Joining us from Clinch today, we have Thomas Marks, SVP of IR, and Bobby Gaylor, EVP of IR. Bobby, take it away.
Thank you, Michael. Welcome everybody. We are Clinch Resources Limited. We are a newly Toronto Stock Exchange-listed company as of March 20th this year. We have spent the bulk of 2026 covering some very critical early steps in the genesis of our company. Number one was to go public, and number two was to secure equipment over the last few months in order to drive the 2027 production and sales guidance and projections, which is 2 million tons plus of production of metallurgical coal and also into the specialty coal markets. I will start going through our presentation here quickly and obviously there is some Q&A hopefully at the end. If anybody has any questions as I go through this, feel free to ask as well. On the cover page here, there is a background picture of our actual load-out located in Gilbert, West Virginia.
All of our assets are in West Virginia, right where the heart of the Sewell seam metallurgical coal is located. About us on the high- level. Clinch Resources has spent the last seven plus years putting together a basket of four producing properties. These are all brownfield projects that we are bringing back online. The first of those producing assets is Lanes Branch , our surface operation, which I am proud to say we brought into production within a couple of months of going public. The first sales out of Lanes Branch have already taken place of train loads and our first overseas vessel being loaded right now, 65,000 tons of met coal going over to Europe. At Clinch itself, we have over 111 million tons of metallurgical coal under a 43-101 research report.
Additionally, we at the RTO own 39% of a separate company called JJ Resources, which some of our ex-people have gone over there to run. This is the old Sewell Mountain project that the Founder o f Clinch, Jon Nix, and myself owned while we were at Zenith Energy, another previous TSX company 13 years ago. This is a very high valuable, high-quality, single seam, mid-vol asset of 51 million tons. It used to directly feed U.S. Steel Corporation for 30 years. We are in the process, or they are in the process of bringing that asset back online with a new slope and shaft. There will be a new prep plant and load-out built with that. That is about a 20-month process that has just begun, and we are very excited about that. Corporate structure.
As we are coming out of the RTO, everything falls under the Newco Clinch Resources that is public in Canada. We have just started the discussions of dual listing into the United States. That is for everybody that is familiar with that process, that is no way to shortcut that. It is about a five to six-month process, and our goal is to hopefully have that dual listing done by the end of first quarter of 2027. We call our U.S. assets Active Resources. Underneath that is all of our properties over 54,000 acres of leased properties in West Virginia and Wyoming and Mingo Counties, JJ Resources in Fayette County, which is pretty close to Beckley. One of the things we are doing differently under this Newco is that in the past, and currently most coal companies, they sell their coal through a broker or brokerage entities.
We are trying to bring that in-house and we have done that with Astor Resources, that first block you see over there to the left. What we have done is we have hired a 25-year commodities veteran out of New York City. We moved him to Nashville, Tennessee, where he just opened up that office a few weeks ago. We want to directly sell to our end users, via our own in-house marketing arm. That way we can recapture all those brokerage fees as well. At full production that we are looking to guide towards for next year, that is a meaningful EBITDA enhancement to our company. Anywhere from, depends on again how much they do, but $15 million- $20 million of EBITDA to that we are capturing in-house. Of course, there is JJ Resources.
Callaus and VCP were a couple of entities that we have got some pieces of ownership in from an early investor in our company prior to the RTO. VCP is very interesting to us because they make sinter pellets. Sinter pellets is another feedstock that is added to the blast furnace process to make virgin high tensile strength steel along with iron ore and our met coal. This is a very highly profitable product that can also be sold into the ferroalloy and ferrosilicon markets worldwide. That is another product for Astor t o market and sell. That is something we are very excited about. Of course, the hot button topic today is critical minerals. If you are in the met coal business, you have gob piles or refuse piles, and inside those piles are over 17 of these critical minerals that the United States government is highly interested in these days.
In our gob piles, there are over four of these critical minerals of size, very interesting to the Department of Defense. Our attack there is that we really do not want to spend our capital extracting that because that is not our expertise. We are not going to pretend that it is. There are third-party extractors out there that we are talking with that they can bring their technology on site and use that to extract, and we will do an 80/20 profit split. That is our attack for critical minerals. There is a slide in this presentation that shows an actual satellite photo of our refuse pile so you can see the enormity of that 30-year refuse piles. Over 40 million tons of product that they can spend the rest of my life and my kids' life running through to extract. Why met coal?
Still to this day, regardless of what you have heard, the only way to make high tensile strength virgin steel is still with iron ore. Met coal is the two main ingredients, along with eight others, including dolomite, limestone, sinter pellets, et cetera, in order to make high tensile strength steel. High tensile strength steel is considered critical because this is what you use to build critical infrastructure like bridges, buildings above two stories, Department of Defense applications, et cetera. You do not want to have low tensile strength steel, which obviously is in danger of failing and collapsing. Met coal is still the only way to do that, along with iron ore and these other ingredients. I do not know if anybody has noticed, but the world has gone a little bit crazy here.
One of the reasons I came back into coal three years ago is I kind of thought that steel was going to be very critical for the rest of my life because of a lot of rebuilding. Whatever you blow up has got to be rebuilt. Just in the last, what, 10 months you have had 50+ Panamax and Super-Panamax shipping ships that have been sunk in just the Strait of Hormuz, the Arabian Gulf, et cetera. So, you have got the rebuilding of Ukraine to come, Gaza. Now you have got critical infrastructure and the energy business in the Middle East. All that stuff portends to a nice runway for met coal and virgin steel production over, again, decades. Also, met coal can be used into the specialty coal market as well.
This is something we have experience in in our prior life in coal of selling this met coal to end users at a specific spec. It starts with having the coal quality first and foremost, which we do. We put the basket of assets together that have this quality and only have this quality so we can sell into the specialty market in the U.S. and worldwide. In the U.S. market, it is anywhere from 3.5 million-4 million tons a year, but that product today is fetching $350 a ton. It is a very highly profitable product, and we expect 20% of our sales and production to go into the specialty markets. We are so excited about it. In fact, one of the last couple contracts that Jon and I sold at Zenith Energy in the specialty markets was to Globe Metallurgical and a gentleman named Brett Young.
We hired Brett as our CFO, and so we are going to be counting on Brett to lead that charge into the specialty markets, which he is actively doing as we speak. Again, met coal was added to the critical mineral list in the United States in November of last year. Most importantly, that qualifies us for a pot of money out of Washington, D.C., and the one that we have got our eye o n that we have already started talking to is the Department of War , which is looking to reshore all critical minerals and critical production, and that is where this critical mineral play comes into play. So that is some discussions that have already begun. I am sure the other met coal producers, there are seven of us in the United States, have done that as well.
But out of the Department of Defense, it is over $2.4 billion that will be allocated, so it portends that all of us will get our piece of that action. When we talk about, we call it free money, but it is not free, but it is 30 and 50- year term 3% money. So it is actually very attractive money and terms, and so hopefully we can have some announcements on that in the next quarter or so about what we are going after there. This chart right here is something I commissioned back in December of last year. It is very important. It talks about-- Sorry about that. It talks about the dark blue shows the decline of met coal production worldwide because of a lack of capital investment into the met coal mines worldwide, not just the United States, but Australia as well.
ESG was a big driver of that as they thought they were going to move to green solar panels and wind turbines, and those do not make bridges and boats. So it shows this is already structurally built in, is in fact from a lack of capital investment of the decline of met coal. The light gray area shows a natural incline of met coal demand, just by growth and everything else. This was all put together pre-war. I will recommission this in December when the new data comes out, and I got a feeling this gap is going to increase. It also explains why met coal is at $275 a ton today on the SGX, which is all the pricing that we all use worldwide. When I left met coal business 13 years ago, it was $80 a ton.
With the declining production and the increasing need for met coal, you are seeing the price of the commodity start to really ratchet up, and it has been on a nice incline for three consecutive years. Again, onto high-l evel, we have over 54,000 acres alone in just the Active Resources properties. If you add in JJ Resources, that is another 24,000 acres. So about 120 sq mi footprint right in the heart of the Sewell Seam in West Virginia, where the last bastions of some of this quality met coal is located in the United States. We have our own prep plant that is owned and operating. We have our own load-out that is owned and operated.
We have got fully permitted all four assets, and so we are in production and sales, and so we are very happy and proud of the fact that we went public in March and had our first sales by August. So in our world, the world of mining, that is very quick. So now it is all about that I have got the equipment secured and on site and working, ramping up and opening up the next three assets, which are all underground, run by electric power. The first of those underground mines is about Mine 8, which is located directly across the street from my prep plant, so I do not have to truck it anywhere. That should be opening here very shortly in the month of October. This just gives you the report straight of our 43-101 reserve report and gives you a little bit of map where we are located.
We're located in the three corners where Virginia, West Virginia, and Kentucky meet. A very challenging topography area, but that's where the met coal is located, the Sewell Seam is located. It shows you where our prep plant is. 4 mi down the road is my load out. Directly across the street from our prep plant is Mine 8, and just to the north, about 350 yards from the prep plant is where Mine 3, our next underground mine, will be coming out around the Christmas time. Everything is in very tight order. Lane's Branch is about 15 mi as the crow flies away. We do some of the product there is sold direct out of the seam, and some of it is processed to the prep plant. We truck that to the prep plant.
There's an actual picture of our prep plant on the left, and then on the right, you got another real-time picture of our load out. I can store 150,000 tons at my prep plant and another 75,000 tons at my load out. What does that mean? That means that if I do get a big bulk order like we just got for 65,000 tons for a vessel, I can get that coal to the load out and it's ready for the trains to show up. Trains in West Virginia are 11,000 tons each. We can load a train in approximately four and a half hours. Literally on the, for example, the vessel we just did, over the course of 24 hours, we can load trains to have those trains on their way to Hampton Roads to load that vessel in real time.
All that stuff is up and running. We spent the last two and a half years and a bit of CapEx to refurb both properties. All the critical pieces of that are all brand new and up and running and operating today. Again, straight ou t of my reserve report shows you where I get my 111 million tons of proven reserves and of measured indicated reserves. There's 22 million of proven and probable, and this is my permitted tons. The reason you permit, you want to have about four or five years on the bench of permits. That way I'm not worried about permitting while I'm in production in real time. Then as I produce out of this column right here under permitted, I will then start to draw back additional permits out of my 22 million proven.
I'm always having 6 million- 7 million tons permitted, so I'm not worried about permits for four or five-year stretches of time. The next two permits, for example, for the production we're starting now and we'll do next year, have already been filed. I anticipate those could be issued by this time next year. So we always have that nice little leeway and comfort zone of permitting. Permitting under the Trump administration, which I get asked about all the time, is substantially easier and quicker than it's been in the past. Us being added to the critical mineral list also has speeded up that process. That's been a very nice additional welcome in my second go around in the West Virginia coal field versus the first time. A quick overview of JJ Resources. Again, we own 39% of JJ.
It's a super high quality, I would argue some of the best reserves left in the world of just pure mid-vol metallurgical coal. This particular mine, when it was under, it was started by The Pittston back in the day, some, gosh, 40 years ago. Directly fed U.S. Steel for over 30 years. It's a super high quality coal. It's a well-known seam worldwide. It will fit any blast furnace on the planet. Just by us announcing the RTO and ownership of JJ Resources, and that JJ Resources is going to get restarted with a new slope and shaft prep plant load-out. We've already been getting calls from some of those end users already wanting to know the timeframe of this coming back online. That process has begun. I anticipate that to be from today, around a 20-month process till you get to the first trains.
We're excited to own that 39% of this very valuable asset. They have an old reserve report. The new reserve report has just started. Expect to see that early 2027. They're also drilling additional core holes into the Sewell Mountain assest at JJ Resources because there's another play below the Sewell seam called the Fire Creek, and we want to exploit that to see, A, the quality of it, which we believe is going to be the same as the Sewell seam, and then how many tons is there that they can add. Currently they have a 51 million ton reserve and they're looking to add to that, which obviously adds a tremendous amount of value as well. Again, there's a slide on Astor about how Astor is going to be our own in-house marketing arm. A bio of Cesar Canali. Cesar is who we hired.
He's ex Jefferies, ex Cargill, ex Argentum, 25-year veteran of the commodity space. He's been trading commodities from different parts of the world worldwide. We're bringing that in-house, so not only can he market our coal, but he can market the other inputs that go into a blast furnace or to a specialty coal market as well. These, again, these are all profit margins for us. Something we're doing a little bit differently this time, which I think is going to bear a lot of good fruit for us. Again, this is our critical mineral page. Again, the only bragging point here is that we've got a lot of refuge for a third party to rumble through to go extract those 17 critical minerals that have been identified on the critical mineral list in this gob pile.
Again, specifically for the Department of Defense, there's four of them of size, I can't remember if it's four or five, but including lithium, gallium, cadmium, thallium. These are the ones that are critically important to the Department of Defense right now, and some of these products go into cruise missiles and ammunition and et cetera. They're very highly interested in this. This is one of the reasons met coal and met coal refuse piles were added to the critical mineral list 10 months ago. That's an actual picture of VCP's sinter pellets Fischer-Tropsch system. This exists in Louisville, Kentucky. It's patented technology that's come out of the University of Louisville, and this helps create those 3-inch supercharged carbon sinter pellets. Again, very highly profitable product.
Again, we currently own 30%, but Astor is going to have the sole exclusive right to market this product worldwide, not just to blast furnaces, but also the specialty ferroalloy markets. Another revenue source input to make us a little bit different going forward than just a standard coal company that produces coal, puts it on a tray, and hopes to sell it to a blast furnace. So upcoming momentum, which again, this changes as the mines come online in real time. The Gantt chart is more important to me here than anything else is that Lanes Branch is in production. We do have sales. Mine 8 will be added shortly in production in the month of October. The focus has now shifted to Mine 3, which is a much quicker, cheaper, easier process to get going than Mine 8 because it's a smaller complex.
We'll be working on Mine 6, the last underground mine, in the first quarter of 2027. All these combined will get me to about 180,000 plus ton run rate a month. That helps me get to my 2 million ton production and sales estimates for next year. U.S. met coal companies are valued at a multiple of EBITDA, so the first step is to secure equipment. We're done. Have the capital to get these mines open. We've got it. They're coming online now, and that will help drive that 2+ million ton number next year, which at today's prices, should generate us north of $200 million of EBITDA for full year 2027. Again, U.S. met coal companies are a multiple of EBITDA, and those multiples today are anywhere from 6x- 7.2x.
That's how I'm going to grow my stock today, which is, again, I haven't looked at today, but say $1.10 a share to $3.50 a share over the next 15 months by executing, blocking, and tackling. The first hard part was securing the capital over the last three and a half years. RTO, secure equipment, get mines open, check, check. Now the next thing is secure contracts, start producing and selling, and generate and drive towards those 2027 estimates. Again, the market overview, it's real simple. The met coal case has not been this good in 45 years. With all the geopolitical issues, wars, et cetera, that's a lot of steel that's being used in military applications right now. There's a lot of critical infrastructure that's being destroyed right now that will have to be replaced.
The world was short Panamax and Super-Panamax vessels going into this, and now 50 of them are at the bottom of the Gulf of Arabian . Some of these vessels are 1,000 ft long, double hold. I think I foresee for the rest of my life that critical high tensile strength steel is going to be paramount for the next 30 years. You're seeing that in the pricing. You're starting to see the pricing that's just been. When I first came back with Jon here to Clinch, I think met coal was $155, $160. It's at $275 today. It's just been on a nice incline. I really don't see any end in that happening anytime soon. We're a lean mean machine as most early-stage companies are with Jon Nix, the Founder, CEO, Brett Young, the CFO.
Again, Brett coming from Ferroglobe and Globe Metallurgical, which again is very important for us entering into the specialty coal markets. Then myself, this is my second go around with Jon, second go around the TSX, my third public company. I have been on the New York Stock Exchange, the NASDAQ. I have been well north of $2 billion of financings. I like to say that IR is what I do for a hobby. I really like operations and capital development first and foremost. I am going to skip that. We got the infrastructure, we have got the management team, we have got the assets, we are permitted. It is go time. It is go time. It has taken us a while to get to go time, but I am happy to say we are in go time today. I am trying to manage my time here, Michael. How am I doing?
Let us see. This would probably be a good time to break if we could.
Okay. Yeah, I will leave it right there. There is a little map of a better map of where we are at and those three corners we are talking about. But yeah, if you have any questions.
I do. Several questions came in. So before we get to them, though, terrific presentation. Thank you for that, Bobby. Our first question kind of looks at the financial side of things. You are projecting a volume of 2 million tons next year. What would that work out in revenue?
That should generate well north of $200 million of EBITDA at today's pricing. That is what our models show. Again, it is hard to pinpoint because every end user is different, every negotiation is going to be different, but using a very conservative basis, that still will put us at north of $100 a ton EBITDA. That is easy math. For us, we take that number, divide that by the number of shares outstanding, and add a multiple, and then, of course, pick a multiple that you want to choose. We think we are going to get a higher end on the multiple because by putting these assets together through the bankruptcy process, we did not pick up any assets that had any asset retirement obligations attached to it.
We did not pick up any assets that had any black lung or health issues, legacy liabilities, or any reclamation bond issues. I have zero. I do not have to burden each ton of production with those burdens going forward. That portends that I have lower lifting costs out of the gate. So far with early production, we are hitting those numbers. We projected $90 a ton. We are beating that a little bit. At scale, which scale for us is around 40,000 tons a month recurring, I anticipate to be a lot lower than $90 a ton. At that, I am easily at $100 a ton EBITDA at a blended rate of 80% going to blast furnace and 20% of my product going to specialty coal. I am going to hit those numbers.
Terrific. Clearly, on the revenue side, the pricing you described is very, very strong, as you said. But we are in an inflationary environment. How is that affecting your production costs? Can you also talk about labor availability and manpower?
Labor has been wonderful. Compared to 13 years ago, the only good thing of what Obama, when he tried to kill the coal industry, specifically in West Virginia, he did a good job of killing half the coal industry in West Virginia. What he did not mean to do, and he has done, is he has right-sided the coal industry in West Virginia. If you are i n business in West Virginia today, it is because you have contracts and sales and you are profitable. Because of the half the coal companies that went out of business, the labor force obviously has been sitting there, and it is plentiful. We bought our second surface spread of equipment about a month ago and put word out that we are hiring 25 more workers for those two shifts, and we had over 300 applicants.
And by that, you can get very choosy about the people that you bring in to interview. We've been interviewing red hat and black hat, which means it's surface and underground certified. Also if they come with their operational experience and their mechanic, it's the best of both worlds. It's nothing like hiring an operator with 20 years experience who can fix his machine. That saves you time and money. Couldn't be happier about the labor situation right now. It's wonderful. As far as inflation is going to affect everybody in some way, in some form or fashion. In the coal patch right now, which is all I care about for Clinch, diesel. If you'rea massive surface operation, diesel is kicking you in the keister right now. Diesel prices have doubled in the last year in the patch.
And of course, if you guys drive diesel trucks, you guys know that's kicking you in the can when you go to fill up today. Where's it going to top out? Where's it going to end? Don't know. The good thing for us is we have one surface operation. We have 27 pieces of yellow iron, whereas some of our neighbors have over 200 pieces of yellow iron and significant surface operations. That's hurting them. My next three mines are underground. That's electric power. That's going to be an advantage to me next year as we move into that. That's something we keep our eye on because it does affect us on the freight rates. Those freight rates, that cost, and trains are run by diesel electric engines. That cost from Norfolk Southern gets passed to our brokers or us as well.
We have seen a little bit of increase in transportation cost. I would say it's around 15% in the last two months. But other than that, with today's pricing, it's easily absorbed.
Great. You mentioned contracts for coal. How far forward are your contracts?
We are in those discussions as we speak, and I would say that they are in the eighth or beginning of the ninth inning. We are getting towards the end of getting ready to hopefully in the month of October have some exciting announcements on some recurring contracts. Typically, it depends. If it is blast furnace, it is at least a 12-month up to a 24-month contract. The specialty coals is 24- 36-month contracts.
Mm-hmm. Okay, great. Just for people who are not familiar with the coal industry, you defined your coal as being mid-vol. Could you explain what that is and what it means?
Mid-vol is, there is thermal coal, which is used for electrical power generation, and then there is metallurgical coal. Inside metallurgical, you have high-vol A, high-vol B, mid-vol. Unfortunately, I am at my home office or I would show you a beautiful chart that would explain how those coals get categorized. It is about volatile matter, it is about ash and sulfur content. When you do the chemistry and where they fall will delineate whether it is high-vol A, high-vol B or mid-vol. Mid-vol is always the preferred because it has less contaminants. It is a very nice volatile matter, which means the BTU content and the burn rate. If you are a smelter, you want a coal that puts a nice consistent burn rate, keeps temperatures constant. That makes a much better end-use product.
What happens a lot, if you do not have access to a lot of mid-vol coal, they will take some high-vol A, B, and some other, and blend with the mid-vol to get their desired specific spec at their blast furnace. So it is different grades of coal. It all falls under the metallurgical category. So it is all, again, a very much preferred product specifically for blast furnace and for the specialty coal ferrosilicon, ferroalloy markets. So it is very slight differences, but the difference is that mid-vol is going to always fetch the highest price, and then high-vol A, then high-vol B in that order. It could be a difference of up to 15% in price if you fall down the ladder.
Got it. Well, we are pretty much toward the end of the time, so before I shut it off, is there anything you would like to say by way of concluding remarks? A high-level case for Why Clinch?
Yeah. Why Clinch is we are the first U.S. met coal IPO in eight years. We have weathered the storm of ESG and found a way to get to this point to go public. Now we are, for the first time in my career, we have tailwinds behind metallurgical coal. We have been added to the critical mineral list. We have gone from targeted to protected. I see nothing but the use for high tensile strength steel for the rest of my life, and probably my kids' life with everything that is going on geopolitically. I came back to this industry because I thought, as things get geopolitically restraightened out, clean water, energy, food, and high tensile strength steel will not suffer at any type of economic downturn.
Again, the proof in the pudding so far of my decision three years ago to come back is the price has just been on a nice incline, which tells you that I think we are in a good position for decades to come.
Well, terrific. Again, a great presentation, Bobby. Really enjoyed it. I am sur e our audience did as well. We hope you will come back again.
Any time. Thank you for having me.
Okay. Thanks again.