METC — 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, up 310% year-over-year.
• Share Repurchase: Repurchased approximately 2.6 million shares 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 U.S. Central Appalachian met coal peers.
• Sales Performance: Q1 adjusted EBITDA was negative $1.8 million, down from $10 million in Q1 2025. Class A EPS showed a loss of $0.30 compared to a loss of $0.19 in the prior year.
• Production: Q1 production fell modestly, with cash margins of $16 per ton, down $24 per ton year-over-year.

2. Strategic Updates and Business Highlights

• Coal Operations: Continued focus on low-volatility coal markets, with plans to increase production at the Berwind mine and restart the Laurel Fork mine.
• Critical Minerals: Advancements in the Carbochlorination flow sheet for rare earth elements, with expected milestones and pilot plant operations starting in 2027.
• Corporate Structure: Initiated a reorganization into three entities: Ramaco Royalty, Ramaco Critical Mineral Resources, and Ramaco Refining, aimed at enhancing shareholder value and operational clarity.

3. Forward Guidance and Outlook

• Q2 Expectations: Anticipate shipments between 900,000 and 1 million tons, with cash costs expected to be at the higher end of the full-year range due to elevated fuel costs.
• Production Guidance: Reiterated full-year operational guidance, with a focus on maintaining production discipline amidst challenging market conditions.
• Market Conditions: Expect improvements in met coal pricing due to anticipated production cutbacks in the industry, which could create a supply imbalance.

4. Bad News, Challenges, or Points of Concern

• Market Pricing: Coal markets remain weak, particularly for high-volatility coal, with U.S. high-vol indices down $20 per ton year-over-year.
• Cost Pressures: Rising diesel prices, influenced by geopolitical tensions, have increased operational costs, impacting overall profitability.
• Production Discipline: The company is moderating production to manage inventory levels in response to weak market conditions, which could affect revenue.

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 in meeting sales guidance was expressed, citing improved demand and ongoing negotiations for additional contracts.
• Critical Minerals Interest: There is growing interest in specific products like gallium and scandium from potential customers, indicating positive market reception for the Brook Mine's offerings.
• M&A Opportunities: Management is open to opportunistic acquisitions in both met coal and critical minerals, given the current market conditions.

Overall, while Ramaco Resources faces challenges in pricing and cost pressures, its strong liquidity position, strategic initiatives in critical minerals, and disciplined production approach provide a foundation for potential recovery and growth.