Exhibit 99.1
American Resources Corporation Reports Third Quarter 2020 Financial Results and Provides Business Outlook
Company reports $127,982 of net income and $2.8 million of adjusted EBITDA
American Metal LLC subsidiary grew 30% over second quarter of 2020
Well-positioned to be a long-term supplier of raw material and critical elements to the modern-day infrastructure market
Strategic steps taken to transform into an infrastructure company producing pure metallurgical carbon, rare earth elements and metal aggregation, while enhancing environmental, social and governance (ESG) profile
Company expects multiple value driving milestones over the remainder of 2020
Company to host conference call on Monday, November 9, 2020 at 10:30 AM ET
October 30, 2020 Source: American Resources Corporation
FISHERS, INDIANA / ACCESSWIRE / October 30, 2020 / American Resources Corporation (NASDAQ:AREC) (“American Resources” or the “Company”), a next generation and socially responsible supplier of raw materials to the new infrastructure marketplace, today reported its third quarter of 2020 financial results and provided a corporate update.
Mark Jensen, Chairman and CEO of American Resources Corporation commented, “Over the course of the third quarter, our team continued to execute on the strategic transformation of the Company to solidify our position as a next generation and socially responsible supplier of raw materials. Our first-class portfolio of assets, which have been strategically acquired at a substantial discount to replacement value, has never been in a better position to deliver long term value for our stakeholders. Bolstered by our restructuring efforts that eliminate the industry’s legacy mentality and issues and focuses on efficiency and forward thinking, our dynamic platform now sits at an inflection point and the beginning of a new era.
Third Quarter 2020 Key Highlights
Acquired two additional continuous miners (critical pieces of mining equipment) in anticipation of restarting Perry County Resources in the fourth quarter of 2020. The two additional continuous miners give American Resources a total of six to utilize under its restructured, efficient, low-cost operating structure. The Company’s plan involves using a total of five continuous miners once fully ramped with two “super” sections and one bridge section.
Further reduced environmental liabilities and long-term costs through the strategic execution of environmental reclamation of idled, irrational thermal coal mines resulting in the bond release of an additional $400,000 of associated environmental reclamation bonds.
Commenced a railcar and metal recycling service partnership through its American Metals business line where it began to receive retired coal railcars to be recycled for their metal content and reused for alternative, modern-day purposes.
Received a prestigious Sentinels of Safety Award from the National Mining Association in recognition of its outstanding safety performance.
Further streamlined the Company’s capital structure through the exercise of over two million warrants during and subsequent to the third quarter of 2020.
Mr. Jensen continued, “With the closing of our most recent capital raise and improvements to our balance sheet, we are confident that we are fully capitalized to execute our near-term plans and advance American Resources into its next and exciting chapter. Our metallurgical carbon operations are poised to restart in the fourth quarter of 2020 at Perry County Resources (“PCR”) to fulfill our customers’ 2021 contracted demand, with production capabilities of over 1.0 million tons per year of metallurgical carbon. Once we are operating at PCR this quarter, our sights will be set towards bringing our McCoy Elkhorn complex online sometime in mid-2021. Additionally, we are pleased with our American Metals business line, having grown nearly 30 percent quarter-over-quarter. We are committed to the growth of American Metals to further diversify our business in a meaningful way, and to advance and support our environmental efforts.”
“Lastly, our recently announced American Rare Earth business line provides us with a lot of excitement and a tremendous opportunity to produce critical elements in the most environmentally friendly and socially conscious manner; all while helping to secure our country’s resource independence and national security. American Rare Earth enables us to continue to innovate by advancing the Central Appalachian region towards becoming a domestic production hub of critical elements and at the same time, fully complements our ESG efforts and Sustainable Development Goals (“SDG”). Through its unique regional production attributes, the collection of these rare earth elements is done in a way that is a benefit to the environment, creates well-paying and meaningful jobs to an economically distressed area, and advances the United States, and the world, to a cleaner, more modern economy. We believe these ESG efforts will further distinguish American Resources as industry revolutionaries along with permanently shutting down and remediating irrational thermal coal operation throughout our region,” added Mr. Jensen.
Conference Call Information
American Resources management will host a conference call for investors, analysts and other interested parties on Monday, November 9, 2020 at 10:30 AM ET.
To participate in the call, please dial (877) 407-4019 and reference the American Resources Conference Call.
Financial Results for Third Quarter 2020
For the third quarter of 2020, American Resources reported net income of $123,982, or $0.00 per share for the three months ended September 30, 2020, as compared with a net loss of $7.34 million, or a loss of $0.30 per share in the prior-year period. The Company earned adjusted earnings before interest, taxes, depreciation, amortization, equity-based compensation, warrant expense and development and restructuring costs (“Adjusted EBITDA”) of $2.8 million in the third quarter of 2020, as compared with Adjusted EBITDA loss of $2.5 million for the third quarter of 2019.
Third Quarter 2020 Summary
Total revenues were $294,646 for the third quarter of 2020. Cost of sales (includes mining, transportation, royalty, holding and processing costs) for the third quarter of 2020 were $72,692, or 24.7 percent of total revenues, compared to $2.95 million, or 160 percent of total revenue in the same period of 2019.
General and administrative expenses for the third quarter of 2020 were $132,676, or 45 percent of total revenue, compared to $1.43 million during the third quarter of 2019. Depreciation for the third quarter of 2020 was $646,438, or 219 percent of total revenue. American Resources incurred interest expense of $379,583 during the third quarter of 2020 compared to $901,812 during the third quarter of 2019. Development costs during the quarter were $792,926, compared to $307,247 in the second quarter of 2020.
The Company did not incur any income tax expense in the third quarter of 2020 as it was able to utilize its available net operating losses (“NOL”) carried forward from prior periods of approximately $13,746,391 as of December 31, 2019.
Operational Results
During the third quarter of 2020, all carbon production continued to be idled due to the disruptions related to the global COVID-19 pandemic. As previously stated, the Company instead shifted its primary focus on increasing efficiencies, readying Perry County Resources to be brought back online, reducing its long-term cost structure, monetizing non-core assets and advancing environmental reclamation.
Mr. Jensen reiterated, “During the third quarter, our carbon production and processing operation remained idle due to the COVID-19 related market disruptions and to ensure the safety of our workers. Enabled by our low corporate overhead and our dedication to not waste valuable resources, we continued to focus on improving our operations, advancing environmental reclamation and scaling our American Metals business during this market disruption, which we believe will drive significant long-term value for our shareholders. As carbon markets began to stabilize, we were able to secure 2021 baseload contracts for Perry County Resources and are in the final stages of preparing to bring the complex back online in the fourth quarter. Furthermore, with the infusion of additional capital, along with a first-class operational team behind a premier asset such as Perry County, we are in a position of strength to ensure a smooth and rapid ramp.”
The exhibit below summarizes some of the key sales, production and financial metrics:
Three month
Three month
September 30,
June 30,
September 30,
Sales Volume (a)
Tons Sold
Company Production (a)
McCoy Elkhorn Coal
Perry County Resources
Deane Mining
Company Financial Metrics(b)
Revenue per Ton
Cash Cost per Ton Sold (c)
Cash Margin per Ton (c)
Development Costs
(a) In short tons
(b) Excludes transportation
(c) Cash cost per ton is based on reported cost of sales and includes items such as production taxes, royalties, labor, fuel, and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Statement of Operations as costs other than cost of sales, but relate directly to the cost incurred to produce coal. Our cash cost of sales per short ton is calculated as cash cost of sales divided by short tons sold, and our cash margin per ton is calculated by subtracting cash cost per ton from revenue per ton. Cash cost of sales per short ton and average cash margin per ton are non-GAAP financial measure which are calculated in conformity with U.S. GAAP and should be considered supplemental to, and not as a substitute or superior to financial measures calculated in conformity with GAAP. We believe cash cost of sales per ton and average cash margin per ton are useful measurse of performance as it aides some investors and analysts in comparing us against other companies. Cash cost of sales per ton and margin per ton may not be comparable to similarly titled measures used by other companies.
Three Months
September 30,
Three Months
September 30,
Nine Months
September 30,
Nine Months
September 30,
Coal Sales
Metal Aggregating, Processing and Sales
Processing Services Income
Total Revenue
Cost of Coal Sales and Processing
Accretion Expense
Amortization of mining rights
General and Administrative
Professional Fees
Production Taxes and Royalties
Development Costs
Total Operating Expenses
Net Loss from Operations
Other Income
Gain on interest forgiven
Gain on Depreciation Recapture
Gain on sale of stock
Loss on settlement of payable
Amortization of debt discount and issuance costs
Interest Income
Warrant Modification Expense
Interest expense
Total Other income (expense)
Net Income (Loss)
Net loss per common share - basic and diluted
Weighted average common shares outstanding
September 30,
December 31,
Accounts Receivable
Prepaid fees
Accounts Receivable - Other
Total Current Assets
Cash - restricted
Processing and rail facility
Underground equipment
Surface equipment
Acquired mining rights
Coal refuse storage
Less Accumulated Depreciation
Note Receivable
Total Other Assets
Accounts payable and accrued liabilities
Accounts payable – nontrade
Accounts payable – related party
Accrued interest
Due to affiliate
Current portion of long term-debt (net of issuance costs and debt discount of $0 and $134,296)
Current portion of convertible debt
Current portion of reclamation liability
Total Current Liabilities
Long-term portion of note payable (net of issuance costs of $408,546 and $417,183)
Convertible note payables – long term
Reclamation liability
Total Other Liabilities
Total Liabilities
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares authorized, 28,400,512 and 27,410,512 shares issued and outstanding, respectively
AREC - Series A Preferred stock: $.0001 par value; 5,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively
AREC - Series C Preferred stock: $.001 par value; 20,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively
Additional paid-in capital
Accumulated deficit
Total American Resources Corporation’s Stockholders’ Equity (Deficit)
Total Stockholders’ Deficit
For the Nine
September 30,
For the Nine
September 30,
Cash Flows from Operating activities:
Net loss
Adjustments to reconcile loss to net cash
Amortization of mining rights
Accretion expense
Cancelation of debt
Liabilities reduced due to sale of assets
Recovery of previously impaired receipts
Amortization of debt discount
Warrant expense
Warrant modification expense
Option expense
Issuance of common shares for services
Issuance of common shares for debt settlement
Return of common shares for property sale
Change in current assets and liabilities:
Accounts receivable
Prepaid expenses and other assets
Accounts payable
Funds held for others
Due to affiliates
Accrued interest
Cash used in operating activities
Cash Flows from Investing activities:
Cash paid for PPE, net
Cash received in asset acquisitions, net
Cash provided by (used in) investing activities
Cash Flows from Financing activities:
Principal payments on long term debt
Proceeds from long term debt
Proceeds from convertible debt
Proceeds from related party
Issuance of warrants in conjunction with convertible notes
Net proceeds from (payments to) factoring agreement
Sale of common stock for cash in connection with public offering
Sale of common stock for cash issued with warrants in connection with public offering
Sale of common stock in connection with warrant conversions
Cash provided by financing activities
Increase (Decrease) in cash and restricted cash
Cash and restricted cash, beginning of period
Cash and restricted cash, end of period
Supplemental Information
Cash paid for interest
Cash paid for income taxes
Non-cash investing and financing activities
Shares issued in asset acquisition
Assumption of net assets and liabilities for asset acquisitions
Issuance of warrants in conjunction with convertible notes
Conversion of accounts payable into common shares
Beneficial Conversion Feature on note payable due to modification
Shares issued in connection with note payable
Conversion of Series A Preferred into common shares
Conversion of Series C Preferred into common shares
Return of shares related to employee settlement
Warrant exercise for common shares
Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted EBITDA to Amounts Reported Under U.S. GAAP
For the three months ended
September 30, 2020
For the three months ended
September 30, 2019
Net Income
Interest & Other Expenses
Income Tax Expense
Accretion Expense
Amortization of Mining Rights
Amortization of Dedt Discount & Issuance
Non-Cash Stock Options
Non-Cash Warrant Expense
Non-Cash Share Comp. Expense
Development Costs
PCR Restructuring Expenses
Total Adjustments
Adjusted EBITDA
About American Resources Corporation
American Resources Corporation is a supplier of high-quality raw materials to the rapidly growing global infrastructure market. The Company is focused on the extraction and processing of metallurgical carbon, an essential ingredient used in steelmaking. American Resources has a growing portfolio of operations located in the Central Appalachian basin of eastern Kentucky and southern West Virginia where premium quality metallurgical carbon deposits are concentrated.
American Resources has established a nimble, low-cost business model centered on growth, which provides a significant opportunity to scale its portfolio of assets to meet the growing global infrastructure market while also continuing to acquire operations and significantly reduce their legacy industry risks. Its streamlined and efficient operations are able to maximize margins while reducing costs. For more information visit americanresourcescorp.com or connect with the Company on Facebook, Twitter, and LinkedIn.
Special Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause the Company’s actual results, performance, or achievements or industry results to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are subject to a number of risks and uncertainties, many of which are beyond American Resources Corporation’s control. The words “believes”, “may”, “will”, “should”, “would”, “could”, “continue”, “seeks”, “anticipates”, “plans”, “expects”, “intends”, “estimates”, or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Any forward-looking statements included in this press release are made only as of the date of this release. The Company does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure you that the projected results or events will be achieved.
PR Contact:
Precision Public Relations
Matt Sheldon
Investor Contact:
Jenene Thomas
Company Contact:
Mark LaVerghetta
317-855-9926 ext. 0
Vice President of Corporate Finance and Communications
Source: American Resources Corporation

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