Ramaco Resources, Inc. (NASDAQ:METC) Q4 2020 Earnings Conference Call February 19, 2021 9:00 AM ET Company Participants Jeremy Sussman - CFO Randy Atkins - Chairman and CEO Chris Blanchard - COO Conference Call Participants Lucas Pipes - B. Riley Securities Nathan Martin - Benchmark David Gagliano - BMO Capital Operator Good morning, ladies and gentlemen and welcome to the Ramaco Resources Incorporated Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. L ...

4th Quarter 2020 Investor Presentation Ramaco Resources February 2021 Disclaimer Forward Looking Statements The information in this presentation includes "forward-looking statements." All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "could," ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) Delaware 38-4018838 (State or ...

Ramaco Resources, Inc. (NASDAQ:METC) Q3 2020 Earnings Conference Call November 4, 2020 11:00 AM ET Company Participants Jeremy Sussman - Chief Financial Officer Randy Atkins - Chairman Mike Bauersachs - President and CEO Conference Call Participants Mark Levin - Benchmark Company Curt Woodworth - Cr??dit Suisse Lucas Pipes - B. Riley David Gagliano - BMO Capital Markets Operator Good morning, ladies and gentlemen and welcome to Ramaco Resources Inc Third Quarter 2020 Earnings Conference Call. At this time, ...

E RAMACO 3rd Quarter 2020 Investor Presentation Ramaco Resources November 2020 Disclaimer Forward Looking Statements The information in this presentation includes "forward-looking statements." All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) | Delaware | 38-4018838 | | --- | --- | | (State or other jurisdiction | (I.R.S. Employer | | of incorporation or organization) | Identification No.) | ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 250 West Main Street, Suite 1800 Lexington, Ken ...

Financial Data and Key Metrics Changes - EBITDA for the first half was approximately $19 million, with nearly $11 million for the second quarter, reflecting a 30% increase quarter-over-quarter [10] - Net income increased by about 35% for the same period [10] - EPS for Q2 2020 was $0.06, up from $0.05 in Q1 2020, but down from $0.26 a year ago [22] - Revenue was $36 million, down 13% from Q1 and down 45% from the same period in 2019 [22] - Other income totaled $8.5 million, primarily from the anticipated forgiveness of the PPP loan [22] Business Line Data and Key Metrics Changes - Q2 sales were 362,000 tons, down 27% from the same period in 2019 [23] - Q2 2020 production was 390,000 tons, exceeding sales due to demand contraction [23] - Average price per ton in Q2 was $91, compared to $116 in the same period of 2019 [23] - Cash margins on company-produced coal were $17 per ton in Q2, down 35% from Q1 and down 62% from the same period in 2019 [24] Market Data and Key Metrics Changes - U.S. steel capacity utilization increased by 59% since last month [15] - U.S. manufacturing of passenger cars rose from about 2,000 units in April to approximately 140,000 units in June [15] - Current pricing for metallurgical coal is about $136 per ton FOB Australia, compared to a spot price of about $107 [15] - China's domestic steel production has fully rebounded, with met coal prices hovering around $50 per ton [16] Company Strategy and Development Direction - The company aims to remain conservatively geared to navigate market turmoil and be poised for recovery [12] - Focus on maintaining low debt, low mine costs, and strong liquidity while being opportunistic [21] - Plans to explore new markets, including a test shipment to Brazil and partnerships in Asia [19] - Development projects are on hold until market clarity improves, with potential for significant production increases once conditions stabilize [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery of the U.S. economy and steel production, tempered by uncertainties [13][14] - The company is prepared for potential supply contractions due to market conditions and competitors' financial distress [17] - Management highlighted the importance of government stimulus and infrastructure spending for recovery in the metallurgical sector [32] - The company remains focused on health and safety measures related to COVID-19 while adapting operations accordingly [36] Other Important Information - The company received approximately $8.4 million in PPP financing, which helped bring back furloughed workers [11] - Capital expenditures for Q2 were $9.1 million, down 21% from the same period in 2019 [26] - The trailing 12 months net debt to adjusted EBITDA level is just under 0.3 times, indicating strong financial health [29] Q&A Session Summary Question: What should be expected regarding domestic pricing in 2021? - Management indicated that the tender sizes for 2021 are better than 2020, but caution is advised due to market uncertainties and potential resurgence of COVID-19 [63][64] Question: Is there a strategy to hold off on domestic contracts and focus on international markets? - Management acknowledged the leverage position and cost advantages, suggesting a balanced approach to domestic and international sales [66][67] Question: Will a significant portion of sales continue to be in the domestic market? - Management confirmed that domestic sales remain a priority, but they are also exploring international opportunities, particularly in Brazil and Asia [73][74] Question: How will the force majeure letters impact shipment modeling for the back half of the year? - Management noted the uncertainty surrounding force majeure impacts and emphasized the importance of long-term relationships with customers [78][80] Question: What is the estimated capital required to double production? - Management estimated that incremental capital expenditures to double production could range from $10 million to $20 million, depending on the projects undertaken [81][82]

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The company's forward-looking statements are based on current expectations and subject to various risks and uncertainties - Forward-looking statements are identified by words like "could," "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions[9](index=9&type=chunk) - Key risks include the impact of the **COVID-19 pandemic**, anticipated production levels, economic conditions in metallurgical coal and steel industries, and regulatory changes[10](index=10&type=chunk) - The company operates in a competitive and rapidly changing environment, and **actual results could differ materially** and adversely from those anticipated[12](index=12&type=chunk) [Part I. Financial Information](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying notes detailing operations and accounting policies [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show an increase in total assets and stockholders' equity, driven by higher cash and inventories Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2020 | December 31, 2019 | | :-------------------------------- | :------------ | :---------------- | | Total Current Assets | $54,175 | $44,323 | | Total Assets | $242,101 | $226,813 | | Total Current Liabilities | $27,837 | $26,411 | | Total Liabilities | $65,568 | $56,730 | | Total Stockholders' Equity | $176,533 | $170,083 | - Cash and cash equivalents increased from **$5,532 thousand** at December 31, 2019, to **$9,759 thousand** at June 30, 2020[18](index=18&type=chunk) - Inventories increased significantly from **$15,261 thousand** to **$25,455 thousand**, reflecting a build-up[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company's revenue and net income declined significantly compared to the prior year, shifting from operating income to an operating loss Condensed Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $36,374 | $65,761 | $78,310 | $123,221 | | Total Costs and Expenses | $40,673 | $52,872 | $81,468 | $102,083 | | Operating Income (Loss) | $(4,299) | $12,889 | $(3,158) | $21,138 | | Other Income | $8,504 | $194 | $9,714 | $492 | | Net Income | $2,652 | $10,613 | $4,614 | $17,496 | | Basic EPS | $0.06 | $0.26 | $0.11 | $0.43 | - Revenue decreased significantly by **44.7%** for the three months ended June 30, 2020, and by **36.4%** for the six months ended June 30, 2020, compared to the prior year periods[20](index=20&type=chunk) - The company reported an operating loss of **$4,299 thousand** for the three months and **$3,158 thousand** for the six months ended June 30, 2020, a substantial decline from operating income in the prior year[20](index=20&type=chunk) - Other income saw a significant increase, primarily due to the recognition of **$7.3 million** from the PPP Loan forgiveness[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased during the first half of 2020, primarily driven by net income and stock-based compensation Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance at January 1, 2020 | Balance at June 30, 2020 | | :----------------------- | :------------------------- | :----------------------- | | Common Stock | $410 | $426 | | Additional Paid-in Capital | $154,957 | $156,777 | | Retained Earnings | $14,716 | $19,330 | | Total Stockholders' Equity | $170,083 | $176,533 | - Stockholders' equity increased from **$170,083 thousand** at January 1, 2020, to **$176,533 thousand** at June 30, 2020, driven by net income and stock-based compensation[24](index=24&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased while financing cash flow increased significantly due to proceeds from borrowings, including the PPP Loan Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net Cash from Operating Activities | $6,833 | $13,031 | | Purchases of Property, Plant and Equipment | $(18,019) | $(19,737) | | Net Cash from Financing Activities | $15,528 | $5,213 | | Net Change in Cash and Cash Equivalents | $4,342 | $(1,493) | | Cash and Cash Equivalents, End of Period | $11,207 | $5,887 | - Net cash from operating activities decreased by **47.6%** to **$6,833 thousand** for the six months ended June 30, 2020, compared to the same period in 2019[28](index=28&type=chunk) - Net cash from financing activities significantly increased to **$15,528 thousand**, primarily due to proceeds from the PPP Loan (**$8.4 million**) and other borrowings[28](index=28&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 – Business](index=12&type=section&id=NOTE%201%E2%80%94BUSINESS) The company's metallurgical coal operations were adversely affected by COVID-19, leading to customer delays, reduced demand, and operational adjustments - Two customers delayed or curtailed contractual obligations, expected to reduce total contracted sales volumes for 2020 by up to **12%**[33](index=33&type=chunk) - Actions taken in response to COVID-19 include a two-week operational furlough of **203 employees**, temporary **30% salary reductions** for certain executives, partial closure of the Berwind mine, and deferral of non-essential capital expenditures[37](index=37&type=chunk)[94](index=94&type=chunk) - The company borrowed an additional **$13.2 million** under two promissory notes to improve liquidity and limit employee furloughs[36](index=36&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=14&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines key accounting policies, including the treatment of the PPP Loan as a government grant and significant customer concentrations - The company is self-insured for workers' compensation claims, with an estimated aggregate liability of **$1.2 million** at June 30, 2020[43](index=43&type=chunk) - The SBA Paycheck Protection Program Loan (PPP Loan) is accounted for as an in-substance government grant, with proceeds recognized as income when related costs are incurred[44](index=44&type=chunk) - Sales to four customers accounted for approximately **73%** of total revenue for Q2 2020, and sales to two customers accounted for approximately **50%** for H1 2020, indicating significant customer concentration[48](index=48&type=chunk) - The adoption of ASU 2016-13 (Credit Losses) and ASU 2018-15 (Internal-Use Software) effective January 1, 2020, did not have a material impact on the consolidated financial statements[49](index=49&type=chunk)[50](index=50&type=chunk) [Note 3 – Property, Plant and Equipment](index=16&type=section&id=NOTE%203%E2%80%94PROPERTY,%20PLANT%20AND%20EQUIPMENT) This note details the composition of and changes in property, plant, and equipment, along with depreciation and amortization expenses Property, Plant and Equipment, Net (in thousands) | Category | June 30, 2020 | December 31, 2019 | | :-------------------------------- | :------------ | :---------------- | | Plant and equipment | $154,337 | $142,773 | | Construction in process | $6,650 | $11,986 | | Capitalized mine development cost | $67,831 | $58,773 | | Less: accumulated depreciation | $(45,673) | $(35,330) | | Total property, plant and equipment, net | $183,145 | $178,202 | Depreciation and Amortization Expense (in thousands) | Period | 2020 | 2019 | | :-------------------------------- | :--- | :--- | | Three months ended June 30, | $5,341 | $4,822 | | Six months ended June 30, | $10,343 | $8,938 | - Capitalized amounts related to coal reserves at non-mining properties totaled **$14.8 million** at June 30, 2020, up from **$12.7 million** at December 31, 2019[52](index=52&type=chunk) [Note 4 – Debt](index=18&type=section&id=NOTE%204%E2%80%94DEBT) The company's debt instruments include a Revolving Credit Facility, a Term Loan, and an Equipment Financing Loan, with all covenants met - The Revolving Credit Facility includes a **$10.0 million** term loan and up to **$30.0 million** revolving line of credit, with **$8.0 million** outstanding and **$22.0 million** available as of June 30, 2020[54](index=54&type=chunk)[55](index=55&type=chunk) - The Term Loan had an outstanding principal balance of **$8.3 million** at June 30, 2020, bearing interest at LIBOR + 5.15%[56](index=56&type=chunk) - An Equipment Financing Loan of approximately **$4.7 million** was entered into on April 16, 2020, with an outstanding balance of **$4.5 million** at June 30, 2020[58](index=58&type=chunk) [Note 5 – SBA Paycheck Protection Program Loan](index=18&type=section&id=NOTE%205%E2%80%94SBA%20PAYCHECK%20PROTECTION%20PROGRAM%20LOAN) The company received an $8.4 million PPP Loan, with $7.3 million recognized as other income due to anticipated forgiveness - Received **$8.4 million** PPP Loan on April 20, 2020, with a 1% interest rate and maturity on April 16, 2022[59](index=59&type=chunk)[60](index=60&type=chunk) - Approximately **$7.3 million** of PPP Loan proceeds were used for eligible expenses by June 30, 2020, and recognized as other income due to anticipated forgiveness[64](index=64&type=chunk) - The remaining **$1.1 million** of the PPP Loan is recorded as deferred income, with full forgiveness expected as eligible expenditures continue to be incurred[65](index=65&type=chunk) [Note 6 – Equity](index=20&type=section&id=NOTE%206%E2%80%94EQUITY) This note describes the company's stock-based compensation plan, detailing restricted stock awards and related expenses - **3.3 million** shares were available for future awards under the stock-based compensation plan at June 30, 2020[66](index=66&type=chunk) - Compensation expense related to restricted stock awards was **$1.1 million** for the three months and **$2.0 million** for the six months ended June 30, 2020[68](index=68&type=chunk) - As of June 30, 2020, there was **$7.8 million** of total unrecognized compensation cost related to unvested restricted stock, to be recognized over a weighted-average period of 2.4 years[68](index=68&type=chunk) Restricted Awards Activity (Shares and Weighted Average Grant Date Fair Value) | Metric | Shares | Weighted Average Grant Date Fair Value | | :----------------------- | :------- | :------------------------------------- | | Outstanding at Dec 31, 2019 | 1,628,241 | $6.32 | | Granted | 1,763,172 | $3.04 | | Vested | (419,844) | $6.17 | | Outstanding at June 30, 2020 | 2,971,569 | $4.40 | [Note 7 – Commitments and Contingencies](index=20&type=section&id=NOTE%207%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) The company has reclamation bonding requirements, contingent transportation commitments, and is involved in ongoing litigation regarding a silo failure - Total reclamation bonding requirements were **$15.1 million**, supported by surety bonds, as of June 30, 2020[70](index=70&type=chunk) - Contingent liabilities under take-or-pay transportation arrangements totaled **$4.1 million**, expiring March 31, 2021[71](index=71&type=chunk) - The company is involved in litigation against Federal Insurance Company and ACE American Insurance Company regarding a partial structural failure of a coal storage silo in November 2018[74](index=74&type=chunk) [Note 8 – Revenue](index=22&type=section&id=NOTE%208%E2%80%94REVENUE) Revenue from both domestic and export coal sales declined significantly, with future performance obligations subject to potential delays Coal Sales Revenue (in thousands) | Category | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic revenues | $20,686 | $39,544 | $51,218 | $76,116 | | Export revenues | $15,688 | $26,217 | $27,092 | $47,105 | | Total revenues | $36,374 | $65,761 | $78,310 | $123,221 | - As of June 30, 2020, outstanding performance obligations for the remainder of 2020 included **0.8 million tons** at an average fixed price of **$93/ton** and **0.1 million tons** with index-based pricing[75](index=75&type=chunk) - **0.2 million tons** at **$91/ton** may not ship in 2020 due to material adverse change and force majeure notices received[75](index=75&type=chunk) [Note 9 – Income Taxes](index=22&type=section&id=NOTE%209%E2%80%94INCOME%20TAXES) The company's effective tax rate is calculated on a discrete basis for interim periods, influenced by state taxes and permanent differences - Recognized **$0.4 million** of tax expense for the excess of book expense over the tax deduction for vested restricted stock awards during the three months ended June 30, 2020[77](index=77&type=chunk) - Effective tax rate (excluding discrete items) was **21%** for Q2 2020 and **16%** for H1 2020, compared to **17%** for both periods in 2019[77](index=77&type=chunk) - The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses, and depletion expense differences[77](index=77&type=chunk) [Note 10 – Earnings Per Share](index=24&type=section&id=NOTE%2010%E2%80%94EARNINGS%20PER%20SHARE) Both basic and diluted earnings per share (EPS) experienced a significant decline in 2020 compared to the same periods in 2019 Earnings Per Share (in thousands, except per share amounts) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | Basic EPS | $0.06 | $0.26 | $0.11 | $0.43 | | Diluted EPS | $0.06 | $0.26 | $0.11 | $0.43 | - Diluted EPS for both three and six months ended June 30, 2020, excludes **937,424 options** to purchase common stock as their effect would be anti-dilutive[79](index=79&type=chunk) [Note 11 – Related Party Transactions](index=24&type=section&id=NOTE%2011%E2%80%94RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions with Ramaco Coal, LLC, primarily concerning production royalty payables and payments - Production royalty payables to Ramaco Coal, LLC were **$0.3 million** at June 30, 2020, and **$0.5 million** at December 31, 2019[80](index=80&type=chunk) - Royalties paid to Ramaco Coal, LLC totaled **$1.1 million** for the three months and **$2.3 million** for the six months ended June 30, 2020[80](index=80&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the adverse impact of COVID-19 on financial results, operations, and liquidity, along with non-GAAP performance measures [Overview](index=25&type=section&id=Overview) The COVID-19 pandemic severely impacted Q2 2020 results, causing reduced demand, customer delays, and operational adjustments to preserve liquidity - The company's primary revenue source is metallurgical coal sales, with a **265-million-ton** reserve base as of December 31, 2019[83](index=83&type=chunk) - COVID-19 caused a severe global economic slowdown, leading to declining demand and reductions in spot prices for metallurgical coal[85](index=85&type=chunk)[87](index=87&type=chunk) - Customer contractual obligations are expected to be delayed or curtailed, reducing total contracted sales volumes for 2020 by up to **12%**[86](index=86&type=chunk) - Operational responses included a two-week furlough for **203 employees**, **30% temporary salary reductions** for executives, and deferral of non-essential capital expenditures[88](index=88&type=chunk)[89](index=89&type=chunk)[94](index=94&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Net income and Adjusted EBITDA declined significantly due to lower sales volumes and realized pricing, though other income increased from PPP Loan forgiveness Consolidated Statement of Operations Data (in thousands) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $36,374 | $65,761 | $78,310 | $123,221 | | Operating income (loss) | $(4,299) | $12,889 | $(3,158) | $21,138 | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | Adjusted EBITDA | $10,811 | $19,093 | $19,228 | $32,778 | - Net income decreased by **75%** and Adjusted EBITDA by **43%** in Q2 2020 compared to Q2 2019, due to lower realized pricing and volumes[95](index=95&type=chunk) - Revenue per ton sold (FOB mine) declined **22%** from $116/ton in Q2 2019 to **$91/ton** in Q2 2020, and **17%** from $111/ton in H1 2019 to **$92/ton** in H1 2020[97](index=97&type=chunk)[107](index=107&type=chunk) - Coal sales volumes decreased by **31%** (QoQ) and **22%** (YoY) for the three and six months ended June 30, 2020, respectively[97](index=97&type=chunk)[107](index=107&type=chunk) - Other income increased significantly to **$8.5 million** (Q2 2020) and **$9.7 million** (H1 2020), primarily due to **$7.3 million** recognized from the anticipated forgiveness of the PPP Loan[102](index=102&type=chunk)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained liquidity through cash reserves, credit availability, and new borrowings while funding significant capital expenditures - At June 30, 2020, cash and cash equivalents were **$9.8 million**, with **$22.0 million** available under existing credit agreements[117](index=117&type=chunk) - Cash flows from operating activities were **$6.8 million** for the first six months of 2020, negatively impacted by a **$4.5 million** build-up of inventories[120](index=120&type=chunk) - Capital expenditures totaled **$18.0 million**, primarily for the Berwind mine development and Elk Creek mining complex infrastructure[118](index=118&type=chunk) - Net borrowings of **$16.3 million** were made to increase cash position and fund capital expenditures during the COVID-19 pandemic[120](index=120&type=chunk) [Indebtedness](index=34&type=section&id=Indebtedness) The company's debt profile includes credit facilities, an equipment loan, and a PPP loan expected to be fully forgiven - Revolving Credit Facility: **$8.0 million** outstanding at June 30, 2020, with **$22.0 million** availability[123](index=123&type=chunk) - Term Loan: **$8.3 million** outstanding at June 30, 2020, interest at LIBOR + 5.15%[124](index=124&type=chunk) - Equipment Financing Loan: **$4.5 million** outstanding at June 30, 2020, interest at 7.45% per annum[126](index=126&type=chunk) - PPP Loan: **$8.4 million** received April 20, 2020, with **$7.3 million** recognized as other income due to anticipated forgiveness for eligible expenses[127](index=127&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) The company had no material off-balance sheet arrangements as of June 30, 2020 - No material off-balance sheet arrangements as of June 30, 2020[134](index=134&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP measures like Adjusted EBITDA and cash cost per ton to evaluate operating performance - Adjusted EBITDA is defined as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, and any transaction-related costs[136](index=136&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Three months ended June 30, 2020 | Three months ended June 30, 2019 | Six months ended June 30, 2020 | Six months ended June 30, 2019 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $2,652 | $10,613 | $4,614 | $17,496 | | EBITDA | $9,546 | $17,905 | $16,899 | $30,568 | | Adjusted EBITDA | $10,811 | $19,093 | $19,228 | $32,778 | - Non-GAAP revenue per ton (FOB mine) decreased from **$116/ton** in Q2 2019 to **$91/ton** in Q2 2020, and from **$111/ton** in H1 2019 to **$92/ton** in H1 2020[139](index=139&type=chunk) - Non-GAAP cash cost per ton sold was **$74/ton** in Q2 2020 (vs $73/ton in Q2 2019) and **$70/ton** in H1 2020 (vs $72/ton in H1 2019)[141](index=141&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Disclosures about market risk are incorporated by reference from the company's 2019 Annual Report on Form 10-K - Quantitative and qualitative disclosures about market risk are incorporated by reference from the Annual Report on Form 10-K for the year ended December 31, 2019[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no significant changes to internal controls during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2020, at the reasonable assurance level[143](index=143&type=chunk)[144](index=144&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2020, that materially affected internal controls[146](index=146&type=chunk) [Part II. Other Information](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to routine litigation, none of which is expected to have a material adverse effect on its financial condition - No pending litigation, disputes, or claims are expected to have a material adverse effect on the company's financial condition, cash flows, or results of operations[149](index=149&type=chunk) - For a description of legal proceedings, refer to Note 7 to the Condensed Consolidated Financial Statements[149](index=149&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, focusing on the adverse impacts of the COVID-19 pandemic and risks related to the PPP Loan - The COVID-19 pandemic has caused significant volatility, economic disruption, and a decline in metallurgical coal prices and demand for steel[152](index=152&type=chunk)[153](index=153&type=chunk) - Customer concentration is a significant risk, with two customers accounting for approximately **50% of total revenue** for the six months ended June 30, 2020[159](index=159&type=chunk) - Customer delays or curtailments due to COVID-19 are expected to reduce total contracted sales volumes for 2020 by up to **12%**[156](index=156&type=chunk)[160](index=160&type=chunk) - There is a risk that the company's eligibility for the PPP Loan could be challenged, potentially leading to civil and criminal penalties[164](index=164&type=chunk) - Uncertainty remains regarding future changes in PPP loan rules and regulations, which could affect loan forgiveness[165](index=165&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety violations and regulatory matters is included in Exhibit 95.1 of this report - Mine safety disclosures are provided in Exhibit 95.1 of this Quarterly Report[166](index=166&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including officer certifications, mine safety disclosures, and XBRL documents - Includes certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[168](index=168&type=chunk) - Mine Safety Disclosure is filed as Exhibit 95.1[168](index=168&type=chunk) - XBRL Instance Document and Taxonomy Extension Documents are included as Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, and 101.PRE[168](index=168&type=chunk) [Signatures](index=47&type=section&id=SIGNATURES) [Signatures](index=47&type=section&id=Signatures) This section contains the certifying signatures of the company's principal executive and financial officers as of August 6, 2020 - The report was signed by Michael D. Bauersachs, President and Chief Executive Officer, and Jeremy R. Sussman, Chief Financial Officer, on August 6, 2020[173](index=173&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001‑38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) | Delaware | 38‑4018838 | | - ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) The company is a pure-play metallurgical coal operator focused on low-cost production for steel and coke producers - Ramaco Resources is a pure-play metallurgical coal company with **242 million tons** of high-quality metallurgical coal reserves across four main properties: Elk Creek, Berwind, RAM Mine, and Knox Creek[16](index=16&type=chunk) - The company's strategy is to grow production to **4-4.5 million clean tons by 2023**, subject to market conditions and capital deployment, while maintaining a position as a low-cost U.S. producer[21](index=21&type=chunk)[29](index=29&type=chunk) - In 2019, **75% of the 1.95 million tons** of coal sold went to North American markets, with the remaining 25% to export markets, primarily Europe[56](index=56&type=chunk) - Two customers accounted for approximately **42% of total revenue** in 2019[56](index=56&type=chunk) - The company's operations are subject to extensive and complex federal, state, and local regulations covering environmental protection, mine safety, and employee health, which represent a major cost consideration[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) [Our Projects](index=8&type=section&id=Our%20Projects) The company's portfolio includes four primary projects, with Elk Creek as the main producing asset - **Elk Creek Mining Complex**: Began production in late 2016, contains approximately **114 million tons** of clean saleable metallurgical coal reserves, and produces a high volatile A/B product[34](index=34&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) - **Berwind**: Development began in late 2017, with commercial production from the Pocahontas No. 4 seam expected in late 2020 and a mine life of over 20 years[19](index=19&type=chunk)[44](index=44&type=chunk) - **Knox Creek**: Includes a 650 tons-per-hour preparation plant that processes coal from the Berwind mine and third-party producers[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - **RAM Mine**: Located in Pennsylvania, it is scheduled for initial production in 2022 with an anticipated annualized rate of **300-500 thousand tons** and a 10-year mine life[51](index=51&type=chunk)[52](index=52&type=chunk) [Environmental and Other Regulatory Matters](index=16&type=section&id=Environmental%20and%20Other%20Regulatory%20Matters) Operations are governed by stringent federal, state, and local laws covering reclamation, water, air, and mine safety - Operations are subject to the Surface Mining Control and Reclamation Act (SMCRA), which requires comprehensive environmental protection, reclamation standards, and a reclamation fee of **$0.28/ton for surface-mined** and **$0.12/ton for underground-mined coal**[65](index=65&type=chunk)[68](index=68&type=chunk) - The Clean Water Act (CWA) and Clean Air Act (CAA) directly and indirectly impact operations by regulating water discharges and air emissions, potentially reducing demand for thermal coal[87](index=87&type=chunk)[88](index=88&type=chunk)[99](index=99&type=chunk) - Climate change regulations concerning greenhouse gas (GHG) emissions from coal consumption, transportation, and production pose a significant risk[90](index=90&type=chunk)[95](index=95&type=chunk) - The Mine Act and MINER Act impose stringent health and safety standards, with MSHA conducting regular inspections that can result in significant penalties and operational shutdowns[79](index=79&type=chunk)[80](index=80&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to development delays, industry cyclicality, regulations, and corporate structure - **Business Risks**: The company's properties are not fully developed, exposing it to construction delays and cost overruns, and demand is highly dependent on the cyclical steel industry[119](index=119&type=chunk)[122](index=122&type=chunk)[124](index=124&type=chunk) - **Operational Risks**: Mining involves inherent hazards, such as the partial silo collapse at the Elk Creek plant in 2018, and is dependent on transportation infrastructure[147](index=147&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk) - **Regulatory Risks**: Laws restricting greenhouse gas emissions, stringent environmental laws (SMCRA, CWA, CAA), and mine safety regulations (MSHA) could adversely impact the coal market and increase costs[193](index=193&type=chunk)[195](index=195&type=chunk)[208](index=208&type=chunk) - **Corporate & Stockholder Risks**: Significant stockholders (Yorktown and ECP) control **~64% of common stock**, allowing them to direct voting and creating potential conflicts of interest[229](index=229&type=chunk)[244](index=244&type=chunk) [Unresolved Staff Comments](index=76&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[245](index=245&type=chunk) [Properties](index=76&type=section&id=Item%202.%20Properties) The company controls approximately 114,662 acres of coal minerals with total estimated reserves of 242 million tons - At December 31, 2019, the company owned or controlled approximately **113,095 acres** of coal minerals in Virginia and West Virginia and **1,567 acres** in Pennsylvania[246](index=246&type=chunk) **Coal Reserves by Project (as of Dec 31, 2019)** | Project | Location | Mining Method | Proven (million tons) | Probable (million tons) | Total (million tons) | Status | Typical Met Coal Quality | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Elk Creek** | WV | Underground, Highwall, Surface | 55 | 37 | 93 | Producing | High Volatile A, A/B, B | | **Berwind** | WV, VA | Underground | 30 | 19 | 50 | Producing | Low Volatile | | **RAM Mine** | PA | Underground | 2 | 3 | 5 | 2022 | High Volatile C | | **Knox Creek** | VA | Highwall, Underground | 81 | 14 | 94 | Producing | High Volatile A | | **Total** | | | **168** | **74** | **242** | | | - Reserve estimates are based on SEC Industry Guide 7 and were assessed for economic recoverability using a three-year average historical benchmark price of approximately **$88/short ton** for semi-soft coking coal and **$104/short ton** for premium hard coking coal[255](index=255&type=chunk)[257](index=257&type=chunk) - In Q4 2019, the company acquired two mining permits near its Knox Creek plant, adding access to approximately **3.45 million tons** of metallurgical coal[255](index=255&type=chunk) [Legal Proceedings](index=81&type=section&id=Item%203.%20Legal%20Proceedings) The company is not involved in any material litigation, though a dispute with an insurer over a silo collapse is noted - The company is involved in a lawsuit filed on August 21, 2019, against its insurer, Federal Insurance Company, seeking coverage for a partial silo collapse that occurred on November 5, 2018[39](index=39&type=chunk)[428](index=428&type=chunk) - Management believes there are no pending legal matters that will have a material adverse effect on the company's financial condition, cash flows, or results of operations[259](index=259&type=chunk) [Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety violation information required by the Dodd-Frank Act is provided in Exhibit 95.1 of the annual report - Mine safety disclosures required by Section 1503(a) of the Dodd-Frank Act are included in Exhibit 95.1 to this annual report[260](index=260&type=chunk) Part II [Market for Registrant's Common Equity and Related Shareholder Matters](index=82&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%20and%20Related%20Shareholder%20Matters) The company's common stock trades on NASDAQ under 'METC' and no cash dividends have ever been paid - The company's common stock is listed on the NASDAQ Global Select Market under the symbol 'METC'[263](index=263&type=chunk) - As of February 20, 2020, there were **37 holders of record** of the common stock[263](index=263&type=chunk) - The company has never declared or paid cash dividends on its common stock[264](index=264&type=chunk) [Selected Financial Data](index=82&type=section&id=Item%206.%20Selected%20Financial%20Data) Revenue grew to $230.2 million in 2019, with net income of $24.9 million and total assets of $226.8 million **Selected Historical Financial Data (In thousands, except per share data)** | | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Income Statement Data:** | | | | | | | Revenue | $230,213 | $227,574 | $61,036 | $5,216 | $— | | Operating income (loss) | $29,532 | $24,096 | $(15,893) | $(7,530) | $(2,333) | | Net income (loss) | $24,934 | $25,074 | $(15,417) | $(7,515) | $(2,335) | | Diluted earnings (loss) per share | $0.61 | $0.62 | $(0.41) | N/A | N/A | | **Balance Sheet Data (End of Period):** | | | | | | | Total Assets | $226,813 | $188,244 | $148,098 | $119,209 | $20,352 | | Total stockholders' equity | $170,083 | $141,109 | $113,397 | $83,788 | $6,660 | **Operating Data (Tons in thousands)** | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total tons sold | 1,950 | 2,148 | 608 | | Tons produced | 1,855 | 1,750 | 548 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=84&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue and net income were stable in 2019, while Adjusted EBITDA grew 31% to $55.4 million - Metallurgical coal markets weakened significantly in 2019 due to Chinese import restrictions and global economic concerns, with the emerging coronavirus outbreak noted as a potential risk[272](index=272&type=chunk)[273](index=273&type=chunk) - For 2020, the company has entered into forward sales contracts for **1.5 million tons** of metallurgical coal at a fixed average price of **$93.29/ton** FOB mine[274](index=274&type=chunk)[298](index=298&type=chunk) - Capital expenditures in 2019 totaled **$45.7 million**, with a planned budget of **$25 million to $30 million** for 2020[275](index=275&type=chunk)[308](index=308&type=chunk) - As of December 31, 2019, available liquidity was **$21.8 million**, comprising cash and availability under the Revolving Credit Facility[308](index=308&type=chunk) [Results of Operations](index=86&type=section&id=Results%20of%20Operations) Higher realized prices for company-produced coal drove a slight revenue increase despite lower sales volume **Comparison of Financial Results (2019 vs. 2018)** | (In thousands) | 2019 | 2018 | | :--- | :--- | :--- | | **Revenue** | **$230,213** | **$227,574** | | Cost of sales | $162,470 | $176,555 | | Operating income | $29,532 | $24,096 | | Net income | $24,934 | $25,074 | | **Adjusted EBITDA** | **$55,382** | **$42,169** | **Coal Sales Breakdown (2019 vs. 2018)** | | 2019 | 2018 | | :--- | :--- | :--- | | **Company Produced** | | | | Coal sales revenue (in thousands) | $219,911 | $179,078 | | Tons sold (in thousands) | 1,872 | 1,721 | | **Purchased from Third Parties** | | | | Coal sales revenue (in thousands) | $10,302 | $48,496 | | Tons sold (in thousands) | 78 | 427 | - The cash cost per ton for company-produced coal increased from **$63 in 2018 to $73 in 2019**, partly due to higher development costs and the impact of the 2018 silo failure[281](index=281&type=chunk) [Non-GAAP Financial Measures](index=88&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA to evaluate performance, which rose to $55.4 million in 2019 **Reconciliation of Net Income to Adjusted EBITDA** | (In thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net income | $24,934 | $25,074 | $(15,417) | | Depreciation and amortization | 19,521 | 12,423 | 3,154 | | Interest expense, net | 1,193 | 1,427 | (272) | | Income taxes | 5,163 | 113 | — | | Stock-based compensation | 4,060 | 2,638 | 2,820 | | Accretion of asset retirement obligation | 511 | 494 | 405 | | **Adjusted EBITDA** | **$55,382** | **$42,169** | **$(9,310)** | **Non-GAAP Revenue and Cost Per Ton (FOB Mine) - 2019** | (Company Produced) | Per Ton | | :--- | :--- | | Revenue per ton sold (FOB mine) | $109 | | Cash cost per ton sold | $73 | [Financial Statements and Supplementary Data](index=96&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and the independent auditor's report - The independent auditor, Briggs & Veselka Co., issued an unqualified opinion, stating the financial statements are presented fairly in all material respects in conformity with U.S. GAAP[333](index=333&type=chunk) [Consolidated Balance Sheets](index=98&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $226.8 million in 2019, driven by growth in Property, Plant and Equipment **Consolidated Balance Sheet Highlights (In thousands)** | | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,532 | $6,951 | | Total current assets | $44,323 | $35,019 | | Property, plant and equipment – net | $178,202 | $149,205 | | **Total Assets** | **$226,813** | **$188,244** | | **Liabilities & Equity** | | | | Total current liabilities | $26,411 | $29,845 | | Long-term debt, net | $9,614 | $4,474 | | Total liabilities | $56,730 | $47,135 | | Total stockholders' equity | $170,083 | $141,109 | | **Total Liabilities and Stockholders' Equity** | **$226,813** | **$188,244** | [Consolidated Statements of Income](index=99&type=section&id=Consolidated%20Statements%20of%20Income) The company reported revenue of $230.2 million and net income of $24.9 million, or $0.61 diluted EPS, for 2019 **Consolidated Income Statement (In thousands, except per share data)** | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Revenue | $230,213 | $227,574 | $61,036 | | Operating income (loss) | $29,532 | $24,096 | $(15,893) | | Net income (loss) | $24,934 | $25,074 | $(15,417) | | Diluted earnings (loss) per share | $0.61 | $0.62 | $(0.41) | [Consolidated Statements of Cash Flows](index=101&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $42.4 million, offset by $45.7 million used in investing activities in 2019 **Consolidated Statement of Cash Flows (In thousands)** | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $42,382 | $36,183 | $(8,469) | | Net cash from investing activities | $(45,722) | $(42,937) | $(19,802) | | Net cash from financing activities | $2,825 | $7,916 | $29,292 | | **Net change in cash** | **$(515)** | **$1,162** | **$1,021** | [Controls and Procedures](index=122&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[447](index=447&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019[448](index=448&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Security Ownership](index=123&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for these items is incorporated by reference from the company's 2020 definitive proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the 2020 Proxy Statement, to be filed within 120 days after December 31, 2019[454](index=454&type=chunk)[455](index=455&type=chunk)[456](index=456&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report - The report includes the consolidated financial statements and related notes for the year ended December 31, 2019[461](index=461&type=chunk) - Key exhibits filed include the Credit and Security Agreements with KeyBank, various mineral lease agreements with Ramaco Central Appalachia, LLC, and the company's Long-Term Incentive Plan[464](index=464&type=chunk)[466](index=466&type=chunk)[472](index=472&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[472](index=472&type=chunk)