Ramaco Resources, Inc.

Good morning. My name is Richard, and I'll be your conference operator today. I would like to welcome everyone to the RIMACO Resources quarterly conference call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer period, and instructions will follow at that time. I will now turn the conference to your host, Jeremy Suffman, Chief Financial Officer. Please go ahead.

Thank you. On behalf of Gramico Resources, I'd like to welcome all of you to our third quarter 2021 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO, Chris Blanchard, our Chief Operating Officer, 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 Ramico's expectations concerning future events. These statements are subject to risks, uncertainties, and other factors, many of which are outside of Ramico'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, Ramico does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Lastly, I'd encourage everyone on this call to go onto our website, ramicoresources.com, and download today's investor presentation under the events calendar. With that said, let me introduce our Chairman and CEO, Randy Atkins.

Thank you, Jeremy. As always, we welcome everybody joining us today. The past few weeks have been a very good run for Ramico. We want to discuss today not only our third quarter results, but also some significant post-quarter results and events. When we last spoke after the second quarter, we felt we were on the verge of a very special positive transition in our overall business. Basically, since the end of the second quarter, our stock price has climbed from 550 a share to roughly $17. Our market cap has similarly grown from about $240 million in June to over $700 million today. We take great pride in what we've accomplished, and we've done this in less than five years starting from scratch. As a commentary of where we currently find ourselves, I'm reminded of that line which goes, who says Christmas can't come a little early? We are now three-quarters through having our best year of financial and operational performance since we went public. As impressive as that is, what it fails to convey is the transformational period we now find ourselves in. Over the past few months, and indeed especially over the past few weeks, a combination of factors have come together almost at once to move us forward into a different dimension as a public company. I realize most of the recent news is already in front of you, but many points bear noting again. We will print our strongest year of financial results. I won't handicap our full year 21 projections now, but Q4 will undoubtedly be the highest quarter we have had since we went public. It is an understatement to say that full year 21, we will show a multiple of of our 2020 results of only $19 million of EBITDA. What is more impressive is that I can tell you that 2022 will also show a significant multiple of EBITDA from what we will do in 2021. We feel comfortable that our 2022 announced domestic sales on about only half of our production. will translate into roughly $325 million in sales and about $190 million of EBITDA. Analysts can do their own math on what the other half of our sales will generate, but it clearly positions us into a different and much larger financial category as a public company. We have already disclosed 2022 domestic sales of basically 1.7 million tons, priced at an average of $196 per short-ton FOB mine. Our cash mining costs are today in the first quartile of the industry, and our main Elk Creek complex has produced cash mining costs averaging $63 per ton through September. We expect to show consistent low mine costs carrying into next year. In commenting on 2022, we feel that both the domestic and international markets have continuing underlying strength and some distance left to run. There may be occasional gyrations in price, but there is a fundamental demand for steel and met coal, which does not match available supply. Essentially, the lack of capital availability and overall ESG pressures have created an inelastic dynamic, which will continue to put an artificial damper on any meaningful new long-term supply creation. Looking short-term on the market, we are also one of the few coal groups that has maintained dry powder of unsold production for Q4. We started the quarter with roughly 180,000 tons left to sell and have about 100,000 left. Some tons might slip into 22 because of export logistics. But all of our new Q4 sales will be indexed export sales into a market which is showing current low vol Atlantic benchmark pricing north of $430 per ton. These sales will match against our low cost of production, and Jason Fannin will talk more about our sales in a moment. Speaking of sales, our sales for 22 and the balance of 21 provide the financial foundation for moving us over 200% up from the 1.7 million ton production level we showed at the end of 2020. We will be at least at 3.7 million tons or more by the end of 2023. Ultimately, we hope to turn this to over 5 million tons in the next few years. As part of the planning for execution of that production ramp, Earlier in Q3, we engineered a creative $35 million unsecured baby bond issuance. This provided us liquidity to capture what we hoped might be a strong near-term opportunity to acquire the Aminati assets from our neighbors at Coronado. This transaction, announced last week, had our two companies circling each other, frankly, for years. The industrial logic of using the contiguous idled Amanati prep plant to wash our Berwyn coal has always been compelling. Frankly, you can see the plant from the face of the Berwyn mine. As much as the avoided trucking costs were a draw, we were closer to full production, and until, rather, we were closer to full production at Berwyn, we frankly did not feel we had the liquidity to make the purchase. The baby bond solved the liquidity issue, and then the management at Coronado very professionally negotiated to allow us to move forward to acquire what was for them a non-core asset. The combination of Berwyn and Aminati operating together now creates a very formidable mine complex. It has a base production level of 1.5 million tons a year of low-cost, high-quality low-vol coal, as well as a long-life 100 million ton reserve base. We also believe the combined mine has some further production upside above the 1.5 million ton level. Our basic economics at Berwyn change overnight from the trucking savings alone. Combining that with the ability to double production makes this a highly compelling deal for us, which somewhat now brings me to the where do we go from here moment. First, we start returning capital back to our shareholders. We hope our shareholders have already noticed that this has been a very good year for them already in that we have over a 500% increase in our stock price. But we hope to make things even a bit better in the years ahead. For a long time, we have advertised that we wanted to be a dividend-paying company. However, beginning life is essentially a startup. We needed to reach a point of being comfortable we had achieved a critical mass in terms of both size and liquidity, as well as sustainable free cash flow generation. Basically, we wanted to ensure that once we started paying a dividend, we would continue on that path and indeed grow it over the years. Our board has now approved the payment of the regular dividend, and we will announce details of that before year end and after our next board meeting. Next, we wanted to look forward to make sure we were securely on track to reach our overall production threshold of approximately 5 million tons. Reviewing our portfolio of organic growth projects, we can easily add incremental new tons to get there. First, there is the 500,000 ton expansion of our Elk Creek Prep Plant. Then we add another 500,000 tons from our Jawbone mine near Knox Creek. as well as 250,000 tons from the newly acquired Laurel Fork mine, which came with the Aminati purchase. These projects, along with the 3.7 million tons from our current Elk Creek and Berwyn mines, push us to roughly 5 million tons. If we were able to complete the permitting of the Ram mine in Pennsylvania, that will push us over 5 million tons. As important as the tonnage, we can complete the expenditure to complete all these projects from internally generated free cash. We may look to equipment lines where appropriate, but we are essentially now in the position of being self-financed to achieve all of our overall future production goals. We will always continue to be opportunistic, but we do not feel the need to look at the purchase of the existing operation of other companies to get where we would like to be. So where does that put Gramico? My answer would be to expect we will continue to meaningfully grow and return capital to our shareholders at the same time. As for growth, for 2022, we are already looking at a 10x of our 2020 EBITDA, and that counts only half of our production. We expect to grow using a Fortress balance sheet with little to no debt, little to no ARO or other liabilities, and to end up bluntly with a lot of cash. Ramico becomes a very formidable cash generation machine, which will continue to throw off increasingly larger amounts of free cash flow from adding low-cost production. We hope to continue to be somewhat insulated from market pressures because of that low-cost production, as well as our strong financial condition. We also look forward to hopefully soon sharing with you what we regard as a future transition for Ramico that is both in addition to and beyond its core business as a supplier of metallurgic coal to our steel customers. Many in the financial community have commented that one of the headwinds for coal-related equities, even in the strong market conditions, is the lack of a credible vision for what comes next. We live in a world faced with the declining use of the commodity as a thermal coal feedstock. Looking further in the future, there is concern that perhaps hydrogen might one day supplant met coal as one of the base ingredients in blast furnace steel production. Although with respect to met coal, that expensive possibility may probably be almost two decades away, we are still starting to look ahead. I will leave you that in the months ahead, we will be describing what our version of the concept of the future for Ramico may look like and what comes next. Now, with that, I would like to turn the floor over to the rest of the Ramico team to dive into more detail on finances, operations, and market. So, Jeremy, please run down our financial metrics. Thank you, Randy.