Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Q3 2020 Earnings Presentation
24 slides from Ramaco Resources's earnings presentation, November 2020
Slide 1: Ramaco Resources 3rd Quarter 2020 Investor Presentation
November Ramaco Resources 2020 3rd Quarter 2020 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: Key Investment Highlights
KY RAMACO RESOURCES Key Investment Highlights 2
Slide 4: Ramaco overview
Ramaco overview “Pure play” metallurgical coal company, currently with ~265 million tons of high quality metallurgical coal reserves (more than a 50-year production life), low net debt, no legacy liabilities, low AROs, and advantaged geology leading to low (NASDAQ: METC) cash costs. At a glance Mark
Slide 5: Investment highlights
Investment highlights Sustainable, low cash cost met coal platform, with minimal net debt, AROs, and no legacy liabilities 1 Portfolio of Large ~265 million ton met coal reserve base with attractive quality characteristics across High-Vol. and Low-Vol. high-quality, long- segments lived assets 2 L
Slide 6: YTD financial highlights
YTD financial highlights Our low cash cost of production has allowed for YTD adjusted EBITDA of $19.9 million which exceeds that of some of our much larger peers. Key Metrics 3Q20 2Q20 Change 3Q19 Change 3Q20 YTD 3Q19 YTD Change Sales of Company Produced Tons ('000) 430 362 19% 510 -16% 1,208 1,452
Slide 7: Long-term potential to more than double production
Long-term potential to more than double production Ramaco annual production (in millions of tons) Majority of Berwind development capex is in our rear-view ~4.0-4.5 mirror. When market conditions allow us to move forward, the 6-month slope project to get to the advantaged Poca #4 seam should yield
Slide 8: Clear path to adding ~2 million tons of permitted growth
Clear path to adding ~2 million tons of permitted growth While growth capex is mostly paused due to market conditions, we have a clear path to adding ~2.0 million additional tons of high quality production to our existing base of just under 2 mtpa, once we decide to resume growth capex spending. Pro
Slide 9: Ramaco's cash mine costs remain among the lowest, insider ownership among the highest
Ramaco’s cash mine costs remain among the lowest in the industry, while insider ownership is among the highest Met coal cash costs ($/short ton FOB mine) (1) $110 $103 $100 We believe Ramaco is firmly in the $90 first quartile of U.S. metallurgical $80 $69 $70 $73 $67 coal cash costs, especially $
Slide 10: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Net Debt / EBITDA(1) 3.5x 3.0x Ramaco has the lowest net debt to 2.5x EBITDA ratio in the coal space. 2.0x 1.5x 1.0x Management is committed to 0.5x 0.5x maintain a “low debt-low ARO” 0.0x posture to allow full flexibility Ramaco Peer 1 Peer 2 Peer 3 Peer
Slide 11: Operations + Met Coal Market Overview
Operations + Met Coal Market Overview 10
Slide 12: Met coal asset portfolio with competitive advantages
Met coal asset portfolio with competitive advantages Central Appalachian operations Elk Creek Berwind Knox Creek ─ ~114 million tons of High Vol. Met reserves ─ ~50 million tons of Low Vol. Met ─ ~95 million tons of High Vol. A reserves ─ 20+ year reserve life in relatively thick coal reserves
Slide 13: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a long term - high value portfolio with over 66% of annual production being higher quality blends of Low Vol., Mid Vol., and High Vol. A coal. Current (2020) Production Long-Term Production Outlook (1) Semi-Soft, Low-Vol, 8% 4% Semi-Soft Mi
Slide 14: Solid fixed priced commitments for 2020
Solid fixed priced commitments for 2020 Current 2020 sales book of ~2.0 million tons committed for 2020, including ~1.8 million tons priced at an average fixed price of $88/ton. 2020 Domestic, fixed price business (1) 2020 Export, fixed price business (1) (in 000s tons) (in 000s tons) 31 120 270 ~80
Slide 15: 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% Many of Ramaco’s U.S. “met coal” 100% peers actually produce more thermal 90% 80% coal than met coal. 70% 60% 50% Ramaco is one of only 2 U.S. publicly 40% traded pure-play met coal companies. 30% 20
Slide 16: Met coal spot prices & forward curve had a large decline based on COVID-19
Met coal spot prices & forward curve had a large decline based on COVID-19 Met Coal Spot Price (1) $300 $275 As of October 31, 2020, Australian $250 met coal spot benchmark prices of $225 $109/ton were down roughly 22% $200 YTD, largely on the back of demand $175 destruction due to COVID-19 $150 c
Slide 17: Met coal arb remains wide open
Met coal arb remains wide open Arb currently around $70/ton: As of October 31, 2020, the metallurgical coal arb is just over $70/ton, which is a near- record. This means it is that much cheaper for Met Coal Arb Into China (1) a Chinese steel mill to import coal compared to buying domestically. In
Slide 18: Domestic steel market roaring back
Domestic steel market roaring back U.S. Steel Prices (1) $1,000 Since early August 2020, U.S. hot $900 rolled steel prices have risen almost $800 60% to $700/ton, which is the $700 highest levels seen since early 2019. This is on the back of strong $600 automotive and housing demand. $500 $400 Jan
Slide 19: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment continues, and is likely to get worse: Met coal capex estimated to fall almost 75% Global Met Coal Capex (1) below peak 2012 levels in 2020. o High cost of capital for many producers. $16 o ESG pressure continues, and is getting $14 stronge
Slide 20: Safety & Environmental
KY RAMACO RESOURCES Safety & Environmental 19
Slide 21: 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 believes that all accidents and occupational illnesses are preventable: Ramaco’s COVID-19 Response Non-Contact tem
Slide 22: Appendix
KY RAMACO RESOURCES Appendix 21
Slide 23: 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 24: Ramaco Resources, Inc.
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455