Coverage/ Warrior Met Coal, Inc./ Mines No. 4, No. 7 & Blue Creek
MI

Operating asset

Mines No. 4, No. 7 & Blue Creek

HCC Production USA underground 100% owned
Valuation case2026-10-16
2026E saleable coal12.25 Mtmetallurgical coal · literal product tonnes
ROM / CHPP feed12.25 Mt0× strip ratio
CHPP / saleable yield100%Saleable tonnes ÷ ROM feed
Realised coal price$176.22/tModeled pricing point
Site cash cost$100.03/tPer saleable tonne
Cash margin$64.36/tAfter royalties and modeled deductions
Risked NPV$5,233m100% ownership

Investment verdict

Three export longwall mines combining low-vol and High Vol A products with a reserve-backed multi-decade runway

B+
  • A
    Grade & continuity

    The operating mines carry 179.3Mt of recoverable reserve. Reserve-weighted dry quality is approximately 10.0% ash, 0.78% sulfur and 29.3% volatile matter across Mine No. 7 low-vol and Mine No. 4/Blue Creek High Vol A products.

  • B+
    Metallurgy

    The mines use established preparation plants and produce saleable hard coking coal. Blue Creek's TRS supports a 10% ash, sub-1% sulfur product in the principal reserve areas, with western quality deterioration explicitly excluded or discounted.

  • B
    Mining complexity

    Longwall mining is established but deep, methane-rich underground operations, continuous-miner development and recurring face moves create material operating and safety complexity.

  • B+
    Infrastructure & power

    Mines No. 4 and No. 7 have CSX rail and Black Warrior River barge access; Blue Creek has Norfolk Southern rail and planned barge optionality. All routes converge on the Port of Mobile, though throughput commitments create fixed-volume exposure.

  • B+
    Permitting status

    All three mines are producing and permitted. Federal coal leases expand access, while reclamation, black-lung security and lease-payment obligations remain material long-duration liabilities.

  • A
    Resource confidence

    The 2025 Form 10-K reports proven and probable reserves by mine with dry ash, sulfur and volatile matter. Blue Creek is additionally supported by a detailed S-K 1300 technical report.

  • B+
    Geological upside

    Blue Creek holds a further 54.0Mt indicated resource exclusive of reserve, and recently acquired federal leases add long-run mining optionality at Blue Creek/Mine No. 1 and Mine No. 4.

  • B+
    Expansion optionality

    Blue Creek's first longwall can ramp toward 6.4Mtpa and infrastructure was designed to accommodate a possible second longwall. No second-longwall capital is included in base NAV.

Valuation snapshot

100% NAV retained
Unrisked NPV $5,233m

Project DCF before the published stage and execution-risk charge.

Risk charge −$0m

Value removed by the model's project-stage and execution-risk adjustment.

Risked NPV $5,233m

Selected project value after risk, before ownership attribution.

Effective discount rate 7%

Time-value hurdle used for the project DCF after published adjustments.

NPV at first production $5,233m

Production-value anchor with pre-production timing removed; used by the FSV ladder.

Ownership100%
Attributable NPV$5,233m
NAV / share$98.98

Annual operating profile

Spot · risked · 100% of project
Saleable coal and CHPP yieldannual ROM-to-product conversion
Mt · %
Saleable-tonne economics2026E operating row and life-of-mine cost basis
US$/t
Realised price$176.22/t
Site cash cost$102.16/t
Cash cost incl. sustaining$122.97/t
Cash margin$64.36/t
ROM coal179.3 Mt
Saleable coal179.3 Mt
LOM saleable yield100%
Site cost / ROM t$102.16/t

A 100% yield indicates a schedule already expressed in saleable tonnes.

Revenue and cost stackcosts and capital aligned below zero
US$m
Capital recoveryannual and cumulative project cash flow
US$m

Timeline Built from the stored anchor years: construction start, first production, and closure (or first production plus reserve life where no closure year is published). The marker is the year the current valuation is struck from.

Production
2026–2041
20262028203020322034203620382040

Dashed line marks 2026, the year this valuation is struck from.

Resources and reserves

Effective 31 Dec 2025 · Attributable basis

Ore reserves

AssetProven (Mt)Probable (Mt)Proven & probable (Mt)
126 53.5 179
Blue Creek58.4 30.8 89.2
Mine No. 437.7 8.10 45.8
Mine No. 729.7 14.6 44.3

Mineral resources

AssetIndicated (Mt)
Mines No. 4, No. 7 & Blue Creek 54.0

Coal tonnes are on the disclosed source basis; no equivalent conversion is applied.

Valuation framework Fair speculative value ladder Production →
Two valuation lenses $5,233m production-value OV anchors the speculative ladder; $5,233m stage-risked DCF is the selected modeled project value.

Speculative value by development stage

Current model stage Production 100%–100% certainty
Market-implied project value $4,755m Company market capitalization
USD OV NPV$5,233mAt production value
Diluted52.9mCompany shares F.D.
Net interest100%Attributable ownership
Exchange rate1.0000USD framework
Project stage Certainty FSV range Attributable FSV USD / share
01 Grassroots
0.5%–1%
$26m – $52m
$26m – $52m
$0.49 – $0.99
02 Target Drilling
1%–2.5%
$52m – $131m
$52m – $131m
$0.99 – $2.47
03 Discovery Delineation
2.5%–5%
$131m – $262m
$131m – $262m
$2.47 – $4.95
04 Infill & Metallurgy
5%–10%
$262m – $523m
$262m – $523m
$4.95 – $9.9
05 PEA
10%–25%
$523m – $1,308m
$523m – $1,308m
$9.9 – $24.74
06 Prefeasibility
25%–50%
$1,308m – $2,617m
$1,308m – $2,617m
$24.74 – $49.49
07 Permitting & Feasibility
50%–75%
$2,617m – $3,925m
$2,617m – $3,925m
$49.49 – $74.23
08 Construction
75%–100%
$3,925m – $5,233m
$3,925m – $5,233m
$74.23 – $98.98
09 Production Current
100%
$5,233m
$5,233m
$98.98
Formula OV NPV × stage certainty × net interest ÷ diluted shares. Red marker = company market capitalization.