Good morning, ladies and gentlemen and welcome to the Ramaco Resources Incorporated’s Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to turn the conference over to your host today, Mr. Jeremy Sussman, Chief Financial Officer. Sir, please go ahead.

Thank you. On behalf of Ramaco Resources, I’d like to welcome all of you to our third quarter 2019 earnings conference call. With me this morning is Randy Atkins, our Executive Chairman; Mike Bauersachs, our President and CEO; and Chris Blanchard, our Chief Operating Officer. Before we start, I’d like to share our normal cautionary statement. Certain items discussed on today’s call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco’s expectations or beliefs concerning future events and it is possible that results discussed will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco’s control which could cause actual results to differ materially from results discussed in the forward-looking statements. Any forward-looking statements speaks only as of the date on which it is made and except as required by law, Ramaco does not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. New factors emerge from time-to-time and it is not possible for Ramaco to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the company’s filings with the Securities and Exchange Commission, included in our Annual Report in Form 10-K. The risk factors and other factors noted in the company’s SEC filings could cause its actual results to differ materially from those contained in any forward-looking statements. Lastly, I’d encourage everyone on this call to go to our website ramacoresources.com and download today’s investor presentation, which is found under the Events Calendar. With that said, let me introduce our Executive Chairman, Randy Atkins.

Thank you, Jeremy. As always, I want to thank everyone for joining us today to discuss our third quarter results. We have predicted in our last earnings call in August, that we felt the market look like it was going to become more turbulent. Unfortunately, we were correct, the met coal markets always seem to go through some form of perennial manic depressive kind of cycle. We are seeing the depressing side of that experience at the moment. Since we went public in early 2017, we have lived through mostly stronger met markets with benchmark prices hovering around $200 per ton as recently as this June. The landscape now in November has a US benchmark closer to 130, and candidly some question as to whether that price really reflects underlying true demand. We have said before, that met coal is a proxy for steel, which in turn is a proxy for wider macroeconomic health. As we look around the world, we see today that that underlying economic outlook is at best opaque. With this somewhat sobering backdrop, as an introduction, we are happy that we have locked in almost all of our 19 sales over a year ago at much stronger prices than where you’re seeing today. As a result, we have reported that year-to-date we have cash margins approaching $40 per ton and pricing levels at roughly $110 per ton pretty much through the rest of the year. We are now essentially sold out through calendar year end and expect to come in at just under 2 million tons sold. We realized by late this summer that the 2020 domestic sale process would be dramatically more challenging than 2019 in terms of both basic customer demand and also pricing into our lower benchmark environment. As a result for 2020,…

Thank you, Randy. My comments regarding our third quarter will be relatively brief, focusing mostly on markets and our forward-looking strategy. Our operations perform well during the quarter and shipments to customers tracking closely with our plan. Most importantly, our safety performance has been particularly good in 2019. Chris Blanchard will follow up with more operational details, including an update relative to our Berwind development mine. Overall, it’s good to add another consistent quarter to our operating history. There is no doubt as an industry we’ve entered a more challenging marketplace for 2020. Ramaco was structured to be able to deal with the soft sort of market conditions and fluctuations we are currently facing. While downturns are unfortunate, this should always be expected and Ramaco remains well positioned for continued profitability through the current low pricing environment. Unlike many of our competitors, Ramaco’s recently concluded quarter benefited from having an outsized domestic book of business. We did not experience the large selling price declines, because our exposure to index pricing was relatively small. This will continue into the fourth quarter. However, we do predict a slight decline in sales volumes for the fourth quarter due to a small amount of deferrals from one of our customers. The domestic contracting season was negatively impacted by reduced amounts of coal purchases from customers year-over-year, and by the diversion of high quality coals from the international marketplace to domestic markets. We witnessed firsthand a number of blend changes. In some cases, we saw very high quality, high volume of coals that were previously unavailable being injected into coal blends. These changes have in some cases, altered where our coal fits in customer’s needs. To-date, we have committed more of our lower quality coals for 2020 sales, leaving us with the ability to upgrade…

Thanks, Mike. As 2019 lines to a close, 2020 markets don’t appear to be nearly as strong as we projected six months ago. However, Ramaco’s operations are in position to perform and succeed at our projected pricing levels and also react quickly to any market recovery. Our base operations are nearing full production and maturity and our development project at Berwind is approaching its final stage. Most importantly, our operations personnel continue to strive for excellence in safety and compliance. Our incidence rate is down over 50% from the same point in 2018. Accident rates are running below industry average. Safety and environmental compliance continue to be a strong focus area for the company. This is reflected by the fact that two of our operations will be recognized for safety performance by the State of West Virginia and our Knox Creek plant has won both safety and environmental awards in Virginia this year. Probably the biggest operational milestone which was reached in the third quarter was completing all the work to install the supplemental silo supports at the Elk Creek plant. As we have discussed on previous calls, these additional supports in the silos were not required to make the silos operational, but were installed by Ramaco after the first silo failed as a failsafe backup system to eliminate the future possibility of any other undetected weld failures. While the Elk Creek plant has had the capability to reach full feed rates for most of2019, by virtue of the permanent bypass bell we installed, the consistency of maintaining full utilization of the plant was challenged until the silo system was brought back on line. Once back in full service with the silos in August, the Elk Creek plant has operated at much higher run rates and has had its second…

Thank you, Chris. In terms of third quarter financial highlights, Randy hit on a number of the key points, but I want to dig into the details a bit more. Third quarter 2019 adjusted EBITDA was $13.6 million, which was a 24% increase from the third quarter of 2018 adjusted EBITDA of $11 million. Third quarter 2019 revenue was $61.4 million, which compared to third quarter 2018 revenue of $62.2 million. Third quarter net income was $5.5 million versus $6.2 million in Q3 of 2018. Lastly, third quarter 2019 earnings per share was $0.14, which compared to the prior year period of $0.15. I want to point out something that we noted in our press release. In the third quarter of 2019, the company’s effective tax rate was approximately 17%. In fact, it has been 17% in each of the first three quarters of 2019. However, we have also been and continue to be consistent that cash taxes should be minimal. Specifically, we expect cash taxes to be less than $100,000 in 2019 as the company continues to benefit from a large NOL or net operating loss position. I point this out for your modeling purposes. Turning to operational metrics, third quarter 2019 price per ton on company-produced coal was $111, which compared to 2018 price per ton of $90. This was the principal reason for the 24% year-on-year increase in third quarter 2019 EBITDA. Third quarter 2019 sales of company-produced tons was 510,000, exactly in line with the year ago period. Third quarter 2019 production was 460,000 tons compared to 449,000 tons in the third quarter of 2018. The increase came entirely from our Berwind development mine, with third quarter 2019 production more than double the same period in 2019 at Berwind. Production at Elk Creek was down 17,000…

[Operator Instructions] Our first question comes from the line of Mark Levin from Seaport Global. Your line is open.

Great, thanks very much. So, a couple of questions about guidance. So I guess it’s not guidance technically, but the comment regarding production volume or in 2020, the range you gave a 1.8 million tons to 2.3 million tons, maybe you can bookmark it. Today’s met prices, Randy, are you closer to 1.8 million tons and at 1.75 million tons, you’re closer to 2.3 million tons? Is there some sort of pricing parameters that would give us an idea of where you would expect to fall within that range?

I think, Mark the way to look at is almost like a seesaw. You’ve got price and demand. So because we’ve got a very low-cost profile, we can make money even in this market. So it’s really a question of assessing really where the underlying demand is. And I think our view is, given the cyclicality of the met pricing environment, where we said in November of 2019 perhaps is not going to be the same place pricewise, we would sit in six months from now nor will it necessarily be the same demand equation. So I think what we’ve done is we’ve really told you physically what we’re in a position to do from a production standpoint, but not necessarily trying to guide you to actually what sales we would suggest that we’re actually going to land on for next year.

It’s kind of a difficult point in the market timing-wise, Mark, because as I kind of mentioned a lot of our high potential customers still don’t know what they’re going to do and have chosen to not enter the marketplace. I do believe we get a lot more clarity in the next 45 days to 60 days or so, to be honest so.

And when you think – and makes perfect sense. And if you think about what CapEx – I know you guys are getting ready to do your budgeting meetings, so I don’t want to – I know you’re not necessarily position to be completely accurate or maybe don’t even want to go there. But when you think about what cash cost would look like at the lower ton rate versus the higher ton rate or what CapEx might look like at that sort of 1.8 million versus the 2.3 million, what would those numbers or what would those ranges potentially look like?

I mean, Mark I think as you said, we’ll be in a better position to kind of go through some of those key numbers for you when we report full year results certainly after our budget meeting. But as I said in my prepared remarks, at its core, Elk Creek is certainly a mid-60s cash cost per ton mines. So I mean we’re comfortable that we can manage to those levels. But we’ll give you some more specifics as we go forward.

Yeah, that’s perfect. And then my last question just has to do with the domestic met pricing and it sounds like you guys have made some strategic decisions based on what you were seeing in the marketplace when you were negotiating over the summer. Maybe you can give us some color about the tenor of negotiations and obviously, it sounds like you guys are going to hold back more of the high-quality stuff. I don’t know if you’re willing to give kind of a pricing breakdown for the higher quality versus the lower quality. But if you are that’s great and then also just kind of how things sort of progressed and what you saw this round domestically versus maybe a year ago.

It was really a completely different kind of setting, Mark. Most of the discussions with customers started with the fact that they were going to buy less coal and make less coke. And as we saw kind of phase one kick in, we saw a lot of coals coming back into the marketplace that traditionally weren’t there. I mean for example; our coals probably would have had a higher rank in some of the blends if it were not for some of the coals that got placed quickly and you can’t blame customers for wanting to make strong coke. So we understood that. It was very important for us with our heavy load of existing business domestically to get a base load to get a good amount of base load demand or a business to sustain our operations. So we were very focused on that. We were focused on volume and price. And I think it obviously had an impact where we ended up. But with that being said, our higher quality coals have more of a tendency to be based off a high-vol A type index in the international marketplace and because of that, we feel like if things recover over the next six months or so that we’re going to have a really good opportunity to have higher priced business internationally. And because of the way things develop domestically, our higher quality coals were not generating the sort of demand that we saw for example last year. So hopefully that helps a little bit.

And I think, Mark just to echo on what Mike said, somewhat of a statement of the obvious, last year when the domestic pricing in negotiations were occurring, that was in the backdrop of a rising market price-wise. This year, it was just completely the opposite. So it was really a question of where you catch your falling knife, and I think our approach was simply to step back from the table and say, we’re not going to try and predict where that knife will go one way or the other, but we’re going to preserve optionality on our best coals so that we can preserve some pricing upside. And I think in terms of your question about what the price might be, again, I think that’s a market-driven decision and it remains to be seen.

And of course to make sure we can run our operations and unlike much of our competition, who did not make that decision, end up sending out warrant notices instead so.

Got it, great. Thanks for the color, gentlemen. Appreciate it.

Thanks, Mark.

Your next question comes from the line of Daniel Scott of Clarksons. Your line is open.

Thanks. Good morning, guys. When I look at the results and I think about your contract book for next year shifting to a lot more exports, what is your level of confidence in being able to place that step-up in tonnage in the export markets? What kind of typical geographies are we looking at for destinations? And if that market stays soft, is the domestic window closed for you or is there still some optionality to return tons domestically?

Yeah, good question. And the good thing about the progress that we’ve made in the last six months is getting all kinds of exposure because of our focus to change our mix. I mean, we knew we had a heavy domestic book and our focus even before the downturn that we’ve experienced was to expand on the export side. I will say that we’ve leaned towards the growth area. I mean, we think our highest potential is probably more or less in Asia, because it tends to be more consistent from a marketplace. And I can say that we’re kind of on-deck at a couple of places, one of them more or less because of dissatisfaction with some of the quality of coals that they’re currently buying and that ours would be a good fit and fit nicely into the blend. And so it’s like trying to predict something that is constantly evolving. I mean, it’s difficult to say, hey, I’m 100% sure we can do it. I can’t say that because there are a lot of things that are out of our control. But we’ve done everything right. We’ve put all the things in place to do it. And I like the fact that we are having some discussions with some customers versus what we’re seeing, for example, in Europe with a lot of uncertainty on buying. So difficult to say now, but we’ll know a lot more in the next 60 days.

Okay, great. And I think your comments were that if, markets get even weaker, that you have the capacity to just basically run at the 1.3 million that’s contracted. Can you do that without really blowing up the cost structure? Is that something you could run with decent margins at that level?

And we didn’t say we would run it at 1.3 million. We would run higher than that, and frankly we’ve got some discussions right now which again, as Mike alluded to, in the next 60 days, probably cover several hundred thousand more tons. But so we basically have covered ourselves on the downside and as I said, let ourselves the optionality to capture some price upside as we go forward into ‘20.

And I did forget to answer the question about domestic business. We still do have some ongoing discussions and are hopeful that that we’re still able to do a little bit more domestically. So I don’t know that we totally write that off at this point either.

Okay and not to dwell on the negative. So on the positive, if you kind of looking at that 1.8 million to 2.2 million band, that you can ratchet in if markets dictated, is there are a lot of variability in the actual operating cost structure there or is it pretty steady?

This is Chris, the operating costs in that band will stay pretty flat. Obviously, the higher we get, the lower they’ll go. But sort of our base case is pretty consistent with what we’ve done this year. And what Jeremy has outlined is our view of Elk Creek going forward.

Okay. And the last for me. Jeremy you gave some extra color on the cost. In the release, there was the comments about the sales from inventory had a negative impact on cost per unit. I think you cleared it up in your comments, saying that you basically spread your cost over fewer tons produced. So it wasn’t cost per ton sold or cost per ton produced. Is that the right way to think about it?

Yeah. So I mean if you think about it, Dan, we produced 460,000 tons and sold 510,000 of our produced coal, whether it be from this quarter or of course prior quarters. And so essentially as I noted, we have the workforce in place to produce considerably more than we did in Q3. And we think that’s the right thing to do, given our structure and given where we are frankly on the cost curve. So yeah, I think long story short, you’re thinking about it correctly.

I might add, Jeremy that the byproduct is eliminating inventories is an increase in liquidity. So we continue to see our cash position gain when we’re eliminating inventories. So that’s a good thing.

And, Dan as our cash position obviously grows, then that gives us more optionality to look around at some other opportunities.

Yeah, on that comment sorry just one last one in there. I would have thought going into the earnings season with pricing where it’s at that maybe some of the growth programs might take a pause. But it sounds like not only are they not necessarily pausing, but at the same time, you could be opportunistic in MNAs. Is that fair?

Yeah, I think that you hit the right word. We’d be opportunistic. Obviously, we like to try to buy things at a very reasonable price and we are looking at some opportunities as we speak. And then, as we talked about last quarter on some of our in-house growth opportunities, we told the board the last meeting we wanted to kind of sit tight and see where the market looked. We’re going to be back having a discussion with our board late this year. And at that time, we’re going to put back on the table some of these ideas and see what direction we want to go.

And I think importantly to keep in mind is, Berwind continues to progress and it’s been a core development and growth project. And we’re getting very close to that slug bottom where we’re going to start, so it’s exciting.

All right, guys, thanks very much. Appreciate it.

Thanks, Dan.

Your next question comes from the line of Lucas Pipes with B. Riley FBR. Your line is now open.

Hey, good morning everyone.

Good morning, Lucas.

I wanted to follow up on this M&A point. What sort of return parameters would you be looking at? And if it’s production related, would it be kind of production immediately or a year away, two years away? If you could describe some of the parameters in more detail, I think that would be very helpful. And then secondly, along at the M&A line, what sort of financing opportunities would you be looking at? Would you, for example, consider debt as part of that or would you take on legacy liabilities? So you mentioned in your prepared remarks that currently you hardly have any in comparison to your peers, so a little bit more context around that would be very helpful. Thank you.

Yeah, sure. Lucas obviously our focus is always on geology when we look at opportunities. And we have a preference of either adding to existing mines or putting in production that is an advantaged geologic area. So I would say that sort of the first line of things that you might see doesn’t even necessarily need to be a large M&A thing. It could, for example, be doing some additional leasing and adding things that would be in many cases accretive from a geologic perspective, an advantaged geology over time. So I think there’s a very good chance that you’ll see some of that. I think you’ll also see us focus on infrastructure that can give us more capabilities and flexibility to enhance our ability to potentially wash coal or ship coal those sort of things. We continue to have a huge aversion to liabilities and prefer to structure transactions that try to at least minimize them. That being said, occasionally you take those sort of things. We took a measured approach when we did Knox Creek for example. So what you won’t see is any large, I think, M&A from us, more next door stuff, more opportunistic stuff, more leasing type stuff. But these things could really have a pretty big impact, in many cases on our cost structure and continue to perpetuate our low cost operations that we have. So I guess based on that, we have and we continue to have a great relationship with our banks. And I’ll let Randy and Jeremy kind of jump in and talk about some of them.

Lucas I think, to your first question about ROIs of course, we would like to have an higher ROI on anything we do as possible. But I would think an easy way to look at it is, we like paybacks probably in the 1 year to 3 year range which gives you some notion of a return you can kind of back into without having to be numerically precise. In terms of our opportunities, we’ve got dry powder. We’ve got dry powder built into our existing debt instrument on the revolver. We’ve got dry powder that we’re discussing as I think we’ve alluded to before with perhaps some equipment financing that we’ve already put in place before. What we don’t want to do is, probably go out and finance against our balance sheet per se as a sort of a cash flow loan of some form. Nor as you asked, we like to accept legacy liabilities. But on the other hand, we’re certainly always aware that we’re in a position because of our balance sheet to perhaps opportunistically do some things which might involve some AROs that others might not be able to do. So that’s kind of a broad-based answer to your question, but I think that’s probably about as precise as we can get.

That’s very helpful. I appreciate all that color. My second question was a follow up on some of the comments regarding pricing and demand. Randy, it sounded like it’s pretty weak out there. I think you made a comment in your prepared remarks that you’re not sure if current pricing is even reflecting demand. Could you elaborate on that and when you drive in around in Central Appalachia, what sort of inventories are you looking at? What’s your sense like is demand just really, really weak and maybe weaker than the market is realizing today? I would appreciate your perspective. Thank you.

Well, I think and of course not everybody reported, but I think everyone would probably reasonably consistent with each other. I think, as Mike said earlier, certainly the domestic mills have cut back on their buying for this year. It’s the mantra as I said, met reflects steel demand and steel demand is a function of the general economy. So as we’ve been a little weaker this year, I think it’s instead of a rising tide carrying all boats, it’s a sinking tide carrying our boats. So I think as you go around Central App and Chris of course who is down there constantly can probably comment as knowingly as anybody here at the table, but I think you are seeing larger stockpiles. You’re seeing some people cut back on a lot of shifts and production. You’re generally seeing the reality of people that have higher cost and higher debt structures being faced with situations where in many cases they can’t sell their coal to meet cost. And so you’re seeing shut-ins, you’re seeing some dispositions taking place. And once again, not with any smugness at all, but we do feel that we’ve designed ourselves to be able to withstand these kind of turbulent times and perhaps hopefully thrive in them. So that’s basically where we are.

Lucas, our book business for the fourth quarter is going to allow us to continue to reduce our inventories. But no doubt, and we see it in the coal fields, increased inventories have basically put people in a position where they have to reduce shifts. And it’s not necessarily just five days a week, it’s four days a week in some cases, that we’re seeing in some of the areas that we operate in. The encouraging thing is that people are taking a sort of proactive approaches to it. And in many cases, these guys don’t have the cash position or the cost structure to allow to perpetuate very long. So it’s difficult to see those sort of things and even layoffs happen. It is encouraging production to shut in. I think, as we look not only at the inventories there, but port levels and inventories there, they’re elevated and it reflects the weakness in Europe. So we watch those things on a monthly basis because we’ve got our space at the ports too. So and hopefully that gives you a little bit of color. I do think that people are taking the right actions in the coalfields to reduce supply.

And I think, Lucas, we alluded that we thought we’ve seen about 4 million tons to 5 million tons come out of the market here. To be perfectly candid, if you look forward to next year, we don’t have a crystal ball more than anybody else, but I could frankly see that number double. So that’s the kind of contraction in supply that I think you're seeing. And of course, you have – when you have situations like this that also makes the financing for those who do have weaker balance sheet that much tougher so.

Yeah, that’s very substantial amount of supply, that’s very helpful. I appreciate all the color and best of luck.

Thanks, Lucas.

Thanks, Lucas.

Your last question comes from the line of David Gagliano of BMO Capital Markets. Your line is open.

Okay, great. Thanks for taking my questions. I’ll try and be brief here. I just wanted to ask a couple of clarification questions relative to comments that were made historically. First question is related to the comments that we made in August. I think I understand, but back in August, there was a plan in place for a September board meeting for approval of the prep plant expansion. What happened there?

Very simply, at that board meeting, we were sitting there in the middle of the downdraft that we sort of saw coming in early August when we last spoke. And it was in the depths of the negotiation situation where we were seeing prices drop and demand drop. So basically, I suggested to the board, we stepped back from the table, take a look and see where the market might be in a few months and clarify it at that time. So we basically –

So that project is officially deferred, correct?

It’s just basically on hold. I wouldn’t say it was deferred.

Okay, sorry on hold. Understood. Okay and then just from May, back in May, we’ve talked about 2020 volumes obviously lower now, but back in May, there was very specific guidance provided for 2021, 2022, 2023. In fact, the numbers for 2021 were 3.1 million tons, I believe, 2022 was 3.6 million tons, 2023 was north of four, 4.2 million tons to 4.5 million tons I think it was. Are those numbers still intact given these projects that are on hold?

Yeah, I think the short answer is the overall end number is intact. The timing to get to where those numbers are has probably been modestly deferred, at least from the standpoint of what we thought was going to happen in 2020. We sort of visualized a reasonably steady demand and I think ‘20 looks like it’s going to be a lower demand factor really across the entire board. So I think we certainly can’t sit here today and predict what we are going to see in ‘21, ‘22 and ‘23. But we are still committed to move forward at those levels of production in the future as the market warrants.

These are all good projects, Dave. They deserve the capital even in this sort of market. But it’s obviously prudent to not put the company under stress from capital deployment. And hopefully we’ll have a lot clearer vision on the rest of the coal we place for the rest of the year and can give you a lot better idea, I think after the next quarter, how things sort of readjust. But one thing’s for sure, all the projects make great sense, have great returns, even in numbers that we see today. It’s just a matter of making sure that we deploy the capital at the right time, and don’t stress ourselves.

Okay, that makes sense. That’s very helpful actually. So at some point between May and now we crossed over a threshold that made the timing of these projects obviously less attractive. So can you give us more color on what that threshold is? Like the go, no-go decisions, what’s the price that we should be thinking about where we’re going to move forward with these projects?

Yeah, David I think the short answer to your question is, it’s a more subjective than an objective decision. I think we want to get some general comfort of where the market looks like it is. And that’s not a magic price number. Because as I said, there is a little bit of a disconnect between price and demand out there right now. So we want to sort of see the market stabilize. And I think once the market is stabilized, we are in a position to move rather quickly to initiate these.

And to take that a step further, I think what all that then creates is, people who are prudent, capital is free cash flow. And we put ourselves in that category. And the key factor, if you look at what we will do is as we have free cash flow, we will deploy it in these good projects. And it’s difficult to predict where we end up from a cash standpoint right now with the tons we’ve placed for next year.

Okay. And I’ll keep it short. I have one more, and it’s not related at all. But just when we go back to near-term guidance and maybe our math is wrong, but when we back into an implied fourth quarter cash cost at Elk Creek, it’s down quite a bit versus the third quarter, even though volumes are down. And I’m trying to reconcile whether we did our math wrong or what should we be expecting for cash cost at Elk Creek in the fourth quarter?

I think third quarter cash costs were up a little bit for all the reasons Jeremy outlined. And we expect all of those one-time occurrences generally, as I mentioned in my remarks, our number two gas mine, it actually has now completed, but it was mining in a lower coal area and it completed those reserves in the third quarter and has moved back to where it will be probably equally productive from a foot per share standpoint, but much thicker coal seam. So where that has always been one of our lower cost producers, it was one of the laggards at Elk Creek, although so we expect that to rectify itself. And we’ve done some cost control measures at Elk Creek like I mentioned on the high wall miner, just several things that will bring our cost back in line or perhaps even a little bit lower than we’ve seen at other points this year.

Okay. So to get to the $66 target for the year, it implies at least in our math, the weighted average, $66 implies a weighted average cash cost of $59 a ton at Elk Creek in the fourth quarter. Is that reasonably accurate sub $60 in 4Q cash costs at Elk Creek?

So, Dave I would just note that in our guidance tables, we do have a footnote that says that the per ton guidance doesn’t include the potential inventory adjustments. So we can we can kind of go through the math offline on that. But just keep that that dynamic in mind.

Okay, thanks. I don’t want to take up too much time on the call.

Thank you.

Thanks, Dave. Appreciate it.

I would now like to turn the conference back to Randy Atkins.

Okay. So again, I would like to thank everybody for joining the call this time. And we look forward to catching up with you again. I guess it will be after the first of the year to discuss our year end results. So thanks again.

Ladies and gentlemen, this concludes today’s conference call. Thank you all for joining. You may now disconnect.