Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Investor Presentation (June 2023)
40 slides from Ramaco Resources's investor presentation, June 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION June 2023 1
Slide 2: Disclaimer
DISCLAIMER Forward Looking Statements: We caution you that these forward-looking statements are subject to a number of risks, uncertainties and assumptions, which The information in this presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities are diffic
Slide 3: Ramaco at a Glance
RAMACO AT A GLANCE Key Highlights Dual Class Structure The Path Forward Key US Supplier of “Pure play” metallurgical coal company Two Ways to Play We expect continued Critical Materials production and free cash flow Our metallurgical coal is a key component in the Ramaco is a low-cost, production of
Slide 4: Ramaco Resources Business Lines
RAMACO RESOURCES BUSINESS LINES Multiple Ways to Invest in our Businesses; Each With Unique Value Characteristics Ramaco Resources recently announced a new class of common stock, the Class B common stock (Ticker: METCB1). This will be distributed to existing shareholders to provide holders with dire
Slide 5: CORE Transaction Executive Summary
CORE TRANSACTION EXECUTIVE SUMMARY Unlocking value in attractive assets Transaction Overview METCB Investment Benefits CORE Assets METCB is being distributed via a tax-free Unique Investment Profile Coal Infrastructure Assets dividend and represents the economic We believe that CORE’s non-cost beari
Slide 6: Investment Highlights
INVESTMENT HIGHLIGHTS Ramaco has built a low-cost met coal platform, with one of the strongest growth pipelines, a clean balance sheet, record 2022 Adjusted EBITDA and net income, with further upside anticipated in 2023. We hope to transition Ramaco into its next development phase with our recent ex
Slide 7: Investment Highlights Continued
INVESTMENT HIGHLIGHTS CONTINUED Ramaco has built a low-cost met coal platform, with one of the strongest growth pipelines, a clean balance sheet, record 2022 Adjusted EBITDA and net income, with further upside anticipated in 2023. We hope to take Ramaco into its next phase with our recent exciting R
Slide 8: Ramaco Track Record of Performance
RAMACO TRACK RECORD OF PERFORMANCE Strong 5-year track record of consistent execution Total coal production (in millions of tons) Revenue (in $MM) Since initial production began in 2017, METC has $508 2.7 consistently executed on 2.2 its plan to grow production 1.8 1.9 1.7 and generate strong free $
Slide 9: Ramaco Has a Strong Balance Sheet
RAMACO HAS A STRONG BALANCE SHEET Conservative balance sheet provides financial flexibility to invest in growth and return capital to shareholders Ramaco has one of the industry’s Management is committed to maintain Ramaco easily has the lowest AROs most conservative balance sheets, a “low net debt-
Slide 10: Solid Start to 2023
SOLID START TO 2023 Strong execution during first quarter positions Ramaco well for its long-term goals Change Change 1Q23 4Q22 1Q22 Strong 1Q23 execution led to vs 4Q YoY record coal production and tons Total Tons Sold (000) 757 675 12% 583 30% sold, as well as lower Non-GAAP cash cost of sales. Re
Slide 11: Management Profiles
MANAGEMENT PROFILES Experienced management team Randall W. Christopher L. Jeremy R. Jason T. Atkins Blanchard Sussman Fannin Founder, Chairman, Chief Operating Officer Chief Financial Officer Chief Commercial Officer Chief Executive Officer • Randall has served as Chairman • Chris has provided minin
Slide 12: CORE Assets Overview
RAMACO CORE ASSETS OVERVIEW
Slide 13: CORE Assets Overview
CORE ASSETS OVERVIEW Coal production and infrastructure royalty business; potential future royalties on REEs and advance carbon products CORE Assets CORE Assets represents the coal royalty and coal infrastructure assets of Portfolio Overview Ramaco, as well as potential future royalties from Ramaco’
Slide 14: CORE Resources Financial Summary
CORE RESOURCES FINANCIAL SUMMARY Strong track record of significant income generation Royalty Tons Sold (Tons in millions) Royalty Revenue ($ in millions) 3.2 $15.8 2.2 2.2 $11.2 1.7 $5.6 $3.3 2020 2021 2022 2023E 2020 2021 2022 2023E Infrastructure Revenue ($ in millions) Total CORE Income ($ in mi
Slide 15: CORE: Dividend Calculation and Analysis
CORE: DIVIDEND CALCULATION AND ANALYSIS Forecasted dividend based on 20% payout of total income* 2022 2023E CORE Cash Available(1) $28.2 $42.4 20% of Cash Available for Dividend(2) $5.6 $8.5 Number of Class B Common Shares Outstanding(3) 9.4 9.4 Dividend Per Share of METCB $0.60 $0.91 (*) Dividends
Slide 16: CORE: Coal Royalties Overview
CORE: COAL ROYALTIES OVERVIEW Royalty income generated from properties mined by Ramaco Coal Infrastructure Overview Elk Creek Mining Complex Knox Creek Complex CORE generates coal royalty income from properties that are controlled by Ramaco Resources (with a de minimis Estimated 30MM tons of coal re
Slide 17: CORE: Coal Infrastructure Overview
CORE: COAL INFRASTRUCTURE OVERVIEW Stable cash flow from fixed fees and low operating costs Coal Infrastructure Overview Elk Creek Preparation Plant CORE’s coal infrastructure assets consist of coal preparation plants and rail-car loading facilities at Elk Creek, Berwind, and Knox Creek. The revenue
Slide 18: CORE: Rare Earth Elements and Advanced Carbon Products Overview
CORE: RARE EARTH ELEMENTS AND ADVANCED CARBON PRODUCTS OVERVIEW The Brook Mine hopes to produce Rare Earth Elements, and supply carbon ore for advanced carbon products iCAM Research Facility In 2011, Ramaco Carbon acquired one of the largest fee owned thermal coal reserve deposits in the US. Ramaco
Slide 19: Rare Earth Elements (REE) Potential
RARE EARTH ELEMENTS (“REE”) POTENTIAL
Slide 20: Ramaco's REE Deposit
RAMACO’S REE DEPOSIT Potentially transformative discovery REE Background: What Are REEs?: Rare earth elements (REEs) are critical minerals essential to the energy transition. They are used in many applications such as electric vehicles, wind turbines, smartphones, and defense applications. Almost 90
Slide 21: Key Highlights from Weir International's May 31, 2023 Update
KEY HIGHLIGHTS FROM WEIR INTERNATIONAL’S MAY 31, 2023 UPDATE TO ITS MAY 2, 2023 TECHNICAL REPORT SUMMARY We believe Ramaco’s Brook Mine has 3 distinct advantages: Brook Mine Estimated TREO Concentration & Distribution (%) The majority of its REEs are found in clay, which are generally much less TREO
Slide 22: Key Highlights from Weir International's Update to Original Exploration Report
KEY HIGHLIGHTS FROM WEIR INTERNATIONAL’S MAY 31, 2023 UPDATE TO ITS ORIGINAL EXPLORATION REPORT 23% of the total REO basket consists of primary magnetic REOs of neodymium, praseodymium, dysprosium and terbium. An additional 6% of the REO basket consists of secondary magnetic REOs of samarium, gadoli
Slide 23: Met Coal Mining Operations
&~RAMACO RESOURCES MET COAL MINING OPERATIONS
Slide 24: Met Coal Asset Portfolio with Competitive Advantages
MET COAL ASSET PORTFOLIO WITH COMPETITIVE ADVANTAGES Central Appalachian operations Elk Creek • 20+ year reserve life in thick coal seams at deep mines and attractive ratios at surface mines translate to low costs. • ~3 million tons per year of High Vol A/B+ production at full capacity, including pr
Slide 25: Medium-Term Potential to More Than Double Production
MEDIUM-TERM POTENTIAL TO MORE THAN DOUBLE PRODUCTION Ramaco annual production (in millions of tons) 6.5 The Company anticipates reaching its original goal of achieving 4 million tons of annualized sales and production in 2H23. 4.6 We have the ability to increase 3.35 production to over 5 million ton
Slide 26: Runway to 6.5 Million Tons of Production
RUNWAY TO 6.5 MILLION TONS OF PRODUCTION 2023 2024 2025 Total Elk Creek Complex Production Capex Capex Capex Capex Quality Targeted Incremental Production (millions of tons) 2023E Production 2.3 HVA/B+ 6.5 Plant Expansion + Crucible & Ram #3 Mines + 2nd 0.7 $18 $10 $28 HVA/B+ Additional Rail Loadout
Slide 27: Global Coal Sales
GLOBAL COAL SALES Ramaco coal has been sold in almost 20 countries, having recently increased its Asian footprint Sweden Finland UK Canada Netherlands Poland Belgium Germany Ukraine Czech Republic Romania South Korea Italy Turkey USA Spain Japan India Indonesia Brazil South Africa 27
Slide 28: Low Cash Mine Costs; Meaningful Margin Growth
LOW CASH MINE COSTS; MEANINGFUL MARGIN GROWTH Our mine costs were among the industry’s lowest in 2022. Met Coal Cash Costs ($/short ton FOB mine)(1) Ramaco Quarterly Margins Per Ton Despite industry-wide inflationary pressures, we are committed to staying Margins Per Ton Reali zed Price $150 Realize
Slide 29: Metallurgical Quality Breakdown
METALLURGICAL QUALITY BREAKDOWN Production growth is focused to create a long-term, high value portfolio. Almost 80% of production at our anticipated 6.5 million ton1 level is expected to be higher quality Low Vol, Mid Vol, and High Vol A coal, with the flexibility to pivot production based on marke
Slide 30: Met Coal Market Overview
MET COAL MARKET OVERVIEW was
Slide 31: Metallurgical Coal Industry Overview
METALLURGICAL COAL INDUSTRY OVERVIEW Unlocking value in attractive assets Metallurgical Coal Overview Metallurgical coal is used primarily for the production of steel and U.S. Met Coal Spot Price(1) benefits from the favorable drivers of steel demand, including infrastructure, clean energy, and EVs.
Slide 32: Domestic Steel Utilization at YTD Highs
DOMESTIC STEEL UTILIZATION AT YTD HIGHS As of May 24, 2023, while down from the recent peak, U.S. hot rolled steel prices have risen U.S. Steel Prices(1) U.S. Steel Capacity Utilization(2) roughly two thirds above their recent lows, largely on the back $2,000 90% of encouraging economic $1,750 85% a
Slide 33: Supply Rationalization Accelerates
SUPPLY RATIONALIZATION ACCELERATES Supply underinvestment and lack of funding continues, Supply rationalization continues: and is likely to get worse: 2022 global coal growth capex is estimated to have fallen over McCloskey estimates that even while U.S. met coal production 80% below peak levels, mo
Slide 34: Safety and Environmental Commitments
SAFETY AND ENVIRONMENTAL COMMITMENTS
Slide 35: Strong ESG Commitment
STRONG ESG COMMITMENT Safety, health and Primary steel is essential to a green future, and metallurgical coal is a necessary ingredient in the environmental production of economic primary steel: principles are core to Met Coal Is Key To Energy Transition: There are currently no large- our strategy.
Slide 36: Environmental, Health & Safety
ENVIRONMENTAL, HEALTH & SAFETY 2022 was one of the Company’s safest year Ramaco’s 2022 water discharge Ramaco is committed to complying with on record, as measured by an NDL compliance was 99.97% in West Virginia both regulatory as well as its own high (no days lost) rate of 0.75. and 100% in Virgin
Slide 37: Appendix
RAMACO APPENDIX
Slide 38: 2023 Ramaco Resources Guidance
2023 RAMACO RESOURCES GUIDANCE Full-Year Full-Year Committed 2023 Sales Volume(f) Volume Avg Price 2023 Guidance 2022 (In millions, except per ton amounts) Company Production (tons) Elk Creek Mining Complex 2,200 - 2,400 2,033 Berwind & Knox Creek Mining Complex 900 - 1,200 651 North America, fixed
Slide 39: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES (In thousands) Q1 2023 Q4 2022 Q1 2022 Adjusted EBITDA and Net Debt are used as Reconciliation of Net Income to Adjusted EBITDA supplemental non-GAAP financial measures by management and external users of our financial Net Income $ 25,257 $ 14,386 $ 41,471 stateme
Slide 40: Contact
250 West Main Street, Suite 1900 Lexington, Kentucky 40507 Investor Relations: info@ramacometc.com 859-244-7455 40