[Management View]
Natural Resource Partners (NRP) generated $42 million in free cash flow in Q3 2025 and $190 million over the last twelve months despite significant headwinds in key commodities. Management emphasized the company's ability to generate substantial free cash flow and progress on debt reduction. Active leasing in the Smackover formation for lithium production was confirmed, though details remain private.

[Outlook]
Management remains conservative with future distribution increases and capital allocation pacing dependent on market recovery. The plan to reach a "fortress balance sheet" hinges on retiring all permanent debt and maintaining $30 million in cash alongside an undrawn revolver.

[Financial Performance]
NRP reported $31 million in net income for Q3 2025, with the mineral rights segment contributing $44 million in operating cash flow. Operating cash flow and free cash flow each declined by $9 million YoY due to weaker metallurgical coal markets. Soda ash segment saw net income decline by $11 million and operating/free cash flow each decrease by $6 million YoY due to lower international sales prices and oversupply.

[Q&A Highlights]
Question 1: Hi. This is Dan Adler. Thank you for all you are doing for shareholders. My question revolves around leasing for lithium mining in this macro region. And if you could provide any information on acreage that has been leased or potential for revenue from that leasing? Thank you.
Answer: Thank you for your call, Dan, and for your question. Yes, we are active in leasing acreage in the Smackover formation for lithium production to multiple lessees. We do not comment on terms of leases and that type of thing. I will say that the activity in the area has varied from robust to lukewarm at various periods over the last several years. But yes, we are active in the Smackover in Southern Arkansas and in Northeast Texas.

Question 2: Hi. Good morning. Just first a bit of a housekeeping question. Just given the passive nature of the partnership, just the operating and maintenance expense, what goes into those expenses? And is there any ability, given the environment, to reduce the expense line?
Answer: Sure. You know, salaries and compensation is a big part of that. We also have a variety of other general corporate costs, insurance, legal, accounting. So there is a variety of general corporate type of costs that flow in there. We also have those same kinds of expenses in the operating expense for the mineral rights segment. But there are also things such as property taxes, which is a big one, and royalty expenses as well. We have some royalty costs as well that go in there. We have a zero-based budgeting approach so that every year the goal is to make total costs as low as possible rather than simply look at increases of cost from year to year. So I will not say that we do not sharpen our pencil whenever times are lean because we do. But the reality is we sharpen our pencil all the time, and we have long-term cost management bills that we follow.

Question 3: Got it. And then just a general quick question. Regarding the company's mineral rights, are the majority of the company's mineral rights specific to certain minerals, or are they general subsurface rights where all the opportunities exist on anything that comes out of the ground? Some better insight there would be helpful.
Answer: It is generally for specific minerals.

Question 4: Understood. And then so with that, are there any opportunities given the growing demand or interest in natural gas? Are there any additional production opportunities that might be arising that you did not previously think existed over the past year?
Answer: I am not sure I understand your question. You referred to higher-cost natural gas plays that the company has mineral rights on that, in the past few years, did not seem like a possibility for production. Where now these plays are in the money and there is increased interest from producers. In other words, call options moving in the money is what you are describing. Yes. The vast majority of our oil and gas mineral rights are in the Haynesville in North Central and West Central Northwest Louisiana. And that is a pretty active basin right now. And so I would say drilling has picked up a bit in the Haynesville. And to the extent that it does, we benefit from that. I will say that those numbers, those production amounts, and those revenues that we can receive from oil and gas minerals, they are not as material to the partnership.

Question 5: Got it. And then just regarding capital allocation, looking at the cash on hand and the debt outstanding, it seems like you are one, maybe two quarters away from being in a net cash position. Is that the right way to look at it?
Answer: You are looking at it correctly. As we have said, we believe that we will be in a position where we will have the vast majority of our remaining debt paid down and be able to increase distributions in the third quarter next year. That is the plan, and that is the forecast. The issue comes in with as we continue in this difficult market, are there going to be things that will happen that will change that? We do not know that there will be, but we are just warning everybody there could be.

Question 6: Hi. Kenny Ackerman. Question again regarding capital allocation. I mean, you guys retired the warrants, retired substantial amounts of debt, almost all of it, as was just discussed. What would be the criteria to start unit repurchases? Or, I mean, what are the thoughts surrounding that? I know this is the first time this has been asked, but just considering everything closer and closer to a net cash position. I mean, is there anything that would inspire you guys to repurchase your units, or is there anything prohibiting it? I know there is one large owner of the partnership. Just did not know if unit repurchases were even possible.
Answer: So let us think of it instead of thinking about being in a net cash position, let us think about how we as the company think about our balance sheet and what signals we look forward to being able to deploy cash in some way other than just paying down debt. We are looking to establish what we define as an NRP fortress balance sheet. And to us, that means two things. It means, number one, no permanent debt in the capital structure. And permanent debt, we define as debt that we do not have the ability or intent to repay prior to maturity with internally generated cash. And then in addition to no permanent debt, we want to have $30 million of cash on the balance sheet. And that also means at the same time that we will have our revolving credit facility in place. Once we are in that position, we feel that we have what we believe is a fortress balance sheet, and then we can feel free to allocate capital as we see best. And what are our priorities for allocating capital? Number one, unitholder distributions. Number two, unit repurchases at material discounts to our estimates of intrinsic value. And number three, if they come along, opportunistic acquisitions where we can acquire assets that are within our circle of competence at what we consider to be bargain prices. And there are no impediments to us being able to buy back units other than can we acquire them for a price that we think is a sufficient enough discount to our estimates of intrinsic value to want to do it.

Question 7: Got it. Makes total sense. And just one follow-up. Can you give any color around what you consider intrinsic value? I mean, just what would the company consider intrinsic value just to get a decent sense of what would qualify for unit repurchases?
Answer: No, we are not going to guide on that. Sorry about that. I would encourage you to go back and read our unitholder letters that are published each spring with the annual report with the 10-K, especially this most recent one. But each one of them talks about how we think in terms of intrinsic value and the process we use to value the company. Because intrinsic value per unit is a very important component of all of our management decisions that we make. And so we have explained in writing how we go about doing that. We just do not tell you exactly what our assumptions are and what we think.

Question 8: Thank you. Hey, everyone. Congrats on the progress, especially with the debt pay down to $70 million. It has been quite the journey over the last ten years. Thanks for the comments on thermal coal. I had a question on that. It seems that every day we are hearing more about data center CapEx being at just very extreme levels. I understand you are not seeing that demand come through to your thermal coal assets yet. But if that does, next year, is there infrastructure and capacity in place for the producers on your thermal coal properties to scale up? Or would that require a lot of additional CapEx on their side? Thank you.
Answer: Good question. And I do not know that we completely know the answer to your question because, as you know, our operators are our operators. We do not operate, and they do not necessarily share everything with us. But I can give you my educated guess on it, my best judgment. I do believe that if the increased power demand from data centers that is forecast to result from all of the CapEx that is now planned over the next five, ten years, I do believe there will have to be material amounts of capital invested in the thermal coal infrastructure, both to bring new production online and to process it. I do not know what those dollars are, and I do not know to the extent that capital would involve mines that are on NRP or on other acreage elsewhere in North America. Does that help?

[Sentiment Analysis]
Analysts and management maintained a cautious tone throughout the call, acknowledging the challenging market conditions while expressing confidence in the company's ability to navigate these difficulties. The sentiment was generally conservative, with a focus on prudent financial management and strategic planning.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|-------------------------------|---------|---------|------------|
| Free Cash Flow | $42M | $51M | -$9M |
| Net Income | $31M | $42M | -$11M |
| Operating Cash Flow | $41M | $50M | -$9M |
| Debt Retired | $32M | $40M | -$8M |
| Common Unit Distribution | $0.75 | $0.75 | 0 |

[Risks and Concerns]
- Soda ash international prices are below cash production costs for most producers, indicating a generational bear market.
- No near-term catalysts for improvement in coal or soda ash markets.
- None of the company's 3.5 million acres of CO2 sequestration pore space are under lease following recent terminations by Occidental Petroleum and Exxon Mobil.
- Management cautioned that prolonged bear markets for key commodities could delay strategic plans.

[Final Takeaway]
Natural Resource Partners (NRP) continues to demonstrate resilience in generating free cash flow and reducing debt despite facing significant market challenges in coal and soda ash. The company's conservative management approach and strategic focus on achieving a "fortress balance sheet" position it well for future opportunities. Active leasing in the Smackover formation for lithium production indicates potential growth areas, though details remain undisclosed. Investors should remain cautious but optimistic about NRP's ability to navigate ongoing market difficulties and capitalize on future opportunities.