Slide 1: 1st Quarter 2020 Investor Presentation
May 2020 Ramaco Resources 1st 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
KN 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, low ARO liabilities, and advantaged geology leading to low cash costs (NASDAQ: METC) At a glance Market summary ▪
Slide 5: 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 as ─ ~50 million tons of Low Vol. Met ─ ~95 million tons of High Vol. A reserves of today reserves (potential Jawbone mine), plus recen
Slide 6: Investment highlights
Investment highlights Sustainable, low cash cost met coal platform, with minimal net debt and 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 Long-term g
Slide 7: 1Q20 financial highlights
1Q20 financial highlights Adjusted EBITDA of $8.4 million in 1Q20 was down just 6% from 4Q19, despite realized pricing down 11%, due to solid cost control Key Metrics 1Q20 4Q19 Change 1Q19 Change Sales of Company Produced Tons ('000) 416 420 -1% 443 -6% Revenue ($mm) $ 41.9 $ 45.6 -8% $ 57.5 -27% Co
Slide 8: 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 in rear-view ~4.0-4.5 mirror. When market conditions allow us to move forward, 6-month slope project to get to the advantaged Poca #4 seam should yield ~0.75 mtpa
Slide 9: Clear path to adding ~2 million tons of permitted growth
Clear path to adding ~2 million tons of permitted growth While growth capex is currently paused due to market conditions, we have a clear path to adding ~1.9 million tons of high quality production to our existing run-rate of ~2.1 mtpa in 1Q20, once we decide to resume growth capex spending. Project
Slide 10: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a long term quality portfolio with over 66% of annual production being high quality Low Vol., Mid Vol., and High Vol. A coal Current Production Long-Term Production Outlook (1) Thermal, Thermal 4% 2% Medium High High Quality Quality Met Med
Slide 11: Solid annual priced commitments for 2020
Solid annual priced commitments for 2020 ~1.5+ million tons committed and priced for 2020, at an average fixed price of over $93/ton 2020 Domestic, fixed price business (1) 2020 Export, fixed price business (1) (in 000s tons) (in 000s tons) 35 24 11 120 270 36 77 180 35 Total: Total: ~1.1 million ~0
Slide 12: Ramaco's cash costs remain among the lowest in the industry
Ramaco’s cash costs remain among the lowest in the industry, while insider ownership is among the highest Met coal cash costs ($/short ton FOB mine) (1) $100 $93 $90 $85 ✓ We believe Ramaco is firmly in the $80 $72 first quartile of U.S. metallurgical $70 $64 $69 $64 coal cash costs, especially $60
Slide 13: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Net Debt / EBITDA(1) 4.0x 3.5x ✓ Even after adding ~$13 million in 3.0x low coupon promissory notes in 2.5x April to increase near-term liquidity, 2.0x Ramaco has the lowest net debt to 1.5x EBITDA ratio in the coal space 1.0x 0.5x 0.5x 0.0x Ramaco Peer 1 Pee
Slide 14: Met Coal Market Overview
KN RAMACO RESOURCES Met Coal Market Overview 13
Slide 15: Met coal spot prices & forward curve down big on COVID-19
Met coal spot prices & forward curve down big on COVID-19 Met Coal Spot Price (1) $300 $275 $250 ✓ As of May 8, 2020, met coal spot $225 prices of $113/ton were down $200 roughly 45% YoY, largely on the back of demand destruction due to $175 COVID-19 concerns. $150 $125 $100 Jan-18 Apr-18 Jul-18 Oct
Slide 16: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment continues, and is likely to get worse: ▪ Met coal capex fell to ~70% below peak 2012 Global Met Coal Capex (1) levels in the past few years. o High cost of capital for many producers $16 o ESG pressure continue, and are getting $14 worse $12
Slide 17: Met coal arb remains wide open
Met coal arb remains wide open Arb currently over $50/ton: ▪ As of May 8, 2020, the metallurgical coal arb is over $50/ton, which means it is that much Met Coal Arb Into China (1) cheaper for a Chinese steel mill to import coal compared to buying domestically. $350 $300 $250 $200 $150 Arb could supp
Slide 18: Domestic steel capacity utilization at 10-year lows
Domestic steel capacity utilization at 10-year lows U.S. Steel Prices (1) $950 $900 $850 ✓ As of May 8, 2020, U.S. hot rolled $800 steel prices of $483/ton were down $750 $700 roughly 25% YoY. $650 $600 $550 $500 $450 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 U.S. Steel C
Slide 19: 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% 97% 90% ✓ Many of Ramaco’s U.S. “met coal” 80% peers actually produce more thermal 70% 60% coal than met coal. Ramaco is one of 50% only two companies that produce 40% 95% or more met coal as a % of tota
Slide 20: Safety & Environmental
KN 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 Ramaco’s COVID-19 Response occupational illnesses are preventable: ◼ Business excelle
Slide 22: Appendix
KN 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. contact and investor relations
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455