METC Ramaco Resources Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported): August 7, 2024

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Ramaco Resources, Inc.

(Exact name of Registrant as specified in its Charter)

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250 West Main Street, Suite 1900

Lexington, Kentucky 40507

(Address of principal executive offices)

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Registrant’s Telephone Number, including area code: (859) 244-7455

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Securities registered pursuant to Section 12(b) of the Act:

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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Emerging growth company  ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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Item 2.02.Results of Operations and Financial Condition.

On August 7, 2024, Ramaco Resources, Inc. (the “Company”) issued a press release reporting its financial and operating results for the second quarter of 2024 (the “Earnings Release”). A copy of the Earnings Release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

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None of the information furnished in this Item 2.02 will be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor will it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”).

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Item 7.01.Regulation FD Disclosure.

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The information set forth in Item 2.02 above and in Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference.

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None of the information furnished in this Item 7.01 will be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor will it be incorporated by reference into any filing under the Securities Act.

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Item 9.01.Financial Statements and Exhibits.

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(d) Exhibits.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Date:August 7, 2024

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Exhibit 99.1

RAMACO RESOURCES REPORTS

SECOND QUARTER 2024 RESULTS

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LEXINGTON, KY., August 7, 2024 -- Ramaco Resources, Inc. (NASDAQ: METC, METCB, “Ramaco” or the “Company”), is a leading operator and developer of high-quality, low-cost metallurgical coal in Central Appalachia and future developer of rare earth and critical minerals in Wyoming. Today it reported financial results for the three months and six months ended June 30, 2024.

SECOND QUARTER 2024 HIGHLIGHTS

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MARKET COMMENTARY / 2024 OUTLOOK

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MANAGEMENT COMMENTARY

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Randall Atkins, Ramaco Resources’ Chairman and Chief Executive Officer commented, “Our second quarter met coal results clearly exceeded our first quarter results both operationally and financially. This was despite continued softness in global coal pricing as shown by the 15% quarterly decline in US met coal indices. Production this quarter of 901,000 tons was a record, increasing by 7% over the first quarter, and was due largely to better productivity, geology, and labor availability. As a result, second quarter non-GAAP mine cash cost per ton sold declined roughly $10 per ton to $108 per ton.

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Operational results should improve throughout the year, as our production growth projects come online. We expect to ramp to a year end exit run rate in excess of 5 million tons on both production and sales with costs hopefully at or below the $100 per ton cash cost range.

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All of our four main growth initiatives for 2024 remain on track and on budget.

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We continue to see operating parallels between 2024 and 2023, where our dynamic was that the second half of the year was significantly stronger than the first half. This was due not only to market driven seasonal steel market pricing, but most importantly also from a production standpoint. We went from being a 3 to a 4 million ton per annum company in the second half of 2023 with a resulting positive financial impact on revenue and costs.

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Should we continue our expected sales cadence this year, the first half of 2024 will be at slightly below a 4 million ton per annum run rate. We expect, however, to exit the year with a run rate on both sales and production above 5 million tons, and with year-end cash costs meaningfully lower than the first half of 2024.

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Unfortunately, despite our positive ramp in production and meaningful decline in cash costs, the global metallurgical coal indices continued to fall last quarter. These meaningfully and negatively impacted both pricing and realizations and of course overall financial performance. Specifically, US low vol and US high vol A indices fell quarterly by roughly 15% on average in the second quarter and by roughly 25% since the start of the year. This was due to a variety of macroeconomic factors. Ultimately the largest was the continued Chinese oversupply of steel into a still muted and slowing world economic environment.

While there have been pockets of modest strength in places like India and even the US, the global steel market is suffering from generally slower growth. The lack of demand, especially in traditional Chinese real estate and infrastructure sectors, has led to lower use of steel in Chinese domestic markets and correspondingly the highest level of Chinese steel exports we have seen in several years. This dumping has in turn hurt pricing in our traditional markets, including the US and Europe because of its impact on domestic steel producers.

It is our hope that the market will move higher in the second half of the year. We saw several high profile mine incidents in recent months which had a temporary impact. This should lead, however, to continued muted supply in the second half of the year, as those producers that suffered major mine outages will likely deplete their inventory.

Second, with both the Indian elections and monsoon season soon behind us, we anticipate Indian buying demand will accelerate in the third quarter. Lastly, it is at least possible that Chinese steel exports will be restricted in many world markets by tariffs and otherwise, which could ultimately boost pricing in our traditional markets. Since this would involve political based economic policy decisions, we shall wait and see.

We are in the midst of the annual 2025 domestic contracting season with North American steel producers. Although it is too early to handicap how terms and prices will evolve for this year, we have entered this year’s season with some wind in our sails. From primarily multi-year export index linked contracts negotiated this year, we have already placed roughly 1.25 million tons of our 2025 production. These would price at average netback pricing of over $150 per ton based against both fixed prices and today’s current forward curve indices.

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As I have always said, we cannot control price, but we can mostly control our production and costs. We continue to stay extremely focused on these fronts. Considering the current pricing weakness, we are reducing some higher cost production by 200,000 tons which modestly impacts annual production and sales guidance. This will have a minimal impact to overall 2024 earnings.

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On our rare earth and critical minerals front, at the Brook Mine in Wyoming we continue to make strong progress. We are in advanced stages of initial mine development as well as related chemical, metallurgical, and mineralogy testing. You will recall our project is unique because we are focused on extracting our REEs and critical minerals from unconventional softer coal and carbon concentrated deposits, not radioactive hard minerals like most others. Based on results from new geological and chemical testing we expect an update of our previous exploration target report in the Fall.

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We have also recently engaged the Fluor Corporation to lead the preparation and completion of our techno economic analysis of the overall commercial aspects of the opportunity, which should be ready later this year. We continue planning toward commencement and construction of our rare earth demonstration facility in mid-2025. The Fluor Corporation and a host of related engineering and testing consultancies will help Ramaco plan this execution.

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Recently, we hosted our fourth annual Ramaco Research Rodeo, or as we call it the “R3”, in Sheridan, Wyoming in partnership with an affiliate of the International Energy Agency. It brought together researchers and leadership from the Department of Energy (DOE), leading scientists from around the world, federal law enforcement, and many more fascinating technology groups. We believe, it is perhaps the world's leading research conference focused on unique coal-to-products research, rare earth element exploration, artificial intelligence, and critical minerals. It also lets us keep abreast of cutting-edge technology in the carbon product, AI and critical mineral fields.

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In summary, on our met coal business, we had a much stronger second quarter both operationally and financially, despite meaningfully lower pricing indices. As the markets remain generally weak, we will continue to operate with a combination of aggression, agility and prudence. We continue to execute on our metallurgical coal production growth strategy, while advancing the commercial development of our Brook Mine REE and critical mineral project.”

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Key operational and financial metrics are presented below (unaudited):

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Differences may occur due to rounding.

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SECOND QUARTER 2024 PERFORMANCE

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In the following paragraphs, all references to “quarterly” periods or to “the quarter” refer to the second quarter of 2024, unless specified otherwise.

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Year over Year Quarterly Comparison

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Overall production in the quarter was 901,000 tons, up 3% from the same period of 2023. The Elk Creek complex produced 508,000 tons, down 16% from last year. We anticipate an increase in third quarter production from Elk Creek compared to the second quarter of 2024. This will come from the new Ram 3 surface/highwall mine and the third section at our Stonecoal Alma mine. The Berwind, Knox Creek, and Maben complexes increased production to a record 393,000 tons in the quarter, up 45% from the same period last year.

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Quarterly pricing was $143 per ton, which was 13% lower compared to $165 per ton in the second quarter of 2023. The decline was largely due to the year-over-year decrease in both US and worldwide metallurgical coal price indices. Cash costs were $108 per ton sold, excluding transportation costs, alternative mineral development costs, and idle mine costs, which was a 2% decrease from the same period in 2023. As a result of the above, cash margins were $35 per ton during the quarter, down from $55 per ton in the same period of 2023. This was based on non-GAAP revenue (FOB mine) and non-GAAP cash cost of sales (FOB mine).

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Sequential Quarter Comparison

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Second quarter of 2024 production was 901,000 tons, up quarterly by 7% due to better productivity, geology, and labor availability. Quarterly sales volume of 915,000 tons was down from 929,000 tons in the first quarter of 2024. The quarterly decline was due to modest transportation constraints in June, which have now largely been alleviated.

Realized quarterly pricing of $143 per ton was down 8% from $155 per ton in the first quarter of 2024 reflecting weaker market conditions and lower index pricing. Key US metallurgical coal indices fell roughly 15% in the second quarter and 25% since the start of 2024.

Quarterly cash costs of $108 per ton compared to $118 per ton in the first quarter of 2024. The meaningful improvement resulted from an increase in production due to better productivity, geology, and labor availability. Quarterly cash margins were $35 per ton, decreasing from $37 per ton in the first quarter of 2024, based on non-GAAP revenue (FOB mine) and non-GAAP cash cost of sales (FOB mine).

BALANCE SHEET AND LIQUIDITY

As of June 30, 2024, the Company had liquidity of $71.3 million, consisting of $27.6 million of cash plus $43.7 million of availability under our revolving credit facility. Liquidity was up from $62.8 million in the same period of 2023.

Quarterly capital expenditures totaled $21.4 million. This declined from the $24.5 million total for the same period of 2023 and increased from the $18.7 million total for the first quarter of 2024. We anticipate capital expenditures to decline meaningfully in the second half of 2024 versus the first half of 2024, especially in the fourth quarter. This decline will come from the addition of new production from the Company’s Ram 3 surface/highwall and Stonecoal Alma mines that began producing in June. Growth capital expenditures associated with those mines have now already been incurred.

The Company’s effective quarterly tax rate was 26%, excluding the $0.8 million favorable impact of discrete tax items. For the second quarter of 2024, the Company recognized income tax expense of $0.9 million.

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The following summarizes key sales, production and financial metrics for the periods noted (unaudited):

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FINANCIAL GUIDANCE

(In thousands, except per ton amounts and percentages)

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Committed 2024 Sales Volume^(a)

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(In millions, except per ton amounts) (unaudited)

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ABOUT RAMACO RESOURCES

Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, and southwestern Virginia and a developing producer of rare earth and critical minerals in Wyoming. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. The Company currently has four active metallurgical coal mining complexes in Central Appalachia and one development rare earth and coal mine near Sheridan, Wyoming in the initial stages of production. In 2023, the Company announced that a major rare earth deposit of primary magnetic rare earths was discovered at its mine near Sheridan, Wyoming. Contiguous to the Wyoming mine, the Company operates a carbon research and pilot facility related to the production of advanced carbon products and materials from coal. In connection with these activities, it holds a body of roughly 60 intellectual property patents, pending applications, exclusive licensing agreements and various trademarks. News and additional information about Ramaco Resources, including filings with the Securities and Exchange Commission, are available at http://www.ramacoresources.com. For more information, contact investor relations at (859) 244-7455.

SECOND QUARTER 2024 CONFERENCE CALL

Ramaco Resources will hold its quarterly conference call and webcast at 9:00 AM Eastern Time (ET) on Thursday, August 8, 2024. An accompanying slide deck will be available at https://www.ramacoresources.com/investors/investor-presentations/ immediately before the conference call.

To participate in the live teleconference on August 8, 2024:

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Domestic Live: (877) 317-6789

International Live: (412) 317-6789

Conference ID: Ramaco Resources Second Quarter 2024 Results

Web link: Click Here

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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 guidance, future events, anticipated revenue, future demand and production levels, macroeconomic trends, the development of ongoing projects, costs and expectations regarding operating results, 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. These factors include, without limitation, unexpected delays in our current mine development activities, the ability to successfully ramp up production at our complexes in accordance with the Company’s growth initiatives, failure of our sales commitment counterparties to perform, increased government regulation of coal in the United States or internationally,

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the further decline of demand for coal in export markets and underperformance of the railroads, the expected benefits of the Ramaco Coal and Maben acquisitions to the Company’s shareholders, the anticipated benefits and impacts of the Ramaco Coal and Maben acquisitions, and the Company's ability to successfully develop the Brook Mine, including whether the increase in the Company's exploration target and estimates for such mine are realized. 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 and Quarterly Reports on Form 10-Q. 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.

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Ramaco Resources, Inc.
Unaudited Consolidated Statements of Operations

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Ramaco Resources, Inc.

Unaudited Consolidated Balance Sheets

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Ramaco Resources, Inc.

Unaudited Statement of Cash Flows

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Reconciliation of Non-GAAP Measures (Unaudited)

Adjusted EBITDA

Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies. We believe Adjusted EBITDA is useful because it allows us to evaluate our operating performance more effectively.

We define Adjusted EBITDA as net income plus net interest expense; equity-based compensation; depreciation, depletion, and amortization expenses; income taxes; certain non-operating expenses (e.g., income tax penalties and charitable contributions), and accretion of asset retirement obligations. Its most comparable GAAP measure is net income. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as a substitute for GAAP measures of performance and may not be comparable to similarly titled measures presented by other companies.

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Non-GAAP revenue and cash cost per ton

Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs including demurrage costs, divided by tons sold. Non-GAAP cash cost per ton sold (FOB mine) is calculated as cash cost of coal sales less transportation costs, alternative mineral development costs, and idle and other costs, divided by tons sold. We believe revenue per ton (FOB mine) and cash cost per ton (FOB mine) provide useful information to investors as these enable investors to compare revenue per ton and cash cost per ton for the Company against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices and costs from period to period excluding the impact of transportation costs, which are beyond our control, and alternative mineral costs, which are more developmentally focused currently. The adjustments made to arrive at these measures are significant in understanding and assessing the Company’s financial performance. Revenue per ton sold (FOB mine) and cash cost per ton sold (FOB mine) are not measures of financial performance in accordance with GAAP and therefore should not be considered as a substitute for revenue and cost of sales under GAAP. The tables below show how we calculate non-GAAP revenue and cash cost per ton:

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Non-GAAP revenue per ton (unaudited)

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Non-GAAP cash cost per ton (unaudited)

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We do not provide reconciliations of our outlook for cash cost per ton to cost of sales in reliance on the unreasonable

efforts exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K. We are unable, without unreasonable efforts, to forecast certain items required to develop the meaningful comparable GAAP cost of sales. These items typically include non-cash asset retirement obligation accretion expenses, mine idling expenses and other non-recurring indirect mining expenses that are difficult to predict in advance in order to include a GAAP estimate.

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