METC — Ramaco Resources, Inc.

Summary of Ramaco Resources Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue and Earnings: Q2 adjusted EBITDA was $6 million, down from $9 million in Q2 2025. Class A EPS showed a loss of $0.26, slightly improved from a loss of $0.29 a year ago.
• Cash Costs: Cash cost per ton sold was $99, maintaining sub-$100 costs for the fourth consecutive quarter, despite rising diesel prices.
• Liquidity: The company ended the quarter with over $400 million in liquidity, following the repurchase of 8% of Class A shares for approximately $66 million.
• Production Guidance: Full-year 2026 production guidance was reduced to 3.6-3.9 million tons from 3.7-4.1 million tons, with sales guidance adjusted to 4.0-4.3 million tons.

2. Strategic Updates and Business Highlights

• Critical Minerals Initiative: The Hatch conceptual study for the Brook Mine was released, indicating significant potential with an NPV of $3.4 billion to $8 billion and average adjusted EBITDA of $600 million to $1.3 billion. The project aims to produce critical minerals, particularly for the semiconductor industry.
• Carbochlorination Process: The company is advancing its carbochlorination method to extract high-value critical minerals, with initial tests showing over 90% extraction rates.
• Metallurgical Coal Operations: Ramaco plans to expand low-vol production, aiming for it to constitute 50% of total output by 2027. The Maben complex is set to add 600,000 tons of production by the end of 2027.

3. Forward Guidance and Outlook

• Production and Sales: Anticipated coal shipments for Q3 2026 are between 950,000 to 1.1 million tons. Full-year cash cost guidance remains at $96 to $99 per ton.
• Capital Expenditures: Expected to increase to $92-$97 million, reflecting investments in low-vol growth projects.
• Market Conditions: The company expects stable pricing in the second half of the year, with low-vol coal demand remaining strong.

4. Bad News, Challenges, or Points of Concern

• Market Weakness: Continued weakness in the high-vol coal market with oversupply issues. The company has idled one section of its high-vol Stonecoal mine.
• Rising Costs: Diesel prices increased significantly, impacting overall production costs. Diesel costs added approximately $3 per ton produced in Q2.
• Delayed Timelines: The Brook Mine project timeline has been extended due to supply chain issues, particularly concerning large power transformers.

5. Notable Q&A Insights

• Offtake Agreements: The company expects to finalize several MOUs for offtake agreements in the near term, with discussions ongoing for various critical minerals.
• E-Waste Potential: The integration of e-waste into the feedstock could significantly enhance financial metrics, with interim studies expected by year-end.
• Market Demand: There is strong demand for critical minerals, particularly gallium and germanium, driven by the semiconductor and defense industries. The company is actively engaging with potential customers to secure long-term supply agreements.
• Future Separation of Businesses: Discussions about potentially separating the rare earths business were mentioned, contingent on achieving more revenue stability and risk mitigation.

This earnings call reflects Ramaco Resources' strategic pivot towards critical minerals while navigating challenges in the metallurgical coal market, with a focus on maintaining financial health and operational efficiency.