Note 8 - Leases

12 Months Ended

Dec. 31, 2023

Notes To Financial Statements

LEASES

NOTE 8—LEASES

The Company has various finance leases for mining equipment, which generally include 3-5 year terms and expire through 2028. In addition, we have one operating lease for office space with a term of approximately five years that runs through 2027.

Amortization of right-of-use assets associated with finance leases was $8.5 million, $4.8 million, and $1.1 million in 2023, 2022, and 2021, respectively, as discussed in Note 3. Interest expense recognized for financing lease liabilities was $0.6 million, $0.4 million, and $0.1 million in 2023, 2022, and 2021, respectively. Operating lease expense was $0.2 million in 2023, $0.2 million in 2022, and $0.1 million in 2021.

Right-of-use assets and lease liabilities are determined as the present value of the lease payments, discounted using either the implicit interest rate in the lease or our estimated incremental borrowing rate based on similar terms, payments and the economic environment where the leased asset is located. Below is a summary of our leases:

(In thousands)	Classification	December 31, 2023		December 31, 2022
Right-of-use assets
Financing	Financing lease right-of-use assets, net	$	10,282	$	12,905
Operating	Other assets		540		694
Total right-of-use assets		$	10,822	$	13,599
Current lease liabilities
Financing	Current portion of financing lease obligations	$	5,456	$	5,969
Operating	Accrued expenses		134		122
Non-current lease liabilities
Financing	Long-term portion of financing lease obligations	$	4,915	$	4,917
Operating	Other long-term liabilities		450		585
Total lease liabilities		$	10,955	$	11,593

Minimum lease payments for our lease obligations are as follows:

	December 31, 2023
(In thousands)	Financing		Operating		Total
Future minimum lease payments:
2024	$	5,910	$	165	$	6,075
2025		2,390		165		2,555
2026		1,233		165		1,398
2027		1,233		165		1,398
2028		514		—		514
Total undiscounted lease payments		11,280		660		11,940
Less: Amounts representing interest		(909)		(76)		(985)
Present value of lease obligations	$	10,371	$	584	$	10,955
Weighted average remaining term (years)		2.8		4.0
Weighted average discount rate		4.2%		6.0%

During 2023, the Company also entered into a lease of office space in Charleston, WV, which is not reflected in the disclosures above because the commencement date has not occurred for accounting purposes. The lease will be recognized at a later date when the space is ready to be occupied by the Company. The term of the lease is expected to be in the range of 6-8 years.

Coal Leases and Associated Royalty Commitments—Leases of mineral reserves and related land leases are exempt from the lease accounting requirements addressed above. Refer to Note 10 for information regarding coal leases and associated royalty commitments.