HCC - NYSE

Good afternoon. My name is Drew and I will be your conference call operator today. At this time, I would like to welcome everyone to the Warrior Second Quarter 2024 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded and will be available for replay on the company's website. I would like to turn the conference over to D'Andre Wright, Vice President of External Affairs and Communications. Please go ahead.

[Operator Instructions]. The first question comes from Lucas Pipes with B. Riley Securities.

Then the cost guidance related to that conservatism as well. You had a nice improvement there quarter-over-quarter.

This is Dale. If you look at our year-to-date, we're right on track of where we said we would be in our range. When you look at where prices are and versus what our guidance is built on, we're pretty much in line with all that. All that seems to be actually unfolding as we said. We feel good about where we are.

The next question comes from Nathan Martin with The Benchmark Company.

Nate, I'll just add to that. If you look at last year, if you remember third quarter, we really pushed a lot of [indiscernible] to introduce our products into Asia. Then we pulled back in the fourth quarter. We only shipped about 1.5 million last year. We try to take advantage of the market situations when we can. If we think the latter half of the year prices are going to increase, then we're going to be a little more patient with our approach. Q3 could be a little lower and Q4 could be a little higher. It just really depends on what the market and customer demand is, so that we maximize price.

Then maybe just one last question on Blue Creek. It's one I get from investors fairly often. Looking to the slide deck, obviously, some of these numbers are a little stale at this point, but specifically focused on the cash costs and the possibilities around the Blue Creek product, I know you guys have said that it should eventually help to lower the overall average cash cost for Warrior. Your slide deck is still showing around $70 or so. But maybe could we just get some thoughts on where that number could look like once you guys update some of these economics, especially given some of the inflationary pressures that we've already applied to the CapEx budget.

No, good question, Nate. We do expect to be updating all those project economics. As we said, the scope change last year really had no effect on – because we had the improvement of transportation costs and everything. So no net impact on the overall economics. I actually think they're going to be better with a higher met coal price in the assumption. So sometime next year, we'll get that information back out. But that's $70 all in before. We've been talking about the inflation and supplies and everything being 30%, 35%. So if you tack that on, you're starting to get to where we think it'll be. Now, I don't know if that's the exact number, but that's a pretty good idea of where we're probably headed right now.

[Operator Instructions]. The next question comes from Katja Jancic with BMO Capital Markets.