Slide 1: Ramaco Resources 3rd Quarter 2022 Investor Presentation
November 2022 Ramaco Resources 3rd 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
KY 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 in 2021. • We recently initiated and then doubled our base dividend. It rem
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 YTD Adjusted EBITDA and net income, with further upside anticipated in 2023. 1 Portfolio of high- Large, high-quality met coal reserve base. We intend to
Slide 6: YTD financial highlights
YTD financial highlights • Net income was $102 million (diluted EPS of $2.27) and Adjusted EBITDA was $173 million for the first 3 quarters of 2022. Third quarter net income and Adjusted EBITDA were 282% and 185% respectively higher than previous third quarter records. • Net income was negatively af
Slide 7: Medium-term potential to roughly triple production
Medium-term potential to roughly triple production Ramaco annual production (in millions of tons) 6.5 The Company anticipates reaching its original goal of achieving 4 million tons of annual production in 2023. 5.5 Furthermore, the Company anticipates growing production to almost 6.5 million ton
Slide 8: Steady path to getting to ~6.5 mtpa of production
Steady path to getting to ~6.5 mtpa of production • We continue to anticipate reaching 6.5 million tons of production by 2025, based on growth capital expenditures of $175 million from 2022-24. $80 million of that figure, or 45%, is anticipated to have been spent in 2022. We expect capex to decrease
Slide 9: Low cash mine costs; Meaningful margin growth
Low cash mine costs; Meaningful margin growth 2021 Met Coal Cash Costs ($/short ton FOB mine) (1) $110 $100 We managed to keep our mine costs $90 among the industry’s lowest in 2021. $80 Despite industry-wide inflationary $70 pressures, such as higher sales- $60 related costs, we are committed to
Slide 10: Ramaco has an extremely strong balance sheet
Ramaco has an extremely strong balance sheet Adjusted Net Debt (Cash) / 2023 Adjusted EBITDA (1) 1.5x Ramaco has one of the industry’s 1.0x most conservative balance sheet, with 0.5x Adjusted net debt to 0.5x Adjusted EBITDA(1). 0.0x (0.5x) Management is committed to Peer 1 Peer 2 Ramaco Peer 3
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 Big Creek mine deep mines and attractive ratios at surface deep
Slide 13: Global coal sales breakdown
Global coal sales breakdown • Ramaco coal has been sold in over 15 countries. While we have historically focused most of our sales into fixed priced North American steel markets, we anticipate that figure to market adjust in 2023, with over 60% of our coal expected to be sold internationally next ye
Slide 14: Metallurgical quality breakdown
Metallurgical quality breakdown • Production growth is focused to create a long-term, high value portfolio with almost 80% of 2025 production expected to be higher quality Low Vol, Mid Vol, and High Vol A coal, with the flexibility to pivot production based on market conditions. 2022 Production/Sale
Slide 15: U.S. met coal spot prices remain elevated
U.S. met coal spot prices remain elevated U.S. Met Coal Spot Price (1) As of November 4, 2022, U.S. High $500 Vol A met coal spot pricing is $298 $400 per metric ton FOB port, up ~40% versus the 5-year average. This is $300 despite the recent pullback on the $200 back of global economic concerns,
Slide 16: Domestic steel markets have weakened
Domestic steel markets have weakened U.S. Steel Prices (1) $2,500 As of November 2, 2022, despite a recent decline from 2021 peak $2,000 levels, U.S. hot rolled steel prices $1,500 have fallen over 50% since the beginning of the year, largely on the $1,000 back of global economic concerns. $500 $0
Slide 17: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment and lack of funding Supply rationalization continues: continues, and is likely to get worse: IHS estimates that while U.S. met coal production 2021 global coal growth capex is estimated to rebounded 8% in 2021 from its COVID-19 induced ha
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. Most of our coal last year was ultimately used to produce primary steel, which is a crucial component of the 2021 bipartisan Infrastructure Bill, including the large-scale production of energy transition windmills and modern electric v
Slide 20: Environmental, Health & Safety
Environmental, Health & Safety • 2021 was the company’s safest year on record. • Ramaco is committed to complying with both regulatory as well as its own high standards for environmental and employee health and safety requirements. Ramaco believes that all accidents and occupational illnesses are pr
Slide 21: Appendix
KY RAMACO RESOURCES Appendix 20
Slide 22: 2022 Guidance
2022 Guidance 2022 Guidance 2022 Guidance 2021 Company Production (tons) Elk Creek Mining Complex 2,000 - 2,100 1,981 Berwind Mining Complex 450 - 500 181 Knox Creek Mining Complex (a) 250 - 300 62 Total 2,700 - 2,900 2,224 Sales Mix (b) Metallurgical 2,150 - 2,300 2,232 Steam 350 - 400 54 Total 2,5
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