Ramaco Resources, Inc. (NASDAQ:METC) (“Ramaco Resources”) today
announced fourth quarter 2016 and full year 2016 results that
reflect the continued development of its metallurgical coal
properties.
On February 8, 2017, Ramaco Resources completed its
initial public offering (the “Offering”) of 6,000,000 shares of its
common stock. The selling stockholders sold 2,200,000
shares and Ramaco Resources did not receive any proceeds from the
sale of those shares. The remaining 3,800,000 shares of
common stock that were sold resulted in net proceeds of
approximately $43.7 million to Ramaco Resources, after deducting
underwriting discounts and commissions and offering expenses.
The Offering capped Ramaco Resources’
capitalization program that began in August 2016, when it completed
the private issuance of $90 million of Series A preferred units to
Yorktown Energy and Energy Capital Partners. This financing
provided net proceeds of approximately $84 million after expenses
and repayment of two related party notes. At December 31, 2016,
Ramaco Resources had liquidity of approximately $65 million.
“We have been very fortunate to have private equity
investors who believe in the future of the metallurgical coal
markets, our investment timing and our ability to execute on our
plan. We have now built on that investment with our successful IPO
last month, making us the newest U.S. public coal company, and with
the commencement of our mining strategy,” said Randall Atkins,
Ramaco Resources’ Executive Chairman.
“The significant liquidity provided from both the
preferred financing in 2016 and our IPO are expected to fund the
complete build-out of planned low cost metallurgical coal projects
through the end of 2018, as well as provide over $21 million in
additional liquidity for acquisitions, operations or other
corporate activity,” Atkins continued.
With mining operations not having commenced until
late December 2016, Ramaco Resources reported a net loss of $1.5
million for the quarter ending December 31, 2016, with revenues of
$3.8 million during the period. Sales of purchased coal for export
through Ramaco Resources’ Knox Creek preparation plant accounted of
$2.2 million of its revenue during the quarter. Processing
third-party coal, primarily under a processing contract acquired
with the plant, accounted for the balance of the revenues for the
period. Cost of sales and processing totaled $3.3 million for the
same period, thus providing Ramaco Resources with a gross margin of
$0.5 million. Other expenses during the quarter totaled $2.1
million, of which $0.5 million is related to professional fees and
$1.2 million of general and administrative costs associated with
the continuing buildup of Ramaco Resources’ properties.
For the full calendar year, Ramaco Resources
reported a net loss of $7.5 million ($0.19 per share on a pro forma
basis) on revenues of $5.2 million. Sales of third-party coal
generated $2.2 million in revenues while $3.0 million was generated
from processing coal for third parties. Ramaco Resources’ operating
and other expenses totaled $8.3 million for 2016. The bulk of these
other expenses were professional fees of $4.3 million which
included expensing of deferred offering costs related to a 2015
proposed financing that was not completed. General and
administrative expenses rose to $3.1 million as Ramaco Resources
continued to build staff in response to its on-going development
plans.
“Our strategic acquisition of the Knox Creek
preparation plant in July 2016 was fortuitous,” said Michael
Bauersachs, President and Chief Executive Officer of Ramaco
Resources. “In addition to acquiring an operational preparation
plant for little cash consideration, Knox Creek also provided
approximately 61 million tons of additional metallurgical coal
reserves. It gave us the ability to wash the raw coal production
from our Berwind property, which we expect to begin producing
mid-year, but also to purchase, process and ship coal for our own
account into the surging export market during this period. We began
third party trading activities in late October and continued into
the first quarter of 2017,” Bauersachs concluded.
In 2016, Ramaco Resources invested $24.8 million in
its planned mining operations and supporting infrastructure,
including $9.5 million invested in the new Elk Creek preparation
plant and rail line. When completed in Q3 2017, Ramaco Resources’
total investment in this facility will exceed $32 million. Total
2016 capital expenditures also included $10.3 million of investment
in mining equipment.
By year-end, Ramaco Resources had purchased over
80% of all the equipment that it will need to open its next two
underground mines at Elk Creek as well as its first surface and
highwall miner mines. All mines at Elk Creek are scheduled to begin
production later in 2017 and early 2018.
About Ramaco Resources, Inc.
Ramaco Resources is an operator and developer of
high-quality, low cost metallurgical coal in central and southern
West Virginia, southwestern Virginia and southwestern
Pennsylvania.
Conference Call
Ramaco Resources will hold its quarterly conference
call and webcast at 9:00 AM Eastern Time (ET) on Wednesday, March
29, 2017 to present its results for the fourth quarter and full
year 2016 results and discuss its business and market outlook for
2017.
The conference call can be accessed by calling
1-844-852-8392 domestically or 1-703-639-1226 internationally. The
webcast for this release will be accessible by visiting
http://edge.media-server.com/m/p/pcih8ojw.
Dissemination of Company
Information
Ramaco Resources intends to make future
announcements regarding its developments and financial performance
through its website at www.ramacoresources.com.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements represent Ramaco Resources’ expectations
or beliefs concerning future events, and it is possible that the
results described in this news release will not be achieved. These
forward-looking statements are subject to risks, uncertainties and
other factors, many of which are outside of Ramaco Resources’
control, which could cause actual results to differ materially from
the results discussed in the forward-looking statements. Any
forward-looking statement speaks only as of the date on which it is
made, and, except as required by law, Ramaco Resources does not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Ramaco Resources to predict all such factors. When
considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements found in
Ramaco Resources’ filings with the Securities and Exchange
Commission ("SEC"), including its Annual Report on Form 10-K. The
risk factors and other factors noted in Ramaco Resources’ SEC
filings could cause its actual results to differ materially from
those contained in any forward-looking statement.
Ramaco Resources,
Inc.Consolidated Balance Sheet |
|
|
|
|
December 31, 2016 |
December 31, 2015 |
Assets |
|
|
Current
assets: |
|
|
Cash and
cash equivalents |
$ |
5,196,914 |
|
$ |
993,627 |
Short-term investments |
|
55,237,747 |
|
|
— |
Accounts
and notes receivable |
|
914,741 |
|
|
— |
Inventories |
|
1,518,638 |
|
|
— |
Prepaid
expenses |
|
388,921 |
|
|
261,291 |
Total
current assets |
|
63,256,961 |
|
|
1,254,918 |
|
|
|
Property,
plant and equipment – net |
|
46,433,726 |
|
|
13,958,283 |
Long-term
investments |
|
5,199,077 |
|
|
— |
Advanced
coal royalties |
|
2,050,000 |
|
|
2,050,000 |
Deferred
offering costs |
|
2,247,974 |
|
|
3,089,079 |
Other |
|
21,354 |
|
|
— |
Total Assets |
$ |
119,209,092 |
|
$ |
20,352,280 |
Liabilities and Members’ Equity (Deficit) |
|
|
Liabilities: |
|
|
Current
liabilities: |
|
|
Accounts
payable |
$ |
8,955,884 |
|
$ |
640,480 |
Accrued
expenses |
|
1,174,904 |
|
|
81,989 |
Distributions payable |
|
3,905,224 |
|
|
— |
Asset
retirement obligations |
|
693,796 |
|
|
— |
Note
payable |
|
500,000 |
|
|
— |
Financed
insurance payable |
|
127,048 |
|
|
192,078 |
Total
current liabilities |
|
15,356,856 |
|
|
914,547 |
|
|
|
Asset
retirement obligations |
|
9,434,838 |
|
|
2,095,073 |
Due to
Ramaco Carbon, LLC |
|
— |
|
|
10,683,010 |
Note
payable- Ramaco Carbon, LLC |
|
10,629,275 |
|
|
— |
Total
liabilities |
|
35,420,969 |
|
|
13,692,630 |
Commitments and contingencies |
|
— |
|
|
— |
Series A
preferred units |
|
88,773,933 |
|
|
— |
Members’
equity (deficit) |
|
(4,985,810 |
) |
|
6,659,650 |
Total Liabilities and Members’ Equity
(Deficit) |
$ |
119,209,092 |
|
$ |
20,352,280 |
Ramaco Resources,
Inc.Consolidated Statement of
Operations |
|
|
|
|
Quarter ended December 31, |
Year ended December 31, |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Revenue |
|
|
|
|
Coal
sales |
$ |
2,166,806 |
|
$ |
— |
|
$ |
2,166,806 |
|
$ |
— |
|
Coal
processing |
|
1,583,732 |
|
|
— |
|
|
3,048,853 |
|
|
— |
|
Total
revenue |
|
3,750,538 |
|
|
— |
|
|
5,215,659 |
|
|
— |
|
Cost and
expenses: |
|
|
|
|
Cost of
coal sales |
|
1,795,845 |
|
|
— |
|
|
1,795,845 |
|
|
— |
|
Cost of
coal processing |
|
1,476,118 |
|
|
— |
|
|
2,600,874 |
|
|
— |
|
Other
operating costs and expenses |
|
51,424 |
|
|
683,052 |
|
|
416,292 |
|
|
934,154 |
|
Asset
retirement obligation accretion |
|
94,516 |
|
|
19,675 |
|
|
229,304 |
|
|
74,516 |
|
Depreciation, depletion and amortization |
|
191,165 |
|
|
— |
|
|
251,684 |
|
|
— |
|
Professional fees |
|
536,665 |
|
|
356,840 |
|
|
4,325,503 |
|
|
406,152 |
|
General
and administrative |
|
1,214,530 |
|
|
372,873 |
|
|
3,125,941 |
|
|
918,269 |
|
Total
cost and expenses |
|
5,360,263 |
|
|
1,432,440 |
|
|
12,745,443 |
|
|
2,333,091 |
|
|
|
|
|
|
Operating
loss |
|
(1,609,725 |
) |
|
(1,432,440 |
) |
|
(7,529,784 |
) |
|
(2,333,091 |
) |
|
|
|
|
|
Interest
expense |
|
(50,043 |
) |
|
(1,922 |
) |
|
(124,117 |
) |
|
(1,922 |
) |
Interest
and dividend income |
|
124,681 |
|
|
— |
|
|
138,752 |
|
|
— |
|
|
|
|
|
|
Net
loss |
$ |
(1,535,087 |
) |
$ |
(1,434,362 |
) |
$ |
(7,515,149 |
) |
$ |
(2,335,013 |
) |
|
|
|
|
|
|
|
Unaudited
pro forma basic and diluted loss per share |
|
|
$ |
(0.19 |
) |
|
For more information, contact:
Michael P. Windisch, Chief Accounting Officer, Ramaco Resources, Inc.
859-244-7455
mpw@ramacocoal.com
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