Greetings. Welcome to American Resources Corporation’s Fourth Quarter 2021 Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. At this time, I'll now turn the conference over to Mark Laverghetta, Vice President, Corporate Finance and Communications. Mr. Laverghetta, you may now begin.

Thank you, Rob. Good afternoon, everyone. On behalf of American Resources Corporation, I'd like to welcome everyone to our fourth quarter and full year 2021 conference call and business update. We welcome this opportunity to not only discuss our accomplishments over the past year, but also on how we’ve positioned ourselves and where we have our site set as we embark on this exciting time. Also on the call today is Mark Jensen, American Resources Chairman and CEO; Kirk Taylor, our Chief Financial Officer; and Tom Sauve, our President. Before we kick it off, I'd like to remind everyone that this call is being recorded and of our normal cautionary statements. Certain statements discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from the results discussed in the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors, uncertainties and other cautionary statements, which are laid out in our press releases and SEC filings. We also do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Lastly, we’ll be holding a question-and-answer session following our prepared remarks. And for anyone wanting to ask a question, you will need to dial in by phone to get into the queue. With that said, I'd like to turn the call over to Mark Jensen.

Thanks, Mark, and thanks, everyone, for joining today. I apologize; my voice is a little bit raspy as we get going. I'm excited about having the opportunity to speak to you and walk through what we did last year, but also focus on where we're at today and where the business is going. Overall, the fourth quarter of 2021 continue to show ongoing execution and growth of execution in terms of positioning American Resources as a low cost and most innovative supplier of raw materials to the infrastructure, metal and electrification market. Given our strategic positioning, we remain extremely well aligned with our national priorities in terms of providing steelmaking carbon to traditional and modern infrastructure initiatives worldwide, as well as being the first domestic supplier of isolated and purified critical and rare earth elements to the domestic supply chain to support the rapid growth and advancement of electrification, clean tech and national security. Our innovative processes allow us to not only bring these solutions to the domestic marketplace, but also to accomplish it through a low cost and the most environmentally safe and scalable methods. Last year, we defined our critical and rare earth element technology chain specific to capture process and purifying critical and rare earth elements. More recently, we had the opportunity to begin introducing our strategic partnerships that enable us to leverage expertise and networks that we feel will ensure our success in synthesizing the domestic and circular supply chain. As of today, we are just a handful of weeks away from the commercially producing domestic sourced and sustainable purified critical and rare earth elements, which as of -- which as far as we know, will be the first in the country to be able to do this within the domestic supply chain of producing purified…

Thanks Mark. American Rare Earth Division represents a very strategic opportunity for us to provide the domestic supply chain with not only domestically sourced critical and rare earth metals, but ones that are truly sustainable being produced from recycled end of life products and waste streams. We believe that this is a critically important component in establishing ourselves and our great country as a competitive leader, while also making a whole lot of strategic sense. Addressing our domestic supply chain and sustainability challenges, in our opinion, it makes the largest impacts throughout our economy. As a reminder and as a point of reference last year at this time, we were still unveiling and defining our suite of IP that we acquired. Today, and as Mark just mentioned, we are only a short time away from having our first commercial production line operating. This first production train will be focused on producing isolated and high purity rare magnet metals such as Neodymium, Praseodymium and Dysprosium from recycled rare earth permanent magnets. Shortly thereafter, our second production train will be operating which will isolate and purify battery metals such as lithium, cobalt, nickel and manganese, end of life recycled lithium-ion batteries. These high purity critical and rare earth metals will have the ability to be sold and used in manufacturing new high growth products and applications such as electric vehicles, defense, green energy and tech devices. I think it is important to mention and highlight our execution, sense of urgency, strategic positioning and incredible team in partnerships. With that being said, we briefly like to tout some of our strategic partnerships and explain what we feel we are collectively leading the way in addressing these challenges. Purdue University and the Davidson School of Chemical Engineering, along with Texas Tech and their Department…

Thanks Mark. Like to begin by mentioning our entrepreneurial innovative and shareholder focus culture and deliver additional value created initiatives Novusterra Inc., as a reminder was a company that we license on non-exclusive basis two of our exclusive licenses and patents for the production and carbon -- of carbon-nail structures and Graphene. Additionally, as we discussed previously, American Acquisition Opportunity Inc. which is a speck the American Resources sponsored, and where American Resources has the opportunity to participate in the value creation of future acquisitions in a non-diluted basis. Just to reiterate, as the largest shareholder America Resources approximately 30% of shares outstanding. Our management team is focused and committed on maximizing the value for all of our shareholders in every possible way. Also, as we privileged discussed, we have a strong desire to dividend out a portion of the underlying shares to all of our shareholders that everybody can participate in this value creation. From a progress standpoint, I would point you in the direction of each of the respective companies, Novusterra and American Acquisition Opportunity Inc. for their latest current updates. We go over a few financial highlights of both this past quarter and past year. Over the course of 2021, we materially improved our balance sheet positions to best capitalize and strengthen the modern infrastructure and raw material market companies emerged from COVID-19 disruptions. By having a strong and nimble balance sheet, we're able to navigate labor shortages, as well as supply chain shortages and make sure the suppliers that we currently need are well benefited and able to supply us with what we need. We were able to eliminate approximately $15.6 million of debt and payables while adding approximately $30 million of cash through an offering of common stock during 2021. Both of these items allowed…

Thank you. We'll now be conducting a question-and-answer session. Thank you. Thank you. And our first question is from the line of Heiko Ihle with H.C. Wainwright. Please proceed with your questions.

Hey there. Thank you guys for taking my questions.

Thank you for joining.

Hey, just a clarification, your backlog $110 million, obviously extremely meaningful number. Can you walk us through what you've been seeing with pricing then versus now? And also, is there timelines to delivery please?

Yes. That's a great question. So pricing. We're -- when we looked at -- when we built this backlog of $110 million, we actually built it -- in with a fixed band. So we had downside protection on that given. I mean, at the end of the day, it's kind of a crazy market so you don't know if it was going to go up or down. But what we also wanted to protect ourselves from the downside, but also enable us to take advantage of the upside. And so we're currently selling at the peak of that, out of Perry county or we're realizing the high end of that realization on the McCoy Elkhorn Complex. Our pricing over there was very similar but its quarterly pricing, adjustment based on it and that adjustment was based on the next price and so we're starting to realize they were also guiding the higher end of that. Each quarter we experienced a higher realization than the previous quarter given the market environment today. What we're doing I mean right now, as you can see, for the month of March, we provided guidance -- we provided an update. I would say in $5.25 million to $6 million, we're on the higher end of that and we anticipate that growth to continue to be experienced and continue to benefit from it as no different than Perry County, we just added that. We’re super section in there we're adding another miner section and more importantly also as much as revenue growth support and also the profitability and which we stated, we were realizing in the month of March being profitable and we continue – we expect that to continue here on but also with the new mine plan is really important. Running a pillar section or two pillar sections within the next 60 days, that drops our mining costs by about 25% to 30%, which is a big deal and we'll be all day run these pillar sections for the next two years, which will enable us to build a strong cash flow generation machine as we continue to expand elsewhere. But that backlog we start to realize that backlog on each month and we're growing our production each month to continue to benefit from the higher prices but also to fulfill that backlog and it'll be -- will continue to ramp up production each month out of our existing operations to fulfill that backlog. So you'll see that continued growth

Makes a lot of sense. Thank you for that. And then I guess this is a little touchy feely question. Can you just sort of walk us through what you're seeing with end market demand from geopolitically safe sources for really anything but especially Rare Earth Metals? I mean, given what's been happening in the world over the last month, I assume you're getting calls from people that have never called you before and never really cared to reach out and make sure that they can source some long or longer term supply for the all of yours for what they might need. Thank you.

Yes, I mean, so Rare Earth elements as well as Battery Metals, I mean the Rare Earth elements obviously extremely important for the electrification economy, wind turbine, electric vehicles, anything that needs -- strike the motor but also US government, Department of Defense. For high-end drones and stuff of that nature, use permanent magnets which you need Rare Earth elements from -- is over 85% to 90% of various elements are isolated and purified in China using solvent based extraction. So one, people are obviously concerned about where they're getting their materials nowadays, but more importantly, they're also they're also starting to care about how they're produced. And utilizing chromatography is an extremely environmentally friendly process compared to solvent based extraction, but more importantly, also very cost effective, where we can go head to head against the Asian markets and be able to produce them at a price point that's important. We're -- and we're starting to see that, you're correct. And we haven't announced any of our strategic partnerships yet, but we're in talks on that front and having a lot of success now, what we're very focused on today is getting the facility up and running and showcasing the cost structure and showcasing the quality and consistency of our product, and we're having some really good conversations on the end users of those products for Rare Earth magnets. Then Battery Metals is a huge market. There's very few if any lithium or cobalt or nickel producers domestically, that are recycling batteries to battery grade material, our technology and our multimodal chromatography enables us to do that, producing 99.99% purity or greater battery metal that can go directly back into the battery marketplace. And there's a lot more battery manufacturing taking place in the domestic market than there is electric motors. So the ability to scale that division is very real, and the ability to scale our revenue rapidly. Post this first initial facility getting up and running is very real, because of the already – the presence of the battery market here domestically. I mean, if you look at cobalt, produced mostly out of out of the Congo. Lithium is – there's not a lot of actual lithium production taking place in the domestic market. So we're excited to showcase this and we're excited to provide a real solution to the domestic marketplace and do it with best-of-class personnel. Jeff Peterson, Dave Sauve, Bill Smith and the team at Christian Pongratz at Texas Tech, and Dr. Botte on our board. We have a team that we built that that knows how to operate this building knows how to build these facilities and scale them rapidly.

Okay. Well, that's good. I appreciate that. Thank you, guys a lot and we'll stay in touch.

Thank you, Heiko, Appreciate you joining the call.

Our next question is from the line of Steven Segal with KBB Asset Management. Please proceed with your questions.

Hi, Mark. How are you? Great job all the advancements you're making. I was just wondering, I heard you mentioned. Sorry – I heard you mentioned the pillar mining. And can you just explain that a little bit as far as the cost incurring how that helps company with costs and current supply issues. Does it make it more efficient to new production?

Yes. Thanks, Steven. Thanks for joining us well. Our team has worked pretty hard to get us in a position where we're able to reap the benefits of the current market environment and one thing that we looked at when we bought this complex was the ability to the pullback to mine and be more efficient, and honestly produce a safer mine. And the pillar strategy was developed two years ago and now we're executing upon that today, which was we knew it's going to take time to get into a position to be able to do this. But with the developments we're putting in today, the current section is pillaring as of this week, the next section that we're putting into production, which would be additional production will be going in in the next 60 days. What's unique about that as you're pulling all your infrastructure back, so right now if you go out in the world today, including the Starbucks from my house, you couldn't get laboring and they're running out of raw materials actually to sell, we’re in a unique position compared to our peers because we're not buying infrastructure. We're actually taking it back out of the mine to reuse that. This mine and or other mining complexes, which will enable us to show a really strong gross profit margin from the operations and operating profit margin from the operations at a time where other operators are struggling to buy these components to keep producing, we’re actually effectively not only mining the carbon out of the mine, but we're also remining our infrastructure, and taking our infrastructure back out to be utilized in a way that enables us to compete or expand the mine elsewhere and/or expand or other mine. So it will drop our cost by about 30%. But it puts us in a really unique position within our peers to take advantage of not the current price, because you'll produce more coal through the pillar mining than you do driving affection, but also at the same point we're able to continue to utilize our infrastructure in a much more cost effective way. So we're excited about the cash flows that it will generate for us. We're excited about what we're doing in March and we're really excited about the April month and the second quarter we're going into given this will be the first quarter that we're experiencing this higher real -- higher revenue generation as well as higher operating profit margins.

Okay. Great. Thank you for that.

Thank you. Thanks. We appreciate you. Thanks for joining.

Appreciate you and your team. Done a great job.

Thank you enough for sure.

Thank you. Our next question is coming from line of Kyle Gallagher with Merrill Lynch. Please proceed with your questions.

Yes. Hey, thanks Mark for the call and grind in through this with the voice issues I think prior and yourself a cold one after that -- after this call, but just a question. I want to make sure I'm kind of wrapping my head around this correctly. You had a tweet come out, I think, it's like March 1, if I believe correctly, and it says something is sect of this is our mini stoker, it's 22% of our daily output that represents about $110,000 of daily sellable revenues from stoker. So it just back of napkin math in this here like or am I to expect that you guys are able to sell about 500,000 a day in stoker, is that -- am I reading that correctly?

Stoker represents, so we pull on the high end about 22% of our production out of our Perry County operation is pulled to stoker. So it's not the -- it's not -- that doesn't represent -- our stoker productions not a half a million tons, the stoker production is -- it’s not 22% of that, it's 22% of our overall production are generated. We pull out stoker for that product. That makes sense.

Okay. Yes. So you're saying, okay, 600 tons of stoker represents about 22% of your daily product output. And so you're going to realize different costs, pricing for different types of products you're calling out, right? And so I presume that this stoker is probably a higher value product?

I mean, our still stoker's definitely the highest margin product. It is a very specialized size and very specialized ash product that actually goes -- it's kind of a cool product that goes towards, it gets shipped overseas to the Nordic market where they actually produce it into so -- use it for the silica value that actually goes into Gorilla Glass. So like -- the carbon we're producing in Perry County goes into iPhone screens, and other high value applications like screens. So it's not burden, that's not utilized for that purpose, but it's -- because of that it drives high profit margins. Now, I will say that we're starting to see some strength in pricing across the board not only on stoker, but also across all of our products that it starts to get really interesting for the current market environment given the strength of the market in general. But it's definitely the highest margin product we produce.

Okay. So for simplification purposes, is there like -- do you think there's like an easier way I should think about, like, kind of what your revenues are going to look. I mean, obviously, I know you guys are ramping things up and there's market fluctuations that go into all this. But just kind of thinking, thinking through it, like how should I think about that revenue ramp for the remainder of the year? Like, what would be sort of a basic, dumbed-down version of that.

I mean, it's probably one -- I mean, we think our revenue is going to continue to show strength. For the month of March, we provided an update of $5.25 million to $6 million. We think it's going to be on the high end. We -- that's -- we're adding an additional section. We just added an additional miner at Carnegie. We're looking at adding an additional section, add -- we got Perry beyond that, so two additional sections there, which will effectively increase our production here by about 60%. But also we're -- I mean, as we continue to ramp up, I mean, it's -- and, obviously, March was our strongest month by far, but we anticipate to continue to see that growth and we're seeing stability of operations. We invested heavily into the mining infrastructure. We invested heavily into our people. And now we have -- we're seeing a lot more stability. So we think April, just standalone, will be -- we'll see better performance and we have -- we're building inventory right now for our April month out of all of our operations. And so, it's -- and we're in the month of March still, of how we time in the realization of our revenues. So, I mean, I think, you'll start to see that continued growth of revenue going into April, just from our core business, let alone, the advancement of the sections. We, obviously, been developing our Carnegie 2 mine as well, which is something that we'll bring online later this year, or later in the -- probably in the summer timeframe, which will provide additional revenue. And then, the additional section of our Carnegie 1. So you'll continue to see that revenue growth on a monthly basis. I mean, I don't -- we don't anticipate any major factors that would prohibit us from doing that, given the workforce that we have at the mine and the ability. We've been able to attract a good team. We've been able to attract a good workforce, because of the investment we made, because of the advancements we made in, not only our equipment, but also the safety and the reliability of our equipment of how it runs for the workforce that want to be productive.

Got it. Yes. I appreciate the extra color there. I think, in some of my notes here, I just misunderstood something you said earlier, but much appreciated, kind of, that just refreshing me on the March numbers and kind of what to consider moving forward. Thanks again for everything, guys.

Thank you. Thanks for joining.

Thank you. At this time, we've reached the end of our question-and-answer session, and I'll turn the call back to Mark Jensen for closing remarks.

I want to say thank you to everybody joining the call today. Sorry, my voice is a little bit raspy. Maybe a little bit hard to understand. My little boy caught something home, he got me a little sick. And thankfully my wife, who is our rock of our family, is at home taking care of him, while I'm able to do what do we do. But at the end of the day, it was -- 2021 was a development year. Things kicked off slower than we anticipated. And at the end of the day, we understand we have to perform and we have to hit our numbers. And we take that seriously. We put our money where our mouth is. We're hitting our stride. We're executing upon the business plan from a revenue generation perspective and also an operational profitability perspective. Management continues to invest into the operation and continue to invest into the company. We're buying stock personally. We were undervalued based on our peers and we believe we're undervalued based on our current performance. Ultimately, the value in the technology that we have in our critical and rare earth elements component tied in with our revenue generation and operational profits that were generated from the carbon side of our business, puts us in a really unique position to execute and execute without having to go back to the investment community to raise additional capital, which we do believe unfortunately does put pressure on the stock. We don't have to do that with our current cash that we're generating from a business and at the end of the day, positioning the business to continue to grow, utilizing our core assets that we own as a business today. We're excited about the current market environment that we see is…

This concludes today's conference. You may disconnect your lines at this time and thank you for your participation.