January 2025 Update Letter to Shareholders

Rhea-AI Summary

American Resources (AREC) has announced its strategic update for 2025, highlighting its transformation following recent subsidiary distributions. The company now operates with a streamlined structure focused on critical materials for defense and commercial applications. Key holdings include:

- ~19.9% ownership in ReElement Technologies (rare earth elements refining)
- ~9.9% in American Infrastructure (acquired by CGrowth Capital)
- 100% in Electrified Materials (pending Form-10 SEC approval for spinout)
- ~8.8% in Royalty Management Holding (NASDAQ: RMCO)
- ~19% in Novusterra Inc. (carbon nanostructures technology)
- ~2.1% in Advanced Magnet Lab (advanced permanent magnets)

The company plans to focus on innovative technologies and operations in critical minerals, particularly targeting mining waste feedstocks as a significant growth opportunity.

Positive

• Strategic restructuring completed for more efficient operations
• Diversified portfolio of holdings across critical minerals sector
• Revenue stream from equipment leasing business
• Focus on low-cost growth opportunities in mining waste feedstocks
• Potential upside from pending EMCO spinout to shareholders

Negative

• Reduced ownership stakes in key subsidiaries after distributions
• Dependency on SEC approval for EMCO spinout
• Significant reduction in direct operational control after distributions

Insights

Financial Analyst

This shareholder update reveals significant strategic restructuring at AREC, transforming from a direct operator to an investment holding company with stakes in critical mineral and clean tech ventures. The company now holds strategic positions in multiple entities: 19.9% in ReElement Technologies, 9.9% in American Infrastructure , 100% in Electrified Materials (pending spinout), 8.8% in RMCO, 19% in Novusterra and 2.1% in Advanced Magnet Lab. This diversified portfolio focuses on high-growth sectors like rare earth elements, battery materials and advanced magnets. The pending Form-10 filing for EMCO and its planned distribution to shareholders represents a potential near-term catalyst. However, the transition to a holding company model means revenue streams will be more dependent on investment performance rather than direct operations, introducing new risk factors for investors. The equipment leasing revenue provides a stable cash flow foundation, though its magnitude isn't specified.

Mining Industry Specialist

The strategic pivot towards mining waste processing for rare earth elements and critical minerals represents an innovative approach to resource extraction. By targeting legacy mining sites, AREC is positioning itself at the intersection of environmental remediation and critical mineral supply chains - a sector receiving significant government attention and support. The partnership with ReElement Technologies for processing these unconventional feedstocks could create substantial value, as it addresses both environmental concerns and domestic critical mineral supply security. The byproduct economics model mentioned could potentially yield lower operating costs compared to traditional mining operations. This approach aligns with broader industry trends toward sustainable resource recovery and could provide AREC with a competitive advantage in accessing these materials without the high capital expenditure typically associated with new mine development.

Technology Sector Analyst

The company's investment in Advanced Magnet Lab and ReElement Technologies positions it well in the critical materials supply chain for emerging technologies. ReElement's 16 patents and university research partnerships in high-purity rare earth element processing are particularly noteworthy as these materials are essential for EVs, renewable energy and defense applications. The convertible note structure in AML provides strategic optionality in advanced magnet manufacturing, a important component for various high-tech applications. The focus on innovative processing technologies through these investments could provide significant upside if these portfolio companies successfully commercialize their technologies. However, investors should note that many of these technologies are still in development phases and commercial success is not guaranteed.

Following the recent distribution of Company subsidiaries, the remaining operations now feature a highly efficient structure with minimal overhead and a business model focused on asset and operational growth

Company is uniquely positioned as an expanding provider of critical materials, including, rare earth, battery and semiconductor elements for defense and commercial applications

FISHERS, IN / ACCESSWIRE / January 8, 2025 /

To our shareholders:

2024 marked a pivotal year of positioning and preparing our subsidiaries and business for growth and expansion as a leading players in the critical mineral supply chain. This strategic direction stemmed from the recommendations of our Board of Director's Special Committee, established in 2022 to identify ways to unlock shareholder value. Our mission is to build low-cost growth platforms by leveraging our core strengths: evaluating opportunities, strategically positioning them, and assembling the right team to execute effectively.

With that process nearly complete, American Resources' primary mission moving forward is to further the build-out of our innovative technologies, solutions, and operations in both the upstream and downstream segments of our former subsidiaries' operations, with a large focus on leveraging the unique capabilities of ReElement Technologies Corporation to support suppliers and users of critical minerals. AREC will continue to invest in and build critical mineral feedstock opportunities while also evaluating downstream opportunities to invest in innovative solutions, such as our prior investment in Advanced Magnetic Lab, as an example.

We believe our ability to identify low-cost opportunities, like mining waste feedstocks that the Company can capture and process into a concentrated feedstock to supply ReElement, represents a significant growth avenue. This partnership and strategy also have the potential to enable one of the largest domestic environmental cleanup initiatives ever to exist in the legacy fossil fuel and mining industries worldwide, leveraged through ReElement's ability to refine such feedstocks economically.

For example, one of American Resources' investment focuses moving forward is the significant opportunity in unconventional rare earth and critical mineral supply sources, such as mining waste. This topic has gained substantial attention both politically and within the industry. These unconventional resources align well with ReElement Technologies' refining process and other companies capable of concentrating these feedstocks. With a vast number of mining waste sites within the United States alone, we believe these locations present a profitable and exciting investment opportunity. By leveraging byproduct economics for extraction, concentration, and purification of elements and minerals, this initiative represents one of the several verticals in American Resources.

Moving forward, our primary focus will remain on investing in cutting-edge technologies and innovative operations, while also maintaining our investment holdings in the following assets, operations, and entities as outlined below.

ReElement Technologies Corporation

• Ownership Interest: Approximately 19.9%

• ReElement Technologies Corporation is revolutionizing the refining of critical and rare earth elements to ultra-high purity, with an initial focus on rare earth elements and key critical minerals such as lithium, cobalt, and nickel. With 16 patents and technologies under its ownership or control, along with sponsored research partnerships with three leading U.S. universities, ReElement is driving innovation to meet increasing demand for magnet and battery metals.

American Infrastructure Corporation (Acquired by CGrowth Capital, Inc. (CGRA) and soon changing its name to American Infrastructure Holding Corporation)

• Ownership Interest: approximately 9.9%:

• On December 30,2024, the Board of American Resources Corporation approved the acquisition of 100% of the common shares of American Infrastructure Corporation by CGrowth Capital, Inc. in exchange for Series A Preferred Stock in CGrowth Capital, Inc. The Series A Preferred Stock includes an anti-dilution provision on the six-month and twelve-month anniversaries of the acquisition date for those shareholders that retain their Series A Preferred securities. The company is committed to properly capitalizing the business to drive further growth within the mineral and resource extraction sectors, with the goal of listing on a senior United States stock exchange during the middle of 2025.

Electrified Materials Corporation ("EMCO") (Formerly American Metals LLC)

• Ownership Interest: 100%

• EMCO has filed its Form-10 with the Securities and Exchange Commission (SEC). Once the filing is declared effective by the SEC, the company can becoming publicly listed, facilitating the completion of the spin-out to the shareholder of AREC. The company has signed a Memorandum of Understanding (MOU) with Lohum Clean Tech, as previously announced, and is in discussions with additional potential partners and investors that have expressed interest in participating in the company's success as part of the Form-10 spinout. Upon SEC approval, AREC will distribute the shares of EMCO to its shareholders, with the precise distribution amount to be determined by the Board of Directors of American Resources Corporation at that time.

Royalty Management Holding Corporation (NASDAQ: RMCO)

• Ownership Interest: Approximately 8.8%.

• AREC holds 100% of its sponsor shares and warrants received from RMCO as part of the de-SPAC merger with American Acquisition Opportunity Inc. With royalty and equity investments across a range of resource and intellectual property-based projects, the AREC team is confident that RMCO has an exciting future ahead of it. Additionally, the team believes the current public market valuation of RMCO is currently significantly undervalued relative to the strength of the platform it has developed, its low-cost operating structure and the inherent value of its underlying investments.

Novusterra Inc.

• Ownership Interest: Approximately 19%.

• Novusterra holds patent rights to develop various products and applications that utilize carbon nanostructures, graphite and graphene from carbon based waste streams and other sources.

Advanced Magnet Lab, Inc. (AML)

• Ownership Interest: Approximately 2.1%

• AREC holds a convertible promissory note in AML providing the option to AREC to become a shareholder at its discretion through the note's conversion. AML has developed a patented and innovative technology platform for manufacturing advanced permanent magnets that outperform traditional designs. The company is working with a variety of defense contractors and private industry partners to implement this cutting-edge technology.

Equipment Leasing Revenue

• American Resources is a holder or controller of a large amount of diverse mining and extraction equipment and infrastructure that provides AREC with cash flow streams from rents received on that equipment.

Thank you for your continued trust and partnership. Together, I am confident we can successfully capitalize on these opportunities and build a brighter future for American Resources as well as our holdings in ReElement Technologies Corporation, Electrified Materials Corporation, American Infrastructure Corporation, Royalty Management Holding Corporation, AML and Novusterra, Inc.

Sincerely,

/s/ MARK JENSEN
Mark Jensen
Chairman and Chief Executive Officer
American Resources Corporation

About American Resources Corporation
American Resources has established a nimble, low-cost business model centered on growth, which provides a significant opportunity to scale its portfolio of assets to meet the growing global electrification markets. Its streamlined and efficient operations are able to maximize margins while reducing costs. For more information visit americanresourcescorp.com or connect with the Company on Facebook, Twitter, and LinkedIn.

Special Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause the Company's actual results, performance, or achievements or industry results to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are subject to a number of risks and uncertainties, many of which are beyond American Resources Corporation's control. The words "believes", "may", "will", "should", "would", "could", "continue", "seeks", "anticipates", "plans", "expects", "intends", "estimates", or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Any forward-looking statements included in this press release are made only as of the date of this release. The Company does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure you that the projected results or events will be achieved.

Investor Contact:
JTC Investor Relations
Jenene Thomas
(908) 824 - 0775
arec@jtcir.com

Company Contact:
Mark LaVerghetta
317-855-9926 ext. 0
investor@americanresourcescorp.com

SOURCE: American Resources Corporation

View the original press release on accesswire.com

FAQ

What are AREC's current ownership stakes in its major subsidiaries after the restructuring?

AREC maintains approximately 19.9% in ReElement Technologies, 9.9% in American Infrastructure , 100% in Electrified Materials , 8.8% in RMCO, 19% in Novusterra, and 2.1% in Advanced Magnet Lab.

When is AREC's Electrified Materials (EMCO) expected to complete its spinout?

EMCO's spinout is pending SEC approval of its Form-10 filing. The exact distribution amount will be determined by AREC's Board of Directors upon SEC approval.

What is AREC's new business focus for 2025?

AREC is focusing on developing innovative technologies and operations in critical minerals, particularly targeting mining waste feedstocks as growth opportunities in both upstream and downstream segments.

How will AREC's investment in mining waste feedstocks benefit shareholders?

The investment in mining waste feedstocks represents a low-cost opportunity for growth, potentially enabling one of the largest domestic environmental cleanup initiatives while providing concentrated feedstock for ReElement's refining operations.