Q2 2025 Ramaco Resources Inc Earnings Call
Operator: Good day, and welcome to the Ramaco Resources second quarter 2025 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 a touch-tone phone. 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.
Good day and welcome to the ramaco. Resources, second quarter, 2025 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.
I would now like to turn the conference over to Jeremy Sussman, Chief Financial Officer. Please go ahead.
Jeremy Sussman: Thank you. On behalf of Ramaco Resources, I would like to welcome all of you to our Q2 2025 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO; Chris Blanchard, our Executive Vice President for Mine Planning and Development; Jason Fannin, our Chief Commercial Officer; and the newest member of our executive committee, Mike Wallachek, our Executive Vice President of Critical Mineral Operations. Before we start, I would 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 Ramaco's expectations concerning future events. These statements are subject to risks, uncertainties, and other factors, many of which are outside of Ramaco's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements.
Thank you on behalf of Ramo resources. I'd like to welcome all of you to our second 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. Jason Fanning our chief commercial officer and the newest member of our executive committee. Mike Wallace, our EVP of critical mineral operations,
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 meeting of the private SEC Securities, litigation Reform Act of 1995.
Jeremy Sussman: Any forward-looking statement speaks only as of the date on which it is made, and except as required by law, Ramaco 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 would 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.ramacoresources.com. Lastly, I would 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.
These 4 looking statements represent Ramos's expectations concerning future events. These statements are subject to risks of uncertainties and other factors. Many of which are outside of Ramos's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements.
Any forward-looking statements only as of the date on which it is made and accepted as required by law. Ramo 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 www.rahway.net.
Lastly, I'd encourage everyone on this call to go on to our website and download today's investor presentation. With that said let me introduce our chairman and CEO Randy Atkins.
Randall Atkins: Thank you, Jeremy. I want to first thank everyone for being with us this morning. We had an exceptionally busy quarter. I will begin with the very recent, very positive events surrounding our Brook Mine critical mineral and rare earth business in Wyoming. The release of the summary of Florida's preliminary economic analysis and an historic ribbon cutting at the Brook Mine in July have both garnered a great deal of attention. These two events reinforce the concept that Ramaco Resources has now embarked on transitioning to become a dual-platform company, unlike any in the United States. Our operations now embrace production of not only metallurgical coal, but also rare earths and critical minerals and their refinement, ultimately the oxides. This transition has also resulted in a fundamental reset in our share price as the market has begun to view us in this new light.
Thank you, Jeremy.
I want to first thank everyone for being with us this morning.
We had an exceptionally busy quarter.
I'll begin with the very recent, very positive events surrounding our Brooke, mine critical, mineral and rare earth business in Wyoming.
The release of the summary of Flores preliminary economic analysis and an historic ribbon, cutting at the Brookmont in July have both garnered a great deal of attention.
These 2 events reinforced, the concept that Ramo has now embarked on transitioning to become a dual platform company. Unlike any in the United States,
our operations. Now Embrace production of not only Med coal but also rarer and critical minerals and their refinement ultimately to oxides.
This transition has also resulted in a fundamental reset in our share price as the market has begun to us in this new light.
Randall Atkins: The Brook Mine is unique, both as a geologic mineral proposition, but also unique in our country's larger strategic quest to claim back, frankly, its own security. We hope and believe that this mine will produce a large and vital domestic supply of rare earth and critical minerals in the face of dominance by a malign foreign nation state. Specifically, the Brook's distinctive geology facilitates not only a lower-cost REE production, but also a lower-cost ultimate processing and refinement. The rare earth mine also combines with our metallurgical coal profile to create a unique growth story, combining two vital forms of now critical minerals. We will soon explore expanding our rare earth mine production profile to enlarge the annual production rate to a multiple of its currently permitted 2.5 million tons per annum. We will similarly look to expand the oxide processing capacity to a larger level as well.
the brook mine is unique both as a geologic, mineral proposition, but also unique in our country's larger strategic quest to clean back frankly, its own security
We hope and believe that this mind will produce a large and vital domestic, supply of rare earth and critical minerals in the face of dominance by a malign foreign nation state.
Specifically, the Brooks distinctive, geology facilitates, not only a lower cost ree production, but also a lower cost, ultimate processing and refinement.
The rare earth mine also combines with our Metco profile to create a unique growth story, combining two vital forms of now critical minerals.
We will soon explore expanding our Rare Earth, mine production profile to enlarge the annual production rate to a multiple of its currently permitted 2 and a half million tons per atom.
We will similarly look to expand the oxide processing capacity to a larger level as well.
Randall Atkins: At the same time, we will be exploring and developing the remaining roughly 11,000 acres, or two-thirds of our reserve base, to determine both the size and geological character of this massive deposit. WEIR has now defined the TREO base at 1.7 million tons on the roughly 4,500 permitted acres. We expect this new exploration will substantially expand the known size of our reserve. As to the mine groundbreaking ceremony two weeks ago, I want to thank again all of the dignitaries for taking part in the opening of the country's first new rare earth mine in more than 70 years. The group was led by Secretary of Energy Chris Wright, the entire Wyoming U.S. Congressional delegation, as well as Wyoming's Governor Mark Gordon.
At the same time we will be exploring and developing the remaining roughly 11,000 Acres or 2/3 of our Reserve Base. To determine both the size and geological character of this massive deposit.
Where has now defined the trio base at 1.7 million, tons on the roughly 4,500 permitted Acres.
We expect this new exploration. Exploration will substantially, expand. The known size of our Reserve.
As for the mine groundbreaking ceremony, two weeks ago.
I want to thank again all of the dignitaries for taking part in the opening of the country's first new Rare Earth mine in more than 70 years.
Randall Atkins: As I said at the ceremony, with both a deposit size of over 1.7 million tons of rare earth oxide, and importantly, with the only domestic slate of five of the seven recently banned rare earths from China, this mine has the potential to become an important bulwark to the supply chain challenge posed by China. This will be America's mine. Its production, refinement, and sales will be on American soil. I will not dwell on the background of our critical mineral business other than to say we have been working on developing the Brook Mine since 2012, and with a particular focus on rare earths now for almost six years. The mine is fully permitted. We began full-scale mine operations this June. We expect to begin pilot plant operations to take our ore to oxide this fall.
The group was led by Secretary of Energy Chris Wright, along with the entire Wyoming U.S. Congressional Delegation and Wyoming's Governor, Mark Gordon.
As I said at the ceremony,
With both the deposit size of over 1.7 million tons of rare earth oxide.
This mine has the potential to become an important bull work to the supply chain challenge posed by China.
This will be America's mind.
Its production refinement and sales will be on American soil.
I will not dwell on the background of our critical mineral business other than to say we have been working on, developing the brook mine since 2012. And with a particular focus on rare Earths now for almost 6 years
The mine is fully permitted.
We began full-scale mine operations at this. June.
Randall Atkins: We will use our pilot operations to optimize the processing techniques for roughly about nine months, which will then assist in the design engineering for our full commercial oxide facility. We hope to transition to construction of the full commercial facility by late next year. Dependent upon some potential acceleration on timing, we would expect to be in commercial oxide production and sales by 2028, or hopefully sooner. Over the past six years plus, we have continued work on this unique opportunity with a combination of assistance from NETL, as well as other third parties such as WEIR and Fluor. In early June, I had the honor to personally meet with Secretary Wright in Washington to brief him on the project.
We expect to begin pilot plant operations to take our ore to oxide this fall.
And we will use our pilot operations to optimize the processing techniques for roughly about 9 months, which will then assist in the design engineering for our full commercial oxide facility.
We hope to transition to construction to the full commercial Facility by late next year.
And dependent upon some potential acceleration on timing. We would expect to be in commercial oxide production and sales by 2028 or hopefully sooner.
Over the past 6 years. Plus we have continued work on this unique opportunity with a combination of assistance from Nell as well as other third parties such as we're and floor.
Randall Atkins: Given the critical importance of the mine to national security, he encouraged us to explore how the government, and in particular the Department of Energy, could assist in accelerating and expanding both the timing as well as the production rate of the mine. Since the Brook Mine is the first and largest new mine and processing facility in the U.S., the federal government is now engaging with several agencies to assist Ramaco Resources in moving this project forward. To this end, for three days this week at the regional NETL headquarters in Oregon, we held an all-hands meeting of Ramaco Resources' entire rare earth team with more than 20 Department of Energy personnel. These scientists and technicians were from NETL, as well as the Lawrence Livermore Lab and Idaho National Lab. Mike Wallachek, who was there with me for the entire time, will be speaking on that in a moment.
In early June, I had the honor to personally meet with Secretary Wright in Washington to brief him on the project.
Given the critical importance of the mind to National Security, he encourages us to explore how the government. And in particular, the department of energy could assist in the accelerating and expanding both the timing, as well as the production rate of the Mind.
Since the brook, mine is the first and largest new mine and processing facility in the US, the federal government is now engaging with several agencies to assist Ramo in moving this project forward.
To this end for 3 days, this week at the regional Nell headquarters in Oregon.
We held an all hands meeting of Ramos's entire Rare Earth team with more than 20 Department of energy personnel.
These scientists and technicians were from NL as well as the Lawrence Livermore lab and Idaho National Lab.
Randall Atkins: The DOE's objective for the Brook Mine is to provide the full capacity of the national lab's comprehensive testing and research capabilities to accelerate our entire mining and process development process. This is somewhat unprecedented. The DOE will provide their wide-ranging resources to essentially become Ramaco's partner in all testing and critical path development of the exploration, processing, refinement, and ultimate production of materials and metals at the Brook Mine. There will be more to discuss on that collaboration as we proceed further in the months ahead. We are also now involved with the administration's National Energy Dominance Council on a variety of fronts.
Mike Wallace check who was there with me uh for the entire time we'll be speaking on that in a moment.
The Doe's objective for the brook. Mine is to provide the full capacity of the National Labs comprehensive testing and research capabilities to accelerate our entire Mining and process development process. This is somewhat unprecedented. The doe will provide their wide. Ranging resources to essentially become ramco's partner. In all testing and critical path. Development of the exploration processing refinement and ultimate production of materials and metals at the brook mine.
There will be more to discuss on that collaboration as we proceed further in the months ahead.
Randall Atkins: This council acts as the White House's coordinating arm to advance critical mineral development across multiple federal cabinet offices and agencies. We are now engaged with the council to advance discussions between Ramaco and several federal agencies, including the Department of Energy, of course, the Department of Defense, the Department of Interior, and the National Security Agency. Again, as those engagement proceeds, we will disclose specifics in due course. We are also now beginning to receive inquiries and meet with potential rare earth and critical mineral customers. We expect samples of various elements and oxides to be available for customer trials as we advance the pilot process. Jason Fannin will be speaking a bit later on the marketing and sales process that we are beginning to conduct.
We are also now involved with the administration's National energy, dominance Council on a variety of fronts.
This Council acts as the White House's coordinating arm to Advanced critical mineral Development Across multiple Federal cabinet offices and agencies.
we're now engaged with the council to advance discussions between Ramo and several federal agencies, including the department of energy, of course, the Department of Defense, the department of interior and the National Security Agency
Again, as those engagement proceeds, we will disclose specifics in due course.
We are also now beginning to receive inquiries and meet with potential Rare Earth and critical mineral customers.
We expect samples of various elements and oxides to be available for customer trials, as we advance the pilot process.
Randall Atkins: We are also broadening our bench of rare earth personnel and are actively hiring individuals with experience in both rare earth geology and processing. These operations will be conducted under the direction of Mike Wallachek, our Executive Vice President of Critical Minerals, who, as many of you know, recently joined us after serving as the global head of Fluor's Critical Mineral Operations. In sum, we are rapidly taking steps to develop our REEs into a commercial business. We are also being provided strong encouragement and support from the Trump administration in this regard. During the pilot phase, we expect to better define the size of the capital investment as we optimize the processing flow sheet and advance further. Fluor has, of course, provided a preliminary CapEx estimate subject to a broad contingency. That figure will be refined as we proceed through the design, engineering, and procurement phase.
Jason Fannon will be speaking a bit later on the marketing and sales process that we are beginning to conduct.
We are also broadening our bench of rare earth personnel, and are actively hiring individuals with experience in both Rare Earth, geology and processing.
these operations will be conducted under the direction of Mike walchek, our EVP of critical minerals who as many of you know, recently joined us after serving as the global head of floors, critical mineral operations,
In some we are rapidly taking steps to develop our Rees into a commercial business.
In this regard.
During the pilot phase, we expect to better Define the size of the capital investment as we optimize the processing flow sheet in advance.
Further.
Flur has of course provided a preliminary capex estimate subject to a broad contingency.
Randall Atkins: As I said earlier, we will be studying how we can enlarge both the scope of the mining production level as well as processing capacity to achieve a much larger scale to the project to meet an obvious U.S. demand. We ultimately expect that investment capital for the new business will come from a variety of sources. This will include, of course, the internal use of Ramaco Resources' own financial and balance sheet capabilities, but it may also include potential governmental and private customer assistance in various forms, including possible direct investment, long-term procurement, advanced payments, and other contractual arrangements. As with any project of this size and scope, we will proceed with funding that is backed by conventional third-party purchase and throughput commitments. We will not disclose any discussions involving potential investments or financings at this time.
That figure will be refined as we proceed through the design engineering and procurement phase.
As I said earlier, we will be stuttering studying how we can enlarge both the scope of the mining production level as well as processing capacity to achieve a much larger scale to the project to meet an obvious us demand.
We ultimately expect that investment capital for the new business will come from a variety of sources.
This will include, of course, the internal use of ramo's own financial and balance sheet capabilities, but it may also include potential governmental and private customer assistance in various forms including possible. Direct investment, long-term procurement Advanced payments and other contractual Arrangements.
As with any project of this size and scope, we will proceed with funding that is backed by conventional, third-party, purchase and throughput commitments.
Randall Atkins: Turning to our metallurgical coal business, the past quarter again underscored how quickly the landscape can shift. Metallurgical coal benchmark prices dropped roughly 25% year on year this past quarter. After bottoming in early June, the Chinese domestic cooking coal prices staged somewhat of a textbook V-shaped recovery, driven less by headline production bands and more by a combination of deliberate softening in supply, as well as targeted safety and environmental checks that slowed output. Even with the sharp pullback we saw this week, prices are still materially above the June-July lows. Beijing's clear signal seems to be that it intends to rein in chronic domestic oversupply, which we hope lends some durability to the recent gains. The other moving parts of the metallurgical coal pricing equation are lining up in similar fashion. Indian steelmakers remain solidly profitable, underpinning steady raw material demand.
We will not disclose any discussions involving potential Investments or financing at this time.
Turning to our Medco business, the past quarter, again, underscored how quickly the landscape can shift.
Metall Benchmark, prices dropped roughly 25% year-on-year. This past quarter.
After bottoming in early June the Chinese domestic cooking. Coal prices stayed somewhat of a textbook v-shaped recovery driven, less by headline production bands and more by a combination delivered softening and demand for being Supply.
As well as targeted safety and environmental. Check environmental checks that slowed output.
Even with the sharp pullback we saw this week, prices are still materially above the June July lows.
Beijing's clear signal seems to be that it intends to rain in chronic domestic over Supply which we hope lends some durability to the recent gains.
The other moving parts of the med, call pricing equation are lining up in similar fashion.
Randall Atkins: Australian exports out of Queensland have yet to fully normalize after weather and operational setbacks earlier in the year. U.S. metallurgical coal producers have reduced production as pricing realizations are in many cases now below mine costs. Taken together, we see a healthier balance developing in the second half, albeit not yet a straight line. Against that backdrop, we continue to focus on what we can control, and that is driving down mine costs and lifting productivity. Chris Blanchard and Jeremy Sussman will speak to those points in a moment. This quarter also marks our second consecutive production record. Our mine cost dropped again this quarter by $5 to $1.03 from $1.08 in the second quarter of 2024, and we expect to drive them further down in the back half of the year. Nevertheless, the weak spot export pricing still outpaces our efficiency and mine cost gains.
Indian steel. Makers. Remain solidly profitable. Underpinning steady raw material demand.
Australian, exports out of Queensland, have yet to fully normalize after weather and operational setbacks earlier in the year.
Us met coal, producers have reduced production as pricing. Realizations are in many cases. Now, below mine costs,
Taken together, we see a healthier balance developing in the second half. Albeit not yet a straight line.
Against that backdrop. We continue to focus on what we can control and that is driving down mine costs and lifting productivity.
Chris, and Jeremy will speak to those points in a moment.
This quarter. Also marks our second consecutive production record.
Our mind cost dropped again, this quarter by 5 dollars to 103 from 108. In the second quarter of 24 and we expect to drive them further down in the back half of the year.
Randall Atkins: As a result, we are trimming full-year sales guidance slightly, simply to be prudent. To be clear, the adjustment is purely price-driven. We will not place tonnage into an oversupplied spot market at negative margins. In short, in the met space, even while price volatility remains, we are cautiously optimistic that pricing will improve as we move through the back half of the year. This is going to be through a combination of firmer Chinese fundamentals, a resilient Indian demand, and constrained or even declining Australian and U.S. supply. To wrap up on a highly positive note, the bottom line is that we are rapidly moving forward with the multi-year process of transitioning Ramaco Resources into becoming the only U.S. dual platform in both rare earth elements as well as the metallurgical coal space.
Nevertheless the weak spot export pricing still outpaces our efficiency and mine cost gains as a result. We are trimming full year sales, guidance slightly simply to be prudent.
To be clear, the adjustment is purely price driven. We will not Place tonnage into an oversupplied spot Market at negative margins.
In short.
In the Met space even while price volatility remains, we are cautiously optimistic that pricing will improve as we move through the back, half of the year.
This is going to be through a combination of firmer, Chinese fundamentals, a resilient, Indian demand and constrained, or even declining Australian and US Supply,
Randall Atkins: We have a very unique business model and a unique and highly promising growth trajectory in both business lines. I feel strongly we will serve both our shareholders and our nation well as the years evolve too. With that, I would like to turn the floor back over to the rest of our team to discuss finances, operations, and markets. First, I would like Mike Wallachek, who leads our critical minerals business, to share some further thoughts on rare earth elements. Mike, if you would continue.
So to wrap up on a highly positive note. The bottom line is that we are rapidly moving forward, with the multi-year process of transitioning Ramo into becoming, the only us dual platform in both rarer as well as the metallurgic call space.
We have a very unique business model.
And a unique and highly promising, growth trajectory in both business lines.
So with that, I'd like to turn the floor back over to the rest of our team to discuss, finances, operations and markets. But first I would like, Mark Mike. Which who leads our critical mineral business to share some further thoughts on Rare Earth.
so, Mike, if you would continue
Mike Wallachek: Thank you, Randy. I first want to say how exciting it is for me to be part of the Ramaco team. As Randy mentioned, I previously held the role of Global Head of Critical Minerals for Fluor, where I was involved in numerous rare earth and critical minerals development projects across the world. I've personally been working on the Brook Mine project since Q4 last year and decided to join Ramaco because I believe this project is the most promising rare earth project in North America. The Brook Mine project is unique across the landscape of rare earth projects, and this company is committed to advancing the Brook Mine into production. The advantages and opportunities associated with the Brook Mine development: first, the mine is already permitted, and we commenced mining in June, so that significantly reduces the development timeline of the project.
Thank you, Randy. Um, I I first want to say how exciting it is for me to be part of the ramaco team. Uh as Randy mentioned, I previously held the role of global head of critical minerals for flu uh where I was involved in numerous rare, Earths and critical minerals development projects across the world.
I've personally been working on the brook mind projects since Q4 last year and decided to to join ramaco because I believe this project
Is the most promising Rare Earth Project in North America?
The brook mind project is unique across the landscape of rare earth projects, and this company is committed to advancing the brook mine into production.
The advantages, uh, and opportunities associated with the brook mind development. Uh, first, the mine is already permitted and we commenced mining in June so that significantly reduces the development timeline of the project.
Mike Wallachek: Secondly, the Brook Mine deposit contains high-value critical minerals co-mingled in coal, and unlike the hard rock deposits, this ore is soft and it's simplifying the front end of the processing plant. It does not contain meaningful levels of radioactivity, which are typically associated with rare earths found in hard rock deposits. Thirdly, the high-value critical minerals and lower value of low-value rare earths mean that the basket value of this project is boosted, or the ore quality, if you will, compared to peer projects. As reported in the disclosed summary of the Fluor PEA, our recoveries are also comparatively high. Our recovered value in dollars per ton of TREO is more than 20 times compared to traditional light rare earth-centric mines. Fourth, this project has excellent access to infrastructure with the I-90 and the main rail line intersecting the property.
Secondly, uh, the brook mind deposit contains high value, critical minerals co-mingled, and coal, and unlike the Hard Rock deposits. This ore is soft and simplifying. The front end of the processing plant.
It does not contain meaningful levels of radioactivity which are typically associated with rare, Earths found in hard rock deposits.
and thirdly, um,
The high-value critical minerals and lower value of low, uh value rare Earths.
Means that the basket value of this project is boosted or the or quality if you will compared to peer projects.
As reported in the disclosed summary of the flu or pea, our recoveries are also comparatively High.
So our re recovered value in dollars per ton of Trio is more than 20 times compared to traditional light Rare Earth Centric Minds.
Forth this project.
Mike Wallachek: Again, this reduces the capital investment and development timeline for the project. Lastly, since the critical minerals are co-mingled in coal and because we intend to sell thermal coal, which is not mineralized, we expect that this will offset the mining costs of these critical minerals. Looking ahead, my main focus is working to accelerate the timeline to reach commercial production. As Randy intended, we plan to rapidly construct our pilot facility so that we can begin pilot operations this fall to take our ore to oxide product. This will allow potential customers to test our products for quality control. Whether it be the Department of Defense or a defense contractor or any other potential customer, any agreed-upon long-term offtake will be subject to meeting certain quality specifications. We view the acceleration of the pilot plant as the crucial next step on the path to commercialization.
Has excellent access to infrastructure with the I90 and the main rail line intersecting the property again. This reduces the capital investment and development timeline for the project.
And lastly, um, since the critical minerals are co-mingled and coal and because we intend to sell thermal coal, which is not mineralized, we expect that this will offset the mining costs of these critical minerals.
Looking ahead. My main focus is working to accelerate the timeline to reach commercial production.
As Randy intended we we plan to rapidly construct, our pilot facility so that we can begin pilot operations this fall to take our or to oxide product.
This will allow potential customers to test our products for quality control.
Whether it be the Department of Defense or a defense contractor or any other potential customer, uh, any agreed upon, long-term offtake will be subject to meeting certainly quality specifications. So we view the acceleration of the pilot plant as The crucial next step on the path to commercialization.
Mike Wallachek: Additionally, this month we are commencing the next phase of the commercial plant design as the flow sheet remains on the critical path. Ultimately, as noted in our earnings release, we remain on track for commercial oxide production in 2027, which has been pulled forward from 2028 per the summary PEA. All this week, as Randy mentioned, the Ramaco Resources technical team has been in meetings with the Department of Energy labs. These meetings were attended by National Energy Technology Lab, Oak Ridge National Lab, the Idaho National Lab, and Lawrence Livermore National Lab. Each of these labs brings technical expertise to this project, from geological definition that will help us better define the other two-thirds of this deposit, which is yet to be explored, to flow sheet improvement ideas, and to battery quality specifications that are going to help us to detail our flow sheet.
Additionally, this month we are calm, commencing the next phase of the commercial plant design um as the flow sheet remains on the critical path.
Ultimately, as noted in our earnings release, we remain on track for commercial oxide production in 2027, which has been pulled forward from 2028 per the summary PEA.
Uh, all this week, as Randy mentioned, the Ramaco technical team has been in meetings with the Department of Energy labs.
Uh, these meetings were attended by the National Energy Technology Lab, Oak Ridge National Lab, the Idaho National Lab, and Lawrence Livermore National Labs. Each of these labs brings technical expertise to this project, from geological definition that will help us better define the other two-thirds of this deposit, which is yet to be explored, to flow sheet improvement ideas.
Mike Wallachek: The comment made by several Department of Energy employees that were attending these meetings was that everyone in the DOE lab wants to be working on this project. We have existing agreements in place to immediately continue work, and we have 70 tons of ore at the Brook Mine site that are in supersacks ready to ship to these labs, and we expect that will happen next week. With that said, I would like to turn the call over now to our Chief Commercial Officer, Jason Fannin.
So we have uh, existing agreements in place, uh, to immediately continue work and we have 70 tons of ore at the brook mine site that are in Super Sacks, ready to ship to these labs and we expect that will happen next week.
With that said, I would like us to turn the call over now to our chief commercial officer.
Jason Bannon.
Jeremy Sussman: Thanks, Mike, and good morning, everyone. Today, I will share our views on the metallurgical coal and steel markets, as well as our sales outlook, and wrap up with a discussion of marketing initiatives on the rare earth elements and critical minerals front. Global metallurgical coal markets continue to weaken from a pricing standpoint during Q2, with last quarter's index averages down approximately 8% since the start of Q1 and down 5% quarter over quarter. To start Q3, during July, we saw Chinese metallurgical coal prices surge 38%, with futures hitting a seven-month high as safety and environmental inspections across important mining regions forced mine and wash plant outages, tightening inland inventories. While we have seen sharp price swings on Chinese exchanges this week, the broader signal from Beijing is unambiguous. Policymakers are intent on addressing persistent oversupply.
Thanks, Mike and good morning everyone. Today. I'll share our views on the cooking cold and steel markets as well as our sales Outlook, and wrap up with a discussion of marketing initiatives on the rare Earths and critical minerals front.
Local cooking, coal markets, continue to weaken from a pricing standpoint during Q2 last quarter's index, averages down approximately 8% since the start of q1 and down 5% quarter over quarter.
To start Q3 during July. We saw Chinese cooking, coal prices, surged 38%.
The future is hitting a 7-month, high is safety and environmental inspections across important mining regions, forced mine, and wash plan. Outages tightening, Inland inventories.
While we've seen sharp price swings on Chinese exchanges this week.
Jeremy Sussman: Their posture should provide underlying support for prices and increase the likelihood that recent gains will have some staying power. At the end of July, the Australian Premium Low Vol Index was $183.20 per ton, up from the low of $166 in late March and from $172 in mid-July. The U.S. East Coast Index values were $174 per ton for low vol, $156.50 per ton for high vol A, and $147.50 per ton for high vol B. SGX Ford pricing also moved higher in late July, with Q3 and Q4 PLV now priced at $185 and $193, respectively. While we treat forward markets with healthy skepticism, Chinese policy pivots, like those in 2016 and 2020, have historically marked turning points which have resulted in sustained recoveries. While risks remain, the worst may be behind us.
The broader signal from Beijing is an ambiguous policy makers are intent on addressing persistent over Supply.
Their posture should provide underlying support for prices and increase the likelihood that recent gains will have some staying power.
At the end of July.
The Austrian premium Australian premium low ball index was $133.20 per ton up from the low of 166 in late March and from 172 in mid July.
The US East Coast index value is 1 174 per ton for low volt.
$156.50 per ton for high ball A.
and 14750 per ton for high ball b.
SDX forward pricing also moved higher in late July, with Q3 and Q4 PLV now priced at $185 and $193, respectively.
While we treat forward markets with healthy, skepticism Chinese policy, pivots like those in 2016 and 2020.
Jeremy Sussman: As we enter the third quarter, we remain optimistic about improving fundamental market conditions, supported by rising finished steel prices in China and India, and iron ore prices holding below $100 per ton amid growing supply. These trends should bolster steel mill profitability and support increased metallurgical coal pricing. That said, persistent strength in Chinese steel exports and unresolved over-capacity concerns continue to pose risks. It remains unclear how policymakers will address these structural challenges, leaving some uncertainty on the horizon. In Europe, we remain cautiously optimistic about the outlook for improved market conditions. Existing safeguard quotas and phased rollout of the EU's carbon border adjustment mechanism are expected to provide a progressively firmer floor against low-cost steel imports. Germany's proposed 500 billion euro off-budget fund, alongside continued European Commission-backed stimulus efforts, should help provide infrastructure and machinery demand as monetary conditions ease and ECB rate cuts take hold.
Have historically marked turning points which have resulted in sustained. Recoveries, while risks Remain the worst may be behind us.
As we enter the third quarter, we remain optimistic about improving fundamental market conditions supported by Rising, fish steel prices in China and India.
Iron ore prices are holding below $100 per ton amid growing supply.
These Trends should bolster steel mill, profitability and support increased medical pricing.
That said, persistent strength in Chinese steel exports and unresolved over capacity concerns continue to pose risks.
It remains unclear how policymakers will address these structural challenges, leaving some uncertainty on the horizon.
In Europe. We remain cautiously optimistic about the outlook for improved market conditions.
Existing safeguard quotas and the rollout of the EU's Carbon Border Adjustment Mechanism are expected to provide a progressively firmer floor against low-cost steel imports.
Germany's proposed 500 billion Euro off budget fund, alongside continued European commission, back stimulus efforts.
Jeremy Sussman: As a result, we expect EU apparent steel consumption to bottom early next year and rebound by 3% to 4% in 2026, helping to restore steel mill margins and support Atlantic Basin millers for coal demand. In the near term, however, conditions remain difficult, and further capacity rationalization across the European steel sector appears likely. In the U.S. and Canada, our domestic end users continue to take shipments at a steady pace, in line with our expectations and contractual commitments. Notably, finished steel prices in the U.S. remain the highest globally, nearly double prevailing Asian seaborn levels, and we expect our domestic partners will continue to enjoy significantly higher steel prices going forward. Building on this favorable backdrop, we are now in the domestic negotiating season with several buyers issuing RFPs.
Should help provide infrastructure, machinery. Demand is monetary conditions ease and ECB rate cuts take hold.
As a result, we expect the EU apparent still consumption to bottom early next year. And rebound, by 3 to 4% in 2026
Helping to restore steel mill. Margins and support Atlantic Basin Miller for cold demand.
In the near term, however, conditions remain difficult, and further capacity rationalization across the European steel sector appears likely.
In the US and Canada, our domestic end users continue to take shipments at a steady Pace in line with our expectations and contractual commitments.
Notably Finnish steel prices in the US remained the highest globally.
Nearly double prevailing agency, born levels. And we expect our domestic Partners will continue to enjoy significantly higher steel prices going forward.
Jeremy Sussman: While we won't discuss specifics today, our focus remains on enhancing the value of our sales portfolio, and we are actively engaged in that effort. Turning to our 2025 sales book, at the start of the third quarter, we had secured commitments for 3.9 million tons. North American buyers account for 1.6 million tons at an average fixed price of $152 per ton, and first half seaborn shipments of 1.3 million tons achieve an average fixed price of $109 per ton. In total, our fixed price book for 2025 stands at 2.9 million tons at a blended price of $133 per ton, with an additional 1 million export tons under index-linked arrangements for delivery throughout the back half of the year. The majority of our few remaining uncommitted tons align with planned Q4 production, providing us the flexibility to strategically layer in additional sales at favorable pricing.
Building on this favorable backdrop. We are now in the domestic negotiating season with several buyers issuing rfps.
While we won't discuss specifics today, our focus remains on enhancing the value of our sales portfolio, and we are actively engaged in that effort.
Turning to our 2025 sales book at the start of the third quarter, we had secured commitments for 3.9 million tons.
North American buyers account for 1.6 million tons and an average fixed price of $152 per ton.
And first half seaborne shipments of 1.3 million tons achieved, an average fixed price of $109 per ton.
In total, our fixed-price book for 2025 stands at 2.9 million tons.
Of the year.
The majority of our few remaining uncommitted tons aligned with planned Q4 production.
Jeremy Sussman: Given ongoing market headwinds, we are optimizing our production plan to minimize lower margin spot sales and prioritize the highest return opportunities. This disciplined approach allows us to protect margins, capitalize on the most optimal sales, and maintain reliable supply for our long-term customers. Turning now to our rare earth and critical minerals operation, we're accelerating the development of our Brook Mine deposit in Sheridan, Wyoming. We've completed end-to-end supply chain mapping for our highest value materials and are actively collaborating with major U.S. buyers, including defense suppliers, to align on operating timelines, product and volume projections, qualification protocols, and downstream applications. This proactive engagement ensures we meet stringent demand criteria while positioning us as a reliable domestic supplier in this strategic sector, laying the groundwork for future offtake agreements as we continue to fast-track the build-out of our pilot processing plant and the later scale-up of our commercial facility.
Providing us a flexibility to strategically layer in additional sales at favorable pricing.
We have ongoing market headwinds. We are optimizing our production plan to minimize lower-margin spot sales and prioritize the highest return opportunities.
This decimal approach allows us to protect margins, capitalize, on the most optimal sales and maintain reliable supply for our long-term customers.
Turning now, to our Rare Earth and critical minerals operation, where accelerating development of our Brooke mind deposit and shared in Wyoming.
We've completed end-to-end supply chain mapping for our highest-value materials.
And are actively collaborating with major US buyers, including the fence suppliers to align on operating timelines product and volume projections, qualification, protocols, and downstream applications.
This proactive engagement ensures. We meet stringent demand criteria while positioning us as a reliable domestic supplier in the Strategic sector.
Jeremy Sussman: With that said, I would now like to turn the call over to our Executive Vice President for Mine Planning and Development, Chris Blanchard, to discuss operations.
Laying the groundwork for future. Off-take agreements. As we continue to Fast Track. The buildout of our pilot processing plant and the later scale up of our commercial facility.
With that said, I would now like to turn the call over to our EVP for mind Planning and Development, Chris Blanchard to discuss operations.
Randall Atkins: Thanks, Jason, and as always, thank you to everyone joining us this morning. Although we had another strong operational quarter, this was, of course, coupled with the continued decline in the metallurgical coal indices and led to a slight compression in our operating margins that Jeremy will describe in more detail. That said, I am extremely proud of the operations team for having first half 2025 cash cost per ton sold that came in just over $100 per ton. This puts us squarely in the first quartile of the U.S. cash cost curve. During the second quarter, we temporarily idled the single-section Eagle Mine, where coal thicknesses and processing recovery made the mine marginal in these market conditions. The mine remains open and is being held in care and maintenance and can be restarted virtually immediately when market conditions warrant.
Thanks Jason. And, as always, thank you to everyone joining us this morning.
Although we had another strong operational quarter, this was, of course, coupled with the continued decline in the metallurgical, coal, indices and led to a slight compression in our operating margins. That Jeremy will describe in more detail.
that said,
I'm extremely proud of the operations team for having first half 2025 cash costs per ton sold that came in just over $100 per ton.
This puts us squarely in the first quartile of the U.S. cash cost curve.
During the second quarter, we temporary Idol. The single section Eagle mine or cold thicknesses and processing recovery, made the Mind marginal in these market conditions.
Randall Atkins: On an even more positive note, our Burwood Mine's two sections have now returned to full productivity, helped by the completion of a new air shaft in mid-May. We have seen the costs from this complex decline to their historically lower levels. The combination of the changes at Elk Creek on volume and the improvement in productivity at Burwood allowed us to close the quarter with June costs coming in the low $90 per ton range for the month on an overall company basis. We expect to continue to operate at these steady state cost levels throughout the balance of 2025, although I would remind everyone that the third and fourth quarters do have the traditional holiday shutdown periods.
The mine remains open and is being held in care and maintenance, and can be restarted virtually immediately when market conditions warrant.
on an even more. Positive note, our Berlin Minds 2 sections have now returned to full productivity helped by the completion of a new air shaft in mid-may.
We've seen the cost from this complex decline to their historically lower levels.
The combination of the changes at Elk Creek on volume and the improvement in productivity at Berlin allowed us to close the quarter with June costs coming in the low $90 per ton range for the month, on an overall company basis.
We expect to continue to operate at these steady-state cost levels throughout the balance of 2025. Although, I would remind everyone that the third and fourth quarters do have the traditional holiday shutdown periods.
Randall Atkins: The bulk of our major met capital projects were completed during the second quarter, and we expect capital expenditures in the east to decline to essentially maintenance levels for the second half of the year. We are, of course, looking at further ways to optimize our production portfolio and will take any opportunities to exercise further volume and cost discipline. We simply won't deploy the human or financial capital to force additional tons into weaker markets. Pivoting to the west and the critical mineral operations, we activated the Brook Mine in June in advance of our mine opening ceremonies on July 11th.
The bulk of our major met capital projects were completed during the second quarter and we expect Capital expenditures in the East to decline to, essentially maintenance levels for the second half of the year.
We are, of course, looking at further ways to optimize our Port production portfolio and will take any opportunities to exercise further volume and cost discipline.
We simply won't deploy the human or financial Capital to force additional tons into weaker markets.
Randall Atkins: Our initial mining area encountered extremely favorable conditions as far as coal thicknesses and mining ratio, and importantly, confirmed the softness and friability of the rock and coal seams and the relative mining advantage we will have for this project. I am happy to report that the mine opening and the initial mining stage were brought in under budget, ahead of schedule, and most importantly, without any injuries or environmental or regulatory issues. As was released earlier this week, the Brook Mine has just received its five-year renewal of its mining permit, and we are excited to move forward with the next stages of this project.
Pivoting to the west and the critical mineral operations, we activated the Brook Mine in June in advance of our mine opening ceremonies on July 11th.
Our initial mining area encountered extremely favorable conditions, as far as coal thicknesses, mining ratios, and importantly, confirmed the softness and fryability of the rock and coal seams and the relative mining advantage we will have for this project.
I'm happy to report that the mine opening and the initial mining stage were brought in under budget, ahead of schedule, and most importantly, without any injuries or environmental or regulatory issues.
As was released earlier this week, the Brook Mine has just received its 5-year renewal of its mining permit, and we're excited to move forward with the next stages of this project.
Randall Atkins: During our initial mining this summer, we successfully mined enough co-mingled rare earth elements, critical minerals, and coal ore to support our bench and pilot testing for the next 12 months, in addition to the 70 tons that will ship next week to the national labs. As Mike mentioned, as we move into the pilot stages of testing, we will start these bulk tests and optimizations offsite initially at third-party labs in advance of the completion of our own lab and pilot testing facilities onsite at Brook. With the backdrop of our continued solid operational results in the east and all of the potential that our critical mineral business holds, I would now like to turn the call over to Jeremy for a deeper dive into the financials for the quarter.
During our initial mining this summer.
We successfully mined enough co-mingled Rare Earth, critical minerals, and coal ore to support our bench and pilot testing for the next 12 months. In addition to the 70 tons, that will ship next week to the National Labs.
Mike mentioned as we move into the pilot stages of testing. We'll start these bulk tests and Optum optimizations offsite initially at third-party labs in advance of the completion of our own lab and pilot testing facilities on site at Brook.
With the backdrop of our continued solid operational results in the East and all of the potential that our critical mineral business holds. I'd now like to turn the call over to Jeremy for a deeper dive into the financials for the quarter.
Jeremy Sussman: Thank you, Chris. As noted, Q2 2025 operational results were again solid, with cash cost per ton sold of $103, which continues to put Ramaco Resources in the first quartile of the U.S. cash cost curve. Cash cost per ton sold would have been $101, excluding the now idled Eagle Mine. Even with higher costs at Eagle, both Q2 and year-to-date cash costs at Elk Creek are in the low $90s per ton range, making it among the lowest cost highball complexes in the country. In addition, for the second straight quarter, we achieved a record level of quarterly production. This led to Q2 tons sold of 1.1 million versus 900,000 in Q1. Unfortunately, metallurgical coal price indices have continued to decline. U.S. indices fell another 5% in Q2 versus Q1 and more than 20% year over year. This caused a year-on-year decline in earnings, despite the operating achievements.
Thank you, Chris.
As noted second quarter, 2025 operational results were again. Solid with cash cost per ton, sold of $103, which continues to put Ramo in the first quartile of the US Cash cost curve.
Cash cost per ton sold would have been 101. Excluding the now idle Eagle mine even with higher costs at Eagle both Q2 and unitate cash costs that Elk Creek are in the low 90s per ton range, making it among the lowest cost high ball complexes in the country.
In addition, for the second straight quarter, we achieved a record level of quarterly production. This led to Q2 tons sold of 1.1 million versus 900,000 in Q1.
Unfortunately metallurgical call Price, indices have continued to decline.
Jeremy Sussman: To get into specifics, Q2 adjusted EBITDA was $9 million compared to $10 million in Q1. Q2's net loss of $14 million compared to Q1's net loss of $9 million. Class A EPS showed a $0.29 loss in Q2 versus a $0.19 loss in Q1. While none of our primary peers have yet reported Q2 results, we suspect that our $20 per ton cash margins this quarter will be among the highest of our peer group. As a reminder, our Q1 cash margins of $24 per ton were the highest among our peer group then. Looking forward, we are making a few tweaks to our 2025 operational guidance given current market conditions. Specifically, we are optimizing our overall production and sales for reducing selective production to limit potential lower price stock sales, especially into Asia. At current prices, this should provide a net benefit to free cash flow.
Us indices fell on. Other 5% in Q2 versus q1 in more than 20% year-over-year. This caused a year-on-year decline in earnings despite the operating achievements.
To get into specifics Q2, adjusted ebit dial was 9 million compared to 10 million, q1 q2's net loss of 14 million compared to q1 of of net q1's. Net loss of 9 million Class. A EPS showed a 29% loss in Q2 versus a 19% loss. In q1
While none of our primary peers have yet reported Q2 results, we suspect that our twenty dollar per ton cash margins. This quarter will be among the highest of our peer group. As a reminder, our q1 cash margins of 24 dollars per ton where the highest among our peer group then.
Looking forward. We're making a few tweaks to our 2025 operational guidance. Given current market conditions specifically, we're optimizing our overall production and sales.
Jeremy Sussman: As a result, full-year 2025 production is now anticipated to come in at the low end of the previous 3.9 to 4.3 million ton range. Full-year 2025 sales are now anticipated to come in at the low end of the previous 4.1 to 4.5 million ton range. Moving to our balance sheet, our liquidity of more than $87 million on June 30th was up over 22% year on year. At the same time, our overall credit metrics remain strong, with net debt to adjusted EBITDA of a little over one times on a trailing 12-month basis. Earlier last month, we announced the redemption of the $35 million 2026 senior notes at 9%, as well as the issuance of $57 million of 2030 senior notes at 8.25%, plus the potential $8 million shoe. This increase in liquidity is, of course, not reflected in our June 30 cash figures.
For reducing selective per production to limit potential, lower price top sales, especially into Asia at current prices. This should provide a net benefit to free cash flow.
As a result, full-year 2025 production is now anticipated to come in at the low end of the previous 3.9 to 4.3 million ton range.
for year, 2025 sales are now anticipated to come in at the low end of the previous 4.1 to 4.5 million, ton range,
Now, moving to our balance sheet, our liquidity of more than $87 million on June 30th was up over 22% year on year. At the same time, our overall credit metrics remain strong, with net debt to adjusted EBITDA of a little over 1 times on a trailing 12-month basis.
Earlier this month or last month, we announced the Redemption of the 3520 2026 senior notes at 9%, as well as the issuance of 57 million of 20 of 2030 senior notes at 8 and a quarter plus potential, 8 million shoe.
Jeremy Sussman: However, as of July 31, our liquidity stood at $105 million. Turning to our rare earth elements and critical minerals business, I am very pleased with the results of the recently released summary preliminary economic analysis from Fluor. The results of the summary PEA outline a pre-tax net present value using an 8% discount rate of $1.2 billion, with an IRR of 38%, with a total initial capital cost estimate of $473 million. Before contingency, the summary PEA shows steady-state EBITDA of $143 million by 2029 and more than $130 million of EBITDA by 2028. Given the multiples on rare earth names, needless to say, we are incredibly excited about the potential of this business. Between the combination of the summary PEA results, coupled with the tenor of our discussion with both the U.S.
This increase in liquidity is, of course, not reflected in our June 30th cash figures. However, as of July 31st, our liquidity stood at $105 million.
Now, turning to our Rare Earth elements in critical minerals business. I'm very pleased with the results of the recently, released summary preliminary economic analysis from floor.
The results of the summary PA outline a pre-tax, Net, Present Value, using an 8% discount rate of 1.2 billion with an irr of 38%, with a total initial Capital cost estimate of 473 million.
But before contingency, the summary shows steady-state EBA of $143 million by 2029, and more than $130 million of EBA by 2028.
Now, give them the multiple on rare earth names. Needless to say, we're incredibly excited about the potential of this business.
Jeremy Sussman: government and potential private industry customers, we are doing what we can to accelerate the pilot plant development. As such, we are increasing 2025 SG&A guidance from $36 million to $40 million to $39 million to $43 million. The bottom line is that despite the challenging market conditions, our metallurgical coal operations remain firmly in the first quartile of the U.S. cost curve. When coupled with our liquidity levels and strong balance sheet, Ramaco Resources is well-positioned to both withstand any continued near-term coal market weakness, while also continuing to accelerate the development of our rare earth and critical minerals business. With that said, I would now like to turn the call back to the operator for any questions from those on the line.
Between the combination of the summary PA results, coupled with the tenor of our discussion with both the U.S. government and potential private industry customers, we are doing what we can to accelerate the pilot plant development.
Of our Rare Earth and critical minerals business.
With that said, I'd now like to turn the call back to the operator, for any questions from those on the line.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Nathan Martin with The Benchmark Company.
We will now begin the question and answer session to ask a question. You may press star then 1 on your touchtone phone, if you are using a speaker-phone please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star. Then 2 at this time we will pause momentarily to assemble our roster.
Our first question comes from Nathan Martin.
With the Benchmark company.
Nathan Martin: Thanks, operator. Good morning, everyone. Maybe just starting on the metallurgical coal side in the east, fully appreciate, you know, leaving the higher cost production in the ground at these prices. But I was wondering if we could get a little more color on any anticipated impact on quality mix. Also, it would be helpful to get your thoughts on the expected mix between domestic and export sales here in Q3, Q4, just given the much more favorable fixed domestic price.
Thanks operator. Good morning everyone. Um, maybe just starting on the, on the mech whole side of the East fully, appreciate, you know, leaving a higher cost production in the ground of these prices, but I was wondering if we get a little more color on any anticipated impact on our quality, mix also would be helpful to kind of get your thoughts on, um, expected mix between domestic and Export sales and 3244, just giving the much more favorable fixed domestic price.
Randall Atkins: Yep. Thanks, Nate. This is Jason Fannin. Yeah, I mean, as far as any quality impacts, obviously, we take that under heavy consideration when we are looking at any of these changes that we made. So we expect absolutely none to the portfolio we have today. I think in the back half, you are pushing there on the sales mix. We are roughly two-thirds seaborn, one-third domestic, relatively similar to the mix there in Q1 and Q2.
Yeah, thanks, Nate. This is Jason. Yeah, I mean, as far as any quality impacts, obviously we take that into heavy consideration when we're looking at any of these changes we might make. So we expect, you know, absolutely none to the portfolio. You know, we have today um,
I think in the the back half the uh, your question there, on the the sales mix, uh, we're roughly uh,
Nathan Martin: Yeah, Nate. We're a little bit more domestic in Q2 than Q1, but overall, in that kind of, you know, one-third on average, maybe we'll be a little closer to 35%, but somewhere in that range. Okay. Appreciate it, guys. Then just with the 2.5% production tax credit you mentioned in your release for met coal starting on January 1st, could you put any estimates around what you think your savings would be there?
2/3, uh uh Seaborn 1/3 domestic, um, relatively similar to the the mix there in uh in q1 Q2.
Yeah, Nate. We, we are a little bit more domestic in Q2 than q1, but overall in that kind of, you know, 1/3 on average, maybe we'll be a little closer to 35%, but, but somewhere in that range,
Okay, appreciate it guys. And then just with the um you know, 2 and a half percent production tax credit, you mentioned in your release from that. Cool. Starting on on January 1st could you put any estimates around what you think your savings could be there?
Speaker 10: Yeah, no, we're certainly excited for that inclusion in the big, beautiful bill. I would say, Nate, obviously, we're still kind of working through the dynamics, but I would say in that kind of $15 million a year range on EBITDA is our best estimate, obviously, plus or minus a little bit.
Yeah, no. We're uh, certainly excited, uh, for, uh, for that, uh, inclusion in the, uh, the big beautiful Bill and, you know, I'd say Nate obviously, uh, uh, we're still kind of working through the the Dynamics, but I'd say in that kind of 15 million dollar a year range on on EBA is is
Estimate obviously plus or minus a little bit.
Jeremy Sussman: Perfect. That's helpful, Jeremy. Thanks. Shifting over to the west and the Brook Mine, there's a report out yesterday, I think, to describe the recent meeting of White House officials with a sampling of rare earth companies and tech giants in attendance. I'm not sure if Ramaco Resources was part of that meeting, but I think the takeaway was that the administration could be looking to expand its price support for domestic critical mineral and rare earth production. It would just be great to get your thoughts there, whether or not Ramaco Resources has been having these kinds of conversations with the administration around the possibilities of providing a price floor for any of the critical minerals you guys expect to produce.
Perfect, that's helpful Jeremy. Thanks. And then, you know, shifting over uh, to the west from the brook mine. Um,
Mike Wallachek: Sure. Nate, this is Randy. First off, we are not going to comment on any specific discussions we are having with the government, although we are having discussions, as I outlined in my remarks. I do think the general approach that the government is using, obviously, the MP material deal is somewhat of a template, is an important one. I have argued that because of the fact that you have got a nation-state that is trying to essentially eliminate any other production of rare earth elements around the world, unfortunately, you have probably got to have the government step in to help support private industry in that respect. That is in a variety of means. Obviously, the market is not a free market because the Chinese manipulate both pricing and production. So you have to establish some degree of a level playing field.
You know, there's a report out yesterday, I think to describe the recent meeting of White House, officials with the sampling of, you know, Rare Earth companies and Tech, Giants and attendants. I'm not sure if rameau was was part of that meeting but I think the takeaway was that the administration could be looking to expand its price support uh for domestic critical mineral and and rare earth production. So just be great to get your thoughts there. And you know whether or not Rand Co has been having these kind of conversations with the administration and around the possibilities of providing a price floor for any of the, uh, the critical minerals. You guys expect to produce.
Sure, uh Nate, this is Randy. So I think first off, we're not going to comment on any, you know, specific discussions we're having with the government. Although we are having discussions as I outlined in my in my remarks, um, I do think yeah. You know, the, the general approach that the government is using obviously, the MP material deal is somewhat of a template. Um, is it important 1? Um, you know, I've argued that, you know, because of the the fact that you've got a a nation state that's trying to essentially eliminate any other production of rare Earths around the world. Uh, unfortunately, you probably got to have the government step in to help, uh, support Private Industry in that respect. And that's in a variety of means, obviously, the more
Mike Wallachek: That probably comes in a number of ways, many of which, of course, were touched on with the MP deal. I have advocated for some time that we probably need a national critical mineral strategic reserve, sort of like we have a national petroleum reserve. That is something that obviously the government is aware of and I think is perhaps considering. I think as far as encouraging and accelerating production in the U.S., forms of throughput agreements and price supports are obviously important factors there because, once again, you have got the Chinese trying to undercut any pricing to eliminate future production from anybody but themselves. We are encouraged by the direction that the government is taking, and we expect to continue our sort of alignment with the government and continue those discussions.
Once again, you've got the Chinese trying to undercut any pricing to eliminate future production from anybody but themselves.
So, um, you know, we are, we're encouraged by the direction that the government is taking, uh, and we, uh, expect to continue our, um, sort of alignment with the government and, uh, continue those discussions.
Nathan Martin: Appreciate those thoughts, Randy. Then, maybe just shifting to the PEA, as I am sure you are aware, I think one of the areas of focus many investors have had related to the price stack assumptions there. I believe you said you guys relied on some industry long-term forecasts amongst other things, but clearly these things can and will vary widely. I guess, more specifically, it would be great to get your thoughts around Scandium, as that seems to represent the largest portion of your forecast revenue. How did you guys arrive at that price? How comfortable are you with your assumption there? Additionally, the 65 million ton per year of estimated sales, at least based on my understanding, likely exceeds the current U.S. demand for that product.
Nathan Martin: How would you potentially kind of balance the supply with demand to keep that price at the level that remains economic for production, as you alluded to?
Mike Wallachek: Sure. Good question. I am going to let Mike handle the first part, and then I will let Jeremy also speak to the price stack we use. Mike, you want to go ahead and touch on that as far as the Scandium and the general pricing approach that we took?
Appreciate those thoughts, Randy. Then maybe just shifting to the, uh, the Pea. Um, you know, as I'm sure you're aware, I think 1 of the areas of focus for many investors, have had related to the the price deck assumptions there. And I believe you said, you guys relied on some industry, long-term forecasts amongst other things, but, you know, clearly these things can and and will vary widely. So I guess, you know, more specifically, uh, you know, it would be great to get your thoughts around Scandium, as that seems to represent the largest portion of your, your forecast Revenue. How did you guys, you know, arrive at that price? How comfortable are you with your assumption there? And then Additionally, you know, the 65 million ton per year of estimated sales at least based on on my understanding likely exceeds, you know, the current US demand for that product. So how would you potentially kind of balance the supply with demand? You know, to keep the price at the level that remains, you know, economic for production as you've alluded to
Jason Fannin: Yeah, thanks, Randy. We had this conversation, in fact, in Albany with the national labs this week. The conversation is that the demand for Scandium would be higher if there was a Western source of Scandium. Right now, Scandium is, you know, sourced mainly from China, and that limits its adoption into, you know, places where we feel long-term that there is going to be supply. We had reports from EY that conducted a study a few years ago that is suggesting Scandium demand is growing, potentially grow to 450 tons a year by 2030 and possibly over 1,000 tons a year. So we have several sources, government sources, and marketing studies conducted that would suggest if we can produce Scandium in the U.S., there will be a market for it.
Sure, good question. So I'm going to let Mike handle the first part. And then I'll let Jeremy also speak to the the price deck we use. So Mike, you want to go in touch on that as far as Scandium and the general pricing, uh, approach that we took.
Yeah. Um, thanks, Randy. Uh, we had, uh, this conversation in fact, in, in Albany, uh, with the National Labs this week and, and the conversation is that the demand for Scandium would be higher if there was a western source of scandium. And, um, right now Scandium is, you know, Source mainly from China and, and that limits, uh, it's, it's adoption into, uh, you know, places where we feel long term that there is going to be Supply. Um, we had reports from ey, they conducted a study, a few years ago that is suggesting Scandium demand is growing potentially grow to 450 tons a year by by 2030 and and possibly over a thousand tons a year. So, um, we, we have several, uh, sources government sources. And, and marketing's studies conducted that, that would suggest if we can produce Scandium in the US, there will be a market for it.
Mike Wallachek: I guess what I would add, Nate, too, in terms of the price stacks really across the board. First of all, this is three years out, so this is not pricing as of today. Second of all, these are Western pricing. Obviously, at the time, going back to the NDPR pricing we were using, it was significantly higher than spot. Then, of course, MP signed an offtake deal pretty close to what was being used in the price stack. Third is, we have looked at where prices have been historically, and certainly there have been periods where Scandium has been significantly higher than the price that we use, and that is certainly true for all of the MVPs. Last but not least, as Randy Atkins said, we have had incomings from customers.
I guess what I'd add needs to in terms of the, the price decks, uh, really across the board. So, you know, first of all, uh, you know, this this is 3 years out. So this is not pricing as of today, second of all, you know, the these These are Western pricing obviously, you know, at the time, going back to the ndpr price.
Mike Wallachek: Again, we are not going to share the specifics of that, but we certainly have a good feel of what they are willing to pay for a long-term secured domestic supply.
Randall Atkins: Yeah, and just anecdotally, to kind of add to what Jeremy Sussman just said, we had a major defense contractor that we have been in discussions with, and their comment to us was, look, if you could have a guaranteed secure domestic supply of a specific type of rare earth elements, the market would be 6X what it is today. Again, that is one customer, but I think it is a major customer and is certainly indicative of the fact that all the market right now is pretty much completely skewed by the Chinese trying to manipulate pricing to make sure nobody does get into the market. You have, I think, Asian Metals is the main index that most people kind of look at. That is published out of Singapore. The publishing is owned by two state-owned Chinese companies that are controlled by the Communist Party over there.
Using it was significantly higher than spot and then you know, of course, MP signed an offtake deal. Pretty close to what what, uh, what what was being used in the price deck? You know, third is, you know, we've looked at sort of where prices have been historically and certainly there have been periods where Scandium has been, you know, significantly higher than the the price that uh that we use. And that's certainly true for all of the the the the MVPs and then last but not least is Randy said, you know, we've had income in from uh, from customers. So, you know, again we're not going to share the the specifics of that but, you know, we certainly have a good feel of of what they're uh, you know, what they're willing to uh to pay over the, you know, for for a, for a, you know, long-term secured domestic Supply. Yeah. And just anecdotally to, to kind of add to what Jeremy just said. We had a major defense contractor that we've been in discussions with and their comment to us. Was look, if you could have a, a guaranteed secure domestic Supply, uh, of a specific type of, uh, Rare Earth the
Market would be 6X what it is today. Um, you know, again that's that's 1 1 customer but I think it's it's a major customer and is certainly indicative of the fact that, you know, all the market right now is pretty much completely skewed by, uh, the Chinese trying to manipulate pricing to, to make sure nobody does get into the market. Uh, you've got, I think Asian Metals is the main index that most people kind of look at that's uh, published out of Singapore. Uh, it's
Randall Atkins: So I am not sure that their prices are necessarily accurate. But again, to a larger comment, this is the kind of business that you are dealing with right now, which is why I think, to a certain extent, the government's involvement is going to be positive.
The publishing is owned by 2 state owned. Chinese companies that are controlled by the Communist party over there. So I'm not sure that their prices are necessarily accurate, but uh, but again into a larger comment that this is the kind of business that you're dealing with right now, which is why I think, you know, to a certain extent that the government's involvement is going to be positive.
Jeremy Sussman: All right, gentlemen, really appreciate that. I will pass it on for now. Best of luck in the second half.
Mike Wallachek: Thank you.
All right, gentlemen. I really appreciate that. I'll, uh, I'll pass it on for now. Best of luck in the second half.
Thank you.
Operator: Our next question comes from Nick Giles with B. Riley Securities.
Our next question comes from Nick Giles, with B Riley securities.
Mike Wallachek: Thank you, operator. Good morning.
Operator: Everyone, I think Nate asked it well, but I wanted to follow up. Can you just talk us through what you see as the most important growth drivers in the Scandia market? Or maybe said differently, Mike, if I heard you correctly, there could be demand created if there was a Western source. I just wanted to make sure I understand kind of all of the end market exposure there as admittedly I'm less familiar. Thank you very much.
Thank you, operator. Uh, good. Good morning everyone. Um, I think Nate asked it well, but I wanted to follow up, you know. Can you just talk us through what you see as the most important growth drivers in the Scandia marketer maybe set differently. Mike, if I heard you correctly, there could be demand created if there was a western source. And so just wanted to make sure I understand kind of all of the End Market exposure. There is um, admittedly. I must familiar. Thank you very much.
Amy: Sure. I think, you know, the obvious end user for Scandium is the airline industry. Some estimates suggest that Boeing and Airbus alone could use up to 100, 150 tons a year. Scandium aluminum alloys are lighter weight, and they certainly benefit aircraft. The NPV of an airplane is quite high when you use these alloys. Again, they haven't been using them because of the supply constraints. I think there's other applications in the automotive industry, in things like heat exchangers. So adoption in several places, alloys that need lighter. I would say the aerospace is the dominant industry that we would target, but there certainly is the automotive industry as the next one.
Sure, I think, uh, you know, the the obvious um, um, end user for Scandium is, is the airline industry. And, you know, some estimates, uh, suggests that Boeing and Airbus alone, uh, could use up to 150. 100 100 100 tons, a year, 100, 150, tons a year. Um, you know, Scandium aluminum Alloys, uh, are are lighter weight, and, uh, you know, they certainly benefit aircraft. The npv of an airplane is, is quite High when you use these Alloys and again, they haven't been using them because of the, uh, Supply constraints. Uh, I think there's there's other applications in the automotive industry, uh, in uh, you know, in in things like heat exchangers. Um, so adoption in in several places, uh, you know, Alloys, uh, that that need lighter. So, uh, I would say the Aerospace is is the dominant industry that we would Target. But there's certainly, um,
The automotive industry is is the next 1.
David Brown: Thanks for that, Mike. I guess just on that, I am just trying to put the pieces together here in the sense that prices were lower, and it appears like there were no supply constraints in the global market. But I guess it might have to do with the source of that supply. So what do you think have been the key constraints? Is it really that just the airlines want to use a Western source and just trying to match the two?
Amy: That's what we're hearing. Long-term certainty of supply is, that's not a Chinese supply source. They haven't been using the Scandium alloys because of fear that, at some point, it could be cut off.
Thanks for that. Mike and I I guess just on that. I'm just trying to put the pieces together here in the sense that you know, prices were lower and and it and it appears like there were no Supply constraints in the global market but I guess um it you know it might have to do with the source of that Supply. So what do you think? You know have been the key constraints? Is it really that you know just the airlines want to use a western source and just trying to to match the 2
Yeah, that's what we're hearing. Um, you know, long term, the certainty of supply is, uh, you know, that's not a Chinese supply source. And so, um, they haven't been using the scandium alloys because of fear that, you know, at some point, it could be cut off.
David Brown: Okay, understood. Thank you. Thank you for that. One last one on the coal side, one for Jason. Jason, revenue per ton came in flat to higher quarter over quarter. I want to commend you for that in this tough market. Curious to hear how you would describe realizations into Asia today. Where are net back shaking out if you tried to move a spot vessel? Understand you only have so many uncommitted tons, but would appreciate your perspective.
Okay. Um understood. Thank you, thank you for that. And uh, 1 last 1 on the call side, um, 1 for Jason Jason, the revenue proton came in flat to higher quarter of a quarter. So I want to commend you for that in this, in this tough Market. Um, but curious to hear how how you would describe realizations into Asia today. I mean, where are netback shaking out if you tried to move a spot vessel uh, under understanding, you only have so many uncommitted tons, but um, you know, would appreciate your perspective.
Speaker 4: Yeah, thanks, Nick. Yeah, certainly. Obviously, in Jeremy's comments, he pointed out that we're some of the reductions we've made in guidance do point to the fact that we'll stay out of the spot market in Asia, obviously, for that reason in particular, versus the Atlantic pricing. Obviously, there's freight impacts and then just a more saturated market there for many different reasons. As to pricing today, it's certainly, I would say, sub $100 back to the mines. That goes to Randy's point earlier, too, that the folks that are still required to participate in that are having to move tons there are most definitely underwater on their cash costs.
Yeah, thanks, Nick. Yeah, certainly. Um, obviously, in Jeremy's comments, you know, he pointed out that we're, uh, you know, some of the reductions we've made and...
In guidance, due point to the fact that we're, you know, we'll stay out of the spot Mark in age. Obviously, you know, for, for that reason, in particular, um, you know, versus the, uh, you know, the Atlantic pricing. Obviously, there's there's Freight impacts and then just a more saturated Market there. Um,
David Brown: The thing I guess I would add, you know, is we are more than 95% committed at the midpoint of production guidance. Candidly, we are not really in the spot market right now. It is not to say that, you know, a long-term good customer is not looking for a hold here or there at close to the index without much discount. We will do those types of deals. But again, we have made the decision to reduce selective production because, as Randy Atkins said, we are just not going to sell at a loss right now.
You know, from many different reasons, you know, as to to, you know, pricing today. It's, it's certainly, you know, I would say sub $100, um, back to the minds. And, and that goes to Randy's Point earlier too, uh, you know, that the folks that are still, uh, you know, required to participate in that or having to move tons. There are most definitely, you know, underwater on their cash costs. Yeah. I mean, the thing, I guess I'd add, um, you know, as, as we are more than 95% committed at the midpoint of, of production guidance. So, um, you know, candidly we're, we're, we're not really in the stock market right now. It's not not to say that, you know, uh, a long-term good customer isn't looking for a hold here or there at, at at close to, uh, close to the index, uh, without much discount. We'll do those types of deals but again, we we've made the, uh, decision to reduce selective, uh, production. Because as, as Randy said, we're just not going to sell at a loss right now.
Operator: Guys, I appreciate the update this morning. I will jump back in the queue, but continued best of luck.
Guy's appreciate the update this morning. I'll jump back in the queue but continued best of luck.
Jeremy Sussman: Operator, we'll turn it back to you.
Randall Atkins: This concludes our question and answer session. I would like to turn the conference back over to Randall Atkins for any closing remarks.
Jeremy Sussman: We again thank everyone for joining us this morning. We will look forward to catching up with you after the next quarter. It should be an interesting quarter for us as well. Take care.
Operator will, uh, will turn it back to you. This concludes our question and answer session. I would like to turn the conference back over to Randall Atkins. For any closing, remarks,
Be an interesting quarter for us as well. Take care.
Randall Atkins: The conference has now concluded. Thank you for attending today's presentation.
The conference has now concluded, thank you for attending today's presentation. You may now disconnect