METCB — Ramaco Resources, Inc.

Summary of Ramaco Resources Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Liquidity: Ended Q1 with $490 million in liquidity, a 310% increase year-over-year.
• Share Repurchases: Approximately 2.6 million shares repurchased at an average price of $14.50, representing about 5% of outstanding shares.
• Cash Costs: Maintained cash costs at $98 per ton, placing them in the first quartile among Central Appalachian met coal peers.
• Adjusted EBITDA: Reported a negative $1.8 million compared to $10 million in Q1 2025.
• Earnings Per Share (EPS): Class A EPS loss of $0.30, compared to a loss of $0.19 in the same period last year.
• Production and Sales: Q1 production fell modestly; cash margins decreased to $16 per ton from $40 per ton year-over-year.

2. Strategic Updates and Business Highlights

• Coal Operations: Continued focus on low-vol markets with plans to restart the Laurel mine and expand the Berwind mine, expected to add 100,000 to 200,000 tons of low-vol production in 2026.
• Critical Minerals: Advancements in the Carbochlorination flow sheet for rare earth elements, with a revised conceptual study expected in late June.
• Corporate Structure Reorganization: Formation of separate entities for Ramaco Royalty, Ramaco Critical Mineral Resources, and Ramaco Refining to enhance shareholder value and operational flexibility.
• Rail Loadout Project: Under construction at the Maben complex, expected to save $20 per ton on trucking costs.

3. Forward Guidance and Outlook

• Production Guidance: Reiterated operational guidance for 2026, expecting shipments of 900,000 to 1 million tons in Q2.
• Cost Expectations: Anticipated cash costs towards the higher end of the full-year range due to elevated fuel prices.
• Market Outlook: Optimistic about potential market improvements in met coal driven by supply contractions and increased demand from steel production.

4. Bad News, Challenges, or Points of Concern

• Market Pricing: Continued weakness in coal pricing, particularly for high-vol coal, with U.S. high-vol indices down $20 per ton year-over-year.
• Cost Pressures: Rising diesel prices, influenced by geopolitical factors, have increased operational costs by approximately $4 per ton.
• Production Discipline: Adjustments in production levels to manage inventory amid challenging market conditions.
• Negative EBITDA: The company reported negative adjusted EBITDA for the quarter, highlighting ongoing financial pressures.

5. Notable Q&A Insights

• Cost Trends: Management indicated that the restart of the Berwind mine would not significantly increase costs, as it is one of their lower-cost operations.
• Sales Commitments: Confidence expressed in securing additional sales to meet annual guidance, with 90% of planned production already committed.
• Interest in Critical Minerals: Growing interest in specific products like gallium and scandium, with ongoing discussions for potential offtake agreements.
• M&A Opportunities: Management open to opportunistic acquisitions in both met coal and critical minerals sectors, given the current market conditions.
• Testing Capacity: Plans to alleviate third-party testing backlogs by ramping up internal testing capabilities at their Wyoming facility.

Overall, while Ramaco Resources faces challenges in market pricing and rising costs, the company is strategically positioned with a strong balance sheet, ongoing operational improvements, and a focus on critical minerals that may provide future growth opportunities.