Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash Incorporated Third Quarter 2023 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be the opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Evan Mapes, Investor Relations. Please go ahead. Thank you, Emily. Good morning, everyone. Thank you for joining us to discuss and review Intrepid's Third Quarter 2023 results. With me today is Intrepid's Co-founder, Executive Chairman, and CEO, Bob Jornayvaz, and CFO, Matt Preston. Also available to answer questions during the Q&A session is our VP of Sales and Marketing, Zachry Adams, and our VP of Operations, John Galassini. Please be advised that our remarks today, including answers to your questions, include forward-looking statements as defined by U.S. securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated and are based on information available to us today, and we assume no obligation to update them. These risks and uncertainties are described in our periodic reports filed with the SEC, which are incorporated here by reference. During today's call, we report a certain non-GAAP financial and operational measures. Reconciliations to the mostly directly comparable GAAP measures are included in yesterday's press release. Our SEC filings and press releases are available on our website, intrepidpotash.com. I'll now turn the call to Bob. Thank you, Evan. Good morning, everyone, and we appreciate your interest in Intrepid and your attendance for our third quarter 2023 earnings call. Intrepid's third quarter was highlighted by strong sales, with our volumes remaining well ahead of last year's pace. For Potash and Trio, our respective volumes through the third quarter represent approximately 95% and 90% of the total we sold in 2022. A couple of reasons for the higher sales include, first, farmers in the United States are finding good value in potash, where U.S. demand is projected to increase by about 10%-15% year-over-year. And second, the premium feed market remains very important for Intrepid, with this market comprising just over 30% of our potash sales mix in the third quarter, while also providing the added benefit of increased netbacks. Looking ahead, we expect continued solid demand in the fourth quarter as harvest for corn and soybeans is tracking ahead of the five-year average, which helps provide an open window for the fall application season. While our volumes have seen a nice rebound from 2022, owing to the impacts from last year's failed extraction well, we've had fewer tons available to sell in 2023 versus what our markets could support, and correcting our potash production trend has been the key strategic priority for Intrepid. Our capital program has been directly focused on revitalizing our potash assets, and owing to our strong project execution, we feel very confident that we are well on the way to increasing our production to the high end of our historical range. Before diving into project details, I wanted to provide some commentary on the outlook for the agricultural markets and potash. Starting with the agricultural markets, as we've been highlighting for several quarters, U.S. farmers are mostly in good shape. They're projected to generate solid profits for the third consecutive year, have healthy balance sheets, farmland values are close to record highs, and futures for soybeans and corn remain supportive. In addition, key international commodities like palm oil, sugar, cocoa, and coffee are all still trading at levels that are either higher than historic averages or pushing for record highs. For potash, current pricing, which is still being impacted by more supply from continued imports of Russian tons into the United States, has led to much better value for farmers. This has served as a key catalyst for stronger demand, with this trend expected to continue for the rest of 2023 and into 2024. On the supply side for potash, global markets still face the possibility of constraints or disruptions, and third-party forecasts show that about 40% of the world's potash exports will come from regions with heightened geopolitical risks. Until these risks are resolved, we think we should see a higher floor for pricing in the near to medium term, or at least until some of the more, more significant supply additions come online. Given the constructive outlook, it's paramount that Intrepid would turn our annual potash production back to the high end of our historical range. As I mentioned earlier in my remarks, I'm very pleased to share that our recent project execution makes us quite confident that we are well on our way to meeting our production goals. We do want to remind folks that our production cycle for potash takes time, from the stages from brine injection to eventual harvest, typically being an 18- to 24-month process. However, the impact from the projects we've undertaken has reduced this timeframe to 9-12 months at HB and 12-15 months at our Moab facility for the long foreseeable future. Moreover, since most of the growth projects were started well over a year ago, with several already having been commissioned, we will start to see more significant incremental production benefits beginning in the second half of 2024. I now want to quickly touch on some of the key concepts and drivers of our potash production, which will hopefully add some clarity to the technical aspects of our business. After that, I'll then go over our project highlights and implications for our production. Throughout the year, we've stressed the importance of two key goals: maximizing our brine availability and maximizing our underground residence time. Maximizing brine availability essentially means we need to inject as much brine as possible into our caverns at HB. At Moab, we need consistent injection and good brine circulation in the caverns, as well as access to new ore and reserves over time. These reserves have multi-decade lives, with significantly higher resource potential, and our drilling projects at Moab are designed to accelerate the process of tapping new ore to increase our brine availability, residence time, which results in higher brine grade. For Wendover, we need to ensure that we have as much brine as possible to transport through our canal system, which totals approximately 120 mi in length, with the brine then being stored and upgraded in our large-scale surface ponds, which have total evaporative surface area of approximately 11,000 acres. In terms of maximizing residence time, this implies letting the brine we inject stay in contact with ore for a long enough time to enhance the potassium chloride concentration of that brine so that, that will eventually extract. By achieving both goals of maximizing brine availability and residence time, the resulting effect is having more volume of higher grade brine to extract, which drives increased production and more tons to sell, and improves our unit economics. Moving on to project highlights. At HB, limited brine availability has been a key driver of the lower production in 2023. This is first and foremost being addressed by the new injection pipeline project, HB 1. With this phase, the installation of the pipeline was commissioned roughly six months ago and is operating solidly. When phase II of the pipeline is complete, which we expect to occur in the spring of 2024, our injection rates and residence times should be the highest in company history. However, in the near term, we have two other projects at HB that will serve as a bridge to increased potash production, which are also designed to have long-term operational lives. One was recently commissioned in October, where we were already extracting a very high-grade brine into our ponds, with the second project expected to be commissioned in the first half of next year. The first project was press released last week, the Eddy Shaft Brine Extraction Project. This project targets 270 million gallons of high-grade brine in the Eddy Cavern, and we expect all of this brine to be pumped into our ponds ahead of the 2024 Summer Evaporation Season. As for production impacts, we estimate this brine source corresponds to incrementally 85,000-100,000 tons of potash product tons, which will be evident in our production figures starting in the second half of 2024 and continuing into 2025. The second project is the Replacement Extraction Well, IP30B, which targets an additional high-grade brine pool in the Eddy Cavern that the shaft can't access. With this brine pool estimated to contain approximately 333 million gal of brine. Once we finish extracting the Eddy Shaft brine, the larger pool will serve as the next brine source for HB. For one final comment on HB, while these two Eddy Cavern projects will contribute to higher potash production in 2024 and 2025, they serve another key purpose. By extracting the already enriched brine pools in the near and medium term, we're able to keep injecting brine throughout the entire HB cavern system, including the exit Eddy Cavern, and let that mine brine build and develop into other sources of high-grade brine pools. This is crucial for driving sustained higher production over the longer term as we look to 2025 and beyond. Moving on to our most consistent potash asset, Moab, which has seen an average annual production of approximately 105,000-110,000 tons for the past 10 years. Over the course of 2023, we've had three key projects at Moab, all of which were commissioned over the summer. They provided modest contributions to our 2023 production, and more substantial impacts are expected in 2024. The primary project to highlight is Well 45 or Cavern 4 project, which created brand new ore for us to target through at least the next decade. Cavern 4 will supplement our brine injection into caverns 1, 2, and 3 in Potash Bed 9, as well as the old mine workings in Potash Bed 5. Given the consistency of production at Moab in completely new ore in Cavern 4, we expect our Moab production to remain pretty consistent with historic levels, with room for upset. Lastly, at Wendover, which is our smallest potash operation, our production in recent years has been negatively impacted by multiple weather events, with those being compounded by a lack of brine storage. To mitigate this, we recently commenced the construction of a new primary pond. The new primary pond will help increase the amount of brine we can store and evaporate, which is key to improving our production. This project is on track to be commissioned in the summer of 2024. We expect to start seeing positive impacts beginning in early 2025. Overall, we're confident that we're well on our way to returning our annual potash production back to the high end of our historical range, and we look forward to updating the market as we continue to make progress on our potash projects in the coming quarters. I'll now turn the call over to Matt. Please go ahead. ... Thanks, Bob. In the third quarter, we generated Adjusted EBITDA of $2.2 million and adjusted net loss of $6.8 million. Weighing on this quarter's results was, again, lower pricing. In Q3, our net realized sales price for Potash and Trio averaged $433 per ton and $298 per ton respectively, with both figures down roughly 40% compared to Q3 of 2022. As Bob noted, while our sales volumes have remained quite strong this year, lower fertilizer pricing, as well as elevated carrying costs, are proving to be headwinds for our margins in the near term. That said, pricing for potash and Trio has seen modest increases since our last earnings call, and improving our unit economics by means of higher production remains the number one priority for Intrepid. To highlight what higher production can mean for our unit economics, we estimate that returning our annual potash production to approximately 350,000 tons will improve our cost per ton by 20%-30%. Moving on to segment highlights. In potash, our Q3 and first nine months sales volumes totaled 46,000 and 213,000 tons respectively, with the third quarter volume being flat compared to last year, while the first nine months volumes represent an increase of just under 25% versus the prior year period. We've seen strong demand from agricultural customers throughout the year, and we've also been selling more tons into feed markets to ensure we take advantage of premium pricing when possible. Our third quarter potash production totaled 43,000 tons, and we now expect our 2023 calendar year production to come in about 10% lower than our previous guidance of 260,000 tons. As for the fourth quarter potash outlook, we expect our sales volumes to be in the range of 40,000-50,000 tons at an average net realized sales price in the range of $410-$420 per ton. This implies second half volumes at roughly the midpoint of the guidance we gave a few months back, with pricing likely coming in slightly higher than we previously expected. In Trio, our Q3 and first nine months sales volumes totaled 52,000 and 179,000 tons respectively, which compares to 39,000 and 169,000 tons in the same prior year periods. In the third quarter, we produced 52,000 tons, flat compared to the prior year, but we did experience unplanned downtime during underground mining and at the mill. While we achieved higher efficiencies from the new continuous miners, the downtime in Q3 offset these gains. As for the fourth quarter Trio outlook, we expect our sales volumes to be in the range of 35,000-40,000 tons at an average net realized sales price in the range of $290-$300 per ton. This implies second half volumes at the upper end of our previous guidance, with pricing right in line. In Oilfield Solutions, the primary driver of the lower revenue in Q3 was fewer sales of third-party water, which also resulted in lower costs of goods sold. Partially offsetting the lower water sales was higher surface use agreement revenue, with the net effect being a modest increase in our quarterly gross margin figure. Lastly, on capital allocation, our priorities remain the same: investing to return our potash production to historical highs while maintaining our strong balance sheet and liquidity position. At the end of October, our liquidity totaled $153 million. And while that, and while that will decrease as trailing earnings compress compared to 2022, we remain focused on effectively managing our working capital as we continue to execute on key projects ahead of what we expect will be a strong spring fertilizer season. Operator, we're now ready for the Q&A portion of the call. Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star and then two. We will pause for a moment as callers join the queue. Our first question comes from the line of Joshua Spector with UBS. Joshua, please go ahead. Your line is open. Hi, good morning, everyone. It's Christopher Perrella on for Josh. With all the projects that you're doing, I know the longer-term goal is to get back up to the higher the historical range. What are the nearer term impacts on 2024 production? What's your outlook for next year in terms of volumes you'll be able to produce? Matt, you wanna take that? Sure. Thanks for the question, Christopher. You know, we're continuing to, you know, pull that high-grade Eddy Shaft brine into our ponds right now, and we just started kind of the 2023-2024 harvest season. I mean, quick summary, Christopher, we're not ready to give guidance on 2024 calendar year production just yet, but we certainly think we'll see a nice bump, year-over-year as we continue to see the effects of this high-grade brine, get the effects of the Moab projects we completed, in the summer of 2023 and start to see that in the back half of 2024. So, you know, given the variability in weather and evaporation, not ready to put a number out there yet, but we certainly think we'll take a big step towards that 350,000 tons as we move forward into the next evaporation season. You know, as a follow-up, as I think about Eddy, and you sized it as 85-100 KT of potash products or incremental potash tons, you know, does about half of that hit in 2024? Where do costs go from here, given the higher production rates or the potential higher production rates next year? Yeah. So, I mean, as far as half of it hitting in 2024, you know, we'll put this 85,000-110,000 tons of potash into our ponds for the you know, the 2024 evaporation season. You know, we'll start harvesting in the fall of 2024 there, which we expect will be a much higher feed grade into our mill. You know, that brine will be mixed with brine from the other portions of our Eddy, of our, excuse me, our HB Potash mine and caverns. And, you know, so we'll see just a general increase, you know, every month as we mill a higher grade feedstock into our HB mill. And so, you know, kind of the timing of which ponds we're in at certain times, you know, is variable, and can't say what exact grade it'll be in the fall of 2024, but we'll kind of see that benefit all the way throughout the 2024 and 2025 harvest season. All right. And then one quick follow-up on Trio. You had higher costs in the third quarter from the unplanned downtime. You know, how much were they, and do they all reverse out in the fourth quarter here? Yeah, from a cost per ton standpoint in the third quarter, I think we were right about $340 per ton. We certainly think we'll see some, you know, marginal improvement into the fourth quarter, you know, anywhere maybe in the 5% range. You know, we have a pretty big inventory of Trio, and so kind of that weighted average cost does take some time to turn over in our COGS. So you won't see that impact immediately in Q4, but we think we'll see some incremental improvement in the fourth quarter compared to the third quarter. All right. Thank you very much. Appreciate the time. Our next question comes from Joel Jackson with BMO Capital Markets. Joel, please go ahead. Your line is open. Hi, good morning. A few questions from me. I'll do one at a time. I've noticed, like, in the last few years, like, Trio's price as a percentage of kind of potash prices have kind of gone together. It seems like the Trio value relative to potash has been quite stable, relatively wise, you know, for years when maybe it's been more volatile. Can you explain, you know, the value of Trio and potash have sort of really traded together very carefully the last few years, maybe different than prior cycles? If that makes any sense. Zach, do you want to take a stab at that first? Yeah. Thanks for the question, Joel. I think part of that could be related to our Trio sales today, and certainly over the last year, have been a higher percentage for our domestic markets. And those typically carry a a higher price point than international sales. So that could be related to, you know, what you're seeing there as far as it tracking closer to potash, with all of our potash sales being domestic markets as well. Okay. Thank you for that. Now, if you can get a big chunk, so you have a goal to get to 350 of potash sales, you know, with all the operational expansions you're doing and improvements. If you can get a big chunk of the way towards 350, you know, what, what can we do for cost? Like, you say you can get 20%-30% cost improvement. Do you think you can get half the distance to the goal line in 2024, or what should we think about it? Yeah. You know, it's like I said, Joel, it's certainly hard to say. We've seen some really good results from the Moab project so far, and the brine grade we're pulling out into our ponds. Obviously, the Eddy Shaft has been very strong so far. We have no expectations of that decreasing here as we continue to pump out of that, and then start pumping out of the IP30B, the replacement extraction well towards the spring and early summer. You know, that being said, I think, you know, kind of just take it to the midpoint, and if we can get kinda halfway there, we'll get half of those cost benefits in the 2024, 2025 season, and then kind of that full 20%-30% when we're back towards the 350,000 ton range. Okay, then, I mean, you've seen a lot of your peers, your potash groups, your peers, over the last week during earnings season, you know, really, boost up now expectations for 2024 potash demand, 3, 4, 5 million tons. A lot of questions about, you know, who's gonna supply the extra 3, 4, 5 million tons globally, and people have different assumptions around what Belarus and Russia can do, and what Canpotex can do with some of the logistics and logistics constraints. You're obviously, you know, a smaller player in the market, but, but you, you know. And it seems there's a lot of strength in North America, Nutrien raises list prices. How do you see the market right now in potash? Anything, open question, you know, and, and how are you seeing more exports come on the river from the FSU? Like, are you seeing anything in the last couple of months making you more excited about the outlook for next year? And maybe talk about demand, supply, anything you want within that very broad question. Joel, thanks for the question. I think the previous earnings calls, you've heard the same story. We expect a pretty robust demand, especially at these values. We continue to see, you know, fertilizer imports out of Russia in all fertilizer products, which is somewhat surprising given the magnitude of the imports we're seeing from Russia, but they're there. We agree with the demand figures that you threw out. We anticipate robust demand, and that's why we are so laser focused on getting our production back to the high end of our historical ranges. Zach, I don't know if you want to add any color, but we do see a robust 2024. Yeah, I would just echo that, Bob. You know, all signs, you know, fall application has been good across the geographies that we participate in, and our expectation is we'll see that continue into the spring. And obviously, the crop commodity prices, they incentivize growers to maximize yields. And you know, not only those, Joel, you know, a lot of our markets we provide nutrients to, forage and grass markets, and cattle pricing is at historical highs as well. And so we see really good demand on the pasture and hay ground across those markets as ranchers look to kinda reinvest in their grass and their acres there as well. ... Okay, finally, did that give you- Did that answer your very broad question? Yeah. Yeah, it did. I know, Bob, you've talked about—I can't remember what forums, whether it was print media or on these conference calls about being surprised—I don't want to put words in your mouth, about Russian imports into the States. So yes. I guess one more question for me on oil field solutions. You know, what kind of expectations directionally, like, should we expect in 2024 from that business? Is it a little higher or a lot higher? Maybe give us some of the puts and takes to expect in 2024 from that business. You know, almost all of that business, I would say that the large majority of that business is centered in New Mexico. And so the fundamentals of servicing the oil and gas industry are very strong, but we continue to navigate the regulatory environment. So, for example, our Sand Mountain project, we're still waiting on one more permit that we should have had months ago. So we continue to navigate the continuing complexity of the New Mexico regulatory environment. So, it's really hard to give really solid guidance based on the number of projects that we have teed up and ready to go, that we just continue to wait on permitting. So it's hard to give specific guidance when we can't get specific answers as to when certain permits will come out of regulatory agencies. I hate to, I hate to make excuses, but that's the reality of life in Southeast New Mexico right now. So if you were like, someone like me asked to model your company, would you then assume kind of a similar, like, base case, balancing all the risks, kind of a similar profitability or similar business size in 2024 versus 2023? Yeah, I mean, I think that's a good place to start, Joel. We certainly have some opportunities there from the sand project Bob mentioned, to, you know, continue to look to increase the high-margin sales we have around our freshwater and 10-pound brine that we've had great success selling and kind of growing that business over the last couple of years. So, you know, I think it's a good place to start, is pretty consistent. You do see, and we've talked about this on past calls, some quarter-to-quarter variabilities, particularly in our South Ranch, where, you know, we sell one or two large fracs a year. And so that variability and timing of sales can cause some of the, you know, quarterly fluctuations. But from a calendar year perspective, it's a good place to start, is being consistent with prior year, as you know, activity continues to be strong down there. Thank you very much. Thanks, Joel. As a final reminder, if you would like to ask a question today, you may do so now by pressing star and then one on your telephone keypads. We have a follow-up question from Joshua Spector with UBS. Please go ahead. Hi. Yes, just a quick one. With all the moving parts here in the fourth quarter, is there incremental EBITDA that you're expecting to generate in 4Q here? I mean, Christopher, do you mind maybe rephrasing that? We say incremental to, to what? I'm sorry, yeah. So sequentially, I mean, with better pricing here and volumes looking a little bit better and maybe costs coming down a little bit, I mean, what's a reasonable range for EBITDA for the fourth quarter expectation? Yeah, we're not gonna, you know... We're not gonna give guidance as far as quarterly EBITDA, but, yeah, certainly Q3 historically is a low point. Sales pick up from just a volume standpoint in the fourth quarter. We had some LCM we took in the third quarter, roughly $3.4 million, and that we expect an increase kind of quarter to quarter, but we're not gonna provide a number there. All right, Okay. Nope, that's fair. I was just looking for any other, one-time items that maybe, you know, as I think about modeling this thing, modeling profitability sequentially, you know, you, you would call out or, or should be aware of. No, there's certainly no one-time items that we expect right now, and I just kind of reiterate, you know, certainly sales, we expect will pick up here in Q4 a little bit, given kind of the rough guidance on pricing and volume. So hopefully that kind of can help get you there. No, I appreciate that. Thank you very much. This concludes the question and answer session. I would like to turn the conference back over to Bob Jornayvaz for closing remarks. I want to thank everyone for your interest in Intrepid, and appreciate your, your interest, and thank you, and have a great day. Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.