Ramaco Resources, Inc. (NASDAQ:METC) Q3 2024 Earnings Conference Call November 5, 2024 9:00 AM ET

Company Participants

Jeremy Sussman - CFO
Randy Atkins - Chairman and CEO
Chris Blanchard - EVP, Mine Planning and Development
Jason Fannin - Chief Commercial Officer

Conference Call Participants

Nathan Martin - Benchmark Company
Lucas Pipes - B. Riley Securities

Operator

Good day, and welcome to Ramaco Resources' Third Quarter of 2024 Results Conference Call. All participants will be in a listen only mode for the duration of the call [Operator Instructions]. Also, please be aware that today's call is being recorded.

I would now like to turn the call over to Jeremy Sussman, Chief Financial Officer. Please go ahead, sir.

Jeremy Sussman

Thank you. On behalf of Ramaco Resources, I'd like to welcome all of you to our third quarter 2024 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO; Chris Blanchard, our EVP for Mine Planning and Development; and Jason Fannin, our Chief Commercial Officer. Before we start, I'd like to share our normal cautionary statement. Certain items discussed on today's call constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements represent Ramaco's expectations concerning future events. These statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco's 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 does not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss today in our press release, which can be viewed on our Web site www.ramacoresources.com. Lastly, I'd encourage everyone on this call to go on to our Web site and download today's investor presentation. With that said, let me introduce our Chairman and CEO, Randy Atkins.

Randy Atkins

Thanks, Jeremy. Good morning to everyone and thanks for joining the call. The third quarter was easily our strongest operational quarter this year. In a nutshell, we continued to focus on controlling what we can and that is cash cost and volume growth. What we can't control is pricing. Despite a 13% decline in the Australian benchmark price this quarter, we seem to be the only public metallurgic coal group to have maintained essentially the same operating margins for both the second and third quarters. One large reason is that throughout this year, our mine costs have declined by over 25%. We went from a March high of $120 to a September low of only $93 per ton. Quarterly, these costs have dropped from $118 per ton in the first quarter to 102 tons this quarter and we hope to actually improve on that in Q4. In addition to excellent cost control, we also had improved mine productivity as well as both record production and sales. Indeed, this was the first quarter in the company's history where we booked more than 1 million tons of quarterly sales. Unfortunately, the bigger story behind both Ramaco and the entire met coal industry's results this quarter is the drop in met coal prices throughout 2024. The decline is of course a direct result of China's overproduction of steel, which it has then exported or dumped into world markets. This has then resulted in world steel companies both cutting back on their own production and then reducing the price they're willing to pay for their met coals feedstocks.