Atlas Energy Solutions Inc

We currently operate our Kermit facilities, Monahans facility, and OnCore distributed mining network in West Texas. For the years ended December 31, 2023 and 2022, our facilities produced, in aggregate, approximately 11.0 million tons and 10.2 million tons of proppant, respectively. For the year ended December 31, 2024, we produced, in aggregate, approximately 19.9 million tons of proppant, inclusive of the production attributable to the assets acquired in the Hi-Crush Transaction. The following map shows the location of these facilities:

Kermit, Texas

The Kermit property in the map below includes K1/K2. This map can be found in Section 1.3 of our 2023 TRS (defined below) prepared by JT Boyd, which is included as Exhibit 96.1 to this Annual Report.

Our K1/K2 facilities are located on 5,826 gross acres of land (of which 5,341 net acres are controlled by us either through lease or fee ownership) in Winkler County, Texas, with onsite processing and truck loading facilities. We commenced construction of our first mine in October of 2017, and commenced operations in June 2018. We commenced construction of our second mine in July of 2022, which we completed in December 2023. Our K1/K2 facilities have a net book value of $405.3 million as of December 31, 2024. Geographically, our facilities are located at approximately 31° 58’ 6.29” N latitude and 103° 0’ 39.46” W longitude, are situated approximately seven miles northeast of Kermit, Texas, and are accessible via Texas State Highway 18. The Midland International Air and Space Port is located approximately 45 miles southeast of the facilities.

The K1/K2 facilities have 294.5 million tons of associated proven reserves as of December 31, 2024. The sand deposits generally range from 60 to over 100 feet thick and consist of 40/70-mesh and 100-mesh sand, with an anticipated production mix of approximately 52% 40/70-mesh and approximately 48% 100-mesh. The crush strength of the sand mined at these facilities is between 7,000 to 8,000 pounds-per-square-inch (“PSI”) for 40/70-mesh and between 10,000 to 11,000 PSI for 100-mesh.

We lease a portion of the mineral reserves and resources associated with our K1/K2 facilities. As of December 31, 2024, we owned approximately 43% and 2% of our mineral reserves and resources, respectively, and leased approximately 57% and 98% of our mineral reserves and resources, respectively, from third-party landowners at our K1/K2 facilities.

In December 2017, we entered into a royalty agreement with Sealy Smith. The royalty agreement associated with the K1/K2 facilities terminated on the date of our IPO, pursuant to the terms of the agreement.

The Kermit property in the map below includes K115/874. This map can be found in Section 1.2 of our 2023 TRS (defined below) prepared by JT Boyd, which is included as Exhibit 96.2 to this Annual Report.

During 2024, we acquired the K115/874 facilities with the Hi-Crush Transaction. Our K115/874 facilities are located on approximately 1,226 gross acres of surface and subsurface (i.e., mineral) rights, all of which are owned by the Company. Our K115/874 facilities have a net book value of $162.6 million as of December 31, 2024. Geographically, these facilities are located at approximately 31° 57' 55" N latitude and 102° 58' 15" W longitude and are accessible via Texas State Highway 115. Several regional airports are located within an hour’s drive from the mine, and the Midland International Airport is approximately an hour and a half away by road.

The K115/874 facilities were initially explored and developed by Permian Basin Sand Company, LLC in 2016 and Hi-Crush purchased this property in early 2017. Site work and construction for the first processing facility began in February 2017 and was commissioned in July 2017. Construction of the second processing facility began in May 2018 and was fully commissioned and producing finished frac sand by January 2019.

The K115/874 facilities have 52.5 million tons of associated proven reserves as of December 31, 2024. The sand deposits generally range from 10 to over 90 feet thick, averaging approximately 60 feet across the property and consist of 100-mesh sand. The crush strength of the sand mined at these facilities is 7,000 PSI for 40/70-mesh and 12,000 PSI for 100-mesh.

Monahans, Texas

This map can be found in Section 1.3 of our 2023 TRS (defined below) prepared by JT Boyd, which is included as Exhibit 96.1 to this Annual Report.

Our Monahans facility is located on approximately 32,224 gross acres of land in Ward County, Texas, with onsite processing and truck loading facilities. We commenced construction of our Monahans mine in February of 2018 and commenced operations in October 2018. Our Monahans facility has a net book value of $217.9 million as of December 31, 2024. Geographically, our Monahans facility is located at approximately 31° 39’ 32.53” N latitude and 102° 52’ 55.46” W longitude, is situated approximately three miles northeast of Monahans, Texas, and is accessible via Texas State Highway 115 and Interstate 20. The Midland International Air and Space Port is located approximated 40 miles east of the facility.

The Monahans facility has 143.0 million tons of associated proven reserves as of December 31, 2024. The sand deposits generally range from 60 to over 100 feet thick and consist of 40/70-mesh and 100-mesh sand, with an anticipated production mix of approximately 62% 40/70-mesh and approximately 38% 100-mesh. The crush strength of the sand mined at the facility is 7,000 to 8,000 PSI for 40/70-mesh and between 10,000 to 11,000 PSI for 100-mesh.

As of December 31, 2024, we lease all of the mineral reserves and resources associated with our Monahans facilities.

The rights and access to the mineral reserves associated with our Monahans operations are secured under a lease agreement (the “Monahans Lease”) with Sealy Smith. Under the Monahans Lease, we are committed to pay royalties on product sold from that facility and are required to pay a minimum royalty of $1.0 million for any lease year following our IPO.

This map can be found in Section 1.2 of our 2024 TRS (defined below) prepared by JT Boyd, which is included as Exhibit 96.3 to this Annual Report.

During 2024, we acquired the OnCore distributed mining network with the Hi-Crush Transaction. The OnCore sites comprise approximately 6,579 acres, including 1,172.4 acres owned in fee and 5,406.6 leased acres. The OnCore sites are primarily operated under lease agreements held between the Company and various private landowners. These agreements provide the Company the right to mine, process, and dispose (i.e., sell) of frac sand from the properties. The OnCore distributed mining network has a net book value of $112.1 million as of December 31, 2024. The OnCore Plants are located in West Texas. Most are clustered around the City of Big Spring, Texas, about 40 miles east of the Midland-Odessa metropolitan area. The OnCore 7 and 9 sites are located in the opposite direction approximately 90 miles west of Midland-Odessa.

The locations of operating and idled OnCore plants are shown in the table below. This table can be found in Section 3.1 of our 2024 TRS (defined below) prepared by JT Boyd, which is included as Exhibit 96.3 to this Annual Report.

Accessibility to the western sites is via Texas state highway TX-302 or U.S. Route 285; while primary access to the eastern sites is via Interstate 20, state highways TX-137, TX-176, or TX-349. Several regional airports are located throughout the area, and the Midland International Airport is just over two-hours drive from the farthest OnCore location by road.

The OnCore distributed mining network was developed after completing a series of regional geologic exploration efforts across areas located outside of the historic Permian Basin frac sand mining activity centers. The first OnCore site opened in late-2020, and after seeing continued demand for locally sourced damp frac sand, there are now a total of 9 different producing OnCore sites.

The status of each site is provided in the table below. This table can be found in Section 3.2 of our 2024 TRS (defined below) prepared by JT Boyd, which is included as Exhibit 96.3 to this Annual Report.

The OnCore distributed mining network has 33.3 million tons of associated proven reserves as of December 31, 2024. The sand deposits generally range from less than 5 to over 40 feet thick and consist of 100-mesh. The crush strength of the sand mined at the facility is 7,000 to 13,000 PSI for 100-mesh.

Our Reserves

Information concerning our material mining properties in this Annual Report has been prepared in accordance with the requirements of Subpart 1300 of Regulation S-K, which first became applicable to us for the fiscal year ended December 31, 2023. As used in this Annual Report, the terms “mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with Subpart 1300 of Regulation S-K.

We categorize our mineral reserves as proven or probable based on the standards set by our independent mining engineers and geologists, JT Boyd. We estimate that we had a total of approximately 592.9 million tons of proven and probable mineral reserves as of December 31, 2024. As of December 31, 2024, we had approximately 294.5 million tons of proven mineral reserves and 36.9 million tons of probable recoverable mineral reserves associated with our K1/K2 facilities, approximately 52.5 million tons of proven mineral reserves and 4.2 million tons of probable recoverable mineral reserves associated with our K115/874 facilities, approximately 143.0 million tons of proven mineral reserves and 2.2 million tons of probable recoverable mineral reserves associated with our Monahans facility, and approximately 33.3 million tons of proven mineral reserves and 26.3 million tons of probable recoverable mineral reserves associated with our OnCore distributed mining network. The quantity and nature of the mineral reserves at each of our properties are estimated by our internal geology department. We use drone surveys and three-dimensional models to regularly update our reserve estimates, making necessary adjustments for operations and mine plans at each location during the year.

Our internal reserve estimates are provided to JT Boyd for review annually so that third-party approved additions or reductions can be made to our mineral reserves and mineral resource calculations due to ore extraction, additional drilling and delineation, property acquisitions and dispositions or quality adjustments. Before acquiring new mineral reserves, we perform surveying, drill core analysis and other tests to confirm the quantity and quality of the acquired mineral reserves. JT Boyd reviewed our mineral reserves and mineral resources as of December 31, 2023 and provided technical report summaries which were filed with our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Technical report summaries for the December 31, 2023 mineral reserves and mineral resources that were acquired in the Hi-Crush Transaction were filed with our Current Report on Form 8-K on May 8, 2024, which encompasses the K115/874 facilities and the OnCore distributed mining network.

K1/K2, K115/874, and Monahans Facilities

We believe, and JT Boyd concurs, that all material assumptions and information pertaining to the disclosure of our mineral resources and mineral reserves, including material assumptions relating to all modifying factors, price estimates, and scientific and technical information, as described in the December 31, 2023 technical summary reports (the “2023 TRSs”) remain current as of December 31, 2024 for the K1/K2, K115/874, and Monahans facilities. As a result, we are relying on the 2023 TRSs for the K1/K2, K115/874, and Monahans facilities. Therefore, portions of the following information are based on assumptions, qualifications and procedures that are summarized here and are described in more detail in the 2023 TRSs.

Due to the expansion and removal of certain OnCore mines in 2024, we engaged JT Boyd to review our OnCore distributed mining network's mineral reserves and mineral resources as of December 31, 2024 and furnish a technical report summary (the “2024 TRS”) for this property.

Reference should be made to the full text of the technical summary reports, incorporated herein by reference and made a part of this Annual Report. JT Boyd is not affiliated with the Company nor any other entity that has an ownership, royalty, or other interest in the properties that are the subject of the technical report summaries. To opine as to the economic viability of our mineral reserves, JT Boyd reviewed our operating cost and revenue per ton data at the time of the proven reserve determination. The sand deposits at our facilities do not require crushing or extensive processing to eliminate clays or other contaminants, enabling us to cost-effectively produce high-quality proppant meeting API specifications.

Summary of Reserves

The following tables provide the tonnage and mesh size characteristics of the proven and probable mineral reserves associated with our property as of December 31, 2024, based on an average of $30.00 per ton for K1/K2 and Monahans facilities, an average of $26.04 for K115/874, and an average of $24.83 per ton for the OnCore distributed mining network. It should be noted that the achieved process yields are slightly different than the overall process yields used to estimate the frac sand resources and reserves, which are based on the results of drill hole sample testing at each property.

Combined

The following table provides the tonnage and mesh size characteristics of the proven and probable mineral reserves associated with our K1/K2, K115/874, and Monahans facilities and OnCore distributed mining network operations as of December 31, 2024 on a combined basis.

Drilling density utilized by us to determine proven versus probable mineral reserves is based upon the relative characteristics of the mineral resource field evaluated, including the consistency and density of the mineral resource within the drilling core sample. The target drill-hole spacing utilized by JT Boyd to estimate our proven and probable mineral reserves are as follows:

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Proven—less than or equal to 1,500 feet

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Probable—less than or equal to 2,500 feet

Material Assumptions

Estimates of frac sand reserves for our K1/K2, K115/874, and Monahans facilities and OnCore distributed mining network were derived contemporaneously with estimates of frac sand resources for each property. To derive an estimate of saleable product tons (proven and probable frac sand reserves), the following modifying factors were applied to the in-place measured and indicated frac sand resources underlying the respective mine plan areas of each operation:

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For the all the K1/K2, K115/874, and Monahans reserves, there was a 95% mining recovery factor which assumes that 5% of the mineable (in-place) frac sand resource will not be recovered for various reasons. For the OnCore distributed mining network reserves, there was a 90% mining recovery factor at each location which assumes that 10% of the mineable (in-place) frac sand resource will not be recovered for various reasons. Applying this recovery factor to the in-place resource results in the estimatedrun-of-mine (“ROM”) sand tonnage that will be delivered to the wet process plant.

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Processing recoveries, based on exploration sample gradation testing, are 85% for the K1/K2 mines, 83% for the K115/874 mines, and 88% for the Monahans mine. For the OnCore distributed mining network, the processing recoveries differ by location within an average of 71% across all OnCore plants. These recovery factors account for removal of out-sized (i.e., larger than 40-mesh and smaller than 140-mesh) sand and losses during processing due to minor inefficiencies.

Further information can be found in Section 6.3.1 of our 2023 TRSs, which are included as Exhibit 96.1 and 96.2, and our 2024 TRS, which is included as Exhibit 96.3, to this Annual Report.

Our Resources

A “mineral resource” is defined by Subpart 1300 of Regulation S-K as a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. Further, mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. Subpart 1300 of Regulation S-K divides resources between “measured mineral resources” and “indicated mineral resources” and “inferred mineral resources,” which are defined as follows:

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Measured mineral resources. Resources for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

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Indicated mineral resources. Resources for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.

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Inferred mineral resources. Resources for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve.

The target drill-hole spacing utilized by JT Boyd to estimate our measured, indicated and inferred resources are as follows:

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Measured – less than or equal to 1,500 feet

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Indicated – greater than 1,500 feet, but less than or equal to 2,500 feet

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Inferred – greater than 2,500 feet, but less than or equal to 5,000 feet

The following tables set forth the mineral resource estimates, exclusive of mineral reserves, associated with our property as of December 31, 2024, based on an average of $30.00 per ton for K1/K2 and Monahans facilities, an average of $26.04 for K115/874, and an average of $24.83 per ton for the OnCore distributed mining network. It should be noted that the achieved process yields are slightly different than the overall process yields used to estimate the frac sand resources and reserves, which are based on the results of drill hole sample testing at each property.

There are no reportable frac sand resources excluding those converted to frac sand reserves for the K115/874 Mine. Quantities of frac sand controlled by the Company within the defined boundaries of the K115/874 property which are not reported as frac sand reserves, are not considered to have potential economic viability; as such, they are not reportable as frac sand resources.

There are no reportable frac sand resources excluding those converted to frac sand reserves for all of the OnCore sites. Quantities of frac sand controlled by the Company within the defined boundaries of each OnCore site which are not reported as frac sand reserves, are not considered to have potential economic viability; as such, they are not reportable as frac sand resources.

As of December 31, 2024, our mineral resources are estimated at 1.439 billion tons (170.5 million tons at the K1/K2 facilities and 1.269 billion tons at the Monahans facility).

Material Assumptions

Estimates of in-place frac sand resources for the K1/K2, K115/874, and Monahans facilities and OnCore distributed mining network operations were prepared by performing the following tasks:

K1/K2 and Monahans

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Available drilling logs and laboratory testing results were compiled and reviewed to check for accuracy and to support development of each operation’s geologic model. The geologic databases utilized for modeling and estimation consist of results from 87 drill holes completed on the K1/K2 property, and 80 drill holes completed on the Monahans property, as is discussed in Chapter 5. The geologic data were imported into Carlson Software, a geologic modeling and mine planning software suite that is widely used and accepted by the mining industry.

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A geologic model of each deposit was created in Carlson Software using industry standard grid modeling methods well-suited for simple stratigraphic deposits. Each geologic model delineates the top and bottom of the mineable sand horizon and the distribution of the product size fractions across the deposits. The top and bottom of the mineable frac sand interval were established as follow:

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As there is minimal overburden material across the subject properties, the top of the mineable sand interval was defined as the current ground surface, as provided by a combination of originally flown aerial topographic surveys and recently surveyed active mining pits.

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The bottom of the mineable sand interval on both Atlas properties was determined by Westward geologists and geological technicians present during the various exploration and sampling campaigns. Westward defined the bottom

of the mineable sand interval as the depth at which a drilled interval no longer contained sand as either the first or second most abundant material present.

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After reviewing the continuity and variability of the deposit, suitable resource classification criteria were developed and applied.

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Estimation of the in-place frac sand resources for the K1/K2 and Monahans properties assumes mining operations will utilize a combination of standard surface excavation equipment for the near-surface initial operations (dry mining) and dredging equipment once initial excavation has reached into the water table. This sequence of operating is widely utilized for mining of similar deposit types. As such, the estimates were subject to the following setbacks and slope requirements:

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50 ft inside of property lines.

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100 ft from pipelines.

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50 ft around the wet and dry process plant areas and main access road/right of way.

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An overall pit wall slope of 3:1 (approximately 19 degrees).

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In-place volumes for each property were estimated from the geologic model within Carlson Software. A dry, in-place, bulk density of 100 pounds per cubic foot was used to calculate the in-place tonnage of frac sand.

K115/874

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The top and bottom elevations of the mineable sand interval was interpreted from drill hole records and sand particle size analyses. The sands mined at the K115/874 operation are present at the surface. As there is little-to-no overburden, the top of the mineable sand unit is considered to be the current ground surface. The bottom of the mineable sand unit is delineated by the depth at which a characteristic red clay interval was encountered.

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Interpreted drill hole records were compiled and validated. Strata thicknesses were aggregated, and sand particle size analyses of the sand unit were composited for each data point. The compiled drill hole data were then imported into Vulcan, a geologic modeling and mine planning software suite that is widely used and accepted by the mining industry.

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A geologic model of the deposit was created in Vulcan using industry-standard grid modeling methods well-suited for simple stratigraphic deposits. The geologic model delineates the top and bottom of the mineable sand horizon and the distribution of the product size fractions across the deposit.

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After reviewing the continuity and variability of the deposit, suitable resource classification criteria were developed and applied.

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Contiguous areas of remaining mineable sand within the K115/874 property were delineated using the estimation criteria, in addition to the following:

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50-ft setbacks from property boundaries.

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50-ft setbacks from pipelines.

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50-ft buffer zones around the process plant areas and main access road/right of way.

o

Pit wall slopes of 3:1 (approximately 19 degrees).

o

Areas mined prior to December 31, 2023, were delineated from aerial imagery and excluded from the estimates of frac sand resources.

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In-place volumes for each of the remaining mining areas were calculated from the geologic model within the Vulcan software. A dry, in-place, bulk density of 100 pounds per cubic foot was used to calculate the in-place tonnage of frac sand.

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The top and bottom elevations of the mineable sand interval of each site was interpreted from drill hole records and sand particle size analyses. The sands mined at the various OnCore sites are generally present at the surface. As there is little-to-no overburden, the top of the mineable sand unit is considered to be the current ground surface or directly beneath a thin soil interval noted in drilling logs. The bottom of the mineable sand unit is delineated by the depth at which drilling was terminated, or an underlying caliche interval was encountered.

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Interpreted drill hole records were compiled and validated. Strata thicknesses were aggregated, and sand particle size analyses of the sand unit were composited for each data point. The compiled drill hole data were then imported into either Carlson Software or Vulcan geologic modeling and mine planning software, both of which are geologic modeling and mine planning software suites that are widely used and accepted by the mining industry.

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A geologic model of each site’s deposit was created using industry-standard grid modeling methods well-suited for simple stratigraphic deposits. The geologic models delineate the top and bottom of the mineable sand horizon and the distribution of the product size fractions across each of the OnCore site deposits.

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After reviewing the continuity and variability of each deposit, suitable resource classification criteria were developed and applied.

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Contiguous areas of remaining mineable sand within the various OnCore sites were delineated using the estimation criteria, in addition to utilizing mapping of remaining mineable areas, as well as considering the following assumptions for each OnCore site:

o

Pit wall slopes of 3:1 (approximately 19 degrees).

o

Areas mined prior to December 31, 2024, were delineated from surveyed topography and/or aerial imagery and excluded from the estimates of frac sand resources.

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In-place volumes for each of the remaining mining areas were calculated from the geologic model within the modeling software. A dry, in-place, bulk density of 100 pounds per cubic foot was used to calculate the in-place tonnage of frac sand.

Further information can be found in Section 6.2.1 of our 2023 TRSs, which are included as Exhibit 96.1 and 96.2, and our 2024 TRS, which is included as Exhibit 96.3, to this Annual Report.

Comparisons

As shown in the table above, the frac sand reserves of the K1/K2 mines decreased by approximately 6.2 million product tons in 2024 as the result of ordinary mining production (depletion). No other year-over-year changes were noted.

There were no year-over-year adjustments to the frac sand resources reported for the K1/K2 mines. As such, the Company continued to control approximately 170.5 million in-place tons of frac sand resources, exclusive of frac sand reserves, at the K1/K2 mines as of December 31, 2024, as shown in the table above.

As shown in the table above, the frac sand reserves of the K115/874 mines decreased by approximately 4.1 million product tons in 2024 as the result of ordinary mining production (depletion). No other year-over-year changes were noted.

As shown in the table above, the frac sand reserves of the Monahans mine decreased by approximately 5.3 million product tons in 2024 as the result of ordinary mining production (depletion). No other year-over-year changes were noted.

There were no year-over-year adjustments to the frac sand resources reported for the Monahans mine. As such, the Company continued to control approximately 1.27 billion in-place tons of frac sand resources, exclusive of frac sand reserves, at the Monahans mine as of December 31, 2024, as shown in the table above.

When comparing the OnCore plants’ estimated frac sand reserves as of December 31, 2024, with those reported as of December 31, 2023, we note a net increase of approximately 12.5 million product tons. This increase is the direct result of: (1) the addition of the OnCore 9 plant, (2) changes in property control and mine plans at the OnCore 1 plant, and (3) depletion through ordinary mining operations and inventory sales.

Our Lease and Royalty Arrangements

We lease a portion of the mineral reserves associated with our K1/K2 operations and all of the mineral reserves associated with our Monahans operations. In December 2017, we entered into a royalty agreement with Sealy Smith in connection with certain leased property at the K1/K2 facilities. The royalty agreement associated with the K1/K2 facilities terminated on the date of our IPO, pursuant to the terms of the agreement. The rights and access to the mineral reserves associated with our Monahans operations are secured under the Monahans Lease with the Sealy Smith. Under the Monahans Lease, we are committed to pay royalties on product sold from that facility and are required to pay a minimum royalty of $1.0 million for any lease year following our IPO. We have certain royalty obligations based on tonnage of sand sold under land leases associated with our OnCore distributed mining network. Our royalty payments are included in our cost of sales.

On March 1, 2024, the Company entered into a pooling agreement with the General Land Office of Texas (“GLO”) that establishes a pooled unit across our fee owned lands and leased lands at the K1/K2 property. The pooling agreement has a current effective blended royalty rate of 5.86% on K1/K2 plant sales. This pooling agreement increases our operational flexibility by establishing a framework to efficiently mine across our fee owned lands and leased lands interchangeably.

Our Permits

We have obtained numerous federal, state and local permits required for operations at our Kermit facilities, Monahans facility, and OnCore distributed mining network. Operations are predominantly regulated by the TCEQ with respect to environmental compliance. The predominant permitting requirement is an active NSR permit for air pollution control. Our operations have a current NSR permit which is renewable next in 2028. Other permits held by our operations include Stormwater, Above Ground Storage Tank, Aggregate Production Operation, and a septic permit. A Spill Prevention, Control, and Countermeasure plan is also active at the locations.

While resources invested in securing permits are significant, this cost has not had a material adverse effect on our results of operations or financial condition. We cannot be certain that existing environmental laws and regulations will not be reinterpreted or revised or that new environmental laws and regulations will not be adopted or become applicable to us. Revised or additional environmental requirements that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business.