Ramaco Resources : Q2 2022 Ramaco Resources Inc. Earnings Presentation

Ramaco Resources

August

2022

2nd Quarter 2022

Investor Presentation

Disclaimer

Forward Looking Statements:

The information in this presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under, but not limited to, the heading "Risk Factors" included in Ramaco's Quarterly Report and elsewhere in the Annual Report on Form 10-K.

Forward-looking statements may include statements about:

• risks related to the impact of the novel coronavirus ("COVID-19") global pandemic, such as the scope and duration of the outbreak, the health and safety of our employees, government actions and restrictive measures implemented in response, delays and cancellations of customer sales, supply chain disruptions and other impacts to the business, or our ability to execute our business continuity plans;
• anticipated production levels, costs, sales volumes and revenue;
• timing and ability to complete major capital projects;
• economic conditions in the metallurgical coal and steel industries generally, including any near-term or long-term downturn in these industries as a result of the COVID-19 global pandemic and related actions;
• expected costs to develop planned and future mining operations, including the costs to construct necessary processing, refuse disposal and transport facilities;
• estimated quantities or quality of our metallurgical coal reserves;
• our ability to obtain additional financing on favorable terms, if required, to complete the acquisition of additional coal reserves as currently contemplated or to fund the operations and growth of our business;
• maintenance, operating or other expenses or changes in the timing thereof;
• the financial condition and liquidity of our customers;
• competition in coal markets;
• the price of metallurgical coal or thermal coal;
• compliance with stringent domestic and foreign laws and regulations, including environmental, climate change and health and safety regulations, and permitting requirements, as well as changes in the regulatory environment, the adoption of new or revised laws, regulations and permitting requirements;
• potential legal proceedings and regulatory inquiries against us;
• the impact of weather and natural disasters on demand, production and transportation;
• purchases by major customers and our ability to renew sales contracts;
• credit and performance risks associated with customers, suppliers, contract miners, co-shippers and traders, banks and other financial counterparties;
• geologic, equipment, permitting, site access and operational risks and new technologies related to mining;
• transportation availability, performance and costs;
• availability, timing of delivery and costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires;
• timely review and approval of permits, permit renewals, extensions and amendments by regulatory authorities;
• our ability to comply with certain debt covenants;
• tax payments to be paid for the current fiscal year;
• our expectations relating to dividend payments and our ability to make such payments;
• the anticipated benefits and impacts of the Ramaco Coal, LLC ("Ramaco Coal") and Maben acquisitions;
• the expected timing of closing the Maben acquisition;
• the risk that a condition to closing the Maben acquisition may not be satisfied;
• risks related to Russia's recent invasion of Ukraine and the international community's response;
• risks related to weakened global economic conditions and inflation; and
• other risks identified in this Quarterly Report that are not historical.

We caution you that these forward-looking statements are subject to a number of risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control, incident to the development, production, gathering and sale of coal. Moreover, we operate in a very competitive and rapidly changing environment and additional risks may arise from time to time. It is not possible for our management to predict all of the risks associated with our business, including those described under the heading "Risk Factors" included in Ramaco's Annual Report on Form 10-K, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this presentation are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

All forward-looking statements, expressed or implied, included in this presentation are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation.

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Key Investment Highlights

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Ramaco overview

(NASDAQ: METC)

(NASDAQ: METCL)

Ramaco is a low-cost, "pure play" metallurgical coal company. We are a key supplier to the North American and international steel industry. Historically, we have sold almost no coal to power plants, though most of our coal can be used by utilities to help ease current global power shortages.

We have a strong pipeline of production growth to ~6.5 million tons from ~2 million tons in 2021. We have minimal AROs, net debt and legacy liabilities. Recently, we initiated and then doubled our base dividend.

We produced record net income and Adjusted EBITDA in 2021 and already topped those annual figures through 1H22 alone.

At a glance

• As a "pure play" metallurgical coal company, our product is a key component in the production of primary steel, which is crucial to infrastructure development. Recently, we took advantage of dislocations in the global thermal coal market to sell a meaningful amount of 2H22 volume to a European utility at a large premium to the current met coal price.
• Based on the midpoint of 2022 production and cost guidance, we have already committed ~95% of our sales, which on these booked sales alone translates to over $230 million of net income, >$5.10 of EPS and $340 million of Adjusted EBITDA*.
• Growth of >425% from ~0.5 million tons produced in 2017 to ~3.0 million tons in 2022 (based on the midpoint of guidance). We expect to produce at least 4.3 million tons in 2023.
• We have minimal AROs, net debt and legacy liabilities, as well as strong free cash flow generation. 1H22 Adjusted EBITDA was a record at $122 million, as was 1H22 net income of $75 million, versus $54 million in 1H22 capital expenditures, with most of the capital expenditures tied to our strong growth pipeline.
• Current metallurgical coal pricing remains strong, with U.S. high- vol A at $245 per metric ton FOB port, up >20% YoY. Current API2 (European thermal coal) pricing is near-record levels around $300/metric ton FOB port.

Market summary

Share price (08/05/22):

Ticker symbol:

Market capitalization:

Net debt (06/30/22):

AROs + Legacy Liabilities (06/30/22):

Implied enterprise value:

Dividend Yield (08/05/22):

$11.15

METC (common stock)

METCL (9% Sr. Notes due 2026)

$494 million

$56 million $26 million

$550 million

4.0%

(*) Mine level, before corporate expenses, using midpoint of cost guidance and forward curve pricing as of August 4, 2022	3
for index-linked sales.

Investment highlights

Ramaco has built a low-cost met coal platform, with minimal AROs, net debt and legacy liabilities, a meaningful

dividend, and one of the strongest growth pipelines in the industry. We generated record 2021 Adjusted

EBITDA and net income and easily topped that figure in the first half of 2022 alone.

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Portfolio of high- quality assets, with long-term growth

Strong commitment to ESG principles

Low-cost U.S. met coal producer

Positioned to serve both domestic and export markets

Clean balance sheet with strong free cash flow generation

Record 2021 results, with an already stronger 2022

Highly experienced team

Attractive valuation, with dividend recently initiated

• Large, high-quality met coal reserve base. We intend to more than double production from under 2 million tons per year in 2020-21 to at least 4.3 million tons in 2023, including ~3.0 million tons this year, with a goal of roughly 6.5 million tons per year of production by 2025.
• Environmental, Social, and Governance (ESG) principles are core to our strategy. Substantially all our coal last year was ultimately used to produce primary steel, which is a crucial component of the 2021 bipartisan Infrastructure Bill, including the large-scale production of energy transition products like windmills and modern electric vehicles.
• 2021 cash costs per ton sold at our flagship Elk Creek complex were in the first quartile of the cost curve of domestic met coal producers. Advantaged geology yields higher clean-tons-per-foot, as well as greater productivity at Elk Creek than most peers. While 2022 costs will be up across the industry due to inflationary pressures, Ramaco is committed to maintaining its position on the cost curve over the long-term.
• Well-positionedto transact into both domestic and export markets. Diversified existing customer base, having sold into North America, South America, Europe, Asia, and Africa on a regular basis.
• Advantaged infrastructure and geographic flexibility.
• Our balance sheet provides us with greater flexibility and lower risk relative to many peers. As of June 30, 2022, Ramaco had $56 million of net debt, $25 million of AROs, and no significant pension and post-retirement obligations. In 2021, the Company raised the first unsecured bond in the U.S. publicly traded coal space in over 4 years. Ramaco had strong quarter-end liquidity of $83 million in 2Q22. This was up over 35% from year-end 2021 liquidity.
• 2021 Adjusted EBITDA was a record at $79 million, as was 2021 net income of $40 million. We have already generated meaningfully more Adjusted EBITDA and net income already in 1H22 than all of 2021.
• Based on the midpoint of 2022 production and cost guidance, we have already committed ~95% of our sales, which alone translates to over $230 million of net income (more than $5.10 of EPS) and $340 million of Adjusted EBITDA*.
• Highly experienced management team and Board of Directors with a long history of acquiring, developing, financing, building, and operating coal assets.
• Current trading levels offer a compelling opportunity to invest in a premier met coal producer with a long-term runway for production and earnings growth. Recently, we both initiated and then doubled our quarterly base dividend, which is trading at a 4.0% yield as of August 5.

(*) Mine level, before corporate expenses, using midpoint of cost guidance and forward curve pricing as of August 4, 2022	4
for index-linked sales.