Peabody Energy Corp (BTU) Q3 2026 Earnings Call Transcript

Good day, and welcome to the Peabody Third Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Kayla Finkeling, Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thanks, Operator, and good morning, everyone. We appreciate you joining us for Peabody's third quarter 2026 earnings call. Joining me today are Peabody's President and CEO, Jim Greck, Chief Financial Officer, Mark Spurback, and Chief Commercial Officer, Malcolm Roberts. After our prepared remarks, we will open up the call for questions. Before we begin, I want to remind you that our remarks today will include forward-looking statements. Please review the statement contained in our earnings release and consider the risk factors referenced there, along with our filings with the SEC. I'll now turn the call over to Jim.

Thanks, Kayla, and good morning, everyone. The third quarter marked a meaningful step forward for Peabody. We continue to advance Centurion. Generated positive adjusted EBITDA across each operating segment and benefited from improved seaborne markets. Underpinning everything we do is our commitment to safety. Our teams maintain their focus on safe execution while delivering on the strategic priorities that help position the company for stronger performance heading into year-end. Our number one priority is Centurion, which met its third quarter sales volume target. Good morning, everyone. However, late in the quarter and into October, the longwall encountered faulting across multiple locations that proved more problematic than anticipated and constrained production. October production was just over 45,000 tons, and we have revised our fourth quarter sales volume expectations to a range of 300,000 to 500,000 tons. The challenge is not a single fault or isolated geological event. The longwall has encountered multiple complex geological structures across the tailgate, face, and headgate areas, and the combination was more complex than our mine plan assumed. Mechanical downtime while navigating these faulted zones allowed additional ground pressure and roof conditions to develop ahead of the face. Under these circumstances, elements of the current longwall design were less effective at managing changing conditions than expected, which further slowed progress. Importantly, we do not view these challenges as a resource quality, reserve, or long-term mine plan issue. Vaulting and structural complexity are common characteristics of Bowen Basin operations. What this first panel has shown us is where our equipment and operating practices need to adapt to operating efficiently in these conditions. In the current panel, we have approximately 110 meters to go before the major fault structure is behind the long wall. We still expect some geological interruptions throughout the remainder of the panel. Our team has identified targeted engineering modifications and operating adjustments that will give us greater flexibility when mining through similar conditions in future panels. For each long wall shield, there are two key equipment upgrades being scheduled around planned downtime to limit disruption to production. The first is a baselift power increase, estimated at $1.5 to $2 million total for all shields, which we plan to complete in the current panel during scheduled maintenance. The second is improvements to the shield extension flipper. Estimated at $5 million to $10 million total for all shields, which we plan to install during the next longwall move in 2027. We have also worked to mitigate the risks of the next panel with an extensive pre-consolidation plan for the faulted zone. Where we do encounter faulting, we will be better prepared with improved longwall positioning, both equipment upgrades in place, and steps to stabilize and strengthen the ground ahead of the fault. Together, these steps are designed to deliver more consistent long-haul performance at Centurion, while our focus continues to be on safe execution. Beyond our current operating priorities, responsible stewardship remains central to how we manage our assets throughout their life cycle. Everybody received the Office of Surface Mining Reclamation and Enforcement's National Award for Excellence in Reclamation, the highest honor in this field. We'll work at the Forum of Seneca II West Mine in Colorado. Since the mine's closure in 2009, reclamation has transformed the site. This national recognition underscores the lasting impact of our commitment to responsible reclamation. That same focus extends to Peabody Development, which is pursuing new ways to create value from our land and resources. Based on promising germanium concentrations, we are nearing agreements with a major customer and a processing partner. Through our R3 joint venture with RWE, we are advancing solar and battery storage projects on reclaimed mine land, with potential success fees beginning in 2027. We're also evaluating opportunities to pair mine mouth generation with data centers. Our approach remains capital light and partnership driven. Positioning us for new revenue streams and long-term growth. Turning to the U.S. regulatory environment as the nation faces rising electricity demand, EPA's partial repeal of the power plant carbon rule, which required unproven and uneconomical technology, and its proposal to resend the endangerment finding represent important steps toward restoring a more common-sense energy policy for our country. I commend the DOE, EPA, and the Trump administration for recognizing the critical role of reliable, dispatchable, and affordable energy. With that perspective on our operations and the regulatory environment, I'll turn the call over to Malcolm to discuss the U.S. and global market fundamentals.

Thanks, Jim, and good morning, everyone. Starting on Jim's overview, I'll discuss the market conditions shaping customer demand. The third quarter featured stronger seaborne pricing driven by continued supply constraints and steady demand. China remained the primary driver of metallurgical coal pricing. Seaborne thermal coal market strengthened primarily because of healthy North Asian demand and supply constraints persisting in Indonesia and domestically in China. In the US, thermal demand improved During the quarter, however, it remains down. Year over year on a year-to-date basis. Starting with seaborne metallurgical coal, premium hard-coking coal averaged $248 per metric tonne in the third quarter, up 35% year over year and the highest quarterly average since early 2024, with spot index prices peaking at $285. As lower Chinese production resulted in Chinese metallurgical coal imports increasing 25%. Chinese safety inspections and production restrictions in Shanxi following the major mine accident in May have particularly affected high quality coking coal supply. An estimated 70 million tonnes of Chinese domestic metallurgical coal production have been removed from the market year to date. For context, the global seaborne metallurgical coal market is approximately 80 million tonnes per quarter. Supply is expected to remain constrained into 2027, supporting seaborne pricing. In India, metallurgical coal buying has been steady but remains selective. Stronger steel prices following the monsoon season slowdown leaves scope for higher imports during the fourth quarter. While tighter Russian PCI supply has renewed Indian buying interest in supply from Australia, through September, premium coking coal and PCI prices were up 31% and 19%, respectively, versus 2025. Against this backdrop, we completed additional spot sales to major Chinese steel producers. Advanced 2027 term discussions and delivered an initial Centurion cargo to an Indian public sector steel producer. US high-vol A coal prices have improved this year, but the price discount to Australian premium hard-coking coal remains material as incremental supply and freight costs weigh on the delivered competitiveness in Asia. Renewed Chinese access with an anticipated lower Chinese import tariffs could improve demand when implemented. Recent US-China trade discussions have outlined China's commitment to at least 11 million tonnes of US-origin imports in 27 and 2028. This import volume is anticipated to be primarily coking coal. Any resulting trade flow shifts are expected to be broadly neutral for Australian pricing. Turning to seaborne thermal coal, Newcastle pricing averaged approximately $135 per tonne during Q3, trending higher to finish the quarter, above $145 per tonne. Price support came from several factors, elevated LNG prices, slower Chinese production, and lower Indonesian exports. China has showed continued interest in Australian thermal coal, particularly for mid-calorific higher ash products, looking to substitute constrained Russian and Indonesian supply. As a result, API5 pricing increased through the quarter, and October spot API5 pricing accelerated even further, reaching $115 per tonne, the highest level recorded for the index since May 2023. Shifting to the United States, third quarter powder river basin sales fell below guidance as cooler weather early in the quarter, strong renewable generation, and low natural gas prices weighed on coal demand. An unplanned extended customer plant outage also reduced shipments. This winter's demand profile will be particularly dependent on the El Nino weather pattern, gas prices, and renewable output. Looking beyond the near term, data centres, manufacturing, and electrification point to sustained electricity demand growth. That potential has yet to translate into materially higher coal purchases. Project timing will remain at risk. In summary, seaborne markets remain constructive, with supply constraints and energy security considerations supporting both metallurgical coal and thermal coal. U.S. thermal fundamentals are more mixed, but coal continues to provide reliable supply of electricity during periods of high demand. With that, I'll turn the call over to Mark for a review of the financial results and the fourth quarter outlook.

Thank you, Malcolm, and good morning, everyone. With that backdrop, let's review our financial results, capital structure actions, and outlook for the remainder of the year. Peabody reported a third-quarter net loss attributable to common stockholders of $32.8 million, or $0.27 per diluted share, a much narrower loss compared to $90.6 million, or $0.74 per diluted share in the second quarter. Adjusted EBITDA increased to $97.5 million, still below the steady-state mid-cycle run rate as we await Centurion's full ramp-up. The improved results were driven by higher production at Centurion, higher average realized seaborne prices, and better U.S. thermal volumes. Costs per ton were higher than anticipated due to lower-than-expected third-quarter U.S. thermal volume and higher-cost faulted conditions, slowing production at Centurion. I'll now walk through the segment results. Seaborne Thermal shipped 3.1 million tons. Exceeding expectations by 100,000. Export shipments were 2 million tons, also above guidance, and the average realized export price exceeded $100 per ton, further expanding margins. Compared to the prior year period, revenue per export ton increased nearly $24, while costs have increased about $7 per ton. The segment reported adjusted EBITDA of $65.5 million. Increasing 26% from the second quarter and 60% from the prior year period. We are anticipating an even stronger fourth quarter with higher production from both Wilpin Young and Wombo selling into very strong Seaborn Energy Coal Markets. Seaborn Metallurgical shipped 2.2 million tons, exceeding company expectations, driven by higher production at Metropolitan. Following a quicker than planned long wall move. Revenue per ton increased 11% from the second quarter to $165. Costs were above target at $162 per ton, primarily reflecting higher cost faulted conditions and lower production at Centurion. The segment turned in its first positive EBITDA quarter of the year, and with higher volume at Shoal Creek and Capabella, we are expecting a stronger fourth quarter. Our U.S. thermal business generated $40.5 million of adjusted EBITDA, more than double the second quarter result. In the Powder River Basin, shipments increased to 19.6 million tons. Together with cost-focused management, costs improved 8% to $12.94 per ton, but remained above target due to lower than anticipated volume as a result of lower coal burn. The segment generated adjusted EBITDA of $15 million. The other, higher calorific value, U.S. thermal business, shipped 3.4 million tons, 300,000 less than anticipated. Lower shipments at Bear Run were due to lower coal burn, and a 20-mile customer had a generation unit down for an extended period. The resulting mix increased average cost per ton above expectations in the quarter. Partially offset by higher average realized revenue per ton. The segment generated $25.5 million of adjusted EBITDA, broadly consistent with the second quarter. Turning to the balance sheet, we ended the quarter with $434 million of cash and $887 million of liquidity. In the third quarter, we repurchased $39 million of the remaining 2028 convertible notes for $58 million. And issued a call for the remaining $40 million, electing cash settlement with an anticipated mid-November closing. The cash repurchase completed in the third quarter continued our return of capital to shareholders, with the $19 million cash premium representing an additional 700,000 shares repurchased, bringing the year-to-date amount to 5.7 million shares. Together with $27.4 million of cash dividends, we have returned $192 million to shareholders in 2026 through September 30. Looking ahead to the fourth quarter, Seaborn Thermal Volume is expected to be 3.6 to 3.8 million tons, including 2.5 to 2.7 million export tons. Approximately 1.6 million tons of Newcastle product. And 0.8 million tons of higher ash Wilpon Young product remain unpriced. Costs are expected to be between $46 and $51 per ton. Significant improvement compared to the third quarter is driven by substantially higher volume from Wombo as a result of mine sequencing, improving quality mix to approximately 65% Newcastle, 35% higher ash coal. Strong performance through the first nine months of the year has allowed us to increase full-year seaborne thermal export volume guidance by 200,000 tons. Seaborne metallurgical volume is expected to be 2.2 to 2.4 million tons, as higher volume at Shoal Creek and Capabella offset lower volume at Centurion, as we work through the difficult faulted conditions that Jim discussed. Realizations are expected to average approximately 70% of the premium hard-coking coal index, with costs of $150 to $160 per ton. Lower fourth-quarter expectations at Centurion resulted in a reduction to full-year seaboard metallurgical volume of 600,000 tons and increased costs $15 per ton. Outer River Basin shipments are expected to be 19.5 to 21.5 million tons. At an average price of approximately $13.75 per ton at costs of $13.00 to $13.50 per ton. With a lower coal burn during the third quarter and modest Q4 forecasts, we have lowered full-year volume by 7.5 million tons, increasing full-year costs by $1 per ton. Other U.S. thermal volume, which has an average calorific value greater than 11,000 BTU. It's expected to be 3.6 to 4 million tons at an average price of approximately $59, and costs of $48 to $52 per ton. Similar to the PRB, we have lowered full-year volume guidance by 200,000 tons due to lower anticipated cold burn. Capital expenditure guidance was reduced by $40 million, primarily related to opportunistic deferral of development at Centurion North. In closing, Peabody exits the quarter in strong financial position, poised to leverage our diversified assets to generate free cash flow from strong seaborne markets. With that, I'll turn the call back to Jim.

Thanks, Mark. Peabody's opportunity is clear. Build on the strength of our thermal businesses, realize Centurion's long-term potential, and unlock additional value from our asset base. Delivering on that opportunity starts with safe, reliable operations and disciplined cost management. We recognize the work ahead at Centurion and remain focused on demonstrating improved progress. Our responsibility is to translate the strength of this portfolio into lasting value for our shareholders. With that, operator, we are pleased to open the call for questions.

We will now begin the question and answer session. To ask a question, you may press star, then one, on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Chris LaFamina with Jefferies. Please go ahead.

Hey, guys. Thanks for taking my question. I just want to ask about Centurion. So the plan was to initially get through the complex faulting area, which you had hoped to achieve by mid-October, but now you've encountered additional faulting problems, and these seem to be spread throughout the mine. It sounds like... This has gone from being getting through the complex faulting and then kind of going about on your prior mine plan to now having to figure out how to manage through this faulting because it's more likely to be a potentially permanent feature in the mine. Is my interpretation of that correct?

Chris, the faulting that we have is still in this localized area that we're trying to get, that we are getting through, that we've talked about earlier. And once we get beyond this 110 meters in this panel, the majority of this faulting goes away. So our outlook on the faulting and the geology in this panel and the rest of the mine hasn't changed, and our outlook for the ability to mine the coal as we get to the subsequent panels hasn't changed. There is faulting across the mine, as it is in all the mines in the Bowen Basin, and what's occurring is, as we're getting through this first panel, we're learning how we have to adapt our equipment to handle this faulting better in some of our operating procedures. So nothing has changed in our outlook on the mine or the faulting. This faulting was known to be there. We had it mapped out. It just turned out to be more complex than we thought it was going to be.

So the faulting throughout the rest of the mine, how do we know that it's not more complex than you had initially assumed it to be? If you've had a problem with this particular area, how do we know it doesn't happen with other faulting areas in the longwall?

Yeah, what we've learned with both the equipment that we have and the modifications that we have, and then the pre-consolidation where we have had the faulting and have done the pre-consolidation, we've had a lot better success at mining through that. This area here, though, we did not have the pre-consolidation done to it, but we have it in the rest of the panel here where we do have faulting, and we'll be doing it in the panels going forward. So the pre-consolidation and the equipment modifications to handle the conditions when we get them, when we encounter them, have us a lot higher degree of confidence of being able to mine through them efficiently in the future.

Okay, so your confidence in getting to full capacity at this mine is not changed, even with these problems that you're encountering right now? That's correct.

Yeah, Chris, we're 100% still going to get to full capacity. And again, this first panel has been a learning experience for us and what we need to do to get to that full capacity. And with the planned equipment modifications that I outlined in my comments, the pre-consolidation and the experience we're learning in this first panel. We're still 100% confident we're going to get to the full output capacity of this mine.

Thank you. Thank you.

The next question is from Katya Jancic with BMO Capital Markets. Please go ahead.

Hi. Thank you for taking my question.

Maybe staying on Centurion.

So, Jim, you mentioned you're confident that you can get to full capacity, but can you maybe talk a bit more about when you could get there, what the timeline is?

Yes, as we get through these faults in this quarter here and early next year, while we're finishing up this panel, we'll do these equipment modifications that I talked about. Some of them we can do during this. While we're in this panel, some we'll do during the next long wall move, and we'll be doing the pre-consolidation in the next panel ahead of us getting there. So as we get through this panel, certainly as we get into the next panel after this long wall move, we'll be at that full capacity potential. But we still have to work through this right now as we do these equipment modifications while we're mining through this panel. But the next panel, we should be ready to go.

So, if I understand correctly, when you do the long wall move in 3Q of next year, that's when you could get to that 1 million ton run rate, or how should we think about it?

Yes, that's when we, with the modifications, we'll feel like we're much more consistently, you know, we'll be operating consistently. And getting to that run rate. Now, as we're in this panel and we get through this faulting area, we'll get to those high run rate levels. Once we get past the faulting area, there's 110 meters we have left. But we won't have those modifications done, Katja. So, in order to consistently keep that run rate, whether there's faulting or not, we need to get these modifications done.

Okay. Thank you. The next question is from Nick Jolls with B. Riley Securities. Please go ahead.

Yeah, thanks, Operator. Good morning, guys. Maybe just on 4Q specifically, I think 45,000 tons in October still implies something around 175,000 tons per month. So can you just... Kind of give us a picture of, you know, exactly where things stand today. Like, is the long wall running? And if so, how many passes are you able to make given the faulting issues? And then how much of the sales volumes would come from, you know, inventory that's on the ground? Thanks.

Yeah, right now, you know, the longwall is running, but not at the rates that we're hoping to get to once we get or that we will get to once we get past this faulted area here, which we expect to be out of later this week. The problematic area, then we still have to get through the 110 meters that we have left. And, you know, we had coming into the quarter about 50,000 tons of inventory. And we've got another 125,000 tons that we know that we'll get from our CM units, and so the remainder would be coming from the long wall, and we feel pretty good about those numbers, you know, attaining that guidance range with the tons off the long wall for the rest of the quarter.

Understood. I was hoping you could give us an early sense for how you're going to guide at Centurion in 2027. I mean, obviously, there's been a number of challenges. Guidance has been consistently downgraded, so it seems like you're still confident you can reach full capacity, but are you willing to set the bar lower just in the case that some of these problems do persist?

Good morning, Nick. It's Mark. Yeah, we're not prepared to share what we're going to do with 2027 guidance for any of our minds yet. We're going to look at it. We're going through our budgeting process. Clearly, we want to see our progress here in the fourth quarter. But I think the most important point is what Jim mentioned earlier, that our long-term outlook has not changed. But we'll work through these modifications to the equipment that Jim mentioned, and we'll come up with guidance in our next call.

Thanks for that, Mark. Maybe just switching gears, I was hoping you could just give us a sense for seaborne thermal costs, kind of how you're seeing those trending, you know, what impact, what incremental impact are the higher diesel prices having here in the fourth quarter, or what kind of, you know, operational improvements have you been able to make to, you know, kind of keep those costs more range bound?

Yeah, in the U.S., I assume you're talking about in PRB, certainly, you know, you saw us raise the expectation of costs on higher diesel and lower expected volumes. You know, it's probably, you know, maybe 50 cents a ton in the PRB, but that guidance, we're comfortable with that. Diesel's come off a little bit from where we specced it. In Seaborne Thermal, you're seeing a pretty significant reduction in our costs quarter over quarter going into the fourth quarter. You can see by the volume, we're up significantly at Wombo and Wilpon Young, so that's really driving the lower costs. There's some diesel impact there, but not significant. So the lower cost getting us into that 4060-51 range is driven by the higher volumes. Offset partially by some higher sales-related costs, given the better pricing environment.

Got it. Okay. Thanks for that clarification, Mark. I'll turn it over. Thanks, Nick.

The next question is from Nathan Martin with StoneX. Please go ahead.

Thanks, Operator. Good morning, everyone. Just a clarification, I guess. The 200,000 additional Seaborn Thermal export tons are now expected for this year. It sounded like, Mark, you said those are largely expected from Wambas or those, you know, Newcastle quality tons.

That's right. Higher Wambas production, higher Newcastle. You saw us move the weight there, kind of 65-35 off of our traditional 50-50.

Okay, got it. Appreciate that. And then on the production and expected U.S. thermal sales for this year, I assume most of those times just roll into next year, and then maybe can you give us an idea of how contracted you guys are for 27 in the U.S. thermal segments and any idea on pricing?

Nate, good morning. Malcolm here. Look, we haven't given guidance for next year, but we'd expect our contract position from this year to Rollins next year, probably with an expectation of a few additional tonnes in the PRB and similar volumes in the other segment. But, yeah, that's still going to come down to guidance, which we'll update at the next call.

Okay, I appreciate that, Malcolm. Maybe coming back to Centurion for a second, I think last quarter, Jim, you mentioned you guys are looking at ways to shorten the duration of the long-haul move, which is now expected in the third quarter, 27. Did you make any progress there, and how long would you expect that long-haul move to take?

We're working on the timing of that, Nathan, with the advancement we're doing right now, but the development is well in place for the next long-haul move, the seven panels, so we've made very good progress there, so we're actually ahead of schedule on the development for the next panel, but when we give the guidance for next year, we'll talk about the timing of the long-haul move and when that will be occurring.

I appreciate that, Jim. I'll leave it there and pass it on. Best of luck. Thank you, Nate.

Again, if you have a question, please press star, then one. The next question comes from Matthew Key with Texas Capital. Please go ahead.

Good morning, and thanks for taking my question. Just staying on Centurion. Well, I know the expectation is that Centurion will get to nameplate capacity, but just given the mine conditions that have been maybe a little bit more persistent, should we expect that Centurion will just be a higher cost producer than maybe what was originally expected for it, like as, you know, it came online? For example, like even if mining conditions stabilized, I know you've incorporated some equipment modifications to kind of better address those challenges. Did those modifications just inherently increase mining costs compared to what was originally expected when, you know, you broke ground on that asset?

Matt, it's Mark. The equipment modifications you mentioned are very modest capital. They will not increase the operating costs of this mine going forward. Certainly, the geological conditions have been more problematic than we anticipated in this panel. The equipment modifications are meant to address that, as well as the learnings we've had from the additional drilling and consolidation work that we've done in this panel. So we think we know how to operate this mine. Jim confirmed that we still anticipate getting to that full production. So our long-term view of costs have not changed. Again, that was $105 a ton in 2024. You know, you inflate that up, and we shouldn't be at that $125 range or whatever next year. We've got a lot to learn. We're still working through this. So give us another quarter here, and we'll provide full guidance on our next call.

That's helpful, caller. I appreciate that, and good to hear. Just on seaborne thermal, I know we'll have more guidance in the next quarter, but just at a high level, in regards to kind of the production outlook there, could you remind me, like, the big movement parts directionally from a production standpoint in seaborne thermal? Just wanted to make sure I'm accounted for everything correctly in my model.

Yeah, I think, you know, we've shared what we think Wilp and Young will do, right? We've got a transition to a couple of pit extensions, so the production came off a little bit this year. It'll come off a little bit more next year. Depending on where we finished a quarter on the domestic ton deliveries, it will depend on how much we have to deliver next year. But I think we're in that 4.4 million ton range again on the domestic side. So maybe you'll see a drop in the export tons year over year next year, somewhere in that $500,000 to $700,000 range. And I would look at Wombo as being pretty consistent at $3 million plus a year. So, as we mentioned, then that domestic delivery out of Wilp and Young retreats significantly in 2028 to only like 2, 2.5 million tons and goes away completely after that. So, we look to ramp up those export tons out of Wilp and Young from, you know, a little over 5 million this year to over 10 million by 2030.

Got it. Super helpful. Appreciate the time and good luck.

Thanks, Matt.

Next, we have a follow-up question from Nick Jolls with B. Riley Securities. Please go ahead.

Hey, thanks for taking my follow-up. I think you mentioned or you made an update on some of these opportunities outside your traditional business, let's call it, specifically on the germanium front. Can you just walk us through kind of what the gating items are to advance that opportunity and the same for the kind of mind-mouth generation opportunities? Thank you.

Yeah, Nick, on the germanium, as I said in remarks, we're working to an agreement with a partner for the offtake and the processing on that, and hopefully that announcement can be coming sometime here in the near future, and because of some of the commercial sensitivity of that nature, we don't want to give a lot of details out of that deal until we have this all buttoned up and He made the announcement, but again, we think it's a very promising opportunity for germanium production and the offtake and the processing. On the MindMouth power plants that you're asking about, you know, what we're looking for there is, you know, partners, you know, the way we're going to... See the revenue from that is, you know, from either the land sales or the sale of coal to the mine mouth generation or from helping, you know, the project development feeds. So we're looking for the partners to build and operate.

The asset.

So, again, we're just in early days of that. There is a lot of interest in the mine mouth generation in the state of Wyoming. And, you know, we're into those conversations in case that potential develops more. But right now, it's very early days with that.

Thanks for that, Jim. Maybe just one more on the kind of legacy operations. Specifically at Capabella, low vol PCI prices have been ticking up, so I think, Mark, you mentioned some higher output from that mine in 4Q, but are there any opportunities to run that mine a little harder and take advantage of some of the spot strength? Thanks.

I think, you know, we've kind of transitioned, you know, from a two-mine operation with Moorville and moved a lot of equipment into Capabella. That's where our focus is in stabilizing that production going forward. We've been mining through some higher ratio coal. We're getting through that as well to some lower ratio. So look forward to strong production, but there's not a step change in production that's kind of on our vision today.

Understood. Okay, thanks for clarifying.

Thanks, Nick.

This concludes our question and answer session. I would like to turn the conference back over to Jim Grech, CEO, for any closing remarks.

Yes. Well, thank you to everybody for your time today and your continued support, and we look forward to updating you on our progress and future calls. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.