Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Investor Presentation (June 2017)
29 slides from Ramaco Resources's investor presentation, June 2017
Slide 1: Ramaco Resources Investor Presentation
2017 June Ramaco Resources Investor Presentation
Slide 2: Disclaimer
Disclaimer Forward Looking Statements The information in this presentation includes “forward-looking statements.” All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, proj
Slide 3: Introduction
KN RAMACO RESOURCES Introduction 2
Slide 4: Ramaco Overview
Ramaco Overview “Pure play” metallurgical coal company with 237 million tons of high quality metallurgical coal reserves (more than a 50-year production life) and advantaged geology leading to low cash costs (NASDAQ: METC) At a Glance Market Summary Trading Price (June 5, 2017): $5.58 Large 237 mill
Slide 5: Met Asset Portfolio with Competitive Advantages
Met Asset Portfolio with Competitive Advantages Central Appalachian Operations Elk Creek (production began in Dec 2016) Berwind (2017 commencement of Knox Creek and Jewell ─ 98 million tons of High Vol. Met production) ─ 61 million tons of High Vol. A ─ Relatively thick coal seams at deep mine
Slide 6: Key Management
Key Management Name Position Prior Experience Years of Experience Randall W. Atkins Co-Founder, Executive Chairman 35+ Michael D. Bauersachs Co-Founder, President & CEO 30+ Marc R. Solochek Chief Financial Officer 30+ Mark A. Clemens Chief Operating Officer 20+ 5
Slide 7: Key Recent & Upcoming Milestones
Key Recent & Upcoming Milestones Management continues to deliver on key company milestones to enhance shareholder value Key Dates December 2011: April 2012: August 2015: September 2016: January 2017: February 2017: Ramaco acquires Ramaco acquires Ramaco acquires Ramaco raises $90M Commenced Ramaco p
Slide 8: Management Financial Approach
Management Financial Approach Maintain Cash on hand and primary proceeds expected to fully fund 2017 and 2018 conservative capital investment budget balance sheet Intend to remain generally debt free Focus on Low cost profile will support cash generation at a variety of met coal prices generation of
Slide 9: Investment Highlights
KY RAMACO RESOURCES Investment Highlights
Slide 10: Investment Highlights
Investment Highlights 1 Portfolio of Large 237 million ton met coal reserve base with attractive quality characteristics across High-Vol. and Low-Vol. high-quality, long- segments lived assets 2 Fully funded 2017 and 2018 capital investment budget Fully financed Initial Elk Creek production profile
Slide 11: Portfolio of High-Quality, Long-Lived Met Coal Assets
1 Portfolio of High-Quality, Long-Lived Met Coal Assets Met Coal Properties Reserves (mm tons)1 Estimated Full Estimated Anticipated Projected Typical Production Cost of Production Mine Life Met Coal Transportation Mining 2022 Production Property Location Proven Probable Total Start Date (Years) Qua
Slide 12: Ramaco is Producing Coal with Attractive Characteristics
1 Ramaco is Producing Coal with Attractive Characteristics Key Highlights Ramaco Mines and Coal Types Produced Elk Creek: contains 28 high volatile metallurgical coal seams, all of Knox which contain high-quality coal. All but one seam is accessible Coal Types Elk Creek Berwind RAMCreek/Jewell above
Slide 13: Near-term Growth with Long-term Upside Potential
2 Near-term Growth with Long-term Upside Potential Production Forecast Elk Creek has commenced production 6.0 $70.00 ─ Production in Stone Coal – Alma Mine began December 2016 $60.00 5.0 ─ Elk Creek West – Eagle Mine commenced mining in 4.4 Production (Million tons per year) 4.3 4.3 April 2017 4.1 4
Slide 14: Low Cost U.S. Met Coal Producer
3 Low Cost U.S. Met Coal Producer U.S. Domestic Met Coal U.S. Seaborne Met Coal Total Cash Cost Curve 20171 (FOB mine) Total Cash Cost Curve 20172 (FOB port) $140 $140 $120 $120 3 $100 $100 $ per ton $ per ton 3 $80 $80 $60 $60 $40 $40 $20 $20 $0 $0 – 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,
Slide 15: Geology Advantages and Higher Productivity Drive Lower Cash Costs
3 Geology Advantages and Higher Productivity Drive Lower Cash Costs Overview Illustrative Geologic Advantage Thicker coal seams result in a comparatively high clean-ton- per-foot and ton-per-employee hour productivity profile SHALE Near-or-above drainage seams enable drift access for underground dev
Slide 16: Ramaco is Well-Positioned to Serve Domestic and Export Steel Markets
4 Ramaco is Well-Positioned to Serve Domestic and Export Steel Markets Planned Export Routes CSX export will go to Kinder Morgan’s Pier IX or DTA NS export tons will go to the NS Lamberts Point facility Target Atlantic basin customers in Europe and South America Europe Key Potential Domestic Custome
Slide 17: Clean, Unlevered Balance Sheet
5 Clean, Unlevered Balance Sheet Ramaco is currently debt free and fully funded for our 2017 and 2018 capital program Existing assets acquired strategically on a debt free basis and with limited environmental liabilities No long-term third party liabilities gives Ramaco a “cleaner” coal production s
Slide 18: Seaborne Met Coal Prices Have Strengthened Significantly
6 Seaborne Met Coal Prices Have Strengthened Significantly Meaningful supply rationalization and stronger than expected demand has led to a strong recovery in worldwide met coal prices Recent rally has been driven by structural factors: ─ Multiple years of declining U.S. met coal production (primari
Slide 19: Highly Experienced Management Team & Strategic Relationships
7 Highly Experienced Management Team & Strategic Relationships 35 years of experience in energy investment and financing Randall W. Atkins Prior energy financing roles at: Ashland Oil, Inc., S.N. Phelps & Co., and J.P. Morgan Co-Founder, Founded Brook Investment Corp. to provide investment banking s
Slide 20: Leading Energy-Focused Sponsors
7 Leading Energy-Focused Sponsors Formed in 1990 with current capital Formed in 2005 with current capital committed and/or invested capital of over committed and/or invested capital of $8 billion over 11 separate funds over $13 billion over 4 separate funds Investments made in 80 companies The firm
Slide 21: Ramaco Valuation vs. Met Coal Prices
8 Ramaco Valuation vs. Met Coal Prices Indexed Share Price vs. Coking Coal Price 200% Impact of 175% Cyclone Debbie 150% $168/mt $174/mt 125% +3% 100% 75% $13.50/share 50% $6.57/share 25% -51% – Feb-17 Mar-17 Apr-17 May-17 Platts Aus. Coking Coal Low Vol (1-month forward) Ramaco’s share prices have
Slide 22: Key Take-Aways
Key Take-Aways 1 2 Portfolio of Fully financed high-quality, long- near-term growth lived assets with long-term upside 8 3 Attractive opportunity Lowest quartile cost for long-term U.S. investors met coal producer 7 4 Highly experienced Positioned to serve team with strong both domestic and sponsor
Slide 23: Appendix
KY RAMACO RESOURCES Appendix 22
Slide 24: Environmental, Health & Safety
Environmental, Health & Safety Ramaco is committed to complying with both regulatory and its own high standards for environmental and employee health and safety requirements Ramaco’s comprehensive health and safety program focuses on its core belief that all accidents and occupational illnesses are
Slide 25: Board of Directors
Board of Directors Management Directors Randall W. Atkins Michael D. Bauersachs Co-Founder, Executive Chairman Co-Founder; President & CEO Additional Directors Founder and Chairman of the One Stop Company, an operator of over 40 stores in West Virginia, until its purchase by Cross America Partners P
Slide 26: U.S. Met Coal Exports
U.S. Met Coal Exports U.S. Exports Met Coal to Four Market Regions: North America (Canada/Mexico): 4-7mmtpy Canada has 3 operating blast furnaces, producing 6mmpty of steel and requiring 4mmtpy+ of U.S. coal Mexico: AHMSHA blast furnace imports 1-2mmtpy to supplement local coal production South
Slide 27: U.S. Met Coal Supply / Demand
U.S. Met Coal Supply / Demand U.S. Met Coal Supply/Demand Balance (mm short tons) Supply Observations Supply 2011 2012 2013 2014 2015 2016 Domestic production cutbacks accelerated Low-Vol 23.8 24.9 25.9 23.4 19.4 17.4 sharply in 2015 driven by global met coal Mid-Vol 13.5 12.8 13.2 13.0 10.2 6.7 p
Slide 28: Supportive Domestic and Global Steel Market Dynamics
Supportive Domestic and Global Steel Market Dynamics Key Takeaways U.S. HRC vs. China HRC Prices $1,200 Stronger domestic integrated steel producers $1,000 12m ($ per ton) $800 Three major consumers of met coke in the U.S. all raised $600 substantial equity in 2016 to delever $400 $200 – − AK Stee
Slide 29: Ramaco Resources, Inc. Lexington, Kentucky
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507