June 14, 2022
Via EDGAR
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: | Karl Hiller |
| Branch Chief |
| Office of Energy & Transportation |
|
|
Re: | Alliance Resource Partners, L.P. |
| Form 10-K for the Year Ended December 31, 2021 |
| Filed February 25, 2022 |
| File No. 000-26823 |
Ladies and Gentlemen:
This letter sets forth the responses of Alliance Resource Partners, L.P. (the “Partnership”) to the comments provided by the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) in its comment letter dated May 3, 2022 (the “Comment Letter”) with respect to the Form 10-K for the year ended December 31, 2021 (the “Form 10-K”) filed by the Partnership on February 25, 2022. We intend to file the modifications to the disclosures in the body of the Form 10-K as part of our Form 10-K for the year ended December 31, 2022 and file revised technical report summaries as exhibits to our Form 10-Q for the quarter ended June 30, 2022. We are happy to discuss any concerns the Staff might have regarding that approach.
For your convenience, we have repeated each comment of the Staff exactly as given in the Comment Letter in bold and italics below and provided our response below each such comment.
Summary of Coal Mineral Resources and Reserves, page 58
1. | We note your disclosures on pages 58 and 59 of the coal price ranges utilized in preparing your resource and reserve estimates. Please modify these disclosures to specify the prices utilized for each coal basin or market region associated with the resource and reserve estimates. See Item 1303(b)(3) of Regulation S - K. |
Response: We acknowledge the Staff’s comment and have modified our disclosure below to specify the prices utilized for each coal basin or market region associated with our resource estimates, which we will also include in future filings:
At December 31, 2021, we had approximately 1.165 billion tons of coal mineral resources. Tonnages are reported on a clean recoverable basis with pricing based on available third-party forecasts and historical pricing adjusted for quality at the end of 2021 in a range from $36.27 to $51.26 per short ton in the Illinois Basin and from $42.68 to $66.27 per short ton in the Appalachian Basin, which are the prices used by RESPEC to estimate the amount of coal mineral resources. All resources are classified as underground mineable in the exploration stage.
Further please see our modified disclosure below to specify the prices utilized for each coal basin or market region associated with our reserve estimates, which we will also include in future filings:
On December 31, 2021, we had approximately 547.1 million tons of coal mineral reserves. Tonnages are reported on a clean recoverable basis with pricing based on available third-party forecasts and historical pricing adjusted for quality at the end of 2021 in a range from $36.08 to $44.01 per short ton in the Illinois Basin and from $42.68 to $66.27 per short ton in the Appalachian
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Basin, which are the prices used by RESPEC to estimate the amount of coal mineral reserves. All reserves are classified as underground mineable in the production stage.
2. | Please expand your summary disclosures to include the resource and reserve estimates associated with your interests in Mid-America Carbonates |
Response: We acknowledge the Staff’s comment and in response, note that our subsidiary Mid-America Carbonates, LLC (“MAC”) does not own, lease or control any limestone resources or reserves or other mineral resources or reserves. MAC is a subsidiary that provides rock dust to our Illinois Basin mining complexes that it manufactures from limestone acquired from nearby third-party mining operations. Because MAC has no mineral resources and reserves, we are unable to expand our summary resource and reserve estimates to include MAC.
Henderson/Union Property, page 60
3. | We note that the Henderson-Union and River View properties overlap though we expect that different coal seams are associated with your estimates of resources and reserves. If this is correct, please include a statement along with these disclosures to clarify that the estimates of resources and reserves are distinct and separate, without any overlap in estimation, even though the mineral and property rights may overlap or have a common surface expression. See Item 1304(f)(2) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and will include the following information in our future filings:
Though there is geographic overlap between the Henderson-Union and River View properties, the resources and reserves of each are associated with different coal seams or, if in the same seam, are separated by existing mine works or geologic features into distinct areas. There is no overlap in the resource / reserve estimation.
Geology and Reserves, page 64
4. | We note that you do not include estimates of mineral resources with all of your estimates of mineral reserves. Please disclose the circumstances underlying the absence of resources in each instance. For example, clarify whether measured and indicated resources associated with the properties were all converted to reserves and if inferred resources were not determined explain the reasons. See Item 1304(f)(2) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and will include the following clarifications following the reserve table in the respective Geology and Reserves sections for each of the individual property disclosures in future filings:
River View, page 64
Due to the level of geologic certainty, all resources were classified as either measured or indicated and were converted to reserves. There were no inferred resources associated with the property.
Hamilton, page 66
Resources associated with Hamilton County are provided in our Coal Mineral Resources table above.
Gibson South, page 68
Due to the level of geologic certainty, all resources were classified as either measured or indicated and were converted to reserves. There were no inferred resources associated with the property.
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Tunnel Ridge, page 70
Due to the level of geological certainty, all resources were classified as either measured or indicated and were converted to reserves. There are no inferred resources associated with the property.
Exhibits 96.1, 96.2, 96.3, 96.4 and 96.5
Section 1 – Executive Summary, page ES-1
5. | We have identified various incremental requirements that pertain to the technical summary reports in the remaining comments of this letter. Please discuss these observations with the qualified persons. We expect that you will need to obtain and file revised reports from the engineering firm to address these concerns. |
Response: We acknowledge the Staff’s comment, and we will file revised technical report summaries incorporating the responses to the remaining comments of this letter as exhibits to our Form 10-Q for the quarter ended June 30, 2022.
6. | We note that quantities corresponding to your disclosures of resources on page 62 of the filing have been labeled as proven and probable in the report tabulation on page 1 of Exhibit 96.1, thereby indicating these are reserves rather than resources. This section of the report should be corrected to utilize the applicable terminology. |
Response: We acknowledge the Staff’s comment and have discussed it with RESPEC, our qualified engineering firm. RESPEC will modify their technical report summaries to remove the label of “Total Proven and Probable” in Table 1-1 of Exhibit 96.1 to instead read “Total Measured, Indicated, & Inferred”.
7. | We note that mineral resource estimates are not provided with all of the mineral reserve estimates in the reports at Exhibits 96.1, 96.2, 96.3, 96.4 and 96.5. The language in Sections 11 and 12 should clarify, where applicable, the circumstances underlying the absence or limited quantification of resource estimates. |
For example, incremental details should clarify whether the measured and indicated resources were quantified and then converted to reserves in preparing the reserve estimates and indicate the reasons inferred resources were not determined or reported. See Item 601(b)(96)(iii)(B)(11)(i) and (12)(i) of Regulation S-K.
Response: We acknowledge the Staff’s comment and respectively believe that Exhibits 96.1, 96.2, 96.3, 96.4 and 96.5 prepared by RESPEC, our qualified engineering firm, are generally responsive to Item 601(b)(96)(iii)(B)(11)(i) and (12)(i) of Regulation S-K as described below. We will also have RESEPC add language to certain technical report summaries to address why inferred resources are not determined or reported as discussed in our responses below:
Exhibit 96.1
The statement “None of the resources are converted to reserves” appears in Section 1.4 and the statement “No reserves are reported” appears in Section 12.
Exhibit 96.2
Our River View mine has no resources associated with the reserves as any resources it may have had were converted to reserves. As a result, the statements “All resources were converted to reserves” and “There are no resources exclusive of reserves” appear in Section 1.4.
The statements “There are no resources exclusive of reserves” and “All resources were classified as either measured or indicated and were converted to reserves” appear in Section 11.4.
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RESPEC will add the statement “Due to the level of geologic certainty, there were no inferred resources” before the statement “All resources were classified as either measured or indicated and were converted to reserves” identified above in Section 11.4.
Exhibit 96.3
The statement “All resources converted to reserves are removed from the resource estimate” appears in Section 1.4 and the statement, “The tonnages are reported on a saleable basis and exclude resources that are converted to reserves” appears in Section 11.4.
Exhibit 96.4
Our Gibson South mine has no resources associated with the reserves as any resources it may have had were converted to reserves. As a result, the statements “All resources were converted to reserves” and “There are no resources exclusive of reserves” appear in Section 1.4.
The statements “There are no resources exclusive of reserves” and “All resources were classified as either measured or indicated and were converted to reserves” appear in Section 11.4.
RESPEC will add the statement “Due to the level of geologic certainty, there were no inferred resources” before the statement “All resources were classified as either measured or indicated and were converted to reserves” identified above in Section 11.4.
Exhibit 96.5
Our Tunnel Ridge mine has no resources associated with the reserves as any resources it may have had were converted to reserves. As a result, the statements “All resources were converted to reserves” and “There are no resources exclusive of reserves” appear in Section 1.4.
The statements “There are no resources exclusive of reserves” and “All resources were classified as either measured or indicated and were converted to reserves” appear in Section 11.4.
RESPEC will add the statement “Due to the level of geologic certainty, there were no inferred resources” before the statement “All resources were classified as either measured or indicated and were converted to reserves” identified above in Section 11.4.
Section 3 – Property Description, page ES-3
8. | As the Henderson-Union and River View properties are shown to overlap geographically, Section 3.1 of Exhibits 96.1 and 96.2 should be expanded to clarify if the estimates of resources and reserves correspond to distinct and separate coal seams, without any overlap in estimation. See Item 601(b)(96)(iii)(B)(3)(i) and (vi) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and have discussed it with RESPEC, our qualified engineering firm. RESPEC will modify their technical report summaries to include the following clarifying statements in section 3.1 of each exhibit:
Exhibit 96.1:
Though there is a geographic overlap with the existing River View operation, the resources of each are associated with different coal seams (WKY7 and WKY6) or, if in the same seam (which occurs in the WKY11 and WKY9), are separated by old works and geologic features into distinct areas. There is no overlap in the resource / reserve estimation.
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Exhibit 96.2:
Though there is geographic overlap with the Henderson Union resource area, the resources are associated with different seams (West Kentucky No.7 and West Kentucky No. 6) or, if in the same seam (which occurs in the WKY11 and WKY9), are separated by old works and geologic features into distinct areas. There is no overlap in the resource / reserve estimation.
Section 11 – Mineral Resource Estimates, page ES-11
9. | We note that estimates of resources are presented in Section 11.4 of Exhibits 96.1 and 96.3 without describing the economic basis. This section should include the assumptions utilized by the qualified person in forming a view on economic viability, including the prices at which product is expected to be sold, and the mining, processing, and general and administrative costs that are expected to be incurred, which collectively establish an economic basis for the estimates. See Item 1302(d) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and have discussed it with RESPEC, our qualified engineering firm. RESPEC will modify their technical report summaries to include the following modified disclosures and modified tables in Sections 11.4 of each of the following exhibits:
Exhibit 96.1
The EIA reported the average weekly coal commodity spot price for Illinois Basin coal (the EIA price) on February 4, 2022, to be $75.50/ton (11,800 Btu, 5.0 lbs. SO2 basis). The reference price used in the economic analysis is $39.10 which is based on the QP’s review of historical pricing realized by the adjacent River View operation and proprietary third-party coal price forecasts provided by ARP. Mining and processing costs along with general and administrative costs were estimated. Table 11-4 shows the economic basis for the estimate of each seam in real 2021 U.S. dollars.
Table 11-4. Henderson Union Resources | ||||
Economic Basis for Estimates (US$/ton) | ||||
Seam | No.11 | No.9 | No.7 | No.6 |
Revenues | $ 39.10 | $ 39.10 | $ 39.10 | $ 39.10 |
Mining and Processing Costs | $ 31.93 | $ 29.82 | $ 30.58 | $ 31.49 |
General & Administrative Costs | $ 0.60 | $ 0.52 | $ 0.49 | $ 0.59 |
Exhibit 96.3
The EIA reported the average weekly coal commodity spot price for Illinois Basin coal (the EIA price) on February 4, 2022, to be $75.50/ton (11,800 Btu, 5.0 lbs. SO2 basis). The reference price used in the economic analysis is $36.27 which is based on the QP’s review of historical pricing realized by the Hamilton operation, proprietary third-party pricing forecasts, and the simple average of the EIA price as reported the first Friday of each month for the calendar years 2020 and 2021 (the 2-year average). Mining and processing costs along with general and administrative costs were estimated. Table 11-4 shows the economic basis for the estimate of each seam in real 2021 U.S. dollars.
Table 11-4. Hamilton Mine Resources | ||
Economic Basis for Estimates (US$/ton) | ||
Seam | Herrin | Springfield |
Revenues | $ 36.27 | $ 36.27 |
Mining and Processing Costs | $ 25.46 | $ 30.07 |
General & Administrative Costs | $ 0.52 | $ 0.59 |
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Section 13 – Mining Methods, page ES-13
10. | We note that quantities identified as raw tons are reported in Section 13.2 of Exhibits 96.2, 96.3, 96.4 and 96.5. This section should clarify whether the raw tons reported in the tabulations represent mined coal tonnage prior to cleaning at the preparation plants; and include the historical mined tonnage/preparation plant production, and estimated metallurgical or preparation plant recovery factors used to determine your resources/reserves. See Item 601(b)(96)(iii)(B)(11)(ii) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and have discussed it with RESPEC, our qualified engineering firm. RESPEC will modify their technical report summaries to include the following modified disclosures and modified tables in Sections 13.2 of each of the following exhibits:
Exhibit 96.2
Planned production varies according to contracted sales volume and expectations of market conditions. Table 13-1 provides historic raw tons mined before processing, preparation plant recovery, and clean recoverable tons. The forecasted raw tons mined before processing, preparation plant recovery, and clean recoverable tons contained in the economic analysis are shown in Table 13-2.
Table 13-1. Historic Production and Recovery | |||||
(tons 000's) | |||||
Category | 2017 | 2018 | 2019 | 2020 | 2021 |
Raw Tons | 13,872 | 15,701 | 19,052 | 15,106 | 15,964 |
Clean Recoverable Tons | 8,962 | 9,753 | 11,342 | 9,412 | 9,848 |
Recovery | 64.6% | 62.1% | 59.5% | 62.3% | 61.7% |
Table 13-2. Life of Reserve Tons | ||||||||||||
Life of Reserve Estimate 2022-2044 (tons 000's) | ||||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 |
Raw Tons | 17,522 | 17,579 | 17,632 | 17,596 | 17,770 | 17,451 | 17,759 | 18,149 | 19,179 | 19,395 | 19,251 | 18,866 |
Clean Recoverable Tons | 11,029 | 10,941 | 10,626 | 10,317 | 9,479 | 9,556 | 9,831 | 9,981 | 10,331 | 10,214 | 9,986 | 9,749 |
Recovery | 62.9% | 62.2% | 60.3% | 58.6% | 53.3% | 54.8% | 55.4% | 55.0% | 53.9% | 52.7% | 51.9% | 51.7% |
Table 13-2. Life of Reserve Tons | |||||||||||
Life of Reserve Estimate 2022-2044 (tons 000's) | |||||||||||
Category | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 |
Raw Tons | 18,489 | 18,119 | 17,757 | 17,401 | 17,053 | 16,712 | 16,378 | 16,050 | 15,729 | 15,415 | 9,372 |
Clean Recoverable Tons | 9,541 | 9,427 | 9,383 | 9,168 | 9,010 | 8,856 | 8,654 | 8,481 | 8,311 | 8,145 | 3,615 |
Recovery | 51.6% | 52.0% | 52.8% | 52.7% | 52.8% | 53.0% | 52.8% | 52.8% | 52.8% | 52.8% | 38.6% |
Exhibit 96.3
Planned production varies according to contracted sales volume and expectations of market conditions. Table 13-1 provides historic raw tons mined before processing, preparation plant recovery, and clean recoverable tons. The forecasted raw tons mined before processing, preparation plant recovery, and clean recoverable tons contained in the economic analysis are shown in Table 13-2.
Table 13-1. Historic Production and Recovery | |||||
(tons 000's) | |||||
Year | 2017 | 2018 | 2019 | 2020 | 2021 |
Raw Tons | 12,132 | 12,852 | 12,383 | 5,937 | 10,352 |
Clean Recoverable Tons | 6,129 | 6,299 | 5,889 | 2,623 | 4,939 |
Recovery | 50.5% | 49.0% | 47.6% | 44.2% | 47.7% |
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Table 13-2. Life of Reserve Tons | |||||||||||
Life of Reserve Estimate 2022-2042 (tons 000's) | |||||||||||
Year | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Raw Tons | 11,748 | 10,582 | 11,468 | 11,075 | 10,910 | 10,992 | 11,356 | 11,224 | 10,728 | 11,056 | 12,074 |
Clean Recoverable Tons | 5,632 | 5,544 | 6,289 | 6,270 | 6,224 | 6,252 | 6,322 | 6,709 | 6,445 | 6,186 | 6,511 |
Recovery | 47.9% | 52.4% | 54.8% | 56.6% | 57.0% | 56.9% | 55.7% | 59.8% | 60.1% | 55.9% | 53.9% |
Table 13-2. Life of Reserve Tons | ||||||||||
Life of Reserve Estimate 2022-2042 (tons 000's) | ||||||||||
Year | 2033 | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 |
Raw Tons | 11,178 | 9,461 | 9,012 | 10,086 | 9,492 | 9,656 | 10,119 | 10,871 | 10,687 | 2,428 |
Clean Recoverable Tons | 6,119 | 6,358 | 6,428 | 6,957 | 6,850 | 6,335 | 6,484 | 6,836 | 6,258 | 1,529 |
Recovery | 54.7% | 67.2% | 71.3% | 69.0% | 72.2% | 65.6% | 64.1% | 62.9% | 58.6% | 63.0% |
Exhibit 96.4
Planned production varies according to contracted sales volume and expectations of market conditions. Table 13-1 provides historic raw tons mined before processing, preparation plant recovery, and clean recoverable tons. The forecasted raw tons mined before processing, preparation plant recovery, and clean recoverable tons contained in the economic analysis are shown in Table 13-2.
Table 13-1. Historic Production and Recovery | |||||
(tons 000's) | |||||
Category | 2017 | 2018 | 2019 | 2020 | 2021 |
Raw Tons | 8,180 | 9,518 | 7,552 | 2,984 | 4,340 |
Clean Recoverable Tons | 5,956 | 6,938 | 5,490 | 2,289 | 3,290 |
Recovery | 72.8% | 72.9% | 72.7% | 76.7% | 75.8% |
Table 13-2. Life of Reserve Tons | ||||||||||
Life of Reserve Estimate 2022-2031 (tons 000's) | ||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 |
Raw Tons | 6,966 | 7,522 | 7,430 | 7,392 | 7,326 | 7,541 | 7,345 | 7,217 | 7,288 | 7,494 |
Clean Recoverable Tons | 5,240 | 5,453 | 5,381 | 5,434 | 5,215 | 5,459 | 5,148 | 5,221 | 5,023 | 4,900 |
Recovery | 75.2% | 72.5% | 72.4% | 73.5% | 71.2% | 72.4% | 70.1% | 72.3% | 68.9% | 65.4% |
Exhibit 96.5
Planned production varies according to contracted sales volume and expectations of market conditions. Table 13-1 provides historic raw tons mined before processing, preparation plant recovery, and clean recoverable tons. The forecasted raw tons mined before processing, preparation plant recovery, and clean recoverable tons contained in the economic analysis are shown in Table 13-2.
Table 13-1. Historic Production and Recovery | |||||
(tons 000's) | |||||
Year | 2017 | 2018 | 2019 | 2020 | 2021 |
Raw Tons | 14,155 | 13,358 | 14,353 | 13,059 | 13,633 |
Clean Recoverable Tons | 6,804 | 6,754 | 7,396 | 6,757 | 7,213 |
Recovery | 48.1% | 50.6% | 51.5% | 51.7% | 52.9% |
Table 13-2. Life of Reserve Tons | ||||||||
Life of Reserve Estimate 2022-2042 (tons 000's) | ||||||||
Year | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
Raw Tons | 14,715 | 13,811 | 13,495 | 13,060 | 12,163 | 12,276 | 12,432 | 12,726 |
Clean Recoverable Tons | 7,533 | 6,891 | 6,666 | 6,567 | 6,335 | 6,393 | 6,639 | 6,675 |
Recovery | 51.2% | 49.9% | 49.4% | 50.3% | 52.1% | 52.1% | 53.4% | 52.5% |
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Section 19 – Economic Analysis, page ES-19
11. | We note that Federal and State income taxes have been excluded by the qualified person in determining the economic cash flows associated with the coal deposits. Therefore, it appears that the assessments of economic viability and the resulting estimates of reserves would need to be revised to reflect expectations regarding the applicable Federal and State income taxes in order to yield estimates that are consistent with our reserve definitions. See Item 601(b)(96)(iii)(B)(19)(i) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and in response, we believe RESPEC, our qualified engineering firm, was responsive to Item 601(b)(96)(iii)(B)(19)(i) of Regulation S-K, that the assumptions used in the economic analysis to be described are those “applicable to the mineral project.” Because our coal operations are held in partnerships, the mineral projects are not subject to federal and state income taxes at the entity level, therefore we believe it is appropriate that the economic cash flows associated with the coal deposits exclude federal and state income taxes.
12. | We note that a cash flow summary is provided for your various mining projects in Section 19.1 of Exhibits 96.2, 96.3, 96.4 and 96.5. This section should also include annual cash flow forecasts that are based on your annual production schedule for the life of the projects, including line items such as revenues, operating costs, capital expenditures, royalties, taxes, and any other items that must be considered in projecting after tax cash flows. See Item 601(b)(96)(iii)(B)(19)(ii) of Regulation S-K. |
Response: We acknowledge the Staff’s comment and have discussed it with RESPEC, our qualified engineering firm RESPEC will modify their technical report summaries to include the following new table 18-2 and modified tables 18-1 and 19-1 in Sections 18 and 19 of each of the following exhibits:
Exhibit 96.2
Table 18-1. Capital Cost Estimate | ||||||||||||
Life of Reserve Estimate 2022-2044 (US$ 000's) | ||||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 |
Routine Operating Necessity | 42,029 | 56,903 | 66,523 | 49,050 | 40,130 | 34,884 | 40,941 | 60,185 | 29,293 | 26,020 | 34,613 | 42,708 |
Major Infrastructure Investment | 3,803 | - | - | 575 | - | - | - | - | - | - | - | - |
Table 18-1. Capital Cost Estimate | |||||||||||
Life of Reserve Estimate 2022-2044 (US$ 000's) | |||||||||||
Category | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 |
Routine Operating Necessity | 51,656 | 28,647 | 26,260 | 31,210 | 41,655 | 56,559 | 25,256 | 26,573 | 31,012 | 5,068 | 203 |
Major Infrastructure Investment | - | - | - | - | - | - | - | - | - | - | - |
Table 18-2. Operating Cost Estimate | ||||||||||||
Life of Reserve Estimate 2022-2044 (US$ 000's) | ||||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 |
Cash Operating Costs | 293,953 | 293,331 | 293,367 | 289,435 | 288,287 | 286,778 | 289,954 | 292,643 | 299,436 | 297,190 | 292,861 | 290,823 |
Royalties | 23,363 | 22,142 | 22,316 | 22,357 | 17,840 | 16,393 | 17,122 | 19,966 | 22,467 | 22,737 | 22,229 | 21,702 |
Depreciation | 50,157 | 47,916 | 53,334 | 52,850 | 54,362 | 49,871 | 51,791 | 50,912 | 49,375 | 47,296 | 45,647 | 44,702 |
Mining and Processing Costs | 367,473 | 363,388 | 369,018 | 364,641 | 360,490 | 353,042 | 358,867 | 363,521 | 371,278 | 367,223 | 360,737 | 357,226 |
Table 18-2. Operating Cost Estimate | |||||||||||
Life of Reserve Estimate 2022-2044 (US$ 000's) | |||||||||||
Category | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 |
Cash Operating Costs | 287,870 | 285,347 | 283,171 | 280,343 | 277,812 | 275,331 | 272,696 | 270,235 | 267,863 | 265,505 | 119,292 |
Royalties | 21,238 | 20,984 | 20,886 | 20,406 | 20,055 | 19,712 | 19,262 | 18,877 | 18,499 | 18,129 | 8,046 |
Depreciation | 43,116 | 42,689 | 42,084 | 42,554 | 42,301 | 42,170 | 41,721 | 41,746 | 36,952 | 24,736 | 7,599 |
Mining and Processing Costs | 352,224 | 349,021 | 346,141 | 343,303 | 340,168 | 337,213 | 333,679 | 330,858 | 323,314 | 308,371 | 134,937 |
Table 19-1. Cash Flow Summary | ||||||||||||
Life of Reserve Estimate 2022-2044 (US$ 000's) | ||||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 |
Revenues | 429,196 | 427,755 | 415,475 | 403,409 | 370,610 | 373,659 | 384,402 | 390,276 | 403,932 | 399,361 | 390,450 | 381,188 |
Cash Operating Costs | (293,953) | (293,331) | (293,367) | (289,435) | (288,287) | (286,778) | (289,954) | (292,643) | (299,436) | (297,190) | (292,861) | (290,823) |
Royalties | (23,363) | (22,142) | (22,316) | (22,357) | (17,840) | (16,393) | (17,122) | (19,966) | (22,467) | (22,737) | (22,229) | (21,702) |
Capital Expenditures | (45,832) | (56,903) | (66,523) | (49,625) | (40,130) | (34,884) | (40,941) | (60,185) | (29,293) | (26,020) | (34,613) | (42,708) |
Working Capital Changes | (4,745) | 3,487 | 5,331 | 1,342 | 1,571 | (936) | 756 | 2,304 | (1,095) | 1,360 | 2,322 | 815 |
Cash Flow | 61,301 | 58,867 | 38,601 | 43,334 | 25,923 | 34,669 | 37,142 | 19,786 | 51,641 | 54,774 | 43,069 | 26,770 |
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Table 19-1. Cash Flow Summary | |||||||||||
Life of Reserve Estimate 2022-2044 (US$ 000's) | |||||||||||
Category | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 |
Revenues | 373,050 | 368,601 | 366,867 | 358,454 | 352,282 | 346,274 | 338,378 | 331,610 | 324,978 | 318,478 | 143,388 |
Cash Operating Costs | (287,870) | (285,347) | (283,171) | (280,343) | (277,812) | (275,331) | (272,696) | (270,235) | (267,863) | (265,505) | (119,292) |
Royalties | (21,238) | (20,984) | (20,886) | (20,406) | (20,055) | (19,712) | (19,262) | (18,877) | (18,499) | (18,129) | (8,046) |
Capital Expenditures | (51,656) | (28,647) | (26,260) | (31,210) | (41,655) | (56,559) | (25,256) | (26,573) | (31,012) | (5,068) | (203) |
Working Capital Changes | 881 | (104) | 880 | 1,746 | 1,916 | 2,351 | (170) | 1,638 | 1,817 | 58 | 4,524 |
Cash Flow | 13,167 | 33,519 | 37,430 | 28,241 | 14,676 | (2,977) | 20,993 | 17,563 | 9,421 | 29,835 | 20,371 |
Exhibit 96.3
Table 18-1. Capital Cost Estimate | |||||||||||
Life of Reserve Estimate 2022-2042 (US$ 000's) | |||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Routine Operating Necessity | 41,789 | 30,658 | 21,819 | 23,467 | 47,393 | 30,239 | 32,383 | 20,164 | 33,680 | 36,255 | 21,922 |
Major Infrastructure Investment | - | - | - | - | - | - | - | - | - | - | - |
Table 18-1. Capital Cost Estimate | ||||||||||
Life of Reserve Estimate 2022-2042 (US$ 000's) | ||||||||||
Category | 2033 | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 |
Routine Operating Necessity | 26,657 | 27,643 | 32,251 | 34,127 | 18,417 | 21,022 | 20,765 | 33,303 | 33,985 | 6,404 |
Major Infrastructure Investment | - | - | - | - | - | - | - | - | - | - |
Table 18-2. Operating Cost Estimate | |||||||||||
Life of Reserve Estimate 2022-2042 (US$ 000's) | |||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Cash Operating Costs | 122,877 | 120,736 | 117,888 | 116,663 | 115,045 | 102,862 | 102,674 | 116,603 | 102,086 | 102,145 | 119,034 |
Royalties | 29,385 | 29,819 | 33,804 | 33,688 | 33,440 | 33,595 | 33,969 | 36,050 | 34,633 | 33,238 | 34,982 |
Depreciation | 44,600 | 42,674 | 40,283 | 28,451 | 32,390 | 33,007 | 35,881 | 30,895 | 29,288 | 26,993 | 28,084 |
Mining and Processing Costs | 196,862 | 193,230 | 191,976 | 178,802 | 180,875 | 169,464 | 172,524 | 183,549 | 166,006 | 162,375 | 182,100 |
Table 18-2. Operating Cost Estimate | ||||||||||
Life of Reserve Estimate 2022-2042 (US$ 000's) | ||||||||||
Category | 2033 | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 |
Cash Operating Costs | 112,781 | 98,103 | 96,324 | 112,598 | 108,633 | 99,692 | 110,560 | 116,203 | 114,055 | 28,719 |
Royalties | 32,876 | 34,160 | 34,539 | 37,380 | 36,804 | 34,037 | 34,840 | 36,730 | 33,624 | 8,214 |
Depreciation | 29,105 | 31,084 | 35,247 | 34,959 | 29,237 | 25,599 | 25,461 | 26,559 | 29,564 | 26,085 |
Mining and Processing Costs | 174,762 | 163,347 | 166,110 | 184,937 | 174,674 | 159,329 | 170,862 | 179,492 | 177,243 | 63,018 |
Table 19-1. Cash Flow Summary | |||||||||||
Life of Reserve Estimate 2022-2042 (US$ 000's) | |||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Revenues | 204,287 | 201,288 | 228,188 | 227,401 | 225,731 | 226,773 | 229,301 | 243,349 | 233,778 | 224,365 | 236,139 |
Cash Operating Costs | (122,877) | (120,736) | (117,888) | (116,663) | (115,045) | (102,862) | (102,674) | (116,603) | (102,086) | (102,145) | (119,034) |
Royalties | (29,385) | (29,819) | (33,804) | (33,688) | (33,440) | (33,595) | (33,969) | (36,050) | (34,633) | (33,238) | (34,982) |
Capital Expenditures | (41,789) | (30,658) | (21,819) | (23,467) | (47,393) | (30,239) | (32,383) | (20,164) | (33,680) | (36,255) | (21,922) |
Working Capital Changes | 13,282 | 3,165 | (6,245) | 570 | 3,000 | (2,074) | (168) | (773) | 1,626 | 1,504 | 212 |
Cash Flow | 23,518 | 23,239 | 48,432 | 54,153 | 32,853 | 58,003 | 60,107 | 69,759 | 65,006 | 54,232 | 60,413 |
Table 19-1. Cash Flow Summary | ||||||||||
Life of Reserve Estimate 2022-2042 (US$ 000's) | ||||||||||
Category | 2033 | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 |
Revenues | 221,921 | 230,589 | 233,144 | 252,323 | 248,434 | 229,759 | 235,182 | 247,940 | 226,968 | 57,340 |
Cash Operating Costs | (112,781) | (98,103) | (96,324) | (112,598) | (108,633) | (99,692) | (110,560) | (116,203) | (114,055) | (28,719) |
Royalties | (32,876) | (34,160) | (34,539) | (37,380) | (36,804) | (34,037) | (34,840) | (36,730) | (33,624) | (8,214) |
Capital Expenditures | (26,657) | (27,643) | (32,251) | (34,127) | (18,417) | (21,022) | (20,765) | (33,303) | (33,985) | (6,404) |
Working Capital Changes | 1,802 | (218) | 985 | 1,159 | (193) | 1,832 | 1,316 | 2,085 | 2,301 | (8,628) |
Cash Flow | 51,409 | 70,465 | 71,015 | 69,378 | 84,387 | 76,840 | 70,332 | 63,788 | 47,605 | 5,375 |
Exhibit 96.4
Table 18-1. Capital Cost Estimate | ||||||||||
Life of Reserve Estimate 2022-2031 (US$ 000's) | ||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 |
Routine Operating Necessity | 22,551 | 15,675 | 27,417 | 15,689 | 18,027 | 16,934 | 18,840 | 19,167 | 18,972 | 16,461 |
Major Infrastructure Investment | - | - | - | 1,500 | - | 15,561 | 16,760 | - | - | - |
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Table 18-2. Operating Cost Estimate | ||||||||||
Life of Reserve Estimate 2022-2031 (US$ 000's) | ||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 |
Cash Operating Costs | 105,827 | 113,280 | 111,312 | 110,220 | 110,842 | 112,881 | 111,148 | 110,888 | 110,655 | 112,355 |
Royalties | 7,520 | 7,795 | 5,458 | 6,625 | 6,410 | 7,211 | 6,117 | 6,996 | 5,499 | 6,141 |
Depreciation | 23,147 | 25,923 | 27,714 | 27,340 | 26,332 | 28,537 | 28,789 | 28,748 | 28,852 | 29,313 |
Mining and Processing Costs | 136,494 | 146,999 | 144,484 | 144,186 | 143,584 | 148,629 | 146,054 | 146,632 | 145,006 | 147,809 |
Table 19-1. Cash Flow Summary | ||||||||||
Life of Reserve Estimate 2022-2031 (US$ 000's) | ||||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 |
Revenues | 190,347 | 196,978 | 194,398 | 196,295 | 188,393 | 197,203 | 186,008 | 188,622 | 181,476 | 178,175 |
Cash Operating Costs | (105,827) | (113,280) | (111,312) | (110,220) | (110,842) | (112,881) | (111,148) | (110,888) | (110,655) | (112,355) |
Royalties | (7,520) | (7,795) | (5,458) | (6,625) | (6,410) | (7,211) | (6,117) | (6,996) | (5,499) | (6,141) |
Capital Expenditures | (22,551) | (15,675) | (27,417) | (17,189) | (18,027) | (32,494) | (35,600) | (19,167) | (18,972) | (16,461) |
Working Capital Changes | 11,271 | 3,520 | (2,250) | 2,594 | 2,187 | 2,841 | 1,241 | 1,716 | 64 | 2,291 |
Cash Flow | 65,720 | 63,748 | 47,961 | 64,854 | 55,301 | 47,457 | 34,384 | 53,288 | 46,413 | 45,509 |
Exhibit 96.5
Table 18-1. Capital Cost Estimate | ||||||||
Life of Reserve Estimate 2022-2029 (US$ 000's) | ||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
Routine Operating Necessity | 55,725 | 44,146 | 43,776 | 45,704 | 37,640 | 69,350 | 38,143 | 30,518 |
Major Infrastructure Investment | 549 | 6,200 | 10,000 | 6,700 | 6,859 | - | 9,400 | 6,859 |
Table 18-2. Operating Cost Estimate | ||||||||
Life of Reserve Estimate 2022-2029 (US$ 000's) | ||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
Cash Operating Costs | 202,396 | 196,408 | 189,771 | 179,094 | 165,892 | 161,118 | 161,032 | 160,767 |
Royalties | 9,679 | 8,823 | 8,565 | 8,408 | 8,235 | 13,579 | 17,602 | 16,771 |
Depreciation | 53,843 | 44,154 | 47,601 | 49,272 | 49,571 | 51,810 | 52,296 | 51,477 |
Mining and Processing Costs | 265,917 | 249,385 | 245,937 | 236,774 | 223,698 | 226,508 | 230,930 | 229,015 |
Table 19-1. Cash Flow Summary | ||||||||
Life of Reserve Estimate 2022-2029 (US$ 000's) | ||||||||
Category | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
Revenues | 322,630 | 294,111 | 285,499 | 280,276 | 270,365 | 272,844 | 283,360 | 286,466 |
Cash Operating Costs | (202,396) | (196,408) | (189,771) | (179,094) | (165,892) | (161,118) | (161,032) | (160,767) |
Royalties | (9,679) | (8,823) | (8,565) | (8,408) | (8,235) | (13,579) | (17,602) | (16,771) |
Capital Expenditures | (56,274) | (50,346) | (53,776) | (52,404) | (44,499) | (69,350) | (47,543) | (37,377) |
Working Capital Changes | 17,707 | 4,356 | 3,610 | 1,203 | 1,581 | 5,049 | (54) | 1,438 |
Cash Flow | 71,989 | 42,889 | 36,997 | 41,573 | 53,321 | 33,845 | 57,129 | 72,989 |
We respectively request that the Staff accept our response.
Please direct any questions or comments regarding the foregoing to the undersigned or to our counsel at Vinson & Elkins L.L.P., David Oelman at (713) 758-3708 or doelman@velaw.com.
| Very truly yours, | |
|
| |
| Alliance Resource Partners, L.P. | |
|
| |
|
| |
| By: | /s/ Brian L. Cantrell |
Brian L. Cantrell | ||
| Sr. Vice President and Chief Financial Officer |
Cc: | Eb Davis |
| Alliance Resource Partners, L.P. |
|
|
| David P. Oelman |
| Vinson & Elkins L.L.P. |
10