Ramaco Resources(US:METC)2025-08-01 14:02Financial Data and Key Metrics Changes - In Q2 2025, adjusted EBITDA was $9 million compared to $10 million in Q1 2025, with a net loss of $14 million versus a net loss of $9 million in Q1 2025 [52][54] - Cash cost per ton sold was $103, down from $108 in 2024, with a potential $101 if excluding the idled Eagle mine [50][52] - The company anticipates full year 2025 production at the low end of the previous range of 3.9 million to 4.3 million tons, and sales at the low end of 4.1 million to 4.5 million tons [54][56] Business Line Data and Key Metrics Changes - The metallurgical coal benchmark prices dropped approximately 25% year on year, with U.S. indices falling another 5% in Q2 2025 compared to Q1 2025 [20][52] - The company achieved a record level of quarterly production in Q2 2025, with tons sold reaching 1.1 million compared to 900,000 in Q1 2025 [51][52] - The Brook Mine is expected to produce a significant domestic supply of rare earth and critical minerals, with a target for commercial oxide production by 2027, accelerated from 2028 [11][31] Market Data and Key Metrics Changes - Chinese coking coal prices surged 38% in July 2025, indicating a potential recovery in the market [33] - The Australian Premium Low Vol Index increased to $183.2 per ton in July 2025, up from a low of $166 in late March [34] - U.S. steel prices remain the highest globally, nearly double Asian seaborne levels, supporting domestic demand for metallurgical coal [39] Company Strategy and Development Direction - The company is transitioning to a dual platform model, focusing on both metallurgical coal and rare earths, aiming to become a significant player in the critical minerals market [6][25] - Plans to expand rare earth mine production to exceed the currently permitted 2.5 million tons per annum and enhance oxide processing capacity [8][10] - The company is actively engaging with U.S. government agencies to support the development of the Brook Mine, emphasizing its strategic importance for national security [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding pricing recovery in the metallurgical coal market, driven by firmer Chinese fundamentals and resilient Indian demand [23][24] - The company is focused on optimizing production and sales to avoid lower-margin spot sales, particularly in Asia [54][87] - Management highlighted the importance of government support for domestic critical mineral production to level the playing field against foreign competition [66][67] Other Important Information - The Brook Mine has received a five-year renewal of its mining permit, allowing for continued development [48] - The company is increasing its SG&A guidance for 2025 from $36 million to $40 million, reflecting the acceleration of the pilot plant development [57] Q&A Session Summary Question: Impact on quality mix and sales mix between domestic and export - Management expects no impact on the quality portfolio and anticipates a sales mix of roughly two-thirds seaborne and one-third domestic [60][62] Question: Estimated savings from the production tax credit - Estimated savings from the production tax credit are projected to be around $15 million per year on EBITDA [63] Question: Discussions with the administration regarding price support for critical minerals - Management confirmed ongoing discussions with the government but did not disclose specifics, emphasizing the need for support to counteract foreign pricing manipulation [65][67] Question: Pricing assumptions for scandium and balancing supply with demand - Management indicated that demand for scandium is expected to grow, particularly if a Western source becomes available, and they are confident in their pricing assumptions based on market studies [70][72] Question: Key growth drivers in the scandium market - The airline industry is identified as a primary end user for scandium, with potential applications in automotive and other sectors [80][82]