Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Q3 2021 Earnings Presentation
26 slides from Ramaco Resources's earnings presentation, November 2021
Slide 1: Ramaco Resources 3rd Quarter 2021 Investor Presentation
November 2021 Ramaco Resources 3rd Quarter 2021 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 • Ramaco is a low-cost, “pure play” metallurgical coal company. We sell virtually no coal to power plants which are a source of greenhouse gas emissions. Instead, we are a key supplier to the North American and international steel industry. We have a strong pipeline of production gro
Slide 5: Investment highlights
Investment highlights Ramaco has built a low-cost met coal platform, with minimal AROs, legacy liabilities, and net debt, as well as one of the strongest growth pipelines in the industry. We anticipate record EBITDA in 2021, followed by an even stronger 2022. Our Board recently authorized the initia
Slide 6: YTD financial highlights
YTD financial highlights We are on track to produce both record Adjusted EBITDA and free cash flow in 2021, on the back of record anticipated production. Despite modest inflationary pressures, YTD 2021 cash costs per ton sold remain among the lowest in the industry at $67/ton. We anticipate 2022 Adj
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) Majority of Berwind development capex (>$60 million) is in our rear- view mirror. In Oct. 2021, we reached the advantaged Poca #4 seam, which should yield ~0.75 mtpa of high-quality, low-vol coal on
Slide 8: Clear path to getting to ~5 mtpa
Clear path to getting to ~5 mtpa By year-end 2023, we anticipate to be producing at a ~3.7 mtpa run-rate. We currently have two separate ~0.5 mtpa permitted expansion projects that we can move forward with at any time. Furthermore, if market conditions permit, we can extend the mine life at our ~0.2
Slide 9: First quartile cash costs; 2021 production guidance improved again
First quartile cash costs; 2021 production guidance improved again Met coal cash costs ($/short ton FOB mine) (1) $110 $100 $97 YTD 2021 cash costs at our flagship $90 Elk Creek complex were $63/ton. This is firmly in the first quartile of $80 $72 $70 $66 the U.S. met coal cash mine cost $62 $63 $
Slide 10: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Net (Cash) Debt / EBITDA(1) 1.6x 1.4x Ramaco is in the enviable position 1.2x of being the only company among 1.0x its peer group of not having any 0.8x meaningful net debt. 0.6x 0.4x 0.2x 0.0x 0.0x Management is committed to Ramaco Peer 1 Peer 2 Peer 3 P
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/Amonate Knox Creek ─ ~112 million tons of High Vol. Met reserves ─ ~100 million tons of Low Vol. Met ─ ~94 million tons of High Vol. A reserves ─ 20+ year reserve life in relatively thick coal
Slide 13: Recent investment highlights
Recent investment highlights Three New Projects To Increase Production Capacity By ~1.7 – 1.95 Million Tons Per Annum (Mtpa): By year-end 2023, we anticipate the Amonate, Berwind, and Big Creek projects will add up to ~1.95 mtpa of additional low-cost low and mid-vol coal to our existing productio
Slide 14: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a long-term, high value portfolio with ~70% of production being higher quality Low Vol., Mid Vol., and High Vol. A coal. Berwind, Amonate, and Big Creek projects will provide a material uplift to our overall coal quality. 2021 Production Ou
Slide 15: Ramaco is a pure-play met coal producer
Ramaco is a pure-play met coal producer In fact, most of Ramaco’s U.S. “met Met Coal As A % Of Total Production (1) coal” peers actually produce more 100% thermal coal than met coal. Ramaco is 100% 90% one of only two U.S. publicly traded 80% “pure-play” met coal companies, 70% based on 2020 produ
Slide 16: U.S. met coal spot prices have doubled from this time last year
U.S. met coal spot prices have doubled from this time last year U.S. Met Coal Spot Price (1) $400 As of Oct. 29, 2021, U.S. High Vol A $350 met coal spot prices have risen $300 >300% from their COVID-19 induced lows, mainly on the back of $250 increased global economic activity, $200 in part due t
Slide 17: Met coal arb wide open due to Australia/China trade war
Met coal arb wide open due to Australia/China trade war Arb currently over $125/ton: As of Oct. 29, 2021, the traditional metallurgical coal arb (Australian pricing versus Chinese pricing) is over $125/ton, and almost $100/ton Met Coal Arb Into China (1) above the 5-year average. This means it is
Slide 18: Domestic steel market roaring back and breaking records
Domestic steel market roaring back and breaking records U.S. Steel Prices (1) As of Oct. 29, 2021, U.S. hot rolled $2,500 steel prices have risen >300% since $2,000 their COVID-19 induced lows, to a near all-time high of around $1,500 $1,900/ton. This is on the back of $1,000 strong demand from th
Slide 19: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment and lack of funding continues, and is likely to get worse: Met coal capex is estimated to have fallen over 75% below peak 2012 levels in 2020. Global Met Coal Capex (1) o Both a high cost of capital and lack of $18 access to funding for man
Slide 20: Safety, Environmental, and ESG Commitment
Safety, Environmental, and ESG Commitment 19
Slide 21: Strong ESG commitment
Strong ESG commitment ESG principles are core to our strategy. We produce virtually no thermal coal, which is used in electricity generation. Almost 100% of our coal last year was ultimately used to produce primary steel, which is a crucial component of the recent bipartisan Infrastructure Bill, inc
Slide 22: Environmental, Health & Safety
Environmental, Health & Safety 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 preventable: Ramaco’s COVID-19 Response Business e
Slide 23: Appendix
KY RAMACO RESOURCES Appendix 22
Slide 24: 2021 Guidance
2021 Guidance 2020 (In thousands, except per ton amounts and percentages) 2021 Guidance Actuals Company Production Elk Creek 2,000 - 2,050 1,548 Triad 125 - 175 — Berwind 25 - 75 147 Big Creek 50 - 100 — Total 2,200 - 2,400 1,695 Sales Mix (a) Metallurgical 2,225 - 2,350 1,749 Steam 50 - 75 — Total
Slide 25: 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 26: Ramaco Resources, Inc.
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455