American Resources Corporation · NASDAQ:AREC
American Resources — Investor Presentation (June 2019)
24 slides from American Resources's investor presentation, Jun 4, 2019
Slide 1: American Resources Corporation
AMERICAN RESOURCES CORPORATION (NASDAQ: AREC) A leading supplier of raw materials to the growing infrastructure market June 2019
Slide 2: Disclaimer
DISCLAIMER This document contains may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual resu
Slide 3: Offering Summary
OFFERING SUMMARY American Resources Corporation (NASDAQ: AREC) $35,000,000 (expandable to $45,000,000 upon agreement between issuer and company) Senior Convertible Debentures due 2022 and Warrants: * 11% annual interest rate = Self amortizing repayment from revenue per ton of coal sold. = Matures in
Slide 4: Creating Increased Price Realization; Free Cash Flow
CREATING INCREASED PRICE REALIZATION; FREE CASH FLOW Unlike a traditional debt financing, American Resources is able to expand its balance sheet while creating additional free cash flow for the Company fueling organic growth. McCoy Elkhorn Complex + INCREASED REVENUE ALSO LEADS TO INCREASED OVERALL
Slide 5: Substantial Asset Ownership
SUBSTANTIAL ASSET OWNERSHIP American Resources has amassed a substantial base of growing assets that provides as ample asset coverage. American Resources Corp's Asset WCC - Mineral WCC - Facilities EKL - Mineral MEC - Mine Infrastructure MEC - Processing & Handling Facilities KCC - Processing & Hand
Slide 6: Why Coal? Why Now?
Why COAL? WHy Now? Coal is the preeminent natural resource on the planet and has many important uses worldwide. The most significant uses of coal is steel production, industrial and electricity generation. Access to affordable and reliable energy and steel is the facilitator of development and the f
Slide 7: Delivering on Accretive Growth
DELIVERING ON ACCRETIVE GROWTH American Resources is a low-cost supplier of metallurgical coal for steel production in the growing infrastructure market. Y Owns all the infrastructure with ample capacity required to rapidly expand production at already approved mines. v Six permits in production wit
Slide 8: Seasoned Management
SEASONED MANAGEMENT American Resources Corporation is led by a seasoned team of entrepreneurs who have experience successfully navigating both expanding and contracting coal markets as well as turning around businesses that need assistance. + Over 12 years leading and managing mining operations and
Slide 9: American Resources Corporation Overview
t BauRsEs CORPORATION OVERVIEW — r Mine #15 Raw Coal Stockpile & Bevins 2 Prep Plant AMERICAN
Slide 10: American Resources Corporation Overview
AMERICAN RESOURCES CORPORATION OVERVIEW Fount ene RM cscctanicroormin American Resources Corporation is a low-cost supplier of carbon from Eastern Kentucky and West Virginia, centered around three operating ‘met coal for steel production in the growing infrastructure market. complexes in Kentucky an
Slide 11: Operating Subsidiaries: KE
OPERATING SUBSIDIARIES: KE American Resources is one of the leading metallurgical coal producers in Eastern Kentucky. All the Company’s operations are non-union and the platforms are highly scalable, running profitably at less then 50% of their name plate capacity. Metallurgical (High Vol) mining op
Slide 12: Proven Ability to Execute & Grow
PROVEN ABILITY TO EXECUTE & GROW The Company has closed on four substantial acquisitions in the last thirty-six months as well as expanded its asset base significantly through organic additions post acquisition. American Resources Corporation sees a wide array of accretive growth opportunities in th
Slide 13: American Resources Corporation Overview
AMERICAN RESOURCES CORPORATION OVERVIEW The Company has four scalable operating subsidiaries that are able to leverage shared resources further reducing its cost structure with an 22% to 28% EBITDA margin in 20191; 34% to 38% by 2021. a 2019E Producing Mines 5 2020E Producing Mines 3 Coal Type High
Slide 14: Coal extraction at Deep Mine #1
Coal extraction at Deep Mine #1 AMERICAN
Slide 15: Global Coal Market Well Positioned for Growth
GLOBAL COAL MARKET WELL POSITIONED FOR GROWTH The global demand for metallurgical coal is robust and the economics are favorable to our business model and expansion. METALLURGICAL COAL SupPLY/DEMAND & HISTORICAL PRICING METALLURGICAL COAL PRODUCTION Cost CURVE Demand for metallurgical coal is exceed
Slide 16: Comparable Companies
COMPARABLE COMPANIES 5/31/2019 ($ in mitons, except per share data) Company Ticker Exchange Stock Market — Enterprise Revenue”) Esrrpa’ Net Income”? Price) Cap Value 2018E —2019E 2018E —_2019E 2018E _2019E ‘Nucor Corporation NUE NYSE $49.28 $15,020 $18,449 $25,103 $24,340 $4,112 $3,193 $2,391 $1,768
Slide 17: Deane Mining, Mill Creek Prep Plant and Rapid Loader Load Out
Deane Mining, Mill Creek Prep Plant and Rapid Loader Load Out AMERICAN
Slide 18: Capitalization Table
IZATION TABLE Assuming the maximum offering raise of $35 million, the pro-forma capitalization of the Company will look as follows: As of March 31, 2019 Adjustinents As Adjusted Assets @ Cash & Cash Equivalents $ $ 278286 $11,746.93 Other Assets $ - S 6.254.846 Fixed Assets and Coal Properties and o
Slide 19: Debt Stack; Balance Sheet Simplification
DEBT STACK; BALANCE SHEET SIMPLIFICATION Assuming the maximum offering raise of $35 million, the pro-forma capitalization of the Company is a very clear balance sheet unlocking substantial cash flow generation. Balance asof_ _W/Financing Permitted Cash Flow Debt Stack 3/31/2019 Proforma Indebtedness
Slide 20: Summary Income Statement
SUMMARY INCOME STATEMENT (US$ 000s, unless otherwise noted) Historically, the Company has been focused on expanding its asset base and expansion opportunities through acquisition and development. In the current year the Company has shifted focus to monetizing assets, expanding revenue base and margi
Slide 21: AMERICAN
AMERICAN
Slide 22: Appendix: Operational Management Biographies
APPENDIX: OPERATIONAL MANAGEMENT BIOGRAPHIES Tarlis Thompson — Chief Operating Officer: Tarlis overseas all operations at American Resources’ Central Appalachian subsidiaries, which includes McCoy Elkhorn, Deane Mining, and Knott County Coal. In this role, Tarlis manages the activities at the compan
Slide 23: Appendix: Board of Directors
APPENDIX: BOARD OF DIRECTORS Mark Jensen — Chief Executive Officer & Chairman of the Board: Mark has been instrumental in all aspects of acquiring, restructuring and building mining operations over the past decade. Having managed through 2009 and 2015 downturns, he has been able to work with his tea
Slide 24: McCoy, Deane, KN
McCoy, DEANE, KN ‘See adetionol cbsciaimers on second page
American Resources — Investor Presentation (June 2019) on 6ix