Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Investor Presentation (June 2017)
28 slides from Ramaco Resources's investor presentation, Jun 7, 2017
Slide 1: Ramaco Resources Investor Presentation June 2017
Ramaco Resources Investor Presentation 2017 June Exhibit 99.1
Slide 2: Disclaimer: Forward Looking Statements
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
KRAMACO RESOURCES Introduction
Slide 4: Ramaco Overview
Ramaco Overview (NASDAQ: METC) Trading Price (June 5, 2017): $5.58 Ticker Symbol: METC Common Shares Outstanding: 39 million Market Capitalization: $248 million Cash and Cash Equivalents: $71 million Total Debt (3/31/17): $0 Analyst Coverage: David Gagliano, BMO Securities Jeremy Sussman, Clarkson P
Slide 5: Central Appalachian Operations
Central Appalachian Operations Elk Creek (production began in Dec 2016) 98 million tons of High Vol. Met Relatively thick coal seams at deep mines and low ratios at surface mines translate to low costs 20 year mine plan with 9 underground and 2 contour surface/highwall mines with high TPEH rate of a
Slide 6: Key Management
Key Management Name Position Prior Experience Years of Experience Randall W. Atkins Michael D. Bauersachs Mark A. Clemens Marc R. Solochek Co-Founder, Executive Chairman Co-Founder, President & CEO Chief Operating Officer Chief Financial Officer 35+ 30+ 20+ 30+
Slide 7: Key Dates and Recent Milestones
September 2013: Ramaco acquires Baisden-Vaughn property adjacent to Elk Creek Key Dates January 2017: Delivered the first trucks of coal to neighboring wash plant September 2016: Ramaco raises $90M convertible preferred from Yorktown and Energy Capital Partners December 2016: Shipped first train at
Slide 8: Management Financial Approach
Maintain conservative balance sheet Cash on hand and primary proceeds expected to fully fund 2017 and 2018 capital investment budget Intend to remain generally debt free Return capital to shareholders Board of Directors adopted a policy that they would consider initiating a quarterly dividend in the
Slide 9: Investment Highlights
KRAMACO RESOURCES Investment Highlights
Slide 10: Investment highlights: high-quality, long-lived assets
Portfolio of high-quality, long-lived assets Large 237 million ton met coal reserve base with attractive quality characteristics across High-Vol. and Low-Vol. segments Low cost U.S. met coal producer We believe our cash costs will be substantially below most U.S. domestic met coal producers Superior
Slide 11: Met Coal Properties
Met Coal Properties Reserves (mm tons)1 Estimated Full Production 2022 (000’s tons) Anticipated Production Start Date Projected Mine Life (Years) Estimated Cost of Production ($/ton)2 Typical Met Coal Quality Transportation Property Location Mining Method Proven Probable Total Elk Creek Logan / Wyom
Slide 12: Coal Types and Operation Commentary
X Coal Types High-Vol. A High-Vol. A/B High-Vol. B High-Vol. A/B Low Ash High-Vol. C Low-Vol. Thermal Coal (CAPP Low Sulfur) Elk Creek Berwind RAM Knox Creek/Jewell ü ü1 ü ü ü Operation Commentary Elk Creek Berwind RAM Mine Knox Creek/ Jewell Advantaged geology with high productivity provides cost a
Slide 13: Production Forecast
Production Forecast Elk Creek has commenced production Production in Stone Coal – Alma Mine began December 2016 Elk Creek West – Eagle Mine commenced mining in April 2017 Construction of the 700 ROM (run of mine) tons per hour Elk Creek preparation plant is projected to be completed in August 2017 B
Slide 14: U.S. Domestic Met Coal Total Cash Cost Curve
U.S. Domestic Met Coal Total Cash Cost Curve 20171 (FOB mine) Ramaco Resources’ expected low cost structure could provide a competitive advantage to serve both the domestic & seaborne market Source: Wood Mackenzie. Assuming $150/tonne benchmark price. 1.Represents total cash costs of coal consumed b
Slide 15: Geology Advantages and Higher Productivity Drive Lower Cash Costs
Thicker coal seams result in a comparatively high clean-ton-per-foot and ton-per-employee hour productivity profile Near-or-above drainage seams enable drift access for underground development Numerous mineable seams in close proximity create a low mining ratio, and translate to low-cost surface and
Slide 16: Planned Export Routes and Key Potential Domestic Customers
Planned Export Routes Europe U.S. Steel: Clairton Works (Clairton, PA) Granite City Works (Granite City, IL) SunCoke Energy: Haverhill North 1 & 2 Operations (Haverhill, OH) Indiana Harbor Operations (East Chicago, IL) Jewell Coke Operations (Vansant, VA) Gateway Energy (Granite City, IL) ArcelorMit
Slide 17: Clean, Unlevered Balance Sheet
U.S. coal peer #5 $1,879 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 story tha
Slide 18: Seaborne Met Coal Prices Have Strengthened Significantly
Q2 2017 Spot highs of $314/mt driven by Cyclone Debbie. Pricing appears to have stabilized around $150/mt Recent rally has been driven by structural factors: Multiple years of declining U.S. met coal production (primarily higher cost operations), creating tight supply dynamics domestically Inability
Slide 19: Highly Experienced Team: Management Biographies
Randall W. Atkins Co-Founder, Executive Chairman 35 years of experience in energy investment and financing Prior energy financing roles at: Ashland Oil, Inc., S.N. Phelps & Co., and J.P. Morgan Founded Brook Investment Corp. to provide investment banking services to mining and energy companies Serve
Slide 20: Leading Energy-Focused Sponsors
Overview Formed in 1990 with current capital committed and/or invested capital of over $8 billion over 11 separate funds Investments made in 80 companies across the energy and natural resource sectors Consistent strategy of backing proven management teams with strong track records of performance For
Slide 21: Ramaco Valuation vs. Met Coal Prices
Indexed Share Price vs. Coking Coal Price Source: Bloomberg as of May 30, 2017. Ramaco Valuation vs. Met Coal Prices 8 Ramaco’s share prices have traded 51% lower since IPO despite no material changes to the company’s production guidance or the met market environment $13.50/share $168/mt $6.57/share
Slide 22: Key Take-Aways
Highly experienced team with strong sponsor support 7 Supportive met coal and steel market conditions 6 Clean, unlevered balance sheet 5 Attractive opportunity for long-term investors 8 Lowest quartile cost U.S. met coal producer 3 Fully financed near-term growth with long-term upside 2 Portfolio of
Slide 23: Appendix
KRAMACO RESOURCES Appendix 22
Slide 24: Environmental, Health & Safety
Environmental, Health & Safety Ramaco’s comprehensive health and safety program focuses on its core belief that all accidents and occupational illnesses are preventable. Ramaco believes that: Business excellence is achieved through the pursuit of safer and more productive work practices Any task tha
Slide 25: Additional Directors
Additional Directors Patrick C. Graney, III Independent Director Founder and Chairman of the One Stop Company, an operator of over 40 stores in West Virginia, until its purchase by Cross America Partners Previously served as Eastern Regional President of Maxum Petroleum, a nationwide independent dis
Slide 26: U.S. Met Coal Exports
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 America (primarily Brazil): 4-9mmtpy Brazil is a major global steelmaker
Slide 27: U.S. Met Coal Supply/Demand Balance
U.S. Met Coal Supply/Demand Balance (mm short tons) U.S. domestic met coal demand has been stable relative to exports, and is expected to be ~18mm ton annual run-rate (excluding ~4mm tons to Canada)2 Restart of Granite City, potential for restarts at USSC and Ashland Domestic production cutbacks acc
Slide 28: Ramaco Resources, Inc.
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507