Slide 1: Ramaco Resources 2nd Quarter 2019 Earnings Release
August 2019 Ramaco Resources 2nd 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
MN 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 Continued g
Slide 7: Ramping production in the next five years
Ramping production in the next five years Ramaco annual production (in millions of tons) ü Continued development of the Berwind deep mine ~4.0-4.5 ü Elk Creek prep plant now fully operational after Q4 2018 silo collapse ü Potential additional near-term capacity with Elk Creek plant expansion ü Geolo
Slide 8: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a quality portfolio with over 75% high quality Low Vol. and High Vol. A production 2019 Production Outlook 2021 Production Outlook (1) Thermal, Low-Vol, Thermal 4% 13% 3% Low-Vol High-Vol B 20% 31% High-Vol B, High-Vol A, 41% 41% High-Vol A
Slide 9: Coal sales commitments for 2019
Coal sales commitments for 2019 ~2.0 million tons committed for 2019, with over 1.8 million tons priced at a ~$115/ton average Domestic, fixed price business Export, fixed price business (in 000s tons) (in 000s tons) 99 12 100 340 65 80 81 Total: Total: 200 ~1.52 million 30 ~0.31 million 150 tons to
Slide 10: Ramaco cash costs remain among the lowest in the industry
Ramaco cash costs remain among the lowest in the industry 2018 met coal cash costs ($/short ton FOB mine) $87 $81 $79 $69 $67 $60 Ramaco Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Note: Excludes Berwind Development Mine. Peer group includes (alphabetically): Arch, Contura, Coronado, Peabody, Warrior Source:
Slide 11: Ramaco represents attractive valuation
Ramaco represents attractive valuation EV / EBITDA(1) 4.0x 3.5x ü Ramaco is trading at only 2.1x 3.0x EV/EBITDA based on 2020 2.5x 2.1x consensus estimates 2.0x 1.5x 1.0x 0.5x 0.0x Ramaco Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Management Ownership % Of Stock (2) 14% ü Ramaco management currently
Slide 12: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Debt / EBITDA(1) 2.5x 2.0x ü Ramaco has limited debt, mostly to manage receivables 1.5x 1.0x 0.5x 0.2x ü Management is focused on maintaining a strong financial 0.0x Peer 1 Ramaco Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 position to allow full flexibility throughou
Slide 13: Met Coal Market Overview
MN RAMACO RESOURCES Met Coal Market Overview 12
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 ü As of August 8, met coal spot prices $250 were down almost 15% YoY, and ~30% YTD $225 $200 $175 $150 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Met Coal Forward Curve (1) ü However, the forward curve
Slide 15: Supply underinvestment continues
Supply underinvestment continues Supply underinvestment continues: § Met coal capex remains ~70% below peak 2012 levels o High cost of capital for many producers Global Met Coal Capex (1) o ESG pressure continue § High cost of production for many players has $16 caused 3 large U.S. met coal bankrupt
Slide 16: Domestic steel markets showing signs of life
Domestic steel markets showing signs of life U.S. Steel Prices (1) $950 $900 $850 ü Although as of August 8, U.S. hot $800 rolled steel prices were down ~30% $750 YoY, they are up ~15% off their lows, $700 following 3 recent price hikes $650 announced by domestic producers $600 $550 $500 Jan-18 Apr-
Slide 17: Met coal arb into China is wide open
Met coal arb into China is wide open ü As of August 8, the metallurgical Met Coal Arb Into China(1) coal arb is ~$30/ton, which means it is roughly $30/ton cheaper for a $375 Chinese steel mill to import coal $350 $325 than to buy domestically $300 $275 $250 $225 $200 $175 ü The uncertainty over rec
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% 96% 90% ü 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: Appendix
MN RAMACO RESOURCES Appendix 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: 2Q19 financial highlights
2Q19 financial highlights Second quarter 2019 EBITDA of $19.1 million was the best in company history (previous high was $14.9 million in the second quarter of 2018) Key S econd Quarter 2019 Metrics 2Q19 1Q19 Change 2Q19 2Q18 Change 1H19 1H18 Change S ales Of Company Produced Tons 499,000 443,000 13
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. The Company believes Adjusted EBITDA is useful because it allows u
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