Third Quarter 2026 Results - RAMACO RESOURCES INC

Explicit Guidance:

• 2026 Financials: Cash cost guidance increased to $101–$103/ton (previously $96–$99) due to diesel inflation; production guidance lowered by 200,000 tons (midpoint) and sales guidance by 100,000 tons (midpoint); capital expenditure guidance increased by $5 million (midpoint).
• 2026 Q4 Performance: Expects adjusted EBITDA for Q4 2026 to exceed the cumulative total of the first three quarters of 2026.
• 2027 Financials: Capex for the Brook Mine project (pilot plant, pre-FID) capped at ~$25 million; full-year 2027 guidance (revenue, earnings, margins) to be released in December following the board meeting.
• Working Capital: Expected to see a $75 million working capital tailwind in 2027 from unwinding 600,000 tons of excess inventory, normalized by mid-2027.

Business-Segment Outlook:

• Met Coal Production: Low-vol production is expected to grow by ~1 million annualized tons in 2027 vs. 2026.
  • Maven Complex: First underground section to start production in December 2026; second section expected to start in summer 2027; full capacity with second/third sections targeted for 2028.
  • Berwyn Complex: Third and fourth sections to come online between now and 2028, targeting ~1.5 million tons annual low-vol production by 2028.
  • Burland Complex: Bringing on Number 3 unit in December 2026; four full sections operating entering 2027, targeting >1 million tons annual low-vol production.
  • Long-term Capacity: Medium-term portfolio targets ~6 million tons total production (2.5M at Elk Creek + 3.2M low-vol); potential expansion to ~8 million tons by activating undeveloped Russell County reserves.
• Met Coal Sales & Pricing: Secured 1.7 million tons of 2027 domestic business at an average price of $139/ton (up 30% YoY volume); combined with 1.1 million tons of export carryover, totaling 2.8 million tons in 2027 commitments. Q4 2026 sales mix expected to mirror Q3 (~35% domestic, ~40% Asia).
• Critical Minerals:
  • Production/Mix: Projected 75% of revenue tied to critical minerals (scandium, gallium, germanium, rare earths) for the semiconductor space.
  • Pilot Plant: Construction expected to complete in second half of 2027; Pre-feasibility study (PFS) to commence Q1 2027 and conclude later in 2027.
  • Refinery: Awaiting Final Investment Decision (FID) on refinery construction; project remains fully financed to this stage; potential for separate entity or capital market transaction post-FID.
  • Recoveries: Validated carbochlorination results: 97% (Sc, Ga, Ge), 92% (Nd, Pr), 96% (Y), 97% (Dy, Tb).

Market and Competitive Outlook:

• Coal Pricing: Australian PLV up 23% in 2026; U.S. HVAL up 26%. Q4 spot prices up 9% vs. Q3 average. Market viewed as having a stronger "floor" due to supply discipline and limited investment, though Chinese steel exports may cap near-term upside.
• Supply Dynamics: China's potential 10M ton import plan expected to absorb supply from other producers, indirectly benefiting Ramico in non-China Asian markets. India remains a primary demand driver (imports forecast to rise from 90M to 94M tons in 2027).
• Competitive Position: Ramico's dual-platform (stable cash-flow coal + development critical minerals) viewed as a stability advantage. Low-vol supply structurally tighter than high-vol; Ramico shifting portfolio toward premium low-vol segments.
• Offtake Pipeline: Three non-binding MOUs signed (Indium Corp, Bedrock Semiconductor, RoboLoop); converting to definitive agreements expected over the coming quarters; e-waste feedstock discussions ongoing to supplement ore.

Macro / Industry Outlook:

• Demand: Strong fundamentals in U.S. domestic steel (hot roll coil >$1,300/ton); major steelmakers deferring maintenance or returning to service, supporting 2027 volume.
• Cost Pressures: Diesel prices at $5.85/gallon (vs. $2.50 at start of 2026), creating ~$3/ton headwind. Management notes freight/diesel risks but expects some mitigation via fixed freight deals and vendor agreements.
• Geopolitical/Regulatory: Emphasis on building domestic midstream capability for critical minerals due to lack of U.S. refining infrastructure; seeking government and private sector financing for refinery.

Strategic Initiatives:

• Infrastructure: Maven Rail loadout expected to reduce trucking costs by ~$20/ton starting January 2027; full commissioning anticipated early Q1 2027.
• Capacity Additions: Restarting Laurel Forkbine; activating additional sections at Berwyn and Mabin; designing preparation plant upgrades at Maven for 2028+ scaling.
• M&A/Restructuring: No specific M&A announced; exploring potential separation of the critical minerals business into a standalone entity pending project sizing and capital market conditions.
• Legal: Secured $30 million jury verdict against Chubb Insurance regarding 2018 Elk Creek silo failure; attorney's fees to be determined by court.

Risks and Headwinds to Outlook:

• Cost Inflation: Diesel price volatility remains a significant headwind; unable to fully offset with savings.
• Project Delays: Pilot plant commissioning delayed to H2 2027 due to late arrival of fume hoods for internal lab.
• Market Volatility: Steel prices and Chinese export volumes could limit upside in seaborne met coal pricing; commodity price fluctuations (rare earths) affect offtake pricing assumptions.
• Execution Risk: Dependency on successful construction of pilot plant and refinement of separation technology to secure final offtake agreements.
• Capital Market Conditions: Future financing for the refinery contingent on securing a "robust book of business" and favorable capital market timing.

Management Tone on the Future:

• Confidence: Management expresses "contrarian comfort" and positive sentiment regarding the direction of both business platforms despite a "rocky 2026."
• Strategic Shift: Confident in the pivot to low-vol production and the long-term value of critical minerals, viewing current market levels as "not reflective of long-term value."
• Financial Strength: Highlights strong balance sheet ($375M liquidity) and cost control as key enablers for navigating the transition and funding development.
• Hedges: Notes that high-vol production remains an option if market support improves; refinery sizing remains flexible based on market and capital requirements.

Miscellaneous:

• Share Structure: Approximately 17 million shares shorted (~40% of free float); management anticipates rapid stock price appreciation as positive news is absorbed.
• Timeline for Updates: Next investor update expected in December (post-board meeting) regarding 2027 full-year guidance; next earnings release following the new year.