Ramaco Resources, Inc.

Good day and welcome to the Ramico Resources Inc first quarter 2025 results conference call. All participants will be in the 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, 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 Ramico 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 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 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.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.

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 US 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, Ramico'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 METCO results of three of our four 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 costs and sales. Again, my continued kudos to our operational and sales team on their excellent job on production costs margins and sales realizations. To look at some of the specifics, both company-wide and at Elk Creek, our mine production was at a quarterly record with one million tons produced this quarter, which of course annualizes to four million tons. This led to the second straight quarter of our cash cost per ton sold coming in under $100. This puts us firmly in the first quartile of the cost curve among U.S. coal met producers. These positive operational metrics were achieved despite setbacks covering about four weeks of challenging weather conditions during the quarter. In our West Virginia mining areas, we had freezing temperatures in January, which was followed by extreme flooding in February. These back-to-back weather events negatively impacted our quarterly production by roughly 150,000 tons. As we look ahead at conditions for the balance of the year, Based on where we currently see the markets, we are reducing both our 2025 production and sales guidance. Jeremy will discuss guidance in more detail. However, from a company perspective, we are not going to force tons into the spot market just for the sake of producing more coal in a weak market without a real return. Despite this downward guidance, we continue to retain the optionality to increase production if more positive market conditions evolve. If that occurs, we can pivot and increase both production and sales this year. We could then exit the year above a 5 million per ton, pardon me, 5 million per annum run rate. Looking a bit further ahead, when we see positive longer-term market clarity, we're poised to also move forward to add an additional 2 million tons of new production. This would come from a million and a half ton deep mine expansion of our Maven-Lovall complex, as well as the continuation of new mining into the Berwyn number three and four sections at our Berwyn complex. This would add a combined roughly half a million tons. And it would take our overall production to approximately six and a half to seven million ton level. It would take roughly a 24 to 36 month time frame from green lighting and cost approximately $100 million in growth capex, spread over two to three years. Market-wise, we are somewhat encouraged, having seen the Australian benchmark price rise about $20 per ton over the past month, despite generally muted world demand. We believe this increase is almost solely driven by global supply cuts, as higher-cost producers continue to struggle with negative margins in the current environment. And we sense that this supply contraction will continue to be a domestic theme in central Appalachian met markets as the year progresses. Because of this impending imbalance, once we see demand reemerge, the markets are poised to see upward and perhaps volatile upward price movement as the market adjusts to more normalized levels. Now I would like to switch to a broad discussion on our Brookman Rare Earth Project. We are particularly encouraged by the steady progress we've made over the past few months since we last spoke. I can assure you we are approaching this transition opportunity to become a major critical mineral producer with a great deal of humility. Having said that, we have been blessed almost by fate with owning a major domestic rare earth deposit of both exceptional size and quality. The deposit is found commingled in coal and the adjoining strata and also has little to no radioactive character. From a national security standpoint, we will never need to ship our ores to China or any other country for processing. Our carbon ore-sourced rare earths and critical minerals will be 100% mined and refined in the USA. I have used the expression that this is a Team USA project, and indeed it is. We are moving as fast and prudently as we can to make this mine a commercial reality. It has the potential to help address what is an acute national strategic supply shortfall of precisely the rare earths and critical minerals which we happen to possess. But perhaps most importantly, to start, I'm proud to announce that we will be bringing on board a person who will help guide us not only through the development process, He will also help oversee the construction and operation of our processing and refining facility, and eventually the overall day-to-day commercial operation of our critical mineral business. We announced this morning that we have now added Mike Woloszek to our senior management team as an executive vice president to oversee this project. Mike is joining us from Australia and leaving his current position as the global executive director of the Fluor Corporation's critical mineral division. He has over 30 years of experience in developing rare earth and critical mineral businesses in all parts of the world. He has been involved in every facet, be it geology, mining, processing, finance, and project execution. Even though we have not yet received the FLUR report, I feel you could view Mike's move to Ramico from having served as the head of FLUR's entire worldwide critical mineral business as a strong indication of his confidence in our project. And these are indeed interesting times in the rare earth business. As many of you know, last month China added to its current bans of various critical mineral exports to the United States by adding new bans of terbium, dysprosium, and scandium. This comes on top of last year's export ban of gallium and germanium. By coincidence, These REEs and critical minerals, along with NDPR, are anticipated to make up over 95% of our revenue and cash flow and constitute about 40% of the overall deposit. Indeed, we have been told by Fluor that the Brook Mine will be the only primary source mine in the world for germanium, gallium, and scandium. Before I address some more specifics of what we are now doing, I would like to note some milestones since our last earning call on this subject. We have now completed most of the secondary round of third-party geological, chemical, and hydrometallurgical testing of our deposit. This has been a multi-year process, and it has not been made easier by the testing backlog we've encountered working with laboratories both in the U.S. and in Canada. The backlog in testing and delays in receiving results has been the primary reason that Florida's preliminary economic analysis will now be produced by the end of June. Today, however, we have released the WEIR update to our technical exploration report and have highlighted several of their findings in this quarter's earnings presentation. These findings focus on disclosing a range of the size and amount of the deposit, It's breakdown by type of rare earth or critical mineral, and their individual concentrations measured as total rare earth oxide. Some specifics of the WEIRD report are that at the high end range, the amount of total rare earth oxide, or TRIO, is now estimated at 1.7 million tons. This includes the band critical minerals of scandium, germanium, and gallium. which constitute roughly 300,000 tons, or 17% of the overall deposit. The deposit has an average concentration grade on an ash basis of between 450 to 570 parts per million, and a maximum grade of between 3,300 and 9,600 parts per million. Based on independent conventional hydrometallurgic testing, performed by Hazen Research and Fluor, the primary and secondary levels of recovery of rare earths are above 80%. The rates of recovery of REEs and selective critical minerals will undergo continuous further testing throughout the process, which is designed to optimize both the levels of recovery and the refinement techniques. We are also now engaged with several third parties in NETL in exploring some novel and unconventional processing techniques which may provide promising new avenues in refinement. But at this level of conceptual testing that we are now at in the process development, we regard these as strong recovery numbers. We will of course strive to further improve results as we proceed further through flow sheet refinement and optimization, and through real-time processing at our future pilot plant. Based on current resource data and our planned processing capacity, the Burke mine is projected to produce approximately 1,400 metric tons of critical mineral oxides per year from mining roughly 2.5 million tons of coal, which we also call carbon ore. For perspective, the U.S. consumes roughly 10,000 metric tons of REEs annually. Of this oxide production, an estimated 560 metric tons, or roughly 40%, will include purified oxides of seven REEs and critical minerals. These include neodymium, presidentium, dysprosium, gallium, germanium, terbium, and scandium. Similarly, based on our current analysis, over 95% of expected revenue and cash flow would be derived from this basket of seven oxide products. The balance of future oxide production of approximately 840 metric tons will include 11 additional REs, which would constitute less than 5% of expected revenue and cash flow. When we have the independent economics and CapEx figures from Flora's report, we intend to publish those in appropriate form and, frankly, have a separate call to discuss them. We are sufficiently confident, however, about both the test results and the economics from working alongside Flora that we are ready to proceed ahead. This June, we intend to initiate large-scale mining at the Brook Mines. This will be an important national milestone and will be the first new rare earth mine in the United States in over 70 years. We are planning a formal ribbon cutting event in mid July with both state and federal senior government officials attending. Please stay tuned for more details in the next few weeks. We will of course be delighted to welcome any shareholders who would like to come to Sheridan to help us celebrate. So please email our investor relations website is appropriate. The Brook Mine will also be the first new coal mine open in Wyoming in over 50 years. And as I said, we intend to initially mine roughly two and a half million tons per year of coal. Roughly a half million tons of the coal and commingled clay and shea material will then be beneficiated and processed as rare earth oxides. Initially, we will produce rare earth concentrates and then ultimately refine these to commercial grade oxides. The overall processing plant will be constructed onsite on our property in Wyoming. The entire vertical integration of the mining and processing will of course be done domestically in the United States. The remaining 2 million tons of non-mineralized coal will be sold as conventional Powder River Basin thermal coal into utility markets. So in simple terms, the coal sales will help us lower the overall cost of the rare earth mining so that we will have an extremely low mine cost basis in the critical minerals. Our next step is to commence later this summer the construction of the pilot plant demonstration facility, which Fluor is now designing. We plan to have that in initial operation by 2026. We then intend to operate in pilot plant mode for roughly a year to produce rare earth and critical mineral concentrate. That pilot operation is designed to inform the ultimate design and operational flow sheet for the full commercial processing and refining plant, which Fluor will again design and engineer. Our current timeline is to commence construction of the full commercial facility by late 26 or early 27. and have that plant producing commercial-grade mineral oxides by 2028. We have fully included the CapEx for the mine opening and pilot plant construction into our current budget for 2025. And indeed, we are pleased to have been awarded a $6.1 million matching fund grant from the Wyoming Energy Authority to be applied toward the pilot plant development and spread between 2025 and 26. Once we have a better sense of what the full commercial project looks like, we will assess with our financial advisors what the optimal capital structure will look like, as well as the appropriate financial options on how to proceed. To say that we are excited is a mild understatement. We are now ready to grow Ramico into being both a critical mineral producer as well as a met coal company. Lastly, I'm delighted that former U.S. Senator Joe Manchin was appointed to our board last month. Joe Manchin brings to Ramaco decades of national leadership at the highest level in energy policy and economic development, as well as a deep understanding of the issues facing the U.S. coal industry and West Virginia coal business in particular. As the former West Virginia Governor, Secretary of State, and then United States Senator, as well as past Chairman of the U.S. Senate Energy and Natural Resource Committee, he has been a steadfast advocate for metallurgic coal in the wider U.S. mining industry. As Ramico advances our rare earth element development in Wyoming, Joe also brings us unparalleled strategic perspective given his experience in both national defense and critical mineral supply chains. So to close, while the first quarter, metallurgic markets have remained weak, we've continued to solidly execute in terms of what we can control, which is production and cash costs. We hope for stronger market conditions as we move later into the year. We also see our Brook Mine critical minerals development as a tremendous opportunity for both Ramico and the country as we work to realize its commercial potential. With that, I would now like to turn the floor over to the rest of our team to discuss finances, operations, and markets. Jeremy, please start a rundown of our financial metrics.