METC — Ramaco Resources, Inc.

Summary of Ramaco Resources Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Liquidity: Record liquidity of $272 million, up 237% year-over-year.
• Net Cash Position: $77 million.
• Common Stock Issuance: Raised $200 million.
• Metallurgical Coal Production: Q3 production at 945,000 tons, down from 1.1 million tons in Q2.
• Cash Cost: $97 per ton, with a reduction to $86 per ton in September.
• Adjusted EBITDA: $8.4 million, slightly down from $9 million in Q2.
• Net Loss: $13 million, compared to a $14 million loss in Q2.
• Class A EPS: Loss of $0.25 in Q3 versus a loss of $0.29 in Q2.

2. Strategic Updates and Business Highlights

• Rare Earths Transition: Significant focus on developing a vertically integrated platform for rare earths and critical minerals, including gallium, germanium, and scandium.
• Brook Mine Expansion: Plans to increase the base size of the Brook Mine by 2.5x to approximately 5 million tons, aiming for over 3,400 tons of annual oxide production.
• Strategic Critical Minerals Terminal: Announced the establishment of a terminal for rare earths at the Brook Mine, which will create a fee-based services business.
• Pilot Plant Development: Groundbreaking for a pilot plant to process rare earths, expected to begin operations in 2026.
• Hiring Key Personnel: Appointment of Martin van Wyk as Senior VP of Critical Minerals Processing to enhance expertise.

3. Forward Guidance and Outlook

• Production Guidance: Full-year 2025 production revised to 3.7 million to 3.9 million tons, down from 3.9 million tons due to market conditions.
• Met Coal Sales: Anticipated sales of 3.8 million to 4.1 million tons for the year.
• Rare Earths EBITDA Projection: Estimated potential EBITDA of over $500 million from the rare earth platform by 2028, with an NPV exceeding $5 billion.
• Market Dynamics: Expectation of continued pressure on metallurgical coal prices due to oversupply and competition, particularly from China.

4. Bad News, Challenges, or Points of Concern

• Met Coal Market Pressures: Continued decline in metallurgical coal prices, with U.S. indices down 20% year-over-year.
• Production Adjustments: Decision to idle the Laurel Fork mine due to unfavorable market conditions, impacting overall production guidance.
• Competitive Landscape: Ongoing challenges from cheap Chinese steel and coal flooding the market, affecting pricing and demand.
• Execution Risks: The complexity of transitioning into rare earths and critical minerals poses operational and financial risks.

5. Notable Q&A Insights

• Political Landscape: Discussions on U.S. government support for domestic critical minerals production amidst geopolitical tensions with China.
• Rare Earth Extraction Process: Clarification on the unconventional extraction of rare earths from coal, emphasizing the benign nature of coal as a feedstock.
• Modular Processing Facilities: Potential for ramping up processing capacity earlier than planned, contingent on successful pilot testing.
• Market Dynamics for Scandium: High demand for scandium with pricing discussions ongoing; recent government contracts indicate a significant price premium compared to historical levels.
• Permitting Timeline: Current permitting allows for significant operational flexibility, with plans to expand the permitted area for increased throughput.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a comprehensive overview of Ramaco Resources’ current position and outlook.