Core Insights - American Resources Corp is leveraging blockchain and AI to enhance the critical minerals supply chain, focusing on traceability and ethical sourcing [1][3][6] Technology and Innovation - The company, through its subsidiary ReElement Technologies and in partnership with SAGINT, is implementing tokenization to ensure full traceability of rare earth and critical minerals from source to end customer [1][2] - The blockchain infrastructure supports secure payment systems and creates a marketplace for trading surplus products outside traditional supply routes, particularly those controlled by China [2][5] Market Demand and Customer Base - The platform is particularly appealing to defense-sector customers who require stringent traceability of their materials [2][4] - American Resources has established relationships with multiple customers in the defense sector, emphasizing the importance of knowing the origin of products [4][6] Ethical Sourcing and Compliance - The company is committed to ethical sourcing practices, especially in regions like Africa, where the platform helps verify compliant and safe production processes [3][6] Cost Efficiency and Competitive Advantage - The implementation of AI-driven simulation software is expected to reduce costs by 10% to 20%, positioning the company as a potential lowest-cost producer globally [7] - The combination of blockchain and AI technologies is seen as a disruptive force in the supply chain, enhancing transparency, trust, and efficiency [6][7]

Core Points - The US and Australia have formalized a deal to enhance the supply of rare earths and critical minerals in response to China's market dominance [1] - The agreement emphasizes the importance of these materials in advanced technologies for both commercial and defense sectors [2] - A key component of the framework is increased cooperation to secure supplies necessary for manufacturing defense technologies [2] Supply Chain and Financing - The US and Australia will mobilize government and private sector support for capital and operational expenditures, aiming to provide at least $1 billion (A$1.54 billion) in financing for projects within six months [3] - The framework includes streamlining permitting processes for mining and processing operations while ensuring compliance with domestic regulations [4] Trade Practices and Recycling - The agreement aims to protect domestic markets from unfair trade practices and develop standards-based systems for pricing [4] - Collaboration on recycling technologies and managing critical minerals scrap is included to enhance supply chain resilience [4] Governance and Framework - A US-Australia Critical Minerals Supply Security Response Group will be established to identify priority minerals and vulnerabilities in supply chains, led by the US Secretary of Energy and the Australian Minister for Resources [5] - The agreement is a framework for cooperation and does not create legally binding obligations, allowing participants to discontinue involvement with written notice [5]

Business Overview - Australian Strategic Materials (ASM) is building a global rare earths and critical minerals business[15] - ASM aims to provide high-tech metals to solve current and future challenges[15] - The company's strategy includes mine to metals approach[25] Korean Metals Plant (KMP) - KMP has an installed capacity of 1,300 tonnes per annum (tpa) of NdFeB alloy[34] - Approximately US$60 million has been invested in KMP to date[34] - KMP is undergoing Phase 2 ramp-up to a designed capacity of 3,600 tpa NdFeB alloy with an additional capital expenditure of approximately US$8 million[34] - Targeted annual revenue for KMP based on estimated Phase 2 maximum production is approximately US$204 million, with approximately US$26 million in annual EBITDA[37] Dubbo Project - The Heap Leach Option reduces the capital forecast cost by approximately 56% from A$167 billion to A$740 million compared to the 2021 Optimisation Feasibility Study[47] - The Heap Leach Option is projected to produce 1,157 tpa of NdPr oxide, 13 tpa of Tb oxide, and 72 tpa of Dy oxide[47] - The Heap Leach Option has a pre-tax NPV of approximately A$1,468 million and an IRR of 229%[47] Financial Status - As of June 30, 2025, ASM had approximately A$190 million in cash[62] - A$249 million was raised via SPP & institutional placement to accelerate growth initiatives[28]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported a cash cost per ton sold of $103, which is a decrease from $108 in 2024, indicating improved efficiency [22][50] - Adjusted EBITDA for Q2 was $9 million, down from $10 million in Q1, with a net loss of $14 million compared to a loss of $9 million in Q1 [52][54] - The company anticipates full year 2025 production at the low end of the previous range of 3.9 million to 4.3 million tons, and sales at the low end of 4.1 million to 4.5 million tons [54][56] Business Line Data and Key Metrics Changes - The metallurgical coal benchmark prices dropped approximately 25% year-on-year, impacting revenue despite record production levels [20][52] - The company achieved a record level of quarterly production with tons sold reaching 1.1 million in Q2, up from 900,000 in Q1 [51] - The Brook Mine, focused on rare earths and critical minerals, is expected to begin pilot plant operations in the fall, with commercial production anticipated by 2027, accelerated from 2028 [11][32][56] Market Data and Key Metrics Changes - Chinese coking coal prices surged 38% in July, indicating a potential recovery in the market, while U.S. met coal producers have reduced production due to pricing pressures [20][34] - The Australian Premium Low Vol Index increased to $183.2 per ton, reflecting a recovery from earlier lows [35] - The company expects U.S. apparent steel consumption to rebound by 3% to 4% in 2026, supporting met coal pricing [38] Company Strategy and Development Direction - The company is transitioning to a dual platform model, producing both metallurgical coal and rare earths, aiming to enhance its market position and growth trajectory [6][25] - Plans to expand rare earth mine production to exceed the currently permitted 2.5 million tons per annum and to increase oxide processing capacity [7][11] - The company is actively engaging with U.S. government agencies to support the development of its critical minerals business, emphasizing national security [13][66] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding pricing recovery in the met coal market, driven by improved fundamentals in China and India [23][34] - The company is focused on optimizing production and sales strategies to avoid lower-margin spot sales, particularly in Asia [54][87] - Management highlighted the importance of government support for domestic critical mineral production to level the playing field against foreign competition [64][66] Other Important Information - The Brook Mine has a defined TREO base of 1.7 million tons, with ongoing exploration expected to expand reserves [8][10] - The company has received a five-year renewal of its mining permit for the Brook Mine, allowing continued development [48] - The preliminary economic analysis from Fluor indicates a pre-tax net present value of $1.2 billion for the Brook Mine project, with an IRR of 38% [55] Q&A Session Summary Question: Impact on quality mix and sales mix between domestic and export - Management confirmed no expected impact on quality and indicated a sales mix of roughly two-thirds seaborne and one-third domestic [60][61] Question: Estimated savings from the production tax credit - Management estimated savings in the range of $15 million per year on EBITDA from the production tax credit [62] Question: Discussions with the administration regarding price support for critical minerals - Management acknowledged ongoing discussions with the government but did not provide specifics, emphasizing the need for support to counteract foreign pricing manipulation [64][66] Question: Price assumptions for scandium and balancing supply with demand - Management indicated that demand for scandium is expected to grow significantly if a Western source is established, with discussions suggesting potential market growth [70][72] Question: Key growth drivers in the scandium market - Management identified the aerospace industry as a primary end user for scandium, with potential applications in automotive and other sectors [80][81]