Warrior Met Coal’s Ballooning Development Costs Prompt Analysts To Rethink Projections



RBC Capital analysts this week lowered their price target for Warrior Met Coal (NYSE:HCC) as costs balloon at the steelmaking coal company’s Blue Creek mine project.

The analysts dropped their price target from $74 to $64 after the company said it plans to spend $335 million to $390 million this year on developing the mine and other discretionary expenditures. That figure was 32% higher than the RBC analysts had expected and 24% above consensus expectations.

For the fourth quarter, the analysts were expecting the company to spend $152 million in capex, mostly on the mine expansion, while a consensus estimated $149 million. The actual price tag for capex and mine development the company reported last week was $182.5 million.

The company said free cash flow declined by $34 million in the fourth quarter compared to the comparable period in 2022 primarily because of capital expenditures at Blue Creek, which is located in Alabama.

Scheduled to begin commercial operations in 2026, Blue Creek has a reserve base of 69.8 million short tons of recoverable reserves and 49.5 million short tons of coal resources, making it one of the largest untouched metallurgical coal reserves …

Full story available on Benzinga.com


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