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Ramaco Resources, Inc. (METC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $134.7m, slightly above consensus*, with diluted EPS of $(0.19) beating the Street’s $(0.22)*; EBITDA came in below consensus as pricing weakness and weather disruptions weighed on profitability .
  • Cost discipline remained strong: cash cost per ton sold was $98 (second consecutive sub-$100 quarter), but margins compressed to $24/ton amid lower realized pricing .
  • Guidance reset: FY25 production, sales, capex, and EPS drivers were adjusted lower; FY25 cost/ton lowered, DD&A reduced, cash SG&A raised (legal costs), and Q2 tons guided to 850–950k .
  • Strategic catalysts: commencement of Brook Mine carbon ore mining in June 2025, pilot concentrate facility construction in Fall 2025, >80% REE recovery rates in testing, $6.1m Wyoming matching grant, and hire of Fluor’s global critical minerals lead to run the project .
  • Management emphasized selective sales (avoiding low-margin spot), optionality to scale coal output if markets improve, and a near-term roadmap to become the first new U.S. rare earth mine in 70+ years .

What Went Well and What Went Wrong

  • What Went Well

    • Record production despite weather: 989k tons (+4% q/q), Elk Creek hit a record 687k tons, with the company annualizing to ~4.0mt .
    • Industry-leading costs and per-ton metrics: cash cost/ton $98; management claims highest realized price ($122/ton) and cash margins ($24/ton) vs U.S. peers in Q1 .
    • Rare earths progress and resourcing: >80% recovery in independent tests; pilot facility planned; $6.1m state grant; executive hire from Fluor to lead commercialization; CEO: “the first new rare earth mine in the United States in over 70 years” .

  • What Went Wrong

    • Pricing headwinds: U.S. met coal indices fell ~$5/ton q/q and ~$65/ton y/y; realized pricing fell to $122/ton, compressing margins .
    • Weather impacts: freezing temperatures and severe flooding reduced production by ~0.1–0.15mt and nudged Q1 costs toward the high end of the range .
    • Guidance reductions: FY25 production (3.9–4.3mt vs 4.2–4.6mt), sales (4.1–4.5mt vs 4.4–4.8mt), capex ($55–65m vs $60–70m), and higher cash SG&A (legal) signal near-term earnings pressure .

Financial Results

Trend of key operating and financial metrics

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD mm)$167.4 $170.9 $134.7
Tons Sold (‘000)1,023 1,122 946
Company Production (‘000)972 954 989
Non-GAAP Revenue/ton ($/ton)$136 $129 $122
Non-GAAP Cash Cost/ton ($/ton)$102 $96 $98
Non-GAAP Cash Margin/ton ($/ton)$34 $33 $24
Net Income ($USD mm)$(0.2) $3.9 $(9.5)
Adjusted EBITDA ($USD mm)$23.6 $29.2 $9.8

Production by complex

MetricQ3 2024Q4 2024Q1 2025
Elk Creek Production (‘000)639 672 687
Berwind/Knox Creek/Maben (‘000)333 282 302

Q1 2025 actual vs Wall Street consensus (S&P Global)

MetricQ1 2025 Consensus*Q1 2025 Actual*Surprise*
Revenue ($USD mm)$134.1*$134.7*+$0.6*
Primary EPS ($)$(0.22)*$(0.19)*+$0.03*
EBITDA ($USD mm)$11.9*$5.9*$(6.0)*

Values retrieved from S&P Global. Company-reported Adjusted EBITDA was $9.8m (non-GAAP), which differs from S&P’s EBITDA basis .

KPIs and Pricing

KPIQ3 2024Q4 2024Q1 2025
Non-GAAP Realized Price ($/ton)$136 $129 $122
Fixed-price 2025 Sales (mm tons; avg $/ton)1.6 @ $152 1.9 total; NA 1.6 @ $152; export 0.3 @ $111 2.2 total; NA 1.6 @ $152; export 0.6 @ $111
Total 2025 Sales Commitments (mm tons)2.7 3.5 3.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company Production (tons)FY 20254.2–4.6m 3.9–4.3m Lowered
Sales (tons)FY 20254.4–4.8m 4.1–4.5m Lowered
Cash Costs per ton sold ($)FY 2025$97–$103 $96–$102 Lowered
Capital Expenditures ($)FY 2025$60–$70m $55–$65m Lowered
Cash SG&A ($)FY 2025$34–$38m $36–$40m Raised (legal)
DD&A ($)FY 2025$73–$78m $71–$76m Lowered
Q2 Tons Sold (tons)Q2 2025N/A850k–950k New
Dividend (Class B)Q2 2025N/A$0.1811/share Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3, Q4)Current Period (Q1 2025)Trend
Met coal pricing and marginsIndices down 32% YTD; margins held ~$34/ton; cost down to mid-$90s/ton Indices down q/q and y/y; realized price $122/ton; margin $24/ton; cost $98/ton Weaker pricing; costs still strong
Weather/supply impactsKnox Creek Jawbone closed; U.S. production falling; Queensland shipments low Freezing/flooding hit ~0.1–0.15mt; cautious spot sales; continued supply curtailments Near-term headwind; supports future tightening
Sales strategyBuild fixed-price NA book; selective export; optionality to grow Avoid low-margin spot; Q2 tons 850–950k; inventory for better markets Defensive positioning
Domestic policy/tariffsPotential tariffs could lift demand by 2–3mt Watching policy; met coal as “critical”; permitting fast-track relevance Potential medium-term tailwind
Rare earths & critical mineralsPEA expected Dec; targeting pilot in 2025 Mining starts June; pilot build Fall; >80% recoveries; exec hire; $6.1m grant Acceleration and de-risking
Labor & logisticsTight labor easing; Maben prep plant reduces trucking Further cost/logistics optimization; potential on-site loadout Incremental efficiency

Management Commentary

  • “We enjoyed both the highest cash margins per ton, as well as the highest realized sales price among our publicly traded peer group this quarter.”
  • “We are not going to force tons into the spot market… in a weak market without a real return.”
  • “This June, we intend to initiate large-scale mining at the Brook mine… the first new rare earth mine in the United States in over 70 years.”
  • “Based on independent conventional hydrometallurgy testing… recoveries of rare earths are now expected to be above 80%.”
  • “Optionality to increase both production and sales this year… exit the year above a 5 million ton per annum run rate” if markets improve .

Q&A Highlights

  • Near-term volumes: Q2 guided 850–950k; management expects H2 pickup and optionality to use inventory if markets improve .
  • Federal program (FAST-41): Not applicable (already permitted); exploring federal financing/procurement avenues as economics are finalized .
  • Partnerships/financing: Company does not seek JV equity; intends to finance the project within Ramaco (with potential non-dilutive federal support) .
  • Capex cadence: FY25 capex trimmed; growth capex deferred; ~$5m for REE in FY25; pilot plant spend included in FY25 capex guide .
  • Pricing/netbacks: Heavy Asian exposure in Q1 pressured realized pricing; company has no CFR exposure; domestic shipments should help mix .

Estimates Context

  • Q1 2025 results vs consensus*: Revenue slight beat (+$0.6m); EPS beat (+$0.03); EBITDA miss (actual below by ~$6m). Lower realized pricing and weather-driven volumes/costs were the primary delta vs EBITDA expectations .
  • Street likely to reduce FY25 estimates for tonnage and EBITDA after guidance lower (production/sales/capex, higher cash SG&A) and Q2 volume outlook, while acknowledging cost progress and fixed-price book support .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term defensive stance: Reduced production/sales and selective spot exposure should protect margins until pricing recovers; watch Q2 volumes and pricing mix .
  • Cost leadership persists: Sub-$100 cash costs with further logistics/rail optimization opportunities underpin margin resilience .
  • Rare earths catalysts: June mining start, Fall pilot build, >80% recoveries, grant funding, and senior leadership hire are de-risking steps; Fluor’s PEA expected imminently to frame economics .
  • Fixed-price book supports H1: 2.2m fixed tons at $141 blended; domestic volumes at $152 average provide pricing ballast vs soft seaborne market .
  • Optional growth if markets improve: Ability to ramp Elk Creek and add ~2mt via Maben deep mine and Berwind #3/#4 over 24–36 months for upside leverage .
  • Legal overhang: Higher cash SG&A tied to Chubb litigation heading to trial; monitor outcome and potential expense normalization post-trial .
  • Watch macro signals: Chinese export policy, global tariffs, and European policy support could tighten markets; supply cuts already evident, setting stage for pricing recovery in H2 .
Note: An asterisk (*) indicates values retrieved from S&P Global.