Ramaco Resources Inc (METC) 2025 Q4 法說會逐字稿

Good day and welcome to the Ramaco Resources fourth quarter 2025 results conference call. (Operator Instructions) 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 Ramaco Resources, I'd like to welcome all of you to our fourth 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 Fannin, our Chief Commercial Officer, and Mike Woloschuk, 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 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.

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'd also like to remind you that you can find the 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'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.

Thank you, Jeremy. First, I want to thank everybody for being with us this morning. We had another extremely busy quarter on our critical mineral front out west, and indeed the best quarter in years on our Medco operations. Given the great job our co-ops team did in maintaining cost control in '25, I'm going to start on that front.

This quarter, we achieved the lowest cost we've seen since the fourth quarter of '21. At our Elk Creek complex, cost averaged just $80 a ton. Quarterly costs and margins were the strongest of all our central app peers.

We're also proud that in this difficult market environment, we have not cut wages or benefits and for our mine workers. We believe Ramaco is a best-in-class employer, and we continue to attract the top mining talent in our industry.

Reflecting our strong workforce, productivity in the fourth quarter was also the strongest we've had last year. Quarterly cash margins of $24 a ton were tied with our first quarter margins as the strongest of $25. This was despite a 17% decline in high valmet colon disease during that period.

As we look to where we're headed in '26, we are initiating our annual Medco guidance, which is published in our release. We are now poised to gross total sales for the sixth year in a row while lowering overall cash costs for the third year in a row.

We cannot control pricing, of course, but we are proud to compare our cost against any non-long haul peer in our space. As a result, if benchmark prices hold at current levels or even improve, we expect strong overall earnings growth in '26 versus '25.

On Met coal sales, we've now committed to roughly 80% of our '26 production at the midpoint of guidance. Jason will go into the specifics on our sales metrics, but we achieve both strong domestic and export pricing.

On overall Met coal markets, we've begun to see some clarity on what we hope is going to be a meaningful rebound this year in index pricing.

The potential triggers are both supply constraints in Australia and some stronger Indian demand after a slow buildup. Australian premium lowball indexes have increased to roughly $240 per ton and by more than $40 a ton from the fourth quarter.

Average low ball and high ball indices are also up almost 10% today compared to the 4th quarter.

As a result of all this market clarity, we are now either accelerating or initiating some of our lowball growth projects at our Berwyn and Maven complexes and moving them from '27 into '26, which we had previously deferred.

These projects are expected to add about a half million tons of production in '27 and between 10 to 200,000 tons of additional production in '26. They'll also add about $20 million in growth CapEx this year and have very strong paybacks.

On markets, we're currently seeing a crowded field of new projects from several of our peers. They're all fiercely competing for Asian export business and have created lots of pricing pressure, with current high index prices lagging well below historic relativities.

We, however, have been able to secure recent high ball sales into Asia at meaningful premiums because of our low pardon me, low sulfur character of our coals. It's our expectation, given market conditions, that published US index pricing will eventually adjust.

Now I'd like to move to our rare earth and critical mineral business.

We're excited about the new proprietary technology breakthrough from our internal team who has developed something called carbo chlorination for purposes of separation and extraction from coal.

Recall that we recently brought on board two of the most senior members of Flouriest Critical Mineral team that had spearheaded the work on our original Preliminary Economic Assessment or PEA. We have referred in our earnings release to some of the details of this novel form of flow sheet.

This carbochlorination process provides a fundamental derisking of a previous complicated and costly separation and extraction process in a number of respects. It reduces the overall capital and operating costs, it improves overall product recoveries and yields.

It will ultimately increase our cash flow. It creates a higher value product slate. It uses a proven technique which has already been deployed in the titanium industry and from a marketing perspective, it reduces the project's reliance on scandium as the main product driver, although we still feel scandium is an important future use for our rare earths.

We are now working with our independent consultant hatch to validate these estimates and expect to publish a revised PEA with third-party economics by the middle of the year. Despite being a coal company, we have a good deal of technology focus in our DNA.

We've been exploring, as many of new uses of carbon in coal and indeed rare earths for over a decade, both on our own and with the Department of Energy's national labs.

We currently have an impressive basket of intellectual property which includes over 70 patents, pending applications, exclusive license agreements, and trademarks.

Indeed, we have now already filed robust patent and trade secret protections around this novel flow sheet process and related technologies. We believe this will ensure that Ramoco and our Brook mine will be the only unconventional source of rare earths and critical minerals that will be able to use this novel proprietary process.

As I said, our internal analysis shows that this flow sheet results in increased cash flow and a reduction of both capital investment and operating costs. These preliminary figures compare very favourably to the already strong original economics that were in both Flo's original PEA last July, as well as the upsized development case from my last shareholder letter in September.

The new flow sheet also shows markedly increased separation recoveries and yields and a higher overall value product slate. Specifically, it changes the proportions of individual production levels of the overall basket of products.

We now anticipate that the largest percentage of production will come from the combination of high purity gallium, high purity alumina, as well as high purity quartz. These all target the semiconductor industries and are very high value products.

As mentioned, we also anticipate that this approach will reduce the overall percentage of scandium production. We continue to think that scandium use will prove to be a very important developing market.

However, the current appetite for high purity gallium and its related alumina and quartz in the semiconductor industry is both proven and rapidly expanding. We hope the Brook Mine will be an important and meaningful resource for this critical industry.

Finally, another important benefit to the new product slate is that the flow sheet route will allow us to forego the costly solvent extraction process.

We now expect to sell our rare earth production as a mixed rare earth carbonate, or what's called MRC to third-party metals and magnet processors at strong pricing.

Imre will now be a smaller percentage of our overall production, and this will also now eliminate the significant CapEx expenditure and the ongoing operating reagent expense associated with the former solvent extraction technique.

New flow sheet modifications will modestly increase the timeline for completion of our preliminary feasibility study from hatch.

However, on a project that could well exceed a billion dollars in capital investment, we would prefer to get it right before we build. We are continuing construction of our pilot plant testing facility in Wyoming, which should be complete this summer.

We will begin moving our internal chemical and metallurgic testing operations into that building when it opens. We will defer construction of the internal processing infrastructure at the pilot until we finalize the flow sheet testing from hatch.

As we've said, the internal equipment is being designed and optimized at the Zan Inc fabrication operations in Ontario.

We now expect full pilot operations to start in 2027.

On our downstream critical minerals front, the Trump administration recently announced an initiative to establish international price for for critical minerals. We remain confident that the US government is committed to ensuring the development of a robust domestic supply chain and will take further steps in this area.

We also continue to pursue procurement funding and development opportunities with both governmental and strategic stakeholders. We expect the new direction and information we've just announced today with this new flow sheet approach will inform a good deal of these discussions as we progress.

We were also recently gratified to see the administration's discussion about the creation of a domestic rare earth stockpile program called Project Vault. This program dovetails with our previously announced critical mineral stockpile and terminal at the Brook Mine, which we are pursuing with Goldman Sachs.

There should be more information on that in the near future.

We are also now exploring some reorganization options for Ramaco's overall corporate structure as we move further into our dual platform operations. We hope to announce more clarity on that in the coming months.

We expect to set up separate corporate entities within a holding company structure to better reflect the different forms of assets and operations that we both now have and are developing for the future.

We hope this structure will provide more operational and financial flexibility as we develop two different and separate businesses in the Met coal and separately in the rare earth critical minerals space.

All of this, of course, will be designed to enhance shareholder value. Again, we will provide more color about that as we roll it out. Lastly, I would note that our balance sheet is now in the strongest position it has been in our history.

This is despite some challenging recent years in the met coal markets. As we raised roughly a billion dollars in capital in the second half of 2025. We also ended the fourth quarter with record liquidity above $520 million up more than 275% year over year.

We expect this additional funding will allow us to more rapidly move forward with our transition to a dual platform of critical minerals company.

Now, I would first like Mike Woloschuk, who leads our critical mineral business, to share some further thoughts and details on our rare earth progress. I'll then turn the floor back to our team to discuss finances, cooperation, and markets. Mike?

Thank you, Randy. As you highlighted, we have some exciting updates, to report on flow sheet development.

We completed an expanded suite of testing of Brookmine composite samples at multiple external metallurgical facilities. These include chemical and mineralogical analysis, or physical properties, chemical mineral extraction, and purification testing.

This expanded test program also included initial testing of the carbochlorination flow sheet. Commercial carbo chlorination is a high temperature industrial process using carbon source such as coal and chlorine to convert metal oxides into volatile metal chlorides and water soluble chlorides.

This is the dominant technology used for nearly all titanium manufacturing today and from our test work completed today, including the mineralogical analysis and metallurgical response of the critical minerals, initial testing of carbo chlorination indicates the Brook mine responds favourably to our proprietary process.

In this flow sheet, the valuable volatilized critical minerals from the Brook Mine include gallium, germanium, aluminium, and silica. Initial tests show virtually all of the gallium was volatilized, and this is a significant recovery bump from the previous flow sheet.

We also achieved high extraction of aluminium chloride, a portion of which can be recovered to produce high purity alumina. Germanium and silica are also volatilized under our intended operating conditions. These volatile vapor phase chlorides will be condensed.

Separated and purified from the crude chloride mixture, this flow sheet allows us to produce higher purity gallium, which is sold at a premium.

We will also generate additional revenue from the HPA and high purity quartz, both high value products used for semiconductor, renewable energy, and other advanced applications.

Our carbonaceous clays contain abundant amounts of kolenite, which is the source for high purity alumina and high purity quartz. Effectively, we are now able to generate revenue from gang, something no hard rock rare earth project is able to do.

Scandium and the suite of the rare earth elements are converted to chlorides in the residue. They remain in the solids after the reaction, and similar to table salt, they will dissolve in water which is and simplify the balance of the rare earth portion of the flow sheet to produce mixed rare earth carbonate or the amrec product as Randy mentioned.

Separation of rare earths into oxides is both technically complex and capital intensive. Production of amrec is a flow sheet simplification that will reduce the capital and operating costs associated with rare earth solvent extraction, separation, and finishing.

The two main reagents in carbochlorination are carbon and chlorine, so a coal deposit has all the carbon we need, and it is not a reagent we have to purchase.

Most of the chlorine is recycled by decomposition of non-revenue generating mineral chlorides, simplifying the bulk reagent logistics associated with the hydrometallurgical flow sheet option.

Our focus going forward is to complete more test work to determine optimum conditions for the carbochlorination reactor and downstream testing on solubilizing the rare earth chloride residues to selectively extract scandium and produce the Mrec.

We will also conduct separation and purification testing on the crude chloride circuits to define the flow sheet necessary to achieve the various gallium purities. The testing plan for high purity alumina and high purity quartz is analogous to gallium.

Ramaco filed provisional patents on the carbo chlorination process to recover rare earths and other critical minerals from coal and carbonaceous clay deposits, and we feel this is a significant competitive advantage over other flow sheets being considered for critical mineral hosted coal deposits.

In parallel to the test work program, we have engaged a specialist consultant with experience in alumina carbochlorination to generate a thermodynamic simulation of the carbo chlorination circuit and to provide design inputs for the updated preliminary economic analysis.

We are engaging hatch to complete a PEA, and this is anticipated to be completed mid-year, followed by a pre-feasibility study by year end.

With the flow sheet pivot, we pause the detailed design of the downstream pilot plant modules at Zeon until we generate a new basic engineering package for carbo chlorination. This is anticipated in Q3 2026. However, we anticipate Zon's continued involvement since they have experienced piloting similar unit operations.

We also anticipate conducting on-site testing, both at the existing ICam Research Center, as well as the new pilot plant building now under construction. We expect the pilot shell to be complete later this summer.

Switching to an update on geology, we completed the fall drill program which included both infill and step out drill holes. We are nearing completion of an initial fence drill program which will inform drill density necessary to increase geological confidence to support selective mining.

We have additional defense programs planned and are increasing the number of drill rigs to complete this program this summer. We hope to have sufficient geological data from our drill programs to move to reserve status, from inferred up to indicated rather by year end, in line with the completion of the hatch pre-feasibility study.

As mentioned, we are building our internal laboratory to conduct internal assaying and metallurgical testing to mitigate lengthy external lab turnaround times.

We have two ICPMS machines, and we have equipment at site already that will be used for the carbochlorination reaction. We anticipate hiring technical and analytical staff to ramp up in-house geomeallurgical testing.

I would now like to turn the call over to our Chief Financial Officer Jeremy Sussman.

Thank you, Mike.

Starting with the balance sheet, I'm pleased to note that we had record liquidity of $521 million at the end of the year. This is the strongest level of liquidity that we've ever had. Liquidity was up over 275% compared to the same period of 2024, and we ended the quarter with a net debt position of 11.

I want to touch upon the extraordinary financial transformation to our balance sheet that we achieved in the second half of 2025.

First, in July and August, we raised $65 million in unsecured notes. Second, in August, we raised $200 million in new equity through an underwriting by Morgan Stanley and Goldman Sachs. Third, in November, working again with Goldman Sachs, Morgan Stanley, and a larger underwriting syndicate, we raised $345 million in six-year unsecured convertible notes with a 0% coupon.

Then in December we increased our revolving credit facility led by KeyBank to $500 million inclusive of a $150 million accordion feature.

In terms of 4th quarter performance, as Randy noted, operational results were again extremely solid, with cash cost per ton sold of $92. This continues to put Ramaco in the 1st quartile of the US cash cost curve. Q4 also represented the company's strongest quarter in terms of cash cost per ton sold in 4 years.

Fourth quarter cash margins of $24 per ton equalled those of the first quarter as the strongest of 2025 despite the US high volume metallurgical coal indices having fallen 17% during that time.

Our Q4 production fell modestly from Q3 to 892,000 tons, which was the result of the typical Thanksgiving and Christmas minor vacations, as well as our continued focus on value over volume.

We'd rather leave production in the ground versus selling it at a loss into the spot market.

Thankfully, our strong balance sheet, including our record liquidity position, allows us this flexibility. Should markets continue to improve, 2026 can provide a very meaningful working capital tailwind on the inventory front, especially in the back half of this year.

While metallurgical pole price indices declined throughout Q4, they're now up meaningfully from the bottom.

Unfortunately, however, US highball indices fell another 4% in Q4 versus Q3. But despite the continued fall in index pricing, we managed to print Q4 financial results that exceeded Q3 financial results as cash costs fell $5 per ton sequentially compared to realized pricing that fell just $4 per ton sequentially.

Now to get into specifics, Q4 adjusted EBITDA was $9 million compared to $8 million in Q3. Class A EPS showed a 22% loss in Q4 versus a 25% loss in Q3. I would note that these fourth quarter results exclude a one-time non-recurring expense incurred in connection with the structuring of a strategic critical minerals terminal at our Brook mine.

All of our primary peers have either reported Q4 results or preannounced results. I'm proud to note that our cash costs of $92 per ton and cash margins of $24 per ton were easily the best in class among our Central Appalachian Met Col peers in Q4.

Looking forward, we're initiating 2026 guidance.

Full year 2026 production is now anticipated to come in at 3.7 million to 4.1 million tons, an increase at the midpoint versus 3.8 million tons in 2025. Full year 2026 sales are anticipated to come in at 4.1million to 4.5 million tons and increase versus 3.8 million tons in 2025.

Our guidance tables lay out a number of other 2026 expectations such as CapEx, SG&A, DDNA, interest income, tax rate, and idle costs. While you can find the specifics in our earnings release, I want to touch on two areas.

First, we anticipate net interest income in 2026 versus net interest expense in 2025 as a result of our large cash balance.

Second, we anticipate CapEx of $85 million to $90 million up from $64 million in 2025. This includes spending on maintenance capital on our metallurgical coal mines of roughly $10 to $11 per ton, approximately $20 million of growth capital at the Berwin and Maven complexes, and roughly $20 million for our rare earth elements and critical minerals business.

We anticipate first quarter of 2026 shipments to be 800,000 to 950,000 tons due to normal seasonality with the Great Lakes, which are of course closed for most of the first quarter. We expect cash costs towards the high end of the annual range for Q1 on the back of lower rateable shipments.

As I look ahead, I'm incredibly optimistic about 2026. First, we have by far the best balance sheet and liquidity in our history.

Second, our cash costs and margins are among the best in Central Appalachia. Third, coal markets appear to be improving in large part due to pricing having reached unsustainable levels from a cost curve perspective in the second half of 2025.

Lastly, we're making meaningful progress on our rare earth elements and critical minerals path towards commercialization.

I would now like to turn the call over to Chris Blanchard, our EVP for Mind Planning and Development.

Thanks, Jeremy, and also to everyone who joined us today. It's always preferable to share our operational results and we have been successful in controlling those things like costs and volumes which are in our control.

Across all of Ramaco's operating complexes, I want to give recognition to all of our miners and support staff who focused on the fundamentals all year to help us drive down costs across the board and to complete the year with our best quarterly performance since 2021.

These successes are continuing as we begin 26. Productivity levels remain high relative to our internal forecasts, particularly at our flagship Elk Creek Complex.

However, while the mines continue to operate at budgeted levels or above, logistics bottlenecks with both of our railroad partners as a result of the extreme temperatures and snow in late January did cause delayed shipments in January and so far in February.

These were primarily due to the difficulties in moving and unloading coal to the piers and ports and the subsequent backlog of loaded trains with insufficient empty cars cycling back to all producers for several weeks.

While we built clean inventory due to these events, no production had to be curtailed. However, the impact of the interruption in rail equipment cycling cascaded and continues to be worked through.

As Randy mentioned, the highball markets remain oversupplied and ultra-competitive.

Fortunately, our Elk Creek product has some quality advantages over some of the incremental highball producers who tend to be of a lower metallurgical rank and have higher sulfur contents To take further advantage of that, we are transitioning a portion of Elk Creek's production into even lower sulfur areas of our reserve to better meet our customers' needs.

As mentioned earlier, we've also kept our wages and benefit packages for our workforce constant, even in the declining market over the last couple of years, and we are taking opportunities to strengthen our workforce with some of the most talented miners available in Southern West Virginia and Virginia.

On the low ball side of the company, we're seeing meaningful improvement in market dynamics and limited excess supply of high-quality, low volatile cos.

Accordingly, our board of directors has approved pulling forward approximately $20 million of planned growth capital from 2027 into 2026 at our Berwyn and at our Maven complexes.

First, we'll begin to ramp low volatile coal production at Berwyn mine, approximately one year ahead of schedule. The timing of the full buildout will be dictated by the completion of two additional air shafts into the coal mine.

Work has been ongoing on these projects since late 2025 and will be completed during this summer. Once the ventilation system is in place, a full section will be added to the mine at an annual expected production rate of 350,000 tons per year.

While the Berwinn mine will not be running at this full rate until the 3rd quarter, we will bring on some interim lowball production during the second quarter at our Laurel Fork mine, utilizing the same equipment, capital, and workforce.

Combined, we project an additional 150,000 approximate clean tons of production during '26. Secondly, at the Maven complex, we are now moving forward with the construction of the flood load batch way loadout system at our Maven processing plant.

Once operational, this will allow us to ship our premium maiden product to our domestic and international customers without adding approximately $20 per ton of additional logistics trucking costs, which have negatively impacted this operation.

We believe that having the fully operational loadout will potentially allow us more opportunities to purchase and ship other high-quality, low vol coal that would be advantaged by loading at Maven.

Work has commenced on the load up project already, and we're projecting it being operational and loading its first train in the middle of the fourth quarter of '26.

The completion of the loadout will make the development of the underground portion of the Maven property much more advantaged, and we will continue to evaluate the full bulk buildout of the underground mines at Maven at that time and let the market conditions guide the timing of that investment and an expansion.

Finally, to briefly turn to some of the mine and construction updates in Wyoming at the Brook Mine. During the fourth quarter, we expanded the Brook mine pit to excavate additional thermal coal for an upcoming trial with a regional customer.

During this mining, we also segregated several 100 additional tons of rare earth element and critical mineral ore from two different enriched strata zones for continued optimization testing.

Construction has also begun on the ore storage facility on the Brook mine itself, which will function as a staging area for mine products prior to being sent to outside labs and ultimately to our own on-site pilot facility, which Mike mentioned is also starting foundation work and will be under roof later this summer.

Detailed design engineering is also underway for all of the electrical transmission to site and the substation to power our future commercial processing facilities.

In closing, with the security and liquidity from all the transformational financial transactions that were consummated during the second half of '26.

We find ourselves with flexibility to modify our operational portfolio to quickly take advantage of the strengthening global Met markets, while also continuing the development of the Brook mine at full speed as well to discuss both the colon and the critical market critical minerals markets in detail.

I'd like to now turn the call over to our Chief Commercial Officer, Jason Fannin.

Thanks, Chris, and good morning everyone. Today I'll share our views on the steel and coking coal markets, provide an update on our 2026 Met coal sales position, and then discuss the progression of our marketing strategy at Brooke following our recent flow sheet breakthrough.

We continue to see global steel markets increasingly shaped by policy rather than supply demand dynamics. China exported a record amount of steel in 2025, even as domestic crude steel production declined that divergence between export growth and domestic contraction is unlikely to persist.

Export licensing measures and rising political pressure suggest that Chinese steel exports could decline meaningfully this year which would lend considerable support to global steel prices and in turn provide uplift to coking coal prices.

European steel production appears to be stabilizing, and prices are already reacting to tighter import controls, rising nearly 20% since early Q4 2025.

One of the world's largest steelmakers has predicted a year over year increase in European steel production of approximately 6 million to 8 million tons, reflecting improved mill margins amid a more constructive policy backdrop.

North America, trade enforcement continues to support domestic pricing. US steel prices remain among the highest globally, with spot pricing nearing $1000 per ton for the first time since mid-2023.

India remains the primary coking coal demand growth engine. Blast furnace production increased 17% year over year in 2025, and blast furnace still making capacity continues to expand aggressively.

Discussions between US and Indian officials regarding increased US met coal imports could lead to a potential removal of the import tax on US Met coal into India which in turn could increase US imports above 2025, 9.5 million tons.

Seaborne coal markets began in 2026 with an already tight Australian premium coking coal supply. Further exacerbated by extreme weather events, with Australian premium lowball pricing sitting just below $240 per ton today, up nearly 20% from Q4.

US East Coast indices are approximately $196 per ton for low ball, $159 for highball A, and $149 for highball.

B this volatility underscores how thin the par market truly is Seaborne hard cooking coal supply is roughly 180 million tons annually with less than 5% of that typically available on the spot that structural thinness magnifies short-term supply disruptions that said, the development of significant long wall highball production capacity in the US has intensified competition in both domestic and export markets.

As a result, US eyeball pricing continues to stubbornly lag historical relativities to Australian PLV. We therefore continue to focus our growth efforts on our lowball portfolio where the supply demand balance remains tighter and pricing durability appears stronger.

The new railroad out at Mabon, once operational, will materially improve logistics economics and provide access to additional customers for this premium central app low volatile call.

Turning to our 2026 sales position, we have secured commitments for 3.1 million tons.

North American customers account for 1.1 million tons at an average fixed price of $142 per ton. In addition, 2 million export tons are committed at index-linked pricing.

Turning to our Brook mine progress, our carbo chlorination-based flow sheet should substantially strengthen and de-risk our product mix and revenue basket.

We are now placing greater weight on high purity gallium, high purity alumina, and high purity quartz, with a modestly reduced emphasis on scandium applications, although scandium does remain an important part of the Brook mine portfolio.

High purity gallium metal, if achieved at scale, positions Ramaco directly within the strategic semiconductor material supply chain.

In parallel, we now intend to market our magnetic rare earths, which represent a smaller portion of our overall revenue basket, primarily as a mixed rare earth carbonate or MR.

These flow sheet enhancements combined with our elevated gallium focus materially expand our addressable market.

We are in active dialogue with several companies and a wide variety of potential customers regarding potential offtake and partnership structures. As we advance pilot operations and generate lab scale and pilot scale material, we expect these discussions to evolve into formal commercial frameworks.

Finally, we continue coordinated engagement with defense primes and governmental stakeholders.

The broader policy backdrop, including potential domestic stockpile initiatives and price support mechanisms, reinforces the strategic relevance of the Brook Mine, as well as the strategic critical minerals terminal, which we announced last year.

For the terminal, our location with a dry climate and a site adjacent to both the Class One railroad mainline and a major interstate highway, puts Ramaco in a unique position to serve the US's stockpiling needs.

To conclude, these are exciting times for the company. On Medco, we enter 2026 with a strong and largely committed sales book, improving lowball pricing dynamics, and a disciplined growth strategy focused squarely on higher return segments.

We believe our cost position, product quality, and logistics flexibility leave us well positioned as markets rebalance.

On critical minerals, our flow sheet direction represents a meaningful step forward. It should enhance product quality, lower capital intensity, and sharpen our commercial focus toward high purity gallium and strategic MRc partnerships.

With that, I'll turn it back to the operator for the Q&A portion of the call. Operator.

Ben Kallo, Baird.

Hey, good morning, guys. Thanks for taking my question, and thanks for all the, detailed information. A lot to go through. Maybe first, so there, the, you had a lot of changes, Brook mine, and the process and technology. I'm just, I guess my question is, how did you guys, decide to go this route?

I know that you guys have been working at this for a long time and so, from the outside, it looks a little abrupt, but I'm sure that, this is a thoughtful process. So just if you could explain that. And then, the second question, just as I'm following up on that is, as you make these changes, I know you, you've been in discussions with, for off-take agreements and, with the government, and does that change the timing of any of that? Thanks you, thank you guys.

Let Mike take the first part of that question.

Yes, sir, we had anticipated that this might be a flow sheet option, some time ago but hadn't, completed the necessary test work to understand the magnitude, granted there's some delays in completion of a PFS with this flow sheet change, the expected, impacts, on the economics are significant, so we were, I guess, delighted to see that, almost all of the gallium went to, gallium chloride, which is, the ability to produce a higher purity gallium product comes at a significant premium.

So, we feel like for a long mine life project such as the Brook mine with potentially 100-year mine life, that this is a material improvement to the economics. Yeah, the last flow sheet, you know. No issues with it, but again, the step change in, improvements, justified the change in our view.

Yeah, I think Ben, to the second part of your question, we have kept our discussions, in relative real time, in terms of different procurement and, finance options and honestly the pivot to probably a more gallium centric.

Product slate is an improvement and enhances our discussions candidly, because, in a number of respects, first of all, we sort of de-risk the process.

The carbochlorination is, of course, a proven technique that's been used with titanium, so it's not as if, this is a novel first time approach, given the fact that we've got a novel feedstock to start with.

But, secondly, of course, it's been noted before, we think scandium is going to be a very important part of The whole kaleidoscope of, different types of rare earth usage moving forward.

It's mainly going to be used for light weighting and obviously for some electronic storage, but it's a market that, is a bit more in the future, that's evolving.

The gallium market for semiconductors is not only, apparent today, but it's growing, rapidly, given sort of the electrification of the entire economy and of course the AI business. So we are finding, a high level of receptivity, both, with strategics as well as with the government, in terms of a pivot toward more gallium, and perhaps a lesser emphasis on scandium. So I hope that kind of generally addresses.

[Douglas Orman, Discovery Capital].

Good morning. Thank you. I'm just making sure I caught that in the initial comments. It sounds like the engineering enhancements, would lead to material increased value relative to the September shareholder letter which had the $5 billion NPV and not just the floor PEA, when we think about a launching off point for, what the new flow sheet will provide. Are we thinking about that correctly? Thanks.

Yeah I think you know we're looking at the increased production and obviously from the new product suite, the potential higher purity and what that translates into in terms of throughput that that's the conversation we're going to have but the basket price.

If you will, is materially increased because of these, products. We've been, our internal estimates, we've been, I would say, conservative in terms of what we're looking at for purity for both high purity alumina and high purity quartz.

We've taken, 4N type purities in our projections, but, if you look at, gallium at six, 6N, it comes at 3 times the price of 4N. And similar, similarly with high purity corps, if you produce a five end versus a four end, it's 3 times the price.

So these are the things that we want to test going forward, the ability to produce those products, understand what the recoveries are, there, there's a whole lot of upside here, and, we already see a significant increase on basket price.

Thanks.

Carlos de Alba, Morgan Stanley.

Yeah, thank you. Good morning, everyone, just I wanted to, may, maybe get a clarification on the, on the new, flow sheet, because I think I just heard that this is not a novel approach that has been used in Titanium, but if that is the case, then, would you mind please explain, just for the, for our benefit.

What is the fundamental technology breakthrough then that you have, achieved with this processing? And then, what is the level of confidence on the new approach? Can you maybe, talk about the independent laboratories that have done initial testing on this new flow sheet, method, and, you can share the names, and if there is any documentation that you will share with the market.

Sure, I think, it comes back to geology, and, because this, the deposit has gallium, germanium, also the mineralogy. So, we've published that the clays are aluminous silica clays.

This carbochlorination process, basically breaks those clays and allows us the ability to produce those products. So high purity quartz, high purity alumina and I think, obviously, the rare earths stay in the residue. So you, you'll find that there's been publications about carbonyl chlorination in rare earths, and yet you've mentioned the titanium industry.

This hasn't been done before in the way that we are viewing the flow sheet. So we have some. IP around it, we talked about patent pending applications, exactly how we're doing it, the operating conditions, the temperatures, the residence times, how we separate these products is proprietary.

I would say that it's, we were even surprised by the results. We've been pub public in our, disclosure about the labs that we've been using, Element USA. We've, engaged, consultant, Kingston Process Metallurgy, who has carbo chlorination experience in the alumina industry, so we're working with them on the simulations. I'm very confident about this.

The other benefit is, we've significantly de-risked the bulk reagent requirements for Hydromel. So, we aren't importing large train loads of reagents in this process.

The fact that we're a coal deposit. The reagent is right there for us to take and chlorine, is simply regenerated in this flow sheet, as they do in the titanium industry.

So most of the chlorine, that we require will be recycled, we'll be, more, I suppose, our operating costs, which were 70% of the processing costs for reagents previously, we'll now be, we'll have, we'll see electricity consumption go up. But that's certainly more favourable, having a, operating costs tied to electricity in a place like Wyoming.

Thank you, Mike, and may I just follow-up on the gallium, aspect of the new flow sheet. I understand that, how, do you have any information that you can share on the economics and the cost advantage that maybe this new approach would have relative, for example, of extracting gallium from a red mud, refining operations.

Our understanding from other companies, more on the aluminium supply chain is that it's not very profitable for them to strike the gallium. So, yeah, I wonder if you have any color that you can share with us.

Yeah, you nailed it. I think that's been one of the challenges of extracting gallium from other sources, red muds, residues from zinc projects.

Gallium is volatile as a chloride, and so that's why this process works. We, as I mentioned, we saw almost all of the gallium go into the, off gas, which will then be condensed as a crude product and separated from the other chlorides.

So what that translates into is a double-digit increase in gallium recovery, and then compounded by the ability to produce higher purity products.

This flow sheet is probably the only one that's going to be a, primary producer of gallium that can really compete with the purities required for semiconductor industry. So, we're excited by that.

Brian Lee, Goldman Sachs.

Hey guys, good morning. Thanks for taking the questions. I guess, maybe following up on the prior line of questioning, the RE basket, I think it's, the price you're outlining on slide 12 went up to $500 and change, from your prior view of $300 and change.

I know you, maybe it's too premature to give us all the nitty gritty specifics, but can you give us a sense of. You know what's embedded in there I think previously you had been talking about, scandium roughly 60% of the value of Brookmine deposit, assuming $3750 you know per kg pricing.

You're saying there's a modest decline in that. Can you kind of give us a sense of what's changing, in terms of mix of scandium on the value of the deposit and then price, if any change there. And then where kind of gallium sits in in the context of the new flow sheet versus the prior reviews thank you.

Yeah, I'm glad you noticed that. I, that basket value, if you will, had some assumptions, that we would, be able to capture 5% of the high purity aluminium market at a four-end purity, and that didn't include any high purity quartz in that analysis. So we think there's even upside, with those numbers when we start putting high purity quartz in the equation and higher purity products.

So I think, truly that number, could get better from what we've published, but, we want to finish the PEA in order to get confirmation, on the numbers and particularly on the costs, which we've, mentioned is going to be mid-year to give you an idea of the basket, we anticipate that Gallium, depending on, and we're working with our internal marketing team.

Could challenge scandium in terms of, equivalent, production, but we anticipate scandium is going to be somewhere, perhaps less than 40. We did see a double-digit increase in scandium recovery as well, right?

So it still maintains, a significant portion of the revenue, but gallium is going to, is going to grow probably, in, into the 30s, and the HPA and HPQ is something that's going to be significant contributor to this project as well. So, and the final point on that, of course, HPA and HPQ don't translate into the PREO grades at all. So, that's why we want to be talking about basket price.

Brian, to your point, you know that the dollar per ton figure is up more than 50% previous to what we had. Previously disclosed, so kind of going back to, I think an earlier question, I mean the bottom line is our internal projections certainly, show material increases and incremental revenue and free cash flow versus what we've previously disclosed and obviously now that's what we're working with a third-party to validate.

Okay, no, that's helpful color. I appreciate that, guys, and then maybe just a question on timing, I appreciate that, the change in the flow sheet, pushes out a little bit of the timing in terms of the pilot and the demonstration facilities.

Seems like it's about a year delayed. How should we think about that in the context of. How you're budgeting for timing of Brook Mine, ultimately coming online, I think most people had, including we, sort of a 2028, startup time frame for that, deposit coming online. Is that still valid, or should we be thinking it's, a year behind schedule like the pilot? Thank you.

Yeah, look, I mean that that's obviously, we're projecting a few quarters of delay, because of this change, so, you know that does push out the overall project schedule, similarly, so that that's kind of what we're anticipating is the is the overall schedule will push out as well, so yeah.

Okay, thanks guys I'll pass it on.

Alex Fuhrman, Lucid Capital Markets.

Hey guys, thanks very much for taking my question and congratulations on all of the progress you made, last year. Wanted to ask about, the revised flow sheet and the decision to sell rare earths as a mixed product now. I'm curious kind of where you see that product going.

Heavy rare earth separation capacity today is virtually non-existent in North America. Do you anticipate that there will be some separation capacity in the future by the time that you have your amre product to sell or actually are there maybe applications for mixed rare earth products?

Yeah, this is Jason. So, I'll speak to that. Yeah, I'd say taking one step back, a lot will depend on what the TREO is on that Mrec, and of course that'll depend somewhat as this flow sheet, further develops, any other separation processes that Mike, and his team are working on.

Yeah, I mean, as you mentioned, in the states, most of the separators are, pilot scale or developing, there are obviously some that, let's say in allied countries overseas, we're in contact with nearly all these folks now, and.

Certainly in the last several weeks we've seen a big emphasis from the government here in the US on that part of the supply chain.

They recognize, the same as we do and you do, that it's, a potential bottleneck today, I think given the timeline that Mike just described and how quickly we see this developing, and as well as the conversations we've had with some of those parties, I think we feel confident that that the capacity will be there when we're going to need it.

Okay, that's really helpful. I appreciate that. Thank you.

Matthew Key, Texas Capital.

Good morning. Thanks for taking my questions. Staying on Brooke, I just, I was wondering if you wanted to do the rare earth separation down the road, could you eventually pursue that there? And like or are the economics just not there to kind of justify the incremental process and res, versus just doing a mixed rare carbonate.

Sure, I think you're on to that. I mean, with the additional revenue, generators for this project, the rare earth side of it, becomes less. So, we're looking at 15% of the overall project revenue basket with rare earths, so it doesn't make sense to, pursue.

A complicated, and it's technically challenging, to separate all of these rare earths, into products, and build the solvent extraction plant to do so. We're better off selling the product to someone else, and the change in flow sheet is really what's driving that strategy.

We're trying to simplify the back end, where it's a smaller portion of our overall revenue reducing the CapEx and potentially the schedule and operating costs associated with it, so.

Got it. That's helpful, and I guess I'll ask one on the met side too, you mentioned that the rail load out could facilitate the eventual development of deep mining at Maven.

How soon could a project come online once you make that go for decision? And, in terms of capital investment of a project like that, could you maybe provide a ballpark, in terms of just getting that across the finish line once you make that go ahead.

So the deep mines are largely permitted already at the Maven complex. So once we decide to move forward, it's mostly, relatively small construction lead time and acquiring equipment.

So somewhere between six- and eight-months lead time from deciding to move forward on the underground to actually having first production.

So it certainly could be a '27 event if the market supported that. And I think the way I would, frame it for you is, each underground section of equipment plus the development is, between, the face ups and facilities and equipment is probably about $12 million to $15 million so.

In our long-term, medium term plans, we project maybe as being about 1.5 million tons per year. So to add an extra 1 million tons it's probably in, $60 million to $70 million, total CapEx development to get there, but that's rolled out over a, extended period of the build out, yeah.

Got it. That's super helpful thanks for taking my questions and best of luck.

Jeff Graham, Northland Capital Markets. Please go ahead.

Morning guys, was curious with this, with the change in the flow sheet and some of the timing, being pushed back a bit, can you touch on your ability to qualify product for customers in the near term here? Is that something that would really ramp up more significantly, once the pilot plans online?

Sure, I think the objective of the pilot plant was exactly that to produce a sufficient quantity for product testing, but we are looking at ways to produce, sufficient volumes, particularly for HPA and HPQ, at bench scale because, we may be able to do that. That's something that we're anticipating that we might be able to do some product testing on two of those before even piloting.

Got it. Okay, great. Thank you and for my follow-up on the on the met cole side, seems like there's potentially some upside to coal sales this year. I know you guys aren't guiding to that yet, but, given the positive commentary you guys have on the macro, what might you guys need to see to, feel good about pushing some more product out to the market? Thanks

Well, I'll let Jason provide the granular detail, but the reality is we've got some unpriced index funds, out there right now. So if we see upward market movement we're going to be able to ride that wave but Jason go ahead and pick.

Up on the other, okay, yeah, and on the low-ball side, here in the states, obviously we're seeing that already, and that's why we're advancing, bringing these tons forward both at, Berwin and then, bring the load out forward there at maybe. Obviously it's still lagging, the POV, the US oil is by more than the freight differential.

You, I think you'll see that that GAAP close as the year goes forward here, obviously highball tough. Q4 was tough, one southern app producer, came up to full production on a new project and one northern app producer brought a project back online fully in Q4. It's a lot of competition we saw in Q4, here in the states we're already seeing supply side changes, we've got a neighbours there at Elk Creek, that come April will fully wind down.

Some of that's due to the export market they face. Some of that's due to, we've all faced, lower domestic pricing this year versus last year. And we've seen some smaller neighbours there in central app as well that have either wound down or winding down now too. So I think you'll see the, those relativities on the high ball start to creep back up closer to historical relativities which will to Randy's comment.

Obviously the biggest part of our met portfolio is Elk Creek, is highball, so those moves up, have a big impact on us as we go forward here and Jeff, I'd just add, we mentioned in the release the ability to, sell, almost 5 million tons just to be clear, that's without any incremental CapEx we've built up a fair amount of inventory on the back of our kind of disciplined approach to sales last year. So, just to be clear, that's, want to make sure that everyone is aware that's not with any incremental CapEx.

Got it. That's all really helpful commentary. Thank you guys for the time.

Nick Giles, B. Riley Securities.

Hi team, this is [Sondaria], on behalf of Nick Giles from B Reilly. I just wanted to check on the, like with the solvent extraction coming out of the flow sheet, directionally how CapEx might trend relative to that prior $1.1 billion estimate, even if it's just an order of magnitude, like how much reduction can we see.

Look, I think, we want to get the numbers, from the PEA to look at what the CapEx is. It's hard to compare exactly these two flow sheets for sure.

We pull out some CapEx on the back end. We also shrink, I, some of the purification because the crude product separation is a small part of the circuit. Carbo chlorination is really where the CapEx is going to be, so I would say that we still want to do those numbers and crunch those numbers, and hatch is going to give us what that looks like at the completion of the PEA.

Got it, and then just one more follow-up. So now that the policy environment around Critical Minerals is quite favourable, how are you guys thinking about, going behind DPA Title II or DOE loan programs as a part of financing? And has there any con, has there been any conversation around this?

Well I think as we've said before we are in conversation with various government groups I'm not going to get into the specifics about which programs that we're pursuing but you know again. The fact that we're now somewhat pivoting to a slate of products which I think the government is acutely interested in, which is the gallium for semiconductors, I think we'll provide a little bit of wind in our sail in terms of those conversations.

Thank you and all the best guys. I'll turn it back.

Nate Martin, Benchmark Company.

Thanks, operator. Good morning, guys. I'll be sticking with the cold side now. Give some 1Q guidance there. Does that incorporate the impacts from the Arctic weather Chris mentioned earlier? And then, how should we think about the cadence of shipments in 2Q through 4Q as the weather warms up and you guys catch up there?

Hey Nate, this is Jason. I'll take that. Yeah, the key one numbers that Jeremy gave earlier do and, in fact, take account the slowdown we saw there in shipments in, late January, early February, we've seen that.

Improve, greatly here over the last few weeks, but, we're still working through the backlog there, on the shipment side, as far as cadence goes, obviously with the lake starting back up, getting out of the winter season, two, we're looking at about a million tons, Q3, Q4, about 12 each.

Okay. Great, Jason. Appreciate that color. Maybe also while I have you, talk about the relativities between, premium low ball and high ball. Should we expect, I guess the first quarter Coca-Cola realization to be pressured given that wide discount we've seen most of the quarter so far, and then maybe any thoughts on what the percentage versus benchmark could ultimately look like for the year.

Yeah, I'd say on the second one, your second question there, that's a tough one. I've been doing this almost 30 years, and I'm always wrong, so I hate to even wager a guess. I do think it will improve, from where we're at, Q4, and I, and I, I'm seeing, some supply side discipline, in this quarter on spot that's out there.

I think we'll see that improve again. There are, our neighbours I mentioned earlier, it's 2 million tons a year coming offline, and we've seen some other smaller ones come offline around us in Appalachia.

I think the higher cost guys just can't compete are going to go away, and I think the lower cost guys that are left, we'll, will have that discipline, and it'll start to shrink that relativity. But I think it'll take some time for the markets to rebalance around, the incremental highball that's coming out of the US now.

Okay, got it. That's fair. And then maybe just one more if I could. The domestic tonnage of 1.1 million tons, obviously priced above the public guidance, it appears you guys mentioned.

Can we maybe get some color on the quality mix of those tons and then, a little bit lower both on an absolute and percentage basis compared to what you guys have done in the last few years. So maybe, a little information around that shift if there is some.

Yeah, I, one thing I pointed out around the last couple years is there were some carryover volumes, let's say '23 to '24 to '25, that was in that tonnage number, on a deal to deal basis, I'd say we're less than 10% down on contracted tons from year to year in that number, given that carryover in previous years, and, on the mix, obviously as Chris and Randy both mentioned.

Our lower sulfur side, there's a limited amount Of, in the domestic, obviously foundry business, we support both those plants pretty heavily, so with that lower overall number, there's a little bit more of a, an impact from those sales.

Yeah, they mix will be similar, it's, about [callfi] 15plus percent low volume and the rest high vol domestically. One of the reasons we're moving forward with the rail load out at, it may have been that, that's a very good, domestic potential, but it's logistically challenged right now. So we think that'll play nicely into the mix next year.

Very helpful, guys. Appreciate the time and best of luck.

Thank you.

This concludes our question-and-answer session. I would like to turn the call back over to Randall Atkins, Chairman and CEO, for any closing remarks.

Great, well, I just want to thank everyone for being on the line today and we'll look forward to catching up here in the next quarter.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.