Genesis Energy(GEL)2025-03-03 18:13Mineral Resources and Reserves - As of December 31, 2024, the company holds mineral leases covering a total area of 87,637 acres across 23 townships, primarily in the "Westvaco" and "Granger" blocks[289]. - The U.S. Geological Survey estimates that the trona deposits in the Green River Basin contain a cumulative resource of over 100 billion tons of trona[287]. - The company’s trona mining operations exploit three trona beds, with reserves contained in four trona beds[287]. - The mineral resources and reserves are classified according to subpart 1300 of Regulation S-K, which requires disclosure of both mineral resources and mineral reserves[279]. - The company’s mineral resources do not have demonstrated economic value unless classified as mineral reserves[280]. - The company has not filed a new technical report summary as there was no material change in mineral reserves or resources since the last report[281]. - Total measured and indicated mineral resources for the Granger Contiguous Leases remained stable at 762 million short tons with a grade of 85% trona as of December 31, 2024[317]. - Total measured and indicated mineral resources for the Westvaco Contiguous Leases also remained stable at 1,225 million short tons with a grade of 87% trona as of December 31, 2024[317]. - Total trona reserves decreased by approximately 7 million short tons, or 0.8%, from 865 million short tons in 2023 to 858 million short tons in 2024[321]. - Dry mining reserves at year-end 2024 were approximately 4 million short tons lower than 2023 due to extraction activities[321]. - Brine mining reserves at year-end 2024 decreased by approximately 3 million short tons, or 0.7%, compared to 2023[322]. Mining Operations and Facilities - The Westvaco site has been in continuous operation since 1947, initially established by Westvaco Chemical Corporation[297]. - The Westvaco facility has a processing capacity of 300,000 tons per year for refined soda ash, utilizing a sesquicarbonate process[297]. - The Granger site transitioned from underground mining to brine (solution) mining in 2005, enhancing operational efficiency[301]. - The Granger facility has been operational for over 35 years, with well-developed infrastructure including rail loadout and product storage facilities[302]. - The Westvaco site is strategically located 18 miles west of Green River, Wyoming, with access to Interstate 80 and the Union Pacific Railroad[296]. - The Granger site is accessible via a spur line connecting to the Union Pacific Railroad, facilitating transportation logistics[300]. - The area surrounding both sites provides a sufficient talent pool for staffing and management needs[296][300]. - The Westvaco site includes comprehensive infrastructure such as electrical generation, natural gas pipelines, and water distribution facilities[298]. - The Granger site has ample buildings for offices, labs, and maintenance shops, supporting operational needs[302]. - The acquisition of both facilities by Genesis Alkali Wyoming, LP occurred in September 2017, following their previous ownership by Tronox Alkali[297][301]. Production and Financial Performance - The total production from the trona property for the fiscal year ended December 31, 2024, was 4,405,000 tons, an increase of approximately 13.2% from 3,889,000 tons in 2023[316]. - The Granger Optimization Project achieved first production in Q4 2023, with an estimated incremental annual production capacity of 750,000 tons in 2024[316]. - The total book value of the Westvaco and Granger sites as of December 31, 2024, was approximately 1,668 million in 2023[315]. - The Westvaco site has been profitably mining and processing trona ore for over 75 years, with ongoing capital expenditures to sustain operations[311]. - The Granger site has been profitably mining and processing trona ore for over 35 years, with capital expenditures focused on sustaining production and completing the Granger Optimization Project[314]. Financial Management and Risk - The company’s senior secured credit facility is guaranteed by substantially all restricted subsidiaries and secured by liens on a significant portion of its assets, including trona leases[290]. - As of December 31, 2024, the company had $291.0 million of debt outstanding under its senior secured credit facility, with a 10% change in the Term SOFR rate resulting in an immaterial impact on net loss[503]. - The economic analysis of mineral reserves is based on 2022 dollars with an annual inflation rate of 2.5% applied to revenue, operating costs, and capital spending[326]. - Cash production costs encompass dry mining, brine mining, processing, royalties, production taxes, insurance, and administrative costs, with historical averages used for operating costs[326]. - Capital expenditures are primarily for sustaining production, assumed to be similar to recent history with inflation aligned to product pricing escalation[326]. - The company utilizes various derivative instruments to manage commodity price risk, including crude oil, natural gas, and freight rates[497]. - The company has entered into derivative instruments that will settle between January 2025 and June 2025, related to its Alkali Business sold on February 28, 2025[497]. - The company manages risks of volatility in NaOH prices by indexing prices for NaHS sales to the market price for NaOH in most contracts[501]. Regulatory and Operational Compliance - Royalty payments for mineral leases range from 2% to 8% of the sales value of soda ash products[289]. - All leases and permits remain valid throughout the life of the operation, with new permits to be obtained for reserves outside current mining permit areas[326]. - The production schedule for mining and processing remaining reserves is based on existing production capacity[326]. - Future secondary brine mining recoveries are expected to be similar to those demonstrated in certain areas of the Westvaco mine[326].