Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Q1 2023 Earnings Presentation
29 slides from Ramaco Resources's earnings presentation, May 3, 2023
Slide 1: Ramaco Resources 1st Quarter 2023 Investor Presentation
May 2023 Ramaco Resources 1st Quarter 2023 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 At a glance Market summary § Key US Supplier of Critical Materials: Ramaco is a low-cost, “pure play” metallurgical coal company. Our product is a key component in the production of primary steel, which is crucial to Share price (05/02/23): $7.56 infrastructure development. We have a
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. We hope to take Ramaco into its next phase with our recent exciting Rare Eart
Slide 6: 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
Slide 7: Solid start to 2023
Solid start to 2023 • First quarter net income of $25 million (diluted EPS of $0.57) and Adjusted EBITDA of $48 million were 76% and 51% respectively above fourth quarter of 2022 results. First quarter Adjusted EBITDA and net income were negatively affected by $3 million and $2 million respectively
Slide 8: Met Coal Operations + Market Overview
Met Coal Operations + Market Overview 7
Slide 9: 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 10: Global coal sales breakdown
Global coal sales breakdown • 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 $65-$70 Brazil $70-$75 So
Slide 11: 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 12: 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 $111 million from 2023-25. 2022 was our peak capex year, with over $90 million spent in growth capital alone last year. Project: 6.5 MM Ton Case
Slide 13: Low cash mine costs; Meaningful margin growth
Low cash mine costs; Meaningful margin growth 2022 Met Coal Cash Costs ($/short ton FOB mine) (1) $120 ü Our mine costs are among the industry’s lowest in 2022. Despite $115 industry-wide inflationary $110 pressures, we are committed to staying at the low end of the U.S. $105 cost curve. $100 $95 ü
Slide 14: Ramaco has an extremely strong balance sheet
Ramaco has an extremely strong balance sheet Total Debt ($mm) (1) $450 $400 ü Ramaco has one of the industry’s $350 most conservative balance sheets, $300 with net debt to 12-month trailing $250 Adjusted EBITDA of just 0.5x. $200 $150 $100 ü Management is committed to $50 $0 maintaining a “low net d
Slide 15: 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 16: Met coal prices remain above average; Curve in contango
Met coal prices remain above average; Curve in contango U.S. Met Coal Spot Price (1) $500 ü As of April 30, 2023, U.S. High Vol A met coal spot pricing is $234 per $400 metric ton FOB port. While this is $300 down from the peak on the back of renewed global economic concerns, $200 pricing remains 6%
Slide 17: Domestic steel markets have recently strengthened
Domestic steel markets have recently strengthened U.S. Steel Prices (1) ü As of April 26, 2023, U.S. hot rolled $2,000 steel prices have risen more than $1,750 $1,500 75% from their recent lows, largely $1,250 on the back of encouraging $1,000 economic activity. Lead times are $750 now above 8 weeks
Slide 18: 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 have § IHS estimates that even while U.S. met coal fallen over 80% below peak levels, more than 10 pr
Slide 19: Rare Earth Elements (REEs)
Rare Earth Elements (“REEs”) 18
Slide 20: Ramaco's REE deposit – Potentially transformative discovery
Ramaco’s REE deposit – Potentially transformative discovery n REE Background: − What Are REEs?: REEs are critical to power the energy transition. They are used in many applications such as electric vehicles, wind turbines, smartphones, and defense applications. Almost 90% of the world’s REEs are pro
Slide 21: Key highlights from Weir International's Technical Report Summary
Key highlights from Weir International’s Technical Report Summary Estimated TREO Grade Distribution We believe Ramaco’s Brook Mine has 3 distinct advantages: 100% I. The majority of its REOs are found in clay, 90% which are generally much cheaper and 80% easier to process. 70% 63.7% % of Tonnage II.
Slide 22: Key highlights from Weir International's Technical Report Summary
Key highlights from Weir International’s Technical Report Summary Estimated Brook Mine TREO Distribution by Oxide 40% 37.79% 35% ü 23% of the total REO basket 30% consists of primary magnetic REOs of neodymium, praseodymium, 25% 18.77% dysprosium and terbium. 20% 16.41% 15% 13.41% 10% 4.06% 5% 2.07%
Slide 23: Safety, Environmental, and ESG Commitment
Safety, Environmental, and ESG Commitment 22
Slide 24: 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 25: Environmental, Health & Safety
Environmental, Health & Safety • 2022 was one of the Company’s safest year on record, as measured by an NDL (no days lost) rate of 0.75. • Ramaco’s 2022 water discharge compliance was 99.97% in West Virginia and 100% in Virginia. • Ramaco is committed to complying with both regulatory as well as its
Slide 26: Appendix
KN RAMACO RESOURCES Appendix 25
Slide 27: 2023 Guidance
2023 Guidance (In thousands, except per ton amounts and percentages) Full-Year Full-Year 2023 Guidance 2022 Company Production (tons) Elk Creek Mining Complex 2,200 - 2,400 2,033 Berwind & Knox Creek Mining Complex 900 - 1,200 651 Total 3,100 - 3,600 2,684 Sales (tons) (a) 3,300 - 3,800 2,450 Cash C
Slide 28: 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 29: Ramaco Resources, Inc.
Ramaco Resources, Inc. 250 West Main Street, Suite 1900 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455