5. ASSET RETIREMENT OBLIGATIONS

Reclamation. The Company’s asset retirement obligations arise from the Federal Surface Mining Control and Reclamation Act of 1977 and similar state statutes, which require mine properties to be restored in accordance with regulatory standards and approved reclamation plans.

Reclamation activities primarily include restoring refuse and slurry ponds, reclaiming pits and related surface areas, sealing portals at underground mines, and treating water. The Company estimates the future cash flows needed to satisfy these obligations on a permit-by-permit basis using current permit requirements and various assumptions, including assumptions of estimated disturbed acreage, cost estimates, and expected productivity. Estimates of disturbed acreage are based on approved mining plans and related engineering data. Cost estimates reflect expected third-party costs. Productivity assumptions are based on historical performance of the equipment expected to be utilized in the reclamation activities.

The Company is subject to evolving environmental regulations, which may be stringent and are often beyond its control. Such changes could increase its costs and materially increase its asset retirement obligations.

The Company’s asset retirement obligations are initially recorded at fair value, determined using assumptions including a discount rate and third-party margin, each of which is discussed further below:

Discount Rate. The Company’s asset retirement obligations are initially recorded at fair value. The Company utilizes discounted cash flow techniques to estimate the fair value of its obligations. The Company bases its discount rate on the rates of treasury bonds with maturities similar to expected mine lives and adjusts for its credit standing as necessary after considering funding and assurance provisions. Changes in the Company’s credit standing could have a material impact on the valuation of its asset retirement obligations. The discount rates used to calculate the Fola Mine and Premier-Cambrian Mine asset retirement obligations are 7.18% and 7.75%, respectively. The annual inflation rate used to calculate the Fola Mine and Premier-Cambrian Mine asset retirement obligations are 2.72% and 2.77%, respectively.

Third-Party Margin. The measurement of an obligation at fair value is based upon the amount a third party would demand to perform the obligation. Because the Company plans to perform a significant amount of the reclamation activities with internal resources, a third-party margin was added to the estimated costs of these activities. This margin was estimated based upon the Company’s historical experience with contractors performing similar types of reclamation activities. The inclusion of this margin will result in a recorded obligation that is greater than its estimates of its cost to perform the reclamation activities. If the Company’s cost estimates are accurate, the excess of the recorded obligation over the cost incurred to perform the work will be recorded as a reduction to amortization within its Consolidated Statements of Operations at the time that reclamation work is completed.

On at least an annual basis, the Company reviews its reclamation liabilities and makes necessary adjustments for permit changes, if any, as granted by state authorities, additional costs resulting from accelerated mine closures, and revisions to cost estimates and productivity assumptions to reflect current experience and updated plans. As of December 31, 2025, the Company recorded asset retirement obligation liabilities of $79,344,297, including liabilities reported as current. While the precise amount of these future costs cannot be determined with certainty, as of December 31, 2025, the Company estimates that the aggregate undiscounted cost of final mine closures is approximately $129,445,432. The Company estimates annual aggregated amortization expense related to the long-term intangible assets of $3,170,377 for each of the next five years.

Minimum reclamation standards established by federal and state regulatory agencies govern the Company’s reclamation requirements at its mining operations. The Company’s asset retirement obligations consist principally of costs to restore acreage disturbed by surface mining operations as well as costs associated with reclaiming support acreage, treating mine water discharge, and performing other related functions at underground mines. The Company records asset retirement obligations at fair value in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred. Changes to asset retirement obligations resulting from permitted sites being added or removed or changes in future cash flow estimates are made in the period in which the change occurs and are offset by increasing or decreasing the carrying value of the related long-lived asset by an equal amount. Changes to the asset retirement obligation are also recognized as accretion expense in future periods. Changes to long-lived assets are also recognized as amortization expense in future periods. The Company reviews its estimated future cash flows for asset retirement obligations on at least an annual basis. The Company’s asset retirement obligations are based on management’s best estimate and may change from period to period as estimated future cash flows change.

 SCHEDULE OF ASSET RETIREMENT OBLIGATION