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FORM 10-K
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x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended December 31, 2019
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or
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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26-1501877
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(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
1001 17th Street, Suite 1050, Denver, Colorado
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80202
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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IPI
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New York Stock Exchange
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Large accelerated filer ¨
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Accelerated filer x
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Non-accelerated filer ¨
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Smaller reporting company ¨
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Emerging growth company ¨
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•
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"Intrepid," "our," "we," or "us" means Intrepid Potash, Inc. and its consolidated subsidiaries.
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•
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"East," "North," and "HB" mean our three operating facilities in Carlsbad, New Mexico. "Moab" means our operating facility in Moab, Utah. "Wendover" means our operating facility in Wendover, Utah. "West" means our previous operating facility in Carlsbad, New Mexico, which was placed in care-and-maintenance mode in mid‑2016. "Intrepid South" refers to certain land, water rights, and other related assets in southeast New Mexico we acquired from Dinwiddie Cattle Company in May 2019. You can find more information about our facilities in Item 2 of this Annual Report on Form 10-K.
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"Ton" means a short ton, or a measurement of mass equal to 2,000 pounds.
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ITEM 1.
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BUSINESS
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Year Ended December 31,
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2019
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2018
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2017
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Potash
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47
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%
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52
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%
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54
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%
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Trio®
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29
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%
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31
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%
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36
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%
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Water
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12
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%
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10
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%
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4
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%
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Salt
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6
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%
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2
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%
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3
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%
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Magnesium Chloride
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2
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%
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3
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%
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3
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%
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Brines
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1
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%
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1
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%
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—
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%
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Other
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3
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%
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1
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%
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—
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%
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Total
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100
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%
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100
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%
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100
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%
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•
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Maximize potash gross margin and optimize potash production. All of our potash production comes from solar solution mines, which carry fewer fixed costs than our conventional potash mines. Our per-ton costs are lower for solution mining than conventional mining as solar solution mining requires less labor, energy, and equipment. In addition, we have the advantage of being located close to the markets we serve, and the North American market is significantly larger than our production capacity. As a result, we are able to selectively participate in the markets that we believe will provide the highest average net realized sales price per ton. We also attempt to maximize our gross margin by leveraging our freight advantage to key geographies, our diverse customer and market base, and our flexible marketing approach. Long-term, we have optimization and expansion opportunities at our solution mining facilities, that, over time, could further reduce our per-ton costs and increase our potash production. For example, we have potential expansion opportunities at our HB mine.
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•
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Expand Trio® sales and maximize gross margin. We plan to continue to expand our sales and marketing efforts for Trio®. These efforts include continued education in international markets and an increased marketing effort in domestic organic markets. In order to maximize gross margin, we are working to optimize our production process to recover more of the langbeinite we mine and to produce more granular-sized product, which is preferred by most markets. Given the current pricing and demand environment, we intend to continue to operate our Trio® facility at reduced production levels and expect to continue to do so for the foreseeable future.
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•
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Expand offerings of oilfield solutions. We intend to continue working to expand sales of water, particularly to service the oil and gas markets near our operating plants in New Mexico. We have a meaningful amount of water
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•
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Continue diversification of products and services. We recover magnesium chloride, salt, brines, and water during the production of potash and Trio®. These byproducts offer additional diversity to our portfolio of product and service offerings. As we continue to look for opportunities to diversify our revenue sources, we may enter into new or complementary businesses that expand our product and service offerings. For example, we are adding a brine station on the Intrepid South property and we are in the process of developing a produced water facility with a partner near our Intrepid South property which we expect will begin operating in mid-2020. We may also expand into oil and natural gas exploration and production, or into new products or services in our current industry or other industries.
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•
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U.S.-based producer. We are the only producer of potash in the United States. We are located in a market that consumes significantly more potash than we can currently produce on an annual basis. Our geographic location provides us with a transportation advantage over our competitors for shipping our product to our customers. In general, this allows us to obtain a higher average net realized sales price per ton than our competitors, who must ship their products across longer distances to consuming markets, which increases their costs and reduces their gross margin. Our location allows us to target sales to the markets in which we have the greatest transportation advantage, maximizing our average net realized sales price per ton. Our access to strategic rail destination points and our location along major agricultural trucking routes also support this advantage.
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•
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Solar evaporation operations. All of our potash production comes from solar solution mines. Solar evaporation is a cost-efficient production method because it significantly reduces labor and energy consumption, which are two of the largest costs of production. Our understanding and application of low-cost solution mining, combined with our reserves being located where a favorable climate for evaporation exists, make solar solution mining difficult for other producers to replicate. We also have significant reserves for future expansion of our solution mining operations.
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•
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Participation in specialty markets. Given the greater scarcity of langbeinite relative to potash and its agronomic suitability for certain soils and crops, we believe there is a market for Trio® outside of our core potash markets. We also believe that there is a market for Trio® beyond the United States, and we continue to attempt to capture and grow this market. Through our existing operations and assets, we also have the potential to grow our offerings of salt, water, and brine with low capital investments.
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•
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Water rights. We have water rights in New Mexico under which we sell water primarily for industrial uses such as in the oil and gas services industry. We continue to work to expand sales of water, especially to support oil and gas development in the Permian Basin near our Carlsbad facilities. The Intrepid South property increased our total water rights available for sale and our footprint in and around the Delaware Basin. This has expanded our relationships with oil and gas producers, which we may be able to use to expand sales of our industrial potash products, byproducts, and services.
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•
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Diversity of potash markets. We sell potash into three different markets—the agricultural, industrial, and feed markets. During 2019, these markets represented approximately 74%, 12%, and 14% of our potash sales, respectively. The agricultural market supplies farmers producing a wide range of crops in different geographies. Because of our geographic proximity to areas that have seen recent increases in oil and gas drilling activity, we
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•
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Marketing flexibility. We have the ability to convert all of our standard-sized potash product into granular-sized product as market conditions warrant. We also produce Trio® in premium, granular, standard and fine standard sizes. This provides us with increased marketing flexibility as well as decreased dependence on any one particular market.
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•
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Significant reserve life. Our potash and langbeinite reserves each have substantial years of reserve life, with remaining reserve lives for our actively mined areas ranging from 30 years to greater than 100 years, based on proven and probable reserve estimates. In addition to our reserves, we have water rights and access to additional mineralized areas of potash for potential future exploitation.
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•
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Existing facilities and infrastructure. Constructing a new potash production facility requires substantial time and extensive capital investment in mining, milling, and infrastructure to extract, process, store, and ship product. Our operations already have significant facilities and infrastructure in place. We also have the ability to expand our business using existing installed infrastructure, in less time and with lower expenditures than would be required to construct entirely new mines.
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Name
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Age
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Position
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Robert P. Jornayvaz III
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61
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Executive Chairman of the Board, President, and Chief Executive Officer
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Robert E. Baldridge
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58
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Senior Vice President - New Mexico
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Mark A. McDonald
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55
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Vice President of Sales and Marketing
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Matthew D. Preston
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35
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Vice President, Finance
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Kyle R. Smith
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46
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Vice President, General Counsel and Secretary
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E. Brian Stone
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57
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Chief Operating Officer
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Erica K. Wyatt
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47
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Chief Human Resources Officer
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ITEM 1A.
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RISK FACTORS
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•
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it could limit our ability to borrow additional money or sell additional shares of common stock to fund our working capital, capital expenditures, and debt service requirements
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•
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it could limit our flexibility in planning for, or reacting to, changes in our business
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•
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we could be more highly leveraged than some of our competitors, which could place us at a competitive disadvantage
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•
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it could make us more vulnerable to a downturn in our business or the economy
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•
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it could require us to dedicate a substantial portion of our cash flows from operations to the repayment of our indebtedness, thereby reducing the availability of our cash flows for other purposes
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•
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it could adversely affect our business and financial condition if we default on or are unable to service our indebtedness, are unable to refinance such indebtedness on favorable terms or are unable to obtain additional financing, as needed
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•
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geologic and mining conditions, which may not be fully identified by available exploration data and may differ from our experiences in areas where we currently mine or operate
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•
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future potash and Trio® prices, operating costs, capital expenditures, royalties, severance and excise taxes, and development and reclamation costs
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•
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future mining technology improvements
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•
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the effects of governmental regulation
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•
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variations in mineralogy
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•
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changes in the interpretation of environmental laws
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•
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modifications to current environmental laws
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•
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the issuance of more stringent environmental laws
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•
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malfunctioning process or pollution control equipment
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•
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our operating performance and the performance of our competitors
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•
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the public's reaction to our press releases, other public announcements, or filings with the SEC
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•
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changes in earnings estimates or recommendations by research analysts who follow us or other companies in our industry
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•
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variations in general economic, market, and political conditions
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•
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changes in commodity prices or foreign currency exchange rates
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•
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substantial sales of common stock by us under our at-the-market offering program or in connection with future acquisitions or capital raising activities
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•
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actions of our current stockholders, including sales of common stock by our directors and executive officers
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•
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the arrival or departure of key personnel
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•
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other developments affecting us, our industry, or our competitors
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•
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the other risks described in this Annual Report on Form 10-K
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•
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allow our board of directors to create and issue preferred stock with rights senior to those of our common stock without prior stockholder approval, except as may be required by NYSE rules
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•
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do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates
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•
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prohibit stockholders from calling special meetings of stockholders
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•
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prohibit stockholders from acting by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders
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•
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require vacancies and newly created directorships on the board of directors to be filled only by affirmative vote of a majority of the directors then serving on the board
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•
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establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting
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•
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classify our board of directors so that only some of our directors are elected each year
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•
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our pre-existing stockholders’ proportionate ownership interest in us will decrease
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•
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the relative voting strength of each previously outstanding common share may diminish
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•
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the market price of the common stock may decline
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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(tons in thousands)
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Proven 4
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Probable 7
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Product/Operations
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Date Mine Opened 2
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Current Extraction Method
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Minimum Remaining Life (years) 3
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Recoverable Ore Tons 5
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Ore Grade 6 (% KCl)
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Product Tons as KCl
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Recoverable Ore Tons 5
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Ore Grade 6 (% KCl)
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Product Tons as KCl
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Potash
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West 2
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1931
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Underground
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51
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82,640
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22.8
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%
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15,410
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36,060
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16.0
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%
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6,540
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East
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1965
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Underground
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3
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5,360
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21.7
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%
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920
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3,510
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22.6
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%
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650
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HB Mine 2, 9
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2012
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Solution
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36
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17,390
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36.4
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%
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5,900
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2,190
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40.2
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%
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790
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Moab
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1965
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Solution
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100+
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29,470
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44.4
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%
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11,450
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31,400
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46.2
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%
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14,760
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Wendover 10
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1932
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Brine Evaporation
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30
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—
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—
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—
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—
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0.7
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%
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3,120
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Total Potash
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32.5
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%
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33,680
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32.3
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%
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25,860
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(tons in thousands)
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Proven 4
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Probable 7
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Product/Operations
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Date Mine Opened 2
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Current Extraction Method
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Minimum Remaining Life (years) 3
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Recoverable Ore Tons 5
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Ore Grade 6 (% Lang)
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Product Tons as Langbeinite
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Recoverable Ore Tons 5
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Ore Grade 6 (% Lang)
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Product Tons as Langbeinite
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Langbeinite
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East 8,11
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1965
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Underground
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34
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31,220
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43.3
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%
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12,170
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17,980
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37.0
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%
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6,490
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1
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The determination of estimated reserves has been prepared by us and is based on an independent review and analysis of our mine plans and geologic, financial and other data by Agapito, which is familiar with our mines. The most recent review performed by Agapito for the New Mexico East, West, and HB properties was in 2019. Agapito's analysis for the West, East and HB mines was based on detailed examination of our geologic site data and mine plan, which was updated with information from 2019, and 2018. As a result of the Agapito 2019 review, langbeinite reserves decreased in the East mine and sylvite reserves increased in the West mine compared to previously reported reserves. The change in reserves was primarily due to the reclassification of reserves in the 3rd and 4th ore zones from langbeinite to sylvite. The cutoff grade for langbeinite also increased, thus decreasing reserves. The HB mine reserve estimate decreased due to depletion for 2019 production from the HB mine. The Moab property reserves are based on Agapito's 2018 mine reserve estimate adjusted for depletion for 2019 production. The Wendover property reserves are based on Agapito's 2018 brine aquifer reserve. However, depletion did not change the reserve life of 30 years as discussed in footnote 3 below. Because reserves are estimates, they cannot be audited for the purpose of verifying exactness. Instead, reserve information was reviewed in sufficient detail to determine if, in the aggregate, the data provided by us is reasonable and sufficient to estimate reserves in conformity with practices and standards generally employed by, and within the mining industry, and that are consistent with the requirements of U.S. securities laws.
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2
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These mines, excluding the HB and West mines, have operated in a substantially continuous manner since the dates set forth in this table. The HB mine was originally opened in 1934 and operated continuously as an underground mine until 1996. In July 2016, we transitioned our West facility into care-and-maintenance mode due to the decline in potash prices.
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3
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Minimum remaining lives are calculated by dividing reserves by annual effective capacity. Effective capacity is the estimated amount of production that will likely be achieved based on the amount and quality of ore that we estimate can be mined, milled, and/or processed, assuming an estimated average reserve grade, potential future modifications to the systems, a normal amount of scheduled down time, average or typical mine development efforts and operation of all of our mines and facilities at or near full capacity. Minimum remaining lives at the West, East, HB mine, and Moab mines are based on reserves (product tons) divided by annual effective capacity over the full expected life of the ore body, and corrections for purity: one ton of red muriate of potash equals 0.95 ton of KCl; one ton of Moab white muriate of potash equals 0.97 ton of KCl; one ton of sulfate of potash magnesia equals 0.97 ton of langbeinite. East langbeinite minimum remaining life was based on a langbeinite-only plant and associated plant capacity. Langbeinite-only production commenced in April 2016 at the East facility and the sylvite plant was shut down at that time. The West facility was shut down and placed into care-and-maintenance mode in July 2016 due to low potash prices. If we decided to produce potash from our East and West mine sylvite ore reserves in the future, we expect that we would reopen the West facility and be required to construct a new plant to replace the East sylvite plant closed in 2016 to process the remaining reserves. Calculated mine lives that exceed 100 years are reported at 100+ years to balance the reserve life with the uncertainties
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4
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Generally, "proven reserves" are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings, or drill holes; grade and/or quality are computed from the results of detailed sampling, and (b) the sites for inspection, sampling, and measurement are spaced so closely and the geologic character is so well-defined that the size, shape and depth, and mineral content of the reserves are well-established. Proven reserve tonnages are computed from projection of data using the inverse distance squared method taking into account mining dilution, mine extraction efficiency, ore body impurities, metallurgical recovery factors, sales prices, and operating costs from potash ore zone measurements as observed and recorded either in drill holes using cores, or channel samples in mine workings. This classification has the highest degree of geologic assurance. The data points for measurement are adequately spaced and the geologic character so well defined that the thickness, areal extent, size, shape, and depth of the potash ore zone are well-established. The maximum acceptable distance for projection from ore zone data points varies with the geologic nature of the ore zone being studied.
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5
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Recovery is the percentage of valuable material in the ore that is beneficiated prior to further treatment to develop a saleable product. Recoverable ore tons is defined as the hoisted ore for the conventionally mined ore in our East and West mines. This figure was derived from the in-place ore estimate that has been adjusted for factors such as geologic impurities and mine extraction ratios. For the HB mine and the Moab property, recoverable ore tons are defined as the potassium that can be extracted from the underground workings and pumped to the surface. This figure was derived from the in-place ore estimate that has been adjusted for factors such as geologic impurities, potash that dissolves but remains in the cavern (dissolution factor), and an extraction factor that accounts for potash that may not be recovered because solution may be channeled away or stranded due to cavern geometry. We do not calculate recoverable ore tons for the Wendover property as it is a lake brine resource, not an in-place ore deposit.
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6
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Ore grade is expressed as expected mill feed grade to account for minimum mining height for the East and West mines. Potash ore grade is reported in percent KCl and langbeinite ore grade is reported in percent langbeinite. The ore grade for the Moab and HB mines is the in-place KCl grade.
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7
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"Probable reserves" are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance of probable (indicated) reserves, although lower than that for proven (measured) reserves, is high enough to assume geological continuity between points of observation. The classification of minerals as probable reserves requires that we believe with reasonable certainty that access to the reserves can be obtained, even though currently-issued permits are not required. Probable reserve tonnages are computed by projection of data using the inverse distance squared method taking into account mining dilution, mine extraction efficiency, ore body impurities, metallurgical recovery factors, sales prices, and operating costs from available ore zone measurements as observed either in drill holes using cores or in mine workings for a distance beyond potash classified as proven reserves. This classification has a moderate degree of geological assurance.
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8
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Our reserves in the 1st, 3rd, 4th, 7th, 8th and 10th ore zones contain either sylvite (KCl) or langbeinite (K2SO4(MgSO4)2) separately. Ore reserves in the East 5th ore zone contain both sylvite and langbeinite which we call mixed ore. We ceased processing sylvite at the East facility in April 2016, and only the langbeinite ore contained in the East 5th ore zone is included in the mine reserve estimate. Additionally, the reserve amounts include the West mine 4th ore zone which contains langbeinite that we anticipate will be processed at the East facility.
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9
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The HB mine reserves were based on solution mining of old workings and recovery of potash from the residual pillars. Reserves are based on thicknesses, grades, and mine maps provided by us. The data presented here includes reserves available via the AMAX/Horizon mine as further described below under Our Development Assets.
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10
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The Wendover facility reserves are the combination of a shallow and a deep aquifer. There were no proven reserves reported for either aquifer because the shallow aquifer represents an unconventional resource and there is uncertainty of the hydrogeology of the deep aquifer. The estimating method for the shallow aquifer was based on brine concentration, brine density, soil porosity within the aquifer, and aquifer thickness from historical reports. The brine concentrations and brine density were confirmed by us recently, but values for the aquifer thickness and the porosity were obtained from literature published by other sources. Probable reserves for the shallow brine at the Wendover facility were calculated from KCl contained in the shallow aquifer based on estimates of porosity and thickness over the reserve area. The distance for projection of probable reserves is a radius of three‑quarters of a mile from points of measurement of brine concentration. Probable reserves for the deep-brine aquifer were estimated based on historical draw-down and KCl brine concentrations. The ore grade (% KCl) for both the shallow and deep aquifer is the percentage by weight of KCl in the brine.
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11
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A portion of these reserves are within the West mine boundary. The classification of the reserve as being associated with the East mine is a result of where the ore is intended to be processed.
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•
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Potash ore at HB is mined from idled original mine workings in the Carlsbad, New Mexico, area.
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•
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The HB mine has a current estimated productive capacity of 180,000 tons annually. The productive capacity may vary between approximately 160,000 and 200,000 tons of potash, primarily due to evaporation rates. Potash produced from our HB mine is shipped by truck to the North facility for compaction.
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•
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Potash ore at Moab is mined from two stacked ore zones: the original mine workings in Potash 5 and the horizontal caverns in Potash 9.
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•
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The Moab mine has a current estimated productive capacity of approximately 110,000 tons of potash annually; evaporation rates have historically varied and, consequently, productive capacity may vary between approximately 75,000 and 120,000 tons of potash.
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•
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Potash at Wendover is produced primarily from brine containing salt, potash, and magnesium chloride that is collected in ditches from the shallow aquifers of the West Desert. These materials are also collected from a deeper aquifer by means of deep-brine wells.
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•
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The Wendover facility has a current estimated productive capacity of approximately 100,000 tons of potash annually; evaporation rates have historically varied resulting in actual annual production between approximately 65,000 and 100,000 tons of potash.
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•
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Sylvite and langbeinite ore at our Carlsbad locations occurs in a stacked ore body containing at least 10 different mineralized zones, seven of which contain proven and probable reserves.
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•
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The East mine has a current estimated productive capacity of approximately 400,000 tons of Trio® annually, based on current design. The East mine was converted to a Trio®-only operation in April 2016 and potash is no longer produced from the East mine.
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•
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The West mine was idled in July 2016 and placed in care-and-maintenance mode. When operational, it has an estimated productive capacity of approximately 400,000 tons of red potash annually.
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•
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The North facility receives compactor feed from the HB mine via truck and converts the compactor feed to finished granular-sized product and standard-sized product.
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•
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We acquired the potash leases associated with the AMAX/Horizon mine in October 2012. The AMAX/Horizon mine was in continuous operation between 1952 and 1993. This mine, similar to the HB mine, is a viable candidate for solution mining in a manner that is consistent with the HB mine.
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•
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State and federal permits were obtained in 2015 to utilize these leases for solution mining. The AMAX/Horizon solution mine is expected to utilize the same evaporation ponds and processing mill as the HB mine. We have not yet made a determination to proceed with this potential development project; however, future work may be performed to determine the ability to convert this idled underground mine to a solution mining opportunity.
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•
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As noted in footnote 9 to Our Proven and Probable Reserves table, these tons are included in the data presented for the HB Mine.
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•
|
The North mine operated from 1957 to 1982 when it was idled mainly due to low potash prices and mineralogy changes which negatively impacted mineral processing at the facilities. Although the mining and processing equipment has been removed, the mine shafts remain open. The compaction facility at the North mine is where we granulate, store, and ship potash produced from the HB mine. Two abandoned mine shafts, rail access, storage facilities, water rights, utilities and leases covering potash deposits, are already in place. As part of our long-term mine planning efforts, we may choose to evaluate our strategic development options with respect to the shafts at the North mine and their access to mineralized deposits of potash.
|
(tons in thousands)
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||
|
|
Ore Production
|
|
Mill Feed Grade1
|
|
Finished Product
|
|
Ore Production
|
|
Mill Feed Grade1
|
|
Finished Product
|
|
Ore Production
|
|
Mill Feed Grade1
|
|
Finished Product
|
|||||||||
Potash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
HB
|
|
734
|
|
|
16.9
|
%
|
|
158
|
|
|
679
|
|
|
17.4
|
%
|
|
150
|
|
|
728
|
|
|
18.0
|
%
|
|
172
|
|
Moab
|
|
509
|
|
|
15.6
|
%
|
|
94
|
|
|
506
|
|
|
15.8
|
%
|
|
105
|
|
|
472
|
|
|
16.7
|
%
|
|
109
|
|
Wendover
|
|
409
|
|
|
15.1
|
%
|
|
75
|
|
|
404
|
|
|
17.3
|
%
|
|
89
|
|
|
362
|
|
|
15.9
|
%
|
|
78
|
|
|
|
1,652
|
|
|
|
|
327
|
|
|
1,589
|
|
|
|
|
344
|
|
|
1,562
|
|
|
|
|
359
|
|
|||
Langbeinite
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
East 2
|
|
944
|
|
|
9.1
|
%
|
|
228
|
|
|
935
|
|
|
9.1
|
%
|
|
217
|
|
|
1,177
|
|
|
8.0
|
%
|
|
243
|
|
Total Primary Products
|
|
|
|
555
|
|
|
|
|
|
|
561
|
|
|
|
|
|
|
602
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
IPI
|
|
Peer Group
|
|
S&P 500
|
|
Dow Jones U.S. Basic Materials
|
||||||||
December 31, 2014
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
December 31, 2015
|
$
|
21.25
|
|
|
$
|
70.19
|
|
|
$
|
99.33
|
|
|
$
|
87.57
|
|
December 31, 2016
|
$
|
14.99
|
|
|
$
|
81.94
|
|
|
$
|
119.24
|
|
|
$
|
105.32
|
|
December 31, 2017
|
$
|
34.29
|
|
|
$
|
91.30
|
|
|
$
|
150.73
|
|
|
$
|
131.75
|
|
December 31, 2018
|
$
|
18.73
|
|
|
$
|
83.75
|
|
|
$
|
147.24
|
|
|
$
|
110.44
|
|
December 31, 2019
|
$
|
18.80
|
|
|
$
|
81.81
|
|
|
$
|
180.47
|
|
|
$
|
132.26
|
|
Issuer Purchases of Equity Securities
|
||||||||
Period
|
|
(a)
Total Number of Shares Purchased1 |
|
(b)
Average Price Paid Per Share |
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs |
October 1, 2019, through October 31, 2019
|
|
–
|
|
—
|
|
–
|
|
N/A
|
November 1, 2019, through November 30, 2019
|
|
103,614
|
|
$2.53
|
|
–
|
|
N/A
|
December 1, 2019, through December 31, 2019
|
|
—
|
|
—
|
|
–
|
|
N/A
|
Total
|
|
103,614
|
|
$2.53
|
|
—
|
|
N/A
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Sales
|
|
$
|
220,075
|
|
|
$
|
208,270
|
|
|
$
|
177,915
|
|
|
$
|
212,097
|
|
|
$
|
287,183
|
|
Net income (loss)
|
|
$
|
13,631
|
|
|
$
|
11,783
|
|
|
$
|
(22,567
|
)
|
|
$
|
(64,183
|
)
|
|
$
|
(524,776
|
)
|
Basic earnings (loss) per share:
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
(6.94
|
)
|
Diluted (loss) earnings per share:
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
(0.20
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
(6.94
|
)
|
|
|
December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Total assets
|
|
$
|
578,439
|
|
|
$
|
525,231
|
|
|
$
|
510,592
|
|
|
$
|
537,551
|
|
|
$
|
639,969
|
|
Long-term debt, net
|
|
$
|
29,753
|
|
|
$
|
49,642
|
|
|
$
|
49,437
|
|
|
$
|
133,434
|
|
|
$
|
149,485
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Cash, cash equivalents, and investments
|
|
$
|
20,603
|
|
|
$
|
33,222
|
|
|
$
|
1,068
|
|
|
$
|
4,464
|
|
|
$
|
63,629
|
|
Stockholders' equity
|
|
$
|
434,656
|
|
|
$
|
417,263
|
|
|
$
|
402,090
|
|
|
$
|
362,567
|
|
|
$
|
426,526
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|
•
|
Potash pricing and demand. Potash remained a significant driver of our profitability, comprising 47% of our total sales in 2019. Our average net realized sales price for potash increased in 2019 to $284 per ton compared to $256 per ton for 2018 due to price increases late in 2018 that we realized in 2019.
|
•
|
Trio® pricing and demand. Wet weather in parts of the United States resulted in below-average application during the first half of 2019 leading to a summer-fill program that reduced domestic Trio® pricing by $35 to $50 per ton depending on product grade. This program erased the domestic pricing increases we achieved in 2018. Two subsequent attempts to increase Trio® pricing, after the summer-fill window and again after the October-fill window, failed to gain traction with buyers and we continued to transact near summer-fill pricing levels in the fourth quarter of 2019.
|
•
|
Water sales. Water sales increased in 2019 to $25.7 million, compared to $19.8 million in 2018, primarily due to the acquisition of Intrepid South and associated water rights in May 2019. Demand for water has been increasing due to increasing oil and gas activities in the Permian Basin near our facilities in New Mexico. We have put in place a diverse set of arrangements aimed at generating a long-term recurring revenue stream from water sales. We have contracts with various water customers from which we expect revenue of between $32 million to $45 million in 2020.
|
•
|
Byproduct sales. Byproduct sales increased to $26.5 million in 2019 compared to $19.3 million in 2018. This increase was primarily due to increased water and brine sales in support of well development and completion activities in the Permian Basin. We also increased sales of salt during 2019, capitalizing on reduced availability in certain parts of the country. Record wet weather in the summer of 2019 in Wendover limited our production of magnesium chloride and is expected to limit product available for sale until the summer of 2020. While the market for magnesium chloride is
|
•
|
Weather impact. Evaporation rates in 2019 were below average across our facilities which will reduce production in the spring of 2020 when compared to the prior year. Above average rainfall at our Wendover facility also decreased our magnesium chloride production in 2019 and we expect to have limited volumes of magnesium chloride available for sale until the evaporation season begins in 2020.
|
•
|
Diversification of products and services. We continued to diversify our products and services in 2019, particularly with the acquisition of Intrepid South in May 2019. In addition to water sales, Intrepid South also generates revenue from right-of-way agreements, surface damages and easements, caliche sales, and a produced water royalty. These sales generated revenue of $3.7 million in 2019 and incur either minimal or no operating expense. We are in the process of adding a brine station at Intrepid South and are currently developing a produced water facility with a partner near Intrepid South. As we continue to diversify our portfolio, we may enter into new or complementary business that expand our product and service offerings beyond our existing assets or products through acquisition of companies or assets or otherwise. Additionally, we may expand into oil and natural gas exploration and production or into new products or services in our current industry or other industries.
|
(in thousands)
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales1
|
|
$
|
220,075
|
|
|
$
|
208,270
|
|
|
$
|
177,915
|
|
|
|
|
|
|
|
|
||||||
Cost of Goods Sold
|
|
$
|
126,110
|
|
|
$
|
121,955
|
|
|
$
|
117,962
|
|
|
|
|
|
|
|
|
||||||
Gross Margin
|
|
$
|
43,478
|
|
|
$
|
38,271
|
|
|
$
|
11,888
|
|
|
|
|
|
|
|
|
||||||
Net Income (Loss)
|
|
$
|
13,631
|
|
|
$
|
11,783
|
|
|
$
|
(22,567
|
)
|
|
|
|
|
|
|
|
||||||
Average Net Realized Sales Price per Ton2
|
|
|
|
|
|
|
||||||
Potash
|
|
$
|
284
|
|
|
$
|
256
|
|
|
$
|
238
|
|
Trio®
|
|
$
|
195
|
|
|
$
|
199
|
|
|
$
|
191
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales1
|
|
$
|
124,648
|
|
|
$
|
124,058
|
|
|
$
|
107,917
|
|
Less: Freight costs
|
|
18,715
|
|
|
17,682
|
|
|
13,912
|
|
|||
Warehousing and handling costs
|
|
4,745
|
|
|
5,046
|
|
|
5,556
|
|
|||
Cost of goods sold
|
|
73,401
|
|
|
72,322
|
|
|
72,229
|
|
|||
Lower of cost or NRV inventory adjustments
|
|
—
|
|
|
—
|
|
|
550
|
|
|||
Gross Margin
|
|
$
|
27,787
|
|
|
$
|
29,008
|
|
|
$
|
15,670
|
|
Depreciation, Depletion, and Amortization Incurred2
|
|
$
|
25,796
|
|
|
$
|
25,134
|
|
|
$
|
26,485
|
|
Potash Sales Volumes (tons in thousands)
|
|
319
|
|
|
364
|
|
|
352
|
|
|||
Potash Production Volumes (tons in thousands)
|
|
328
|
|
|
344
|
|
|
359
|
|
|||
Average Potash Net Realized Sales Price per Ton3
|
|
$
|
284
|
|
|
$
|
256
|
|
|
$
|
238
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales1
|
|
$
|
69,551
|
|
|
$
|
66,808
|
|
|
$
|
63,686
|
|
Less: Freight costs
|
|
20,514
|
|
|
19,370
|
|
|
18,104
|
|
|||
Warehousing and handling costs
|
|
3,876
|
|
|
4,225
|
|
|
4,114
|
|
|||
Cost of goods sold
|
|
42,251
|
|
|
45,284
|
|
|
45,187
|
|
|||
Lower of cost or NRV inventory adjustments
|
|
1,810
|
|
|
1,711
|
|
|
5,829
|
|
|||
Gross (Deficit) Margin
|
|
$
|
1,100
|
|
|
$
|
(3,782
|
)
|
|
$
|
(9,548
|
)
|
Depreciation, Depletion, and Amortization incurred2
|
|
$
|
6,163
|
|
|
$
|
6,343
|
|
|
$
|
6,576
|
|
Sales Volumes (tons in thousands)
|
|
225
|
|
|
225
|
|
|
237
|
|
|||
Production Volumes (tons in thousands)
|
|
228
|
|
|
217
|
|
|
243
|
|
|||
Average Net Realized Sales Price per Ton3
|
|
$
|
195
|
|
|
$
|
199
|
|
|
$
|
191
|
|
|
|
United States
|
|
Export
|
||
For the year ended December 31, 2019
|
|
74
|
%
|
|
26
|
%
|
For the year ended December 31, 2018
|
|
81
|
%
|
|
19
|
%
|
For the year ended December 31, 2017
|
|
72
|
%
|
|
28
|
%
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
|
$
|
27,894
|
|
|
$
|
17,404
|
|
|
$
|
6,312
|
|
Less: Warehouse and handling
|
|
—
|
|
|
10
|
|
|
—
|
|
|||
Cost of goods sold
|
|
12,367
|
|
|
4,349
|
|
|
546
|
|
|||
Gross Margin
|
|
$
|
14,591
|
|
|
$
|
13,045
|
|
|
$
|
5,766
|
|
Depreciation, Depletion, and Amortization incurred
|
|
$
|
1,566
|
|
|
$
|
343
|
|
|
$
|
19
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(In thousands)
|
||||||||||
Cash flows provided by operating activities
|
|
$
|
49,381
|
|
|
$
|
64,237
|
|
|
$
|
16,693
|
|
Cash flows used in investing activities
|
|
$
|
(80,641
|
)
|
|
$
|
(16,781
|
)
|
|
$
|
(7,854
|
)
|
Cash flows provided by (used in) financing activities
|
|
$
|
18,795
|
|
|
$
|
(15,301
|
)
|
|
$
|
(15,760
|
)
|
•
|
$20 million of Senior Notes, Series A, due April 16, 2020
|
•
|
$15 million of Senior Notes, Series B, due April 14, 2023
|
•
|
$15 million of Senior Notes, Series C, due April 16, 2025
|
•
|
We are required to maintain a minimum fixed charge coverage ratio of 1.30 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our fixed charge coverage ratio as of December 31, 2019, was 10.4 to 1.0, therefore we were in compliance with this covenant.
|
•
|
We are allowed a maximum leverage ratio of 3.5 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our leverage ratio as of December 31, 2019, was 1.3 to 1.0 therefore we were in compliance with this covenant.
|
|
|
Payments Due By Period
|
||||||||||||||||||||||||||
|
|
Total
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
More Than 5 Years
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Long-term debt
|
|
$
|
50,000
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,000
|
|
|
$
|
—
|
|
|
$
|
15,000
|
|
Variable rate interest obligations on long-term debt1
|
|
6,747
|
|
|
1,785
|
|
|
1,412
|
|
|
1,412
|
|
|
1,064
|
|
|
717
|
|
|
357
|
|
|||||||
Operating lease obligations2
|
|
6,629
|
|
|
2,432
|
|
|
2,116
|
|
|
1,459
|
|
|
357
|
|
|
167
|
|
|
98
|
|
|||||||
Purchase commitments3
|
|
6,415
|
|
|
6,415
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Asset retirement obligation4
|
|
65,565
|
|
|
—
|
|
|
2,147
|
|
|
3,200
|
|
|
1,375
|
|
|
3,175
|
|
|
55,668
|
|
|||||||
Minimum royalty payments5
|
|
12,880
|
|
|
515
|
|
|
515
|
|
|
515
|
|
|
515
|
|
|
515
|
|
|
10,305
|
|
|||||||
Total
|
|
$
|
148,236
|
|
|
$
|
31,147
|
|
|
$
|
6,190
|
|
|
$
|
6,586
|
|
|
$
|
18,311
|
|
|
$
|
4,574
|
|
|
$
|
81,428
|
|
1
|
See "Senior Notes" section above for more detail on the variable rate interest associated with our long-term debt. Amounts in the table above represent interest calculated at rates in effect as of December 31, 2019.
|
2
|
Amounts include all operating lease payments, inclusive of sales tax, for leases for office space, railcars, and other equipment.
|
3
|
Purchase commitments include the approximate amount due to vendors for non-cancelable purchase commitments for materials and services.
|
4
|
We are obligated to reclaim and remediate lands that our operations have disturbed, but, because of the long-term nature of our reserves and facilities, we estimate that the majority of those expenditures will not be required until after 2024. Although our reclamation obligation activities are not required to begin until after we cease operations, we anticipate certain activities to occur prior to then related to reclamation of facilities that have been replaced with newly constructed assets, as well as certain shaft closure activities for shafts that are no longer in use. Commitments shown are in today's dollars and are undiscounted.
|
5
|
Estimated annual minimum royalties due under mineral leases, assuming approximately a 25-year life, consistent with estimated useful lives of plant assets.
|
•
|
significant underperformance relative to expected operating results or operating losses
|
•
|
significant changes in the manner of use of assets or the strategy for our overall business
|
•
|
the denial or delay of necessary permits or approvals that would affect the utilization of our tangible assets
|
•
|
underutilization of our tangible assets
|
•
|
discontinuance of certain products by us or our customers
|
•
|
a decrease in estimated mineral reserves
|
•
|
significant negative industry or economic trends
|
|
|
Potash Segment
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Total Segment Sales
|
|
$
|
124,648
|
|
|
$
|
124,058
|
|
|
$
|
107,917
|
|
Less: Segment byproduct sales
|
|
21,245
|
|
|
16,586
|
|
|
12,377
|
|
|||
Potash freight costs
|
|
12,936
|
|
|
14,194
|
|
|
11,818
|
|
|||
Subtotal
|
|
$
|
90,467
|
|
|
$
|
93,278
|
|
|
$
|
83,722
|
|
|
|
|
|
|
|
|
||||||
Divided by:
|
|
|
|
|
|
|
||||||
Potash tons sold (in thousands)
|
|
319
|
|
|
364
|
|
|
352
|
|
|||
Average net realized sales price per ton
|
|
$
|
284
|
|
|
$
|
256
|
|
|
$
|
238
|
|
|
|
Trio® Segment
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Total Segment Sales
|
|
$
|
69,551
|
|
|
$
|
66,808
|
|
|
$
|
63,686
|
|
Less: Segment byproduct sales
|
|
5,252
|
|
|
2,669
|
|
|
348
|
|
|||
Trio® freight costs
|
|
20,514
|
|
|
19,367
|
|
|
18,104
|
|
|||
Subtotal
|
|
$
|
43,785
|
|
|
$
|
44,772
|
|
|
$
|
45,234
|
|
|
|
|
|
|
|
|
||||||
Divided by:
|
|
|
|
|
|
|
||||||
Trio® Tons sold (in thousands)
|
|
225
|
|
|
225
|
|
|
237
|
|
|||
Average net realized sales price per ton
|
|
$
|
195
|
|
|
$
|
199
|
|
|
$
|
191
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
20,603
|
|
|
$
|
33,222
|
|
Accounts receivable:
|
|
|
|
|
||||
Trade, net
|
|
23,749
|
|
|
25,161
|
|
||
Other receivables, net
|
|
1,247
|
|
|
597
|
|
||
Inventory, net
|
|
94,220
|
|
|
82,046
|
|
||
Other current assets
|
|
5,524
|
|
|
4,332
|
|
||
Total current assets
|
|
145,343
|
|
|
145,358
|
|
||
Property, plant, equipment, and mineral properties, net
|
|
378,509
|
|
|
346,209
|
|
||
Water rights
|
|
19,184
|
|
|
2,311
|
|
||
Long-term parts inventory, net
|
|
27,569
|
|
|
30,031
|
|
||
Other assets, net
|
|
7,834
|
|
|
1,322
|
|
||
Total Assets
|
|
$
|
578,439
|
|
|
$
|
525,231
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Accounts payable:
|
|
|
|
|
||||
Trade
|
|
$
|
9,992
|
|
|
$
|
9,107
|
|
Related parties
|
|
—
|
|
|
28
|
|
||
Income taxes payable
|
|
50
|
|
|
914
|
|
||
Accrued liabilities
|
|
13,740
|
|
|
8,717
|
|
||
Accrued employee compensation and benefits
|
|
4,464
|
|
|
4,124
|
|
||
Other current liabilities
|
|
19,382
|
|
|
11,891
|
|
||
Advances on credit facility
|
|
19,817
|
|
|
—
|
|
||
Current portion of long-term debt
|
|
20,000
|
|
|
—
|
|
||
Total current liabilities
|
|
87,445
|
|
|
34,781
|
|
||
|
|
|
|
|
||||
Long-term debt, net
|
|
29,753
|
|
|
49,642
|
|
||
Asset retirement obligation
|
|
22,140
|
|
|
23,125
|
|
||
Operating lease liabilities
|
|
4,025
|
|
|
—
|
|
||
Other non-current liabilities
|
|
420
|
|
|
420
|
|
||
Total Liabilities
|
|
143,783
|
|
|
107,968
|
|
||
|
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Common stock, $0.001 par value; 400,000,000 shares authorized:
|
|
|
|
|
||||
and 129,553,517 and 128,716,595 shares outstanding
|
|
|
|
|
||||
at December 31, 2019, and 2018, respectively
|
|
130
|
|
|
129
|
|
||
Additional paid-in capital
|
|
652,963
|
|
|
649,202
|
|
||
Retained deficit
|
|
(218,437
|
)
|
|
(232,068
|
)
|
||
Total Stockholders' Equity
|
|
434,656
|
|
|
417,263
|
|
||
Total Liabilities and Stockholders' Equity
|
|
$
|
578,439
|
|
|
$
|
525,231
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
|
$
|
220,075
|
|
|
$
|
208,270
|
|
|
$
|
177,915
|
|
Less:
|
|
|
|
|
|
|
||||||
Freight costs
|
|
40,056
|
|
|
37,052
|
|
|
32,016
|
|
|||
Warehousing and handling costs
|
|
8,621
|
|
|
9,281
|
|
|
9,670
|
|
|||
Cost of goods sold
|
|
126,110
|
|
|
121,955
|
|
|
117,962
|
|
|||
Lower of cost or net realizable value inventory adjustments
|
|
1,810
|
|
|
1,711
|
|
|
6,379
|
|
|||
Gross Margin
|
|
43,478
|
|
|
38,271
|
|
|
11,888
|
|
|||
|
|
|
|
|
|
|
||||||
Selling and administrative
|
|
23,556
|
|
|
20,438
|
|
|
18,915
|
|
|||
Accretion of asset retirement obligation
|
|
1,793
|
|
|
1,668
|
|
|
1,558
|
|
|||
Restructuring expense
|
|
—
|
|
|
—
|
|
|
266
|
|
|||
Care and maintenance expense
|
|
549
|
|
|
530
|
|
|
1,687
|
|
|||
Other operating expense (income)
|
|
1,220
|
|
|
141
|
|
|
3,523
|
|
|||
Operating Income (Loss)
|
|
16,360
|
|
|
15,494
|
|
|
(14,061
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other Income (Expense)
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
(3,031
|
)
|
|
(3,855
|
)
|
|
(11,692
|
)
|
|||
Other income
|
|
355
|
|
|
252
|
|
|
403
|
|
|||
Income (Loss) Before Income Taxes
|
|
13,684
|
|
|
11,891
|
|
|
(25,350
|
)
|
|||
|
|
|
|
|
|
|
||||||
Income Tax (Expense) Benefit
|
|
(53
|
)
|
|
(108
|
)
|
|
2,783
|
|
|||
Net Income (Loss)
|
|
$
|
13,631
|
|
|
$
|
11,783
|
|
|
$
|
(22,567
|
)
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
129,049,168
|
|
|
128,070,702
|
|
|
115,708,859
|
|
|||
Diluted
|
|
131,050,920
|
|
|
130,985,919
|
|
|
115,708,859
|
|
|||
Income (Loss) Per Share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
(0.20
|
)
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
(0.20
|
)
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Deficit
|
|
Total Stockholders' Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance, December 31, 2016
|
|
75,839,998
|
|
|
$
|
76
|
|
|
$
|
583,653
|
|
|
$
|
(221,164
|
)
|
|
$
|
362,565
|
|
Adjustment to opening balance
|
|
—
|
|
|
—
|
|
|
120
|
|
|
(120
|
)
|
|
—
|
|
||||
Issuance of common stock
|
|
50,612,027
|
|
|
51
|
|
|
59,079
|
|
|
—
|
|
|
59,130
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,567
|
)
|
|
(22,567
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
3,622
|
|
|
—
|
|
|
3,622
|
|
||||
Vesting of restricted shares, net of common stock
used to fund employee income tax withholding due upon vesting |
|
1,077,292
|
|
|
1
|
|
|
(782
|
)
|
|
—
|
|
|
(781
|
)
|
||||
Exercise of stock options
|
|
117,213
|
|
|
—
|
|
|
121
|
|
|
—
|
|
|
121
|
|
||||
Balance, December 31, 2017
|
|
127,646,530
|
|
|
128
|
|
|
645,813
|
|
|
(243,851
|
)
|
|
402,090
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,783
|
|
|
11,783
|
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
4,179
|
|
|
—
|
|
|
4,179
|
|
||||
Vesting of restricted shares, net of common stock
used to fund employee income tax withholding due upon vesting |
|
975,061
|
|
|
1
|
|
|
(904
|
)
|
|
—
|
|
|
(903
|
)
|
||||
Exercise of stock options
|
|
95,004
|
|
|
—
|
|
|
114
|
|
|
—
|
|
|
114
|
|
||||
Balance, December 31, 2018
|
|
128,716,595
|
|
|
129
|
|
|
649,202
|
|
|
(232,068
|
)
|
|
417,263
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,631
|
|
|
13,631
|
|
||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
4,281
|
|
|
—
|
|
|
4,281
|
|
||||
Vesting of restricted shares, net of common stock
used to fund employee income tax withholding due upon vesting |
|
816,177
|
|
|
1
|
|
|
(541
|
)
|
|
—
|
|
|
(540
|
)
|
||||
Exercise of stock options
|
|
20,745
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Balance, December 31, 2019
|
|
129,553,517
|
|
|
$
|
130
|
|
|
$
|
652,963
|
|
|
$
|
(218,437
|
)
|
|
$
|
434,656
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
13,631
|
|
|
$
|
11,783
|
|
|
$
|
(22,567
|
)
|
Depreciation, depletion, and amortization
|
|
34,121
|
|
|
32,215
|
|
|
33,209
|
|
|||
Amortization of intangible assets
|
|
214
|
|
|
—
|
|
|
—
|
|
|||
Accretion of asset retirement obligation
|
|
1,793
|
|
|
1,668
|
|
|
1,558
|
|
|||
Amortization of deferred financing costs
|
|
303
|
|
|
732
|
|
|
1,778
|
|
|||
Stock-based compensation
|
|
4,281
|
|
|
4,179
|
|
|
3,622
|
|
|||
Allowance for doubtful accounts
|
|
75
|
|
|
100
|
|
|
865
|
|
|||
Loss (gain) on disposal of assets
|
|
345
|
|
|
(87
|
)
|
|
1,830
|
|
|||
Lower of cost or net realizable value inventory adjustments
|
|
1,810
|
|
|
1,711
|
|
|
6,379
|
|
|||
Other
|
|
(34
|
)
|
|
(4
|
)
|
|
1,073
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Trade accounts receivable, net
|
|
1,337
|
|
|
(7,484
|
)
|
|
(6,870
|
)
|
|||
Other receivables, net
|
|
(650
|
)
|
|
165
|
|
|
(270
|
)
|
|||
Refundable income taxes
|
|
—
|
|
|
2,663
|
|
|
(1,284
|
)
|
|||
Inventory, net
|
|
(11,525
|
)
|
|
(67
|
)
|
|
(1,263
|
)
|
|||
Other current assets
|
|
(1,019
|
)
|
|
1,762
|
|
|
(3,207
|
)
|
|||
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
2,280
|
|
|
1,740
|
|
|
1,738
|
|
|||
Income tax payable
|
|
(865
|
)
|
|
914
|
|
|
—
|
|
|||
Operating lease liabilities
|
|
(2,090
|
)
|
|
—
|
|
|
—
|
|
|||
Other liabilities
|
|
5,374
|
|
|
12,247
|
|
|
102
|
|
|||
Net cash provided by operating activities
|
|
49,381
|
|
|
64,237
|
|
|
16,693
|
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
||||||
Additions to property, plant, equipment, mineral properties and other assets
|
|
(63,836
|
)
|
|
(16,891
|
)
|
|
(13,505
|
)
|
|||
Additions to intangible assets
|
|
(16,873
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of property, plant, equipment, and mineral properties
|
|
68
|
|
|
110
|
|
|
5,651
|
|
|||
Net cash used in investing activities
|
|
(80,641
|
)
|
|
(16,781
|
)
|
|
(7,854
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
||||||
Issuance of common stock, net of transaction expenses
|
|
—
|
|
|
—
|
|
|
59,130
|
|
|||
Repayment of long-term debt
|
|
—
|
|
|
(10,000
|
)
|
|
(75,000
|
)
|
|||
Debt prepayment costs
|
|
—
|
|
|
(402
|
)
|
|
(3,001
|
)
|
|||
Proceeds from short-term borrowings on credit facility
|
|
30,317
|
|
|
13,500
|
|
|
22,000
|
|
|||
Repayments of short-term borrowings on credit facility
|
|
(10,500
|
)
|
|
(17,400
|
)
|
|
(18,100
|
)
|
|||
Capitalized debt costs
|
|
(503
|
)
|
|
(210
|
)
|
|
(129
|
)
|
|||
Employee tax withholding paid for restricted shares upon vesting
|
|
(540
|
)
|
|
(903
|
)
|
|
(781
|
)
|
|||
Proceeds from exercise of stock options
|
|
21
|
|
|
114
|
|
|
121
|
|
|||
Net cash provided by (used in) financing activities
|
|
18,795
|
|
|
(15,301
|
)
|
|
(15,760
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Change in Cash, Cash Equivalents, and Restricted Cash
|
|
(12,465
|
)
|
|
32,155
|
|
|
(6,921
|
)
|
|||
Cash, Cash Equivalents, and Restricted Cash, beginning of period
|
|
33,704
|
|
|
1,549
|
|
|
8,470
|
|
|||
Cash, Cash Equivalents, and Restricted Cash, end of period
|
|
$
|
21,239
|
|
|
$
|
33,704
|
|
|
$
|
1,549
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
||||||
Net cash paid (received) during the period for:
|
|
|
|
|
|
|
||||||
Interest, net of $0.2 million of capitalized interest in 2019, and $0.1 million in both 2018 and 2017
|
|
$
|
2,733
|
|
|
$
|
3,470
|
|
|
$
|
11,639
|
|
Income taxes
|
|
$
|
942
|
|
|
$
|
(3,469
|
)
|
|
$
|
(1,499
|
)
|
Accrued purchases for property, plant, equipment, and mineral properties
|
|
$
|
5,021
|
|
|
$
|
1,082
|
|
|
$
|
4,068
|
|
Note 1
|
— COMPANY BACKGROUND
|
Note 2
|
— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
significant underperformance relative to expected operating results or operating losses
|
•
|
significant changes in the manner of use of assets or the strategy for our overall business
|
•
|
the denial or delay of necessary permits or approvals that would affect the utilization of our tangible assets
|
•
|
underutilization of our tangible assets
|
•
|
discontinuance of certain products by us or our customers
|
•
|
a decrease in estimated mineral reserves
|
•
|
significant negative industry or economic trends
|
Note 3
|
— RECENTLY ADOPTED ACCOUNTING STANDARDS
|
Note 4
|
— EARNINGS PER SHARE
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income (loss)
|
|
$
|
13,631
|
|
|
$
|
11,783
|
|
|
$
|
(22,567
|
)
|
|
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
|
129,049
|
|
|
128,071
|
|
|
115,709
|
|
|||
Add: Dilutive effect restricted common stock
|
|
1,215
|
|
|
1,982
|
|
|
—
|
|
|||
Add: Dilutive effect of stock options outstanding
|
|
787
|
|
|
933
|
|
|
—
|
|
|||
Diluted weighted average common shares outstanding
|
|
131,051
|
|
|
130,986
|
|
|
115,709
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
(0.20
|
)
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
(0.20
|
)
|
|
|
Year Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Anti-dilutive effect of restricted shares
|
|
495
|
|
|
—
|
|
|
3,328
|
|
Anti-dilutive effect of stock options outstanding
|
|
1,649
|
|
|
1,452
|
|
|
1,711
|
|
Anti-dilutive effect of performance units
|
|
—
|
|
|
—
|
|
|
63
|
|
Note 5
|
— CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
20,603
|
|
|
$
|
33,222
|
|
|
$
|
1,068
|
|
|
Restricted cash included in "Other current assets"
|
150
|
|
|
—
|
|
|
—
|
|
|||
Restricted cash included in "Other assets, net"
|
486
|
|
|
482
|
|
|
481
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
21,239
|
|
|
$
|
33,704
|
|
|
$
|
1,549
|
|
Note 6
|
— INVENTORY AND LONG-TERM PARTS INVENTORY
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Finished goods product inventory
|
|
$
|
55,585
|
|
|
$
|
48,370
|
|
In-process mineral inventory
|
|
25,591
|
|
|
24,325
|
|
||
Total product inventory
|
|
81,176
|
|
|
72,695
|
|
||
Current parts inventory, net
|
|
13,044
|
|
|
9,351
|
|
||
Total current inventory, net
|
|
94,220
|
|
|
82,046
|
|
||
Long-term parts inventory, net
|
|
27,569
|
|
|
30,031
|
|
||
Total inventory, net
|
|
$
|
121,789
|
|
|
$
|
112,077
|
|
Note 7
|
— PROPERTY, PLANT, EQUIPMENT, AND MINERAL PROPERTIES
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Land
|
|
$
|
27,274
|
|
|
$
|
519
|
|
Ponds and land improvements
|
|
65,992
|
|
|
58,961
|
|
||
Mineral properties and development costs
|
|
143,988
|
|
|
139,418
|
|
||
Buildings and plant
|
|
81,468
|
|
|
81,429
|
|
||
Machinery and equipment
|
|
253,536
|
|
|
241,977
|
|
||
Vehicles
|
|
6,222
|
|
|
5,669
|
|
||
Office equipment and leasehold improvements
|
|
9,136
|
|
|
13,779
|
|
||
Operating lease ROU assets
|
|
8,123
|
|
|
—
|
|
||
Construction in progress
|
|
7,124
|
|
|
2,822
|
|
||
Total property, plant, equipment, and mineral properties, gross
|
|
$
|
602,863
|
|
|
$
|
544,574
|
|
Less: accumulated depreciation, depletion, and amortization
|
|
(224,354
|
)
|
|
(198,365
|
)
|
||
Total property, plant, equipment, and mineral properties, net
|
|
$
|
378,509
|
|
|
$
|
346,209
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Depreciation
|
|
$
|
27,889
|
|
|
$
|
27,858
|
|
|
$
|
28,323
|
|
Depletion
|
|
4,173
|
|
|
4,357
|
|
|
4,886
|
|
|||
Amortization of ROU assets
|
|
2,059
|
|
|
—
|
|
|
—
|
|
|||
Total incurred
|
|
$
|
34,121
|
|
|
$
|
32,215
|
|
|
$
|
33,209
|
|
Note 8
|
— LEASES
|
Leases
|
|
Classification on the Balance Sheet
|
|
Balance, December 31, 2019
|
||
Assets
|
|
|
|
|
||
Operating lease ROU assets, net
|
|
Property, plant, equipment, and mineral properties, net
|
|
$
|
6,064
|
|
Liabilities
|
|
|
|
|
||
Current operating lease liabilities
|
|
Other current liabilities
|
|
$
|
2,187
|
|
Non-current operating lease liabilities
|
|
Operating lease liabilities
|
|
$
|
4,025
|
|
|
|
December 31, 2019
|
|
Weighted average remaining lease term - operating leases (in years)
|
|
3.1
|
|
Weighted average discount rate - operating leases
|
|
5.62
|
%
|
|
|
For the Year Ended December 31, 2019
|
||
Operating lease expense
|
|
$
|
2,410
|
|
Short-term lease expense
|
|
107
|
|
|
Total lease expense
|
|
$
|
2,517
|
|
|
|
For the Year Ended December 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
2,441
|
|
Right-of-Use Assets exchanged for new operating lease liabilities
|
|
8,123
|
|
Years Ending December 31,
|
|
Operating Leases
|
||
2020
|
|
$
|
2,432
|
|
2021
|
|
2,116
|
|
|
2022
|
|
1,459
|
|
|
2023
|
|
357
|
|
|
2024
|
|
167
|
|
|
Thereafter
|
|
98
|
|
|
Total future minimum lease payments
|
|
$
|
6,629
|
|
Less - amount representing interest
|
|
417
|
|
|
Present value of future minimum lease payments
|
|
$
|
6,212
|
|
Less - current lease obligations
|
|
2,187
|
|
|
Long-term lease obligations
|
|
$
|
4,025
|
|
Years Ending December 31,
|
|
Operating Leases
|
||
2019
|
|
$
|
2,266
|
|
2020
|
|
1,874
|
|
|
2021
|
|
1,602
|
|
|
2022
|
|
1,083
|
|
|
2023
|
|
172
|
|
|
Thereafter
|
|
1,343
|
|
|
Total
|
|
$
|
8,340
|
|
Note 9
|
— INTANGIBLE ASSETS
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
Finite-lived intangible assets:
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Produced water disposal royalty agreements
|
|
$
|
2,700
|
|
|
$
|
(90
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Surface damage and easement agreements
|
|
3,735
|
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
6,435
|
|
|
$
|
(214
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Water rights
|
|
$
|
19,184
|
|
|
|
|
$
|
2,311
|
|
|
|
Note 10
|
— DEBT
|
•
|
$20 million of Senior Notes, Series A, due April 16, 2020
|
•
|
$15 million of Senior Notes, Series B, due April 14, 2023
|
•
|
$15 million of Senior Notes, Series C, due April 16, 2025
|
•
|
We are required to maintain a minimum fixed charge coverage ratio of 1.30 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our fixed charge coverage ratio as of December 31, 2019, was 10.4 to 1.0, therefore we were in compliance with this covenant.
|
•
|
We are allowed a maximum leverage ratio of 3.5 to 1.0 as of the last day of each quarter, measured based on the previous four quarters. Our leverage ratio as of December 31, 2019, was 1.3 to 1.0 therefore we were in compliance with this covenant.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Notes, at carrying value
|
$
|
50,000
|
|
|
$
|
50,000
|
|
Less current portion of Notes
|
(20,000
|
)
|
|
—
|
|
||
Less deferred financing costs
|
(247
|
)
|
|
(358
|
)
|
||
Long-term portion of Notes, net
|
$
|
29,753
|
|
|
$
|
49,642
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Interest on notes and credit facility
|
$
|
2,908
|
|
|
$
|
2,849
|
|
|
$
|
7,043
|
|
Make-whole payments
|
—
|
|
|
402
|
|
|
3,001
|
|
|||
Amortization of deferred financing costs
|
303
|
|
|
732
|
|
|
1,778
|
|
|||
Gross interest expense
|
3,211
|
|
|
3,983
|
|
|
11,822
|
|
|||
Less capitalized interest
|
180
|
|
|
128
|
|
|
130
|
|
|||
Interest expense, net
|
$
|
3,031
|
|
|
$
|
3,855
|
|
|
$
|
11,692
|
|
Note 11
|
— ASSET RETIREMENT OBLIGATION
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Asset retirement obligation, at beginning of period
|
|
$
|
23,125
|
|
|
$
|
21,476
|
|
|
$
|
19,976
|
|
Liabilities settled
|
|
(38
|
)
|
|
(19
|
)
|
|
—
|
|
|||
Liabilities incurred
|
|
60
|
|
|
—
|
|
|
29
|
|
|||
Changes in estimated obligations
|
|
(2,690
|
)
|
|
—
|
|
|
(87
|
)
|
|||
Accretion of discount
|
|
1,793
|
|
|
1,668
|
|
|
1,558
|
|
|||
Total asset retirement obligation, at end of period
|
|
$
|
22,250
|
|
|
$
|
23,125
|
|
|
$
|
21,476
|
|
Note 12
|
— REVENUE
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Beginning balance
|
|
$
|
11,678
|
|
|
$
|
—
|
|
Additions
|
|
11,058
|
|
|
17,558
|
|
||
Recognized as revenue during period
|
|
(6,124
|
)
|
|
(5,880
|
)
|
||
Ending balance
|
|
$
|
16,612
|
|
|
$
|
11,678
|
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
Product
|
|
Potash Segment
|
|
Trio® Segment
|
|
Oilfield Solutions Segment
|
|
Intersegment Eliminations
|
|
Total
|
||||||||||
Potash
|
|
$
|
103,403
|
|
|
$
|
—
|
|
|
$
|
2,973
|
|
|
$
|
(1,909
|
)
|
|
$
|
104,467
|
|
Trio®
|
|
—
|
|
|
64,299
|
|
|
—
|
|
|
—
|
|
|
64,299
|
|
|||||
Water
|
|
1,823
|
|
|
4,495
|
|
|
19,339
|
|
|
—
|
|
|
25,657
|
|
|||||
Salt
|
|
12,022
|
|
|
757
|
|
|
—
|
|
|
—
|
|
|
12,779
|
|
|||||
Magnesium Chloride
|
|
4,907
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,907
|
|
|||||
Brines
|
|
2,493
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,493
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
5,582
|
|
|
(109
|
)
|
|
5,473
|
|
|||||
Total Revenue
|
|
$
|
124,648
|
|
|
$
|
69,551
|
|
|
$
|
27,894
|
|
|
$
|
(2,018
|
)
|
|
$
|
220,075
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
Product
|
|
Potash Segment
|
|
Trio® Segment
|
|
Oilfield Solutions Segment
|
|
Intersegment Eliminations
|
|
Total
|
||||||||||
Potash
|
|
$
|
107,471
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107,471
|
|
Trio®
|
|
—
|
|
|
64,139
|
|
|
—
|
|
|
—
|
|
|
64,139
|
|
|||||
Water
|
|
1,368
|
|
|
2,430
|
|
|
15,999
|
|
|
—
|
|
|
19,797
|
|
|||||
Salt
|
|
6,638
|
|
|
239
|
|
|
—
|
|
|
—
|
|
|
6,877
|
|
|||||
Magnesium Chloride
|
|
6,804
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,804
|
|
|||||
Brines
|
|
1,777
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,777
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
1,405
|
|
|
—
|
|
|
1,405
|
|
|||||
Total Revenue
|
|
$
|
124,058
|
|
|
$
|
66,808
|
|
|
$
|
17,404
|
|
|
$
|
—
|
|
|
$
|
208,270
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
Product
|
|
Potash Segment
|
|
Trio® Segment
|
|
Oilfield Solutions Segment
|
|
Intersegment Eliminations
|
|
Total
|
||||||||||
Potash
|
|
$
|
95,540
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95,540
|
|
Trio®
|
|
—
|
|
|
63,338
|
|
|
—
|
|
|
—
|
|
|
63,338
|
|
|||||
Water
|
|
441
|
|
|
289
|
|
|
6,312
|
|
|
—
|
|
|
7,042
|
|
|||||
Salt
|
|
6,275
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
6,334
|
|
|||||
Magnesium Chloride
|
|
5,432
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,432
|
|
|||||
Brines
|
|
229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
229
|
|
|||||
Total Revenue
|
|
$
|
107,917
|
|
|
$
|
63,686
|
|
|
$
|
6,312
|
|
|
$
|
—
|
|
|
$
|
177,915
|
|
Note 13
|
— COMPENSATION PLANS
|
|
|
2019
|
|
2017
|
||||
Closing stock price on grant date
|
|
$
|
3.31
|
|
|
$
|
2.29
|
|
Risk free interest rate
|
|
2.2
|
%
|
|
1.7
|
%
|
||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
||
Estimated volatility
|
|
84.5
|
%
|
|
81.7
|
%
|
||
Expected life
|
|
4.81 years
|
|
|
5.00 years
|
|
|
|
|
|
Weighted Average
Grant-Date Fair Value |
|||
|
|
Shares
|
|
||||
Restricted shares of common stock, beginning of period
|
|
1,953,305
|
|
|
$
|
1.87
|
|
Granted with service only condition
|
|
683,575
|
|
|
$
|
3.47
|
|
Granted with service and performance conditions
|
|
218,393
|
|
|
$
|
3.81
|
|
Granted with service and market conditions
|
|
545,707
|
|
|
$
|
2.89
|
|
Vested, service only condition
|
|
(927,344
|
)
|
|
$
|
2.01
|
|
Vested, service and market conditions
|
|
(71,251
|
)
|
|
$
|
2.10
|
|
Forfeited, service only condition
|
|
(190,060
|
)
|
|
$
|
2.15
|
|
Forfeited, service and performance conditions
|
|
(218,393
|
)
|
|
$
|
3.81
|
|
Restricted shares of common stock, end of period
|
|
1,993,932
|
|
|
$
|
2.69
|
|
|
|
2018
|
|
2017
|
||||
Closing stock price on grant date
|
|
$
|
3.90
|
|
|
$
|
2.29
|
|
Risk free interest rate
|
|
1.1
|
%
|
|
1.6
|
%
|
||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
||
Estimated volatility
|
|
72.8
|
%
|
|
71.5
|
%
|
||
Expected option life
|
|
6.00 years
|
|
|
6.00 years
|
|
|
|
2018
|
|
2017
|
||||
Closing stock price on grant date
|
|
$
|
3.90
|
|
|
$
|
2.29
|
|
Risk free interest rate
|
|
2.9
|
%
|
|
2.2
|
%
|
||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
||
Estimated volatility
|
|
75.0
|
%
|
|
81.7
|
%
|
||
Expected life
|
|
10.00 years
|
|
|
10.00 years
|
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value1
|
|
Weighted Average Remaining Contractual Life
|
|
Outstanding non-qualified stock
options, beginning of period |
|
3,351,684
|
|
|
$3.91
|
|
|
|
|
Granted
|
|
—
|
|
|
$—
|
|
|
|
|
Exercised
|
|
(20,745
|
)
|
|
$1.03
|
|
|
|
|
Forfeited
|
|
(69,372
|
)
|
|
$1.35
|
|
|
|
|
Expired
|
|
(126,773
|
)
|
|
$22.03
|
|
|
|
|
Outstanding non-qualified stock
options, end of period |
|
3,134,794
|
|
|
$3.25
|
|
$1,857,788
|
|
7.2
|
|
|
|
|
|
|
|
|
|
|
Vested or expected to vest,
end of period |
|
3,134,794
|
|
|
$3.25
|
|
$1,857,788
|
|
7.2
|
|
|
|
|
|
|
|
|
|
|
Exercisable non-qualified
stock options, end of period |
|
1,388,702
|
|
|
$3.10
|
|
$1,408,824
|
|
6.3
|
1
|
The intrinsic value of a stock option is the amount by which the market value exceeds the exercise price as of the end of the period presented.
|
Note 14
|
— INCOME TAXES
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current portion of income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
(2,793
|
)
|
State
|
|
53
|
|
|
85
|
|
|
10
|
|
|||
Deferred portion of income tax expense:
|
|
|
|
|
|
|
||||||
Federal
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
State
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total income tax expense (benefit)
|
|
$
|
53
|
|
|
$
|
108
|
|
|
$
|
(2,783
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Federal taxes at statutory rate
|
|
$
|
2,874
|
|
|
$
|
2,497
|
|
|
$
|
(8,873
|
)
|
Add:
|
|
|
|
|
|
|
|
|
|
|||
State taxes, net of federal benefit
|
|
1,245
|
|
|
1,663
|
|
|
(1,414
|
)
|
|||
Change in valuation allowance
|
|
(6,754
|
)
|
|
(3,330
|
)
|
|
(104,710
|
)
|
|||
Change in federal and state tax rates
|
|
2,322
|
|
|
634
|
|
|
115,545
|
|
|||
Percentage depletion
|
|
(600
|
)
|
|
(656
|
)
|
|
(598
|
)
|
|||
Other
|
|
966
|
|
|
(700
|
)
|
|
(2,733
|
)
|
|||
Net expense (benefit) as calculated
|
|
$
|
53
|
|
|
$
|
108
|
|
|
$
|
(2,783
|
)
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
|
0.4
|
%
|
|
0.9
|
%
|
|
11.0
|
%
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred tax assets (liabilities):
|
|
|
|
|
||||
Property, plant, equipment and mineral properties, net
|
|
$
|
133,586
|
|
|
$
|
138,855
|
|
Federal and state net operating loss carryforwards
|
|
63,194
|
|
|
65,779
|
|
||
Asset retirement obligation
|
|
5,763
|
|
|
5,950
|
|
||
Deferred revenue
|
|
4,371
|
|
|
3,035
|
|
||
Other
|
|
2,839
|
|
|
2,888
|
|
||
R&D credits
|
|
1,870
|
|
|
1,870
|
|
||
Total deferred tax assets
|
|
211,623
|
|
|
218,377
|
|
||
Valuation allowance
|
|
(211,623
|
)
|
|
(218,377
|
)
|
||
Deferred tax asset, net
|
|
$
|
—
|
|
|
$
|
—
|
|
Note 15
|
— COMMITMENTS AND CONTINGENCIES
|
Note 16
|
— FAIR VALUE MEASUREMENTS
|
•
|
Level 1—Quoted prices in active markets for identical assets and liabilities
|
•
|
Level 2—Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations whose inputs are observable or whose significant value drivers are observable
|
•
|
Level 3—Significant inputs to the valuation model are unobservable
|
Note 17
|
— EMPLOYEE BENEFITS
|
|
|
Contributions
|
||
Year Ended December 31, 2019
|
|
$
|
1,522
|
|
Year Ended December 31, 2018
|
|
$
|
1,410
|
|
Year Ended December 31, 2017
|
|
$
|
685
|
|
Note 18
|
— BUSINESS SEGMENTS
|
Year Ended December 31, 2019
|
|
Potash
|
|
Trio®
|
|
Oilfield Solutions
|
|
Other
|
|
Consolidated
|
||||||||||
Sales1
|
|
$
|
124,648
|
|
|
$
|
69,551
|
|
|
$
|
27,894
|
|
|
$
|
(2,018
|
)
|
|
$
|
220,075
|
|
Less: Freight costs
|
|
18,715
|
|
|
20,514
|
|
|
936
|
|
|
(109
|
)
|
|
40,056
|
|
|||||
Warehousing and handling costs
|
|
4,745
|
|
|
3,876
|
|
|
—
|
|
|
—
|
|
|
8,621
|
|
|||||
Cost of goods sold
|
|
73,401
|
|
|
42,251
|
|
|
12,367
|
|
|
(1,909
|
)
|
|
126,110
|
|
|||||
Lower of cost or NRV inventory adjustments
|
|
—
|
|
|
1,810
|
|
|
—
|
|
|
—
|
|
|
1,810
|
|
|||||
Gross Margin
|
|
$
|
27,787
|
|
|
$
|
1,100
|
|
|
$
|
14,591
|
|
|
$
|
—
|
|
|
$
|
43,478
|
|
Depreciation, depletion, and amortization2 incurred
|
|
$
|
25,796
|
|
|
$
|
6,163
|
|
|
$
|
1,566
|
|
|
$
|
810
|
|
|
$
|
34,335
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018
|
|
Potash
|
|
Trio®
|
|
Oilfield Solutions
|
|
Other
|
|
Consolidated
|
||||||||||
Sales1
|
|
$
|
124,058
|
|
|
$
|
66,808
|
|
|
$
|
17,404
|
|
|
$
|
—
|
|
|
$
|
208,270
|
|
Less: Freight costs
|
|
17,682
|
|
|
19,370
|
|
|
—
|
|
|
—
|
|
|
37,052
|
|
|||||
Warehousing and handling costs
|
|
5,046
|
|
|
4,225
|
|
|
10
|
|
|
—
|
|
|
9,281
|
|
|||||
Cost of goods sold
|
|
72,322
|
|
|
45,284
|
|
|
4,349
|
|
|
—
|
|
|
121,955
|
|
|||||
Lower of cost or NRV inventory adjustments
|
|
—
|
|
|
1,711
|
|
|
—
|
|
|
—
|
|
|
1,711
|
|
|||||
Gross Margin (Deficit)
|
|
$
|
29,008
|
|
|
$
|
(3,782
|
)
|
|
$
|
13,045
|
|
|
$
|
—
|
|
|
$
|
38,271
|
|
Depreciation, depletion, and amortization incurred2
|
|
$
|
25,134
|
|
|
$
|
6,343
|
|
|
$
|
343
|
|
|
$
|
395
|
|
|
$
|
32,215
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2017
|
|
Potash
|
|
Trio®
|
|
Oilfield Solutions
|
|
Other
|
|
Consolidated
|
||||||||||
Sales1
|
|
$
|
107,917
|
|
|
$
|
63,686
|
|
|
$
|
6,312
|
|
|
$
|
—
|
|
|
$
|
177,915
|
|
Less: Freight costs
|
|
13,912
|
|
|
18,104
|
|
|
—
|
|
|
—
|
|
|
32,016
|
|
|||||
Warehousing and handling costs
|
|
5,556
|
|
|
4,114
|
|
|
—
|
|
|
—
|
|
|
9,670
|
|
|||||
Cost of goods sold
|
|
72,229
|
|
|
45,187
|
|
|
546
|
|
|
—
|
|
|
117,962
|
|
|||||
Lower of cost or NRV inventory adjustments
|
|
550
|
|
|
5,829
|
|
|
—
|
|
|
—
|
|
|
6,379
|
|
|||||
Gross (Deficit) Margin
|
|
$
|
15,670
|
|
|
$
|
(9,548
|
)
|
|
$
|
5,766
|
|
|
$
|
—
|
|
|
$
|
11,888
|
|
Depreciation, depletion, and amortization incurred2
|
|
$
|
26,485
|
|
|
$
|
6,576
|
|
|
$
|
19
|
|
|
$
|
129
|
|
|
$
|
33,209
|
|
Note 19
|
— CONCENTRATION OF CREDIT RISK
|
Note 20
|
— FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS
|
Note 21
|
— QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share amounts)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 31, 2019
|
|
September 30, 2019
|
|
June 30, 2019
|
|
March 31, 2019
|
||||||||
Sales
|
|
$
|
48,849
|
|
|
$
|
51,160
|
|
|
$
|
62,512
|
|
|
$
|
57,554
|
|
Cost of Goods Sold
|
|
$
|
26,735
|
|
|
$
|
31,863
|
|
|
$
|
35,818
|
|
|
$
|
31,694
|
|
Lower of cost or NRV inventory adjustments
|
|
$
|
348
|
|
|
$
|
1,462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gross Margin
|
|
$
|
10,190
|
|
|
$
|
6,949
|
|
|
$
|
13,171
|
|
|
$
|
13,168
|
|
Net Income (Loss)
|
|
$
|
2,082
|
|
|
$
|
(217
|
)
|
|
$
|
5,611
|
|
|
$
|
6,155
|
|
Basic and Diluted Earnings
Per Share |
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 31, 2018
|
|
September 30, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
||||||||
Sales
|
|
$
|
54,364
|
|
|
$
|
41,410
|
|
|
$
|
55,176
|
|
|
$
|
57,320
|
|
Cost of Goods Sold
|
|
$
|
26,504
|
|
|
$
|
23,370
|
|
|
$
|
35,426
|
|
|
$
|
36,655
|
|
Lower of cost or NRV inventory adjustments
|
|
$
|
930
|
|
|
$
|
—
|
|
|
$
|
76
|
|
|
$
|
705
|
|
Gross Margin
|
|
$
|
14,826
|
|
|
$
|
8,959
|
|
|
$
|
7,286
|
|
|
$
|
7,200
|
|
Net Income (Loss)
|
|
$
|
7,634
|
|
|
$
|
3,350
|
|
|
$
|
(958
|
)
|
|
$
|
1,757
|
|
Basic and Diluted Earnings
(Loss) Per Share |
|
$
|
0.06
|
|
|
$
|
0.03
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.01
|
|
|
|
(In thousands)
|
||||||||||||||
Description
|
|
Balance at Beginning of Year
|
|
Charged to Costs and Expenses
|
|
Deductions
|
|
Balance at End of Year
|
||||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Allowances deducted from assets
|
|
|
|
|
|
|
|
|
||||||||
Deferred tax assets - valuation allowance
|
|
$
|
326,417
|
|
|
$
|
—
|
|
|
$
|
(104,710
|
)
|
|
$
|
221,707
|
|
Reserve for parts inventory obsolescence
|
|
3,109
|
|
|
1,073
|
|
|
—
|
|
|
4,182
|
|
||||
Allowance for doubtful accounts and other receivables
|
|
—
|
|
|
865
|
|
|
—
|
|
|
865
|
|
||||
Total allowances deducted from assets
|
|
$
|
329,526
|
|
|
$
|
1,938
|
|
|
$
|
(104,710
|
)
|
|
$
|
226,754
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Allowances deducted from assets
|
|
|
|
|
|
|
|
|
||||||||
Deferred tax assets - valuation allowance
|
|
$
|
221,707
|
|
|
$
|
—
|
|
|
$
|
(3,330
|
)
|
|
$
|
218,377
|
|
Reserve for parts inventory obsolescence
|
|
4,182
|
|
|
15
|
|
|
(2,454
|
)
|
|
1,743
|
|
||||
Allowance for doubtful accounts and other receivables
|
|
865
|
|
|
100
|
|
|
(500
|
)
|
|
465
|
|
||||
Total allowances deducted from assets
|
|
$
|
226,754
|
|
|
$
|
115
|
|
|
$
|
(6,284
|
)
|
|
$
|
220,585
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Allowances deducted from assets
|
|
|
|
|
|
|
|
|
||||||||
Deferred tax assets - valuation allowance
|
|
$
|
218,377
|
|
|
$
|
—
|
|
|
$
|
(6,754
|
)
|
|
$
|
211,623
|
|
Reserve for parts inventory obsolescence
|
|
1,743
|
|
|
—
|
|
|
(1,127
|
)
|
|
616
|
|
||||
Allowance for doubtful accounts and other receivables
|
|
465
|
|
|
75
|
|
|
(60
|
)
|
|
480
|
|
||||
Total allowances deducted from assets
|
|
$
|
220,585
|
|
|
$
|
75
|
|
|
$
|
(7,941
|
)
|
|
$
|
212,719
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Schedule
|
|
Schedule Description
|
Schedule II
|
|
Valuation and Qualifying Accounts
|
|
|
|
|
Incorporated by Reference from the Below-Listed Form (Each Filed under SEC File Number 001-34025)
|
|
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
Filing Date
|
|
Restated Certificate of Incorporation of Intrepid Potash, Inc.
|
|
8-K
|
April 25, 2008
|
|
|
Certificate of Amendment to Restated Certificate of Incorporation of Intrepid Potash, Inc.
|
|
8-K
|
May 26, 2016
|
|
|
Amended and Restated Bylaws of Intrepid Potash, Inc.
|
|
8-K
|
June 25, 2015
|
|
|
Description of Registrant's Securities
|
|
*
|
|
|
|
Form of Indemnification Agreement with each director and officer
|
|
8-K
|
April 25, 2008
|
|
|
Director Designation and Voting Agreement, dated as of April 25, 2008, by and among Intrepid Potash, Inc., Harvey Operating and Production Company, Intrepid Production Corporation, and Potash Acquisition, LLC
|
|
8-K
|
May 1, 2008
|
|
|
Registration Rights Agreement, dated as of April 25, 2008, by and among Intrepid Potash, Inc., Harvey Operating & Production Company, Intrepid Production Corporation, and Potash Acquisition, LLC
|
|
8-K
|
May 1, 2008
|
|
|
Acknowledgment and Relinquishment, dated as of December 19, 2011, by and among Intrepid Potash, Inc., Harvey Operating and Production Company, Intrepid Production Corporation, and Potash Acquisition, LLC
|
|
10-K
|
February 16, 2012
|
|
|
Amended and Restated Credit Agreement, dated as of August 1, 2019, by and among Intrepid Potash, Inc., the subsidiaries party thereto, Bank of Montreal, as administrative agent, swing line lender, lead arranger, and book runner, and the lenders party thereto.
|
|
8-K
|
August 1, 2019
|
|
Amended and Restated Note Purchase Agreement, dated as of October 31, 2016, by and among Intrepid Potash, Inc. and each of the purchasers named therein
|
|
8-K
|
November 1, 2016
|
|
|
First Amendment to Amended and Restated Note Purchase Agreement, dated as of November 9, 2016, by and among Intrepid Potash, Inc. and each of the purchasers named therein.
|
|
8-K
|
November 14, 2016
|
|
|
Fourth Amendment to Amended and Restated Note Purchase Agreement, dated as of June 30, 2017, by and among Intrepid Potash, Inc. and each of the purchasers named therein
|
|
8-K
|
June 30, 2017
|
|
|
Amended and Restated Employment Agreement, dated as of May 19, 2010, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
May 19, 2010
|
|
|
Amendment to Employment Agreement, dated February 23, 2011, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
March 1, 2011
|
|
|
Second Amendment to Employment Agreement, dated as of February 14, 2013, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
February 19, 2013
|
|
|
Third Amendment to Employment Agreement, dated as of March 22, 2016, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
March 23, 2016
|
|
|
Fourth Amendment to Employment Agreement, dated as of March 12, 2019, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
March 15, 2019
|
|
|
Amended and Restated Employment Agreement, dated as of May 19, 2010, by and between Intrepid Potash, Inc. and Hugh E. Harvey, Jr.+
|
|
8-K
|
May 19, 2010
|
|
|
Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan+
|
|
8-K
|
May 24, 2019
|
|
|
Form of Restricted Stock Agreement under Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan+
|
|
10-Q/A
|
August 4, 2016
|
|
|
Form of Stock Option Agreement under Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan+
|
|
10-Q/A
|
August 4, 2016
|
|
|
Intrepid Potash, Inc. Amended and Restated Short-Term Incentive Plan+
|
|
8-K
|
May 26, 2016
|
|
|
Form of Change-of-Control Severance Agreement with Robert P. Jornayvaz III and Hugh E. Harvey, Jr.+
|
|
10-Q
|
November 3, 2011
|
|
|
Form of Change-in-Control Severance Agreement with Margaret E. McCandless and Mark A. McDonald+
|
|
10-K
|
March 12, 2019
|
|
|
Form of Noncompete Agreement with executives other than Robert P. Jornayvaz III+
|
|
10-K
|
February 28, 2017
|
|
|
Form of Retention Agreement+
|
|
10-K
|
March 12, 2019
|
|
|
Aircraft Dry Lease, dated as of January 9, 2009, by and between Intrepid Potash, Inc. and Intrepid Production Holdings LLC
|
|
8-K
|
January 12, 2009
|
|
|
First Amendment to Aircraft Dry Lease, dated as of September 1, 2014, by and between Intrepid Potash, Inc. and Intrepid Production Holdings LLC
|
|
8-K
|
August 18, 2014
|
|
|
Aircraft Dry Lease, dated as of September 1, 2014, by and between Intrepid Potash, Inc. and Odyssey Adventures, LLC
|
|
8-K
|
August 18, 2014
|
|
|
Purchase and Sale Agreement, dated February 5, 2019, by and between Dinwiddie Cattle Company, LLC, Sherbrooke Partners, LLC and Intrepid Potash - New Mexico, LLC.
|
|
10-Q
|
May 7, 2019
|
|
|
Amendment to Purchase and Sale Agreement, dated March 28, 2019, by and between Dinwiddie Cattle Company, LLC, Sherbrooke Partners, LLC, and Intrepid Potash - New Mexico, LLC.
|
|
10-Q
|
May 7, 2019
|
|
|
Closing Agreement, dated April 23, 2019, by and among Dinwiddie Cattle Company, LLC, Sherbrooke Partners, LLC, and Intrepid Potash - New Mexico, LLC.
|
|
10-Q
|
August 6, 2019
|
|
|
List of Subsidiaries
|
|
*
|
|
|
|
Consent of KPMG LLP
|
|
*
|
|
|
|
Consent of Agapito Associates, Inc.
|
|
*
|
|
|
|
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)
|
|
*
|
|
|
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)
|
|
*
|
|
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
**
|
|
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
**
|
|
|
|
Mine Safety Disclosure Exhibit
|
|
*
|
|
|
|
Transition Services Agreement, dated as of April 25, 2008, by and between Intrepid Potash, Inc., Intrepid Oil & Gas, LLC, and Intrepid Potash-Moab, LLC
|
|
8-K
|
May 1, 2008
|
|
|
Extension and Amendment to Transition Services Agreement dated July 14, 2009, to be effective as of April 25, 2009, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
August 7, 2009
|
|
|
Third Amendment to Transition Services Agreement dated March 26, 2010, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
May 5, 2010
|
|
|
Fourth Amendment to Transition Services Agreement dated March 25, 2011, between Intrepid Potash, Inc. and Intrepid Oil and Gas, LLC
|
|
10-Q
|
May 5, 2011
|
|
|
Sixth Amendment to Transition Services Agreement dated April 3, 2013, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
May 2, 2013
|
|
|
Seventh Amendment to Transition Services Agreement dated March 24, 2015, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
April 28, 2015
|
|
|
Eighth Amendment to Transition Services Agreement dated March 22, 2017, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
May 2, 2017
|
|
|
Ninth Amendment to Transition Services Agreement dated February 20, 2019, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC.
|
|
10-K
|
March 12, 2019
|
|
101.INS
|
|
XBRL Instance Document
|
|
*
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
*
|
|
101.CAL
|
|
XBRL Extension Calculation Linkbase
|
|
*
|
|
101.DEF
|
|
XBRL Extension Definition Linkbase
|
|
*
|
|
101.LAB
|
|
XBRL Extension Label Linkbase
|
|
*
|
|
101.PRE
|
|
XBRL Extension Presentation Linkbase
|
|
*
|
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
+
|
Management contract or compensatory plan or arrangement
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
INTREPID POTASH, INC.
(Registrant) |
|
|
|
March 3, 2020
|
|
/s/ Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III - Executive Chairman of the Board, President, and Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer) |
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Robert P. Jornayvaz III
|
|
Executive Chairman of the Board,
President, and Chief Executive Officer
|
|
March 3, 2020
|
Robert P. Jornayvaz III
|
|
|
|
|
|
|
|
|
|
/s/ Matthew D. Preston
|
|
Vice President of Finance (Principal Financial Officer)
|
|
March 3, 2020
|
Matthew D. Preston
|
|
|
|
|
|
|
|
|
|
/s/ Hugh E. Harvey, Jr.
|
|
Executive Vice Chairman of the Board
|
|
March 3, 2020
|
Hugh E. Harvey, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Terry Considine
|
|
Director
|
|
March 3, 2020
|
Terry Considine
|
|
|
|
|
|
|
|
|
|
/s/ Chris A. Elliott
|
|
Director
|
|
March 3, 2020
|
Chris A. Elliott
|
|
|
|
|
|
|
|
|
|
/s/ J. Landis Martin
|
|
Lead Director
|
|
March 3, 2020
|
J. Landis Martin
|
|
|
|
|
|
|
|
|
|
/s/ Barth E. Whitham
|
|
Director
|
|
March 3, 2020
|
Barth E. Whitham
|
|
|
|
|
•
|
400,000,000 shares of common stock, par value $0.001 per share; and
|
•
|
20,000,000 shares of preferred stock, par value $0.001 per share.
|
Name
|
State of Organization
|
Ownership Percentage
|
Intrepid Potash-Moab, LLC
|
Delaware
|
100%
|
Intrepid Potash-New Mexico, LLC
|
New Mexico
|
100%
|
Intrepid Potash-Wendover, LLC
|
Colorado
|
100%
|
Moab Gas Pipeline, LLC
|
Colorado
|
100%
|
Intrepid Aviation LLC
|
Colorado
|
100%
|
203 E. Florence, LLC
|
Delaware
|
100%
|
1.
|
I have reviewed this annual report on Form 10-K of Intrepid Potash, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: March 3, 2020
|
|
/s/ Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board, President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Intrepid Potash, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: March 3, 2020
|
|
/s/ Matthew D. Preston
|
|
|
Matthew D. Preston
Vice President Finance
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated: March 3, 2020
|
|
/s/ Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board, President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated: March 3, 2020
|
|
/s/ Matthew D. Preston
|
|
|
Matthew D. Preston
Vice President Finance
|
Mine Name and MSHA Identification Number
|
Section 104 S&S Citations
|
Section 104(b) Orders
|
Section 104(d) Citations and Orders
|
Section 110(b)(2) Violations
|
Section 107(a) Orders
|
Total Dollar Value of MSHA Assessments Proposed
|
Total Number of Mining-Related Fatalities
|
Received Notice of Pattern of Violations Under Section 104(e)
|
Received Notice of Potential to Have Pattern under Section 104(e)
|
Legal Actions Pending as of the End of the Period
|
Legal Actions Initiated During the Period
|
Legal Actions Resolved During the Period
|
Intrepid Potash East
(29-00170)
|
7
|
—
|
—
|
—
|
—
|
$18,231
|
—
|
—
|
—
|
—
|
3
|
4
|
Intrepid Potash West
(29-00175)
|
—
|
—
|
—
|
—
|
—
|
$924
|
—
|
—
|
—
|
—
|
1
|
1
|
Intrepid Potash North
(29-02028)
|
—
|
—
|
—
|
—
|
—
|
$1,440
|
—
|
—
|
—
|
—
|
1
|
1
|
•
|
General - In general, the number of citations and orders will vary depending on the size of the mine, the individual inspector assigned to the mine, and the specific mine characteristics. Citations and orders can be contested and appealed and, in that process, are often reduced in severity and amount and are sometimes vacated.
|
•
|
MSHA Identification Numbers - MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities. We provide the information in the table by MSHA identification number.
|
•
|
Section 104 Significant and Substantial (“S&S”) Citations - These citations are issued for alleged violations of a mining safety standard or regulation where there exists a reasonable likelihood that the hazard contributed to or will result in an injury or illness of a reasonably serious nature.
|
•
|
Section 104(b) Orders - These orders are issued for alleged failure to totally abate the subject matter of a Section 104(a) citation within the period specified in the citation.
|
•
|
Section 104(d) Citations and Orders - These citations and orders are issued for an alleged unwarrantable failure (i.e., aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation.
|
•
|
Section 110(b)(2) Violations - These violations are issued, and penalties are assessed, for flagrant violations (i.e., a reckless or repeated failure to make reasonable efforts to eliminate a known violation that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury).
|
•
|
Section 107(a) Orders - These orders are issued for an imminent danger to immediately remove miners.
|
•
|
Total Dollar Value of MSHA Assessments Proposed - Proposed assessments issued during the period do not necessarily relate to the citations or orders issued by MSHA during that period or to the pending legal actions reported in the table.
|
•
|
Notice of Pattern of Violations Under Section 104(e); Notice of Potential to Have Pattern under Section 104(e) - These notices are issued for a pattern of violation of mandatory health or safety standards or for the potential to have such a pattern.
|
•
|
Legal Actions Pending, Initiated, and Resolved - The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. Each legal action is assigned a docket number by the Commission and may have as its subject matter one or more citations, orders, penalties, or complaints.
|
Mine Name and MSHA Identification Number
|
Contests of Citations and Orders
|
Contests of Proposed Penalties
|
Complaints for Compensation
|
Complaints of Discharge, Discrimination or Interference
|
Applications for Temporary Relief
|
Appeals of Judges’ Decisions or Orders
|
Total
|
Intrepid Potash East
(29-00170)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
Intrepid Potash West
(29-00175)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
Intrepid Potash North
(29-02028)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
•
|
Contests of Citations and Orders relate to challenges by operators, miners or miners' representatives to the issuance of a citation or order issued by MSHA.
|
•
|
Contests of Proposed Penalties (Petitions for Assessment of Penalties) are administrative proceedings challenging a civil penalty that MSHA has proposed for the violation contained in a citation or order.
|
•
|
Complaints for Compensation are filed by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA for the purpose of determining the amount of compensation, if any, due miners idled by the orders.
|
•
|
Complaints of Discharge, Discrimination or Interference involve a miner's allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint, or that he or she has suffered discrimination and lost his or her position.
|