Ramaco Resources : Q1 2026 Ramaco Resources, Inc. Earnings Call

Published: 2026-05-13 14:58:08 ET METC

Published on 05/13/2026 at 02:58 pm EDT

Corporate Participants

With that said, let me introduce our Chairman and CEO, Randy Atkins.

I'm going to lead off with our shareholder return and capital allocation strategy, because since the start of the year, we've bought back a significant amount of stock, and that has been for the first time. As we said in our release, thus far this year, we've repurchased about 2.6 million shares of our Class A common stock at an average price of about $14.50 per share, and that represents about 5% of our stock.

Our stock currently continues to trade below levels of last year when we issued equity either directly in a stock issuance last summer or indirectly through our convertible notes last fall. We're also now generally trading on a forward basis in line with our met coal peers based on consensus estimates.

As a dual-platform company, we're currently seeing very little value in our stock price that reflects our rare earth or other

critical mineral assets. So given that backdrop, we're gonna continue to explore whether buying shares represents a

prudent investment of our current cash capital. As of today, we've got about $63 million of additional buying power under

the original $100 million authorization, which the board provided last year. We also ended the first quarter with about

$490 million in liquidity, which was up about 310% year-over-year. Our balance sheet is giving us lots of options to simultaneously consider continued share repurchases, advancing efforts at our Brook Mine, or growth efforts for our low vol coals.

In turning to the met coal business, we continued strong cost control in the same challenging market price conditions

we've now endured for the past year. Our miss for this quarter has all been top line. This was the third consecutive quarter

of cash costs, which were under $100 per ton. In the face of the rising diesel prices this year, we've managed to

accomplish this cost discipline without cutting wages or benefits to our miners, which we regard as the most significant. I would note that on our mine cost, the conflict with Iran has had a related impact, of course, on oil pricing and has escalated the cost of all of our fuel products. We've seen rack pricing increase to as high as $5.45 a gallon across our operations, which is up from about $2.50 at the end of last year.

Based on our historical purchases and usage of diesel and gasoline, on an annualized basis Ramaco realizes about $1.50 per ton of cost increase for each $1 per gallon of diesel fuel increase. This impacts not only direct mine costs, but indirectly through third-party transportation costs for both our raw and clean coal. While we're expecting fuel prices to ultimately subside sometime in the second half, at current levels the impact on our mining cost is approximately $4 per ton when compared to earlier this year in 2026.

Despite our continued solid operational performance, coal markets remain challenged, both in general and especially on pricing. Once again, especially on high vol side. While high vol prices rose modestly in the first quarter of 2026, we still view current indices as unsustainably weak.

One important point that I would like to note, however, is regarding future pricing. We are finally beginning to see some long-anticipated drops in production, both domestically and overseas. We are witnessing everything from bankruptcies, production cutbacks, distressed sale processes, and in all these cases, they involve both large public and private producers. By our estimates, almost 2 million tons came out of the domestic market in 2025. This year, we expect an additional roughly 3 million tons or more to follow. At some inflection point, these production cutbacks will create a supply imbalance, which will begin to impact pricing we hope.

Our growth plans relating to coal are all about the low vol markets. Last quarter, we restarted our Laurel Fork Mine and will be adding an additional third section to our Berwind Mine this summer. At full production, these projects are expected to add about 100,000-200,000 tons of low vol in 2026 and about 0.5 million tons of production additionally in 2027. Our new rail loadout is under construction at our low vol Maben complex and is expected to be complete later this year. When

it opens, we expect to save about $20 per ton on trucking costs. The load out, of course, gives us more options when we consider whether and when to start our Maben 1.5 million ton low vol deep mine project as market conditions dictate.

We've also been a bit quiet for the past few months on our rare earth element and critical minerals front. However, we have not been idle. I expect that in the second half, we will reflect and announce a number of milestones. We have principally been waiting on receipt of the revised conceptual study from Hatch, which we expect in late June, as well as the technical geological report summary coming from Weir, which will follow. Both of these analyses are based on our new patent-pending carbochlorination processing technique.

As we noted last quarter, our internal projections continue to estimate that this new flow sheet process should generate a material increase in incremental revenue and free cash flow. This is compared, of course, to our previously published projections by Fluor about a year ago using a different solvent extraction processing technique. With new independent analysis for the carbochlorination flow sheet coming into focus, we've ramped up efforts regarding potential offtake transactions and non-dilutive third-party financings. I will not get into specifics today, but we will make specific disclosures when those transactions are hopefully complete. Advanced discussions are continuing with both domestic and overseas groups, and these include both public and private counterparties.

A further note, the subsequent more detailed preliminary feasibility study, also being prepared by Hatch, remains on track to be completed in late 2026. Today in Wyoming, our building structure to house the pilot plant seems to be able to be completed this summer, and the fabricated interior equipment will start installation this fall, with full pilot operations starting in 2027, all as previously announced.

Last quarter, I also mentioned that we were exploring some reorganization options for Ramaco's overall corporate structure as we move further into our dual platform. This effort is largely in response to anticipating the startup of our critical mineral operations. We have now taken a number of concrete legal and accounting steps to move this forward and

Disclaimer

Ramaco Resources Inc. published this content on May 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 13, 2026 at 18:57 UTC.