Ramaco Resources, Inc.

Welcome to the Ramico Resources fourth quarter 2023 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, today's event is being recorded. I would now like to turn the conference over to Jeremy Sussman, Chief Financial Officer of Ramico Resources. Please go ahead, sir.

Thank you. On behalf of Ramico Resources, I'd like to welcome all of you to our fourth quarter 2023 earnings call. With me this morning is Randy Atkins, our Chairman and CEO, Chris Blanchard, our Chief Operating Officer, and Jason Fanning, 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. I'd 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. With that said, let me introduce our Chairman and CEO, Randy Atkins. Randy Atkins Thanks, Jeremy.

Good morning to everyone. As always, thanks both for your interest and for joining the call. We have a lot of positive developments to unpack this morning since we spoke last November. As I discussed then, over the past few years, we have tried to differentiate ourselves by aggressively but prudently growing our production and sales profile. In 2021 through last year, we doubled our production. Our goals over the next few years are to again double our current 3.5 million ton level in met coal, and next, to hopefully add an intriguing and very valuable new line of business with rare earths. Looking back over the last few years, we invested almost a quarter of a billion dollars in capital for increased production and acquisition. That strategic investment and growth paid off for us in the second half of 23, again, letting us beat consensus for the last two quarters. I will let Jeremy provide the financial metrics, where Q4 was the record quarter for us this year, and we printed $182 million in annual EBITDA, and also had record-free cash flow, all despite some muted pricing in the overall markets. As we look down the road at our quality slate, we were aiming to essentially double our low vol, mid vol levels to about 50 percent of overall production, with another 30 percent as high vol A. Today, we are about 40 percent high vol A and 30 percent low vol mid-vol. In part, that decision is based on our organic reserve quality mix, but it's also based on what we perceive may be some future crowding in the high vol A space. Several piers are slated to bring on as much as 6 million tons of new production in that blend over the 24 to 26 period. On the other hand, we see low vol production is essentially flat with a fair amount of anticipated depletion from existing low-vol mines. Moving forward, we expect spreads may start widening between premium low-vol and lower-tier high-vol calls, and we hope to be able to capture that margin. Turning to our fourth quarter performance, we managed to do well despite seeing not much strength in pricing over the back half of the year. This year's North American domestic settlements for 24 were down year over year about $40 a ton from 23. While U.S. net indices rose in the fourth quarter, they also ended 23 more than 10 percent below Q1 levels. Our fourth quarter financially was fundamentally due to a sales increase of shipping at a 4 million ton per annum run rate during the whole second half of 23. That was a bump of about 33% compared to our 3 million tonne per rate in the first half. We were also helped by the completion of the 1 million tonne increase in our processing capacity at our Elk Creek complex. Moving to this year's sales and marketing, we took a balanced approach to our 24 domestic sales exposure and committed only about 1.5 million tonnes of coal to North American customers. We thought the offered pricing terms were pretty muted and probably at the bottom of the cycle when tenders were being negotiated last fall. Despite that, our average mixed fixed domestic sales price of $167 per ton was the highest 24 pricing figure among our publicly traded peers. By shaving back the level of our North American business, we pivoted to an increased export book which will now be over two-thirds of this year's sales. At the start of December, we had 2 million tons committed sales for 24. In the past two months, that number has almost doubled to 3.9 million tons, which means we are now basically 100% sold out at the low end of our original 24 production guidance. Fortunately, most of those sales have been in the works for some time, so we were able to move those tons without sacrificing pricing. We now hope to accelerate that sales growth as we move further into 24. As a result of that material increase in committed sales, as you know, we recently raised our 24 sales and production guidance. Depending upon continued market conditions, we hope to end the year with a sales jump of as much as 40 percent from 23 levels. To profile our sales to date, interestingly, we have now begun to move significant tons into Asian markets. Two years ago, we didn't really have any Asian business. Now we will end up the year with north of 30% of our sales going to Asian customers. When all is said and done, about 30% of our overall 24 book will be priced off Australian indexes, about 40% off Atlantic indexes, and about 30% will be fixed price domestics. Jason will speak on the relativities of our pricing and also give most of our color on markets, but I'll add a few observations. We now see European markets are somewhat spring-loaded. It has been pushed down so hard over the past year and a half that we feel when it rebounds and many of the mills reopen, we may see somewhat of a pop and perhaps some supply dislocations in the Atlantic markets. We have historically done well in Europe, and indeed, we're decent-sized sellers even into Ukraine. When that whole situation eventually resolves itself, there could be an interesting turn. In Asia, as I said, we were nowhere in this market two years ago. We are now a major supplier to Indonesia and other non-China markets. Despite the gloom around China, we see the other Asian markets as relatively healthy. We look forward to making further inroads in the region, particularly with our ability to leverage our increasing low-vol production slate. Switching to operations, I want to compliment our operating team first for a great safety record last year. I also want to note the great work on developing the two deep mine sections at our low-vol Berwyn mine. Since September, Berwyn has produced at an annualized run rate of 600,000 tons. We are now planning to begin the third section in the next few months and hope to be at a million-ton run rate by year end. Cash mine costs at Berwyn have currently been under $90 per ton from both deep sections. If this trend continues, and as we ultimately take the mine to four sections, we expect Berwyn to be among the highest margin and largest production low-vol mine complexes in the country. Moving on to another low-vol project, last month we purchased a very reasonably priced $3 million existing coal prep plant, which will be relocated to our Maven complex. We will spend another $8 million this year to move, relocate, and upgrade this plant. For cost comparison, had we built a new plant of comparable capacity, the price was estimated at roughly $40 million. This plant should be operational by the first quarter of 24. It will meaningfully reduce both the current overall $40 per ton trucking cost as well as our cash mine costs. The plant will have an ultimate annualized clean coal capacity of 1.3 million tons, far more than our 350,000 ton current surface and high wall production. We will have the opportunity to add a good deal more deep tons to that complex in the years ahead, as the market may dictate. Chris will also make some comments on Maven in his remarks. Looking at our balance sheet, last year we were able to halve the amount of debt on our books, and we started 2024 with about $50 million of term and equipment debt. Assuming current conditions continue, we will look to retire all of that debt this year. And as I said earlier, we are also rapidly growing. Looking ahead, we are planning today for the notional increase in the amount of both sales and inventory we envision over the coming years. Accordingly, we just executed a mandate with KeyBank on behalf of our banking syndicate to both increase and extend the size and term of our existing revolver. This facility will then have a base borrowing amount of $200 million with an additional $75 million accordion feature expansion, as well as a new five-year term. This is an increase from our existing $125 million facility, and we look to finalize all this in Q2. Finally, with respect to our Brook Mine rare earth project, we are aggressively working to advance the commercialization. We expect to receive the updated independent target exploration report from Weir International within two weeks. When we do, we will publish the report and I will provide an accompanying shareholder letter to explain its findings as well as the project's critical path and direction. We will also expect to host a separate analyst call to discuss its conclusion and respond to any investor questions. Also, I would be remiss not to note that on the back of our solid met coal execution, this year and the announcement of our RE discovery, we were delighted that our shareholders enjoyed some very impressive results over the past year. In 2023, our market cap increased by over $500 million. Today, including the value of our METCB shares, we have a combined market cap of roughly $1 billion. This compares to our market value of just over $100 million a few short years ago. Indeed, to start the year, we enjoyed the highest total shareholder return, which includes share price and dividends, of any company in the coal and mining space. We had a one-year return of roughly 200 percent and over a thousand percent return for the three-year period dating back to 2020. We are deeply appreciative of our investor support from both long-time as well as new shareholders. and we are working hard to continue to reward that support. In summary, this year promises some very positive results for Ramico. And with that, I will turn the floor over to the rest of our team to discuss finances, operations, and markets. So, Jeremy, please start us off with a rundown on financial metrics.