportunities for continued growth in this business. Now, let me pass it back to Jimmy for some closing remarks before we open the call for Q&A.

Thanks, Mitesh. As we head into the Q2 and beyond, there are a few key areas of focus. First, we will continue to identify best practices across our operations while sustaining our safety-driven culture. Second, I am optimistic about our cost outcomes in the High CV Thermal and Metallurgical segments. With both PAMC longwalls out of the tough mining conditions we saw in Q1 2026, our prices normalizing, and Leer transitioning to the north reserves, we expect our cost to improve relative to the Q1. Third, we are actively pursuing insurance recoveries from the Leer South fire event. We are pleased with the results of Q1 2026 as they mark the Q1 after the merger with all our assets fully operational. I believe we have just scratched the surface with our capabilities, both operationally and financially.

Going forward, we will focus on our controllables as the markets remain dynamic, given the global economic uncertainty. Our high-rank coals, however, continue to receive strong demand as we shift focus to the most advantageous market for our products. Throughout our operations, we continue to focus on cost-saving measures during this market uncertainty, and we fully anticipate carrying this positive momentum throughout the rest of the year. Finally, let me finish by recognizing our employees. Throughout last year, they worked tirelessly to integrate and develop Core Natural Resources into what it is today, a premier world-class company. Throughout 2025, the teams believed in the vision as we pushed to restart the Leer South longwall and focused on identifying best practices.

We are accustomed to navigating the cyclical nature of the coal markets, and we will continue to manage 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?

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from George Eddy with UBS. Please go ahead.

Hey, good day, gents. Thanks for the call today. Firstly, just on the High CV segment, can you remind me the sensitivity of that $28.5 to the API2 price, given, I think, there was sort of 3 or 4 million tons pegged at the API2 benchmark?

Sure, George, this is Bob. For the balance of volume, we have left to sell Q2 through Q4. Just around 3 million tons is linked to API2. We also have, call it 300,000 tons linked to high-vol B as well. The rest is fixed price. Right now, the sensitivity is roughly about $0.07 a ton across the segment, and that's assuming about a $120 API2 price. Right now API2 is around $110, $115, but we expect that to continue to be volatile as you know what's going on in the Middle East.

Yeah. Thanks, Bob. The, just on the tons contracted for 2027 for each business segment, can you just remind me what percentage of the business is contracted next year, please?

Yeah. Under High CV segment, we're sitting here roughly give or take around 50% of our volume contracted. To be honest with you, if you look at PAMC and West Elk, it's basically 50/50 in terms of where we are against what our expected production is going to be in 2027. The good news for us is, we've certainly been able to take advantage of the situation in the Middle East over the last couple of months and lock in some volumes at some attractive pricing when API2 prices were up in that $130, $140 range. You know, we're not prepared to give exactly, you know, what we're looking at pricing-wise, but I can tell you the market, if you look at year-on-year, isn't going.

Yeah. Great. Thanks, Bob. Lastly, Mitesh, sorry if I missed this earlier, insurance pricing, can you remind us the timing and latest on dollars as well there for rest of the year?

Yeah. George. Sure. As you know, the Baltimore Bridge claim is settled on the Leer South front. We have submitted our final claims, which indicate a limit loss. The insurance companies are reviewing the claims and going through their internal review and approval process, which could take different times for different insurance companies. However, we are optimistic that we'll start seeing some approvals trickle here in Q2. In aggregate, I would expect to collect another $100 million in incremental proceeds from insurance.

Yeah. Okay. That's super helpful. Thanks, gents.

Thank you, George.

Thanks, George.

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

Yeah, thanks, operator. Good morning, everyone. I just wanted to go back to, you know, High CV cash costs, obviously elevated here in Q1, but you've maintained the guide. Can you just help us understand kind of the cadence of those cost improvements throughout the year, kind of sensitivity to electricity prices and then how much West Elk is contributing today?

Hi, Nick. It's Jimmy. Yeah, we left our guidance alone when you look on the cost side of it because we had some things in Q1 that I feel like it's gonna normalize, and we'll be back on track in Q2 and for the remainder of the year. We had two of our long walls that's in the Pennsylvania Mining Complex that were in sandrock intrusions. You know, we've had those before. We've been able to dive down underneath them. These were a little different. They struggled, so we don't have that. Both those long walls are out of that now, and we also had, as you stated earlier, we did have abnormal power pricing that hit us in Q1 that we think will normalize and come down here as the weather changes.

It was mostly due to that Arctic blast, as we said in our comments. Of course, when you're going through those sandrock and rolls like that, it requires more supplies to mine the coal. It's higher bit pricing. You know, you use more of those, you wear those out, so we think we're gonna be in a really good spot there. Looking at West Elk, West Elk is running great. There was no fault of West Elk. It's just the trains of us moving the coal away, and that has certainly improved. We've been working with our rail partners and, you know, we improved, but what happened to West Elk? They couldn't run at 100% capacity because we didn't have the space in our inventory. We think that's gonna levelize and go away.

I really think I didn't want to raise the cost guidance. I believe that we're gonna be back on track and be in that and even have some improved marks for the remainder of the year.

Nick, following up on your question on sensitivity and just give you some parameters around it, right? If you think about PJM power prices, I think in months like January, we were over $100 in power prices. Right now, we are already sub-50, and as you look at the curve, I think the curve is around that number. Summer months a little bit higher, fall it comes back again, but just from a sensitivity perspective, about a $1 MW change could be around $750,000 for us, just to keep that in mind.

Yeah.

Thank you both. That's really helpful. Maybe, you know, along a similar vein in the PRB, you maintain the guide. Was curious on just what enabled you to do that, and then, you know, if we were to assume that diesel prices were to remain elevated, any sense on how much kind of upward cost pressure that would create in the PRB? Thanks.

I think when you look at PRB, there's a couple of things there. Number one, we lost a couple weeks of production out there with the connecting link that was on the dragline boom, which obviously hurt the volumes a little bit, and we're kind of in shoulder season out there now as well, and then we're also looking at other cost incentives out there, such as optimizing our truck fleet, looking at what we can do with the schedules that we're working. The team out there is working really hard to bring that back within the guidance. I think if you add those volumes back, if diesel prices do sort of normalize or reduce some, I think we'll be right back on track where our cost guidance is and even an opportunity to improve that.

It's something we continually work on, Nick, and I have a pretty high degree of confidence that we're gonna reach that.

Good to hear. Guys, I appreciate the update. I'll jump back in the queue, but continue best of luck.

Thanks, Nick.

Thanks.

You now have a question from Nathan Martin with The Benchmark Company. Please go ahead.

Thanks, operator. Good morning, everyone.

Good morning, Nathan.

Bob, maybe just going back to George's initial question. As we look at 2026 in the High CV Thermal segment, you guys are 28.5 million tons committed in price. Can we just get a breakdown of that between PAMC and West Elk and any sensitivities there? I think you said API2 was $0.07 off a 120 base. I just wanna make sure.

Yeah. That's correct. Right now, of the 29.1 million tons in total, you know, 23.4 is PAMC, 5.7 million is West Elk. West Elk contributed 1.1 million tons toward the sales line in Q1. We expect, as Jimmy mentioned, as our railroad partners are certainly doing better today than they were in Q1, we expect that volume to start increasing as we move forward throughout this quarter and the balance of the year to get, you know, to that 5.7 million ton level. I will tell you too, you know, based on that, you know, we're being somewhat cautious since we're only in April right now or May, I should say.

You know, there's still certainly some opportunities out there. The domestic market certainly is remaining somewhat strong. Even though gas prices are down, we're still seeing a strong level of trains coming in and offtake., and then in India as well, you know, they're forecasting a strong El Niño. If that does happen, it'll delay, you know, likely delay the monsoon season. We're seeing, I'd say, more inquiries than we typically would this time of year, so very encouraging there, and we'll certainly look to place as much volume as we can and get as much volume out of PAMC as we can. You know, 5.7 million tons at West Elk.

We're not sold out, we're very close, so all the balance of the volume left to sell is at PAMC, and again, encouraging that the fact that where prices are today, I will tell you that those specific prices today are above where our guidance is so there's a chance that we could see some improvement as we move forward. The volume that you're seeing that is not priced is linked to Newcastle. That's some of our business we have into Asia out of our West Elk mine.

Okay. Great, Bob. That's helpful. Maybe just sticking with West Elk for a second. You guys talked about it last quarter and talked about it a little bit now. You know, moving some domestic tons to power plants in the East. Sounds like that was mainly just a transportation problem, and I think you just mentioned inventory space. Any additional thoughts there? One of your peers also talking about exporting some more tons out of the West Coast. Maybe any thoughts you guys have as far as that goes as well?

Yeah. For West Elk, you know, I'm very encouraged by what we've seen from our domestic customers in the East. A lot of overlap there with our PAMC coal as well. I could tell you to date, we have one long-term contract in place. We're working on several others. The coal has been well accepted. Traditionally, it wasn't really a core market for the legacy Arch folks, but today, I'd tell you it is, as we try to ramp that mine up to 6 million tons as we move forward. On the West Coast, we are moving West Elk through the West Coast out of Long Beach today. We anticipate that, you know, continuing.

Then i,n terms of additional West Coast capacity or just additional export capacity off the West Coast, we're certainly looking into that for some opportunity to move some of our PRB coal as well. I know Oakland's been talked about by many. We're certainly in discussions there and then also some potential export capacity through Canada as well.

Yeah. We look at, as far as exporting and moving the coal, we look at all the ports. Obviously, when you have to start looking at how long the vessel sat there for demurrage, you look at the travel distance and everything else. Just like we run to the market, we try to do the same thing with the ports. We try to go out of the ones that are most economical for us, and obviously, we prefer to go out of our own. I mean, we certainly look at all those West Coast ports, you know, Long Beach, as well as we even look at Vancouver and some of those. Anywhere we can move the coal that makes economic sense, we certainly look at all of those.

Got it. Appreciate that. Then, Jimmy, maybe just one more while I have you. Any comments or thoughts on the administration's Section 303 determinations that were passed as it applies to, you know, helping the coal supply chains and baseload power gen?

Yeah. I'll start out with that, then turn it over to Deck to follow up on that. We are very happy with the administration. I mean, particularly, you know, their ability to extend the life of some of these power plants, and we think it's certainly gonna be needed if you look at the power, which has been basically flat, you know, for many, many years leading up to, say, 2024. With the increase that everybody's projecting on power gen alone, we feel pretty good about what the administration has done to this point. Now, I always say they can't solve the problems for us, but they certainly can give a solution to where we can work on those, and they've been very, very positive as far as coal goes.

I know President Trump, you know, he brought back the National Coal Council. It's a lot of positive momentum coming out of the administration. Deck and team are working with them every day to make sure that we take full benefit of everything that we get out of there. With that, I'll let Deck add some comments.

Yeah. Thanks. Yeah, thanks for that. Look, I totally agree with Jimmy. This administration's hugely supportive. You know, there are a whole, you know, range of areas where they're trying to be helpful. Look, I would say with the Section 202(c) authority, which is preventing some of these retirements prematurely of coal plants. We've got five Section 202(c) orders in place right now. In aggregate, those plants used 10 million tons of coal last year. I think really clear then that they're needed. If they were running at that level last year, you know, that capacity is needed. You know, we've talked about the fact that, you know, as we look out now, suddenly there's been an inflection in terms of the outlook for U.S. power demand.

You know, the numbers are a range of numbers, but one of the ones we've been looking at recently, Grid Strategies, is suggesting that over the next five years, you could see a 3.7%, you know, growth rate in U.S. power demand. In that scenario, this administration is getting the fact that you have to have these coal plants, so that's hugely helpful. I think also addressing just a raft of regulations really that were designed to drive some of these coal plants into closure. This administration is trying to unwind those and doing, you know, really a superb job, and the goal there is not just to keep the plants open, but to allow for reinvestment, to make those plants young again, because you can replace all the component parts, so that's useful.

Obviously, you know, as you know, the royalty rate reduction in the PRB has been helpful to us, and I think, you know, bodes well for the outlook there for a healthy industry in the PRB, the 45X production credit. Look, couldn't, you know, be more pleased with where this administration is going, and we're gonna continue to work with them. You know, we talked about the unlocking of exports. That's another area where this administration is highly focused on finding ways to liberate more tons, get more tons into the seaborne market so a range of areas where, you know, we're getting good support.

You know, the administration has certainly given us a lot of resources to work on our problems that we have, so very, very appreciative and very thankful and very involved, quite frankly, with the administration.

All right, guys, appreciate the time. I'll pass it along. Best of luck going forward.

Thank you.

You now have a question from Matthew Key with Texas Capital. Please go ahead.

Good morning, everyone, and thanks for taking my questions. In regards to the inflationary cost pressures, you know, most notably diesel, while you obviously didn't raise your cost guidance, I was wondering if there's anything you could do to, you know, help manage those pressures, such as hedging diesel or something like that?

Yeah. Matt, good question. There's additional disclosure in our 10-Q that we did hedge some diesel prior to prior to the war starting in Gulf in the Gulf area. I think we were on a path to hedge a significant portion of our cost on the diesel front, but there was a sudden spike, and we pulled back a little bit because the volatility was just too much to justify hedging at that point. Things are settling down a little bit, and we'll continue to look and evaluate it. As you can imagine, the curve is in backwardation again now, which is great, and we'll continue to evaluate how we layer in those hedges to make sure that there is enough cushion between our selling price and the cost of mining.

Got it. That's helpful, Mitesh. Thank you. You know, met coal benchmark pricing did improve, at least directionally in Q1 2026. Still seeing a very wide spread for high-vol A pricing versus premium low-vol benchmark. I was wondering if you could provide, you know, just some color on what you're seeing in the met coal market, specifically as it relates to high-vol A.

Yeah. I mean, it's again, we're in really good position as we announced this morning, you know, 8.3 million tons contracted for the balance or for this year. You know, when you look at where we're at with what we have left to sell, majority of that is high vol. There's some low vol as well. I'd say the most encouraging thing too, is the fact that we have over 30% of our volume this year linked to PLV prices. Asia continues to grow for us, and that's where the growth and demand is. India certainly is growing, but we are seeing some opportunities back in Brazil and also into Europe right now. CBAM being one that is helping the European steel markets.

We're not seeing as much steel dumping into Brazil today as we did last year so that's encouraging as well. I think those spreads will likely remain for a little bit of time here, just for the simple fact that, you know, the high vol is a little bit oversupplied today, but I see that as, again, we start seeing some higher cost operations continue to exit the market, specifically here in the domestic, or sitting here in the United States. I think you'll start to see those spreads shrink over time, but the team has done a great job, again, linking over 30% of our index volumes to PLV.

Matt, I would maybe just to echo those views of sort of where the market is. If you look last year at U.S. exports, they were down around 6 million tons, Australian exports of coking coal down around 6 million tons, so that's 12 million tons. I think there's been a lot of focus on the production that's coming back into the market, but there had been substantial rationalization and step down. I do think that's important. That's an important dynamic there. I would also say, there are indications that operational challenges are starting to sort of crop up elsewhere, as you would expect, right? That's typically what happens is 5%-10% of global supply is experiencing some level of challenge.

You know, while the market remains under pressure, I do think there are counterbalances to, you know, I think that top-line story that, oh, there's some capacity that's come back into the market after, you know, after some outage.

Got it. Well, I appreciate all that color, and best of luck moving forward.

Thank you.

Thank you.

As a reminder, if you wish to ask a question, please press star one. You have another question from Nick Giles with B. Riley Securities. Please go ahead.

Thanks, operator. Thanks for taking my follow-up. You kind of answered it there on the met side, but maybe I could just ask, you know, as we try to model out met volumes throughout the course of the year, can you just remind us how many longwall moves you have scheduled, when those are scheduled in both just the met segment and high CV? Thanks.

Yeah. If you look at Q1 that we just finished up, we had four longwall moves there in Q1. In Q2, we have three: We have one at PMC, we have two at our met mines, one at Leer, one at Leer South, and then I think for the remainder of the year, our Q4 is kind of heavy, but we have 13 for the year. That's pretty much where we are, and Nick, as I've always said, I love longwall moves because that means progress is being made.

Understood. No, I appreciate that, Jimmy. Maybe just on the synergy front. Not sure if you provided an update there, but, you know, I think of 2026 as one of the first full years that we can see the benefit of the synergies, so what metrics should we be paying attention to, and what should we use as the denominator as we try to measure that progress?

Nick, again, there are a lot of ways the synergies are playing out. I will say, the most obvious one for you to see is on the SG&A side. If you look at, I am going back to 2024, the first full year prior to the merger for both, the last full year prior to the merger, for both the companies, I think the combined company had cash SG&A of about $153 million, excluding any merger-related expenses and stock-based comp, right, and right now we are guiding to a top end of about $100 million, so that tells you that significant progress is being made on the synergy front when it comes to cash SG&A.

Similarly, on the marketing side, if you look at the middlings where they are disclosed as thermal by-product in our release. Given where current met coal prices are on the legacy Arch side, which is mostly their product, you would have realized high twenties kind of a realization on the middlings. We are blending it with some of our Pennsylvania mining complex and some of our other mines, and we are value uplifting it by almost $15 a ton, right, so when you add those pieces together, I think we are significantly ahead on the synergy achievement side.

I think what is clouding it a little bit on the marketing front is also, overall met coal prices are just lower, which reduces the value of those synergies and we are hoping as those prices normalize, I think you will see more impactful numbers on the synergy front, but even on the High CV Thermal side, as the prices improve, the value of middlings go up just from blending activity as well. Those are the two lines that you can easily see on our financials.

The other lines I would say is, we already talked about the financing synergy with the three bonds that we did. The rate that we got versus what each of those companies had it in the past, and on the insurance side, if you look at put all those to items together, there was $20+ million in synergy on an annualized basis on that front as well. So net-net, when you add all those up, I think you are looking at over $160 million in synergy run rate, which is, I think, the last midpoint we provided was around $165 at the midpoint, which was higher than, I think, originally at the merger we said $110 million-$140 million and then raised it to a midpoint of $165, so we are tracking towards that high end already.

Understood. Thanks for all that detail, Mitesh. Maybe one more, if I could. I think, you know, your commitment to shareholder returns seems pretty clear to me. You know, kinda how do things stand on the M&A front? Are you seeing any opportunities across the M&A landscape, whether from a mine perspective, anything along the supply chain and/or anything, you know, from a logistics perspective that's worth looking at? Thanks.

Nick, it's something that we evaluate daily. I mean, we look at a lot of things that come toward us, and as I've always said, you know, my job to allocate capital is for the highest rate of return. We do look at a lot of things that come in. I will tell you currently today, we don't have anything to, you know, that we can put certainty around that we've done, but we do look at every opportunity that comes to us. We owe it to our shareholders and our employees to do that, and we'll continue to do so, and if something comes out there that makes sense, we certainly have the liquidity, we have the ability to do it, and we would do it.

Guys, thanks again. I appreciate all the color.

Yep. Thanks, Nick.

Thanks.

There are no further questions at this time. I will now turn the call over to Jimmy Brock for closing remarks. Please continue.

Well, we'd like to thank everyone for joining us on the call today, and certainly look forward to the rest of the year to come. As I said in my opening remarks, I think the best is yet to come for Core Natural Resources. Thanks for joining.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.