Good day, and welcome to the Ramaco Resources, Inc. First Quarter 2025 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jeremy Sussman, Chief Financial Officer. Please go ahead.

Thank you. On behalf of Ramaco Resources, I’d like to welcome all of you to our first quarter 2025 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO; Chris Blanchard, our EVP for Mine Planning and Development; and Jason Fannin, our Chief Commercial Officer. Before we start, I’d like to share our normal cautionary statement. Certain items discussed on today’s call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco’s expectations concerning future events. These statements are subject to risks, uncertainties, and other factors, many of which are outside of Ramaco’s 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 does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I’d also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss today in our press release, which can be viewed on our website, www.ramacoresources.com. Lastly, I’d encourage everyone on this call to go on to our website and download today’s investor presentation. With that said, let me introduce our Chairman and CEO, Randy Atkins.

Good morning, and thanks to everyone for joining the call. We have a lot of information to share this morning on both our met coal business as well as our critical minerals project. So let’s start on the met coal side. Despite the macro gloom on the overall market, we have continued to perform strongly on the operational front. The first quarter of ‘ 25 saw the continued decline in both U.S. and Australian met coal prices. That decline mirrored our decline in earnings this quarter, despite our solid operational performance in the face of some difficult weather conditions. The same macro causation continues to negatively impact world steel markets. Again, that is the Chinese overproduction of steel, combined with its below-market sales into both the developed and developing world. Unfortunately, this is the same theme we have mentioned for the past few quarters. It’s also a reality that may continue to be with us until there is a rebalancing in the world steel markets. Even with this headwind on pricing, Ramaco’s first quarter results continue to be strong from a number of metrics and by somewhat punching above our weight. While Jeremy will go into more detail, I’m proud to say that we enjoyed both the highest cash margins per ton and the highest realized sales price among our publicly traded peer group this quarter, all of whom have already reported Q1 results. Somewhat surprisingly, our adjusted EBITDA this quarter was also higher than the met coal results of 3 of our 4 larger public peers, with far larger production than us. Our operational results were in line with our theme from the past few quarters. We can’t control pricing, yet we do have some ability to manage production cost and sales. Again, my continued kudos to our operational…

Thank you, Randy. As you noted, first quarter 2025 operational results were again solid, with cash cost per ton sold under $100 for the second straight quarter and a record level of quarterly production. Unfortunately, metallurgical coal price indices have continued to decline. This caused both the sequential and year-on-year decline in earnings despite the operating achievements. To get into specifics, Q1 adjusted EBITDA was $10 million compared to $29 million in Q4. Q1’s net loss of $9 million compared to Q4 net income of $4 million. Class A EPS showed a $0.19 loss in Q1 versus a $0.06 gain in Q4. As I mentioned, the primary reasons for lower Q1 EBITDA and EPS were the $7 per ton sequential decline in our quarterly realized pricing and 175,000 tons decline in tons sold. On the pricing front, key U.S. metallurgical coal indices fell 3% in Q1 versus Q4. The Australian benchmark index fell roughly 9% during the same period. On the volume front, weak market conditions caused us to be selective with spot sales in the first quarter. On the operational front, we actually had a record quarter of production, annualizing to 4 million tons despite losing roughly 150,000 tons due to challenging weather conditions. As a reminder, we experienced freezing temperatures for 2 weeks in January and then saw historic flooding in February. Thus, the decision to build inventory for a better market was deliberate. At the same time, we continue to perform well on the cost front with cash cost of sales coming in at $98 in Q1, which was the second straight quarter of sub-$100 per ton costs. These levels are firmly within the first quartile of U.S. metallurgical coal cash cost curve. As important as it is to control costs, it is equally important to be…

Thank you, Jeremy, and thanks to everyone who is able to join us this morning. As Randy and Jeremy have both noted, despite our continued operational successes on the mining side, the continued weakness in the global met markets and the dynamics of the steel business continue to hinder our financial performance. As we mentioned briefly, adverse weather in January and February, extreme freezing temperatures, and historic flooding, respectively, caused us to miss our production targets in those 2 months by approximately 150,000 clean tons. This production miss, coupled with the idle costs and cleanup and recovery efforts incurred at the mines, contributed to the slight uptick in our mine operating cash costs from the fourth quarter of ‘24 to the first quarter of this year. Performance at our High-Vol Elk Creek complex has continued to surpass expectations on a cash cost basis overall. Correcting for the lost tons at Elk Creek due to the weather events, the fully ramped Elk Creek complex is operating right at a 3 million ton per year production rate. That translates into average cash cost of production significantly below $100 per ton. However, given the market weakness in both price and demand, we are looking at potential areas to further improve cost performance at Elk Creek as well as company-wide. As Randy noted, we do not want to produce tons simply for the sake of producing them. At our Berwind complex, during the first quarter, we began construction of the next ventilation shaft for the continued expansion of that mine. The completion and the activation of this shaft in the next several weeks will allow us the optionality to relatively quickly start the new #3 and #4 producing super sections once we get clarity on better market conditions. Equally important at Berwind, we have…

Thanks Chris and good morning everyone. Today I will share our views on our sales outlook and current posture, coking coal and steel markets, to finish up with some comments around our initial RVD and critical minerals marketing and sales endeavors. Starting with an overview of our sales book in the various markets we serve, the U.S. and Canada have domestic end user, are taking shipments at a ratable pace, consistent with our expectations and structural schedules. This steady case provides continued support for our overall sales book, even in the face of solid seaborne pricing. At the start of the second quarter, we get the commitments for 3.7 million tons. North American buyers account for 1.6 million tons at an average fixed price of $152 per ton. First quarter seaborne shipments of 0.6 million tons achieved an average fixed price of $111 per ton. In total, our fixed price book for 2025 stands at 2.2 million tons at a blended price of $141 per ton. With an additional 1.5 million tons sold to seaborne customers at index length pricing for later delivery. Most of our remaining uncommitted volumes are tied to planned back half production, giving us the flexibility to layer in additional sales at attractive risk reward price points. With market headwinds persisting, we are optimizing our production plan to limit lower price spot sales and focus on the highest return opportunities. This flexible, systematic approach is designed to enhance margins, target the best sales opportunities, and continue serving our long-term customers, positioning Ramaco for the future growth. As we look at the macro, global coking coal markets have continued to weaken from a pricing standpoint, with index averages down approximately 6% since the start of Q1. As of May 9th, the Australian premium low-vol index currently sits…

[Operator Instructions] The first question comes from Nick Giles with B. Riley Securities. Please go ahead.

Yes. Thank you, operator and good morning everyone. Guys thanks so much for the detailed update this morning. My first question was on the met coal side. So, second quarter guidance of 900,000 tons at the midpoint. So, as I am trying to back into what your guidance could imply for the second half, I believe I am getting to around at least a 25% improvement from 2Q to the 3Q, 4Q levels. So, I just was curious how we should think about sales mix, cost improvements, etcetera, as we move into the second half? Thank you very much.

I am going to let Jeremy answer that, but first let me apologize, we are having some audio issues that we have heard from several of you on the line. So, we are not quite sure how to fix that, but hopefully you can take a look at the transcript and that will clarify whatever remarks you weren’t able to hear clearly.

Yes. Thanks Randy. And good question, Nick. So, yes, our Q2 sales guidance of 850,000 tons to 950,000 tons obviously does imply a pickup in the back half of the year. So, I think of Q2, again, possibly towards the higher end of the range with the lower tonnage, w are just simply not going to force tons into a challenging market right now, but we do, as we said in our remarks, expect the market to pick up in the back half of the year. We are already starting to certainly see some supply for them. So, I would sort of think about Q3 probably up, let’s call it in the 1 million, 1.1 million range versus Q2. Then you kind of back into the map in Q4, I know that’s a pretty widespread, but certainly we have built an inventory and if the market does improve, we have got an ability to ship fair apples and import corn [Technical Difficulty]

Jeremy, that’s helpful. I caught most of that, but might have just lost the last bit, but I think I got the message there. So, I appreciate it. My second question, I did want to turn to the rare earth side, and earlier this month, there was a second installment of critical mineral production projects that were named as FAST-41 projects. And so my question is, do you think that the Brook Mine could be included on such a list? And if so, what could the potential benefits be of any inclusion? Could there be Federal funds that could either accelerate or improve the economics of the project? Thank you very much.

Sure Nick. This is Randy. So, sort of two parts to your question, the first is that the projects that were named as being fast-track are ones that have permit issues. So, there is a new entity called the Permitting Council that was the one that was essentially responsible for identifying projects that could be put on, as they said, a fast-track to try to resolve, frankly, Federal permitting issues related to either Federal lands, environmental questions or things of that nature. We were not put on that list because frankly, we didn’t qualify. We already have a permit. So, we are kind of moved beyond that. But to the second part of your question about Federal assistance, so we have been in touch with another new entity called the National Energy Dominance Council. They are certainly aware of our project as are several rungs above them on the Federal side. And once we get to a point where we actually understand the financial dimensions of what we are talking about in terms of the overall development, then we intend to sit down and see what different types of alternatives might be available on the Federal level, be they financing, be they procurement, be they some form of relationship with certain parts of the defense establishment, there is a variety of different avenues that we may be able to go down. But as I have said, the interesting thing, of course is, we are the first to come out of the gate that’s actually going to be in a position to begin producing. So, the Federal government is certainly trying to do their best to be helpful to us.

Randy, thank you so much for that. First of all, the clarification on the permitting side and then the additional color there. And so, I will sneak in one more just as a follow-up to that. I just want to better understand your desire to potentially bring in either a financing, strategic, or operating partner. Obviously, you have some strong partnerships in place with Fluor and Weir and other parties you have worked with. But is there any desire to bring in more of a concrete partnership in the form of a JV? And if so, at what stage would we think about something like that? And what could economics look like? Thank you very much.

Yes, sure. So, let me clarify the thesis of your question. We are not seeking a joint venture partner, nor are we reaching out to any third-parties to join us. We view this project as one that Ramaco is going to be able to finance on their own, either directly through the existing Ramaco entity, or we can explore various offshoots of the mothership, so to speak, to finance this separately. That of course does not even mention any involvement that we might have with Federal partners that would be, hopefully, on a non-dilutive manner for whatever contributions that they would make. So, just to be clear, with the partners that we have now are really development partners. Floor is obviously an important partner to us on design and engineering. We have other third-party groups. We’re we are working with the National Energy Tech Lab and other parts of the national laboratories under the Department of Energy in exploring a number of different novel technologies, both in terms of exploration, where we are using some pretty novel AI techniques, as well as various types of novel refining and processing techniques. So, bottom line, when we get this boat on the water, we intend to put it out there as a Ramaco venture, not as a joint venture with any other third-parties. And indeed, when you think about it, there really aren’t any other third-parties out there that are in the rare earth business in the United States that are really operating, certainly, the minerals that we do. So, again, we are kind of blazing a trail, at least with respect to the critical minerals and the particular rare earth that we will be involved in developing.

Randy, again, this is all super helpful clarification. So, I appreciate the update this morning and continue the best of luck.

Thank you so much.

Our next question comes from Nathan Martin with The Benchmark Company. Please go ahead.

Thanks operator. Good morning guys. I want to start on the CapEx side, obviously, trimming that by $5 million at the midpoint. Is that deferred maintenance or some growth being put on hold, given the current market conditions? This would be great to get an updated breakdown of sustaining versus growth and even what’s being spent at the Brook Mine this year.

Thanks Nate. It’s Jeremy. Good question. So, yes, we did trim from $60 million to $70 million down to $55 million to $60 million. We did remove the fourth section of the Berwind mine from our CapEx guidance. So, effectively, that growth has been deferred in the current market environment. I think about it as let’s call it about $10 a ton of maintenance CapEx, which leaves you around $15 million or so of growth CapEx, roughly $5 million or so of that is on the REE front. And then the rest is mostly in the first half of the year, a lot of which already took place in Q1. We talked about some growth projects in ‘24 that carried into 2’5. So, when you look at the balance of the year, our CapEx from Q2 through the fourth quarter on average will be less than $15 million a quarter versus obviously the 20-ish number in Q1.

Alright. Very helpful, Jeremy. Thanks for that breakdown. Your comment as well about how 2Q costs likely at the higher end of full year guidance range is given fewer shipments. From thinking about a potential offset, you guys have 1.6 million domestic tons fixed at $152 a ton, obviously well above where the current export market is. I believe domestic shipments usually pick up in the second quarter. Is that fair? And is it possible we could see maybe your average realized price per ton, flat or even up in 2Q just given support from those higher priced domestic tons?

Nate, it’s Jeremy again. So, I guess the way I would think of it is, we have shipped about 300,000 tons of domestic business in the first quarter. On the export side, we were heavy into Asia. So, both of those went against us. That does imply, call it 400,000 tons or so a quarter, Q2 through Q4 as the lake season picks up. So, you are absolutely right on that. The bad news, of course is, the majority of our tons in Q2 and through the rest of the year still go into the export market. Spot pricing is down, call it 4% or 5% from the first quarter. And about 60% plus of our Q2 tons will be exposed to the indices. So, I think domestically will help a little bit, but certainly it’s tough to overcome the indices kind of are what they are.

Yes. That’s fair, Jeremy. And then any thoughts on exposure to the CFR pricing versus FOB and responsibly trade, obviously preferring realized price?

We don’t have any CFR exposure, Nate.

Okay. Great to hear, Randy. Maybe just one final, this goes back to, last month’s executive orders ended declaring, met coal, a potential critical mineral. Can we get any thoughts on that and what you guys see as any potential benefits, whether that’s permitting your Federal money, etcetera?

I think we would love to see Federal money from met coal, but I don’t count on that anytime soon. I think the permitting side is meaningful, particularly to the extent that there are potential projects involving BLM land. We have got a few that we are potentially looking at. I think that will be helpful. Certainly on the permitting side, just as you saw the fact that Weir had a mine included in the fast-track list that the Permitting Council put out. If we look like, we are having bumps in the road on permitting, I think that will be handy as well. But I think in general, it’s a realization that met coal really is a critical material. And I think that in the longer range will be helpful to us. And I think as the Federal government begins, frankly, to develop out what their overall coal policy will be, I think you can expect that there will be nuances that will come into play on additional matters and means that the Federal government will try to be of some assistance as it does relate to met coal going forward.

I appreciate those thoughts, Randy. Jeremy, thanks for your time as well and best of luck guys.

Thanks Nate.

Thanks Nate.

We have a follow up question from Nick Giles with B. Riley Securities. Please go ahead.

Thank you so much for taking my follow-up. I did just want to go back to the – Randy, you made some comments. I think you said there has been a backlog in testing and that’s contributed to some of the delays in us receiving the preliminary economic analysis. And I think now you are targeting a release by the end of this quarter. And so I just wanted to ask, is there a level of conservatism in that guide? And then in addition, what should we ultimately be looking for in this PEA? I mean any flavor you can give us either on the CapEx side or project returns, anything of that nature? Thank you very much.

Sure. Great question. So, as we all understand sort of the rare earth critical mineral business is the shiny object at the moment out in the general market and of course strategically as well. As a result, frankly, limited number of testing facilities both in the U.S. and Canada that are involved in the myriad of different types of testing, be they chemical, hydrometallurgic, and other relating to any type of critical minerals have been swamped. Test results that we were promised to be back in two months, we have had to wait over a year. And the way that this works, it is clearly not like the coal business. The coal business, you can walk in a mine and look at the wall and see how tall the coal is. Here you are dealing with particles that are in essence the size or less of a strand of your hair. So, these are not things that are readily apparent. And the real trick, of course, is the processing and refinement. So, you have to go through a series of different testing to optimize essentially the chemical and metallurgic character of what you will get out the other end. As a result, you have to test and then retest. And so that is what has taken such a painstaking amount of time to get completed. And of course once we have the test results, then Floor is able to take that, optimize those within their database and black box computerization of projects that they look at around the world to come up with essentially just what you ask, which is the economics of this. So, we expect the preliminary economic analysis as a first go will have the preliminary both CapEx as well as economics of the project. I would…

Randy, thank you for all that color. Maybe just one more if I could, I mean you did mention in your release that the Brook Mine is Wyoming’s first coal mine in 50 years. And so I just wanted to ask about the coal component of the project. Could there be saleable production? Should we consider the coal as a potential byproduct? I mean how should we think about – how should we think about the coal contribution here?

Well, I am delighted you brought that up. And I again apologize for the audio because you might not have heard it in my remarks. But we have got essentially at this point, 2.5 million tons that we are projecting to mine of material in general, which includes obviously the coal as well as the strata above and below the clays and the shales. Of that 2.5 million tons, about a 0.5 million tons will be mineralized product that we will then use to refine to make rare earth and critical mineral oxides and concentrates. The other 2 million tons a year will basically be good old fashioned Powder River Basin thermal coal, which we will indeed sell into the thermal utility markets. And we will use the revenue from that sale of coal to in essence reduce the mine cost as it relates to the rare earth operation. So, the end game is that we will have a very low cost basis as it relates to the rare earth operation, which again puts us in a rather unique position. Most other rare earth projects around the world, the rare earth – or the material that they are mining is the principal component for the rare earth. They are not a lot of secondary uses for whatever is mined. In our situation, the reverse is the case. We have got – most of the material we mine will be – able to be sold and then reduce the essence, the cost that’s associated with the critical minerals themselves. So, we regard that as a distinct advantage of this project. And Nick, I might just point to in relation to both of your questions to Slide 16. You can kind of go through that, but it’s some new information where we break down our annual production of what we are expecting out of the Brook mine. And of course, you can put the market prices next to that and come up with a kind of a basket number. So, hopefully that helps.

Yes, I will say the interesting thing about market prices. Needless to say, the entire business is controlled by one monopolistic producer, which is China. And as a result, the prices vary widely, particularly once the restrictions on exports and bans on exports started to kick in, the prices on various critical minerals have wildly moved. So, how those prices actually look by the time we go into production and frankly, how real the prices that are published or look, I think will be vastly different, which we hope obviously in a positive vein.

Randy, Jeremy and team again, this is all very helpful. So, keep up the good work. Thank you.

Thank you.

Thank you.

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Randall Atkins for any closing remarks.

We just appreciate everybody being on the call today. I know it’s a little bit longer than normal, but we – as I have said, had a lot of wood to chop here to cover. And also, I apologize to the extent that the audio apparently was a bit choppy. So, again, I would encourage everybody to read the printed transcript to make sure that they caught everything that was said. And other than that, we appreciate everybody’s interest in Ramaco and we will look forward to catching up probably actually before the second quarter results with hopefully a separate call that will relate specifically to our critical mineral and rare earth business. So, with that, we thank you very much.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.