Ramaco Resources, Inc. (METC)

Ramaco Resources, Inc. is a Delaware corporation formed in October 2016, with principal offices in Lexington, Kentucky. It operates and develops high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia, and describes itself as a pure play metallurgical coal company with 59 million reserve tons and 1,119 million measured and indicated resource tons. Its Class A and Class B common stock and its 9.00% Senior Notes due 2026 are listed on the NASDAQ Global Select Market. The company says its advantaged geology gives it higher productivity and lower cash costs than most U.S. metallurgical coal producers.

Its development portfolio centers on four properties. The Elk Creek complex in southern West Virginia (about 20,200 acres, six active mines, 16 targeted seams) produces mostly high-volatile A/B coal and began production in December 2016. The Berwind complex on the West Virginia/Virginia border (about 62,500 acres, three active mines, including the Amonate Assets acquired from Coronado in December 2021) targets low-volatile coal in the Pocahontas No. 4 seam. The Knox Creek complex (two active mines, 64,050 acres, with a preparation plant) and the Maben complex (one active mine, 28,000 leased acres, acquired in 2022) complete the core properties. Beyond coal, the company holds the Brook Mine property (about 16,000 acres plus a research and development facility) and mineral deposits near Sheridan, Wyoming, where it is assessing rare earth element recovery and coal-to-carbon-based products. Its RAM Mine permit in Pennsylvania was denied and will not be appealed. Estimated annual capacity is just under four million clean tons, with a plan to reach about seven million, subject to market conditions, permitting and capital. It also buys coal from independent producers for blending or resale.

The company's target customers are North American blast furnace steel mills and coke plants, along with international metallurgical coal consumers in Europe, South America, Asia and Africa, and occasionally coal traders and brokers. Some coal is marketed into specialty markets that value low ash content. Demand is highly correlated with steel industry conditions. North American contracts are typically 12-month, fixed price and volume agreements negotiated in the third and fourth quarters of the prior year, while export sales are priced off indices with terms from spot to one year.

Operationally, Elk Creek coal is processed at an on-site preparation plant, upgraded in 2022-2023 to about three million tons of annual capacity, and shipped from rail load-out facilities served by CSX. Berwind has its own processing plant, which saves transportation to the Knox Creek plant 26 miles away. Mineral rights are largely controlled through leases, including with McDonald Land Company. U.S. exports compete with lower-cost Australian metallurgical coal, which has a geographic advantage in the Pacific Basin, and the company says the Atlantic Basin is the main market for U.S. exports.