Ramaco Resources, Inc.

Welcome to the Ramico Resources First Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star and 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star and 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star and zero. I would now like to turn the call over to Jeremy Sussman, Chief Financial Officer. Sir, please go ahead.

Thank you. On behalf of Ramico Resources, I'd like to welcome all of you to our first quarter 2023 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO, and Chris Blanchard, our Chief Operating 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 Rameco'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, Rameco does not undertake any obligation to update or revise any forward-looking statement, 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, ramicoresources.com. Lastly, I'd encourage everyone on this call to go onto our website and download today's investor presentation under the events calendar. With that said, let me introduce our chairman and CEO, Randy Atkins.

Thanks, Jeremy. Good morning to everyone, and thanks for joining the call. We have a lot to unpack this morning. First off, we executed well in Q1. Fortunately, we had a strong quarter and ended up a bit ahead of what was expected. Also, yesterday we filed a separate press release and shareholder letter related to the significant news on our rare earth deposits in Wyoming. As I will discuss, the independent confirmation on this discovery may lead to a unique new direction for us. To start, in terms of our quarterly performance, I'm happy to note that with some help from the rails, we managed to ship coal in Q1 with much better results. We told our investors that our goal in 23 is to execute. Thus far this year, we are steadily working to reverse the operational setbacks we incurred in 22. Last quarter, adjusted EBITDA jumped 50% to $48 million from year end. and earnings per share jumped 75% to 57 cents per share. In Q1, we also achieved both record production and sales. As a result of our better-than-expected performance, we are increasing our full-year production and sales guidance, which Jeremy will talk about in more detail in a moment. In addition, despite continued inflationary and wage pressures, our cash mine costs fell almost $10 per ton from Q4 to Q1. Elk Creek cash costs declined more than 10% sequentially to $90 per ton in Q1, which likely puts elk among the lowest cash cost mines in the country. In addition, as second half production ramps at Berwyn, our overall company-wide mine costs should decline even further. I am pleased to note that the first section at the Berwyn No. 1 mine restarted earlier than anticipated and has been ramping production since March in line with expectations. Board recently approved pulling forward the start of the second section of Berwyn from 24 into mid-23, which should add approximately 300,000 tons of additional production on an annualized basis by late this year. and the extra tonnage will continue to reduce mine cash costs. We can also report that our Maven mine recently produced its first tons. In addition, the startup is imminently from our roughly year-long project to increase Elk Creek's prep plant capacity by 50% from 2 to 3 million tons on an annualized basis. We will ramp production at Elk commensurate with that processing capacity. On the marketing front, we now have 81% of our forecasted 23 production contracted, with almost 2 million tons sold at a fixed price of just under $200 per ton. Our sales team continues to aggressively reach out to new markets to increase our global footprint. And since the start of the year, we have sold our first tons to India, Japan, and Indonesia. Overall, we now have about 700,000 tons of production at midpoint of guidance, which is not contracted for and will be sold at index pricing. While worldwide benchmark pricing continues to move lower, our strong contracted position somewhat insulates Bramico a bit more than our peer group. As far as looking down the road for the balance of 23, we will have a substantial second half increase in production and sales cadence, as we ramp up Berwyn and the Elk plant. By Q3, we should be running at a four to four and a half million ton per year annualized production and sales rate. Chris Blanchard will have more to say on all our operations in a moment as well. I would now like to turn to perhaps today's major announcement. This week we received an independent assessment that our Brook Mine may contain one of the largest unconventional rare earth deposits in the United States. as well as one of the most significant finds in this country of valuable rare earth elements containing magnetic properties. I've laid out a good deal of background on this in my shareholder letter. To borrow a phrase from the play Hamilton, it is nice to have Washington on your side. The journey which led us to this point started with our research partnership with the Department of Energy's National Energy Technology Laboratory. Several years ago, we provided NETL samples of our Brook Mine Coal as part of a national assessment they were performing to identify major areas of deposits in the U.S. of critical and strategic rare earth elements. They came back to us about a year later, candidly surprised that they had found exceptionally high concentration levels of magnetic REs in our deposits. Indeed, levels in line with some of the highest recorded concentrations found in China. That clearly got our attention. Over the past two years, we have embarked on an extensive core drilling and chemical analysis to determine the extent of the deposit. The technical detail on the geological and chemical analysis is contained in the Exploration Target Report from WARE International, our independent reserve engineers. That report is now on our website. It is important to recognize that what we have discovered and are reporting on today encompasses less than one-third of the ultimate area of the Brook Mine. That area is permitted and we could fast track initial production on the site by later this year, subject to further assessment. We will also do additional future work to determine the scale and dimension of the entire deposit contained across the whole property. That then begs the question, where do we go from here? First, working with NETL and others, we will continue further geological assessment, drilling, and chemical analysis on the entire property so we can understand the overall scope of the deposit. We will also study the best manner to process what is largely a clay-type deposit into an REE concentrate. The good news is that given the softer nature of the clays, it will be less costly and more environmentally friendly to process than typical REEs found in harder conventional mineral structures. We also intend to study some novel mining techniques, which we might deploy to capture more of the clay and perhaps less of the coal. Overall, the mining approach will basically be straightforward, old-fashioned surface mining. And of course, as we proceed with our diligence, we will study the economics around the entire proposition. When I said this was a unique find, I meant it, as this is really the only unconventional RE play in the United States at this time, and much of what we will be doing, certainly on processing, will be a matter of first impression. As I said in my shareholder letter, we will look at this development with the same financial discipline that we have deployed in all our METCO business. This will not be a bet-the-farm approach, although eventually, it might lead to Ramico developing a very valuable farm. Our idea is to take this on a step-by-step, almost modular approach to make sure we are proceeding correctly in what is a fast-moving new area of critical minerals. We intend to fund this project from internal cash flow and apply the same conservatism and discipline that we have to our other development projects. And unlike many discussed critical mineral projects. This one is currently already permitted, shovel-ready, and in a position to begin mining by later this year, should we so choose. We also hope to be materially helped by our partnership with the DOE's national labs. They have unique visibility into the overall REE space, as well as access to new techniques and science that will benefit the whole process. In summary, we will, of course, update our shareholders on a regular basis as we move forward. But in closing, this important mineral discovery opens a door for Anaco to transform into a very different type of company going forward. We would no longer solely be a met coal producer, but we could also become an important producer of REE critical minerals and their constituent products, especially magnetics. I would also note, from an investment standpoint, that there are currently not many operating REE producers in the U.S., and they tend to be valued very differently than coal companies. We hope, as this unfolds, this could turn out to be a very positive experience for Ramico and for its investors. As they say, brave new world. And with that, I would like to turn the floor over to the rest of the team to discuss more detail on finance, operations, and markets. Please start with a rundown on our financial metrics in the overall market.