Slide 1: Ramaco Resources 4th Quarter 2022 Investor Presentation
March 2023 Ramaco Resources 4th Quarter 2022 Investor Presentation
Slide 2: Disclaimer
Disclaimer Forward Looking Statements: The information in this presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
Slide 3: Key Investment Highlights
KN RAMACO RESOURCES Key Investment Highlights 2
Slide 4: Ramaco overview
Ramaco overview • Ramaco is a low-cost, “pure play” metallurgical coal company. We are a key supplier to the U.S. and global steel industry. We have a strong pipeline of production growth to ~6.5 million tons from ~2 million tons in 2021. • In late 2021, we initiated and then doubled our base divide
Slide 5: 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. 1 Portfolio of high- § Large, high-quality met coal reserve base. We intend t
Slide 6: 2022 financial highlights
2022 financial highlights • Net income of $116 million (diluted EPS of $2.60) and Adjusted EBITDA of $205 million, were 192% and 159%, respectively, above the prior highest year on record. • Net income was negatively affected by $8 million (diluted EPS of $0.17) from idle costs at the Company’s Berw
Slide 7: 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 ü The Company anticipates reaching its original goal of achieving 4 million tons of annualized sales and production in 2H23. ü Furthermore, the Company anticipates growing production to 6.5 millio
Slide 8: Steady path to getting to ~6.5 mtpa of production
Steady path to getting to ~6.5 mtpa of production • We anticipate reaching 6.5 million tons of production by 2026, based on growth capital expenditures of $121 million from 2023-25. 2022 was our peak capex year, with over $90 million spent in growth capital alone last year. Project Quality Productio
Slide 9: Low cash mine costs; Meaningful margin growth
Low cash mine costs; Meaningful margin growth 2022 Met Coal Cash Costs ($/short ton FOB mine) (1) $120 $115 ü We managed to keep our mine costs among the industry’s lowest in 2022. $110 Despite industry-wide inflationary $105 pressures, such as higher sales- related costs, we are committed to $100 s
Slide 10: Ramaco has an extremely strong balance sheet
Ramaco has an extremely strong balance sheet 2022 Total Debt ($mm) (1) $450 $400 ü Ramaco has one of the industry’s $350 most conservative balance sheets, $300 with trailing net debt to Adjusted $250 EBITDA of just 0.4x. $200 $150 $100 ü Management is committed to $50 $0 maintain a “low net debt-low
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 ─ 20+ year reserve life in thick coal seams at ─ 20+ year reserve life in thick coal seams at ─ Production at Mid Vol / High Vol A Big deep mines and attractive ratios at surface de
Slide 13: Global coal sales breakdown
Global coal sales breakdown • Ramaco coal has been sold in almost 20 countries, having recently sold its first cargo into India. Sweden UK Canada Netherlands Poland Belgium Germany Ukraine Czech Republic Romania South Korea Italy Turkey USA Spain India $65-$70 Brazil $70-$75 South Africa $35-$40 12
Slide 14: 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 ton level is expected to be higher quality Low Vol, Mid Vol, and High Vol A coal, with the flexibility to pivot production based on mark
Slide 15: Met coal prices remain elevated
Met coal prices remain elevated U.S. Met Coal Spot Price (1) ü As of March 6, 2023, U.S. High Vol A $500 met coal spot pricing is $328 per $400 metric ton FOB port, >60% above the 7-year average. This strength is $300 in part due to continued supply $200 constraints on availability of new mine capit
Slide 16: Domestic steel markets have recently strengthened
Domestic steel markets have recently strengthened U.S. Steel Prices (1) ü As of March 7, 2023, U.S. hot rolled $2,000 $1,750 steel prices have risen over 75% $1,500 from their recent lows, largely on $1,250 the back of encouraging economic $1,000 activity. Lead times are now at 8 $750 weeks, which i
Slide 17: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment and lack of funding continues, and is likely to get worse: Supply rationalization continues: § 2022 global coal growth capex is estimated to § IHS estimates that while U.S. met coal production have fallen over 80% below peak levels, which reb
Slide 18: Safety, Environmental, and ESG Commitment
Safety, Environmental, and ESG Commitment 17
Slide 19: Strong ESG commitment
Strong ESG commitment • ESG principles are core to our strategy. Almost all of our coal production can be used to make primary steel, which is a crucial component of the Inflation Reduction Act, including the large- scale production of energy transition windmills and modern electric vehicles. Primar
Slide 20: Environmental, Health & Safety
Environmental, Health & Safety • 2022 was one of the Company’s safest year on record, as measured by NDL (no days lost) rate of 0.75. • Ramaco’s 2022 water discharge compliance was 99.99%. • Ramaco is committed to complying with both regulatory as well as its own high standards for environmental and
Slide 21: Appendix
KN RAMACO RESOURCES Appendix 20
Slide 22: 2023 Guidance
2023 Guidance Full-Year First Quarter Full-Year (In thousands, except per ton amounts and percentages) 2023 Guidance 2023 Guidance 2022 Company Production (tons) Elk Creek Mining Complex 2,100 - 2,300 450 - 500 2,033 Berwind & Knox Creek Mining Complex 900 - 1,200 175 - 200 651 Total 3,000 - 3,500 6
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 1900 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455