METC - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen and welcome to the Ramaco Resources Third Quarter 2018 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the conference over to your host, Michael Windisch, Chief Accounting Officer for Ramaco Resources. Please go ahead.

Michael Windisch

Thank you, Hayley. On behalf of Ramaco Resources, I would like to welcome all of you to our third quarter earnings conference call. is our our Chris President Chief Officer. morning CFO; Chairman Blanchard, this Operating Bauersachs, Mike and me Randy Executive Atkins, and our With CEO; and

the cautionary would on discussed be call of Private results and new constitute the share by it Ramaco which to Before a Securities represent These Certain forward-looking statement forward-looking within or cause today’s any outside are not like is forward-looking the statements XXXX. of start, forward-looking or control, law, Ramaco’s events statement statements. speaks possible to actual expectations otherwise. I are our only of does as we normal meaning statements statement differ not forward-looking Litigation of statements regarding which future statements other as Act to on and the to the as achieved. future Ramaco’s results from uncertainties update it These discussed of that which could except any subject in statements. the obligation forward-looking many revise concerning beliefs materially date information, is Any and made will forward-looking whether of events or risks, discussed results factors, required undertake result Reform

Atkins, in said, contained factors Chairman materially the and results risk in and XX-Q. annual cause and New you Commission, including statements, to those should Ramaco time emerge Randy cautionary forward-looking such noted factors that and with differ Exchange CFO. from possible found our considering time the to I XX-K company’s factors statement. the any statements company’s the these on and could forward-looking Form filings keep factors it for like introduce factors. risk not is other report to Form other our in to actual The would Securities mind our When SEC predict from With the all filings and in

Randy Atkins

joining for call to third Mike. and discuss thank our results Thanks us everyone quarter to our today want I events. for recent some

at quite Ramaco, us For it’s all week. a been of

on As a raw single probably structural a failure Creek aware ton you had storage are Monday, at coal complex, Elk our silo. involving X,XXX we

two have to we a of hold tons got add tons. of over To combined overall additional X,XXX other those some about silos two give more. We and have at Creek storage raw there, planning are other context, XXX,XXX Elk coal

between conveying single the however, the the failed of silo, served that less belts of storage our the that failure our prep silo conduit X% that overall equipment, So, involves represents capacity. the plant. the to and of coal The a of number delivery have got silo system than we of significance for as

We on this have provided slides connection. which illustrate call, some the

we would hope that plant even until an damage much all fourth in storage Bauersachs pile. the not the beltline anticipate to commenting back prep be to and negative prep long-term the build we Blanchard the in the from this the plant will have of to conveyer single we any conduit Mike do greater to had and shutdown later on silo, Given like system existing entire a operational in we our moment. I alternative raw But stress impacts coal Chris quarter. detail be running aspects the

capacity. have alternative however, be plant since not will also construct continuing at the also operations, completed, idled which have we us we costs the and while and have from are Elk our insurance it we without coal beltline until In prep Creek meantime this And We conveyor. to stopping. mine temporarily coal prep is with provided Elk processing the our feel we associated any customers. force to deliveries Creek in covers interruptions both, plant restoring financially point and majeure affected we place, business that out notices coal I on also we suspended would

We also fully ride period out the are liquidity sufficient we enjoy operational. to until

changes unfortunately, The quarter, was balance on sales would second from to related Miner’s and weeks conditions Creek. from to to for productivity saw issues related a mining July loss customary worth results June production price at we and to geology half like I Elk earnings the in our of turn the Now the in declines from of the the tons over changes When Holiday. strong export X analyzed which decline, quarter.

the million, with second quarter. of about Quarterly we’ve earnings the per translated X% adjusted down to $XX million yesterday. from which $X.XX. through income was quarter some about of have start $XX for milestones been Net QX. was million $XX $XX gives Let’s year late released EBITDA financial $X million, us roughly Revenue the the was EBITDA share for overall of in September. adjusted That which million, total roughly

anticipate the production levels. have issues We sandstone to expected Berwind, a to details to will in discuss operational we at and moment, rebound but call, we a around we work mentioned in QX managed our which

slightly. track Seam for to prolific on in Pocahontas also geology, declined primarily are mid-XXXX again #X production reach and Operationally Berwind. volumes at We on more based

XXXX As XXs. to had guided low you cost the recall, we

This $XX to ton, geological quarter, $XX behind will we with X-month our approximately normalized hope per per us, ton. cash makes mining more issues our average move the costs grew which We to roughly cost.

additional anticipate for these cash We this qualities price year, contracted mining placed compares for against also prices the be customers. roughly an This for earlier to increase $XXX able an sales hold set is to average had levels. coal have with customers marketing say, customers Needless cash roughly and tons average mine, now XX% $XX our coal very The of to mine. of in domestic to sales, met domestic of export the index. XXX,XXX price XXXX. sales year-over-year. will for sale is various strong of of half assuming at margins ‘XX XXXX, to we moving the FOB various FOB XXXX of met we These Now first roughly cost, are tons X,XXX,XXX we our which to delivery

million production X.X production. approximately XXXX guidance tons, be will owned company a initial Our for

looking actively ways organically increase are that We to level. at

go XXXX sales have into To far, thus the million, domestic about the level primarily development we the We export is a spent I the $XX increased to sandstone had around related we will primarily, And of some anticipate same Creep entire bit that year. CapEx. Beyond just attributable got spending capital, markets. at little guided on balance discussed, development of mainly about tons to talk for cost, work indeed, Berwind. have of basically to our the CapEx we capitalize available

all plant ‘XX system And at we’re define we the well Form spend and revolver other once intend X-K, we year on full KeyBank to the Elk a of major to will Our file financing is secured be guidance. This provide Cleveland. prep amount a plant levels an will and of will mention term conveying as with information loan once would this by a Creek. position like what to I to related million also inventory. rather prominently new to equipment that combined as are rehabilitate our prep able of closed CapEx receivables we $XX in revised, we week a asset-based that need and

bank of in professionally from would validates, some also forward which add a development graduation somewhat our growing full-fledged lender’s also partnership looking a for the for take of with with capital We the providing a working a sense right operating appreciation producer, support we to We requirements. would us situation working like financing successful perspective. fast-moving on, a are to what doubt, out express KeyBank, a candidly in. financing this are no that long from to box a company is pride I

over and We environment. to as So and legs between early the A June. $XXX. now And on production $XXX Australia let’s announcements We for of see Also turning right X% first and continues well. are $XXX like the both remain around production. our XXXX turn strength be to all to steel and at with $XXX. was the market there’s that the steel signposts of curve now ‘XX ended XXXX. driving strong. since $XXX. And as call some our all pricing. supply. and September some to XXXX and June, The China we time no over macro and few now obviously encouraged In the it was been the views markets, million over has per obviously, hopefully of for October our in spot lost continue almost supply curve This struggles quite last the international ton represents both, seaborne West in Chinese the at in in forward week of looking X last production is on side, these tons peers benchmark at this on see Production call, in mine met very [indiscernible] the increases since And we our high-quality finally, through Virginia. into domestic XXXX utilization forward in year-over-year factors June, in domestic U.S., Pinnacle set hit the now meaningful forward into almost capacity to on well steel production financing shows it XX% XX, X%. even continue It’s new

XXXX. leads this moving optimism of us harbor All some into to

detail. to alluded some moving of And are there challenges opportunities that, floor in I’ll us Mike turn term, substantial have with but to, to front the we’re certainly we that we ‘XX. we feel on As into as near operating over dive

Mike Bauersachs

Randy. you, Thank

earnings an fewer negatively The was by XXXX conditions, standpoint geologic and some solid from impacted export quarter workdays third quarter uneven localized shipments. of a

our with will long-term, also at with More structural begin in and available has #X Chris raw for us I Blanchard, silo deals update Chief Operating goal discussion Officer a have my of to the realizing be prolific comments some to topics Berwind. failure answer the importantly, that of reaching detailed us for will maintain call a of and order our quarter the To questions. during the include provided Pocahontas our pathway with related more Seam partial joined a Creek. in coal actions the with clear non-silo Elk comments, my will

operating normal the experienced days mines During in to all our the and quarter, a due at July miners holiday vacation. of third we reduction X

multiple and drop experienced turn in operating deep feet shift our a sizable hours issues, at also We off productive mines. of in per due advance to

to gas Virtually, number mining the quarter. transition the quarter-over-quarter third We every largest also single-bench which #X section The our experienced at had section relocated during a moves occurred variance disproportionately a the large #X of height. quarter. returned mine, operational in cutting we in at created October. This our coal to difficult condition of more Due conditions also reduced productivities more number and mine to normalized quarter. a gas third changes, and the in

surface impact in surface especially quarter-over-quarter as mine completed created well in challenges quarter compares $XXX, to Our has at the tons. in we peak the over that been experienced the quarter. per favorably some Creek XX earlier this commitment for Eagle as the mines negative which anticipated, July the from quarter revisions mine Per associated the to dealing depicts at production our increased To the negative seeing mine. of the on led the $XXX plans on headwinds was offset height our drop with ship This production our to Seam These ground. highlight same XX,XXX August seam specifically productivity to slide speed the side positive with slide per more third Note on costs. variance, while feet. See Creek variances tons September the first the Elk that the of mine XX,XXX partially production second in of height tons the advanced we’re of our June. Creek higher shows issues in tons quarter. productivities, to high to that impact off Eagle year, reflect these reality Elk was of the also the related production in The fewer unit deep than The mine XX,XXX for September $XXX. following Elk deep even PowerPoint average through change, multiple

XXX,XXX the over forward, coal how The levels and new of will what production. during anticipate we tons many be cost, up at the mine high-vol year, seams at making Going question remaining our per as will low produce metallurgical steam that mine, operating portion tons we since will shipped surface half mining exceeding mark XXXX, be some will the tons. be surface is with in

on We meaningful have this our continue process through could impact advances. earnings. sort XXXX of determination outcome budget as to a this our The

second ship. continuous the second at mine well another added section the fourth miner have we as to During the also Alma our as quarter,

While our to not with include original second projections we strong for market XXXX given this forward this chose move conditions. did continued section,

We expect of to be for this second operational all XXXX. section

path to drilling core mine, us with a communicated, production. our our targeted Moving to our #X reach Berwind we program previously as revised provided Pocahontas

The to Berwind new transition through thin in XXXX. an development development mine to development During as expected initiate which in in the in mid was transitioned conditions, mining of challenging full it mining still old mine corridor. conditions but Near-term October. quarter, the production in is commenced the our relatively better, mode mining are startup thin and

While low and on choose end treat much call retention Seam way development we to currently XXX This #X final We how is budget. configured volatile turnover experience until the some the and employees to during XXXX. same plan the our situation period. and will conference of a our with to year employees. our add XXXX, in remains mine produce have is in we in last of projected approximately We it discussed pretty delay XXXX XXX production during reaching tons section approximately during a XXX,XXX to coal additional depending our

While find experienced have our continuing hiring to we for at slight made be of for XXXX. to some wage In that an we to employment benefits support continues retention and package edge, issue changes candidates Ramaco. are monitor, maintaining we our

that We to sure we recent that in point, acted the production a new to of strong advantage could seek regarding time. cash significant upon seen issue. desire get pricing numerous will this in our At make In that our CapEx also forward-looking add this XXXX beyond. although they our we committed long influence and facts, stepped development of contribute in silo midst flow have Creek, point, production. be increases substantial efforts to employees annual project, are strongest not remain which Berwind Elk permits our we with budgeting, XXXX we have generate runway standpoint, From our up communication process. a the will committed all balance to we production any we’ve and to have our budget At of taking at our free the to

year the considerations feed be tons, Even timing slightly X.XX plant. now are expect our Elk with end by company during plant, capacity production end impacted these Creek below approximately to of is preparation the All which low of an XXXX idled to million silo is near-term because we the impact At guidance. tons difficult silo to difficult finalize also issue where up point, for our it budget The plans. to we of predict the year. this of makes our end relative it to of will sold issue, the XXXX restoring

a We will later production the clarity reflect be date. to sales marketing a slides on our a and Even transitioned sales Note a of provide plans have depict our the headwinds, slide our transformation base. on current to and busy full-scale that year-to-date and quality the with more coal. company will very shipment series third XXXX for perspective, year the domestic a depicts From that XXXX, of profile quarter. production we we customer had shipments with diverse that clearly

pricing. tons million We’ve tons Creek at Knox next that attracted Creek and illustrate, XXX,XXX high-volatile business the of approximately into As coal. low-volatile committed our and domestic of Elk series both, we’ve slides low-volatile entered X.XX

believe in additional to that availability. we be XXXX. low-volatile can continue also inquiries that continue will to confirm tight We I about low-volatile feel coal

As touched slide. our also high-volatile we’ve Elk the This on the earlier, ton. AB $XXX on typical from illustrated pricing per approximately $XX is of per increased also ton coal, to Creek

with placed domestic our As being those fewer tons our customers, expected, in have we to coals resulting migrated the most. value who

depicts well upward to presses Creek set, expenditure qualities to and slide plate we in haul reason these long-lived have to trend shipments been Each need these plant. of program From XXXX associated capital much that the to the seen expected XXXX capital now and the the and a our substantially related paved with to contribute production capital our for export included mine. the extensive decades like are commitments extend development and tons. domestic Note efficiency increase as standpoint, based non-budgeted associated current With valuations being assets, business largest export export for has year. CapEx costs gradual roads, higher The on desired costs come. focus projects our of and to drilling business at XXXX development AB slide the export XXXX our preparation for and a mine peripheral Elk Berwind spending as commitments. we year-to-date depicts index that Overall,

and Going forward, With not infrastructure spending projects operations. number full parts, we on for anticipate related moving of decided spending. guidance have XXXX existing less capital CapEx a to issue we year

have examinations Creek. Elk secured, in silo for infrastructure, must failure. due remaining of results days, is safely The recently on made in The is the silo danger connected are X have disclosed X to several not silos on not no progress taken The that examinations. we area structural at and failure to these the and not the immediately past the raw be brought reactivated. of was the are Once but Moving of to they over able review we silo down. the silo the started additional repairable economically experts damage coal structural situation, eminent be damaged

and plant Based with silos the for will depicted are order plant bypass to the the that recovered they preparation apparent on while belt in bypass plant. a begin the the connected is to the it reactivate system on of coal The to final weeks. approximate bypassing and relation became safety primary shortly We installation location concern, and in designing need as of the our number workforce a idled the of completely preparation preparation the structural the to are slide. be raw of in silos plant examination will our

from coal complex. have As Elk our customers currently majeure such, our receive notices to scheduled to sent are all force we who Creek

notices decks XXXX new domestic to being on this current to contracts good been sent with our shipments. relative majeure as are slide shape we at as in are that No XXXX not anticipated force customers have Fortunately, time. the depict,

need with we could to silo We expansion The is capability loading particular, a that business cover sufficient plans No and process bottleneck in we we intermediate interruption us In and at confident protection plant that we to can the fully we that put are have importantly, ship be existing continue Creek. costs from potential our property believe, plans issue Most the interruption. restore not we growth sure to to Elk business will reviewing. we prevents have our until damage and respect implementing term run mines. do an processing insurance new have place impact and facilities mines to from provide preparation that also significant make necessary that been tons.

have expect coal not the stock negatively substantial affected. Therefore, to the We both pile on production mines mines property. space at for the do we and be

future While shipment issue. Creek at conclusion, production and acted and to team on and is practicing the Ramaco. be efforts interest shipping want responsibility the quickly our thank restore who Safety sales silo guided will the And by not everyone’s be just not it. volumes should volume I to at affected, be everyone’s saying Elk will impacted. but processing phrase, In for best

the Thank metallurgical performance. end of you. coal the Let to result comes else remain mind and provide And company committed comparable relative third that business in months. X We approximately one that will brief our a firmly the the believe to quarter continue me Mike update to best financial coal to that XX now Windisch also the ask we to no add country. plan mines developed has profile I will company be in

Michael Windisch

you, I third our to like Mike. refocus financial the results. discussion would Thank on quarter

of huge the X-month $XX period, adjusted approximately quarter, reported sequentially year-over-year. per $X.X decreases represent During over net obviously million $X.XX increase share Both and but or million. EBITDA second the of income we

$X.XX The revenues caused in cash in were the net adjusted capital second impact our coal our months income purchased bottom EBITDA For EBITDA ton some capitalized and million and $XX.X $XX per $XX.X larger totaled at by was quarter. Total about Including driven million, quarter by quarter This million for revenues increase quarter. the XX, in a current primarily third export and X million during was down share or during pricing. $XX.X totaled ton second adjusted $XX.X in from an geology-driven the million. productivity line costs slight $XX.X X% decrease the from per and decrease This the development a quarter ended in per in approximately was our was issues. costs year-to-date. to the mine, Berwind September $XX expenditures

Given damaged still the and are Elk for at fourth CapEx the silo situation we evaluating the with plans Creek, quarter our beyond.

of XXXX. and expense still million is for during anticipated effective $XX,XXX of be taxes X.X%, an We $XXX,XXX for less ended which X the than current represents $X.X also recognized September tax income our months rate full approximately to XX. the Cash X tax are year. This period projection and

enhanced and were loan As $XX to we combined provide will higher managements Randy equipment prepared the mentioned, like retire have. loans time, Proceeds on us with X-year flexibility KeyBank. working that short-term this a subsequent new to The million concludes might questions X-year closed quarter for $XX to you end, we ABO At of would capital used debt. remarks. any interest and This line a million, open with amortized moving forward. up

Operator

And you. [Operator question Jeremy Sussman Thank of our comes Clarksons. from first Instructions]

Your is now line open.

Jeremy Sussman

and thanks questions. very morning good for taking much my Hi,

Randy Atkins

Thanks, Jeremy.

Jeremy Sussman

would very can is be that a bit what a timeline that envision? guess, maybe it obviously this as an to starting prep an your understand rough kind elaborate XXXX. if plant you you noted remarks, build helpful? event, silo event any of I stockpile this recognize guess, me plan I obviously, a conveying recent recent from alternative to on the work system that area. expect existing sounds color just it you event, maybe And let correctly, you be it can if you more I confined very prepared I so around to the the little to with you in provide largely entails

Mike Bauersachs

to Chris I Great. that let key closer up it one am he is here. Jeremy, Blanchard since to going

Chris Blanchard

you in At previously be fourth prep stockpile that but a this the Jeremy, in to we to time, silos set give the bypass bring additional put the and it say, belt are are it’s quarter. plant. not completed but going per premature do going between from expect a to we a belt timeline we to the

process the are beltline. of work the of fabrication ground the doing installation in the engineering for and We that

Mike Bauersachs

we our as Jeremy, of way way is that kind will work other year. the only note stockpiles will impact building the we through be that really the into our working I and fact next

So projections can well, working the running on we as in we a able the essence, stockpiles how as we are to the plant production. as hard to it. that figure as are soon lot out reducing we prep in of run current are And is trying to balance

that. to So are continuing we work on

Chris Blanchard

And Jeremy, belt that provided bypass the we one to deck the system. there a a in other look extent tells you last at thing, our call, of that for thousand slide picture proposed picture is if the a the words,

can you to new amount So of of the dramatic in see plant. particularly it’s basically of prep tying sort construction, the a it’s not one line back

Jeremy Sussman

think the quarter, definitely follow-up, maybe I marketing a coal Slide if as majeure the you immediately. yes, color. if about could And helpful. appreciate the fourth a is X if all you really don’t in process it if sounds from forced I producing of be even And lot perspective, I that event

at XXXX? could above I a see shipments, mean trying you invoked maybe you just majeure, are so see contracted? purchased this does kind shipments you to either the you’ve let’s we in force this do of here. does bit production to it sell a I’m guess, mean exclude way, So rates could previously able coal understand second, that we for And given balance need sell to of sort the production what market dynamics that of at this

Mike Bauersachs

in lot of we of a question sort to I’ll coming Mike production in So, And yes. Jeremy, the answer short have ‘XX. because blank is a there let fill will your out

Michael Windisch

have would failure, we than would next this year happen because same produced the this through had point. stockpiles. before more Yes, sold work The Jeremy. same tons have will thing now we issue We at had inevitably the year,

sales take we So sold elect force majeure the many coal right point, set in produced. is to coal had different. each tons we’ll cases, At have in likely on than customers that And future. this contract to the more

a want this I’ll our that will We’re be of deal them care I pricing a the From that to We pricing. year’s take pricing will customers. on say working of really Most case standpoint, pricing good repeat anticipate basis with versus customers. be case-by-case different. of are a each alternate great them.

Jeremy Sussman

XXXX? meaning, year This

Michael Windisch

Yes.

Jeremy Sussman

Okay.

Now helpful. if little mills. bit mills or given come bit than past in color that you gave see utilizations maybe able hit And a you environment? market? year-over-year so. and steel past aggressively I of for to can. one the levels achieve you or think this out years I more you clearly shows can the earlier Randy, very And the the either XXXX in domestic your on the noted in highest that appreciate we’ve the just that a the capacity business were guys a with guess, elaborate follow-up, did this last earlier, X in past the that seen that’s I you maybe the bit I pricing market particular, increase your state domestically, in the – years domestic And in

Randy Atkins

short is Jeremy, did out they the answer – yes, come early. I again,

domestic so burned If the come in as bit prices you of got ‘XX again early. the they remember up mills them this some early little pretty out ram We a in were saw ‘XX. quite quickly, year out

that others, the have strengthened into thinking were Obviously, the Some as going better play to fall. the prices than prices down. poker we’ve gone come

than least into future you’ll in of find earlier new say will in was coming ball would portion you their to domestic I it, at normal substantial is much a a domestic that probably the going find I lock probably to if crystal out So mills requirements the the past. and trying

Jeremy Sussman

color, the good everything. all with and luck Appreciate obviously

Randy Atkins

Thanks.

Mike Bauersachs

Jeremy. Thanks,

Operator

you. Thank

question Mark of next from comes Seaport Our Levin Global.

now is open. line Your

Mark Levin

Couple quick questions. Yes. of

about some you’re insurance maybe to details details specific around the to detail the how coverage, about – any First, – financial extent, the would insurance provide of deductibles, how able the work? other

Mike Bauersachs

because – what working we’ll the relate have. the and have this what Mark, work policies, some we’re of actually we’re replacement couple merely basically, the and insurer it. to of infrastructure and we’ve to with different going to closely silo a be In got we case, eliminate – going to a we make the some with changes

be think I that fine. So will all

deductible We coverage a the interruption have actually certain that is days. business number of

I actually X work working week. of days course, we think it’s and a XX days

have on which placed the with with of – kind the gap where of will And a receivables. working loss profits, will coal Obviously, us, it through not some flow that. cash ticking our there, and there it’s course, deals we’ve situation. basically So help be way clock’s

and So an again, going property the on continuing or to next assessment in they day that’s make to need to work I insurance so. on with that providers the happen the think

– think term. it’s – of our that obviously than could numbers And millions clear but all I we point adequate. get probably more the to early indication can And we too it’s have dollars give a it’s of that, tens most XX-day you access as too to. sales you of thing, other So any arrangements Mark? out So one I payment understand XX-day to of are

flow to as a concerned, not really ‘XX be going we impact as going to we’ve already is advantage ‘XX this far as as So sold. what XXXX concerned. cash is is far are This of – more

Mark Levin

know the case end and case the seeming, done Mike what and that’s along take it about potential the between will end And of situation? year. fixed expectation by back issue there what regulators just remedied talking or push and end else I ‘XX? Is slippage have reasonably that or are base with failure. be it. the the of the there Got was Chris the coming it the the were be What’s of could into the that of base anyone year. now guess silo issues that And sort any the will about you worst-case will to talking I year any it way by from whether is confident that

Mike Bauersachs

love but I’d Mark, it’s answer at that to point. just so this question, early

Mark Levin

fair. Okay,

Mike Bauersachs

though X foresee things regulatory permitted. The I think don’t so. this point, – we’re do footprint those I is – of We that, one into days issue, It’s thing at we any this mean,

Mark Levin

that’s alright. Yes, Sure.

Mike Bauersachs

continue will important this more What so Randy will is and learn issue can. as we to And much to I things as as I this is, say alluded we develop. guidance is think that

Randy Atkins

Yes.

of reality correctly I think sort noted, this Mike here. at moment the check as is, zero Mark the ground is here

of So probably give some probably as aspects this be or in weeks to guidance board and in would much less, it’s will financially which time. of this handle, our to the as we matter more across of we’re that intend impact how a at think going of get on terms predict number X soon able to probably a pretty both operationally I anything we

Mike Bauersachs

we can of them. to them steel help And mean, these ship it’s Chris? when and describe, It the having we this, about we we’re kind actually structural overseas, might it’s have I from also Chris think use think fabricate of I construction not things we – to some that let mean, like right,

Chris Blanchard

on Yes. structural about believe property we’re some can the talking do have the belt belt Thanks, building we that roughly we use. And XXX Mike. thrust No, feet is that we that bypass long.

design foundation an a – infrastructure it’s project fabrication. It’s a project. not engineering more So and of then and field tremendous

in not that, we can as with use we to the helped confidence some have at is finalize And available engineering the we it work can’t certainty we property, of devil on say opposed have that what all. having details. in having all until the anything the we certainly course, but So

Mark Levin

to issues the Mike, Thanks, conditions. just just in third the with some It of operationally And you quarter, Chris. sort makes final temporary then mining mentioned non-silo sense. question has adverse do related

are as the the conditions third? cash assess – you versus the As How at the almost fourth here you versus being quarter this guess now mining looked sitting in feeling fourth fourth quarter this look quarter How the they because and we’re mid-November. cost might are about I in quarter? quarter

Mike Bauersachs

more a he going ever. granular joined just as since that to And give Chris Chris give you has second-best I bit more let can tell we details. you in some I’m the little our I’ll October, here. let that, at month really with Sure. detail look numbers you

Chris Blanchard

it second-best Keeping was second in only this the October Ramaco in second that our production month have year. production quarter June numbers, yet, haven’t mind to financials we we that closed on had, has the the just

best expect continues move downward. the month-over-month was year. surface cost its the October to just would that, on and we So month to improve of The mine

a So short quarter. obviously, it’s

and periods planned X November December. vacation have We in

basis be lower did we ratable good of days, was because a sort based on So going a production of volume start. to but that We a anyway, off run to on were #X normal area they the to where and Mine mine in levels the out both Eagle our our areas productivity of October. move return at and gas in did can those of

the also We #X #X in also the section at – Mine, section. to is of finished our to similar – we as our favorable conditions Mike alluded which ramp-up Alma

basis. productivity we rest out expecting on slightly – ramp-up our through Mine that So the this of year run-day a Alma we’re of should to

Mark Levin

really Yes. good. sounds That all

from So a between? more the in quarter like bow around a more quarter put the fourth does likely just third the second quarter to perspective like or cost or somewhere look of kind that,

Mike Bauersachs

I between, having – again, likely it’s but somewhere – I’m think not it’s even in

Mark Levin

fair. know I yes. yes, it’s early, That’s

Mike Bauersachs

tough of as you, to it’s your or really as relates Well, one-sixth days because lose I a production know, it quarter you so worked. mean, always, Mark, lost

– So

Mark Levin

guys. color the Thanks. update, and Appreciate Sure. the

Operator

Thank you.

question next Our Riley comes FBR. B. of from Pipes Lucas

is now line Your open.

Lucas Pipes

everyone. Hey, morning, good

Mike Bauersachs

Lucas. Hey,

Lucas Pipes

your wanted ask to X.X the market. question on locked in tons, for a obviously, majority about million vast that up sales I strategy of XXXX, domestic you’ve

kind index this you or price kind are there we to at you to fixed of market? remaining be strategy the you. Thank the opportunity As targeting about Should be is layer tons contracts sold, an be may thinking of to more in here look export time?

Mike Bauersachs

a foreign Lucas seeing to that buyers part the still is on on of that we’re think I what index. go inclination there’s

we’ve placement So got – ‘XX. a for a XXX,XXX round numbers, left we’ve we got about anticipate tons

of And plus We’re going as of the export can. much cross-over to be of blend as pure some to anticipate trying that’s we coal move to we met that coal. – markets a going in

Lucas Pipes

Perfect.

be thinking produced should of million of about X.X company So we tons? sales kind

Mike Bauersachs

correct. That’s but – Lucas. think that. debate process point at point, on, would comfortable about that’s with things things with, The I we’re on, this budget continue what few a additional we at about going this Yes, like these production, think to is going I all

Lucas Pipes

such. a if attracting costs on follow-up your plans thoughts at prepared the much that question Thank and benefit helpful. you. could quick appreciate on it. this If you in qualified topic. remarks, would all? you. for changes mentioned Michael, labor And pressure That’s put I Got I How your – to on heard you right,

Mike Bauersachs

Yes.

did but I at bit us. of it that think I continuing would sort on think to little – plan we’ve impacts the it little mean, attractive of make come more way. maybe people in been when fortunate of workforce, it’s are I and a so to about benefits mean, a I pretty our it worst-case minor. or have for pretty $X work a ton a to flow

any don’t we frankly in inflation roof we faults I think really Chris, of I and sort see did than comments worse will. those on inflation? – steel and things

Chris Blanchard

sales sales us increase $X in our as labor to costs $X almost payments. a a Well, don’t $XX and just higher as related there’s X slip on price the we the categories. drive just side markets $X $X the would steel $X then because see much to and severance-type We go steel the where with But will side. main labor lose faster. steel We I may on want a move year-over-year real depending And qualified or royalties have would probably productivity is, say have in might between on that ton and surcharges. risk costs in our miners the or

willing So we’re certain. for that’s to a cost pay that

Mike Bauersachs

of I wildcard course, And the think other rail. always is,

we’ve in piece the you a demurrage export and will when got really So rails and take got their step probably strong on business. also ending market, the

Chris Blanchard

flat quarter, third basically even will third the shipped second performance decrease with between and the quarter Creek on at railroad say, and Elk the I we good. saw the tons CSX production very was in

Lucas Pipes

color, I appreciate the gentlemen. helpful. Very really

Mike Bauersachs

Thanks, Lucas.

Operator

Our Thank comes from you. of next Markets. Capital Instructions] [Operator Gagliano David question BMO

now Your line is open.

David Gagliano

tight. I’ll my for Thanks taking try questions. pretty great. Hey, and keep them

a of for trying thing. purposes details more that little modeling get Just to kind

– we see for like sales off, built the and tons conveyors fourth November if XXX,XXX, XXX,XXX example, of reasonable? quarter? quarter, plants assume down. and the I prep month the it for X would Is December, fourth for First looks volumes being basically about

Chris Blanchard

absolutely ship we X I trying as obviously, as over maybe we will we you that. to Dave. it’s and November. few month. it mean, clarity just hard and fact the a in as and month Yes, with out But It’s mean, come very actually this you’re I things soon soon get X.X is that tell. maybe can, I will thing ready build tell, downtime, to really I we point, At can the we’ve hard Dave, this on really could be it’s into appreciate We’ll I resume to can to some just difficult. as say It’s had of place, tell model, guidance that a leaked

David Gagliano

XXXX, of of XXX,XXX be XXX,XXX, we X.X million sales – inventory then tons number? of from our And Okay. in terms just tons sales adding out for should production, from volume

Chris Blanchard

in bulk week. $X.X that company you build presuming operate of down, this base if probably for if ‘XX will the the plant case for – the case in move produced tons David, year your be we is million so up to base any the prep of sales XXX,XXX doesn’t and plant fourth an the additional past inventory, the Monday would will quarter

Mike Bauersachs

also we purchased will have tons. course, of And

Chris Blanchard

of layer on top that. tons the And Right. in purchased

David Gagliano

Thanks. quickly. one Perfect. real last And okay. just Right, one,

in just producing, up to are if your the of quarter. blow your for wrong? the income selling you to I kind that It fixed cost the – you’ve would am a but costs or terms fourth cost issue calibrate me quarter of sales sort of In got commentary earlier of seems in cost statement absorption not was because fourth

Mike Bauersachs

basis, On some a basis. go EBITDA yes, the a on sales a an volume of to has moderated with change on third up basis cost inventory the the and with produced that

should second the a basis, be the and quarter. costs on our third produced between So

David Gagliano

cost include of an EBITDA production, Okay, sales, but but so – – the basis on correct? the with goods will okay, associated fixed costs sold so not

Mike Bauersachs

P&L of sold so it GAAP Will you build, the cost are inventory those booking the go are until the part that be in inventory, the tons through your of for won’t accounting.

David Gagliano

the good Okay, Thanks. for the color next luck alright. with and Thanks phase.

Mike Bauersachs

appreciate it, Dave. We

Operator

you. Thank

question comes of Research. Our Vertical from next Michael Dudas

Your line is open. now

Michael Dudas

all out first XXXX, mentioned maybe you’re metrics you morning, that? of to or for of or out in tons that is I that thinking of you Berwind. market Thanks. assuming other gentlemen. development Two about Good prices, some What tons do require in are remarks, things is or some about prepared of Elk Creek of normal looking certain to part guess, about additional maybe to the than everything First back – it that better Mike, try would just about into

Mike Bauersachs

just amount. think as on through. everything since really get bottleneck XXX,XXX these impact. I be I about would delayed I the place we larger a larger think difficult I things a than some maybe is trigger mean, sort make absolutely of tons of as and potential I the in will mentioned, rather which things really especially more with to need it of plus that it pulling some Yes, to sort think those issues,

– substantially at of I’d margins Mike, the of more a and kind this increased I more change, but with XXXX fully realize and year we with year being again a it that’s increased kind low-volatile where our could So With stage way kind production and at this being much high-volatile look the then it. larger production, but of impactful

Michael Dudas

– Berwind, still up of that. thinking appreciate milestones of the similar #X. following we some Are to are I get And with what then kind looking opposed to timeframe Pocahontas the the the way or accelerate that past months the now that a you’ve anything, or in about few or talked in see been defer could other you one that have goal? that guys you

Chris Blanchard

of still April when track. in this mine it so behind initially on X obviously, hit we months, that channel development X about we – to The the sandstone put year, are

Michael Dudas

Okay.

Chris Blanchard

will now end slope the the we of but – planned XXXX. #X puts development in ‘XX, in #X where production in #X the But into ‘XX, #X we of we in projecting in the we Seam to reached the us the mid-XXXX, Seam timeframe should the the mining have end are development towards area start up slope to by

Michael Dudas

gentlemen. Thanks, helpful. very That’s

Mike Bauersachs

Mike. Thanks,

Operator

you. Thank

next question from Sefton comes Place. Our of Linnane Nick

open. now is line Your

Nick Linnane

for my Thanks questions. taking

inventories of operate raw you any question the The catch do think is, rate there of kind comments if any it down hence, any then ton terms on plant sales on able what the first to sort dollar And you is, – of of on tons? one make again, quality once put capacity what the in if And of saleable what you committed you can is prep domestic up And difference? we’re value currently production? coal? versus kind that, can second of per at can material is is overall running the the of average

Mike Bauersachs

Yes, sure.

versus so kind coal or product stuff. than And of of a – things far the we be think what in is low What blend basically our slightly that crack of be a believe B entrant level. A, or what up closer realizing or into at this some probably quality Let would XXs – sort we that a our strategies all levels that. this shakes and X are last of higher a coal, quality. all refocus A B to to it’s ship an we fully which very kind as reflecting much take of talk export on B what begin of more, like happen been coal. tend XXX one place coal that a to pretty we place we $XXX how we we that to market strong very able kind of reasons out wise, And the the we’ll have at seen in qualities domestically, closer I like or at. I have being from And we can of in seen should kind think just look year that a as kind blending And as our see the placed we the good created are the should be – to across on about that export-wise look index what an kind of area B coal it that essence our and at first of me kind is market the we’ve pricing today, we’ve A of if so where in we why and validates to

and me talk let plant capacities. prep in have here, goes since as about the we far let jump As him Chris especially

Chris Blanchard

and questions them there plant, answer It the maybe try on sounded I’ll were two prep like both.

on the can comfortably don’t of the then and plant per recoveries time. pretty that year. XXXX. base our the would mid-summer. again that Elk inventories operating view, First production the being of that, million obviously Elk to we is quarter assuming on off that tons more Again, recoveries X summer of plant up We the entire from of which but excess that we rest potentially dependent work the at again our with at realize, macro build tons the by see is process at clean largely baseload inventory we in end sort and to the the A underground case prep mines lot preparation has X.X the begin then do million fourth the that dependent mining conditions, of And Creek mine. a Creek

Nick Linnane

just about coal it’s One quality going the is committed I you mean, the quality sold that to you coal sales higher the the follow-up, you. you Okay, same? question. say coal back haven’t would have or than lower thank quality for domestic or basically

Chris Blanchard

been further seams, starting basically the been Well, normal and from must down, seen. I a a better stuff. new some the be I probably in as the I – to slightly more our a is the blended between XX,XXX or It’s XX,XXX ship typically, towards coal. past. And minor, weighted it’s noted but able and to experience say, same. to have say little get those do of that tons we little fairly met breakout we’re tons, so about qualities steam generally the into couple think we be just it it’s qualities. of about remains still steam bit would I It

targeting the export qualities in the say would but I So generally higher slightly some same, better slightly market.

Nick Linnane

Okay. much. Thank you very

Operator

the today’s like Ladies for Thank concludes would turn this call gentlemen, to to back commentary. you. and I session. Randy Atkins any closing question-and-answer

Randy Atkins

guidance also much. analyze the some any plant, And Mike appreciate certainly going a on and be and today. relating being the very XXXX. think week this I further have have that impacts had to forward as to we and to challenging we indicated good a certainly we’re look Well, call through will We on you with out Great. shortly prep we’ll everyone thank work

Operator

you and This conference. all disconnect. concludes have day. a you thank today’s great in gentlemen, Everyone and participating today’s Ladies for may program,

Ramaco Resources (METC) 12 Nov 182018 Q3 Earnings call transcript