American Resources Corp (AREC)

[RandyKCMO]

NEWS... 1/3/2018 Starting the New Year off right!

American Resources Corporation Signs Multi-Year Metallurgical Coal Sale Agreement

https://finance.yahoo.com/news/american-resources-corporation-signs-multi-110000931.html


THE NUMBERS ARE IMPRESSIVE!

1. They have a commitment to purchase (resale) 50,000 tons of metallurgical coking coal monthly. That comes out to 600,000 tons annually.

2. The purchase agreement is valued at $58 Million Annually or $92 per ton (using the $110 Million over two years).

3. These 50,000 tons of monthly production represent 30% of this mine complex's production.

"The currently contracted tonnages under this agreement represent approximately 30% of McCoy Elkhorn Coal's metallurgical coal production capabilities based on forecasted capex over the next year."

4. PLUS "The customer has also provided a capital investment to finish the Carnegie 1 mine rehabilitation and expansion, as well as production at the company's PointRock mine." How much investment capital (NON-DILUTIVE) is involved. From the press release it's not clear, but comparing the annual value of year one to year two... I'm guessing they contributed $3,000,000 up front.

Looking to 2019 and beyond... the numbers are almost scary good:

If this 600,000 tons represents 30% if annualized capex tonnage, we can expect a minimum of 2,000,000 tons of total production OR somewhere around of $194,000,000 revenue for 2019. If I'm remembering correctly, they were projecting $45-50 Million revenue in 2018.

And that works out to a fourfold increase in revenue. Can you say 400% annualized growth?

AND... These projected numbers are only a projection of part of their overall production!!!

They have other mines and recently acquired properties are not included in these projections.