v3.26.1
Derivatives and Fair Value Measurement
 3 Months Ended
Mar. 31, 2026
Derivatives and Fair Value Measurement [Abstract]  
Derivatives and Fair Value Measurement
15.
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 obligations under the
terms of the financial instrument.
The Company
mitigates
credit risk
by entering
into derivative
contracts with
high credit
quality counterparties,
limiting the amount of exposure to each counterparty 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$.
During
the
three
months
ended
March
31,
2026,
the
Company entered into forward foreign currency contracts to hedge its
foreign exchange exposure on a portion of
the US$ 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
$
30.0
million as
at March
31, 2026,
with maturity
dates varying
from April
2026 to
June
2026. Given the forward foreign currency contracts were designated as cash flow hedges, the unrealized
loss of
$
0.1
million
was
recognized
in
“Accumulated
other
comprehensive
loss”
at
March
31,
2026
in
the
unaudited
Condensed
Consolidated
Balance
Sheet,
and
will
be
reclassified
into
“Coal
revenues”
in
the
Condensed
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
16.
“Accumulated
Other
Comprehensive Losses.”
As of March 31,
2026, the Company recognized
a derivative liability
of $
0.1
million in respect of
forward foreign
currency contracts
unrealized loss,
classified within
“
Other Financial Liabilities
”. 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 assets
”.
The following table presents the details of outstanding
foreign currency contracts:
March 31, 2026
December 31, 2025
Notional
amount
(thousands)
Unit of
measure
Varying
maturity
dates
Notional
amount
(thousands)
Unit of
measure
Varying
maturity
dates
Designated forward foreign
currency contracts
30,000
US$
April 2026
-
June 2026
80,000
US$
January
2026-
March
2026
b) 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
March 31,
2026 and
December 31,
2025, the
Company’s forward foreign
currency contracts, a
net derivative
liability
of
$
0.1
million
and
derivative
asset
of
$
2.5
million,
respectively,
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).
Financial Instruments Measured on a Nonrecurring
Basis
Other than the estimated
fair value of the assets
described in Note 4. “Impairment
of assets”, which are
Level 3
fair value, there were
no
other assets and liabilities that
were measured at fair value
on a nonrecurring basis
as
of March 31, 2026, and December 31, 2025.
Other Financial Instruments
The following methods and assumptions were used to estimate the fair value of other financial instruments
as of
March 31, 2026 and December 31, 2025:
●
Cash and cash equivalents,
accounts receivable, accounts
payable, accrued expenses,
lease liabilities
and
other
current
financial
liabilities:
The
carrying
amounts
reported
in
the
unaudited
Condensed
Consolidated Balance Sheets approximated
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
d
the
carrying
values
reported
in
the
unaudited
Condensed
Consolidated
Balance
Sheets.
●
Interest bearing liabilities: The
Company’s outstanding interest-bearing liabilities are carried at
amortized
cost. As of March 31, 2026, the
fair value of the amounts drawn under the ABL
Facility approximated
the
carrying value reported
in the consolidated
balance sheets. The
estimated fair value
of the Notes
as of
March 31, 2026
was approximately
$
362.6
million based upon
quoted market prices
in a market
that is
not considered active (Level 2). The
estimated fair value of the
Curragh Housing loan was $
25.6
million
based upon unobservable inputs (Level 3).