In a latest earnings name, Ramaco Sources (NASDAQ:) reported a robust end to the 12 months with document quarterly earnings and impressive plans for enlargement. The corporate introduced intentions to double its met coal manufacturing from the present 3.5 million tons and delve into the uncommon earth enterprise.

Regardless of a difficult pricing setting, Ramaco achieved a document EBITDA of $182 million and substantial free money circulate. Wanting forward, the corporate plans to retire all debt in 2024 and has made important strides in growing its market cap, which now stands round $1 billion.

Key Takeaways

• Ramaco Sources reported document EBITDA of $182 million and internet revenue of $30 million for This autumn 2023.
• The corporate goals to double met coal manufacturing and broaden into the uncommon earth enterprise.
• Over two-thirds of 2024 gross sales are anticipated to be exports, with important development in Asian markets.
• Ramaco anticipates a 40% enhance in gross sales from 2023 ranges and a 30% enhance in manufacturing and gross sales for 2024.
• The corporate has a robust security document and plans to extend manufacturing at its Berwind mine and relocate a coal prep plant to cut back prices.
• Ramaco’s market cap elevated by over $500 million in 2023, with complete market cap now roughly $1 billion.
• Shareholder returns have been spectacular, with a one-year return of roughly 200% and a three-year return of over 1,000%.

Firm Outlook

• Manufacturing and shipments are anticipated to extend all year long, with a big enhance within the second half on account of new mines.
• Ramaco is working to extend and prolong its current revolver, with a preliminary settlement reached with KeyBank.

Bearish Highlights

• The present pricing setting is difficult, with index values softening and a dislocation between US and Australian pricing.

Bullish Highlights

• Ramaco has secured a number of long-term offtake agreements in Asian markets.
• The corporate has doubled its dedicated and offered place for 2024, with 1.8 million tons of recent gross sales added since December.
• Demand for US low-vol and mid-vol coal segments continues to outpace provide.

Misses

• No particular misses have been highlighted within the earnings name abstract supplied.

Q&A Highlights

• Capital expenditures (CapEx) are anticipated to extend to round $13 million, probably doubling over the subsequent two years.
• Important CapEx for the uncommon earth challenge isn’t anticipated till 2025, after figuring out the suitable processing approach.
• An analyst name is deliberate to debate the findings from upcoming stories on the uncommon earth component challenge.

Ramaco Sources’ earnings name underscored the corporate’s sturdy monetary efficiency and strategic initiatives geared toward substantial development in each the coal and uncommon earth sectors. With a transparent give attention to increasing market attain and manufacturing capabilities, Ramaco is positioning itself to capitalize on growing demand and to proceed delivering worth to its shareholders.

InvestingPro Insights

Ramaco Sources (METC) has proven a outstanding monetary efficiency, as evidenced by the sturdy end for the 12 months highlighted of their latest earnings name. The corporate’s strategic plans for enlargement and debt retirement align with key metrics and insights from InvestingPro. Listed here are some related knowledge factors and suggestions that add additional context to Ramaco’s monetary well being and development prospects:

InvestingPro Information:

• Market Capitalization: Ramaco’s market cap has reached roughly $1.02 billion USD, underscoring the corporate’s important development and investor confidence.

• P/E Ratio: The value-to-earnings ratio stands at 11.95, suggesting that the inventory could also be attractively valued relative to its earnings.

• Income Progress: A sturdy income development of twenty-two.6% during the last twelve months as of This autumn 2023 signifies the corporate’s sturdy gross sales efficiency, aligning with their bold enlargement plans.

InvestingPro Suggestions:

• Shareholder Yield: Ramaco has been recognized as having a excessive shareholder yield, which is a testomony to their dedication to returning worth to traders.

• Important Return: The corporate has skilled a big return during the last week, month, three months, and 12 months, with InvestingPro noting a very massive worth uptick during the last six months. This displays sturdy market momentum and investor optimism.

For readers seeking to dive deeper into Ramaco Sources’ financials and efficiency, there are extra InvestingPro Suggestions obtainable at https://www.investing.com/professional/METC. The following tips present extra nuanced insights, similar to the corporate’s valuation implying a robust free money circulate yield and its operation with a reasonable stage of debt.

InvestingPro presents a complete of 11 suggestions for METC, every offering beneficial data for traders contemplating this inventory. To achieve entry to those insights and improve your funding technique, use the coupon code PRONEWS24 to get a further 10% off a yearly or biyearly Professional and Professional+ subscription.

Full transcript – Ramaco Sources Inc (METC) This autumn 2023:

Operator: Welcome to the Ramaco Sources Fourth Quarter 2023 Outcomes Convention Name. All contributors might be in a listen-only mode. [Operator Instructions] Please notice right now’s occasion is being recorded. I might now like to show the convention over to Jeremy Sussman, Chief Monetary Officer of Ramaco Sources. Please go forward, sir.

Jeremy Sussman: Thanks. On behalf of Ramaco Sources, I would wish to welcome all of you to our fourth quarter 2023 earnings name. With me this morning is Randy Atkins, our Chairman and CEO; Chris Blanchard, our Chief Working Officer; and Jason Fannin, our Chief Industrial Officer. Earlier than we begin, I would wish to share our regular cautionary assertion. Sure objects mentioned on right now’s name represent forward-looking statements inside the that means of the Non-public Securities Litigation Reform Act of 1995. These forward-looking statements signify Ramaco’s expectations regarding future occasions. These statements are topic to dangers, uncertainties and different components, lots of that are outdoors of Ramaco’s management, which may trigger precise outcomes to vary materially from the outcomes mentioned within the forward-looking statements. Any forward-looking assertion speaks solely as of the date on which it’s made, and besides as required by legislation. Ramaco doesn’t undertake any obligation to replace or revise any forward-looking statements, whether or not because of new data, future occasions or in any other case. I would wish to remind you that you could find a reconciliation of the non-GAAP monetary measures that we plan to debate right now in our press launch, which may be seen on our web site, ramacoresources.com. Lastly, I would encourage everybody on this name to go on to our web site and obtain right now’s investor presentation. With that stated, let me introduce our Chairman and CEO, Randy Atkins.

Randy Atkins: Thanks, Jeremy. Good morning to everybody. As all the time, thanks each on your curiosity and for becoming a member of the decision. We have now a number of optimistic developments to unpack this morning since we spoke final November. I focus on then, over the previous few years, now we have tried to distinguish ourselves by aggressively however prudently rising our manufacturing and gross sales profile. In 2021 via final 12 months, we doubled our manufacturing. Our targets over the subsequent few years are to once more double our present 3.5 million ton stage in met coal. And subsequent, to hopefully add an intriguing and really beneficial new line of enterprise with uncommon earth. Wanting again over the previous few years, we invested virtually $0.25 billion in capital for elevated manufacturing and acquisition. That strategic funding in development paid off for us within the second half of ’23, once more, letting us be consensus for the final two quarters. I’ll let Jeremy present the monetary metrics the place This autumn was the document quarter for us this 12 months, and we printed $182 million in annual EBITDA and in addition had document free money circulate, all regardless of some muted pricing within the total market. As we glance down the highway at our high quality slate, we have been aiming to basically double our low-vol, mid-vol ranges to about 50% of total manufacturing with one other 30% is high-vol A. Right this moment, we’re about 40% high-vol A and 30% low-vol, mid-vol. Partly, that call is predicated on our natural reserve high quality combine, nevertheless it’s additionally based mostly on what we understand could also be some future crowding within the high-vol An area. A number of friends are slated to carry on as a lot as 6 million tons of recent manufacturing in that mix over the 24 to 26 interval. However, we see low volt manufacturing is actually flat with a good quantity of anticipated depletion from current low-vol mines. Shifting ahead, we count on spreads might begin widening between premium low-vol and lower-tier high-vol coals and we hope to have the ability to seize that margin. Turning to our fourth quarter efficiency. We managed to do properly regardless of seeing not a lot energy in pricing over the again half of the 12 months. This 12 months’s North American home settlements for ’24, have been down year-over-year about $40 a ton from ’23. Whereas U.S. met indices rose within the fourth quarter, in addition they ended ’23 greater than 10% under Q1 ranges. Our fourth quarter financially was basically on account of a gross sales enhance of transport at a 4 million-ton every year run fee throughout the entire second half of ’23. That was above of about 33% in comparison with our 3 million-ton per fee within the first half. We have been additionally helped by the completion of the 1 million-ton enhance in our processing capability at our Elk Creek advanced. Shifting to this 12 months’s gross sales and advertising. We took a balanced method to our ’24 home gross sales publicity and dedicated solely about 1.5 million tons of coal to North American prospects. We thought the provided pricing phrases have been fairly muted and possibly on the backside of the cycle when tenders have been being negotiated final fall. Regardless of that, our common combined, mounted home gross sales worth of $167 per ton, was the very best ’24 pricing determine amongst our publicly traded friends. By saving again the extent of our North American enterprise, we pivoted to an elevated export e-book, which can now be over 2/3 of this 12 months’s gross sales. At first of December, we had 2 million tons dedicated gross sales for ’24. Up to now two months, that quantity has virtually doubled to three.9 million tons, which implies we are actually mainly 100% offered out on the low finish of our unique ’24 manufacturing steerage. Luckily, most of these gross sales have been within the works for a while, so we have been in a position to transfer these tons with out sacrificing pricing. We now hope to speed up that gross sales development as we transfer additional into ’24. Because of that materials enhance in dedicated gross sales, as you realize, we not too long ago raised our ’24 gross sales and manufacturing steerage. Relying upon continued market circumstances, we hope to finish the 12 months with a gross sales soar of as a lot as 40% from ’23 ranges. The profile our gross sales so far, apparently, now we have now begun to maneuver important tons into Asian markets. Two years in the past, we did not actually have any Asian enterprise. Now we are going to find yourself the 12 months with north of 30% of our gross sales going to Asian prospects. And all of seven finished, about 30% of our total ’24 e-book might be priced off Australian indexes, about 40% off Atlantic indexes and about 30% might be mounted worth home. Jason will communicate on the relativities of our pricing and in addition give most of our coloration on markets, however I am going to add a number of observations. We now see European markets are considerably spring loaded. It has been pushed down so onerous over the previous 1.5 years that we really feel when it rebounds and most of the mills reopen, we might even see considerably of a pop in maybe some provide dislocations within the Atlantic markets. We have now traditionally finished properly in Europe and certainly have been first rate sized sellers even into Ukraine. When that complete state of affairs finally resolves itself, there could possibly be an fascinating flip. In Asia, as I stated, we have been nowhere on this market two years in the past. We are actually a serious provider to Indonesia and different non-China markets. Regardless of the gloom round China, we see the opposite Asian markets is comparatively wholesome. We look ahead to making additional inroads within the area, notably with our potential to leverage our growing low-vol manufacturing slate. Switching to operations. I wish to complement our working crew first for an ideal security document final 12 months. I additionally wish to notice the nice work on creating the 2 deep mine sections at our low-vol Berwind mine. Since September, Berwind has produced an annualized run fee of 600,000 tons. We are actually planning to start the third part within the subsequent few months and hope to be at 1 million-ton run fee by year-end. Money mine value at Berwind have at the moment been underneath $90 per ton from each deep sections. If this development continues, and as we in the end take the mine to 4 sections, we count on Berlin to be among the many highest margin and lowest and largest manufacturing low-vol mine complexes within the nation. Shifting on to a different low-vol challenge. Final month, we bought a really fairly priced $3 million current coal prep plant, which might be relocated to our Maven advanced. We are going to spend one other $8 million this 12 months to maneuver, relocate and improve this plan. For value comparability had we constructed a brand new plant of comparable capability, the worth was estimated at roughly $40 million. This plant must be operational by the fourth quarter of ’24. It is going to meaningfully scale back each the present total $40 per ton trucking value in addition to our money mine prices. The plant may have an final annualized clear coal capability of 1.3 million tons, excess of our 350,000 ton present floor and highwall manufacturing. We may have the chance so as to add a very good deal extra deep tons to that advanced within the years they ended because the market might dictate. Chris can even make some feedback on Maven in his remarks. our stability sheet. Final 12 months, we have been in a position to have the quantity of debt on our books, and we began 2024 with about $50 million of time period and gear debt. Assuming present circumstances proceed, we glance to retire all of that debt this 12 months. And as I stated earlier, we’re additionally quickly rising. Wanting forward, we’re planning right now for the notional enhance within the quantity of each gross sales and stock we envision over the approaching years. Accordingly, we simply executed a mandate with KeyBank on behalf of our banking syndicate to each enhance and prolong the dimensions and time period of our current revolver. This facility will then have a base borrowing quantity of $200 million with a further $75 million accordion characteristic enlargement in addition to a brand new five-year time period. This is a rise from our current $125 million facility, and we glance to finalize all this in Q2. Lastly, with respect to our Brook mine uncommon earth challenge, we’re aggressively working to advance the commercialization. We count on to obtain the up to date impartial goal exploration report from have been worldwide inside two weeks. Once we do, we are going to publish the report and I’ll present an accompanying shareholder letter to elucidate the findings in addition to the challenge’s essential path and course. We can even count on to host a separate analyst name to debate his conclusion and reply to any investor questions. Additionally, I might be remiss to not notice that on the again of our strong met coal execution this 12 months, and the announcement of our RIE discovery, we have been delighted that our shareholders loved some very spectacular outcomes over the previous 12 months. In 2023, our market cap elevated by over $500 million. Right this moment, together with the worth of our METCB shares, now we have a mixed market cap of roughly $1 billion. This compares to our market worth of simply over $100 million a number of quick years in the past. Certainly, to begin the 12 months, we loved the very best complete shareholder return, which incorporates share worth and dividends of any firm within the coal and mining area. We had a one-year return of roughly 200% and over 1,000% return for the three-year interval courting again to 2020. We’re deeply appreciative of our traders’ assist from each very long time in addition to new shareholders, and we’re working onerous to proceed to reward that assist. In abstract, this 12 months guarantees some very optimistic outcomes for Ramaco. And with that, I’ll flip the ground over to the remainder of our crew to debate funds, operations and markets. So, Jeremy, please begin us off with a rundown on monetary metrics.

Jeremy Sussman: Thanks, Randy. As you famous, financially, we loved a robust fourth quarter in 2023, which was simply our strongest quarter of the 12 months. Whereas U.S. metallurgical coal indices did rise within the fourth quarter in comparison with the prior two quarters, the indices have been nonetheless greater than 10% under Q1 ranges. Our sturdy This autumn was frankly on account of each strong execution of our development technique and tight value management. Particularly, in every of Q3 and This autumn, we shipped a 4 million-ton every year run fee in comparison with a 3 million-ton every year run fee within the first half. In This autumn, our margins expanded greater than 50% versus Q3. Realized pricing was up 10% to $173 per ton on stronger indices. Extra importantly, money value per ton fell $7 sequentially and on each a stronger absolute and relative contribution from our primary Berwind mine, as Randy famous. When it comes to monetary metrics, adjusted EBITDA was $58 million in This autumn and up virtually 30% from Q3. Fourth quarter internet revenue of $30 million was up greater than 50% sequentially. Now, I wish to make one level on internet revenue and earnings per share. First, for comparative functions, had we calculated EPS as we had previously, I might notice that This autumn absolutely diluted EPS would have been $0.68. That stated, since we issued the monitoring inventory in mid-2023, GAAP accounting guidelines have frankly sophisticated our EPS calculations. 2024 might be our first full 12 months with having a twin fare class construction. I might notice that the Class B dividend quantity every quarter will have an effect on the Class A EPS calculation alone. Adjusted EBITDA, internet revenue and all different key objects is not going to be affected. Based mostly on our present outlook, I might count on quarterly 2024 Class A EPS to return in anyplace from 70% to 90% of how EPS can be calculated on a traditional single truthful class estimate. For some steerage, the upper internet revenue is the higher the proportion of EPS assigned to the Class A shares will seemingly be. As a reminder, the Class A inventory has just below 44 million shares excellent. We predict first quarter shipments of 800,000 to 950,000 tons which is properly under the run fee we anticipate for the complete 12 months. Nonetheless, we anticipate constructing stock in Q1 forward of some bigger time period offers into Asia, which started in Q2 and in addition forward of the Nice Lakes, which opened in late March. With that stated, we anticipate each manufacturing and shipments to extend all year long with a significant uptick within the second half. Particularly, this second half enhance will come from the addition of the greater than 400,000-ton every year Ram 3 floor and highwall mine at Elk Creek and the 300,000-ton every year third part on the Berwind mine. Mine prices are additionally projected to say no every quarter all year long as volumes enhance sequentially. For the complete 12 months, we’re reiterating all key prior 2024 operational steerage, which you could find in our desk. I am going to notice that on the midpoint of steerage, we anticipate each manufacturing and gross sales up roughly 30% versus 2023 and a slight decline in money prices and a roughly 30% decline in CapEx. Shifting to the stability sheet. In This autumn, we repaid the ultimate $10 million of debt associated to the 2022 Ramaco Coal acquisition. We ended 2023 with simply $48 million of time period debt excellent, excluding the revolver, and $42 million of money. Lastly, we completed 2023 with document year-end liquidity of $91 million in comparison with $49 million at year-end 2022. As Randy each stated and supplied specifics, now we have simply this week reached a preliminary settlement with KeyBank to extend and prolong the phrases of our revolver. We count on this to be finalized in Q2. And I might now like to show the decision over to our Chief Working Officer, Chris Blanchard.

Chris Blanchard: Thanks, Jeremy, and thanks to everybody who joined us this morning. I wish to first begin by reiterating how happy and proud we’re of the protection efficiency and environmental stewardship that we achieved within the discipline in 2023. We had total our lowest incident fee in our historical past final 12 months, and we’re targeted on enhancing and enhancing that efficiency as we transfer ahead. Wanting again on 2023 operationally, it was a story of two halves. The primary half was constrained at each of our huge complexes. We had delays within the preparation plant improve at Elk Creek and Berwind was finishing its improvement mining to succeed in the thick Pocahontas retailer groups following the ignition occasion of 2022. The second half, nonetheless, noticed us enhance preparation capability at Elk Creek and start the monetization of our stock, which had constructed up. We additionally reached the lengthy talked about primary reserve on the Berwind mine and workers the mine and shortly reached and exceeded projected manufacturing ranges. We additionally began our floor mine at Maven, which has run higher than anticipated. The gross sales and advertising crew has finished an unimaginable job promoting our stock. Now as we flip into 2024, our operations will ramp as much as meet these new elevated gross sales ranges and work to double the dimensions of our manufacturing over the subsequent a number of years, as Randy has described. That work is underway in any respect three of our primary complexes now. At Elk Creek, after a few years with flat manufacturing, we have moved ahead with the Ram quantity 3 challenge. This can carry on 300,000 to 400,000 annualized extra manufacturing from a second floor mine and its accompanying Highwall Miner operation. This mine had been beforehand deliberate in each 2022 and 2023, however on account of market circumstances, the plant capacities and availabilities, it was postponed. Already in ’24, now we have damaged floor and now count on our first floor tons in July with the Ram quantity 3 Highwell Miner following with manufacturing starting in October. The Ram 3 value construction ought to match or beat the prevailing floor mine at Elk Creek, each growing our total volumes and in addition reducing the common Elk Creek money prices. At Berlin, as we mentioned, each tremendous sections are actually in regular operation and since Q3 have been hitting focused manufacturing. Our primary part has reached the realm the place a sequence of air shafts and a brand new portal and elevator might be constructed. As soon as accomplished, this air flow enhance will enable the startup of our quantity three part. With three sections working later this 12 months, we count on to be producing at practically 1 million clear ton per 12 months fee from the Berwind mine itself. With the investments Aramco (TADAWUL:) has revamped the previous a number of years at Berlin within the preparation plant in belt strains from the mine to the plant, and naturally, within the buy of the coal reserves, Berwind is lastly poised to be among the many lowest value and largest premium low-vol complexes in the USA for a few years. Lastly, at Maven, we’re taking steps to develop that operation right into a full stand-alone advanced with the acquisition and the relocation of the preparation plant to the Maven web site. Work has begun on demolition of the prevailing plant and the primary deliveries of elements have begun this week. We anticipate the rebuild of the plant to start in the summertime and the plant to be commissioned late this 12 months. The scale of the plant, as bought, will enable us to clean all present floor and Highwall Miner coal at Maven in addition to any preliminary underground sections which are contemplated sooner or later. As Maven grows, the modular plant design will enable us to shortly add improve circuits to the plant. Relying on market circumstances, we consider the Maven advanced, if completely greenlighted may finally produce between 1.2 million to 1.5 million annual clear tons. Nonetheless, within the close to time period, getting the preliminary preparation plant in operation will drive down our transportation prices and save us practically $40 per clear ton on the uncooked coal invoice that we at the moment bear. Having the clear coal at Maven additionally opens this premium coal for cargo on each of the railroads in addition to the river served prospects. It’s an thrilling time for Ramaco operations. Within the subsequent couple of years might be eventful as we develop out our current complexes and proceed to search for different opportunistic methods to boost shareholder worth. As we develop, nonetheless, our major focus will stay on security efficiency, environmental stewardship and sustaining strict value management in any respect of our current and new operations. Now for a extra detailed dialogue of the markets and the gross sales e-book, I want to flip the decision over to our Chief Industrial Officer, Jason Fannin.

Jason Fannin: Thanks, Chris, and good morning, everybody. I’ll share what we’re seeing within the markets and our present and ahead gross sales outlook. World coking coal markets stay properly supported, primarily on account of decrease provide due to continued underinvestment within the coal area. financial circumstances, metal market fundamentals and demand outlook proceed to differ broadly across the globe. Built-in meals and coke batteries within the U.S. proceed to run sturdy on the again of sustained metal demand and pricing ranges. Brazil continues to wrestle with low-cost metal imports and wheat coke manufacturing, whereas financial circumstances in Europe, together with excessive carbon taxes are holding demand from rebounding there. Though many blast furnaces have returned to manufacturing to begin the 12 months with low utilization charges. One brilliant spot for U.S. producers throughout a lot of 2023 and persevering with into 2024 has been the Pacific market ex-China the place Ramaco is now turning into a participant. We noticed super year-over-year demand development in India. New coke batteries persevering with to ramp up in Indonesia and conventional prospects in South Korea and Japan, increasing their intakes of U.S. coking coal as they diversify and derisk their provide portfolio. Since our final name, now we have successfully doubled our dedicated and offered place for 2024. Since December, as Randy stated, we added 1.8 million tons of recent gross sales basically all to seaborne markets at index-linked pricing. This now brings our total sole place to about 3.9 million tons, mainly 100% of our unique decrease finish sale of steerage. As Randy additionally talked about, throughout a lot of 2023, Ramaco targeted its advertising efforts on the rising Asian markets, putting a number of check cargoes of all grades of coking coal, low-vol, mid-vol and high-vol into a number of completely different finish customers. The end result of these efforts has resulted in quite a lot of long-term offtake agreements throughout all ranks of our product portfolio with shipments starting in earnest throughout Q2. On the identical time, now we have maintained and grown our enterprise in North America and the Atlantic Basin with particular long-term companions who place incremental premium pricing worth Aramco’s broad spectrum of low-ash, low-sulfur coking coals. Turning to the present pricing setting, index values have softened because the begin of the 12 months. China is buying and selling water although coal manufacturing has been in the reduction of, India has a quickly subdued market as elections there have slowed extra new infrastructure challenge bulletins. As of March 7, the U.S. East Coast index values have been $257 per ton for low-vol, $249 per ton for high-vol A and $208 per ton for high-vol B. Whereas Australian premium low-vol unhappy at $304 per ton. This dislocation between U.S. and Australian pricing has persevered since late September, with U.S. coking coals persevering with to be basically undervalued. Throughout 2022, U.S. low-vol averaged 96% relativity to Australian POV and U.S. high-vol common a 99% relativity. These relativities have dropped considerably. And as of yesterday, stood at 85% and 82%, respectively. U.S. low-vol market is at the moment a lot tighter than the indices counsel. As Randy commented, we see demand persevering with to outpace provide within the U.S. low-vol and mid-vol section, the place Ramaco is putting its bets and continues to give attention to rising manufacturing. We see a lot of the near-term development in U.S. coking coal provide within the high-vol area. Luckily, we already positioned a lot of a high-vol deduction into long-term offtake agreements previous to a number of this extra new high-vol manufacturing coming to market. Concerning our sole pricing efficiency versus the markets, our low- and mid-vol coals offered into conventional markets have been offered at close to parity to the U.S. low-vol index. Our high-vol gross sales to conventional markets are at a modest low cost to U.S. indices. Our gross sales within the Asian markets are priced in opposition to a basket of Australian indices together with typical freight differentials. Wanting forward, we hope to position a considerable quantity of extra tonnage for the 12 months consistent with or maybe exceeding our steerage. With that stated, I might now wish to return the decision to the operator for the Q&A portion of the decision. Operator?

Operator: Thanks. We are going to now start the question-and-answer session. [Operator Instructions] Right this moment’s first query comes from Lucas Pipes with B. Riley Securities. Please go forward.

Nick Chile: That is Nick Chile asking a query on behalf of Lucas. Congrats on the strong outcomes right here. My first query was round quantity cadence. First quarter steerage was 800,000 to 950,000 tons. And I used to be questioning what would take you to the excessive or low finish of that vary? And then you definitely talked about a 5 million-ton run fee over the second half. And will we take into consideration that as a fair break up or extra weighted to 4Q?

Jeremy Sussman: Nick, it is Jeremy right here. Good to listen to from you. So, I imply, sitting right here in the beginning of March, there’s all the time a number of variability with rails and as we export extra, you are going to find yourself on bigger and bigger vessels. So, I imply, frankly, the distinction between the low finish and the excessive finish this quarter is totally on the logistics facet, I might say. So clearly, we hope to be on the excessive finish, however I believe historical past has instructed us that whereas the rails have definitely improved. On the finish of the day, there’s nonetheless some variability in there, therefore the vary. When it comes to the cadence, I imply, I would say quantity will ramp up type of every quarter. So if you happen to’re type of serious about a gross sales cadence, second quarter will in all probability be round 1 million tons. I would say third quarter and fourth quarter is admittedly the place you are going to see the massive step up, and admittedly, fourth quarter slightly bit greater than the third quarter, name it, $1.25 million, $1.3 million in This autumn and actually — I am going to let Chris type of contact slightly bit about this, however the huge delta is simply as he talked about in his ready remarks, whenever you carry the third part on at Berwind and the Ram 3 mines at Elk Creek. I imply, that is virtually 3/4 million tons on an annualized foundation. Chris, do you wish to contact on slightly bit on that?

Chris Blanchard: Sure. So, the cadence is, clearly, Ram floor mine, which is the smaller a part of that advanced will are available in, in very finish of the second quarter, starting of the third quarter, after which we’ll layer within the Highwall Miner at Elk Creek within the fourth quarter. And that would be the bulk of the manufacturing. And in order that’s why you get the step change on the Elk Creek facet. After which at Berwind on the low-vol, it is all based mostly across the timing of our third part, which is air flow dependent. So, we would love to begin that earlier, however the actuality is it actually will not begin up till third quarter. After which as we construct the workforce and get it to normalized manufacturing, you may see that step change within the fourth quarter, which has us exiting the 12 months the 5 million-ton run fee.

Nick Chile: Tremendous useful. My subsequent query was simply on high quality combine. You supplied a pleasant outlook on a full 12 months foundation. And I believe you talked about the Nice Lakes choosing up right here in March. So how ought to we take into consideration high quality combine right here in 1Q? And possibly how issues would progress into the second quarter as properly?

Jason Fannin: Sure. Nick, that is Jason. So far as Q1 goes, I believe our high quality combine will look fairly a bit prefer it did in This autumn. Definitely, as Chris talked about, a number of the manufacturing ramp coming within the again half of this 12 months, which we’ll see definitely extra low quantity. As you talked about, Ram 3 was a wiser a part of that — a smaller a part of that uptick within the again half. Our Q1 manufacturing combine and high quality combine basically mirrored This autumn there.

Jeremy Sussman: Nick, one factor I would level to the Slide 7, the place we type of give the breakdown. Randy touched upon it in his ready remarks. However I believe the factor to notice there may be the massive change is on the low-vol facet. So, I imply, proper now, we’re at kind of a 40% low-vol mid-fall type of type of a combination. As we transfer ahead, in the end, that may take us above type of 50%. So, I imply our combine, I would say, in will look slightly bit completely different clearly than it should type of after we exit the 12 months as Berwind ramps and in the end, you get a full 12 months Maven and produce on extra tons there as properly.

Nick Chile: Bought it. Bought it. If I may possibly simply sneak yet one more in the marketplace. I believe you touched on the European market and cited decrease utilization. I used to be questioning if you happen to’d count on these operations to ramp up over the course of the 12 months? Are you seeing any inexperienced shoots but? Thanks for any extra feedback.

Jason Fannin: Sure. So, Nick, that is Jason once more. Sure, I imply, as Randy talked about, it looks as if that market is type of spring loaded for a rebound. I believe there are a number of triggers which are goes to be essential to trigger that. They have been so depressed now for the final couple of three years. Definitely, actually since COVID after which the power impacts after the Ukraine conflict started, now we have grown enterprise with sure prospects there for the premium merchandise. These prospects have a really, I would say, sturdy outlook for this 12 months because it goes ahead. A few of these prospects have certainly restarted blast furnaces. I believe a number of the capability holdbacks on these furnaces are an try to preserve the metal pricing at an inexpensive stage for them. I believe one of many huge triggers for a rebound there can be some decision in Ukraine. In the event you recall, previous to the conflict, they have been taking upwards of 4 million tons a 12 months from the U.S. That could possibly be a giant soar in demand out of the states, if and when that occurs. However definitely, there are shoots there and there are optimistic facets there, it is only a matter of timing.

Randall Atkins: I would additionally say, Nick, that on a macro, in fact Europe has been kind of behind the U.S. When it comes to its notion of when rates of interest might begin to decline. However I do suppose if you happen to see the U.S. decline in some unspecified time in the future this 12 months, you may see Europe in all probability comply with in its footsteps not an excessive amount of additional after that. And I believe that might be one other catalyst in direction of seeing slightly bit extra financial exercise over there.

Operator: [Operator Instructions] Our subsequent query right now comes from Nathan Martin with The Benchmark Firm. Please go forward.

Nathan Martin: Possibly sticking with the slide deck actual fast. I believe it is Slide 6. You guys discuss medium-term manufacturing of roughly 7 million plus tons. Might you present slightly extra coloration round that concentrate on, possibly how a lot CapEx that would presumably take, or a minimum of what number of years you guys foresee it taking to type of get to that stage, what I believe, Randy, you stated it is mainly double what you guys did in 2023?

Randy Atkins: Sure. I believe by way of the cadence, we type of take a look at that as in all probability a three-year ramp. We bumped Elk Creek as much as about 3.5 million tons. We have now Berwind in all probability at a 1.5 million to 2 million ton stage. We have not greenlighted Maven but, however that might bump in all probability to about 1.5 million tons, give or take. After which we would even have Knox Creek in there with, frankly, as a lot as just a bit bit underneath 1 million tons. So really, that provides as much as slightly bit greater than $7 million, however we have room for slightly wiggle room in there. I believe by way of the CapEx, we have set to work via it. However I might say our primary CapEx for this is able to in all probability be ’25 million, ‘$26 million. We to get to the place we’re proper now in ’24 shifting even as much as kind of a $4.5 plus million threshold. We’re actually bumping CapEx, solely about $13 million from what we had initially are available in at possibly within the kind of the low 60s, excessive $50 million vary. And as we glance additional out, we provides you with loads of heads up as to what the numbers might be. However I might say our cadence would in all probability ramp for in all probability two years at a few doubling of that fee. And naturally, that additionally contains upkeep CapEx, too. So our development CapEx goes to be a lot lower than that. However after we get to the purpose of laying all that out with any new steerage on particular initiatives, to take that up, we might be joyful to offer all of the CapEx numbers round it, development CapEx that’s.

Nathan Martin: Bought it. Admire it, Randy. Possibly shifting over to the Brook mine and the potential uncommon earth component facet of the home. You talked about the expectation to get to Weir report, I believe, over the subsequent 2 weeks or so. What sort of data do you count on from that? After which individually, do you guys nonetheless anticipate receiving the report from SRK, I believe you stated beforehand by the tip of the primary half. And proper me if I am unsuitable, however I consider that ought to give us the primary glimpse within the potential economics of the challenge as properly.

Randy Atkins: Sure. So nice query. So mainly, to interrupt it down, within the Weir report, we’re going — we basically been placing up an amazing quantity like hundreds of extra samples which were examined since our first report. So that is what’s given the time lag. We have additionally gone again as we are going to clarify and finished some fascinating new testing metrics that might be targeted not solely on tonnage, however extra importantly, on concentrations. So, I do not wish to entrance load that as a result of it will be out quickly sufficient. And by way of SRK, mainly, what they have been introduced in to do was, in fact, to assist us decide the economics. And the best way that, that cadence will roll is, first, it’s a must to decide basically what the chemical and metallurgic and minerallurgic character of the deposit is earlier than you may actually decide how the perfect processing methods might be developed. And in order that’s frankly the method that we’re in now. And once more, as soon as we come out with the report, we may have a full disclosure of all the pieces we’re . We simply introduced on board somebody who’s type of now going to functionally run our uncommon earth effort, who’s bought quite a lot of expertise and background on this space. So, look ahead to having a kind of an analyst name right here in all probability someday inside the subsequent month to have the ability to clarify all findings from the Weir report and in addition to offer you kind of a essential path of how we’re continuing ahead with the commercialization efforts.

Nathan Martin: Possibly only one extra on CapEx and because it pertains to what we’re simply speaking about. I imply these stories come out, for example, with optimistic outcomes. Is there a chance that CapEx strikes up in 2024? Or are we nonetheless slightly bit methods off earlier than we glance to begin spending extra materials quantities on that challenge?

Randy Atkins: You are speaking about on REEs or on met coal?

Nathan Martin: Sure, on REEs on the Brook Mine, precisely.

Randy Atkins: We have now spent exceedingly modest quantities kind of within the $3 million to $4 million vary on our complete uncommon earth challenge to-date. So, you are able to do the mathematics on what sort of return that is generated for us, a minimum of from a market worth standpoint, so our CapEx regarding the mine on the market actually will not start to kick in till ’25. And that’s premised on the truth that we are going to provide you with what’s the acceptable processing approach that we’ll attempt to pursue. We have got a number of testing to do earlier than we provide you with that conclusion. And as soon as we get to that time, once more, similar to we all the time do with any of our CapEx, we provides you with loads of steerage on what that appears like. However I am pondering not a lot CapEx even in ’25. I might look to extra CapEx in all probability be within the outer years.

Operator: Thanks. And girls and gents, this concludes our question-and-answer session. I would like to show the convention again over to Mr. Atkins and the administration crew for any closing remarks.

Randy Atkins: Nice. Effectively, as all the time, we admire everyone being on the road this morning. We look ahead to catching up right here in a number of months. And thanks on your curiosity. Thanks very a lot.

Operator: Thanks, sir. This concludes right now’s convention name. We thanks all for attending right now’s presentation. You could now disconnect your strains, and have a beautiful day.

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