American Resources Corporation (AREC) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the Virtual Investor Company Spotlight event featuring American Resources. My name is Jenene Thomas. I'm CEO of JTCIR, and I will be the moderator for today's event. I am very pleased to welcome back Mark Jensen, Chairman and CEO; and Mark LaVerghetta, Head of Corporate Finance of American Resources to the Virtual Investor platform. Welcome, gentlemen.

Thanks, Jenene.

Good to see you again.

Great to see you. So everyone, before we get started, I just want to remind our audience that American Resources is publicly listed on NASDAQ and trades under the ticker AREC. During today's discussion, the company will be making forward-looking statements and I encourage everyone to view the company's latest SEC filings on their website at americanresourcescorp.com for the latest information. We will also be joined opening up for Q&A after the discussion with Mark and Mark. And so I'll give those instructions when we're ready to do so. So Mark Jensen to start, for those that are new to the story, could you introduce yourself and provide a little bit of your background?

Yes, absolutely. My name is Mark Jensen, I'm the Chairman and CEO of American Resources Corporation. One of the Founders of the business, I've been not only the CEO of the company since inception, but also the largest or second largest investor, I guess, to date and continually investing back in the business. I've been an entrepreneur most of my life, I spent many years in New York on the Wall Street side of things, but been involved in the mining industry for over 20 years now and ultimately been on the refining side for over 7 years now.

Great. Mark LaVerghetta?

Yes, sure. Been with American Resources shortly after inception, probably around 2016 time frame, been a Founder of the businesses or subsidiaries, American Metals, American -- or excuse me, ReElement Technologies, which we'll dive into later. It's been about 20 years on the Wall Street as well. So in helping guide the direction of the company and excited to explain where we're going.

Wonderful. Thank you, both. So Mark Jensen, American Resources is such an innovative company. It's been going through a consistent evolution for the past several years. And so for today's discussion, I would like to focus on the 3 distinct core businesses under the American Resources umbrella and take a deep dive into each. So starting with American Carbon, can you provide us with an overview, its recent focus on growth and how you plan to monetize the assets?

Absolutely. American Carbon, we focus on the metallurgical carbon market. So we're providing carbon to the steel industry, where we extract it, process it and ship it on our own rail spurs from our own processing plants. Business was built through acquisitions since 2015. We acquired 8 companies that were run pretty poorly that needed restructuring, but they had good bones and good opportunities there to expand it, and we've done that. So over the last year, we started commencing production and really lately put the focus on the high-value, high-margin mines. So right now, our primary driver of revenue is our McCoy Elkhorn complex. It's running the Carnegie 1, Carnegie 2 mine. We're going to show some pretty rapid growth out of there coming in the next few months here, which we're excited to talk about the execution of the team. Business was built by us, but now led by Tarlis Thompson, and he's absolutely crushing. He's shown he's a leader. He's from the area, and he's done a really good job of positioning the McCoy Elkhorn complex for rapid growth. And being that it's a very high-margin complex. We're excited to put our efforts there. And then our highest margin complex is our Wyoming County complex, which we're getting ready to restart there, but working on the taxes and bond, which we can dive into a little bit later. But had really good feedback and progression on that recently. And the business is in a position where it's going to use its own cash flow and put cash back on the balance sheet but continue to expand the growth of the business, not only on mining but also on processing.

Excellent. So trying to ReElement, which is more than a recycling platform. Can you speak to how you are differentiating yourself as a pure-play refiner of critical elements?

ReElement is a business that is hard about to get extremely excited about everyone. The team that we built there, but the technology that we possess and have showcased at commercial scale is a big deal. The ability to refine lithium ad dollars per kilogram from end-of-life batteries, but also on spodumene and sigh of partnerships there, that are progressing very nicely. Many we haven't talked about publicly and we will over the coming months, but the ability to refine critical and rare earth elements at the time that nobody else can do that. So our competition is our battery charters, which is a business we're excited about. And we'll talk more about that into the American Metals business line, but refining of rare earth and critical elements is lost in this country. It's not being done. Nobody has done it today at commercial scale other than ourselves. And on the rare earth side, we've signed 2 offtakes, 1 with AML, Advanced Magnetic Labs, which they've asked me to sell on the Board of as part of our investment we made into the company, and I personally invested as well to the company is a really revolutionary technology, been funded by the government DLA, DoD, and then USA Rare Earth, which is a phenomenal business with a phenomenal team in place. And I couldn't be more excited to have them as our baseline customer of our rare earth elements and the ability to partner with them up and down the stream of the business line. We put the puzzle pieces in place. We have some really nice things taking place there right now on the growth of the business. And we're talking about scale. We're not talking about just growing it slowly. It's -- we have some progressions that are taking place that will really show the scale of our technology and the ability to grow it at a rapid pace to keep up with the demand of the electrification industry domestically as well as worldwide.

Yes. To add a lot to that, too, when we started ReElement Technologies, we looked at where the biggest bottleneck resided here domestically. And that is on the refining side. We know the mining industry very well. We've navigated through that through acquisitions and operations. We looked at the critical minerals market. And we saw from a domestic standpoint and also from a global perspective that the antiquated or legacy way of refining these critical minerals a, the United States has no capacity, zero capacity. And without that capacity, we are going to struggle in a big way to compete on the global stage. And then when you look at the existing ways of how these minerals are refined, it's very environmentally and socially toxic. So when we look to acquire that IP, we looked at ways that we could disrupt the standard of how these minerals are refined. So not only are we able to bring that refined capacity to the domestic marketplace, but we feel that we're leading the world in innovation of how these things are refined and a more environmentally safe, low-cost and flexible way.

Excellent. I know we've had a focused event regarding ReElement previously on the Virtual Investor platform. And you talked about the fundamental pieces that you put together to kind of really grow and build this business unit. So I think 1 of the key things for me that was a huge takeaway was people that you've surrounded yourself with for the team there. I'd like for you to talk about that for a minute.

Yes, absolutely. So I mean Jeff Peterson, our Chief Operating Officer, served on the Nuclear Navy on 1 of the subs and a very senior position there, he is a true leader. Understands how to not only get people to execute upon the mission but also continue to scale that team. We've made some really good hires in the last couple of weeks and are continuing to hire and expand that division. Bob Galyen was previously on our Technical Advisory Board and said, once we showcased commercial scale and purity of lithium at a very economically feasible process, he would be interested in joining the board. Well, he asked to join the Board now. Bob was the CTO, #2 employee at CATL. CATL produces, I think, approximately 50% of the world's lithium-ion batteries. And so he's been in this industry for a long time from Indiana was 6 minutes from our facility today, which is fantastic to have him around. But he is the leader in the battery world and had a great conference with them last week out in Arizona at the NAPA Conference. Having him as part of the team, Julie Griffith, joining the Board as well, Dan Hasler, Former Commerce Secretary for Indiana joining the Board. And then I want to talk on our partners, USA Rare Earth. Tom, the CEO there, is excellent. They just brought him on. He's been phenomenal to work with. Josh Hawes their team there, Mark Sentient and weighed over at AML. I'm just building out a real team of people that understand the industry and where it's going. And then on the battery side, we've had numerous MoUs signed that we'll be able to disclose over time that with partners that are leading in the space on the battery side. And in an industry that is rapidly growing, not like domestically, but also worldwide.

Yes, 1 person to add to, when you look at our ReElement division is Bill Smith. He spent over 30 years at Eli Lilly. And when you look at taking our IP and our processing technology and converting it from lab scale to eventually out to commercial scale, he's the ideal person to do that. He's done that time and time again with high success and the pharmaceutical manufacturing industry. And he's able to guide us in how we implement this technology and scale it.

For our prop stick, Chris Moorman and the rest of the team too. I mean, Chris has been joined our team reclines Chief Commercial Officer, and he's absolutely crushed it. I mean he's -- I'd like to define them as a mediator, he is a guy that gets after it and tries to accomplish the goals and make sure it does whatever he as to get that done in a positive way for the company.

Wonderful. Excellent team, and you've really been able to showcase a lot of progress. So looking forward to continuing to watch that.

One other shout out on our team is Dr. Yi Ding, who was the -- yes, I mean he's been a -- he's a rock star. I mean he helped develop our chromatographic separation process for inorganic molecules in the critical minerals space at Purdue university. We brought him in-house 7, 8 months ago probably. He's a rock star when it comes to implementing this technology as well.

Wonderful. Do you want to do the blanket like Grammy thing and for anyone else I forgot that I have to.

We need to come.

No, we have got the number of other team members we can give shout out to for sure.

100%.

Absolutely. All right. So why don't you take us through American Metals. Can you provide some insight into how this came to be as well as what's to come moving forward?

Yes. So American Metals was formed. We were looking at rapidly growing the recycling space on the ferrous metals. So we bought a lot of distressed assets. We reclaimed a lot of those properties, clean them up, got over $24 million in bond releases. We reclaim more mines in the Sierra Club and American Metals was a big part of the component of that. What we saw the opportunity and really ReElement is staying in its land. It's a pure-play refiner. That's the value-add component of the industry, and it's going to do extremely well in that footprint, and we wanted to maintain there. Now on the shredding side, the partnerships we have, which we hopefully can disclose in short order on the end of life products division. The ability to shred power tools, the ability to take end-of-life magnets and the products that magnets come in the wind turbines and recycle those sell off ferrous metals, the coppers, the aluminums and then the end-of-life batteries. We are working and been working on a partnership on the American Metals side, where we'll be providing the shredding solutions, providing that black mass production to ReElement to process and a partnership with ReElement once it's spun off as its own company here shortly. The American Metals business line has the ability to grow rapidly. We have great partnerships. Bob Galyen introduced us to a partner named Jack Gilleland, they spent many years in China building the automotive industry. China is way ahead of the game in terms of battery recycling. And so when we partner with Bob and had Bob come in the team, he introduced us with some partners over in China, they've done a phenomenal job of leading us into very optimized solutions that work today, and being able to utilize those technologies here domestically with our partners that we're bringing in on the American Metals side, will be a major supplier to ReElement as part of that of being able to recycle these materials and American -- let ReElement focus on its core competency of refining, which is a value-add stuff. The volume we'll be able to do out of American Metals what will be fantastic. And it's bit of the worst for a long time, and we're excited that it's coming to fruition here very shortly.

Yes. Jenene, we said this earlier in the introduction is we're not just a recycling platform, right? And we wanted to showcase ReElement as a pure play clean tech refining option value add into the supply chain here domestically and globally. Currently, the battery recycling market is a little opaque right now. They can -- they really don't have the ability to refine. And we didn't want to just pigeon hole ReElement as a recycling platform or a battery recycler. We can -- it's flexible on the type of feedstocks. It can purify, separate and purify those elements for the electrification market. But the natural evolution in -- the evolution of our business lines, American Metals was always -- we took scrap metal, processed it to be recycled in the electric arc furnaces. American Metals from a battery processing standpoint, we'll do just that. Battery -- we can do it other battery recycling platforms do. They have a challenge of being able to do what we can do. And we wanted to differentiate ourselves in that by segregating out the battery preprocessing division from ReElement.

Excellent. So even have been on this platform for approaching 3 years, which I can't believe and we have a great audience with us today, and I'm sure a lot of those have been following the story for the past 3 years and longer for certain. So much progress that you've made. You've been sharing with story you've transformed the company truly by leaps and bounds and so many important pieces of the story with continued solid execution. Mark, I think this will probably be the favorite -- most favorite question you get asked, but as CEO of American Resources, what do you think investors are missing from this story?

Yes. I mean, I think -- so we've got a lot of feedback from a lot of mutual funds and larger investors that have asked about the ReElement division. And they don't want to invest in carbon. And then we've got other investors that want to just invest in pure play carbon. So it's -- I think, conglomerates and the small cap world don't make sense. It's confusing to investors and/or investors when investing in pure play. And so -- and the ReElement division without a doubt is being mispriced today with the mining side is being mispriced today. And I wake up every morning and I'm excited about both, but I'm probably folks back and forth on the opportunity of what I'm more excited about. But they're both executing. They're both hitting their metrics that they need to hit today. But ReElement is a game changer in terms of the process of what we're able to displace. We are going to completely displace Hydromet. There is going to be some companies that build Hydromet facilities and try to operate here domestically. They won't be successful. Environmentally, it's very costly to do so. You can only process NMC batteries. You can't process LFP batteries, which is over 55% of the market and well -- and growing. We can. Our process for LFP recycling is environmentally possible. The ability to co-locate with investors, with partners, we can do that. We can build modular scalable facilities, co-locate a battery refractures and hydromet, you can't do that. It takes years to get 1 permitted we alone building ones, hundreds of millions of dollars where we can build out modular facilities at our quarter sites for $50 million to process their waste material and let them benefit from the economics of it as well. That's a huge deal. I mean, Bob always says that Robin who built CATL to $185 billion company, Bob was the #2 employee there. You literally work there. I mean, you build it with Bob. He was that he did it through collaboration in joint ventures, and we intend to do the same. And ReElement is not being recognized in the public market value today, and it will. I mean, the spin-off will help do that. It will open it up where people that certain environmentally social funds. I think our core business is probably the most, we've reclaimed more mines I said, the Sierra Club, but once we get spun off, I think it will make it a very clear value proposition for investors, and we'll be able to benefit from that. Our investors will be able to benefit from that.

I think the Street might be missing 1 aspect to -- we've said this internally and externally as well is that we're standing on the shoulders of giants. And our shareholders get the benefit from that, whether it's in our coal division from McCoy Elkhorn complex that Mark was talking about earlier, James River, the predecessor that owned it before us, spent over -- spent about $150 million of building that out. And that's about the size of our market cap today. We own 5 complexes outright, essentially debt free. So we have that the back and the shareholders get the benefit from those assets, and those investment made by our predecessors. On the critical minerals side and the ReElement division, Mark talks about Bob being the #2 at CATL. I mentioned Bill Smith, our technology was built between a long-term collaboration between Purdue University and the pharmaceutical manufacturing industry, right? Our shareholders get the benefit from all of that R&D, all of that development work, all of that commercialization that's been put into that. So I think there's a little bit of a misconception where we're a little bit R&D type. We're trying to bring a new concept. We have long-term IP, long-term big assets that our shareholders get the benefit from. Like I said, we get to stand on the shoulder of giants. And our shareholders get the benefit from that as well. And we'll continue, as we continue to collaborate in the critical minerals space and show how that value-add refining capacity works with our partners. That's going to be -- that's going to -- that's 1 of the most exciting things that I look forward to.

Touch on that real quick again. I mean, in terms of scale from a lithium hydroxide and lithium carbonate perspective, I will refine more lithium in 2024 than I believe anybody else will. Let's talk to other people. I can -- I know who they are, and I don't think they're going to be -- I think we're going to be very successful in that regard. In terms of showcasing the scale and the ability to scale our technology rapidly. That's the difference. And we can permit in 2 months. We did it, and we're doing it again. And our next size of facility will be impressive. And more to come on that.

Yes. And the last thing to add is, on the ReElement space, our ability to refine -- from a recycling platform, LFP battery chemistry is a clear differentiator and our ability to co-locate with partners across the supply chain, where we don't have to rub a hub and spoke we can cut out the logistics cost because when you're dealing with end of life or you're dealing with commodities, any commodity logistics is a big cost, especially when you're looking at the EV world today, everybody is looking at cutting their costs, minimizing logistics and controlling their supply chain. And that's what we can provide.

Safety aspect, right? I mean keeping your employees safe, keeping people on the road safe. Transporting battery waste or battery materials or end of life batteries still on the highway. There's been 3 fires this year alone for people transporting that material. And by being able to co-locate and/or operating in the close proximity on a co-locatable basis is a huge deal, and you're going to read a lot more about that in the next few years.

Yes. And now as we're still diving into this question in investors are missing. I mean even if you look at from a comparable basis. If you look at some of battery recycling platforms, again, we're not just a recycling platform, but I mean there's public companies out there that are battery recycling platform that have $1 billion market somewhere between $0.5 billion and $1 billion market cap. We can replicate that. That's not -- like I said before, we can do what they do. They can't do what we do and how we scale our technology. It's 1 -- it's going to be 1 of the more exciting things that we're going to be able to showcase. And I think that's being missed.

Perfect. So I think a great breakdown of the 3 core businesses, why don't we turn to 2023. Why don't you talk to us about what 2023 looks like for American Resource as a whole, and what should investors be excited about?

Yes. I mean on the carbon side, we'll have record carbon production. I think that's going to be pretty easy to achieve based on what we have going on right now, the -- and high margin. Perry County, when we had the flooding issues, we had other challenges there that it needs to be a big mine. It needs to run as a big mine. You need a lot of people to do it and you need a lot of equipment to do it. And we've been able to relocate our mobile equipment to be high margin now and McCoy showcasing that. The McCoy growth. Carnegie 1, Carnegie 2, expanding Carnegie 2 here very shortly to over double the production, same with Carnegie 1 and then mine 15a, mine 17 and then the McCoy Elkhorn processing plant in short order, being able to process coal. We're going to -- that business is about putting cash back on the balance sheet, and then we'll light -- I mean, that's -- I would say McCoy is actually our silver asset. Our gold asset is Wyoming. Its mid-vol coal, phenomenal asset. We'd look to put a lot of effort forth into that this year. But keeping our CapEx as low as we possibly can, we can, let's track this. We have a lot of assets. We have a lot of equipment. That's probably 1 of the bigger bottlenecks over the last year was trying to get the people and try to get equipment. We own that. So the carbon side is going to be fantastic, announcing our bigger facility on the ReElement side and some of the partnerships we have, the MoUs we've already signed that we can announce here in short order with partners, the ability to scale our existing partnerships, we already have. And then showcase our technology. I mean I will say that the African market is massive. The resources that they possess there, they have no refining. Zimbabwe just put a regulation that you can't support raw material out of theirs, they need refining, they don't have it. You can't build Hydromet there. Senegal, some of the regions around there. We've been in numerous conversations there, the ability to process lithium spodumene. Our process works extremely well with lithium. It's the way that the columns, the structures that we utilize and the process utilized is extremely efficient on lithium extraction and lithium purity. The ability to produce high-purity lithium at 99.999% purity. When you're talking to the OEMs and the CAM producers, that need these raw materials, that's a huge deal. And our columns work extremely well in that process and very, very efficient. And then the partnerships on scaling even our technology beyond where it's at today is we have some really fun things going on there that we'll be able to showcase, we got a lot American Metals. But I mean, 2023 is a big year for us. It's bring us on the main stage within the refining space. And separating the companies will open us up to government grants and some of those things. I mean, government registration probably doesn't want to give a lot of grants to a coal company. Well, we filed the Form 10, we responded to the first round of comments that's progressing nicely. And then some of the value add things to Novusterra is a phenomenal technology. synthetic graphite -- the ability to produce synthetic graphite, carbon nano structures the team we built there, the process they're getting a lot of them done, so we can refile the S-1 there. And then the SPAC, it's an equity value realization of that. I mean it's -- thankfully, we don't want to -- it's going through its process, going through the S-4 review. There's a lot going on right now, and we're going to be able to simplify the story. I mean that's something that's probably been a little bit confusing to the larger investment community is it can be a little bit complicated. And that's why we put through the special committee and got with the special committee to take their opinions from an outsider's perspective, what needs to be done and simplification of story and growth of the assets is what we're going to be able to roll out this year.

Excellent. Then anything on the metals side?

Yes. I mean, the partnerships are working on, the equipment we're utilizing. It's a lot of people jumped into battery recycling not refining. 95% of the market can't refine and won't refine. They produce black mass and they sell it to China. That's government funds to do that, which is insane to me, but that's what happened. I'm relatively not a quiet guy when it comes to talking about that. The -- our ability to produce black mass through the battery -- through the American Metals line and then sell it to and partner with ReElement is a huge deal. We've been looking for the right solution, not the quick solution. And we feel very confident with the team we put in place there, the partnerships we put in place and the research we've done, that we're putting the right solution in there. and then building the relationships on the OEM side, the battery manufacturer side, the CAM producer side, the waste material that they have and then the end of life side. It's been a lot of work. And this industry is just starting. Everybody thinks everybody is -- that the battery industry is fully ramped up. The Tesla is the only 1 that produces batteries in the United States lithium-ion batteries and at any scale. And there's a bunch of announcements coming out, and we're excited about those, and we're excited about those relationships, but they haven't started yet. And so it's -- we're going to be feeding that supply chain through lithium carbonate, with lithium hyrdroxide at scales that our competitors are out there putting out there, we're just going to do it. And we're not giving a lot of guidance this year just because it's a growing market, but I think we'll be showcasing very impressive numbers in that regard.

Wonderful. Okay. So before we transition to the Q&A, is there anything that you'd like to add? Anything else you'd like to cover related to the value proposition or talking about the near-term milestones you're most excited about?

Yes. I mean on the carbon side, it's about high-margin growth. I'm excited. Tarlis, I give props earlier, but he deserves it. I mean he's basically been running that division for us, and he's done a phenomenal job. He's building a team around him. As I said, a proven leader, but he's putting off the growth that he said he could achieve. He put a plan in place and he's executing upon that plan. I'm super excited about what he's been able to accomplish there and what he's achieving and the growth plan that he's putting in place that's supported by myself and the Board and the team and then ReElement. We still face on commercial scale. Now we're getting ready to showcase it at a much larger scale and a much larger facility that is going to grab a lot of attention. And it should because the ability to process the raw materials. But we're excited that -- we signed the offtakes on the rare earth domain, the 2 magnet producers that are actually going to be making magnets, they only 2 in the country. There's another third one that says they're going to make magnets. I haven't heard a lot of updates from them, but I know USA Rare Earth is crushing it. And I know AMLs as well. So we're super excited about being able to actually sell products to people that can actually make something. And then same on the battery front. I mean having Bob Galyen joined the company, having obviously, Bill, to help lead on the engineering and design side, but it's about on leasing our technology now and displacing Hydromet, which is an environmentally toxic process and not scalable at all. We'll be able to showcase that not only here domestically, but also throughout the world.

Excellent. Okay. So we are at that point where we are going to open it up for Q&A for our participants. If you click on the Q&A button at the bottom of the screen, type in your question, and we will get to as many as possible. One of the things I love about Mark and Mark is they said, bring it and we'll answer any question that comes in. So I'm excited. I know that you like to get questions from shareholders and interested parties. So we're going to go through the list here. Okay. So what is the ETA on the spin-off of shares?

Yes. We've got Form 10 filed. So now it's at the point of the SEC review process. I think the number of comments that came back, and I don't know the exact number. Kirk has done a great job of leading that charge on that, our CFO but good questions by them. And obviously, it's -- we'll get that pushed through as quickly as we possibly can. But it's in the SEC process. We think we'll be able to respond. We are responding expeditiously to their comments, and we'll get them turned around as quickly as we can. But we think within -- I would say in the summer some time, I don't know exactly when, maybe sooner. But it's -- we can't -- it's out of our control, all we can do is respond back to comments on questions they have.

I think 1 thing to add to that, too, because we get that question quite a lot. And us as being management team being the largest shareholder group within the company. We want to do this right. We don't want to do it quick. Everybody just says, when do I get my dividend? When am I getting my dividend? We want to do it right, right? And part of that, and we've publicly stated that there is some restructuring that needs to take place prior to the spin-off. But we want to make sure all of our shareholders get the correct or commensurate value that ReElement should get in the public marketplace as a stand-alone entity. And there are some things that we want to do to ensure that, that value benefits all of our shareholders. And we're going to do things right rather than fast for this because we understand the opportunity, and we see the upside potential.

Love that. Okay. You mentioned MoUs. Can you tell us if you can't get into the details, just in general, what a transaction would look like?

Yes. We signed -- I mean MoUs with battery manufacturers to develop in-line processing of their waste material. Geographic central MoUs, where we'll be joint venturing or licensing for certain applications of our technology to certain international regions, processing end-of-life products with partners. We've been working on -- we've signed them we use that processing third-party black mass from parties that are battery shredders that are in the battery recycling space, that trend batteries and produce black mass. So we numerous -- we've got -- and then on the African side, MoUs with parties and geographic regions there to process lithium spodumene, lithium ores and we believe we'll have more of that in the near future. I think lithium ores is a very attractive feedstock for us. But yes, we've got a lot of success. Now some of those -- there's someone used to take time to get put out there publicly and there's a lot going on behind the scenes, but it's all progressing in good order for our technology. As Mark mentioned, the uniqueness of our technology is the ability to colocate and or build in multiple locations. We will have multiple facilities throughout the country and throughout the U.S. that can refine locally reduced transportation risk, reduce logistics cost because of our CapEx is such a small component compared to Hydromet that will enable us to scale our technology that way.

A lot of great questions. Some of them are -- people are asking the same questions. So I'm just slipping through these. Okay. What is the revenue guidance for 2023?

Yes. We haven't stated that publicly.

And when I say something, I'm going to be careful what we're going to execute. I mean it will be well above 2022. We're not giving guidance. We believe 2023 will be a year of continually putting cash back on the balance sheet on the mining operations. We're not giving guidance on ReElement's revenue right now. It's positioning itself for very strong revenue growth as our customers come online. We can only control, what we can control and the battery industry is just starting up. So it's -- but we believe we're well positioned there to grab a lot of business. On the mining side, it's -- I will say that 1 thing I'm excited about is the supply chains are opening back up. The labor market is opening back up. We're attracting a lot of people because of the stability of our McCoy Elkhorn complex to the mines and the part of the country, in that part of Kentucky. So it's -- we're starting to see some things alleviate there. That have been challenges in the past. And that market is doing extremely well right now. I mean it hit a height last year and the second quarter of last year, dipped back down now as you're starting to see PMI growth out of China. China consumes over 52% of the world's net carbon produced over 50% of the world steel seeing them come back online is a huge thing. And that market has been great anyways without that. So it's excited to see that roll out and we're going to expand our production to meet the needs that our customers are asking us to as well. And so it's -- I think we'll show a strong revenue growth, but we're not giving any formal guidance.

Okay. Next question, since your revenue generating, we need to access the capital markets in the near term.

1 As we said, we're working on the taxes and bond process outside of our control. Interest rates have been rising. The high-yield bond market, tax and bond market has been relatively closed until recently. But we'll entertain accretive ways of capital, not equity capital through the public stock price. We said that -- I can't say it many more times, but we believe we're undervalued right now. We bought back a little bit of stock before the blackout period, when the blackout period is over, we'll continue to buy back stock. And so as an investor that I'm buying stock personally, we wouldn't obviously I get what the company does, but the company is not looking to issue equity capital. We believe we're way undervalued, and we don't need to. We have plenty of other alternative forms of capital available to us that are more either government grant-based programs, taxes and bond financings, credit facilities that if we need it. But the company -- the mining side is doing extremely well right now.

So you are answering some questions while you're answering that question, which is good. Okay. Our next question is with those shipping black mass to China shift to ReElement, what is the -- what are the barriers internal within companies, prior agreements, et cetera.

Sorry, could you read that again?

Yes. So with those shipping black mass to China shift to RE, so I'm guessing is ReElement, what are the barriers internal within companies, prior agreements, et cetera?

No barriers. I mean, China is doing what China does best, and they're trying to control the market, they're paying about commodity prices for certain aspects. And that's a short-term game. Now that being said, yes, we can take black mass from anybody and make it very attractive as those partners. And we're setting up a lot of arrangements there for the manufacturing waste as well as for the end-of-life products, which is where the black mass comes from. But yes, we can process as much as people can get to us. We can scale our facilities as quickly as needed on the black mass side of the equation. And I mean, I think the federal government is also going to start landing 1 or 2 people that are exporting raw materials on the rare earth side as well as on the battery materials side to China. It's -- especially if they took federal funds. The world seems a little unstable right now in the U.S. to start protecting a supply chain, especially if government is going to fund it. But even without that, our supply chains and our partnerships are building out in a way that will enable us to continue to scale our growth on the end of life products, manufacturing waste as well as on the ore side of the equation.

Yes. Relative to that question as well as the black mass market, it continues to evolve. As Mark said, China is doing what they do, paying above market in the spot market right now for it to control those volumes and control those materials. I think 1 thing as the supply chain continues to develop, end-of-life batteries continues to grow, more black mass, our ability -- we don't need to be transactional with black mass as we partner, we can partner with -- we can joint venture and create a structure with our partners to be able to benefit on the upside of those purified products that go right back into our domestic manufacturing, as our domestic manufacturing gets stood up here. As it's everybody, I'm sure, listens to the news being released. There's a lot of announcements. There's a lot of attention and a lot of capital being in place to the EV market and the electrification. And our manufacturing capacity here as that continues to grow and gets stood up our ability to not just be transactional but partner and help folks control the supply of those critically needed raw materials is a differentiator, and we can step in at when needed. So there's really no barriers.

Okay. Okay. When is Perry County going to resume activity? And why has it been idle for so long?

Going to make sense from the investors and when the right deals in place. It's Perry County, our McCoy complex, we can start up mines, we can start sections and be very profitable doing that. Operating in 1 section of Carnegie 2, getting ready to operate a second section there. That margins -- that value is very high margin. Perry County is a big mine. It's got its challenges. It's got its opportunities. It's -- but it needs to be run as at least a 2 to 3 section, 4-section mine, then it becomes extremely profitable. But right now, we're able to relocate some of our mobile equipment to generate higher margins and more cash to put on the books. I mean that's I think 1 thing people -- our Board is focused on is generating cash and putting cash back on the balance sheet to take advantage of opportunities that are available. And that's what we intend to do this year by expanding at the McCoy complex and then the Wyoming County complex. And we see offers every day. We're not going to jump on any offer, and we've had offers for to sell Perry County. And they just weren't -- they weren't accretive enough to our investors, and we're not in a position where we need to accept those offers. I think people realize that, and we'll have opportunities that -- and we've had some really interesting opportunities too that we're currently evaluating. And we'll continue to evaluate those. So it's a phenomenal product. And the margins when you're running it 2- to 4-section mine there are absolutely phenomenal. But that's a -- it's a -- you need a lot of people to do that. Now the labor market is starting to come back in a pretty big way. So that opportunity could exist here in the short order. But we're really going to focus on getting -- expanding the McCoy complex right now because every dollar we put there gets paid back in a very, very short order.

When it comes to our carbon platform, including Perry County as it relates to this question, we've always stated that, were and as Mark explained, what is 2023 look like and things like that. We're focused on monetizing our coal assets. We've stated that. And there's a variety of ways that we can do that from operating them ourselves to joint venturing, selling, divesting individual assets or selling the best in the entire platform, right? Any and all things are on the table for us at this point, but we're going to do what's best for the long-term value of our company and for our shareholders. Perry County, because post flooding, we had a trouble, we lost about 50% of our team there, of our operating team. And some of them moved over to McCoy and then we made the determination to relocate some of those assets to expand high-margin growth around McCoy. So when we look at Perry County, there needs to be some additional assets that were to go back over there be procured or anything like that, but it's a time to own really good quality coal assets right now. We're highly focused on monetizing the entire platform one way or the other.

Great. Okay. With respect to Novusterra, does AREC still retain a 50% revenue sweep. And is there an update on the IPO time line?

Yes. So when we sold the -- as part of the restructuring of Novusterra, where we sold the exclusive license -- sublicense to them other than Kanai, which they're working directly with Kanai as well, which got the grant from the U.S. Air Force.

Army -- yes, Air Force. Yes.

So a lot going on at any right now in partnership with other there. The -- we own roughly 85% of the company now. So we don't have a revenue split anymore. It was -- we believe the equity value is worth more. The technology is really unique. Ability to improve carbon nanostructure grafting, one of the most exciting batteries I saw at the conference is actually a lithium sodium grafting battery that's 40% lighter than the traditional lithium-ion battery. So it was really need to see that. We've got some good conversations with them Novusterra -- the Novusterra team. But Novusterra is focused on getting its audits up to date to get the filing out there as part of the management change and bringing in really an operational management team. Andrew did a great job of setting the company up but it was time to bring in a team that could run it and build it. Just hired Josh Brumbaugh, as the CFO. So now we've got a full-time CFO, which we've been working -- the company is working on a long time. But we're excited about the equity position we have there. Synthetic graphite, I think, is a huge market. Now the technology still needs to be refined for that, but the opportunity exists to produce a very low-cost carbon based materials. And I'm excited where Novusterra is positioned in that regard because ultimately, synthetic graphite is going to end up being over 90% or over 75% of graphite and lithium-ion batteries. CATL is a major user of our synthetic graphite today. So we're -- the team is working on that with Dr. Jerry Bodie and the Texas Tech team. But it's -- we're excited where they're going. I think they will be getting the S-1 filed when the audit is done and they're progressing towards that process that's an equity realization of that for the American Resource shareholders. But at the same point, the company is building, generating revenue through the Kanai partnerships. Kanai is doing a phenomenal job of getting out there through the Department of Defense. And I think it's -- we're very excited about where Novusterra is as a company.

Yes, our shareholders should recognize that almost like a free option that they have on the Novusterra asset. When the S-1 was filed last time, since then, we've had the ability to retrench a little bit, and reposition Novusterra for -- to be a bigger, faster, stronger company and execute. We put a team in place that is a lot of military focus, very good Department of Defense, very focused to stay in its lane and execute. So I think our shareholders should realize that there's tremendous value that could be unlocked at Novusterra, it's probably going to take a little bit of time. There's some patients that need to be had, but it's a nice little option that we have as an investor and a large shareholder American -- being American Resources of Novusterra. It's an exciting opportunity. It's an exciting entity for sure.

This time is flying by. We do have time for 1 more question. The question comes in, is there any concern with the stock price in attracting new investors.

I mean it's below $3. And you hear that institutions want -- typically, you need it above $3. Now as their main shipping playing in the stock price, probably, fundamentals will win out, though. At the end of the day, I hope our investors are patient, they don't be that patient, I don't think. I think we're weighing our value based on our peers today. And they'll be continually showing progression on what we're doing as a business on all the divisions. But I mean, we are reaching out towards the investment community and having those conversations to bring in investors in the open market. I mean, we do care about our stock price at the fundamental value of our company. But we believe, ultimately, stock prices will trade based on our fundamental value of the company ends up. And we believe based on fundamentals where we end about. And we will focus on the execution of the business. We will absolutely speak to investors and communicate with investors as we're doing today, and have those conversations and ultimately we believe over time, we will see the performance of the stock price or match the performance of the business as we execute.

You made -- certainly made a lot of progress. Congratulations on all of you accomplished. I really appreciate your time with us here today. I think we have a great audience, a lot of participants today. So I think this was a great update, a great overview as well as a good opportunity to get what's to come from American Resources. So before we close, Mark, any parting remarks?

Yes. One, thank you for your time, Jenene. And thanks all the investors that ask questions and that dialed-in to listen. I'd say to follow some of the progress we're making, we look into who we brought on as a team, look at how we're attacking the industry and technology that we're utilizing to do it and where our legacy competitors are focusing on ultimately, it's an exciting place. I've never -- as an entrepreneur, you kind of always hope for kind of a large runway to attack and the ReElement side of it, we have it. And then on the carbon side, we have it too. I mean we have a lot of people that are investing in the space. Most people are paying that are not investing back into growth. There's very able investment back into growth, and we're doing that. But we're able to do it in a way that keeps our CapEx really low going forward, because of the previous capital we spent, the equipment we bought, the assets we bought and the way we positioned the company. So we'll generate cash, but we're also going to grow that business. And Tarlis has shown that he can do that. And Jeff shown he can do it on the ReElement side. And then our team on the American Metals side, we're going to unleash that here shortly. So it's -- I would say we have a lot of progress. We've announced a lot of progress over the last year. If you look at what we accomplished over the last year, I'm proud of it. It's -- there's been challenges and opportunities, and we've capitalized on the opportunities and we've conquered the challenges. And now I would say, follow what we do over the next few months, the next few weeks, next few days because at the end of the day, it's about showcasing execution and lighting the fire of where we sit today.

Well, I have to say so much progress, not just in the past year. We've been having you on for the past almost 3 years, and the evolution of the company is so much to be proud of. I know you and your team just think about this every day, execute every day. You have the right team in place, speaking of the team before we go. Is there anyone that you forgot that you want to mention before we leave?

Yes, I can't remember the entire team now.

No that's fine. In all seriousness, congratulations on all you've accomplished. Definitely a lot to watch for American Resources. I want to thank our audience. We've had great participation today. Really appreciate everyone following the Virtual Investor platform. This does conclude the Virtual Investor Company Spotlight featuring American Resources. As a reminder, American Resources trades on NASDAQ under the ticker AREC. Mark Jensen, Mark LaVerghetta, thank you so much. Look forward to having you back soon.

Thanks, Jenene.

Thanks, Jenene. Thanks, everybody.