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Section 1: 10-Q (10-Q)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: September 30, 2017

 

OR

 

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 001-3473

 

     
“COAL KEEPS YOUR LIGHTS ON”

 

“COAL KEEPS YOUR LIGHTS ON”

HALLADOR ENERGY COMPANY

(www.halladorenergy.com)

Colorado

(State of incorporation)

 

84-1014610

(IRS Employer

Identification No.)

       

     
     

1660 Lincoln Street, Suite 2700, Denver, Colorado

(Address of principal executive offices)

 

80264-2701

(Zip Code)

 

Registrant’s telephone number: 303.839.5504

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨ 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)

 

Large accelerated filer ¨ Accelerated filer x
Non-accelerated filer ¨ Smaller reporting company ¨
(Do not check if a smaller reporting company) Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

As of November 3, 2017, we had 29,809,898 shares outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION 3
   
ITEM 1.  FINANCIAL STATEMENTS 3
   
Consolidated Balance Sheets 3
Consolidated Statements of Comprehensive Income 4
Condensed Consolidated Statements of Cash Flows 5
Consolidated Statement of Stockholders’ Equity 6
Notes to Consolidated Financial Statements 7
Report of Independent Registered Public Accounting Firm 12
   
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 13
AND RESULTS OF OPERATIONS  
   
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 17
   
ITEM 4.  CONTROLS AND PROCEDURES 17
   
PART II - OTHER INFORMATION 18
   
ITEM 4.  MINE SAFETY DISCLOSURES 18
   
ITEM 6.  EXHIBITS 18

  

  2

 

 

PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
Hallador Energy Company
Consolidated Balance Sheets
(in thousands)
(unaudited)

 

   September 30,   December 31, 
   2017   2016 
ASSETS          
Current assets:          
Cash and cash equivalents  $9,407   $9,788 
Restricted cash (Note 5)   3,428    2,817 
Certificates of deposit   2,735    7,315 
Marketable securities   1,924    1,763 
Accounts receivable   16,776    22,307 
Prepaid income taxes   1,588    - 
Coal inventory   15,121    10,100 
Parts and supply inventory   10,543    10,091 
Purchased coal contracts   2,045    8,922 
Prepaid expenses   10,401    9,647 
Total current assets   73,968    82,750 
Coal properties, at cost:          
Land and mineral rights   129,724    126,303 
Buildings and equipment   351,334    339,999 
Mine development   134,537    126,037 
Total coal properties, at cost   615,595    592,339 
Less - accumulated DD&A   (196,805)   (169,579)
Total coal properties, net   418,790    422,760 
Investment in Savoy (Note 3)   7,986    7,577 
Investment in Sunrise Energy (Note 3)   3,966    4,122 
Other assets (Note 4)   14,271    14,114 
Total assets  $518,981   $531,323 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Current portion of bank debt, net (Note 2)  $33,171   $28,796 
Accounts payable and accrued liabilities   19,822    19,773 
Total current liabilities   52,993    48,569 
Long-term liabilities:          
Bank debt, net (Note 2)   174,066    204,944 
Deferred income taxes   47,325    45,174 
Asset retirement obligations (ARO)   13,699    13,260 
Other   1,921    2,486 
Total long-term liabilities   237,011    265,864 
Total liabilities   290,004    314,433 
Stockholders' equity:          
Preferred stock, $.10 par value, 10,000 shares authorized; none issued   -    - 
Common stock, $.01 par value, 100,000 shares authorized; 29,810 and 29,413 shares outstanding, respectively   298    294 
Additional paid-in capital   97,738    93,816 
Retained earnings   130,120    122,052 
Accumulated other comprehensive income   821    728 
Total stockholders’ equity   228,977    216,890 
Total liabilities and stockholders’ equity  $518,981   $531,323 

 

See accompanying notes.

 

  3

 

  

Hallador Energy Company
Consolidated Statements of Comprehensive Income
(in thousands, except per share data)
(unaudited)

 

   Nine Months Ended   Three Months Ended 
   September 30,   September 30, 
   2017   2016   2017   2016 
Revenue:                    
Coal sales  $199,280   $207,429   $73,896   $65,360 
Equity income (loss) - Savoy   409    (42)   153    26 
Equity income (loss) - Sunrise Energy   18    (264)   16    (106)
MSHA reimbursement   1,725    1,753    89    - 
Other income   901    1,340    314    487 
Total revenue   202,333    210,216    74,468    65,767 
Costs and expenses:                    
Operating costs and expenses   138,125    142,114    54,354    46,940 
DD&A   28,533    26,180    9,729    7,942 
ARO accretion   640    764    219    260 
Coal exploration costs   566    1,168    152    354 
SG&A   12,095    8,076    2,859    2,585 
Interest (1)   9,662    12,694    3,229    2,601 
Total costs and expenses   189,621    190,996    70,542    60,682 
                     
Income before income taxes   12,712    19,220    3,926    5,085 
                     
Less income taxes:                    
Current   (1,158)   (270)   (2,532)   (270)
Deferred   2,151    3,153    2,542    1,033 
Total income taxes   993    2,883    10    763 
                     
Net income (2)  $11,719   $16,337   $3,916   $4,322 
                     
Net income per share (Note 6):                    
Basic and diluted  $0.38   $0.54   $0.13   $0.14 
                     
Weighted average shares outstanding:                    
Basic and diluted   29,603    29,251    29,774    29,252 

 

 

 

(1)  Interest expense for the first nine months of 2017 and 2016 includes $(476) and $793, respectively, for the net change in the estimated fair value of our interest rate swaps.  Such amounts were $(36) and $(955) for Q3 2017 and 2016, respectively.

(2)  There is no material difference between net income and comprehensive income.  

 

See accompanying notes.

 

  4

 

 

Hallador Energy Company

  Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   Nine Months Ended September 30, 
   2017   2016 
Operating activities:          
Cash provided by operating activities  $47,387   $43,691 
           
Investing activities:          
Capital expenditures (1)   (21,328)   (11,810)
Proceeds from sale of equipment   506    - 
Proceeds from maturities of certificates of deposit   4,580    - 
Purchase of Freelandville assets   -    (18,000)
Other   -    186 
Cash used in investing activities   (16,242)   (29,624)
           
Financing activities:          
Payments on bank debt   (27,875)   (26,492)
Bank borrowings   -    15,000 
Debt issuance costs   -    (2,090)
Dividends   (3,651)   (3,597)
Cash used in financing activities   (31,526)   (17,179)
           
Decrease in cash and cash equivalents   (381)   (3,112)
Cash and cash equivalents, beginning of period   9,788    15,930 
Cash and cash equivalents, end of period  $9,407   $12,818 

 

__________________

(1) We acquired $3.3 million in capital equipment in the first nine months of 2017 that was prepaid in a prior period.

 

See accompanying notes.

 

  5

 

  

Hallador Energy Company

Consolidated Statement of Stockholders’ Equity

(in thousands)

(unaudited)

                           

   Shares   Common Stock   Additional Paid-in Capital   Retained Earnings   AOCI*   Total 
Balance January 1, 2017   29,413   $294   $93,816   $122,052   $728   $216,890 
                               
Stock-based compensation   -    -    6,384    -    -    6,384 
                               
Stock issued on vesting of RSUs   720    4    -    -    -    4 
                               
Taxes paid on vesting of RSUs   (323)   -    (2,462)   -    -    (2,462)
                               
Dividends   -    -    -    (3,651)   -    (3,651)
                               
Net income   -    -    -    11,719    -    11,719 
                               
Other   -    -    -    -    93    93 
                               
Balance, September 30, 2017   29,810   $298   $97,738   $130,120   $821   $228,977 

 

_____________________________

*Accumulated Other Comprehensive Income

 

See accompanying notes.

 

  6

 

 

Hallador Energy Company

Notes to Consolidated Financial Statements

(unaudited)

 

(1)General Business

 

The interim financial data is unaudited; however, in our opinion, it includes all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods. The financial statements included herein have been prepared pursuant to the SEC’s rules and regulations; accordingly, certain information and footnote disclosures normally included in GAAP financial statements have been condensed or omitted.

 

The results of operations and cash flows for the nine months ended September 30, 2017, are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2017. To maintain consistency and comparability, certain 2016 amounts have been reclassified to conform to the 2017 presentation.

 

Our organization and business, the accounting policies we follow and other information, are contained in the notes to our consolidated financial statements filed as part of our 2016 Form 10-K. This quarterly report should be read in conjunction with such 10-K.

 

The consolidated financial statements include the accounts of Hallador Energy Company (the Company) and its wholly-owned subsidiary Sunrise Coal, LLC (Sunrise) and Sunrise’s wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. We are engaged in the production of steam coal from mines located in western Indiana.  

 

New Accounting Standards Issued and Adopted

 

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11").  ASU 2015-11 simplifies the subsequent measurement of inventory.  It replaces the current lower of cost or market test with the lower of cost or net realizable value test.  Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.  The new standard was applied prospectively and is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted.  The adoption of ASU 2015-11 did not have a material impact on our consolidated financial statements.

 

New Accounting Standards Issued and Not Yet Adopted

 

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company’s primary source of revenue is from the sale of coal through both short-term and long-term contracts with utility companies whereby revenue is currently recognized when risk of loss has passed to the customer. Upon adoption of this new standard, the Company believes that the timing of revenue recognition related to our coal sales will remain consistent with our current practice. The Company is currently evaluating other revenue streams to determine the potential impact related to the adoption of the standard, as well as potential disclosures required by the standard. Because we do not anticipate a change in our pattern of revenue recognition, we anticipate that neither method of adoption will have a material impact on our consolidated financial statements, other than the additional disclosure requirements which will apply to us.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02").  ASU 2016-02 increases transparency and comparability among organizations by requiring lessees to record right-to-use assets and corresponding lease liabilities on the balance sheet and disclosing key information about lease arrangements.  The new guidance will classify leases as either finance or operating (similar to current standard’s “capital” or “operating” classification), with classification affecting the pattern of income recognition in the statement of income.  ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted.  We are currently in the process of accumulating all contractual lease arrangements in order to determine the impact on our financial statements and do not believe we have significant amounts of off-balance sheet leases; accordingly, we do not expect the adoption of ASU 2016-02 to have a material impact on our consolidated financial statements.

 

  7

 

 

(2)Bank Debt

 

On March 18, 2016, we executed an amendment to our credit agreement with PNC, as administrative agent for our lenders, for the primary purpose of increasing liquidity and maintaining compliance through the maturity of the agreement in August 2019.  The revolver was reduced from $250 million to $200 million, and the term loan remains the same. Our debt at September 30, 2017, was $211 million (term-$80 million, revolver-$131 million). As of September 30, 2017, we had additional borrowing capacity of $69 million and total liquidity of $83 million.

 

Bank fees and other costs incurred in connection with the initial facility and the amendment were $9.1 million, which were deferred and are being amortized over the term of the loan. The credit facility is collateralized by substantially all of Sunrise’s assets, and we are the guarantor.

 


The amended credit facility increased the Maximum Leverage Ratio (Sunrise total funded debt/ trailing 12 months adjusted EBITDA) to those listed below:

 

Fiscal Periods Ending  Ratio
September 30, 2017 through March 31, 2018  4.25X
June 30, 2018 and September 30, 2018  4.00X
December 31, 2018  3.75X
March 31, 2019 and June 30, 2019  3.50X

 

The amended credit facility also requires a Debt Service Coverage Ratio minimum of 1.25X through the maturity of the credit facility. The amendment defines the Debt Service Coverage Ratio as Sunrise’s trailing 12 months adjusted EBITDA/annual debt service.

 

At September 30, 2017, our Maximum Leverage Ratio was 2.42, and our Debt Service Coverage Ratio was 2.19. Therefore, we were in compliance with those two ratios.

 

The interest rate on the facility ranges from LIBOR plus 2.25% to LIBOR plus 4%, depending on our leverage ratio. We entered into swap agreements to fix the LIBOR component of the interest rate to achieve an effective fixed rate of ~5% on the original term loan balance and on $100 million of the revolver. The revolver swap notional value steps down 10% each quarter which commenced on March 31, 2016.

 

At September 30, 2017, we were paying LIBOR of 1.24% plus 3.50% for a total interest rate of 4.74%. We anticipate this stepping down to LIBOR plus 3.00% in November, 2017.

 

Bank debt less debt issuance costs are presented below (in thousands):

 

    September 30,   December 31, 
   2017   2016 
Current debt  $35,000   $30,625 
Less debt issuance cost   (1,829)   (1,829)
Net current portion  $33,171   $28,796 
           
Long-term debt  $175,742   $207,992 
Less debt issuance cost   (1,676)   (3,048)
Net long-term portion  $174,066   $204,944 

 

  8

 

 

(3)Equity Method Investments

 

We own a 30.6% interest in Savoy Energy, L.P., a private company engaged in the oil and gas business primarily in the State of Michigan.

 

We also own a 50% interest in Sunrise Energy, LLC, which owns gas reserves and gathering equipment with plans to develop and operate such reserves. Sunrise Energy also plans to develop and explore for oil, gas and coal-bed methane gas reserves on or near our underground coal reserves.

 

(4)Other Assets (in thousands)

 

   September 30,   December 31, 
   2017   2016 
Other assets:          
Advanced coal royalties  $9,629   $9,296 
Marketable equity securities available for sale, at fair value (restricted)*   2,005    2,036 
Other   2,637    2,782 
Total other assets  $14,271   $14,114 

____________________

*Held by Sunrise Indemnity, Inc., our wholly owned captive insurance company.

 

(5)Self-Insurance

 

We self-insure our underground mining equipment. Such equipment is allocated among ten mining units spread out over 18 miles. The historical cost of such equipment is approximately $256 million.

 

Restricted cash of $3.4 million represents cash held and controlled by a third party and is restricted for future workers’ compensation claim payments.

 

(6)Net Income per Share

 

We compute net income per share using the two-class method, which is an allocation formula that determines net income per share for common stock and participating securities, which for us are our outstanding RSUs.

 

The following table sets forth the computation of net income allocated to common shareholders (in thousands):

 

   Nine Months Ended   Three Months Ended 
   2017   2016   2017   2016 
Numerator:                    
Net income  $11,719   $16,337   $3,916   $4,322 
Less earnings allocated to RSUs   (444)   (429)   (153)   (115)
Net income allocated to common shareholders  $11,275   $15,908   $3,763   $4,207 

 

  9

 

 

(7)Asset Impairment Review

 

Carlisle Mine

 

In December 2016, the deterioration of the North End of the Carlisle Mine (the North End), coupled with lower coal prices led us to determine that the North End could no longer be mined safely and profitably. The sealing of the North End was completed in March 2017.

 

With the Carlisle Mine remaining in hot idle status, we conducted a review of the Carlisle Mine assets as of September 30, 2017, based on estimated future net cash flows, and determined that no impairment was necessary.

 

The Carlisle Mine assets had an aggregate net carrying value of $112 million at September 30, 2017.  If in future periods we reduce our estimate of the future net cash flows attributable to the Carlisle Mine, it may result in future impairment of such assets and such charges could be significant. 

 

Bulldog Mine

 

In October 2017, we entered into an agreement to sell land associated with the Bulldog Mine for $4.9 million. As part of the transaction, we will hold the rights to repurchase the property for 8 years. Because of the likelihood of exercising the repurchase option, we will account for the sale as a financing transaction. The Bulldog Mine assets had an aggregate net carrying value of $15 million at September 30, 2017. Also in October 2017, the Illinois Department of Natural Resources (ILDNR) notified us that our mine application, along with modifications, was acceptable. The permit will be issued upon submittal of a fee and bond which is required to be submitted within 12 months of the notification. We have determined that no impairment is necessary. If estimates inherent in the assessment change, it may result in future impairment of the assets.

 

(8)Income Taxes

 

Our effective tax rate (ETR) was estimated at 8% and 15% for the nine months ended September 30, 2017 and 2016, respectively. Assuming no changes in our expected results of operations, we expect our ETR for the remainder of 2017 to be about the same as the first nine months of 2017. Our ETR differs from the statutory rate due primarily to statutory depletion in excess of tax basis, which is a permanent difference.

 

(9)Restricted Stock Units (RSUs)

  

Non-vested grants at December 31, 2016   733,000 
Granted - weighted average price per share on grant date was $7.99   1,210,000 
    Vested - weighted price per share on vesting date was $7.59   (720,500)
Forfeited   (8,000)
Non-vested grants at September 30, 2017 (1)   1,214,500 

 

(1) Following is the vesting schedule of RSUs.

 

Vesting
Year
  RSUs
Vesting
 
2017   270,000 
2018   178,250 
2019   373,750 
2020   231,250 
2021   161,250 
    1,214,500 

 

On May 25, 2017, the Hallador Energy Company 2008 Restricted Stock Unit Plan (the Plan) was amended and restated to extend the term of the Plan to May 25, 2027, and add 1,000,000 shares to the Plan.

 

At September 30, 2017, we had 1,267,917 RSUs available for future issuance.

 

  10

 

 

Upon vesting, the shares noted above had a value of $5.5 million for the nine months ended September 30, 2017, of which $438,000 was for the three months ended September 30, 2017. Under our RSU plan, participants are allowed to relinquish shares to pay for their required statutory income taxes.

 

For the nine months ended September 30, 2017 and 2016, our stock-based compensation was $6.4 million and $1.8 million, respectively. For the three months ended September 30, 2017 and 2016, our stock-based compensation was $1.0 million and $.6 million, respectively.

 

The outstanding RSUs have a value of $6.1 million based on the November 3, 2017, closing stock price of $5.02.

 

(10)Subsequent Events

 

In October 2017, we declared a dividend of $.04 per share to shareholders of record as of October 31, 2017. The dividend is payable on November 17, 2017.

 

  11

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

Hallador Energy Company

Denver, Colorado

 

We have reviewed the accompanying consolidated balance sheet of Hallador Energy Company and subsidiaries (the “Company”) as of September 30, 2017, the related consolidated statements of comprehensive income for the nine and three-month periods ended September 30, 2017 and 2016, the consolidated statements of cash flows for the nine-month periods ended September 30, 2017 and 2016, and the consolidated statement of stockholders’ equity for the nine-month period ended September 30, 2017.  These financial statements are the responsibility of the Company’s management.

 

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information referred to above for it to be in conformity with accounting principles generally accepted in the United States of America.

 

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2016, and the related consolidated statements of comprehensive income, cash flows, and stockholders’ equity for the year then ended (not presented herein); and in our report dated March 10, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

  

/s/ EKS&H LLLP

 

November 6, 2017

 

Denver, Colorado

 

  12

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion updates the MD&A section of our 2016 Form 10-K and should be read in conjunction therewith.

 

Our consolidated financial statements should also be read in conjunction with this discussion. The following analysis includes discussion of metrics on a per ton basis derived from the consolidated financial statements, which are considered non-GAAP measurements.

 

Our Coal Contracts

 

The table below (in thousands, except prices) shows our contracted tons. Some of our contracts contain language that allow our customers to increase or decrease tonnages throughout the year. The table represents the minimum and maximum tonnages we could deliver under existing contracts. In some cases, our customers are required to purchase their additional tonnage needs from us. We fully anticipate making additional sales.

 

                           Estimated 
   Minimum Tons to Be Sold   Maximum Tons to Be Sold   Prices @ 
   Priced   Unpriced   Total   Priced   Unpriced   Total   Minimum 
   Tons   Tons   Tons   Tons   Tons   Tons   Tons 
2017                                   
(last 3 months)   1,533         1,533    1,590         1,590   $40.96 
2018   4,061    -    4,061    4,788    -    4,788    40.71 
2019   2,836    810    3,646    3,903    1,210    5,113    42.70 
2020   1,810    1,199    3,009    2,210    1,791    4,001    45.57 
2021   -    2,009    2,009    -    3,001    3,001      
2022   -    2,009    2,009    -    3,001    3,001      
2023   -    1,620    1,620    -    2,420    2,420      
2024   -    810    810    -    1,210    1,210      
    10,240    8,457    18,697    12,491    12,633    25,124      

 

Unpriced tons are firm commitments, meaning we are required to ship, and our customer is required to receive said tons through the duration of the contract. The contracts provide mechanisms for establishing a market-based price. As set forth in the table above, we have 8-13 million tons committed but unpriced through 2024.  We currently have a minimum of 6.4 million tons contracted for 2017, of which 4.9 million were sold during the first nine months of 2017; we project total contracted tons for 2017 to range from 6.4 to 6.5 million. We expect 2018 sales volumes to be similar and potentially greater than 2017 sales volumes due to the addition of the Princeton Rail Loop which we anticipate being operational in Spring, 2018.

 

We expect to continue selling a significant portion of our coal under supply agreements with terms of one year or longer. Typically, customers enter into coal supply agreements to secure reliable sources of coal at predictable prices while we seek stable sources of revenue to support the investments required to open, expand and maintain, or improve productivity at the mines needed to supply these contracts. The terms of coal supply agreements result from competitive bidding and extensive negotiations with customers.  

 

Asset Impairment Review

 

See Note 7 to our consolidated financial statements.

 

  13

 

 

Liquidity and Capital Resources

 

As set forth in our Statement of Cash Flows, cash provided by operations was $47 million in 2017 and $44 million in 2016. Our CapEx budget for the next three months is $10 million, of which $6.5 million is for maintenance CapEx. Cash provided by operations for the next three months should fund our maintenance capital expenditures, debt service, and dividend.

 

As referenced in the table below, we have acquired land and begun construction of a rail loop approximately 46 miles south of our Oaktown mining complex. The rail loop is expected to become operational in Spring, 2018 and will provide us direct access to the Norfolk Southern railroad which will increase our customer reach in Indiana and the Southeast.

 

Other than our surety bonds for reclamation, we have no material off-balance sheet arrangements. Our surety bonds covering reclamation total $25 million in the event we are not able to perform.

 

Capital Expenditures (CapEx)

 

For the first nine months, capex for 2017 was $24.6 million, including $3.3 million of non-cash acquisitions, allocated as follows (in millions):

 

Oaktown – investment  $8.5 
Oaktown – maintenance CapEx   11.6 
Princeton Rail Loop   3.7 
Other projects   0.8 
Capex per the Cash Flow Statement  $24.6 

 

Results of Operations

 

Oaktown’s operating costs were $26.60/ton and $29.90/ton for the nine months and three months ended September 30, 2017, respectively. We see Oaktown’s costs ranging from $27 to $29 for the remainder of 2017. We expect SG&A for the remainder of 2017 to be $2.9 million and operating costs associated with Prosperity and Carlisle for the remainder of 2017 to be $1.5 million. Prosperity and Carlisle operating costs were $1.7 million during the three months ended September 30, 2017. We expect those costs to be $6 million in 2018.

 

  14

 

 

Quarterly coal sales and cost data (in thousands, except per ton and percentage data). Per ton calculations below are based on tons sold.

 

   4th 2016   1st 2017   2nd 2017   3rd 2017   T4Qs 
Tons produced   1,640    1,917    1,647    1,487    6,691 
Tons sold   1,739    1,555    1,548    1,786    6,628 
Coal sales  $71,495   $62,555   $62,829   $73,896   $270,775 
Average price/ton  $41.11   $40.23   $40.59   $41.38   $40.85 
Wash plant recovery in %   67%   67%   61%   69%     
Operating costs  $50,663   $39,692   $44,079   $54,354   $188,788 
Average cost/ton  $29.13   $25.53   $28.47   $30.43   $28.48 
Margin  $20,832   $22,863   $18,750   $19,542   $81,987 
Margin/ton  $11.98   $14.70   $12.11   $10.94   $12.37 
Capex  $8,022   $3,093   $10,260   $11,304   $32,679 
Maintenance capex  $5,301   $836   $6,581   $4,507   $17,225 
Maintenance capex/ton  $3.05   $.54   $4.25   $2.52   $2.60 

 

   4th 2015   1st 2016   2nd 2016   3rd 2016   T4Qs 
Tons produced   1,608    1,524    1,448    1,501    6,081 
Tons sold   1,432    1,629    1,464    1,485    6,010 
Coal sales  $65,762   $75,795   $66,274   $65,360   $273,191 
Average price/ton  $45.92   $46.53   $45.27   $44.01   $45.46 
Wash plant recovery in %   64%   65%   63%   68%     
Operating costs  $46,470   $49,777   $45,397   $46,940   $188,584 
Average cost/ton  $32.45   $30.56   $31.01   $31.61   $31.38 
Margin  $19,292   $26,018   $20,877   $18,420   $84,607 
Margin/ton  $13.47   $15.97   $14.26   $12.40   $14.08 
Capex  $4,058   $6,053   $1,822   $3,935   $15,868 
Maintenance capex  $1,047   $2,984   $904   $1,709   $6,644 
Maintenance capex/ton  $0.73   $1.83   $.62   $1.15   $1.11 

  

2017 v. 2016 (first nine months)

 

For 2017, we sold 4,889,000 tons at an average price of $40.76/ton. For 2016, we sold 4,578,000 tons at an average price of $45.31/ton. The decrease in average price per ton is the result of our contract mix, expiration of contracts, and acquisition of other contracts.

 

Operating costs averaged $28.25/ton ($26.60/ton at our operating Oaktown mines) in 2017 and $31.04/ton ($28.55 at Oaktown) in 2016.  This ~$2-3 reduction in cost was due to two primary factors.  First, we made a conscious effort to produce more tons in the first six weeks of the first quarter, in anticipation of stronger market demand. Secondly, we added new haulage equipment to some of the units at the Oaktown mines; those units are seeing production increases of ~30%.  Both of these factors combined led to a 13% increase in production over our 2016 average production.  In Q4, we anticipate the arrival of additional haulage equipment and the implementation of a new elevator at Oaktown 1. Both investments will contribute to maintaining our low-cost structure.

 

SG&A expenses are $4.0 million higher in 2017 than in 2016 due primarily to a stock bonus of $3.8 million awarded to three executives as reported in our 8-K filed May 17, 2017.

 

Our Sunrise Coal employees totaled 714 at September 30, 2017, compared to 737 at September 30, 2016.

 

  15

 

 

2017 v. 2016 (third quarter)

 

For 2017, we sold 1,786,000 tons at an average price of $41.38/ton. For 2016, we sold 1,485,000 tons at an average price of $44.01/ton. The decrease in average price per ton is the result of our contract mix, expiration of contracts, and acquisition of other contracts.

 

Operating costs averaged $30.43/ton ($29.90/ton at our operating Oaktown mines) in 2017 and $31.61/ton ($29.57 at Oaktown) in 2016.

 

Earnings (loss) per Share

 

   4th 2016   1st 2017   2nd 2017   3rd 2017 
Basic and diluted  $(.13)  $.25   $.01   $.13 

 

   4th 2015   1st 2016   2nd 2016   3rd 2016 
Basic and diluted  $.02   $.21   $.19   $.14 

  

Income Taxes

 

Our effective tax rate (ETR) was estimated at 8% and 15% for the nine months ended September 30, 2017, and 2016, respectively. Assuming no changes in our expected results of operations, we expect our ETR for the remainder of 2017 to be about the same as the first nine months. Our ETR differs from the statutory rate due primarily to statutory depletion in excess of tax basis, which is a permanent difference.

 

MSHA Reimbursements

 

Some of our legacy coal contracts allow us to pass on to our customers certain costs incurred resulting from changes in costs to comply with mandates issued by MSHA or other government agencies.  We do not recognize any revenue until our customers have notified us that they accept the charges.

 

We submitted our incurred costs for 2012 in June 2015 and received $1.75 million from one of our customers in June 2016. We received an additional payment of $1.25 million in Q2 2017 for 2012 costs. As stated above we do not record such reimbursements as revenue until they have been agreed to by our customers.

 

Incurred costs for 2013 will be submitted in Q4 2017. 2013 costs are expected to be between $2 million and $2.7 million. Such reimbursable costs for 2014 through 2016 are not expected to be material.

 

Restricted Stock Grants

 

On May 16, 2017, the Board authorized the grant and immediate vesting of 495,000 RSUs to our executives as reported in our 8-K filed May 17, 2017. On May 16, 2017, the grant and vesting date of those RSUs, the shares were valued at $7.74 per share based upon the closing price on that date.

 

Under our RSU plan, the participants are allowed to relinquish shares to pay for their required statutory income taxes. Of the 495,000 RSUs granted, 230,057 shares were relinquished back to the Company as consideration for the income taxes due.

 

As part of our executive Four-Year Compensation Plan, on June 6, 2017, the Board authorized the grant of 645,000 RSUs to our executives as reported in our 8-K filed June 9, 2017. The shares were valued at $5.3 million based upon $8.23 per share, the closing stock price on the date of grant. These RSUs vest over four years, with the first vesting date on December 16, 2018.

 

For the nine months ended September 30, 2017 and 2016, our stock-based compensation was $6.4 million and $1.8 million, respectively. For the three months ended September 30, 2017, and 2016, our stock-based compensation was $1.0 million and $.6 million, respectively.

 

  16

 

 

Bulldog Mine

 

See “Item 1. Financial Statements - Note 7. Asset Impairment Review”.

 

Princeton Rail Loop

 

As noted in the Liquidity and Capital Resources section of Management’s Discussion and Analysis, construction has begun on the Princeton Loop, a truck to rail coal loading facility that will be located 6 miles west of Princeton, Indiana, on Highway 64. The facility will include the ability to unload trucks, blend coals, load 135 car unit trains in four hours and store over 4 million tons of coal. The new facility will primarily serve utility coal plants served by Norfolk Southern Railway Company once the rail facility is completed in the spring of 2018.

 

Critical Accounting Estimates

 

We believe that the estimates of our coal reserves, our deferred tax accounts, our business acquisitions, and the estimates used in our impairment analysis are our only critical accounting estimates. The reserve estimates are used in the DD&A calculation and in our internal cash flow projections.  If these estimates turn out to be materially under or over-stated, our DD&A expense and impairment test may be affected.

 

We account for business combinations using the purchase method of accounting. The purchase method requires us to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items.

 

We have analyzed our filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We identified our federal tax return and our Indiana state tax return as “major” tax jurisdictions. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our consolidated financial position. 

 

New Accounting Pronouncements

 

See “Item 1. Financial Statements - Note 1. General Business” for a discussion of new accounting standards.

 

Yorktown Distributions

 

Yorktown Energy Partners and its affiliated partnerships (Yorktown) own approximately 18.3% of our total shares outstanding as of September 30, 2017. Yorktown has made 14 distributions to their numerous partners since May 2011. Yorktown last distributed shares in November 2016.

 

If we are advised of another Yorktown distribution, we will timely report such on a Form 8-K.

 

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

No material change from the disclosure in our 2016 Form 10-K.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls

 

We maintain a system of disclosure controls and procedures that are designed for the purpose of ensuring that information required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our CEO and CFO as appropriate to allow timely decisions regarding required disclosure.

 

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO and CFO of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective for the purposes discussed above.

 

  17

 

 

There have been no changes to our internal control over financial reporting during the quarter ended September 30, 2017, that materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Safety is a core value at Hallador Energy and our Subsidiaries. As such we have dedicated a great deal of time, energy, and resources to creating a culture of safety. Thus, we are very proud of the mine rescue team at Sunrise Coal who’s current list of achievements include reigning National Champions of the Nationwide Mine Rescue Skills Championship and Governor’s Award recipient (1st place) at the 2017 Indiana Mine Rescue Association Contest.

 

See Exhibit 95 to this Form 10-Q for a listing of our mine safety violations.

 

ITEM 6. EXHIBITS

 

15 Letter Regarding Unaudited Interim Financial Information
31.1 SOX 302 Certification
31.2 SOX 302 Certification
32 SOX 906 Certification
95 Mine Safety Report
101 Interactive Files

 

  18

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  HALLADOR ENERGY COMPANY
   
Date: November 6, 2017 /s/ Lawrence D. Martin
  Lawrence D. Martin, CFO and CAO

 

  19

 

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Section 2: EX-15 (EXHIBIT 15)

 

Exhibit 15     Letter Regarding Unaudited Interim Financial Information

 

Hallador Energy Company

 

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Hallador Energy Company for the periods ended September 30, 2017, and 2016, as indicated in our report dated November 6, 2017. Because we did not perform an audit, we expressed no opinion on that information.

 

We are aware that our report referred to above, which is included in your Form 10-Q for the quarter ended September 30, 2017, is incorporated by reference in Registration Statement Nos. 333-163431 and 333-171778 of Hallador Energy Company on Form S-8.

 

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

 

/s/ EKS&H LLLP

November 6, 2017

 

Denver, Colorado

 

 

 

 

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Section 3: EX-31.1 (EXHIBIT 31.1)

 

Exhibit 31.1

 

CERTIFICATION

 

I, Brent K. Bilsland, certify that:

 

1.       I have reviewed this quarterly report on Form 10-Q of Hallador Energy Company;

 

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.       The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.       The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

 

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

  

November 6, 2017

/s/ Brent K. Bilsland

Brent K. Bilsland, President and CEO

 

 

 

 

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Section 4: EX-31.2 (EXHIBIT 31.2)

 

Exhibit 31.2

 

CERTIFICATION

 

I, Lawrence D. Martin, certify that:

 

1.       I have reviewed this quarterly report on Form 10-Q of Hallador Energy Company;

 

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.       The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

e)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

f)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

g)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

h)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.       The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

 

c)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

d)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

  

November 6, 2017

/s/ Lawrence D. Martin

Lawrence D. Martin, CFO

 

 

 

 

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Section 5: EX-32 (EXHIBIT 32)

 

Exhibit 32

 

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report (the "Report"), of Hallador Energy Company (the "Company"), on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof the undersigned, in the capacities and date indicated below, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

November 6, 2017    
  By:  /s/ Brent K. Bilsland  
    Brent K. Bilsland, President and CEO
     
  By: /s/ Lawrence D. Martin  
    Lawrence D. Martin, CFO

 

 

 

 

 

 

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Section 6: EX-95 (EXHIBIT 95)

 

Exhibit 95 Mine Safety Disclosures

 

Our principles are safety, honesty, and compliance. We firmly believe that these values compose a dedicated workforce and with that, come high production. The core to this is our strong training programs that include accident prevention, workplace inspection and examination, emergency response, and compliance. We work with the Federal and State regulatory agencies to help eliminate safety and health hazards from our workplace and increase safety and compliance awareness throughout the mining industry.  Sunrise has not had a fatality since its establishment in 2005.

 

Sunrise is regulated by MSHA under the Federal Mine Safety and Health Act of 1977 (“Mine Act”). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. We present information below regarding certain violations, which MSHA has issued with respect to our mines. While assessing this information please consider that the number and cost of violations will vary depending on the MSHA inspector and can be contested and appealed, and in that process, are often reduced in severity and amount, and are sometimes dismissed. We are currently contesting two MSHA citations.

 

Sunrise has not been issued written notice from MSHA of a pattern of, or the potential to have a pattern of, violations of mandatory health or safety standards that are of such a nature as could significantly and substantially cause and effect health or safety standards under section 104(e) of the Mine Act.

 

The table that follows outlines citations and orders issued to us by MSHA during the first nine months of 2017. The citations and orders outlined below may differ from MSHA`s data retrieval system due to timing, special assessed citations, and other factors.

 

Definitions:

 

Section 104(a) Significant and Substantial Citations “S&S”: An alleged violation of a mining safety or health standard or regulation where there exists a reasonable likelihood that the hazard outlined will result in an injury or illness of a serious nature.

 

Section 104(b) Orders:  Failure to abate a 104(a) citation within the period of time prescribed by MSHA. The result of which is an order of immediate withdraw of non-essential persons from the affected area until MSHA determines the violation has been corrected.

 

Section 104(d) Citations and Orders: An alleged unwarrantable failure to comply with mandatory health and safety standards.

 

Section 107(a) Orders: An order of withdraw for situations where MSHA has determined that an imminent danger exists.

 

Section 110(b) (2) Violations: An alleged flagrant violation issued by MSHA under section 110(b) (2) of the Mine Act.

 

Pattern or Potential Pattern of Violations: A pattern of violations of mandatory health or safety standards that are of such a nature as could have significantly and substantially contributed to the cause and effect of coal mine health or safety hazards under section 104(e) of the Mine Act or a potential to have such a pattern.

 

Contest of Citations, Orders, or Proposed Penalties: A contest proceeding may be filed with the Commission by the operator or miners/miner’s representative to challenge the issuance or penalty of a citation or order issued by MSHA.

 

 

 

 

Carlisle Mine                                    

 

   Section   Section   Section   Section   Section   Proposed 
   104(a)   104(b)   104(d)   107(a)   110(b)(2)   MSHA 
   Citations   Citations   Citations/Orders   Orders   Violations   Assessments 
                       (In thousands) 
January   2    0    0    0    0   $1.35 
February   1    0    0    0    0    0.40 
March   1    0    0    0    0    0.35 
April   0    0    0    0    0    0.10 
May   0    0    0    0    0    0.35 
June   0    0    0    0    0    0.00 
July   0    0    0    0    0    0.10 
August   0    0    0    0    0    0.10 
September   0    0    0    0    0    0.00 
Totals   4    0    0    0    0   $2.75 

                                     

Oaktown Fuels No. 1                                    

 

   Section   Section   Section   Section   Section   Proposed 
   104(a)   104(b)   104(d)   107(a)   110(b)(2)   MSHA 
   Citations   Citations   Citations/Orders   Orders   Violations   Assessments 
                       (In thousands) 
January   1    0    0    0    0   $4.05 
February   2    0    0    0    0    2.85 
March   2    0    0    0    0    3.10 
April   3    0    0    0    0    3.40 
May   5    0    0    0    0    9.40 
June   3    0    0    0    0    1.65 
July   5    0    0    0    0    4.15 
August   2    0    0    0    0    3.50 
September   1    0    0    0    0    2.00 
Totals   24    0    0    0    0   $34.10 

 

 

 

                                     

Oaktown Fuels No. 2                                    

 

   Section   Section   Section   Section   Section   Proposed 
   104(a)   104(b)   104(d)   107(a)   110(b)(2)   MSHA 
   Citations   Citations   Citations/Orders   Orders   Violations   Assessments 
                       (In thousands) 
January   2    0    0    0    0   $4.65 
February   4    0    0    0    0    5.80 
March   2    0    0    0    0    3.00 
April   0    0    0    0    0    0.35 
May   1    0    0    0    0    3.35 
June   1    0    0    0    0    1.25 
July   0    0    0    0    0    0.70 
August   0    0    0    0    0    1.20 
September   1    0    0    0    0    4.90 
Totals   11    0    0    0    0   $25.20 

                                    

Oaktown Fuels Preparation Plant                                

  

   Section   Section   Section   Section   Section   Proposed 
   104(a)   104(b)   104(d)   107(a)   110(b)(2)   MSHA 
   Citations   Citations   Citations/Orders   Orders   Violations   Assessments 
                       (In thousands) 
January   0    0    0    0    0   $0.00 
February   0    0    0    0    0    0.00 
March   0    0    0    0    0    0.00 
April   0    0    0    0    0    0.00 
May   1    0    0    0    0    0.30 
June   0    0    0    0    0    0.10 
July   1    0    0    0    0    0.10 
August   0    0    0    0    0    0.10 
September   0    0    0    0    0    0.50 
Totals   2    0    0    0    0   $1.10 

                                    

Ace in the Hole Mine:  None                                    

Carlisle Prep Plant:  None                                    

Prosperity Mine: None                                    

 

 

 

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