v3.25.4
Derivatives and Fair Value Measurement
 12 Months Ended
Dec. 31, 2025
Derivatives and Fair Value Measurement [Abstract]  
Derivatives and Fair Value Measurement
21.
Derivatives and Fair Value
Measurement
(a)
Derivatives
The
Company
may
use
derivative
financial
instruments
to
manage
its
financial
risks
in
the
normal
course
of
operations, including foreign
currency risks, commodity
price risk related
to purchase of
raw materials (such
as
gas or
diesel) and interest
rate risk. Derivatives
for speculative purposes
are strictly prohibited
under the Treasury
Risk Management Policy approved by the Board of Directors.
The financing
counterparties
to the
derivative
contracts
potentially expose
the
Company
to credit-related
risk.
Credit risk is
the risk that
a third party
might fail to
fulfill its performance
obligations under the
terms of the
financial
instrument. The Company mitigates credit risk ensuring derivative contracts are entered with counterparties with
high credit quality and frequently monitoring their financial
condition.
Forward foreign currency contracts
The Company’s Australian Operations utilize the cash generated
from US$ denominated coal sales revenues to
fund operating costs,
which are predominantly in
A$. During the year
ended December 31, 2025,
the Company
entered into forward foreign
currency contracts to hedge
its foreign exchange exposure
on a portion of the
US$
denominated coal sales revenue at its Australian Operations,
whose functional currency is A$.
The aggregate
notional amount
of the
outstanding forward
foreign currency
derivative contracts
designated as
cash flow hedges was $
80.0
million as at December 31, 2025, with maturity dates
varying from January 2026 to
March 2026. Given the forward foreign currency contracts
were designated as cash flow hedges, the unrealized
gain of
$
2.5
million
was recognized
in “Accumulated
other comprehensive
loss” at
December
31,
2025 in
the
audited Consolidated Balance
Sheet, and
will be
reclassified into “Coal
revenues” in the
Consolidated Statements
of
Operations
and
Comprehensive
Income
in
the
period
in
which
the
hedged
transaction
impacts
income,
expected to be within the next 3 months. Refer to Note 22. “Accumulated
Other Comprehensive Losses”.
As of December
31, 2025, the
Company recognized a derivative
asset of $
2.5
million in respect of
forward foreign
currency contracts unrealized gain, classified within “
Other Current Assets
.”
b) Fair Value of Financial
Instruments
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
December
31,
2025,
the
Company’s
forward
foreign
currency
contracts,
a
net
derivative
asset
of
$
2.5
million, were required to be measured at fair value on a recurring basis based on
a valuation that is corroborated
by
the
use
of
market-based
pricing
(Level
2).
As
at
December
31,
2024,
there
were
no
financial
instruments
required to be measured at fair value on a recurring basis.
Other Financial Instruments
The following methods
and assumptions
are used to
estimate the fair
value of other
financial instruments
as of
December 31, 2025 and 2024:
•
Cash and cash
equivalents, accounts receivable,
accounts payable, accrued
expenses, lease liabilities
and other current financial liabilities: The carrying amounts reported in the Consolidated Balance Sheets
approximate fair value due to the short maturity of these
instruments.
•
Restricted deposits,
lease liabilities,
interest bearing
liabilities and
other financial
liabilities: The
fair values
approximate the carrying amounts
reported in the Consolidated Balance Sheets.
•
Interest bearing liabilities: The
Company’s outstanding interest-bearing liabilities are carried at
amortized
cost. As of December
31, 2025, the fair
value of the amounts drawn
under the ABL Facility approximated
the carrying value reported in the Consolidated Balance Sheet. As of December 31, 2025, the estimated
fair value of
the Notes was
$
366.9
million based
upon quoted
prices in a
market that
is not considered
active (Level 2), and the estimated fair value of the Curragh Housing loan was $
26.4
million based upon
unobservable inputs (Level 3).