UNITED STATES
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Washington, D.C. 20549
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FORM
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Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023.
TABLE OF CONTENTS
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Coronado Global Resources Inc.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
2023
December 31,
2022
Current assets:
Cash and restricted cash
$
$
Trade receivables, net
Income tax receivable
Inventories
5
Other current assets
7
Assets held for sale
4
Total current assets
Non-current assets:
Property, plant and equipment, net
6
Right of use asset – operating leases, net
9
Goodwill
Intangible assets, net
Restricted deposits
16
Deferred income tax assets
Other non-current assets
Total assets
$
$
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
$
Accrued expenses and other current liabilities
8
Income tax payable
Asset retirement obligations
Contract obligations
Lease liabilities
9
Other current financial liabilities
Liabilities held for sale
4
Total current liabilities
Non-current liabilities:
Asset retirement obligations
Contract obligations
Deferred consideration liability
Interest bearing liabilities
10
Other financial liabilities
Lease liabilities
9
Deferred income tax liabilities
Other non-current liabilities
Total liabilities
$
$
Common stock $
authorized,
September 30, 2023 and December 31, 2022
Series A Preferred stock $
authorized,
and December 31, 2022
—
—
Additional paid-in capital
Accumulated other comprehensive losses
14
(121,970 )
(91,423 )
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
Nine months ended
Note
2023
2022
2023
2022
Revenues:
Coal revenues
$
$
$
$
Other revenues
Total revenues
3
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
Depreciation, depletion and amortization
Freight expenses
Stanwell rebate
Other royalties
Selling, general, and administrative
expenses
Total costs and expenses
Other (expense) income:
Interest expense, net
(14,496 )
(17,220 )
(43,341 )
(52,034 )
Loss on debt extinguishment
(1,385 )
(1,385 )
Decrease (increase) in provision for
discounting and credit losses
(572 )
Other, net
Total other (expense) income, net
(7,156 )
(22,767 )
(Loss) income before tax
(39,313 )
Income tax benefit (expense)
11
(51,423 )
(37,775 )
(235,391 )
Net (loss) income attributable to
Coronado Global Resources Inc.
$
(21,083 )
$
$
$
Other comprehensive loss, net of income
taxes:
Foreign currency translation adjustments
14
(18,247 )
(41,998 )
(30,547 )
(75,908 )
Total other comprehensive loss
(18,247 )
(41,998 )
(30,547 )
(75,908 )
Total comprehensive (loss) income
attributable to Coronado Global
Resources Inc.
$
(39,330 )
$
$
$
(Loss) earnings per share of common stock
Basic
12
(0.13 )
Diluted
12
(0.13 )
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2022
$
$
$
$
(91,423 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(4,503 )
(4,503 )
Total comprehensive (loss) income
—
—
(4,503 )
Share-based compensation for equity
classified awards
—
—
(308 )
(308 )
Dividends
—
—
(8,382 )
(8,382 )
Balance March 31, 2023
$
$
$
$
(95,926 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(7,797 )
(7,797 )
Total comprehensive (loss) income
—
—
(7,797 )
Share-based compensation for equity
classified awards
—
—
Balance June 30, 2023
$
$
$
$
(103,723 )
$
$
Net loss
—
—
(21,083 )
(21,083 )
Other comprehensive loss
—
—
(18,247 )
(18,247 )
Total comprehensive loss
—
—
(18,247 )
(21,083 )
(39,330 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(8,382 )
(8,382 )
Balance September 30, 2023
$
$
$
$
(121,970 )
$
$
Coronado Global Resources Inc.
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2021
$
$
$
$
(44,228 )
$
$
Net income
—
—
Other comprehensive income
—
—
Total comprehensive income
—
—
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(150,881 )
(150,881 )
Balance March 31, 2022
$
$
$
$
(27,970 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(50,168 )
(50,168 )
Total comprehensive (loss) income
—
—
(50,168 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(200,040 )
(200,040 )
Balance June 30, 2022
$
$
$
$
(78,138 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(41,998 )
(41,998 )
Total comprehensive (loss) income
—
—
(41,998 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(125,734 )
(125,734 )
Balance September 30, 2022
$
$
$
$
(120,136 )
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In US$ thousands)
Nine months ended
September 30,
2023
2022
Cash flows from operating activities:
Net income
$
$
Adjustments to reconcile net income to cash and restricted cash provided by
operating activities:
Depreciation, depletion and amortization
Amortization of right of use asset - operating leases
Amortization of deferred financing costs
Loss on debt extinguishment
Non-cash interest expense
Amortization of contract obligations
(23,896 )
(26,883 )
Loss on disposal of property, plant and equipment
Equity-based compensation expense
Deferred income taxes
Reclamation of asset retirement obligations
(3,168 )
(3,961 )
(Decrease) increase in provision for discounting and credit losses
(4,255 )
Changes in operating assets and liabilities:
Accounts receivable
(170,094 )
Inventories
(54,704 )
Other assets
(5,197 )
(30,109 )
Accounts payable
(3,371 )
Accrued expenses and other current liabilities
(69,303 )
Operating lease liabilities
(9,311 )
(6,202 )
Income tax payable
(128,418 )
Change in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
(182,442 )
(141,928 )
Purchase of restricted and other deposits
(26,836 )
(9,558 )
Redemption of restricted and other deposits
Net cash used in investing activities
(183,028 )
(150,670 )
Cash flows from financing activities:
Debt issuance costs and other financing costs
(3,420 )
Principal payments on interest bearing liabilities and other financial liabilities
(2,732 )
(9,773 )
Principal payments on finance lease obligations
(98 )
(91 )
Premiums paid on early redemption of debt
(90 )
Dividends paid
(16,755 )
(473,900 )
Net cash used in financing activities
(23,005 )
(483,854 )
Net increase in cash and restricted cash
Effect of exchange rate changes on cash and restricted cash
(15,180 )
(50,144 )
Cash and restricted cash at beginning of period
Cash and restricted cash at end of period
$
$
Supplemental disclosure of cash flow information:
Cash payments for interest
$
$
Cash paid for taxes
$
$
Restricted cash
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business, Basis of Presentation
(a)
Description of the Business
Coronado Global Resources Inc. is a global producer, marketer, and exporter of a full range of metallurgical
coals, an essential element in the production of steel. The Company has a portfolio of operating mines and
development projects in Queensland, Australia, and in the states of Pennsylvania, Virginia and West Virginia in
the United States, or U.S.
(b)
Basis of Presentation
The interim unaudited condensed consolidated financial statements have been prepared in accordance with the
requirements of U.S. generally accepted accounting principles, or U.S. GAAP, and with the instructions to Form
10-Q and Article 10 of Regulation S-X related to interim financial reporting issued by the Securities and Exchange
Commission, or the SEC. Accordingly, they do not include all of the information and footnotes required by U.S.
GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC and the
Australian Securities Exchange, or the ASX, on February 21, 2023.
The interim unaudited condensed consolidated financial statements are presented in U.S. dollars, unless
otherwise stated. They include the accounts of Coronado Global Resources Inc. and its wholly-owned
subsidiaries. References to “US$” or “USD” are references to U.S. dollars. References to “A$” or “AUD” are
references to Australian dollars, the lawful currency of the Commonwealth of Australia. The “Company” and
“Coronado” are used interchangeably to refer to Coronado Global Resources Inc. and its subsidiaries,
collectively, or to Coronado Global Resources Inc., as appropriate to the context. All intercompany balances and
transactions have been eliminated upon consolidation.
In the opinion of management, these interim financial statements reflect all normal, recurring adjustments
necessary for the fair presentation of the Company’s financial position, results of operations, comprehensive
income, cash flows and changes in equity for the periods presented. Balance sheet information presented herein
as of December 31, 2022 has been derived from the Company’s audited consolidated balance sheet at that date.
The Company’s results of operations for the three and nine months ended September 30, 2023 are not
necessarily indicative of the results that may be expected for the year ending December 31, 2023.
2. Summary of Significant Accounting Policies
Please see Note 2 “Summary of Significant Accounting Policies” contained in the audited consolidated financial
statements for the year ended December 31, 2022 included in Coronado Global Resources Inc.’s Annual Report
on Form 10-K filed with the SEC and ASX on February 21, 2023.
(a) Newly Adopted Accounting Standards
During the period, there has been no new Accounting Standards Update issued by the Financial Accounting
Standards Board that had a material impact on the Company’s consolidated financial statements.
3. Segment Information
The Company has a portfolio of operating mines and development projects in Queensland, Australia, and in the
states of Pennsylvania, Virginia and West Virginia in the U.S. The operations in Australia, or Australian
Operations, comprise the 100%-owned Curragh producing mine complex. The operations in the United States,
or U.S. Operations, comprise
owned idled mine complex (Greenbrier) and
The Company operates its business along
organization of the
CODM, manages and allocates resources to the various components of the Company’s business.
The CODM uses Adjusted EBITDA as the primary metric to measure each segment’s operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP. Investors should be
aware that the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled financial
measures used by other companies.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion and amortization and other
foreign exchange losses. Adjusted EBITDA is also adjusted for certain discrete items that management exclude
in analyzing each of the Company’s segments’ operating performance. “Other and corporate” relates to additional
financial information for the corporate function such as accounting, treasury, legal, human resources, compliance,
and tax. As such, the corporate function is not determined to be a reportable segment but is discretely disclosed
for purposes of reconciliation to the Company’s unaudited Condensed Consolidated Financial Statements.
Reportable segment results as of and for the three and nine months ended September 30, 2023 and 2022 are
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended September 30, 2023
Total revenues
$
$
$
$
Adjusted EBITDA
(32,353 )
(11,899 )
Total assets
Capital expenditures
Three months ended September 30, 2022
Total revenues
$
$
$
$
Adjusted EBITDA
(10,349 )
Total assets
Capital expenditures
Nine months ended September 30, 2023
Total revenues
$
$
$
$
Adjusted EBITDA
(29,088 )
Total assets
Capital expenditures
Nine months ended September 30, 2022
Total revenues
$
$
$
$
Adjusted EBITDA
(28,579 )
Total assets
Capital expenditures
The reconciliations of Adjusted EBITDA to net income attributable to the Company for the three and nine months
ended September 30, 2023 and 2022 are as follows:
Three months ended
Nine months ended
September 30,
September 30,
(in US$ thousands)
2023
2022
2023
2022
Net (loss) income
$
(21,083 )
$
$
$
Depreciation, depletion and amortization
Interest expense (net of interest income)
Income tax (benefit) expense
(18,230 )
Other foreign exchange gains
(1)
(7,859 )
(31,917 )
(17,265 )
(55,064 )
Loss on extinguishment of debt
Losses (gains) on idled assets
(2)
(1,221 )
(Decrease) increase in provision for
discounting and credit losses
(536 )
(12 )
(4,255 )
Consolidated Adjusted EBITDA
$
$
$
$
(1)
certain entities within the group that are denominated in currencies other than their respective functional currencies. These gains and losses
are included in “Other, net” on the unaudited Consolidated Statement of Operations and Comprehensive Income.
(2)
assets that were classified as held for sale. Refer to Note 4 “Assets held for sale” for further details.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The reconciliations of capital expenditures per the Company’s segment information to capital expenditures
disclosed on the unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2023 and 2022 are as follows:
Nine months ended September 30,
(in US$ thousands)
2023
2022
Capital expenditures per unaudited Condensed Consolidated Statements of
Cash Flows
$
$
Accruals for capital expenditures
Payment for capital acquired in prior periods
(11,241 )
(7,475 )
Advance payment to acquire long lead capital items
(21,577 )
Capital expenditures per segment detail
$
$
Disaggregation of Revenue
The Company disaggregates the revenue from contracts with customers by major product group for each of the
Company’s reportable segments, as the Company believes it best depicts the nature, amount, timing and
uncertainty of revenues and cash flows. All revenue is recognized at a point in time.
Three months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
Three months ended September 30, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
Nine months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
Nine months ended September 30, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
(1) Other revenue for the Australian segment includes the amortization of the Stanwell non-market coal supply contract obligation liability.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
4. Assets Held for Sale
During the fourth quarter of 2020, the Company committed to a plan to sell the Greenbrier mining asset and
determined that all of the criteria to classify assets and liabilities as held for sale were met. The asset is part of
our U.S. segment, located in the State of Virginia in the United States. The Greenbrier asset does not form part
of the Company’s core business strategy and has been idle since April 1, 2020.
The Company remains committed to a plan to sell the asset, however, on March 31, 2023, the Company
concluded that the timing of the sale within the next twelve months is uncertain. As such, the Greenbrier mining
asset has been reclassified as held and used since March 31, 2023, as it does not meet the criteria for
classification as held for sale.
The Greenbrier mining asset remains idle and the Company does not intend to recommence operations at the
mine.
The assets and liabilities of Greenbrier met the criteria for classification as held for sale as of December 31, 2022,
therefore the Condensed Consolidated Balance Sheet continues to reflect these assets and liabilities as held for
sale as of that date.
5. Inventories
(in US$ thousands)
September 30,
2023
December 31,
2022
Raw coal
$
$
Saleable coal
Total coal inventories
Supplies inventory
Total inventories
$
$
Coal inventories measured at its net realizable value were $
million
and $
and December 31, 2022, respectively, and primarily relates to coal designated for deliveries under the Stanwell
non-market coal supply agreement.
6. Property, Plant and Equipment
(in US$ thousands)
September 30,
2023
December 31,
2022
Land
$
$
Buildings and improvements
Plant, machinery, mining equipment and transportation vehicles
Mineral rights and reserves
Office and computer equipment
Mine development
Asset retirement obligation asset
Construction in process
Total cost of property, plant and equipment
Less accumulated depreciation, depletion and amortization
Property, plant and equipment, net
$
$
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
7. Other Assets
(in US$ thousands)
September 30,
2023
December 31,
2022
Other current assets
Prepayments
$
$
Long service leave receivable
Tax credits receivable
Deposits to acquire capital items
Short term deposits
Other
Total other current assets
$
$
The Company has other current assets which includes prepayments, favorable mineral leases, long service leave
receivable, equipment deposits, short term deposits and coalfield employment enhancement tax credit
receivable.
Short term deposits are term deposits that do not meet the cash and cash equivalents criteria.
8. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
(in US$ thousands)
September 30,
2023
December 31,
2022
Wages and employee benefits
$
$
Taxes other than income taxes
Accrued royalties
Accrued freight costs
Accrued mining fees
Acquisition related accruals
Other liabilities
Total accrued expenses and other current liabilities
$
$
Acquisition related accruals is an accrual for the estimated remaining stamp duty payable on the Curragh
acquisition, including penalty interest, of $
further details.
9. Leases
From time to time, the Company enters into mining services contracts, which may include embedded leases of
mining equipment and other contractual agreements to lease mining equipment and facilities. Based upon the
Company’s assessment of terms within these agreements, the Company classifies a lease as either finance or
operating.
During the nine months period ended September 30, 2023, the Company entered into a number of agreements
to lease mining equipment. On mobilization of this mining equipment, the Company recognized right-of-use
assets and operating lease liabilities of $
As of September 30, 2023, there are additional operating leases of mining equipment, which have not yet been
mobilized, that have a present value of minimum lease payments of approximately $
leases have commenced in October 2023 with lease terms of
Information related to the Company’s right-of-use assets and related lease liabilities are as follows:
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Three months ended
Nine months ended
(in US$ thousands)
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Operating lease costs
$
$
$
$
Cash paid for operating lease liabilities
Finance lease costs:
Amortization of right of use assets
Interest on lease liabilities
Total finance lease costs
$
$
$
$
(in US$ thousands)
September 30,
2023
December 31,
2022
Operating leases:
Operating lease right-of-use assets
$
$
Finance leases:
Property and equipment
Accumulated depreciation
(243 )
(186 )
Property and equipment, net
Current operating lease obligations
Operating lease liabilities, less current portion
Total operating lease liabilities
Current finance lease obligations
Finance lease liabilities, less current portion
Total Finance lease liabilities
Current lease obligation
Non-current lease obligation
Total Lease liability
$
$
September 30,
2023
December 31,
2022
Weighted Average Remaining Lease Term (Years)
Weighted average remaining lease term – finance leases
Weighted average remaining lease term – operating leases
Weighted Average Discount Rate
Weighted discount rate – finance lease
Weighted discount rate – operating lease
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The Company’s operating leases have remaining lease terms of
to extend the terms where the Company deems it is reasonably certain the options will be exercised. Maturities
of lease liabilities as at September 30, 2023, are as follows:
(in US$ thousands)
Operating
Lease
Finance
Lease
Year ending December 31,
2023
$
$
2024
2025
2026
2027
Thereafter
Total lease payments
Less imputed interest
(7,462 )
(3 )
Total lease liability
$
$
10. Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities at September 30, 2023:
September 30, 2023
December 31, 2022
Weighted Average
Interest Rate at
September 30, 2023
Final
Maturity
% Senior Secured Notes
$
$
%
(2)
New ABL Facility
Discount and debt issuance costs
(1)
(7,608 )
(9,373 )
Total interest bearing liabilities
$
$
(1)
Debt issuance costs incurred on the establishment of the ABL Facility has been included within "Other non-current assets" in the
unaudited Condensed Consolidated Balance Sheet.
(2)
Senior Secured Notes
As of September 30, 2023, the Company’s aggregate principal amount of the
% Senior Secured Notes
due 2026, or the Notes, outstanding was $
secured obligations of the Company.
The terms of the Notes are governed by an indenture, dated as of May 12, 2021, or the Indenture, among
Coronado Finance Pty Ltd, an Australian proprietary company, as issuer, Coronado, as parent guarantor, the
other guarantors party thereto and Wilmington Trust, National Association, as trustee. The Indenture contains
customary covenants for high yield bonds, including, but not limited to, limitations on investments, liens,
indebtedness, asset sales, transactions with affiliates and restricted payments, including payment of dividends
on capital stock. As of September 30, 2023, the Company was in compliance with all applicable covenants under
the Indenture.
Under the terms of the Indenture, upon the occurrence of a “Change of Control” (as defined in the Indenture), the
issuer is required to make an offer, or a Change of Control Offer, to repurchase the Notes at
% of the
aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase
date. Alternatively, if the issuer elects to redeem all of the Notes, during the 12-month period commencing on
May 15 of the years set forth below at the redemption prices (expressed in percentages of principal amount on
the redemption date) set forth below, plus accrued and unpaid interest to, but not including, the redemption date,
the issuer is not required to make a Change of Control Offer:
Period
Redemption price
2023
108.06%
2024
104.03%
2025 and thereafter
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
New Asset Based Revolving Credit Facility
On May 8, 2023, the Company, Coronado Coal Corporation, a Delaware corporation and wholly owned subsidiary
of the Company, Coronado Finance Pty Ltd, an Australian proprietary company and a wholly owned subsidiary
of the Company, or an Australian Borrower, Coronado Curragh Pty Ltd, an Australian proprietary company and
wholly owned subsidiary of the Company, or an Australian Borrower and, together with the other Australian
Borrower, the Borrowers, and the other guarantors party thereto, collectively with the Company, the Guarantors
and, together with the Borrowers, the Loan Parties, entered into a senior secured asset-based revolving credit
agreement in an initial aggregate amount of $
Services Australia Pty Ltd, as the Administrative Agent, Global Loan Agency Services Australia Nominees Pty
Ltd, as the Collateral Agent, the Hongkong and Shanghai Banking Corporation Limited, Sydney Branch, as the
Lender, and DBS Bank Limited, Australia Branch, as the Lender and, together with the other Lender, the Lenders.
On August 3, 2023, the Company satisfied all conditions precedent under the New ABL Facility, at which time it
became effective and replaced the predecessor ABL Facility.
The New ABL Facility matures in August 2026 and provides for up to $
$
Availability under the New ABL Facility is limited to an eligible borrowing base, determined by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under the New ABL Facility bear interest at a rate per annum equal to an applicable rate of
%
plus BBSY, for loans denominated in A$, or SOFR, for loans denominated in US$, at the Borrower’s election.
The New ABL Facility is guaranteed by the Guarantors. Amounts outstanding under the New ABL Facility are
secured by (i) first priority lien in the accounts receivable and other rights to payment, inventory, intercompany
indebtedness, certain general intangibles and commercial tort claims, commodities accounts, deposit accounts,
securities accounts and other related assets and proceeds and products of each of the foregoing, collectively,
the New ABL Collateral, (ii) a second-priority lien on substantially all of the Company’s assets and the assets of
the guarantors, other than the New ABL Collateral, and (iii) solely in the case of the obligations of the Australian
Borrower, a featherweight floating security interest over certain assets of the Australian Borrower, in each case,
subject to certain customary exceptions.
The New ABL Facility contains customary representations and warranties and affirmative and negative covenants
including, among others, a covenant regarding the maintenance of leverage ratio to be less than
covenant regarding maintenance of interest coverage ratio to be more than
payment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or any of its
Subsidiaries, covenants relating to financial reporting, covenants relating to the incurrence of liens or
encumbrances, covenants relating to the incurrence or prepayment of certain debt, compliance with laws, use of
proceeds, maintenance of properties, maintenance of insurance, payment obligations, financial accommodation,
mergers and sales of all or substantially all of the Borrowers and Guarantors’, collectively the Loan Parties, assets
and limitations on changes in the nature of the Loan Parties’ business.
Subject to customary grace periods and notice requirements, the New ABL Facility also contains customary
events of default.
Under the terms of New ABL Facility, a Review Event (as defined in the New ABL Facility) is triggered if, among
other matters, a “change of control” (as defined in the New ABL Facility) occurs.
Following the occurrence of a Review Event, the Borrowers must promptly meet and consult in good faith with
the Administrative Agent and the Lenders to agree a strategy to address the relevant Review Event including but
not limited to a restructure of the terms of the New ABL Facility to the satisfaction of the Lenders . If at the end of
a period of
result of their discussion or meeting with the Borrowers or do not wish to continue to provide their commitments,
the Lenders may declare all amounts owing under the ABL Facility immediately due and payable, terminate such
Lenders’ commitments to make loans under the ABL Facility, require the Borrowers to cash collateralize any
letter of credit obligations and/or exercise any and all remedies and other rights under the New ABL Facility.
To establish the New ABL Facility, the Company incurred debt issuance costs of $
elected an accounting policy to present debt issuance costs incurred before the debt liability is recognized (e.g.
before the debt proceeds are received) as an asset which will be amortized ratably over the term of the facility.
The costs will not be subsequently reclassified as a direct deduction of the liability. The carrying value of debt
issuance costs, recorded as “Other non-current assets” in the unaudited Condensed Consolidated Balance Sheet
was $
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
As at September 30, 2023, the letter of credit sublimit had been partially used to issue $
guarantees on behalf of the Company and
ABL Facility. As at September 30, 2023, the Company was in compliance with all applicable covenants under the
New ABL Facility.
Predecessor ABL Facility
On August 3, 2023, the New ABL Facility replaced the predecessor ABL Facility. As a result of the early
termination of the predecessor ABL Facility, the Company recorded a loss on debt extinguishment of $
in its unaudited Condensed Consolidated Statement of Operations and Comprehensive Income for each of the
three and nine months ended September 30, 2023.
The foregoing descriptions of the Notes and the New ABL Facility are subject to the disclosure in Note 17.
“Related Party Transactions” incorporated herein by reference.
11. Income Taxes
For the nine months ended September 30, 2023 and 2022, the Company estimated its annual effective tax rate
and applied this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The
tax effects of unusual or infrequently occurring items, including effects of changes in tax laws or rates and
changes in judgment about the realizability of deferred tax assets, are reported in the interim period in which they
occur. The Company’s 2023 estimated annual effective tax rate is
%, which has been favorably impacted by
mine depletion deductions in the United States.
The Company had an income tax expense of $
on an income before tax of $
discrete benefit of $
Income tax expense of $
an estimated annual effective tax rate of
% for the period.
The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements.
For the nine months ended September 30, 2023, the Company had
interest or penalties is required, it is the Company’s policy to include these as a component of income tax
expense.
The Company is subject to taxation in the U.S. and its various states, as well as Australia and its various localities.
In the U.S. and Australia, the first tax return was lodged for the year ended December 31, 2018. In the U.S.,
companies are subject to open tax audits for a period of seven years at the federal level and five years at the
state level. In Australia, companies are subject to open tax audits for a period of four years from the date of
assessment.
The Company assessed the need for valuation allowances by evaluating future taxable income, available for tax
strategies and the reversal of temporary tax differences.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
12. Earnings per Share
Basic earnings per share of common stock is computed by dividing net income attributable to the Company for
the period, by the weighted-average number of shares of common stock outstanding during the same period.
Diluted earnings per share of common stock is computed by dividing net income attributable to the Company by
the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive
securities.
Basic and diluted earnings per share was calculated as follows (in thousands, except per share data):
Three months ended September 30,
Nine months ended September 30,
(in US$ thousands, except per share data)
2023
2022
2023
2022
Numerator:
Net (loss) income attributable to Company
stockholders
$
(21,083 )
$
$
$
Denominator (in thousands):
Weighted-average shares of common stock
outstanding
Effects of dilutive shares
Weighted average diluted shares of common
stock outstanding
(Loss) Earnings Per Share (US$):
Basic
(0.13 )
Dilutive
(0.13 )
The Company’s common stock is publicly traded on the ASX in the form of CDIs, convertible at the option of the
holders into shares of the Company’s common stock on a
.
13. Fair Value Measurement
The fair value of a financial instrument is the amount that will be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The fair values of financial
instruments involve uncertainty and cannot be determined with precision.
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible. The Company determines fair value based on assumptions that
market participants would use in pricing an asset or liability in the market. When considering market participant
assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and
unobservable inputs, which are categorized in one of the following levels:
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the
reporting entity at the measurement date.
Level 2 Inputs: Other than quoted prices that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the asset or liability.
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that
observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity
for the asset or liability at measurement date.
Financial Instruments Measured on a Recurring Basis
As of September 30, 2023, there were
recurring basis.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Other Financial Instruments
The following methods and assumptions are used to estimate the fair value of other financial instruments as of
September 30, 2023 and December 31, 2022:
●
expenses, lease liabilities and other current financial liabilities: The carrying amounts reported in the
unaudited Condensed Consolidated Balance Sheets approximate fair value due to the short maturity of
these instruments.
●
values approximate the carrying values reported in the unaudited Condensed Consolidated Balance
Sheets.
●
cost. As of September 30, 2023, there were
New ABL Facility. The estimated fair value of the Notes as of September 30, 2023 was approximately
$
14. Accumulated Other Comprehensive Losses
The Company’s Accumulated Other Comprehensive Losses consists of foreign currency translation adjustment
of subsidiaries for which the functional currency is different of the Group’s functional currency in U.S. dollar.
Accumulated other comprehensive losses consisted of the following at September 30, 2023:
(in US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 2022
$
(91,423 )
Net current-period other comprehensive income (loss):
Loss in other comprehensive income before reclassifications
(11,939 )
Loss on long-term intra-entity foreign currency transactions
(18,608 )
Total net current-period other comprehensive loss
(30,547 )
Balance at September 30, 2023
$
(121,970 )
15. Commitments
(a) Mineral Leases
The Company leases mineral interests and surface rights from land owners under various terms and royalty
rates. The future minimum royalties under these leases as of September 30, 2023 are as follows:
(in US$ thousands)
Amount
Year ending December 31,
2023
$
2024
2025
2026
2027
Thereafter
Total
$
Mineral leases are not in scope of Accounting Standards Codification, or ASC, 842 and continue to be
accounted for under the guidance in ASC 932, Extractive Activities – Mining.
(b) Other commitments
As of September 30, 2023, purchase commitments for capital expenditures were $
obligated within the next twelve months.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
In Australia, the Company has generally secured the ability to transport coal through rail contracts and coal export
terminal contracts that are primarily funded through take-or-pay arrangements with terms ranging up to
.
In the U.S., the Company typically negotiates its rail and coal terminal access on an annual basis. As of
September 30, 2023, these Australian and U.S. commitments under take-or-pay arrangements totaled
$
16. Contingencies
In the normal course of business, the Company is a party to certain guarantees and financial instruments with
off-balance sheet risk, such as letters of credit and performance or surety bonds.
arrangements are reflected in the Company’s unaudited Condensed Consolidated Balance Sheets. Management
does not expect any material losses to result from these guarantees or off-balance sheet financial instruments.
As required by certain agreements, the Company had cash collateral in the form of deposits in the amount of
$
to-back support for bank guarantees, financial payments, other performance obligations, various other operating
agreements and contractual obligations under workers compensation insurance . These deposits are restricted
and classified as long-term assets in the unaudited Condensed Consolidated Balance Sheets.
In accordance with the terms of the New ABL Facility, the Company may be required to cash collateralize the
New ABL Facility to the extent of outstanding letters of credit after the expiration or termination date of such letter
of credit. As of September 30, 2023,
and
For the U.S. Operations in order to provide the required financial assurance, the Company generally uses surety
bonds for post-mining reclamation. The Company can also use bank letters of credit to collateralize certain
obligations. As of September 30, 2023, the Company had outstanding surety bonds of $
of credit of $
contractual obligations under workers compensation insurance and to secure other obligations and commitments.
For the Australian Operations, the Company had bank guarantees outstanding of $
million issued from the New ABL Facility, as at September 30, 2023, primarily in respect of certain rail and port
arrangements.
As at September 30, 2023, the Company in aggregate had total outstanding bank guarantees provided of $
million to secure obligations and commitments, including $
regulatory changes relating to these obligations could result in increased obligations, additional costs or additional
collateral requirements.
Stamp duty on Curragh acquisition
On September 27, 2022, the Company received from the Queensland Revenue Office, or QRO, an assessment
of the stamp duty payable on its acquisition of the Curragh mine in March 2018. The QRO assessed the stamp
duty on this acquisition at an amount of $
(A$
awaiting the outcome of this objection. The outcome of this objection remains uncertain.
The Company continues to maintain its position and the estimated accrual of $
duty payable on the Curragh acquisition based on legal and valuation advice obtained. In October 2022, the
Company made a partial payment following filing of the objection reducing the estimated accrual to $
(A$
Condensed Consolidated Balance sheet, as at September 30, 2023.
From time to time, the Company becomes a party to other legal proceedings in the ordinary course of business
in Australia, the U.S. and other countries where the Company does business. Based on current information, the
Company believes that such other pending or threatened proceedings are likely to be resolved without a material
adverse effect on its financial condition, results of operations or cash flows. In management’s opinion, the
Company is not currently involved in any legal proceedings, which individually or in the aggregate could have a
material effect on the financial condition, results of operations and/or liquidity of the Company.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
17. Related
‑
Party Transactions
The Energy & Minerals Group
On September 25, 2023, Energy & Minerals Group, the Company’s controlling stockholder through its ownership
of Coronado Group LLC, including through certain of its affiliates and managed funds (the Sellers), advised the
Company that it had entered into a membership interest purchase agreement, or MIPA, with Sev.en Global
Investments a.s., or SGI. A copy of the MIPA has not been made available to the Company or the Special
Committee referred to below as of the date of this Quarterly Report on Form 10-Q. However, the Company
understands that, pursuant to the terms of the MIPA, the Sellers agreed to sell all of their interests in Coronado
Group LLC to a wholly-owned subsidiary of SGI. We refer to the proposed transaction as the SGI Transaction.
The Company also understands that, under the MIPA, the SGI Transaction is subject to customary closing
conditions including regulatory approvals in the U.S. and Australia.
The Board of Directors has appointed a special committee of independent directors, or the Special Committee,
to, among other things, assess the impact and consequences of the SGI Transaction on the Company and take
such actions as the Special Committee deems appropriate in connection with the SGI Transaction.
The Energy and Minerals Group has reported that following the closing of the SGI Transaction, SGI will be the
direct or indirect owner of Coronado Group LLC. As of the date of this Quarterly Report on Form 10-Q, Coronado
Group LLC is currently the direct owner of
shares of common stock, or
% of the Company’s outstanding total common stock) and the
Share.
Based on information that the Company is currently aware of, on completion of the SGI Transaction, a change of
control as defined under the terms of Notes and New ABL Facility may occur. Refer to Note 10. “Interest Bearing
Liabilities” for further information.
Under the Company’s 2018 Equity Incentive Plan, the change of control provisions may also be triggered on
completion of the SGI Transaction, however the Compensation and Nominating Committee of the Board of
Directors, at its sole discretion, will determine how the outstanding awards under the plan will be dealt with, which
may include acceleration of the vesting conditions.
In addition, certain contract counterparties, including Stanwell, customers, suppliers and third-party providers
may assert contractual rights, such as consent or termination rights that may be triggered by the change of control
resulting from the consummation of the SGI Transaction.
For a number of customers and supplier agreements, including contractor agreements, the completion of the SGI
Transaction may trigger a financial or suitability assessment by the counterparty, which may entitle the
counterparty to terminate the agreement, request further security or seek amendments to the terms of the
agreement.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
18. Material Transactions
Curragh Housing Transaction
On May 8, 2023, the Company entered into an agreement, the Curragh Housing Agreement, for accommodation
services and to sell and leaseback housing and accommodation assets included in property, plant and
equipment. The transaction did not satisfy the sale criteria under ASC 606 –
Revenues from Contracts with
Customers
underlying property, plant and equipment on its condensed consolidated balance sheet. Upon completion, the
proceeds of $
Liabilities” on the Company’s Condensed Consolidated Balance Sheet. The term of the financing arrangement is
%.
In connection with this transaction, the Company will borrow an additional amount of $
which will be recorded in “Interest Bearing Liabilities” on completion date. The term of the arrangement is
ten
years
%.
The Curragh Housing Agreement is subject to conditions precedent not completed as at September 30, 2023.
In line with the Company’s capital management strategy, the above transactions provide additional liquidity. In
addition, the accommodation services component of the Curragh Housing Agreement is anticipated to enhance
the level of service for our employees at our Curragh mine.
Coronado Global Resources Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Coronado Global Resources Inc.
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Coronado Global Resources
Inc. (the Company) as of September 30, 2023, the related condensed consolidated statements of operations and
comprehensive income for the three and nine-month periods ended September 30, 2023 and 2022, the
condensed consolidated statements of stockholders’ equity for the three-months periods ended March 31, June
30 and September 30, 2023 and 2022, the condensed consolidated statements of cash flows for the nine-month
periods ended September 30, 2023 and 2022, and the related notes (collectively referred to as the “condensed
consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications
that should be made to the condensed consolidated interim financial statements for them to be in conformity with
U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2022, the
related consolidated statements of operations and comprehensive income, stockholders' equity and cash flows
for the year then ended, and the related notes (not presented herein), and in our report dated February 21, 2023,
we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2022, is
fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company's management. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We
conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements
consists principally of applying analytical procedures and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards
of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.
/s/ Ernst & Young
Brisbane, Australia
November 8, 2023.
Coronado Global Resources Inc.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis of our Financial Condition and Results of Operations, or
MD&A, should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the
related notes to those statements included elsewhere in this Quarterly Report on Form 10 -Q. In addition, this
Quarterly Report on Form 10-Q report should be read in conjunction with the Consolidated Financial Statements
for year ended December 31, 2022 included in Coronado Global Resources Inc.’s Annual Report on Form 10-K
for the year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission, or SEC, and
the Australian Securities Exchange, or the ASX, on February 21, 2023.
Unless otherwise noted, references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “Company,” or
“Coronado” refer to Coronado Global Resources Inc. and its consolidated subsidiaries and associates, unless
the context indicates otherwise.
All production and sales volumes contained in this Quarterly Report on Form 10-Q are expressed in metric tons,
or Mt, millions of metric tons, or MMt, or millions of metric tons per annum, or MMtpa, except where otherwise
stated. One Mt (1,000 kilograms) is equal to 2,204.62 pounds and is equivalent to 1.10231 short tons. In addition,
all dollar amounts contained herein are expressed in United States dollars, or US$, except where otherwise
stated. References to “A$” are references to Australian dollars, the lawful currency of the Commonwealth of
Australia. Some numerical figures included in this Quarterly Report on Form 10-Q have been subject to rounding
adjustments. Accordingly, numerical figures shown as totals in certain tables may not equal the sum of the figures
that precede them.
CAUTIONARY NOTICE REGARDING FORWARD -LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
or the Exchange Act, concerning our business, operations, financial performance and condition, the coal, steel
and other industries, as well as our plans, objectives and expectations for our business, operations, financial
performance and condition. Forward-looking statements may be identified by words such as “may,” “could,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “anticipate,” “forecast,” “outlook,” “target,” “likely,”
“considers” and other similar words.
Any forward-looking statements involve known and unknown risks, uncertainties, assumptions and other
important factors that could cause actual results, performance, events or outcomes to differ materially from the
results, performance, events or outcomes expressed or anticipated in these statements, many of which are
beyond our control. Such forward-looking statements are based on an assessment of present economic and
operating conditions on a number of best estimate assumptions regarding future events and actions. These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced plans, or an investment in our securities include, but are not limited to:
●
●
unrest and wars, as well as risks related to government actions with respect to trade agreements, treaties
or policies;
●
as diesel fuel, steel, explosives and tires, as the result of inflationary pressures or otherwise;
●
developments. For example, the amendments to the coal royalty regime implemented by the Queensland
state Government in Australia in 2022 introducing higher tiers to the coal royalty rates applicable to our
Australian Operations;
●
relating to mining activities, including possible impacts on global climate issues, which could result in
increased regulation of coal combustion and requirements to reduce GHG emissions in many
jurisdictions, including federal and state government initiatives to control GHG emissions could increase
costs associated with coal production and consumption, such as costs for additional controls to reduce
carbon dioxide emissions or costs to purchase emissions reduction credits to comply with future
emissions trading programs, which could significantly impact our financial condition and results of
operations, affect demand for our products or our securities and reduced access to capital and insurance;
Coronado Global Resources Inc.
●
related provisions in material agreements;
●
due to future public health crisis (such as the COVID-19 pandemic), of one or more of our major
customers, including customers in the steel industry, key suppliers/contractors, which among other
adverse effects, could lead to reduced demand for our coal, increased difficulty collecting receivables
and customers and/or suppliers asserting force majeure or other reasons for not performing their
contractual obligations to us;
●
●
governing such indebtedness;
●
performance or otherwise;
●
●
coal deliveries, or increase the cost of operating our business;
●
●
●
●
●
●
●
arrangements with rail and port operators;
●
●
●
●
any exposure to hazardous substances caused by our operations, as well as any environmental
contamination our properties may have or our operations may cause;
●
●
regulations;
●
●
proprietary or confidential information about us, our customers or other third parties;
●
require us to recognize impairment charges related to those assets;
●
●
impact our reported financial results; and
Coronado Global Resources Inc.
●
Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q.
We make many of our forward-looking statements based on our operating budgets and forecasts, which are
based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is
very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could
affect our actual results.
See Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022,
filed with the SEC and ASX on February 21, 2023, and Part II, Item 1A. “Risk Factors” of our Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2023, filed with SEC and ASX on May 8, 2023, for a more
complete discussion of the risks and uncertainties mentioned above and for discussion of other risks and
uncertainties we face that could cause actual results to differ materially from those expressed or implied by these
forward-looking statements.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary
statements, as well as others made in this Quarterly Report on Form 10-Q and hereafter in our other filings with
the SEC and public communications. You should evaluate all forward-looking statements made by us in the
context of these risks and uncertainties.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to
you. You should not interpret the disclosure of any risk to imply that the risk has not already materialized.
Furthermore, the forward-looking statements included in this Quarterly Report on Form 10-Q are made only as
of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a
result of new information, future events, or otherwise, except as required by applicable law.
Overview
We are a global producer, marketer and exporter of a full range of Met coal products. We own a portfolio of
operating mines and development projects in Queensland, Australia, and in the states of Virginia, West Virginia
and Pennsylvania in the United States.
Our Australian Operations comprise the 100%-owned Curragh producing mine complex. Our U.S. Operations
comprise two 100%-owned producing mine complexes (Buchanan and Logan), one 100%-owned idled mine
complex (Greenbrier) and two development properties (Mon Valley and Russell County). In addition to Met coal,
our Australian Operations sell thermal coal domestically, which is used to generate electricity, to Stanwell and
some thermal coal in the export market. Our U.S. Operations primarily focus on the production of Met coal for
the North American domestic and seaborne export markets and also produce and sell some thermal coal that is
extracted in the process of mining Met coal.
During the third quarter of 2023, Coronado navigated through some operational headwinds that were out of our
control, including adverse geological conditions at our U.S. Operations impacting production rates yield and
unexpected downtime for repairs and maintenance following a mechanical failure of one of the draglines at our
Australian Operations. In addition, coal production rates at our Australian Operations were lower in the third
quarter of 2023 primarily due to planned focus on advancing pre-strip waste movement and the completion of
planned maintenance on the two coal preparation plants. Overall, these events contributed to the lower saleable
production of 0.8 MMt compared to the three months ended June 30, 2023. Despite the lower production, sales
volume compared to the three months ended June 30, 2023 increased as the Company drew down on coal
inventory built in the previous quarter.
Coking coal index prices improved in the third quarter of 2023 compared to the previous quarter due to a
combination of tight supply from the Australian coal market, which was impacted negatively by continued rail
constraints and planned maintenance disruptions to operations and at Queensland ports, and heightened
demand from Indian steel mills restocking raw material as the monsoon season comes to an end. The Australian
Premium Low Volatile Hard Coking Coal, or AUS PLV HCC, index price averaged $263.6 per Mt for the three
months ended September 30, 2023, $20.8 per Mt higher, compared to the three months ended June 30, 2023.
The AUS PLV HCC averaged $283.5 per Mt for the nine months ended September 30, 2023, $109.0 per Mt
lower, compared to the nine months ended September 30, 2022. The spot price of AUS PLV HCC reached $333
per Mt during the three months ended September 30, 2023.
Our results for the nine months ended September 30, 2023, were adversely impacted by (1) lower average
realized Met price per Mt sold compared to the nine months ended September 30, 2022, (2) additional fleets
deployed to recover pre-strip overburden removal, (3) significant wet weather events during the first quarter of
2023 and equipment breakdown at our Australian Operations impacting production, (4) rail constraints and
disruption to port operations impacting timing of sales at our Australian Operations, (5) adverse geological
Coronado Global Resources Inc.
conditions at our U.S. Operations resulting in slower production rates and yield in the quarter ended September
30, 2023, and (6) continued inflationary pressure on labor and supply costs.
For the nine months ended September 30, 2023, we produced 11.9 MMt and sold 11.7 MMt of coal. Met coal
sales represented 75.8% of our total volume of coal sold and 91.0% of total coal revenues for the nine months
ended September 30, 2023, compared to 78.4% and 96.2%, respectively, for the nine months ended September
30, 2022.
Coal revenues of $2,163.1 million for the nine months ended September 30, 2023, decreased by 23.3%
compared to the same period in 2022, driven by average realized Met price per Mt sold, which was $57.9 per Mt
lower than the average realized price per Mt sold of $279.4 for the nine months ended September 30, 2022.
Additionally, sales volumes were 0.7 Mt lower for the nine months ended September 30, 2023, compared to the
same period in 2022, primarily driven by lower production as well as required coal qualities to meet sales
commitments during the nine months ended September 30, 2023.
Mining costs for the nine months ended September 30, 2023, were $1,210.4 million or $105.5 per Mt sold, $17.9
per Mt sold higher compared to the corresponding period in 2022, largely driven by elevated inflation levels, the
impacts of lower production following significant weather events, equipment breakdown, adverse geological
conditions at our U.S. Operations and additional fleets mobilized at our Australian Operations during the nine
months ended September 30, 2023.
Dividends
In September 2023, the Company settled its previously declared dividends of $8.4 million, which were paid to
stockholders from available cash.
Liquidity
As of September 30, 2023, our net cash position, comprising of $336.8 million cash (excluding restricted cash)
less $242.3 million aggregate principal amount of Notes outstanding, was $94.5 million. Coronado has available
liquidity of $486.8 million as of September 30, 2023, consisting of cash (excluding restricted cash), unrestricted
short term deposits of $21.6 million and $128.4 million availability under our New ABL facility.
Safety
For our Australian Operations, the twelve-month rolling average Total Reportable Injury Frequency Rate, or
TRIFR, at September 30, 2023 was 2.43,
compared to a rate of 3.92 at the end of December 31, 2022. At our
U.S. Operations, the twelve -month rolling average Total Reportable Incident Rate, or TRIR, at September 30,
2023 was 1.60, compared to a rate of 2.42 at the end of December 31, 2022. These strong results year to date
reflect a record safety rate at our U.S. Operations and the best safety rate since July 2018 for our Australian
Operations. Reportable rates for our Australian and U.S. Operations are below the relevant industry benchmarks.
Our Logan mining complex at our U.S. Operations, which includes multiple underground and surface mines,
achieved 1.5 million hours Lost Time Injury, or LTI, free during the quarter.
The health and safety of our workforce is our number one priority and Coronado continues implement safety
initiatives to improve our safety rates every quarter.
Segment Reporting