Q4 2023 American Resources Corp Earnings Call
Participants
Mark Laverghetta; Vice President, Corporate Finance & Communications; American Resources Corp
Kirk Taylor; Chief Financial Officer; American Resources Corp
Mark Jensen; Chairman of the Board, Chief Executive Officer; American Resources Corp
Heiko Ihle; Analyst; H.C. Wainwright & Co.
Mike Niehuser; Analyst; Roth Capital Partners LLC
Steve Segal; Analyst; KBB Asset Management
Kyle Gallagher; Analyst; Merrill Lynch Wealth Management
Presentation
Operator
And yes, greetings, and welcome to the American Resources Corporation Fourth Quarter and Year End 2023 conference call. (Operator Instructions) As reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Mark Laverghetta, Vice President, Corporate Finance and Communications. Thank you. You may begin.
Mark Laverghetta
Thank you, and good afternoon, everyone. On behalf of American Resources Corp., I'd like to welcome everyone to our fourth quarter and full year 2023 Conference Call and Business Update. We always welcome this opportunity to provide an update on our businesses and discuss our accomplishments we made over the past several months and how we are uniquely positioned within the end-markets that we serve for our American carbon American Metals energy element technologies divisions.
On the call today is Mark Jensen, our CEO; Taylor, our Chief Financial Officer; and Tom Sauve, our President. We'll provide some prepared remarks today and then we'll go into some question and answers.
Before we kick it off, I'd like to remind everyone of our normal cautionary statement. Certain statements discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from the results discussed in the forward-looking statements.
Considering forward-looking statements, you should keep in mind the risk factors, uncertainties and other cautionary statements which are laid out in there press releases and SEC filings. We also do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information future events or otherwise.
I'm Lastly for anyone wanting to ask a question today, I believe you will need to dial in by phone to get into the queue. I'm going to begin today with a few comments from our Chief Financial Officer. Taylor?
Kirk Taylor
Thank you, market. Your own Virginia, you mailed out of your day to listen to our fourth quarter earnings call. In the past several months, we've continued our execution on solidifying our strategic positioning we've done within our addressable markets, which we believe positions ourselves and our company for attractive long-term value creation in doing so in conjunction with the directive of our Strategic Committee from our Board of Directors and embarked on several initiatives to unbundle our unique platform of assets, better unlock value for all of our shareholders and position each entity as a stand-alone company.
Much of our focus over the past several months has been to position and prepare both American carbon as well as relevant technologies stand-alone public companies. These efforts include securing growth capital such as a $45 million captive industrial bond for Wyoming County of complex, and our recently announced or as of today announced securing $150 million net of fees, industrial development bonds involved, what we believe is the nation's first and this current lithium and critical mining mineral refinery in Kentucky.
Both these examples show that we have successfully capitalize near term and intermediate term growth plans for both American carbon as well as relevant technologies.
The closing of our second tax-exempt bond note a tremendous milestone for our Company as we continue to put the necessary pieces in place to execute on our mission is another monumental moment for a real element Technologies division and for our country.
Our Kentucky lithium projects and such a great example how we can efficiently execute our nation's energy transition goals. The planned transformation of our dock County facility enables us to utilize control land resources already in place infrastructure and a tremendously skilled workforce to quickly meet the needs of the rapidly growing energy storage market along with utilizing our groundbreaking refining process to produce ultra-pure battery-grade products in an environmentally safe, low cost process.
The region of the country, this region of the country is well positioned geographically, but in developing battery belt and codes have a long-standing history of pride and know how the raw material commodity processing industry appreciate the leadership of not counting Kentucky and working with us and sharing our vision and again, working with HilltopSecurities and their exceptional execution throughout this process.
We're also in the process of working to secure additional sources of project development and growth capital through the tax-exempt bond market, government incentives and grants, as well as bringing strong equity partners, both strategic and financial matters across North American carbon, American Metals & Rail Technologies. I'll briefly go over year end American resources.
Consolidated summary over the past year showcase our operational flexibility while also prioritizing the most accretive uses of capital at securing additional non-dilutive capital to position our unique set of assets and execute on our value-creating initiatives.
Our full year '23 revenues of $16.7 million, which is a decline from 2022. Our ads are attributed to our decision to allocate capital, the most accretive uses throughout all of our businesses, three element, American Metals and American carbon. As such, our management and Board chose to aggressively advance the development of our Element technologies, which include operating expansion, doubles no facility for customer qualification and validation.
Large-scale domestic project development, which includes the Marion, super campus as well as the Kentucky lithium project international expansion and into our we feel the world-class team and procuring feedstock and offtake agreements.
Additionally, while we have also been focused on streamlining our balance sheet and continuing to reduce our bonding costs, our long-term environmental liability at the corporate level and at the operating subsidiary level. As such, we chose to keep our metallurgical carbon extraction and processing activities idle in the development stage while working aggressively to mitigate ongoing environmental liabilities attached to that permits that we acquired through previous bankruptcies of prior legacy producers throughout the year, we did not take on any meaningful new operational debt.
And the only new project that we took was associations for the tax, a bond for the development of our Wyoming County, Virginia mining complex. As of today, our current shares outstanding just over $79.1 million Class A common shares cash on hand at the end of 2023, including funds held for development in Wyoming County for count by $37.3 million.
And again, as a reminder, all of our excess cash is held in PIC limits as a top tier U.S. based bank. Our unique platform of assets is in a tremendous position to deliver attractive returns and value to our shareholders. I can now turn the call back over to Mark McGettrick for some additional comments. Mark?
Mark Laverghetta
Thanks, Kirk. I'm going to make a few comments on the Element technologies as we frequently state are the Element Technologies division represents an incredibly exciting and very strategic opportunity for us. We've never been involved with an entity that, in our opinion, has as much upside than the element. Our mission has always been focused on how to most efficiently and effectively deploy critical mental refining outside of China.
And it has always been our belief that attempting to deploy legacy Chinese refining technologies in the US or Europe. Really any other part of the industrialized world would pose real challenges. Those types of facilities and technologies are extremely expensive to build and operate due to the harsh chemicals, waste output and maintenance at large scale and are not sustainable outside of China.
Given the projected growth in demand, the geopolitical landscape, the monopolistic position. China has facilitated over the past couple of decades and there and the rapid execution we've achieved to date, realignment is uniquely positioned to solve complicated and pressing problems that exist today. As such, we sit at where I say is the intersection of critical mineral supply chain, health and resiliency and national security interests.
But we continue to strategically position ourselves in the global supply chain for critical minerals. It is becoming more and more evident that we are separating ourselves from the pack as the preeminent refining solution outside of China and the most efficient critical mineral refining platform in the world, our ability to produce high-purity lithium products, battery elements, rare earth oxides and critical defense elements for both recycled feedstocks as well as from natural feedstocks, showcases our platform's flexibility and certainly differentiates differentiates us from anyone else out there.
While our platform's flexibility uniquely positions us across multiple supply chains, we also have to stay focused on our particular end markets we serve. And as we continue to execute and scale, those end markets are the production of rare earth oxides that are predominantly used for the manufacturing of permanent magnets, which are critical components within high-efficiency motors and applications such as electric vehicles, windmill turbines, power tools as well as critical defense technologies and also the production of either ultrapure lithium carbonate or lithium hydroxide, which are precursors for battery cathode that are used in a variety of lithium ion battery technologies.
And then as well, another end market is critical defense elements. These are highly unique for certain defense or military applications. The feedstocks that we're currently most focused on are both primary ores as well as recycled feedstocks which, again, it contributes to the unique aspect and our unique positioning throughout the global marketplace.
And these feedstocks include end of life rare earth permanent magnets, which can come to us as magnets themselves as or part of decommissioned wind turbines, electric vehicle rotors and motors or any other consumer goods such as power tools and other iWays. This is really where we cut our teeth and how it began the Element technologies with our partners at Purdue University in extracting the rare earth elements from the magnets and refining them back into magnet grade rare earth oxides.
Another key feedstock for us is black mass, which is shredded cathode material from lithium lithium excuse me, lithium ion batteries and lithium ion battery waste or scrap, not all black mass is the same or there is a very wide range of qualities and a variety of different battery chemistries that have different inherent elements and minerals would have taken in black mass from well over a dozen producers worldwide and validated the efficacy of our technology.
It is important to note that the battery recycling industry's competency is really in the collection and aggregation of batteries and shredding them to produce a black mass material. Black mass cannot be used in the manufacturing of new cathode or batteries and requires further refinement of the material to produce battery grade producer precursor products.
Competency of those platforms is not separating the high value elements in black mass and refining the back into battery-grade precursor products that is where we step in. Additionally, our ability to handle different types of black mask chemistries is another distinct differentiator of ours.
Typically, battery shredders require NMC nickel, manganese, cobalt type battery chemistries in order to monetize the inherent nickel cobalt value, while most, if not all of the lithium has either lost or wasted. A lot of NMC black mass are sold today, into China for refinement, which we believe will eventually be restricted or banned.
And we are having success as a value added partner to separate and refine NMC based elements for certain recycling platforms all over the world. However, our ability to at, however, our ability to economically refine LSP. or lithium iron phosphate black mass is extremely unique, and we believe we are the only ones in the world that can economically extract the lithium and refined it back to battery-grade product.
LFP chemistry is the largest subsegment of lithium ion battery chemistry today in the world and growing, which also sets us apart from any other critical mineral refining platform and showcases the value of our platform to the recycling industry. Our value added position in the recycling market and a sustainable supplier of critical minerals is strategically important as we move towards a highly mineral dependent electrified economy.
And from our perspective, traditional solvent based processing methods don't work efficiently within the recycling industry for a variety of reasons, including performance CapEx and OpEx fundamentals. Those challenges are beginning to manifest themselves in a big way across the recycling industry are powered by every element product offering, which is a collaborative and flexible refining service within the recycling industry has tremendous growth opportunities to efficiently scale alongside the growth of the recycling industry while also being able to adapt to different and evolving battery chemistries.
And we are beginning to see the success with some early adopters and partners while recycling feedstocks are important from a sustainability perspective and provide us a tremendous opportunity. Natural Aur's will allow us to move the needle faster to meet the rapidly growing demand of the energy storage market. Our current focus is mainly Hard Rock lithium bearing ores, given the efficiency of our process and technology to refined lithium very cost-effectively. However, we also currently are working on different resource types, including cobalt, nickel bearing ores, unique and specific critical critical mineral defense, Metso Minerals.
And we are also in the early stages of incorporating rare-earth DOORS into our development platform. Our commercial qualification plant in Noblesville, Indiana has been extremely busy taking in these different feedstocks and validating our process and products with a variety of existing and potential partners in a variety of industries, including the renewable renewable energy space, automobile OEMs, battery recycling, consumer power tools and miners of minerals and ores from across the globe.
These customer qualification and validation processes have sometimes been lengthy, sometimes taking over a year, but they have also been successful in showcasing our distinct advantages. Additionally, our noble facility has been hard at work utilizing these feedstocks to validate and design our process at larger commercial scale for our two US-based large-scale projects in that County, Kentucky and Marion, Indiana, while also other co-located facilities in the United States and abroad.
Our two large-scale US-based critical mineral refining project exemplify how we are leading the charge and our unique uniquely equipped to address probably the largest chokepoint in the critical mineral supply chain, which we believe is midstream processing and refining. Our Kentucky lithium project is up cycling one of our carbon processing facilities in Eastern Kentucky and transforming it into a large-scale critical mineral refined refinery with initial focus on hard rock lithium ores as its primary feedstock.
It is currently being designed with an initial capacity to produce 15,000 tons per year of battery-grade lithium, and we'll have the ability to incrementally add modular capacity beyond that. As previously discussed, this project is now funded with the closing of our tax-exempt bond. We announced today, and I cannot think of another project that defines energy transition better.
Our Marion, Indiana, super site project is converting what was once a beacon of U.S. innovation and manufacturing it was once the largest television manufacturing facility in the world and is transferring transforming it into a first of its kind critical and rare earth mineral refining campus with the focus on recycled feedstock.
This facility will be undergoing has been undergoing renovations and is being designed with initial capacity to produce 5,000 metric tons of battery-grade lithium and 1,000 tons of rare earth oxides per year. I cannot think of a nother project that defines the reshoring of U.S. manufacturing better than this project. Our innovative and advanced separation and purification methods using chromatography replaced the guts within a typical typical hydrometallurgical process.
In essence, we use a modified version of hydromet, but without the harsh solvents and assets that are typically used in the separation phase of refinement. This allows us to displace the task that conventional mining methods used in China and what many are trying to attempt to deploy outside of China. We are lower cost and more efficient because we utilize a smaller footprint. We don't use harsh chemicals, meaning our OpEx is much lower and our environmental footprint is much cleaner.
Our process is modular scalable, contributing to a meaningfully lower CapEx. Also, our speed to market is faster than anyone else. Disruptive technologies comes down, in my opinion, to cost and know-how, and we are in a unique and fortunate position to have both our intellectual property has been developed and commercialized with approximately 40 years and over $40 million invested across multiple industries.
Our best-in-class team leverages the know-how from the research and development, the commercialization and operational expertise, coupled with our asset base and relationships to execute on our mission. And we are able to produce high demand products cost competitively, if not lower than China. We believe our platform technology is an important linchpin in making the United States competitive within the electrified car economy. As well as for national security objectives.
The value proposition for every element is the world needs advancements in refining these raw materials that power our modern day technologies. And we believe we provide the most efficient solution while also being in the lead position to do so. We truly believe the Element has the opportunity to create substantial and meaningful value for our shareholders.
And the decisions we make and the time associated around the entire process, while sometimes certain things being out of our control are based on maximizing that value, the very best that we can. I'd like to now turn it over to Mark Jensen for some additional comments. Mark?
Mark Jensen
Thanks, Mark, and thanks, everyone, for joining. I would also like to applaud our entire team for their efforts, diligent planning and positioning of all of our assets. We're a unique company. We have three platforms underneath one umbrella.
Those assets are being fairly valued and more importantly, we recognize that what we're focused on doing today is positioning our assets to unlock that value to give our team members, the tools that they need to execute upon that plan to drive value for our shareholders through individualized entities upon the separation of what they're able to accomplish the past several months have been highly focused on preparing for these visits this positioning of these businesses for the separation and operation of stand-alone companies.
That means and that involves having Board members in place for corporate governance, having the team members in place for execution and giving them the tools that they need to take these businesses to the next level. Thankfully, we are very well suited to do that.
Today we have boards in place for each one of our divisions. We have teams in place for each one of our divisions and we have the assets in place and technology in place to absolutely crush it. We are focused on driving the highest-value aspects of our business forward for the long term.
We have shared and communicated a number of very significant milestones that we've been able to achieve and we have a number of significant milestones yet to come, but we are in a very favorable position within the marketplace, not only at the American Carbon division where we have some nameplate assets that are some of the lowest cost mining operations that are getting ready to ramp up production aggressively between our Wyoming and McCoy complexes as well as our real in the Technologies division, which Mark and Kirk and Valencia have sharing some of the opportunities that we have in front of ourselves.
We're extremely excited about these entities and we're extremely excited about where they can go upon the separation of the businesses so that they have their core focus and their ability to focus solely on their operations over the course of the last quarter, we have been investing heavily into the business. It's Wyoming has been developing from the tax-exempt bond.
Macquarie has been positioning the ramp-up of our Carnegie mines and re element has been focused on proving out and running production in our Navajo facility, but developing our Kentucky lithium site, our Marion site, as well as our international opportunities that we have made significant milestones on as in the world of critical minerals. The supply chains are broken.
We rely upon China for 95% of everything we do. Our military our commercial enterprises. And the only thing they all care about is cost. We can provide products at the same cost if not better than what China can do today as a game-changer. We're going to break the monopoly. We're going to bring technology to the forefront, and we're going to execute on our mission, and we're going to do that in a very rewarding way to our shareholders. We've been laying the groundwork to that.
We put the assets in place. We've proven that the technology works and works extremely well. And our operational team has done a phenomenal job at that. Now we're putting the financing in place with the $150 million taxes amount because today and other tax-exempt bond, we're working on as we speak, we've applied for government grants. We'll see if we get them. We also have a significant number of international financing operations that are in place that could unlock our international efforts, especially in Africa.
They need what we offer. We offer refining solutions that they can't get anywhere else other than China. And that product goes to China doesn't develop a manufacturing society. It's exploitation where we're focused on developing economic relationships. Our technology enabled that developed at a pretty University here in Indiana. We're extremely proud of that. We're extremely proud of the efforts that are pretty pretty team has put in place and the support that they've given our operational team to drive our technology forward.
Our team has worked countless hours to be where we're at today today. It's about running production every day in our Nobles, though, facility and gearing up for our Kentucky site as well as our Marion site. Our team has been working countless hours over in Africa and traveling numerous times to over there to develop the relationships and share what we bring differently to the table to drive economic value for our shareholders. Perlos Thompson has been leading our American Carbon division to position these assets to light the fire of production at low cost.
Everybody wants revenue on a daily basis we care about long-term value. We care about making sure we turn these mines on to optimize them. We've reduced environmental liability significantly over the course of the last year, including over the last quarter and will showcase that here shortly. Our intent is to spin these assets off and ramp up production at all divisions, and we're going to do that. And we're going to share that news here very, very shortly. I'll talk about that more further early under this call.
As Kirk mentioned, we have not taken our foot off the gas. We've been aggressively planning, working positioning to execute on the strategy. We spun off our NovaStar asset, a phenomenal business, gotten won contracts with the Air Force and the Army through defense and working on getting through their S-1 process the IPO later this year.
We will very shortly here next week announced when we're spinning off our American Carbon division so that we can ramp up production there and the team can focus solely on being the lowest cost producer of met coal to the steel industry. And we'll then shortly thereafter announce where we're spinning off our element into its own standalone platforms who has a clean focus on being the world's supplier of refining solutions for critical minerals beyond China.
And I truly believe we will be the only solution that works economically in this country as well as in others for that separation purification step, which is really the heart of what we do. We've also been focused on putting these non-dilutive capital financing's in place to protect our shareholders. We can hit the easy button tomorrow easily. We can go out and raise equity capital and do it every other company does, but we actually care our team actually cares.
Our team is motivated by the shares and equity that we all own and that our family zone that's important to us. So we don't hit the easy button. We fight the hard fight to put our position businesses in place to be successful because the $45 million tax-exempt bond and one of the most challenging markets you can find with a phenomenal investors.
And that capital is being used to develop the Wyoming County complex to be an absolutely phenomenal complexes to focus on producing met coal and then a by-product of producing concentrates of rare earth elements of which we'll share those results very shortly, which are better than or just one of the largest mining operations that have announced the earth elements to date on a parts per million basis, absolutely phenomenal results.
And we have announced that we've had offers to sell the coal business and the numbers, the values were good. We were okay with them. The concern was around structure. We're not going to put our investors at risk of not getting paid the full consideration of what those assets are worth. So our focus next week, we'll announce the record date and the payment date of when we're going to spin American carbon off now we are focused on still monetizing the assets and we're still going to evaluate opportunities to monetize those assets.
We have signed agreements, binding agreements to sell the dean complex that they didn't pay us. It's an unfortunate that being said, there was a lot of money and we're pursuing that in court as we speak, and I think we'll get it. I feel very confident about that, feel very confident about our position to make sure we get that money for our shareholders.
We welcome. We also have other interest in other buyers that are interested in some of the non-core non-focused assets for the quality of production that we're looking at targeting. And then post spinoff, we are looking at further expanding American carbon and the team as per the American carbon executive team has presented a plan of growth for the division organically as well as acquisitions in the West Virginia region as well as in other materials.
During the course of the last up to a period of time, we acquired an iron ore asset, which is a phenomenal asset. We're doing a ton of work there right now on evaluating the reserves and spending, actually a few team members up that region here very shortly to further look at how we bring that into production and look at technologies to monetize that most economically. So it's not only looking at the net carbon division, but looking at the entire infrastructure landscape of how do we produce products to monetize that division and expand that division in the American Carbon division.
We as I mentioned, we will announce next week, the date we'll provide clarity of when we're going to dividend it out to our underlying shareholders. And then we'll share the growth curve of how we anticipate that we have equity interests. We have debt interest to further finance and expand that division and we're going to focus on growing that division to make sure that the shareholders receive the entire rewarded for what it's worth relevant.
Same thing, we filed the Form 10 for both of these divisions. We're going to push that through. We're working on closing the financing that was previously announced. We have great interest in it. We don't need a lot of that with the tax-exempt bonds we just closed. So we're going to trying to focus on minimizing dilution, but bringing in the necessary capital to continue to move the business forward as quickly as we possibly can. As we see the opportunity today, every element has had us focusing on allocating capital to make sure that we're allocating in the most accretive way.
Our Marion facility is going for certificate of occupancy in the next few weeks, and we believe we'll get at our ability to finalize the renovations there over the next few months to start deploying equipment, there will enable us to expand our production and Marion as well as expand our refining capacity. And also and that's a beautiful thing for us. We are the only refining facility in the United States that can do that can perform at the purity levels that we're able to achieve that are necessary to build a domestic battery industry internationally.
We've made huge strides within our international footprint for element. We've had conversations with groups out of Canada, Australia, numerous groups out of Africa, some of our largest sourcing of materials that are coming out of Germany that we're refining that we'll be refining and renewable fuel and marine facilities establishing those international relationships takes time. That being said, we've been putting a lot of groundwork there.
And I think we've collapsed that time significantly due to the efforts of our team members and the willingness and passion to travel to spend time with their families to build a team and build a platform that can help us grow to that next level very, very quickly. And ultimately, it's about partnerships. We've announced numerous partnerships over the course of the last year, we've announced DDP.
We have numerous partnerships. We're not allowed to mention the name. It's unfortunate that being said, they're great partners. And ultimately, we're getting calls from numerous other partners that need the solutions that we provide. Over the course of the next year, we'll be able to talk much more openly about who these partners are. We hope as we continue to expand the relationships with them, not only from feedstocks, but also the sales side.
And we also look to continue to expand all of our platforms on international footprint and closing, we remain very confident in the positioning of all of our assets and the long term value that they provide to our shareholders. We remain remain hyper focused on locking unlocking that value. That's why we're focused on these distributions. That's why we're focused on spinning them off a micro-cap conglomerate doesn't make sense.
We're fortunate that we built a micro-cap conglomerate. We did it based on effort. We did it based on. We put ourselves out there, the technologies worked the platform work. The platform is positioned and now it's time to let them go off on their own and be successful. And we have the teams to be able to do that.
These milestones were the distribution of NovaStar shares over the course of the last quarter, closing of our tax-exempt bond to finance both our Carbon division as well as our RE element division and our ability to showcase the results of what our technology can produce. We have ample liquidity on our balance sheet.
We do not foresee us needing to issue equity at a rack level to raise additional capital. We do want to position the individual entities to do their financing on the American carbon side and the relevant time American resources post distribution of these assets will expand aggressively into the critical mineral space.
On the mining front, we have numerous opportunities in front of us as well as on the utilizations of the products that we produce through very good partnerships that we've been working on for numerous numerous months, if not years.
Now, just to reiterate, the management and the families of our management are some of the largest shareholders of American resources. Our management team is committed to maximizing the value of all of our businesses and believe our continued execution and unbundling of these assets will help us achieve this. Thank you for all your time, and I'd like to turn it back over to the moderator for some Q&A.
Question and Answer Session
Operator
Thank you. We'll now conduct our question and answer session. (Operator Instructions)
Tycho Elan, HC. Wainwright.
Heiko Ihle
And Mark, can you hear me? Alright.
Mark Jensen
I can.
Heiko Ihle
Perfect. Excellent. You got these executed MOUs with the German battery recycling platforms that Doosan felt deal and the battery damage service for you, obviously, arguably a very big market opportunity there. But can you maybe give some some sort of figures of what you internally think how big of a market opportunity there might be in your collaboration going forward?
Mark Jensen
Yes, absolutely. So it isn't all I mean phenomenal partners that can have better data services. These are called actually just I think it's putting on the putting on a boat one of our containers and it got a 50 or 53 foot container, a 40 foot container. And with some black math as we speak and the attractiveness about the partnerships and what we do, we're one of the few players, if not the only that can recycle LFP batteries profitably. And that's due to the technology, the process flow of how we extract lithium out of it, the size and scale of what that means.
I mean, so do themselves a phenomenal company, phenomenal technology and their business model is to operate the existing plant, a recycling footprint, but also license it out. And what's great about that is we've got a really fun collaborative relationship with them where they refer us to their partners are also buying their centers. So this can be pretty substantial.
Our goal right now. I mean, we're in Noblesville, small footprint, 7,000 square feet, our Marion facilities, 400,000 square feet. So getting certificate of occupancy there is obviously quite important for us to rapidly expand our production. But the meaningful nature of it is one, obviously, domestically, there's a lot of black master data goes to China from the U.S. Unfortunately, that's going to stop.
I think, Syngenta, and we'll be the solution here for that where the we are the solution for refining here domestically in Europe. I believe it's the same thing. We're getting beyond relationships there, but also helping them source product as well. And those relationships can be very meaningful for us from a revenue basis going in for the next 12, 24 months.
Heiko Ihle
That's very helpful. And also your royalty income in 2023 was quite strong. Just looking over the income statement, can you provide some longer-term guidance on where we should model royalty income going forward in 2014 and after that And speaking of longer-term modeling to wish do you think we should CGLA. in 2024, please?
Mark Jensen
So that's a good question. So I mean, G&A, so you got to understand we're adding platform right now. So I'll answer your last question first, it's going to change pretty dramatically because the divisions are going to separate. So each division will have their own G&A, but it will be a fraction of what the obviously holding company has today. And so our G&A overall, though, will, I think stay pretty consistently where it's at today, it's not going to rise a substantial amount, obviously, with revenue increase that will, and we're getting ready to do that. So we're obviously getting ready to expand our revenue base.
On the Element side, we're getting ready very quickly here to expand our revenue base from the mining side as with the spin-off announcement and next week and then also the ramp of production. The So G&A will be, I would say, on a whole if you look across the entire platform will be pretty consistent with that today. It's not going to not going to expand a lot if any, from the royalty income.
I would also say it's pretty consistent. It'll be I think it will be pretty consistent going forward based on where it's at right now.
Heiko Ihle
Fair enough. Appreciate I'll get back in queue. Thanks, guys.
Mark Jensen
Excellent. Thank you.
Operator
Mike Niehuser, Roth Capital.
Mike Niehuser
Yes, you can hear me okay.
Operator
Yes, coming through and yes, thank you.
Mike Niehuser
Sorry about that. Dion, you mentioned that your of your very bold statements about breaking the monopoly with China and I have to get you to explore that a little bit more. And I think and that hinges on cost. And as you look at costs, when you when you make that statement, comparing yourself with China and having lower costs, is that on a like A., a currency basis or does that impute an environmental savings?
I get the feeling that both China and you are the other ends of the spectrum as far as the environmental impact winter? Yes, they've tortured. You know, they've tortured some areas in China and you're a nothing Burger in the environmental footprint. So are you figuring that into breaking the monopoly? Or are you just looking at cold hard dollars?
Mark Jensen
Yes, that's a great question, Mike. Nobody cares. Nobody in reality about non-cash costs, meaning that you could have the best environmental footprint in the world. But if you're 50% more expenses, nobody is going to buy it. You have to compete head to head on costs now thankfully, we do that because we have a great environmental process. Our technology is environmentally sound. We don't use harsh chemicals. It's closed loop systems. We don't discharge elements in the waterways we've come in resins versus the motion and chemicals.
So we compete on cost because of our environmental footprint, but we compete head-to-head on cost. That's the only thing that matters when it comes to commodities. And I don't care what anybody says critical minerals are nothing but a commodity. We've been in the commodity industry for over 20 years. And if you can't compete on cost, you don't win and you don't survive.
So absolutely. When I say we could be head to head against China. Again, not us as China, but it kind of at the May are the dominant producer of rare earth elements today, and they are the dominant producer of critical minerals. They also refined the OBM zirconium, all the other products that we rely upon in our great country. We compete head-to-head on cost for those products in the United States, not counting logistics, not counting any non-cash numbers.
We compete based on dollars not only compete we win based on. If you look at lithium demand, I guess to give you example, lithium got down as low at about $13 a kilogram lithium carbonate which is one of them we produce, we can produce hydroxide. We focus on carbonate today when you saw lithium get down to $13 our scale and our 5,000 metric tons of lithium carbonate out of our Marion facility or or Kentucky lithium site were profitable. Some significant piece of that.
China and other players have been the industry started cutting back production because the legacy method is expensive. That's a phenomenal place to be when we are the natural hedge we have in place this cost structure, and that's because of the team and the way that we push our team and the way that we focus on making sure that we survive commodity markets. So yes, that is purely Mike.
Mike Niehuser
Excellent answer. Thank you. On the American carbon side, Tom, I'm not it's not clear to me what's operating and what is it sounds like that the Carnegie mines that have been operating are not now is that incorrect help?
Mark Jensen
That's that is correct. So we are let me let me say we're at. So we're getting ready. We're doing development in Wyoming, and we spent a lot of time and energy doing development at Carnegie. We've also been working with some international customers that would be long term customer bases outside of our traditional platform and who we sell product to today, it gives us more stability problem with some of our existing customers is it's been on-again, off-again really challenging to run a mining business and applied that what is a phenomenal situation for us right now is the quality of the products that we have, the ability to produce a lot of product from a very low cost.
Our Wyoming complexes and mid-vol complex. We have over 30 some million dollars to allocate on the deployment of that, also deploying the concentration technology, the ability to concentrate critical minerals, which we'll share that over the next week or two, the results we got, which are phenomenal as a byproduct, not mining critical minerals and rare earth elements and coal-based deposits. You never make money doing that you're going to be able to go and make money doing it as a byproduct, but where we add on the mining side.
So why are we not operating today as one, the market is on-again, off-again and two, we wanted to be in a position where we can ramp up Wyoming and Carnegie in relatively similar timeframe and most importantly, ramping up at very, very low cost structure. So Carnegie one, there was a single section mine for a long time. We finished over the last quarter, developing the second section there.
So we can operate it today as a two section mine, Carnegie two is already developed as a two section line, the ability to ramp those mines up to get to that 60,000 tonnes a month number based on the efforts of our teams and have a fairly low cost way. We didn't allocate a ton of capital to the Macquarie complex over the last year or last six months, I should say that being said, tireless and the operational team did a phenomenal job there to position that and set them up for success.
These are effectively Verge in mind and pretty low-cost less than five miles from our beverage branch facility. So ramping the production up there, tying that in with high-vol B product by High-Vol A. and tying that in with our mid-vol product out of Wyoming, make an absolutely phenomenal blender at that 100 to 120,000 tons a month when they're both fully ramped up, and that's where we wanted to be upon the spinoff of American carbon.
So that's our Carnegie will probably be the first open up and open up a few months before Wyoming Palm, which is M&A. And then I would say over the next 30 days and timing it with the spinoff and then Wyoming will be ramping kind of due to a ramp up in Wyoming on ramp up here shortly thereafter.
Mike Niehuser
But when we look at the first quarter, our business will be reported soon. We shouldn't be expecting a lot in the way of carbon sales, if any? And could I assume they're going to start to see a little bit of a trickle of rare sales product sales start to come in?
Mark Jensen
in the first quarter, you will not see a lot of revenue in the second quarter, you'll start to see all that from both sides.
Mike Niehuser
I imagine you're going to have a very, very, very busy second quarter.
Mark Jensen
I will say that I think our teams worked seven days a week for the last couple of years. But our but the getting all the corporate and getting spin outs done are really complicated excluding Innovia, Sarah, one thing, but we got that done and completed and all the shareholders that held shares will have to have those never fair shares and their accounts that they don't call their prime brokers and make sure that they deliver them to you because they've been delivered out of our I'm getting American carbon spun out, which over the next we'll announce it next week will be very timely and give the team focus right that you just want to be motivated based on their success.
And so putting those into their isolated platforms gives them the ability to focus on their growth and making sure that they have the corporate structure in place to do that. So that we're I mean, we're I will say we made a lot of groundwork for now it's focused on ramping up production than our Nobles Gulf. So the team's done a phenomenal job of the elements that they're focused on, ramping up production, running production every day I think we're going to three years and we're going to almost essentially three shifts at our Navajo facility, which is awesome.
I really need to see the planning there. And then at the mining side that materializes pretty impressively wanting to ramp up and get them get the complexes at full throttle based on where they're at today. I mean, this is the first time we've ever been in a position where the mines can be fully expanded and working with some of the international customers. And we have that were of finalizing some some relationships with hopefully very shortly, well put us in a really good position.
Mike Niehuser
And if I can ask one more question, and we're really at an historic time and our country's history or the economy's history here of reestablishing a rare earth circular supply chain and not only with the ores, but also with the recent announcements for end-of-life materials from an auto unnamed auto manufacturer along with the relationship you have with a couple of battery or unseasoned magnet manufacturers. Can I get a comment upon the state of?
We are connecting the links of the circular economy because I don't think it will ever be quite like this again. And it's really starting to take form in multiple ways with the work you've done and on that should be my last question.
Mark Jensen
Yes, that's a we could talk all we can talk for a while about. I mean, if you look back over the course of the last two years of one communicating what we can do showing what we can do and then bring it into partners that are better for that. And I will say today, people aren't as scared as they should be on the supply chains that we have today. Our military relies upon China for a product that's geared to Brothers and the military, if they didn't have the tools they needed to defend ourself that they'd be that would be a scary situation.
And so today, getting those recycling, I mean, there's billions of dollars of magnets that landfill every year in the United States alone and batteries, most of the biomass, meaning the threat of lithium-ion batteries, they go to China. And that's unfortunate then a lot of those companies were funded by the U.S. government that are sending product in China that's got to stop.
That being said, it's starting to stop. We're starting to get a substantial amount of feedstock and Chris, more women on our team, our Chief Commercial Officer, has done a phenomenal job of opening up some doors and bringing in product that we can produce now versus we're thankfully going to three shifts because we have so much product coming in.
That's a great thing and focusing aggressively on the Marion facility to ramp up that 400,000 square foot facility, 42 acres. That's huge for the technology that we utilize the recycle market phenomenal. That's a phenomenal platform for us because we can refine that. We're replacing that bottleneck. We're replacing what's done in China today. Lifecycle tried to do it. They failed not had their digs, Adam, but they couldn't build a traditional Hyderabad plant.
It's one really hard to permit to really hard to operate solvent extraction in the United States I think is almost impossible to operate economically and Republic were impossible to maintain over the long term and then on the rare side knows where producer in the U.S. trying to do that today, Greg has done a great job in the company. I just think you're going to struggle with that, we can provide the solutions that we have had.
We have a platform that we're going to be announcing here shortly that on the Element side that showcases how we can work collaboratively with those partners to bring that separation purification step to them to help them be better to we need to protect our supply chain for our country and ultimately it works really well for us as a business because that's revenue and growth.
And then on the order side, why we're in Africa, Africa is one of the most resource-rich nations in the world. It's one of the fastest growing populations in the world, and we have phenomenal relationships there between exchange rate. If I'm Vice President of National Strategy, banking cater fee overwhelm and Africa, Bubba Kumar, who just joined us on the Board.
I've read element technologies, Africa, just a phenomenal group of people that know Africa really well, but more importantly, know how to work with Africa and not exploit them and work in a partnership-based model with them to help drive value locally in the countries, but also give us a tremendous amount of feedstock that we can process domestically as well as in Africa to drive economic growth there, but also secure our supply chains here of ethanol.
And so it's about securing those feedstocks, which which takes time. I mean, you think you can go to somebody and say, hey, give me your end-of-life magnets because you're not doing anything with them today. That's an easy conversation to have. You'd be surprised if it's not their core focus of every day, what they get paid to do, it takes some time to get comfortable to do that. And But thankfully, we're at that point now where it's starting to flow in, and that's getting us putting us in a really, really good position, too, really ramp up aggressively.
Mike Niehuser
And how soon do you think you'll see product coming out of Marion, Marion facility?
Mark Jensen
Lithium carbonate,we produce what we produce lithium carbonate every day. And so as Mark mentioned during the call, you have to go through the trial and getting the getting through the qualification process and work. I think we're in the qualification process with seven different companies today, maybe more than we ship them samples or lithium carbonate starting off allied brands and it goes to kilograms, then it goes to tons.
And obviously now over the course of the next through our period of time, we will that we're actually starting to sell that product to one of our groups. And when we sell into a few others and obviously, on the rare side, as we start to expand, we've announced contracts with a USA where it's been a great collaborative partnership. We have and we have partnerships and a phenomenal company.
One of the coolest Magna companies I've ever had been working in this industry for a long time now, and their technology is absolutely phenomenal for producing magnets, great check them out, I'm on the board of the company. We're an investor in the company as well. So extremely excited about them. But most are we produce lithium carbonate every day. Our goal when we get some get Oxy and Marion is to start working on the magnet lines there for recycling antibody manner and preprocessing those magnets and then start turning. Those are Doxis as well.
Mike Niehuser
Okay. Thank you
Mark Jensen
Excellent, thank you.
Operator
Steve Segal, KBB Asset Management.
Steve Segal
Hey, Mark. How are you? Great job in getting all this stuff done for you. I was just wondering, I had two questions. One is unknown on spin-off of carbon. Will Wyoming be part of that and then like. Okay, I guess that's the question.
Mark Jensen
Yes. So Wyoming will be parts of Wyoming County will be part of it. So let me put it when we spin off carbon. It's spinning off the American Carbon Complex with that also comes the ability to produce concentrates. So were Ramaco announced that they are they have billions of dollars worth of shares in Wyoming, the state. But we in theory, would have the same amount of errors in Kentucky and West Virginia.
And what we don't spend money on research reports and all that stuff. But what comes with the American Carbon Complex is one, obviously, the met coal division, the iron ore platform that we bought. We're working on another acquisition as we speak. Around the infrastructure marketplace.
And we have a couple of mining assets in what in West Virginia we're working on as well that we can post spinoff can look at on the acquisition front, but also comes with that the rate of concentration side. So as we produce net carbon, the waste material, the ionic clay, that come out of that spread, the rare earth element in it. So we'll look to also extract that as well, which would which is part of the initial phase of that is Wyoming County in Washington.
Steve Segal
Okay. Thank you for explaining that? And then though, though the bond that you announced today for that facility, that could be on the redevelopment side, correct?
Mark Jensen
Yes, that's that's we all know that that's refining lithium ores from international sources. So predominantly from Africa, working on a partnership in Australia as well as in Canada. The byproduct that comes out of that actually goes into the ceramic industry. So there's really not a whole lot of waste that will come around there.
But that's part of the element that's being built on are not counting complex that we have and we have a complex there has about $3.5 million of reclamation liabilities sitting on the American carbon platform that we've assigned to re element that will get cleaned up here, those bonds will be removed less liability for carbon, better platform for them for every element and Gray, a nominal workforce.
That knows how to process commodities. I mean our team and people, we've been we've been employing since the region since 2015, 16, and they know how to process commodities better than anybody in the world. And we're going to we're going to give them a long-term stable opportunity for employment to stay in their communities
Steve Segal
Right. And that's not it's not breaking as coal, right?
Mark Jensen
It's a tug less and less environmentally harsh process and coal. And but it's more contained inside of a warehouse. There's no water discharge. We produce cleaner water than what comes into our system. So I mean, it just gave you give them a really good working environment and less people in their community, stay in their community. And that community is international right now I mean, not County is in rough shape. They have no business is going there, Bill Robinson about highest levels.
And that's so we're going to really help anybody as of now in general, not from a lack of a development, lack of digital executive. They've done a phenomenal job in recruiting to bring us in. But the rest of the community has nothing going forward. And so some works, I mean, but there's a phenomenal workforce there, and they but they leave the area to work every day. So we're excited about helping bring a business there that can provide jobs there and start reducing some of the corruption that takes place there.
Steve Segal
Okay. And then the other question is I know it's an unnamed domestic manufacturer but can you talk about what your what your agreement kind of entails now of a hybrid without detail too many details and where you see it going to?
Mark Jensen
Yes, that was though we have we have numerous partnerships as we speak. I can't disclose all the names because it is confidential just given their business where they're at in the world today, but we take from on the magnet front, we take power tools and we take rotors and we take old motors and come from the automotive industry from the power tool market from the wind turbine market. And then so we have I can't I can't disclose names other than EDP Renewables who's been very have a very great partnership for us.
They have a ton of REpower is coming coming through great business as a whole excited that we're able to disclose that partnership some of the other ones, but they're just cautious about disclosing given their own business interests, nothing with us. We do a lot of stuff with them. So we're excited about that.
But I'm taking those what is our relationship with one of the magnet groups are we take the non spec writers in and then we share in a portion of the percentage of revenue that we generate out of that more of the profit that we generate out of it, I should say. And so that's a great thing for us is we're building a supply chain in a low-cost way for the industry.
So that the industry can not Rob can rely upon us, not China to get their supplies going forward, but hopefully here in the near term, which we should be able to talk a little bit more forthright about who our partners are. So I can't tell nine event and companies that I can release to release their name.
Steve Segal
Okay, great. That firms explain why those kind of things and design. Okay. Thank you very much.
Mark Jensen
Steve, I appreciate you.
Operator
Kyle Gallagher, Merrill.
Kyle Gallagher
Yes, hey, Mark, can you hear me?
Mark Jensen
Hey Kyle. I got you.
Kyle Gallagher
I mean different Africa, hey, I'm going to say this seems to me to be an exciting time for you guys. And I feel like in all the times. I've been listening to you guys as conferences about the most excited. I heard your voice in the prepared remarks around. So a lot of good things happening here from my question is you had mentioned something about like a company, I think like on lease cycle or lifecycle or excuse me for butchering the name and there were some things that you could do not specifically with them, but a company like that to help build out the industry.
Are you thinking on the on the redevelopment side as you build this up, you know, either through like co-locations or different partnerships? Or would those be like situations where you would be licensing the technology to like a third party to use? Or how are you guys kind of thinking about expanding and growing some of those partnerships?
Mark Jensen
That's a great question. So we want all the recycling companies in the U.S. to be successful, right there and they do one component of the process. We do another compound. We knew the refining lifecycle was going to build a hydromet plant. It didn't work out Glencore, they're great. They're great financial partner to them, great company and they stepped in and are helping them.
Now what we can offer to the whole entire industry is that separation, purification, refining step within higher hydrogen. So they're producing a leachate. They're taking them to buy batteries there and they're turning it into a concentrated solution. We can then step and refine that program and CapEx is roughly less than it's less than half the operating costs and less than half.
So there's no reason why they wouldn't want to do that. And we're starting to get a lot of interest from multiple. I'm nothing over lifecycles that don't represent that by any means. But we're getting a lot of interest from a lot of really great partners that need that separation purification steps. It will not be a license, though we don't license our technology.
The reason for it is our team every day is innovating and they're always developing better more cost effective solutions were already the lowest cost in the US. Now we want to stay the lowest cost in the U.S. to do that. Bob gallium told me we need to constantly invest in research when he joined our Board something he was adamant about you did see a PR when he built the company from 0 to $185 billion and he sees our our technology is a platform technology, very similar to what CATL was when he joined our company.
And what's the one thing he said to me was always invest in research. And so we've done it with Purdue University as well as within our internal team and our eating on our team. The guy is phenomenal. I don't any fleets. And but what we offer is we offer the ability to partner with companies. We will help refine their materials or separate their materials from the rare earth elements tied to the lithium or the cobalt or nickel or the Neovia under this podium and provide that separation purification step in their facilities as a partnership-based model. That's something we offer today.
Now on the other front, we also offer a full suite will take it all the way through all the way to lithium carbonate, lithium hydroxide, Cobalt sulfate, nickel, sulphate, niobium, and then the oxides on the redevelopments, but the partnership, it's a partnership-based model. And one of the key about that and clear about that because we want to bring our innovations constantly.
If we do if we modify something within our process to make it to drop our costs from sub $5 today of lithium carbonate at 5,000 metric tons a month, a year, we want to get it down to $4. We want to be able to bring that technology to the partnership to make that partnership better. So in a license that's harder to do that. And our producer doesn't necessarily want us to license out the technology, nor do we want to work with them as a partnership in a collaborative way.
Kyle Gallagher
Got it. And then if you could just give a little bit more color. You know, I don't know how many quarters back, but it was a while I had kind of asked you what some of the bottlenecks you were experiencing at that time? You know, it was getting access to a lot of good feedstocks. It seems to me from just what your comments today. And what I'm hearing is that the feedstock side of the equation is starting to get ramped up in a somewhat of a material way is how I would think of it.
How are you seeing that balance with the offtake side? I think you mentioned that a you do a lot of samples, you know, from a gram two a kilo tonne. Are you seeing, you know, an equal ramp up kind of on the offtake side as you are on the feedstock side? Or can you give any commentary on how those two sides of the equation are balanced for re-element?
Mark Jensen
Yes. I mean, listen, I want I don't want anything to go slow, Mike, and I'm a pretty aggressive guy and I and I'm pretty passionate and I care a lot about our company. So I want to do things as fast as we possibly can. As you look back a year ago, I would say feedstock was kind of a bench to get permanent language. Our team's done a really good job at that of securing those feedstocks been right and come out came onboard just a passionate guy and I think him and I are about as passionate as you get.
Kirk has done a phenomenal job change. Don and Ben Kincaid on the African front, on the ore side has done a phenomenal job just ever. The team has done a great job of building the feedstock prices, but also feedstocks come in when you prove that our technology works and we've done that. And so now and I wouldn't say that's not a problem sales sales are I wouldn't say sales are from either.
I mean, one, there's long lead items. You've got to get the ramp of production like kilns and stuff like that, which are key to knocking down those barriers. Everything on you see a very run through it or you walk around it or you open the door, it's finding a team that's willing to go through the efforts to do that and to continue to push forward in the most economic way and the fastest growth way sales side, we have we have a great partnership that we've been taking material and now we're getting ready for selling that back to them in a lithium carbonate form.
We're in the qualification process with over seven companies. Few of those had we will legitimately take everything you can produce once we get through the qualification process. Now we don't want to do that. We want to we want a diversified portfolio of customers. And but as we're ramping up production, especially as the Marion facility gets closer to fruition where our customers will be in line then.
What I will say I read, so you look at the end of what is it, the inflation reduction at that clip. And it means that I don't think it's what it is. But and we will be and we qualify under the inflation Reduction Act. So when we produce lithium carbonate. We're one of the few players in the US have actually be able to achieve that for our customer base.
And so we believe we're in a really good position and we think you'll actually get a premium for that today in the market, you don't get zero premium if you produce higher a compliant material. I'm here shortly. We think you will and that's why we're as we're ramping up production to we can we could sell all the product we want on the commodity market, but we want direct customers that were and that's why we're going through all these qualification properties and they're going really, really well.
And then at that point, when you start saying not only am I through your qualification process but I'm your only IRA product compliant supplier. What is that worth? I think it's quite a bit.
Kyle Gallagher
Yes, I as always, Mark, really appreciate your patience on these calls and getting through all of our questions and the candid responses, man, thanks a lot.
Mark Jensen
Kyle. I appreciate it. We speak from the heart we speak from where we're at. We speak from the passion that our team chairs and honestly, where we want to see these divisions go. I mean, I've built a whole business from the ground up with my team super passionate about it. I'm not going to give it away for what it's not worth. I'm going to fight for it, challenging industry. It is, but we have great assets. The government division. I've never seen I've never seen an opportunity like I've seen in reality to that.
It doesn't I never thought I'd be in a position to be having a keen as passionate as we have had an opportunity as broad as we have refining critical minerals and a statement of our country needs that our country needs it for commercial enterprise refresh and use that for defense.
So I didn't read remarks today. I kind of went Africa because, yes, we're passionate and we're super excited about where we're at may not be the revenue numbers that people want, and we recognize that, but it's about positioning. It's about being in a position where we can capitalize and take advantage of market opportunities as they exist. And survive and thrive, and that's what we do.
Kyle Gallagher
Awesome, man. Thank you.
Mark Jensen
Thank you.
Operator
Thank you. And there are no further questions at this time. So I'll hand the floor back to the management for closing remarks.
Mark Jensen
Yes, one, I want to say thank you all for joining. And as always, I'm a little bit long-winded, but genuinely care about where we're at as a business care about our team care about our shareholders and our stakeholders. I thank you all for the time you've given us today, and thank you for taking an interest in our company. And I'm super excited about where we go from here about the a couple of more earnings calls that we'll have to deal in different voices as we separate these companies, but thankful for the position we're in and excited about the future.
Operator
Thank you, and that concludes today's call. All parties may disconnect. Have a great day.
