METCB — Ramaco Resources, Inc.

Ramaco Resources Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted EBITDA: $6 million, down from $9 million in Q2 2025.
• Cash Margin: $17 per ton, decreased from $20 per ton year-over-year.
• Realized Price: $116 per ton, a 6% decline compared to $123 per ton in Q2 2025.
• Cash Costs: $99 per ton, maintaining costs below $100 for the fourth consecutive quarter despite rising diesel prices.
• Liquidity: Over $400 million, with $66 million used for share buybacks (8% of Class A shares).
• Production Guidance: Full-year 2026 production revised to 3.6 to 3.9 million tons, down from 3.7 to 4.1 million tons.

2. Strategic Updates and Business Highlights

• Brook Mine Project: Significant progress with the Hatch conceptual study indicating potential NPV of $3.4 billion to $8 billion and average adjusted EBITDA of $600 million to $1.3 billion. The project aims to shift from upstream feedstock to midstream refining of critical minerals.
• Carbochlorination Process: Successfully developed to extract high-value minerals (gallium, scandium, germanium) from coal, with initial tests showing over 90% extraction rates.
• Low-Vol Production Growth: Plans to increase low-vol production to 50% of total output, with expansions at Maben and Berwind mines expected to add significant capacity by 2027.
• E-Waste Integration: Exploring the incorporation of e-waste into the feedstock to enhance mineral yields.

3. Forward Guidance and Outlook

• Production and Sales: Anticipated coal shipments for Q3 2026 between 950,000 to 1.1 million tons. Full-year sales guidance adjusted to 4.0 to 4.3 million tons.
• Cash Cost Guidance: Expected to remain in the range of $96 to $99 per ton for the full year.
• Capital Expenditures: Increased guidance to $92 to $97 million, reflecting investments in low-vol growth projects.
• Market Dynamics: Anticipated stability in pricing due to declining global supply of prime hard coking coal.

4. Bad News, Challenges, or Points of Concern

• Market Weakness: Continued challenges in the high-vol coal market, with excess domestic production leading to lower realized prices.
• Increased Costs: Rising diesel prices have added approximately $3 per ton to production costs, impacting margins.
• Delayed Timelines: The Brook Mine project timeline has been pushed back due to supply chain issues, particularly related to large power transformers.
• Production Discipline: Proactively idling sections of high-cost operations to manage overall production costs amidst market pressures.

5. Notable Q&A Insights

• Realized Prices: Limited upside in realized prices anticipated until a shift towards low-vol production materializes.
• Offtake Agreements: Expectation of MOU announcements in the near term, with customer feedback indicating a desire for long-term domestic supply stability.
• E-Waste Potential: Early estimates suggest that incorporating e-waste could significantly enhance financial metrics, with further studies planned.
• Separation of Rare Earths Business: Discussions around potential separation of the rare earths business are ongoing, contingent on risk mitigation and revenue generation.

Overall, Ramaco Resources is navigating a challenging market environment while making strategic advancements in critical minerals and low-vol coal production, with a focus on optimizing costs and enhancing shareholder value.