Ramaco Resources, Inc. · NASDAQ:METC
Ramaco Resources — Q2 2021 Earnings Presentation
26 slides from Ramaco Resources's earnings presentation, August 2021
Slide 1: Ramaco Resources 2nd Quarter 2021 Investor Presentation
August Ramaco Resources 2021 2nd 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
KN RAMACO RESOURCES Key Investment Highlights 2
Slide 4: Ramaco overview
Ramaco overview Ramaco is a “pure play” metallurgical coal company. We sold no coal to power plants in 2020, which are a major source of greenhouse gas emissions. Instead, we are a key supplier to the United States and international steel industry. We have ~261 million tons of high- quality metallur
Slide 5: Investment highlights
Investment highlights Ramaco has built a sustainable, low-cost met coal platform, with ample liquidity, a net cash position, minimal AROs, no legacy liabilities, and a strong growth pipeline. 1 Portfolio of high- Large, high-quality ~261 million ton met coal reserve base across High-Vol. and Low-V
Slide 6: YTD financial highlights
YTD financial highlights Net income was $14.1 million (EPS of $0.32), while adjusted EBITDA was $29.6 million for the first half of 2021. Adjusted EBITDA was our second best first half for the Company since our inception, driven by record production and continued low cash costs. After quarter-end, t
Slide 7: Long-term potential to roughly double production
Long-term potential to roughly double production Ramaco annual production (in millions of tons) Majority of Berwind development capex is in our rear-view mirror. ~4.0-4.5 The Feb. 2021 announcement to move forward with the Berwind slope project to get to the advantaged Poca #4 seam should yield ~0
Slide 8: Clear path to adding ~2 million tons of permitted growth
Clear path to adding ~2 million tons of permitted growth In Feb. 2021, our Board of Directors gave the “green light” to our Phase #1 growth expansion. This is expected to add ~1 million tons per year of incremental production compared to our current ~2 million ton per year production base at Elk Cre
Slide 9: First quartile cash mine costs; 2021 guidance improved again
First quartile cash mine costs; 2021 guidance improved again Met coal cash costs ($/short ton FOB mine) (1) $120 $110 $107 $100 First half 2021 cash costs at our $90 flagship Elk Creek complex were $80 $72 $66 $61/ton. This is firmly in the first $70 $59 $61 $62 quartile of the U.S. met coal cash
Slide 10: Ramaco has a best-in-class balance sheet
Ramaco has a best-in-class balance sheet Net (Cash) Debt / EBITDA(1) 2.5x 2.0x Ramaco is in the enviable position of being in the only net cash 1.5x position among its peer group. 1.0x 0.5x 0.0x (0.1x) Management is committed to (0.5x) maintain a conservative “low debt- Ramaco Peer 1 Peer 2 Peer
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 ─ ~112 million tons of High Vol. Met reserves ─ ~50 million tons of Low Vol. Met ─ ~94 million tons of High Vol. A reserves ─ 20+ year reserve life in relatively thick coal reserves
Slide 13: Berwind and Big Creek investment highlights
Berwind and Big Creek investment highlights Two New Mines To Increase Production Capacity By ~50%: In Feb. 2021, our Board of Directors approved the expenditure to open two new mines, Berwind and Big Creek, which are expected to add almost one million tons per year of additional low and mid-vol pr
Slide 14: Metallurgical quality breakdown
Metallurgical quality breakdown Growth is focused to create a long-term, high value portfolio with roughly two-thirds of annual 2022-2023 production being higher quality Low Vol., Mid Vol., and High Vol. A coal. Berwind and Big Creek mines will provide a material uplift to the quality of our overall
Slide 15: Ramaco is a pure-play met coal producer
Ramaco is a pure-play met coal producer The majority 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. 100% 90% 80% 70% Ramaco is one of only two U.S. 60% publicly traded “pure-play” met coal 50% companies, based on 2
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) As of July 30, 2021, U.S. High Vol A $250 met coal spot prices have risen 45% $225 YTD, mainly on the back of $200 increased global economic activity, in part due to large global economic $175 stimulus. $1
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 $80/ton: As of July 30, 2021, the traditional metallurgical coal arb (Australian pricing versus Chinese pricing) is over $80/ton, which Met Coal Arb Into China (1) is not far off the record. This means it is that much cheap
Slide 18: Domestic steel market roaring back and breaking records
Domestic steel market roaring back and breaking records U.S. Steel Prices (1) $2,000 As of July 30, 2021, U.S. hot rolled $1,800 steel prices have risen more than $1,600 300% since this time last year, to a $1,400 record of over $1,850/ton. This is on $1,200 the back of strong automotive, $1,000 i
Slide 19: Supply rationalization accelerates
Supply rationalization accelerates Supply underinvestment and lack of funding continues, and is likely to get worse: Met coal capex 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 many p
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
KN 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 1,975 - 2,050 1,548 Triad 125 - 175 — Berwind 25 - 75 147 Big Creek 50 - 100 — Total 2,175 - 2,400 1,695 Sales Mix (a) Metallurgical 2,175 - 2,350 1,749 Steam 25 - 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: [email protected] 859-244-7455