Slide 1: 3rd Quarter 2019 Earnings Release
November 2019 Ramaco Resources 3rd Quarter 2019 Earnings Release
Slide 2: Disclaimer
Disclaimer The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complet
Slide 3: Key Investment Highlights
KY RAMACO RESOURCES Key Investment Highlights 2
Slide 4: Ramaco overview
Ramaco overview “Pure play” metallurgical coal company with ~250 million tons of high quality metallurgical coal reserves (more than a 50-year production life), low debt, low ARO liabilities, and advantaged geology leading to low cash costs (NASDAQ: METC) At a glance Market summary Large ~250 mill
Slide 5: Met coal asset portfolio with competitive advantages
Met coal asset portfolio with competitive advantages Central Appalachian operations Elk Creek Berwind Knox Creek ─ 96 million tons of High Vol. Met reserves ─ 71 million tons of Low Vol. Met reserves ─ 75 million tons of High Vol. A ─ 20+ year reserve life in relatively thick coal ─ Mining of
Slide 6: Investment highlights
Investment highlights Sustainable, low cash cost met coal platform, with minimal net debt and legacy liabilities 1 Portfolio of Large ~250 million ton met coal reserve base with attractive quality characteristics across High-Vol. and Low-Vol. high-quality, long- segments lived assets 2 Productio
Slide 7: 3Q19 financial highlights
3Q19 financial highlights Third quarter 2019 adjusted EBITDA of $13.6 million was 24% above the same period in 2018 Key Metrics 3Q19 2Q19 Change 3Q18 Change 3Q19 YTD 3Q18 YTD Change Sales of Company Produced Tons ('000) 510 499 2% 510 0% 1,452 1,406 3% Revenue ($mm) $61.4 $65.8 -7% $62.2 -1% $184.6
Slide 8: Ramping production prudently
Ramping production prudently Ramaco annual production (in millions of tons) Continued development of the Berwind deep mine ~4.0-4.5 Elk Creek prep plant now fully operational after Q4 2018 silo failure Potential additional near-term capacity with Elk Creek plant expansion Geologically advant
Slide 9: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a quality portfolio with over two-thirds of annual production eventually being high quality Low Vol. and High Vol. A coal 2019 Production Outlook Long-Term Production Outlook (1) (1): Growth is subject to Board approval, and market conditio
Slide 10: Coal sales commitments for 2019
Coal sales commitments for 2019 ~2.0 million tons committed for 2019, with ~1.9 million tons priced at a ~$110/ton average Domestic, fixed price business (1) Export, fixed price business (1) (in 000s tons) (in 000s tons) 99 12 100 340 81 134 110 Total: Total: ~1.46 million ~0.45 million 34 200 tons
Slide 11: Ramaco's cash costs remain among the lowest in the industry, while insider ownership is among the highest
Ramaco’s cash costs remain among the lowest in the industry, while insider ownership is among the highest 2018 met coal cash costs ($/short ton FOB mine) (1) $90 $87 $79 $81 $80 We believe Ramaco is firmly in the $67 $69 $70 first quartile of U.S. metallurgical $60 coal cash costs. $60 $50 $40 $30
Slide 12: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Debt / EBITDA(1) 3.0x 2.5x Ramaco has limited debt, mostly to 2.0x manage receivables 1.5x 1.0x 0.5x Management is focused on 0.2x maintaining a strong financial 0.0x Ramaco Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 position to allow full flexibility thro
Slide 13: Met Coal Market Overview
KY RAMACO RESOURCES Met Coal Market Overview
Slide 14: Forward curve remains well supported, despite fall in spot
Forward curve remains well supported, despite fall in spot Met Coal Spot Price (1) $300 $275 As of Nov. 1, met coal spot prices $250 were down almost 40% YTD, or over $225 $75/ton. The Australian benchmark $200 spot price as of Nov. 1 was $175 $134/metric ton FOB port $150 $125 Jan‐18 Apr‐18 Jul‐1
Slide 15: Supply underinvestment continues, but short-term demand a concern
Supply underinvestment continues, but short-term demand a concern Supply underinvestment continues: Met coal capex remains ~70% below peak 2012 levels o High cost of capital for many producers, while ESG pressure continue Global Met Coal Capex (1) High cost of production for many players has cau
Slide 16: Steel pricing remains weak
Steel pricing remains weak U.S. Steel Prices (1) $950 $900 $850 As of Nov. 1, U.S. hot rolled steel $800 prices were down ~30% YoY. $750 Though a recent across-the-board $700 $650 price hike is expected to “stop the $600 bleeding” $550 $500 $450 Jan‐18 Apr‐18 Jul‐18 Oct‐18 Jan‐19 Apr‐19 Jul‐19 Oct
Slide 17: Met coal arb into China is wide open
Met coal arb into China is wide open, as Chinese port restrictions “mess” with traditional pricing relationship As of Nov. 1, the metallurgical coal Met Coal Arb Into China(1) arb is $30/ton, which means it is roughly $30/ton cheaper for a $375 Chinese steel mill to import coal $350 compared to bu
Slide 18: Ramaco is essentially a pure-play met coal producer
Ramaco is essentially a pure-play met coal producer Met Coal As A % Of Total Production (1) 100% 97% 90% The majority of Ramaco’s U.S. “met 80% coal” peers actually produce more 70% 60% thermal coal than met coal. Ramaco 50% is one of two players that produce 40% 95% or more met coal as a % of tot
Slide 19: Safety & Environmental
KY RAMACO RESOURCES Safety & Environmental 18
Slide 20: 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 21: Appendix
KY RAMACO RESOURCES Appendix 20
Slide 22: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more
Slide 23: Ramaco Resources, Inc. contact
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 POINT OF CONTACT: Jeremy Sussman Chief Financial Officer jrs@ramacocoal.com | 859-244-7455