Slide 1: Ramaco Resources 2nd Quarter 2020 Investor Presentation
August Ramaco Resources 2020 2nd 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: 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 6: 2Q20 financial highlights
2Q20 financial highlights 2Q20 adjusted EBITDA was $10.8 million, up 28% from 1Q20. 1H20 EBITDA was $19.2 million, which comfortably exceed many of our larger peers. Key Metrics 2Q20 1Q20 Change 2Q19 Change 1H20 1H19 Change Sales of Company Produced Tons ('000) 362 416 -13% 499 -27% 778 942 -17% Rev
Slide 7: Long-term potential to more than double production
Long-term potential to more than double production Ramaco annual production (in millions of tons) Majority of Berwind development capex in rear-view ~4.0-4.5 mirror. When market conditions allow us to move forward, 6-month slope project to get to the advantaged Poca #4 seam should yield ~0.75 mtpa
Slide 8: Clear path to adding ~2 million tons of permitted growth
Clear path to adding ~2 million tons of permitted growth While growth capex is currently paused due to market conditions, we have a clear path to adding ~1.9 million additional tons of high quality production to our existing base of just under 2 mtpa in 1H20, once we decide to resume growth capex sp
Slide 9: Cash mine costs among the lowest, insider ownership among the highest
Ramaco’s cash mine costs remain among the lowest in the industry, while insider ownership is among the highest Met coal cash costs ($/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 $66 $69 coal cash costs, especially $60
Slide 10: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Net Debt / EBITDA(1) 3.0x Even after adding ~$13 million in new liquidity from low coupon 2.5x promissory notes in April, Ramaco 2.0x has the lowest net debt to EBITDA 1.5x ratio in the coal space. 1.0x 0.5x 0.2x 0.0x Management is committed to Ramaco Pee
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 ─ ~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 13: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a long term - high value portfolio with over 66% of annual production being higher quality blends of Low Vol., Mid Vol., and High Vol. A coal. Current Production Long-Term Production Outlook (1) Thermal, Thermal 4% 2% Medium High High Quali
Slide 14: Solid annual priced commitments for 2020
Solid annual priced commitments for 2020 Current 2020 sales book of ~1.5+ million tons committed and priced for 2020, at an average fixed price of over $93/ton, and ~0.1 million tons committed at Index-based pricing. 2020 Domestic, fixed price business (1) 2020 Export, fixed price business (1) (in 0
Slide 15: 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% Many of Ramaco’s U.S. “met coal” 90% peers actually produce more thermal 80% coal than met coal. 70% 60% 50% Ramaco is one of only two companies 40% 30% that produce 95% or more met coal as 20% a
Slide 16: Met coal spot prices & forward curve had a large decline based on COVID-19
Met coal spot prices & forward curve had a large decline based on COVID-19 Met Coal Spot Price (1) $300 $275 As of August 4, 2020, met coal spot $250 benchmark prices of $107/ton were $225 down roughly 21% YTD, largely on $200 the back of demand destruction due $175 to COVID-19 concerns, as well a
Slide 17: Met coal arb remains wide open
Met coal arb remains wide open Arb currently almost $50/ton: As of August 3, 2020, the metallurgical coal arb is ~$49/ton, which means it is that much Met Coal Arb Into China (1) cheaper for a Chinese steel mill to import coal $350 compared to buying domestically. $300 $250 $200 $150 Arb could sup
Slide 18: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment continues, and is likely to get worse: Met coal capex estimated to fall almost 75% Global Met Coal Capex (1) below peak 2012 levels in 2020. o High cost of capital for many producers. $16 o ESG pressure continues, and is getting $14 worse.
Slide 19: Domestic steel capacity utilization bouncing off 10-year lows
Domestic steel capacity utilization bouncing off 10-year lows U.S. Steel Prices (1) $1,000 $900 Our steel customers are also feeling $800 price and demand pains. $700 $600 As of August 4, 2020, U.S. hot rolled $500 steel prices of $442/ton were down 26% YoY, and at 4+ year lows. $400 Jan-18 May-
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 occupational illnesses are preventable: Ramaco’s COVID-19 Response Non-Contact tem
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: Eagle Underground Mine – 2Q20
Eagle Underground Mine – 2Q20 23
Slide 25: Alma Underground Mine – 2Q20
Alma Underground Mine – 2Q20 24
Slide 26: Elk Creek Preparation Plant – 2Q20
Elk Creek Preparation Plant – 2Q20 25
Slide 27: Ramaco Resources, Inc.
Ramaco Resources, Inc. 250 West Main Street, Suite 1800 Lexington, Kentucky 40507 INVESTOR RELATIONS: info@ramacocoal.com 859-244-7455