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Ramaco Resources, Inc. Announces Second Quarter 2017 Results

LEXINGTON, Ky., Aug. 14, 2017 (GLOBE NEWSWIRE) -- Ramaco Resources, Inc. (NASDAQ:METC) (“Ramaco Resources”) today announced its results for the quarter ended June 30, 2017 highlighted by the receipt of its mining permit for its low volatile metallurgical coal Berwind mine and initiation of its development, as well as the continued development of its Elk Creek mining complex.

Ramaco Resources reported a net loss of $3.5 million, or $0.09 per share for the quarter ended June 30, 2017 compared with a net loss of $0.6 million, or $0.03 per share, for the quarter ended June 30, 2016. Revenues in the second quarter of 2017 totaled $11.1 million.

“Our second underground mine at the Elk Creek complex, the Rockhouse Eagle Mine, while still in development, began producing coal in the second half of the quarter and is steadily moving towards the area of the mine where we will mine two seams simultaneously with an expected seam height of approximately 12 feet. We believe that this mine is poised to give us a tremendous boost in production at very low costs,” said Michael Bauersachs, President and Chief Executive Officer of Ramaco Resources. “We have also started staffing our #1 Surface and Highwall Miner operations at Elk Creek and expect production to commence this fall,” Bauersachs continued. “The startup of our Elk Creek preparation plant is expected in late September.  This timing will still permit us to meet our 2018 business plan as well as being able to move into the market during the fourth quarter of 2017,” Bauersachs concluded.

For the quarter ended June 30, 2017, Ramaco Resources had coal sales revenues of $10.5 million on the sale of 56,857 tons of produced coal and 39,637 tons of purchased coal. For the entire year of 2017, Ramaco Resources has about 440,000 tons of coal committed under contract, of which 113,000 had been delivered through June 30th and Ramaco Resources estimates that in the second half of the year it will have an additional 280,000 tons of uncommitted coal to sell. These tons will be placed in a mix of sales to both domestic and export metallurgical coal customers.

Third-party coal processing at the Knox Creek prep plant accounted for $0.6 million in revenues for the period. The Company ceased processing third party coal in April to allow for a full commitment to washing third party purchased coal and our future Berwind production. Cost of sales and processing for Ramaco Resources totaled $10.5 million in the second quarter of 2017, resulting in a gross margin of $0.6 million.

Last year, in the second quarter of 2016, Ramaco Resources had no revenue or cost of sales because it was still in the mine-development mode.

Other expenses during the second quarter of 2017 totaled $4.3 million compared to total other expenses of $0.6 million in the second quarter of 2016 and consisted primarily of general engineering and other outside service expenses of $1.4 million and selling, general and administrative expenses of $2.2 million. The former reflects the continuing development of the Ramaco Resources properties, while the latter reflects the Company’s continued growth in the size of its staffing requirements for its mines and business.

In the second quarter of 2017, Ramaco Resources invested $24.5 million in its planned mining operations and supporting infrastructure. This included $8.5 million for the new Elk Creek preparation plant and rail line and $4.6 million for the purchase of the Alma Mine infrastructure and mining equipment from the contract miner. During the quarter, the Alma Mine was converted from a contract mining operation to a company-operated mine.

“Ramaco Resources had about $52 million of cash and investments at June 30, 2017 which we believe is more than sufficient to complete our planned 2017 construction and development ramp-up as well as meet operating cash needs,” Randall Atkins, Ramaco Resources’ Executive Chairman stated. “Although as we previously stated that our production ramp-up was slower in the first half of this year, we expect to substantially increase production once our Elk Creek plant is online next month and our Berwind mine begins production toward year end. At this point, we expect total 2017 production to be approximately 720,000 tons, with this lower level primarily due to the timing issues with the issuance of the Berwind permit and completion of the Elk Creek preparation plant. We remain convinced that we will have one of the lowest production cost structures in the industry, which will provide us long term optionality in many facets of our business. Finally, we also believe that even as a new entrant, we will be successful in placing our coal into both the domestic and export metallurgical coal markets in the second half of the year, at profitable levels in an improving and stable price environment,” Atkins concluded.

About Ramaco Resources, Inc.

Ramaco Resources is an operator and developer of high-quality, low cost metallurgical coal in southern West Virginia, southwestern Virginia and southwestern Pennsylvania.

Conference Call

Ramaco Resources will hold its quarterly conference call and webcast at 9:00 AM Eastern Time (ET) on Wednesday, August 16, 2017 to present its results for the second quarter of 2017 and discuss its business and market outlook for the balance of the year.

The conference call can be accessed by calling 1-844-852-8392 domestically or 1-703-639-1226 internationally. The webcast for this release will be accessible by visiting http://edge.media-server.com/m/p/4tx3vtmg

Dissemination of Company Information

Ramaco Resources intends to make future announcements regarding its developments and financial performance through its website at www.ramacoresources.com

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco Resources’ expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco Resources’ control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Ramaco Resources does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Ramaco Resources to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Ramaco Resources’ filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in Ramaco Resources’ SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.

   
Ramaco Resources, Inc.

Consolidated Balance Sheet
 
   
    June 30, 2017     December 31, 2016  
Assets                
Current assets                
Cash and cash equivalents   $ 2,858,014     $ 5,196,914  
Short-term investments     49,842,881       55,237,747  
Accounts receivable     1,869,930       914,741  
Inventory     2,415,032       1,518,638  
Prepaid expenses     766,989       388,921  
Total current assets     57,752,846       63,256,961  
                 
Property, plant and equipment - net     88,333,656       46,433,726  
                 
Long-term investments     -       5,199,077  
Advanced coal royalties     2,782,748       2,050,000  
Deferred offering costs     -       2,247,974  
Other     218,706       21,354  
                 
Total Assets   $ 149,087,956     $ 119,209,092  
                 
Liabilities and Equity                
                 
Liabilities                
Current liabilities                
Accounts payable   $ 16,307,435     $ 8,955,884  
Accrued expenses     385,616       1,174,904  
Distributions payable     -       3,905,224  
Asset retirement obligations     1,032,388       693,796  
Note payable     -       500,000  
Other     -       127,048  
Total current liabilities     17,725,439       15,356,856  
                 
Asset retirement obligations     9,777,720       9,434,838  
Other     26,956       -  
Note payable - Ramaco Carbon, LLC     -       10,629,275  
Total liabilities     27,530,115       35,420,969  
                 
Commitments and contingencies     -       -  
                 
Series A preferred units     -       88,773,933  
                 
Equity                
Preferred stock, 50,000,000 shares authorized, none outstanding     -       -  
Common stock, 260,000,000 shares authorized, 39,509,311 and zero shares outstanding, respectively     395,093       -  
Contributed capital     -       13,265,547  
Additional paid-in capital     147,618,884       -  
Accumulated losses     (26,456,136 )     (18,251,357 )
Total equity     121,557,841       (4,985,810 )
                 
Total Liabilities and Equity   $ 149,087,956     $ 119,209,092  


Ramaco Resources, Inc.

Consolidated Statement of Operations
 
   
    Three Months Ended June 30,     Six Months Ended June 30,  
    2017     2016     2017     2016  
                                 
Revenue                                
Coal sales   $ 10,522,122     $ -     $ 20,374,100     $ -  
Coal processing     551,380       -       2,237,674       -  
Total revenue     11,073,502       -       22,611,774       -  
Costs and expenses                                
Cost of coal sales (exclusive of items shown separately below)     9,787,810       -       19,625,423       -  
Cost of coal processing (exclusive of items shown separately below)     687,151       -       1,695,450       -  
Other operating costs and expenses     1,396,690       153,690       1,413,990       225,255  
Asset retirement obligation accretion     101,276       20,134       202,553       40,269  
Depreciation, depletion and amortization     310,889       -       467,016          
Professional fees     272,164       70,009       586,942       3,411,637  
Selling, general and administrative     2,227,116       359,497       5,513,701       759,492  
Total costs and expenses     14,783,096       603,330       29,505,075       4,436,653  
                                 
Operating loss     (3,709,594 )     (603,330 )     (6,893,301 )     (4,436,653 )
                                 
Interest and dividend income     100,343       -       216,772       -  
Other income and expense     121,492       -       118,235       -  
Interest expense     (212 )     (9,469 )     (22,820 )     (10,711 )
                                 
Net loss   $ (3,487,971 )   $ (612,799 )   $ (6,581,114 )   $ (4,447,364 )
                                 
Unaudited pro forma basic and fully diluted loss per share   $ (0.09 )   $ (0.03 )   $ (0.18 )   $ (0.20 )


For more information, contact:
Michael P. Windisch, Chief Accounting Officer, Ramaco Resources, Inc.
859-244-7455
mpw@ramacocoal.com

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