Coal + Bitcoin Mining | Alliance Resource Partners | ARLP + BTC

Coal + Bitcoin Mining | Alliance Resource Partners | ARLP + BTC

hey guys this is Rudy coming at you live from Palm Beach in Florida it is Tuesday it is April 30th it’s the end of the month and can you believe it I just made a video yesterday on Alliance resource limited partners and here I am back again with Alliance resource limited partners version to why would I do that well I’m going to tell you in just a minute so stick with me here for a couple of minutes and I’ll tell you what’s going on with Alliance Resource Partners that prompted me to make another video just one day later oesk reported coal miner Alliance resource dabbles in crypto Mining and mines 425 Bitcoin tokens right so what exactly is going on here why is a coal miner getting involved in mining Bitcoin well let’s take a closer look and see what’s going on firstly let’s just uh do a quick recap of the quarterly results which were pretty good in fact if you’re not sure if it’s pretty good or not or not just take a look at the stock price over the past couple of days and you’ll see that stock price has performed pretty good the results were pretty good Revenue $650 million net income $158 million earnings per share121 million wish $121 per unit uh the analyst expected $12 eida I don’t like eida as a as a benchmark or metric or as a financial reporting tool but you know what people use it so uh I’ll just bow down to the rate of wi wisdom anyway theid I’m going to get back to this one in just a second 235 5 million Coal Sales volume increased by 2.4% to 8.7 million tons despite the fact that the coal production declined slightly the Coal Sales prices per ton was down but even though the prices were down the oil and gas royalty volumes increased 18% to a record $898,000 barrels of oil equivalent segment adjusted iida Here We Go Again $485 up to a threee up 3% year-over-year cash flows from operating activities $29 million Capital expenditures capex 123 million poly distribution for people like me who are long in Lions Resource Partners 7 cents per unit that’s for the quarter they’re paying $280 per year liquidity increased to 551 million so okay that’s a quick flyover uh just to tell you how well Alliance Resource Partners did over the last quarter anyway I’m not trying to pump the stock I’m just here to share some information with you so what happened so a couple of guys on on our channel here our investment Community asked some questions and they were really really great questions which prompted this video so right the first one Matt Bitner is not necessarily in orders so when I say the first one I’m just it’s just the one at the top right do you know how much of ARP arlp business is based on coal exports to other countries I think the reason why Matt was asking that is because the growth areas for coal are predominantly in South Asia and specifically India and uh China so I looked it up on their website it says in 202 3 so last year 80% of tons sold were purchased by domestic Electric utilities right so by far the greatest majority 80% 15.7 so almost 16% sold into International markets and 3.4% was sold to domestic industrial customers according to the website but Mr Burke uh Drew my attention to the fact that I might just want to spend a little bit of time paying more attention to what they’re doing from a Bitcoin mining point of view because Mr Burke Drew my attention to the fact that one of the questions asked by the analyst during the conference call the earnings call was and then could you shed some light or additional light on the Bitcoin mining activities and including the rationale and any potential risks uh question by Mark reichman so I’m going to come back to that in a minute because I want to talk about that just a little bit Michael burn also posed the question arlp a good one still not getting enough bites at these lows did you explore that they are starting to do some Bitcoin mining at plants right so he says not seeing much commentary on that anywhere or anywhere else for that matter in other words it was just like a fly over right so flying beneath radar if you prefer where not a lot of people were paying too much attention to it so let’s take a look and see what’s going on here so NASDAQ listed Co Miner Alliance Resource Partners setting his earnings cor that it has mined $50 million in Bitcoin from Excess power at its facilities in the second half of 2020 this is krie Marshall the C uh CFO Chief Financial Officer for Alliance resource says in the second half of 2020 we started mining Bitcoin as a pilot project to monetize the already paid for yet underutilized electricity load at our riverv viiew mine now isn’t that a brilliant way for you to utilize your underutilized electricity load which has already been paid for and it’s just sitting there right so in other words what um ker Marshall is saying we have all this electricity Supply if you’d like just sitting there doing nothing so why don’t we just use it to mine Bitcoin Marshall said at the end of the quarter the company had 425 Bitcoins that’s quite a chunk of money right considering that bitcoin’s trading at around 60 something on his balance sheet which it is valuing at $30 million well not today but maybe at the time of reporting and also factoring in the net cost of property plant and Equipment it was up $7.3 million Marshall said the company wasn’t buying Bitcoin or anything of that nature it was only mining Bitcoin with the equipment it already has we do have some extra capacity that we are renting out to other Bitcoin miners are these guys smart or what within the data center that we’ve effectively Built For This Bitcoin mining to take advantage of the low energy costs we have and guess what alliance Resource Partners has the lowest energy cost you can imagine because they are mining coal in the grand scheme of things arlp Bitcoin on the balance sheet Holdings are relatively small I’m going to talk about that in just a second because I looked at up data compiled shows micro strategy has the largest Holdings at 13.5 billion other notable entries on the list include Tesla which has $615 Million worth of bitcoin Bitcoin is currently well was currently trading at about $63,000 according to coin desk so I looked at the balance sheet for arlp this is from the balance sheet this is the income statement it says change in fair value of digital assets of course that is all Bitcoin 2024 for the quarter $1.8 million and in the previous quarter at the end of December uh 2023 it was zero and down at the bottom here this is from their balance sheet the current assets show digital assets to the value of $30 million and at the end of December that was $9.5 Million so up quite a bit nice little jump there money for nothing and your checks for free according to Mark noler let’s talk a little bit about eidar right so analysts and financial people especially in the United States love to talk about iida what is so special about iida so by definition it means earnings before interest taxes and depreciation or amortization um amortization if your mind could also be referred to as depletion now IA as a general role is an interesting Benchmark to look at because effectively what it does is it eliminates all the sort of non-cash Entry uh element from your operating Revenue that you’ve generated because these things like depreciation and amortization or whatever don’t cost you any money but you are allowed to deduct them making your um gross profit uh less or reducing your gross profit which also means you pay less tax so now we have eida and uh look at Alliance Resource Partners they’ve just added another little element to this which is the change in fair value of digital assets this is not according to Rudy this is according to Alliance resource Limited partnership they are saying segment adjusted eidi is defined as net income attributable to arlp before net interest income taxes depreciation dep depletion and amortization change in fair value of digital assets right so da so I’m highlighting this here IA EB T da and I’m adding another da for the changing fair value of digital assets so from this day forward we will call Eid all right so you got to stick with me here because next time I talk about e da you are also going to have to consider that I’m talking about a change in the fair value of digital assets which has never been done before so this is a world premiere and the first and you heard it your first no one has ever spoken about eada until Rudy from best investor today what about Bitcoin well Bitcoin was $63,000 approximately at the time of the earnings call which was a long time ago now approximately 24 hours ago right but today Bitcoin is trading at about $60,000 uh I don’t remember when I took the screenshot but oh there it is 7:44 p.m. uh no I didn’t take it at 7:44 p.m. I took it during the day so this is uh oh okay it’s a different time zone anyway Bitcoin was down about 6% or so today down to $60,000 which obviously will affect their IID da da right so this is bitcoin’s picture for one day and if you’re holding Bitcoin as a store of value in instead of holding it as a digital asset that has different intrinsic values or or a different meaning to you or different reason why you should hold it at all uh you cannot view it as a store of value when the market tanks and Bitcoin just tanks along with it now experts and this is where the experts come in right because we have to always have an opinion from the experts so scientists say experts say whatever right so whenever you read that especially if it’s at the start of the sentence you really need to strip it down and say who’s saying and who’s saying what fear the Resurgence of envir of environmental narrative as a US coal miner generates $30 million by mining Bitcoin Alliance Resource Partners predicts that it could mine as much as 190 Bitcoin this year well you know at about $6,000 per coin or token or thereabouts and that’s a good chunk of money right it’s certainly enough operational chain change for them to make additional um dents in their capex or reduce their operational expenditure because it’s money for nothing and your checks for free crypto slate says however crypto environmentalist what the heck is a crypto environmentalist is that like a degree that you can study at uh one of these woke universities nowadays I’m not sure you can tell me in the comments Daniel baton never heard of him before but he’s a crypto environmentalist he argues that the firm’s pivot to Bitcoin mining could harm the environmental narrative around the flag Flagship digital asset he said Bitcoin mining companies have moved off using coal that’s not actually true but uh to a large degree they are all trying to position themselves as being green and environment friendly and using only renewable energy in order to mine Bitcoin but I guess Daniel says you can’t stop coal mining companies from mining Bitcoin no you can’t because they have money for nothing especially when it comes to mining Bitcoin either way in terms of a changing of changing the environmental narrative around Bitcoin this doesn’t help doesn’t help who well doesn’t help the narrative right they are trying to make a story out of this and uh it’s not working the way that they had planned or intended it to be over the past few years Bitcoin mining companies have increasingly relied on green energy sources with over 50% of their energy sources powered by renewable sources those are predominantly solar panels or photovoltaic panels and um wind turbines of course we don’t need to necessarily take into consideration that in order to manufacture photovoltaic or wind turbines you require enormous amounts of fossil fuels in fact one wind turbine requires 80 barrels of diesel just to keep the uh props from turning right anyway that’s a separate issue so um Bitcoin mining companies have relied increasingly on green energy sources with over 50% of energy sources provided by renewable sources which themselves have sucked up an enormous amount of fossil fuel I said sucked up an enormous amount of fossil fuels their entry into the Bitcoin mining scene could prompt critics to renew their concerns about the environmental uh environmental hazards associated with the sector woohoooo Bitcoin magazine who is Daniel baton Daniel baton is a climate Tech investor author analyst and environmental campaigner who previously founded and led his own tech company which exited in 2019 So Daniel baton is a writer really uh for Bitcoin magazine and he is the leader the expert that they went to to get an opinion about Alliance resource limited partners mining Bitcoin with their free excess energy here’s Daniel’s quote from X which was previously known as Twitter Bitcoin mining companies moved off using coal but I guess you can’t stop coal mining companies from you from mining Bitcoin either way in terms of changing the environmental narrative around Bitcoin this doesn’t help uh he has a fair point depending on uh where your allegian is like Li but it doesn’t uh prevent people from uh giving him some counter comments and and uh replying to his post on X Tipton Cole said accepting the framing that coal is intrinsically bad for the environment is a mistake virtue signaling use of Renewables instead of coal is factless some good language there right M for heat Gardener said we need better education on lost power and off peak waste even though it’s c powered the entire electric grid is better off with miners using their excess well you know um of course you can call me incredibly biased but I tend to lean towards ston coal and M for heat Gardener and their preferred narrative rather than Daniel batons so how do I feel about this in general drill baby drill if you want energy Independence especially if you’re in the United States you got a drill baby drill but you can also call it dig baby dig depending on what it is that you’re doing or in the case of Bitcoin mine baby mine um I’m not sure how you feel about Alliance resource limited partners mining Bitcoin uh I think it’s a smart move I mean this is a really really well-managed company and they are doing exceptionally great things I would never in a million years if you had asked me um when I first went long in Alliance resource limited partners which is now um almost two years ago to the day it’s uh I think I started started buying Alliance resource limited partners in um oh it might be 3 years 2021 I would never have dreamed that a rlp would be mining Bitcoin and even renting out space to other miners for them to mine Bitcoin um especially because they have excess Electrical uh supplying capacity so um smart move man this is a really well-managed company and it’s not a company to be honest um that I pay overwhelmingly much attention to um there are companies within my portfolio so issuers publicly traded issuers in my portfolio that I spend a lot of time on and I pay a lot of attention to them to uh kind of see where they’re going uh reading their um Financial reports the SEC filings and things like that I mean you guys will know if you’ve been following along with me like uh how deep I I dived into companies like you know ocidental petroleum or or Devon or whatever I do that with quite a number of companies in my portfolio but Alliance Resource Partners is actually an exception to that rule because originally when I purchased my first uh trunch of Alliance resource limited partner shares I bought it purely from the point of view of saying as long as they keep paying a dividend I’ll keep building a big position or good position in Alliance resource limited partners because I view it as a high yielding savings account to that end uh the the business that they’re involved in the commodity their quarterly results or what whatever are of less interest to me because it’s a high yielding savings account so as long as they keep paying me a dividend or interest if you’d like of you know 12 13 14 15% per year I’m quite happy to just have it sit in my portfolio but then there are moments like this uh spurred by people like um Matt and Michael and Mr Burke on our channel that prompt me to go like wait a minute you know take another look at this one and see what’s going on anyway uh some of the stuff was a little bit tongue and cheek I hope you enjoyed it and uh thanks for watching I’ll be back soon with more maybe with something else talk to you then I look forward to uh interacting with you in the comments take care bye-bye

#oilandgas #wti #wticrude #brentcrude #energy #climatecrisis #coal #mining #rareearth #minerals #dividends #uranium #bitcoin #bitcoinmining

My videos are educational. I do not offer financial advice. I do not receive or accept direct payment for my content. If you view my videos as investment advice you will probably lose all your money… so do your own research before making investment decisions!

I am a value investor, searching for undervalued stocks. I look for securities with prices that are unjustifiably low based on intrinsic worth, estimated by analyzing an issuer’s fundamentals.

I do not support the efficient market hypothesis. This suggests that stocks always trade at their fair value, making it harder for investors to either buy stocks that are undervalued, or sell them at inflated prices. I believe the market will eventually favor quality stocks that were undervalued. I am not really concerned with the activities of the stock market, although I “watch” market activity all the time.

One of our business entities is a family-managed charitable foundation, Memory Trees (www.memorytrees.co). This allows us to give back and uplift others who are less fortunate than ourselves. Please hit the subscribe button if you like my content. Thanks for watching!