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Ramaco Resources, Inc. (METC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was mixed: revenue fell to $121.0M amid weaker met coal indices, but unit cash costs improved to $97/ton, driving a sequential uptick in cash margin/ton to $23; Ramaco posted a net loss of $(13.3)M and Class A diluted EPS of $(0.25) .
  • Versus S&P Global consensus, EPS modestly beat by $0.05 (actual $(0.25) vs. $(0.298)*) while revenue missed ($121.0M actual vs. $130.9M*); S&P-defined EBITDA ($3.0M*) was below the ~$5.45M* estimate. Values retrieved from S&P Global.
  • Liquidity reached a record $272.4M (cash ~$193.8M + RCF availability ~$78.6M); Ramaco ended the quarter in a net cash position >$77M after raising $200M of equity and refinancing notes .
  • Strategic rare earths inflection: management upsized Brook Mine feedstock (base ~5M tons coal ore) targeting ~3,400 t/yr of REE/critical mineral oxides, broke ground on pilot processing, signed a broad NETL CRADA, and engaged Goldman Sachs to structure the Strategic Critical Minerals Terminal (SCMT) .
  • 2025 guidance was trimmed for production (3.7–3.9Mt) and sales (3.8–4.1Mt), with lower DD&A and tax-rate guidance; SG&A guidance increased due to methodology change to include stock comp; management emphasized refusing to sell tons at a loss and prioritizing REE commercialization .

What Went Well and What Went Wrong

  • What Went Well

    • Cost execution: cash cost/ton improved to $97 (from $103 in Q2) with cash margin/ton up 15% sequentially to $23 despite a 6% QoQ decline in U.S. met coal indices .
    • Balance sheet: record liquidity of $272.4M and net cash >$77M post $200M equity raise and note refinancing, providing flexibility to avoid loss-making sales and fund REE initiatives .
    • REE/CM momentum: expanded Brook Mine plan (~5M tons coal ore; ~3,400 t/yr oxides), broke ground on pilot facility, signed NETL CRADA, and appointed Goldman Sachs as SCMT structuring agent—building a vertically integrated platform .
    • Quote: “We will avoid selling our production at a loss into a saturated low price market environment.” – Randall Atkins .

  • What Went Wrong

    • Soft pricing/volumes: revenue declined to $121.0M (−21% QoQ; −28% YoY) as U.S. met coal indices fell and tons sold declined to 873k (from 1,079k in Q2) .
    • Earnings pressure: net loss $(13.3)M; Adjusted EBITDA $8.4M vs. $23.6M YoY; S&P-defined EBITDA tracked below consensus .
    • Guidance trimmed: production/sales ranges reduced due to idling Laurel Fork and weak export spot markets; idle costs raised .
    • Analyst concern: mix-shift to domestic and disciplined spot exposure constrained shipments; Q4 also has holiday downtime (cost impact) .

Financial Results

Performance vs prior periods (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$134.656 $152.959 $120.996
Class A Diluted EPS ($)$(0.19) $(0.29) $(0.25)
Adjusted EBITDA ($M)$9.8 $9.0 $8.4
Non-GAAP Revenue/ton ($/t)$122 $123 $120
Non-GAAP Cash Cost/ton ($/t)$98 $103 $97
Non-GAAP Cash Margin/ton ($/t)$24 $20 $23
Tons Sold (k)946 1,079 873

Consensus vs Actual (Q3 2025)

MetricS&P Consensus*Actual
Revenue ($M)$130.92*$120.996
Primary EPS ($)$(0.298)*$(0.25)
EBITDA ($M, S&P definition)$5.45*$3.01*

Values retrieved from S&P Global.

Segment/Operations

Production (tons, ‘000)Q1 2025Q2 2025Q3 2025
Elk Creek687 688 647
Berwind/Knox/Maben302 311 298
Total Company989 999 945

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Liquidity ($M)$118.4 $87.3 $272.4
Net Cash/(Debt)n/aNet debt >$85M at 6/30 Net cash >$77M
Cash Capex ($M)$20.3 $15.1 $16.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Production (tons)FY20253.9–4.3M 3.7–3.9M Lowered
Sales (tons)FY20254.1–4.5M 3.8–4.1M Lowered
Cash Cost/tonFY2025$96–$102 $98–$100 Narrowed (midpoint maintained)
Capex ($)FY2025$55–$65M $58–$62M Slightly raised midpoint
SG&A ($)FY2025$39–$43M (ex stock comp) $63–$67M (incl. stock comp) Raised; methodology changed
DD&A ($)FY2025$71–$76M $70–$72M Lowered
Interest expense, net ($)FY2025$8–$9M $8–$9M Maintained
Effective tax rateFY202525–30% 20–25% Lowered
Idle mine & other ($)FY2025$1–$2M $2–$2.5M Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Met coal pricing & China steel exportsWeak indices; strategic refusal to sell at a loss; guidance trimmed Continued pressure; index −6% QoQ; matching production to demand; avoid loss-making sales Ongoing headwind
Cost disciplineCash costs sub-$100 in Q1; first quartile Cash cost $97/ton; September at $86/ton; costs trending lower into Q4 Improving
REE/CM strategy & scalePilot in 2026; initial commercial oxides 2028; Weir TREO ~1.7M tons; $6.1M WY grant Upsized base feedstock (~5Mt ore); ~3,400 t/yr oxides; pilot groundwork; NETL CRADA; SCMT Accelerating
Offtake/pricing (REE bifurcation)Fluor PEA economics (shared later in Q2) Western vs. China pricing decoupling; scandium U.S. DoD deal ~$6.25M/ton reference Positive pricing setup
Permitting & execution5-year Brook Mine permit renewal [41 in index, context Q2]Expanding permit scope; pilot timeline; modular ramp optionality Advancing
Liquidity & financingRCF and notes activity; liquidity ~$105M at 7/31 Record liquidity $272.4M; net cash >$77M; $200M equity raise Strengthened
M&A posture (met)Optionality to grow when prices improve Opportunistic bolt-ons if highly accretive; growth CapEx minimal in 2026 Cautious, opportunistic

Management Commentary

  • Strategic transition: “We continue the transition into becoming… the nation’s first dual platform critical minerals company… focused on both metallurgical coal and rare earth and critical minerals.” – Randall Atkins .
  • Capital discipline and pricing stance: “We will avoid selling our production at a loss into a saturated low price market environment.” – Randall Atkins .
  • REE economics and market structure: “There is going to be a premium for reliable Western supply lines… caused by Chinese export restrictions.” – Randall Atkins .
  • Pilot and commercialization: “We broke ground on the pilot… expect initial operations in 2026… the six-month operation period is to generate product that’s on spec for our off-takers.” – Randy Atkins and Mike Woloschuk .
  • Liquidity enabling strategy: “We now have the strongest liquidity position we have ever had… which allows us the flexibility to take this posture [on pricing].” – Jeremy Sussman and Randall Atkins .

Q&A Highlights

  • Policy support and supply deals: Management views recent international deals as short-term bridges until U.S. supply ramps; government support is progressing across agencies and labs .
  • REE extraction de-risking: Focus is on solubilizing high-value minerals from clays/shales; higher-risk extraction step completed, now optimizing downstream purification (precipitation/ion exchange) .
  • Ramp modularity and timeline: Running parallel test programs (two commercial labs + DOE labs); optionality to stage capacity; early engagement with tech providers and long-lead items .
  • Scandium demand/pricing: Discussions ongoing with domestic and international customers; DoD/Rio Tinto price ~$6.25M/ton cited as recent marker; not negotiating in public .
  • Permitting & mine plan: Existing permit provides long runway; planning to expand scope; deeper zones may open alternative extraction methods longer term .
  • Market/shipments: Q4 shipment outcome largely market-driven; inventory allows flexibility; holiday months impact costs .

Estimates Context

  • EPS: Beat – actual $(0.25) vs. S&P consensus $(0.298)*. Values retrieved from S&P Global.
  • Revenue: Miss – actual $120.996M vs. S&P consensus ~$130.92M*. Values retrieved from S&P Global.
  • EBITDA (S&P definition): Miss – actual ~$3.01M* vs. ~$5.45M* consensus. Values retrieved from S&P Global.
  • Target price consensus: ~$39.14* (contextual, not a quarterly metric). Values retrieved from S&P Global.
  • Likely estimate revisions: Persistent pricing pressure and reduced FY2025 volume guidance may drive revenue/EBITDA estimate trims; cost performance and liquidity strength partially offset .

Key Takeaways for Investors

  • Cost leadership intact: Sub-$100/ton cash costs and improved cash margins despite weaker indices underscore operational quality and provide downside protection .
  • Balance sheet optionality: Record liquidity and net cash enable disciplined selling (no loss-making spot) and self-funding of REE milestones without stressing equity in the near term .
  • REE/CM catalysts: Near-term pilot commissioning steps (2026), NETL CRADA, and SCMT structuring with Goldman Sachs de-risk the path to a vertically integrated U.S. REE platform .
  • 2025 reset: Lowered production/sales ranges and higher idle costs reflect market realities; tax-rate/DD&A reductions help EPS optics; SG&A guidance uplift due to methodology change (incl. stock comp) .
  • Trading setup: Narrative likely pivots around REE optionality and government/strategic partnerships vs. near-term met coal macro; discipline on volumes should limit downside from spot price volatility .
  • Watch 2026 contracts and demand: Domestic steel negotiations and potential supply rationalization could shift pricing dynamics; management will update when finalized .
  • Execution focus: Timely pilot progress, offtake traction (esp. scandium), and clarity on commercial facility capex/financing will be key stock catalysts over the next 12–18 months .

Additional Source Documents Consulted

  • Q3 2025 press release and 8-K (results, guidance, metrics):
  • Q3 2025 earnings call transcript (strategy, Q&A):
  • Other Q3 press releases: Pilot facility groundbreaking ; NETL CRADA ; Goldman Sachs SCMT structuring agent .
  • Prior quarters for trend: Q2 2025 PR ; Q1 2025 PR .