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Good day, and welcome to the Ramaco Resources First Quarter 2026 Results Conference Call. All participants will be in listen-only mode. Should you need assistance please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then one on your telephone keypad. To withdraw your question please press star then two. Please note this event is being recorded.

Thank you. On behalf of Ramaco Resources, I'd like to welcome all of you to our first quarter 2026 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO, Chris Blanchard, our EVP for Mine Planning and Development, Jason Fannin, our Chief Commercial Officer, and Mike Woloschuk, our EVP of Critical Mineral Operations. 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.

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 website, www.ramacoresources.com. Lastly, I'd encourage everyone on this call to go onto our website and download today's investor presentation. With that said, let me introduce our Chairman and CEO, Randy Atkins.

Thanks, Jeremy, and thanks to everyone for joining us this morning. I'm gonna lead off with our shareholder return and capital allocation strategy, because since the start of the year, we've bought back a significant amount of stock, and that has been for the first time. As we said in our release, thus far this year, we've repurchased about 2.6 million shares of our Class A common stock at an average price of about $14.50 per share, and that represents about 5% of our stock. Our stock currently continues to trade below levels of last year when we issued equity either directly in a stock issuance last summer or indirectly through our convertible notes last fall. We're also now generally trading on a forward basis in line with our met coal peers based on consensus estimates.

As a dual-platform company, we're currently seeing very little value in our stock price that reflects our rare earth or other critical mineral assets. Given that backdrop, we're gonna continue to explore whether buying shares represents a prudent investment of our current cash capital. As of today, we've got about $63 million of additional buying power under the original $100 million authorization, which the Board provided last year. We also ended the first quarter with about $490 million in liquidity, which was up about 310% year-over-year. Our balance sheet is giving us lots of options to simultaneously consider continued share repurchases, advancing efforts at our Brook Mine, or growth efforts for our low-vol coals.

In turning to the met coal business, we continued strong cost control in the same challenging market price conditions we've now endured for the past year. Our miss for this quarter has all been top line. This was the third consecutive quarter of cash costs, which were under $100/ton. In the face of the rising diesel prices this year, we've managed to accomplish this cost discipline without cutting wages or benefits to our miners, which we regard as the most significant. I would note that on our mine cost, the conflict within Iran has had a related impact, of course, on oil pricing and has escalated the cost of all of our fuel products. We've seen rack pricing increase to as high as $5.45/gal across our operations, which is up from about $2.50/gal at the end of last year.

Based on our historical purchases and usage of diesel and gasoline, on an annualized basis, Ramaco realizes about $1.50/ton of cost increase for each $1/gal of diesel fuel increase. This impacts not only direct mine costs, but indirectly through third-party transportation costs for both our raw and clean coal. While we're expecting fuel prices to ultimately subside sometime in the second half, at current levels, the impact on our mining cost is approximately $4/ton when compared to earlier this year in 2026. Despite our continued solid operational performance, coal markets remain challenged, both in general and especially on pricing. Once again, especially on high-vol side. While high-vol prices rose modestly in the first quarter of 2026, we still view current indices as unsustainably weak.

One important point that I would like to note, however, is regarding future pricing. We are finally beginning to see some long-anticipated drops in production, both domestically and overseas. We are witnessing everything from bankruptcies, production cutbacks, distressed sale processes, and in all these cases, they involve both large public and private producers. By our estimates, almost 2 million tons came out of the domestic market in 2025. This year, we expect an additional roughly 3 million tons or more to follow. At some inflection point, these production cutbacks will create a supply imbalance, which will begin to impact pricing, we hope. Our growth plans relating to coal are all about the low-vol markets. Last quarter, we restarted our Laurel Fork Mine and will be adding an additional third section to our Berwind Mine this summer.

At full production, these projects are expected to add about 100,000 tons-200,000 tons of low-vol in 2026 and about half million tons of production additionally in 2027. Our new rail loadout is under construction at our low-vol Maben complex and is expected to be complete later this year. When it opens, we expect to save about $20/ton on trucking costs. The load out, of course, gives us more options when we consider whether and when to start our Maben 1.5 million ton low-vol deep mine project as market conditions dictate. We've also been a bit quiet for the past few months on our rare earth element and critical minerals front. However, we have not been idle. I expect that in the second half, we will reflect and announce a number of milestones.

We have principally been waiting on receipt of the revised conceptual study from Hatch, which we expect in late June, as well as the technical geological report summary coming from Weir, which will follow. Both of these analyses are based on our new patent-pending carbochlorination processing technique. As we noted last quarter, our internal projections continue to estimate that this new flow sheet process should generate a material increase in incremental revenue and free cash flow. This is compared, of course, to our previously published projections by Fluor about a year ago using a different solvent extraction processing technique. With new independent analysis for the carbochlorination flow sheet coming in focused, we've ramped up efforts regarding potential offtake transactions and non-dilutive third-party financings. I will not get into specifics today, but we will make specific disclosures when those transactions are hopefully complete.

Advanced discussions are continuing with both domestic and overseas groups, and these include both public and private counterparties. A further note, the subsequent more detailed preliminary feasibility study, also being prepared by Hatch, remains on track to be completed in late 2026. Today in Wyoming, our building structure to house the pilot plant seems to be able to be completed this summer, and the fabricated interior equipment will start installation this fall, with full pilot operations starting in 2027, all as previously announced. Last quarter, I also mentioned that we were exploring some reorganization options for Ramaco's overall corporate structure as we move further into our dual platform. This effort is largely in response to anticipating the startup of our critical mineral operations.

We have now taken a number of concrete legal and accounting steps to move this forward and have formed separate corporate entities within a holding company structure currently under the parent Ramaco Resources. One new company will be called Ramaco Royalty. This will house all our mineral reserve infrastructure, intellectual property rights, and other related income-producing assets. This will include our fee-owned reserves of both metallurgical and thermal coals, as well as our rare earth and critical minerals. Similarly, this entity will own our infrastructure assets in the East, such as our prep plants and rail loadouts. In the West, it will own our pre-FEED infrastructure related to the Brook Mine processing facility. It will also include any possible rail infrastructure, as well as the critical mineral and storage facility we have been working on with Goldman Sachs.

To our knowledge, this will be a unique collection of income-producing assets, especially those relating to rare earths, which will provide us some optionality in the future. The second company will be Ramaco Critical Mineral Resources. This will house the production and sales operations of our Western Brook Mine rare earth critical minerals and thermal coal mining. Think of this as mirroring the same form of our existing met coal development, production, and sales operation in the East, except it will be exclusively focused on our Western critical minerals. The third company will be Ramaco Refining. This will hold the carbochlorination separation facilities, which will be constructed to process the Brook Mine critical mineral feedstocks into oxides and MREC.

This reorganization is being taken to both ultimately enhance shareholder value and better reflect the different and distinct forms of assets and operations that we both currently have and are developing for the future. Each of these operations have different operating, financial, and capital market profiles, even though for the time being, they will all operate under the holding company structure of our parent, Ramaco Resources. Hopefully, this structure will provide more operational and financial flexibility as we develop different and separate production, processing, and sales businesses in both the met coal as well as the critical mineral space. We expect to have the pieces in place for this reorganization in the second half of the year. We'll also talk about it further at that point.

With that, I'd like to turn the floor back over to the rest of the team to discuss finances and operations and markets. First, I'll ask Mike Woloschuk, who heads our critical mineral efforts, to provide some updates on our rare earth progress. Mike?

Well, thank you, Randy. In the Q1, we continued advancing the conceptual study for the carbochlorination flow sheet with Hatch. Our key engineering deliverables have been completed and issued in the quarter. The mineralized Brook Mine coal used as a key reagent in this process is estimated to be a significant contribution to rare earth element production as the enriched coal seams are targeted for this duty. We identified opportunities to increase chlorine recycling, and we have identified other opportunities that will be included in the final study report anticipated for late June. While we are continuing third-party metallurgical testing, we placed key analytical and equipment orders to fit out our internal geometallurgical laboratory at the iCAM facility. This will enable a higher volume of test work and assay results to be delivered with faster turnaround times compared to the external labs.

We anticipate internal geometallurgical testing to ramp up in early Q2 to support the next phases of this project. In Q1, we completed drilling of 33 holes with over 9,300 ft of core. These drill programs include 27 infill drill holes and six water monitoring holes. We currently have four drill rigs on site, and we anticipate drilling to continue to year-end. In total, we now have drilled 174 holes and 35,000 ft of core since our program started. Pilot plant building construction activities included completion of the foundation systems to support the floor slab with the overall building expected to be complete late summer and early fall. Our coal storage facility construction is included, completion of the foundation, the stem walls, and lateral reinforced tension members. The overall structure is expected to be completed this month.

Overall, we remain extremely excited about the Brook Mine opportunity with the carbochlorination flow sheet. We will, of course, be in a position to discuss more about that once we have receipt of the Hatch and Weir reports expected shortly. Our overall timeline remains the same as we have previously disclosed. In the second half of this year, we look forward to making meaningful progress on both completing the pilot plant build-out, along with the pre-feasibility study. I would like to now turn the call over to our Chief Financial Officer, Jeremy Sussman.

Thank you, Mike. Starting with the balance sheet, I'm pleased to note that our record year-end 2025 liquidity allowed us to opportunistically repurchase $37 million worth of shares since the beginning of this year. This effectively reduces our shares outstanding by 2.5 million shares. As Randy noted, as long as we believe that our stock remains substantially undervalued, we will continue to look to opportunistically repurchase shares to our advantage. We ended Q1 with one of the strongest balance sheets in the space, with almost $500 million in liquidity. In terms of first quarter performance, as Chris will discuss, operational results were again solid with cash costs per ton sold of $98. All of our primary peers have now reported Q1 results.

I'm proud to note that our cash costs of $98/ton continue to be in the first quartile of the U.S. cash cost curve among our Central Appalachian met coal peers. This figure is especially impressive considering the dual impact of higher diesel costs, coupled with the weather-related transportation issues that negatively impacted our overall sales figures by more than 50,000 tons in the first quarter. Q1 cash margins of $16/ton fell from $24/ton in the same period of 2025. This was due to lower realized prices of $114/ton, compared to $122/ton in Q1 of 2025. As Jason will discuss, domestic high-vol markets remain weak.

Despite Australian benchmark pricing improving $50/ton year-on-year in Q1 of 2026, US high-vol indices declined to $20/ton during that same timeframe. Frankly, we view this trend as unsustainable given the level of losses we are seeing among higher cost producers. Our Q1 production fell modestly from the same period as last year, as we continue to exercise production discipline in the face of challenging market conditions. In terms of our financial results, Q1 adjusted EBITDA was -$1.8 million, compared to $10 million in Q1 of 2025. Class A EPS showed a $0.30 loss in Q1 versus a $0.19 loss in the same period of last year. Looking forward, we are reiterating all key 2026 operational guidance, including production, tons sold, and cash costs.

In terms of second quarter 2026 guidance, we anticipate higher shipments between 900,000 tons and 1 million tons. We expect cash costs towards the higher end of the full year range for the second quarter on the back of elevated fuel costs due to the Iranian conflict. As we look ahead, our strong balance sheet and first quartile cash cost position provide us with meaningful optionality to both invest in our coal and rare earth elements business, while also allowing us to continue to opportunistically repurchase shares. As of March 31st, we had over 1 million tons sitting in the inventory, which will provide us with a meaningful working capital tailwind should markets improve throughout the year as we anticipate. With that said, I'd now like to turn the call back to Chris Blanchard, our EVP for Mine Planning and Development.

Thanks, Jeremy. Before jumping into some of our operational metrics and progress over the last few months, I wanted to recognize our coal miners for their significant improvements in safety and compliance in 2026 compared to the same period last year. While we still have much work to do towards an ultimate goal of zero incidents, 2026 year-to-date performance has improved by 250% compared to the same period in 2025, and is back on a trajectory of continuous improvement that we have had for most of our history. In these challenging market conditions, it does remind us that a safe mine is a productive mine, and productive mines tend to be lower cost as well. Turning to those performance metrics, we have been able to maintain acceptable cash costs at our operation despite headwinds on our operating supply costs.

Specifically, the run-up in the cost of diesel fuel driven by the Iranian conflict has impacted first quarter costs negatively by approximately $1.50/ton sold compared to where we otherwise would have been. While fuel prices have pulled back from peak levels, they do remain elevated compared to the beginning of the year, and we continue to monitor this closely. Also, on the supply side, raw tungsten pricing is up by approximately 350% in 2026 on Chinese export controls. This has led to nearly a 100% increase in the cost of our mining bits and tools, which particularly impacts our underground mines. We're continuing to work with our key suppliers to mitigate these cost increases and others whenever possible.

Given the poor coal pricing environment on the high-vol side of the business, we have moderated production from our Elk Creek Complex to both manage physical inventory and to not produce additional tons into a marginal market. We are continuing to monitor the market conditions and may make further reductions throughout the year if they are warranted. However, at our low-vol operations, we continue to work to add new low-cost production and lower our existing operating costs there. At the Berwind Complex, the first of two new air shafts is nearing completion into our Berwind P4 mine. The second shaft will be excavated immediately following the first, and we expect both shafts online and in operation by late August.

This ventilation upgrade will then allow us to ramp the Berwind mine with another full super section and push this mine's production up to 900,000 to 1 million clean tons annually. While this ventilation work is still ongoing, during April, we brought online our idled Laurel Fork low-vol mine. The ramp-up of this single-section mine is continuing and is on budget currently. Switching to our Maben low-vol complex, we have initiated the Norfolk Southern rail load-out project. All major materials are procured and excavation for the load-out belts is already underway. We expect the unit train load-out to be fully operational in the fourth quarter of 2026, fully eliminating all trucking logistics costs from our Maben mine and lowering projected cash costs in the rail car to the same low levels as the rest of Ramaco's mines.

This should also allow the Maben product to move more easily into the domestic metallurgical coal markets as we contract for 2027. Work continues at Maben on permitting and initial development work for the future underground mines planned for this complex. Moving forward, we are continuing to focus on those items which we have some ability to control, namely volume and costs. We're positioning ourselves to quickly capitalize on market improvements or shortfalls by other producers. For a discussion of the coal and critical mineral markets, I would now like to shift the call to Jason Fannin, Chief Commercial Officer.

Thanks, Chris. Good morning, everyone. Today, I'll discuss our Q1 sales results, provide an update on our 2026 met coal sales position and market outlook, and lastly, cover our Brook Mine critical minerals marketing efforts and progress. Regarding the seaborne metallurgical coal markets, I first want to address Q1 indices and pricing dynamics. Our realized pricing in Q1 was marginally lower quarter-over-quarter, despite benchmark indices broadly moving higher. The explanation is straightforward, and it comes down to two things: which geographies and indices our book was sold into and against, and a set of non-recurring operational headwinds. On the index side, although the PLV headline number rose 17% in Q1, the relevant benchmarks for the majority of our export tonnage increased only about 6% quarter-over-quarter.

These were sales against the US high-vol indices, which today are about 35% lower than the PLV index and remain heavily deviated from their historical relativities to PLV. Another 25% of our Q1 sales were domestic shipments of high-volatile coal, with pricing, of course, down year-over-year about 8.5%. 55% of our Q1 exports went to Asia, which is the highest proportion in company history. PLV-linked business represent only about 15% of our overall Q1 volumes because a large PLV-linked shipment representing another 6% of overall Q1 volume slipped into early Q2 due to weather-related logistics backlogs. Increased shipments against PLV-linked contracts in Q2 should benefit export realizations versus Q1.

On the operational side, severe weather disruptions to both CSX and Norfolk Southern rail networks in January and February impacted our ability to make timely planned coal deliveries, particularly some higher-priced domestic specialty orders, which slipped into Q2. Also for Q2, we expect increased overall shipment volumes with our Great Lakes business now fully flowing and the normalization of the rail and weather-related disruptions that impacted Q1 execution. On pricing for Q2, we expect to move about 70%-75% of committed volumes to the seaborne market, with about 25% of export tons priced off the PLV index. Another 25% on a fixed pricing basis and the remaining seaborne volumes roughly evenly split and priced against the US low-vol and the US high-vol indices, respectively.

Turning to our overall 2026 sales position, we have now secured commitments for a total of 3.5 million tons, which represents about 90% of our planned annual production at the midpoint. Domestic customers account for 1.1 million tons at an average fixed price of $138/ton. Export commitments total 2.4 million tons, comprised of 1 million tons at an average fixed price of $107/ton and 1.4 million tons on index-linked pricing mechanisms. As of the end of Q1, we had shipped about 650,000 tons of our annual index-based business and had about 1.75 million tons remaining to price. As we look ahead to the second half of 2026, we are optimistic about an improved market environment for met coal.

On the demand side, protectionist policies in the U.S. and Europe have lifted steel prices and increased hot metal output. While India's 2026 crude steel production is projected to increase 8%-9% year-over-year. In one of the most constructive developments for seaborne coking coal demand in some time, China's steel exports have fallen nearly 10% through April on a year-over-year basis. If that moderation proves durable, it will lend considerable support to global steel prices and blast furnace mill margins. On the supply side, we expect high-vol coking coal production to continue to contract throughout the year, which should narrow the wide disparity between U.S. high-vol indices and Australian indices. Randy and Jeremy have already pointed to a number of Appalachian and Australian producers who have either gone into bankruptcy, curtailed productions, or placed some sales for sale.

As the year plays out, this expected supply contraction will have an impact. Specifically regarding Australia, we believe current PLV levels are not only sustainable but have further upside as the year goes on. This is set against the backdrop of limited capital investment, high royalty taxes, and continued production issues and interruptions alongside strengthening global steel markets. Moving to our Brook Mine, we continue to advance our critical minerals marketing program with increasing momentum. Our expanded marketing team is actively engaging potential customers and partners in the U.S. and overseas across the full Brook Mine product portfolio. We hope to announce various counterparty MOU transactions this coming quarter. As we generate additional lab scale and pilot scale material in 2027, we expect these MOU frameworks to evolve toward formal commercial agreements.

With that, I'll turn it back over to the operator for the Q&A portion of the call. Operator?

We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Brian Lee of Goldman Sachs. Go ahead, please.

Hey, guys, this is Tyler Bisset for Brian. Thanks for taking our questions. Appreciate all the color on the impact from the higher cost on the coal side. You know, as you think out for the rest of the year, presumably you are bringing back online some higher cost operations. How do you think about, you know, your cost trends in the back half of the year? Can you just kind of walk us through some of the puts and takes there?

Chris, why don't you handle that? Brian, I mean, I think effectively what we're bringing back online at the Berwind Mine is not necessarily what I would describe as a high-cost operation. It's actually one of our better cost products. Chris, why don't you go into a little bit more granularity?

Yeah. Obviously last year we did idle the Laurel Fork Mine, which is the one that we've restarted in April.

It is only being restarted until the ventilation work I was describing is completed at the Berwind Mine. We're using it as a staging ground to hire the workforce that will then be transferred over to Berwind so that we don't have to experience the same ramp up in production and hiring at Berwind that we normally would if we waited till September to start that section. We would have that normal incremental, while you've got the lower production ramp up at Berwind, we're just choosing to take that in advance. It's a relatively small amount of tons that Laurel Fork will produce over April through August. Don't view that as impacting the cost probably more than $1 overall on the low-ball side of the business.

Ultimately, when Berwind starts, that mine has historically been one of our lowest cost producers in the portfolio.

Awesome. Super helpful. On the sales commitments, I know these represent, you know, about 90% of your production midpoint of guidance, but it's just 80% of the midpoint of your sales guidance. What gives you confidence that you can book these incremental volumes to meet your sales guidance for the year? I guess, again, what are some of the puts and takes here through the balance of the year?

Sure. Jason, you wanna take that?

Yeah, sure. Yes. Tyler, this is Jason. Yeah, certainly we're seeing demand start to pick up already here, and I think it's, you know, a lot of that's just on the back of the, you know, the various geographies, steel markets improving. You know, certainly Europe, we've seen some changes, more incremental demand there. You know, we're quite confident here in what we're seeing not coming out of China as far as the demand we're starting to see, into the Pacific, particularly, you know, we talked about the Maben load-out firing up. We've actually got our first cargo of Maben going seaborne this quarter, into the Pacific against PLV. You know, I think I'm, you know, both the high-vol and the low-vol sides there.

Again, we're being prudent with the high-vol, but we're seeing demand start to pick up. You know, we just got to be smart about the pricing.

All right. Thank you. I'll turn it over.

Thanks, Brian.

The next question comes from Jeff Grampp of Northland Capital Markets. Go ahead please.

Morning, all. Thanks for the time. I was curious as it relates to potential offtake agreements or MOUs at Brook. I know you guys can't get into the too much today, but curious if there's any particular products that are gaining more interest versus others that you think are more actionable in the near term. Thanks.

Yeah. I, of course, as I said earlier, I don't wanna tempt fate and get into too much specifics, but I mean, I would say that the products in general that a number of our potential customers are focused on are gallium and scandium. We were actually relatively pleased by the interest that we've gotten on scandium since that's been a subject of some criticism of our portfolio in the past.

Got it. Appreciate that. For my follow-up, you know, given the strong balance sheet that you guys have here, I'm wondering, you know, your thoughts on M&A and maybe even bifurcating that in terms of, you know, potential on the met coal side, given some of the kind of near-term distress, and then if there's anything on the critical minerals reserve side that might be interesting.

Sure. As I've kind of quipped before, you know, on M&A, we're not too fond of the M, but we're happy to look at the A. You know, we've opportunistically, you know, as part of, frankly, our DNA, done acquisitions, particularly of reserves that we felt were able to be opportunistically acquired. We bought a large portfolio from Coronado here several months ago. We've done other purchases of similar note over the years. I think it's becoming a more target-rich environment if you will call it that. We are certainly out there looking. Again, if we see anything that seems to make sense, we'll pull the trigger.

Again, assuming we can get it at an opportunistic price, and the market conditions today would seem to dictate that, there may be a few things that you could pick up, on an advantage basis.

All right. Understood. Appreciate those comments. We'll stay tuned.

Thank you.

The next question comes from Davis Sunderland of Baird. Go ahead please.

Hey, good morning, guys. Thank you very much for the time, and thank you for taking our questions. Maybe you two for me. First, I know earlier this year, you guys talked a bit about some backlogs at the national labs and some of the other third-party testing sites. I just wondered if these have improved, worsened, stayed the same, or any other thoughts you could provide on outlook for this for the balance of the year. Then I have 1 follow-up.

Sure. Well, I'm gonna let Mike go into granular detail, but one rather important thing is we're now starting to onboard testing to our own facilities out at our research facility in Wyoming. I'm hopeful that, you know, as we get certainly more space out there, we will then be able to do a lot of the at least initial testing work ourselves out in Wyoming. Of course, once we get the pilot facility up and at 'em, then we'll be doing a great deal of testing. As far as third-party groups, Mike, why don't you comment on that?

Look, it's still persisted as a challenge. I think there's a lot of activity happening in critical minerals domestically and the labs are full. You know, we identified this a couple of quarters ago and therefore, fitting out our own labs.

Doing our own testing, and I think that'll alleviate some of the challenges that the entire industry is facing with regards to lab capacity.

Super helpful, and thank you both for that. Maybe my second one, again, fully acknowledge that more details are later to come this year. Maybe for you, Randy, just wondering if you could talk a bit more about the strategy or the rationale maybe to break things down in this reorganization the way that you did, maybe why you're doing it by assets versus by products or, just any other thoughts on this specific methodology would be helpful. Thank you guys very much.

Sure. You bet. I mean, as we started down this process of really having sort of a dual platform with two different critical minerals, you know, coal is now a critical mineral as well, of course. The rare earths and their adjacent critical minerals obviously are viewed in an entirely different light than the coal business. Needless to say, if you go back and look at publicly traded companies in the rare earth space, they traded at a slightly different multiple than coal companies. I think ultimately at some point it would make sense to be able to unlock the value that we have in our various assets so that they could be ultimately separately valued in the marketplace as opposed to being in sort of a more conglomerate structure.

You know, growing up, I looked at a lot of conglomerates, and I remembered they were very complicated, as of course, for analysts to be able to follow because they're completely different businesses in many cases. Even though all of our business are somewhat mining related, certainly the processing aspects of the rare earth business are completely different than anything associated with the coal industry. The other thing, which is pretty unique, of course, is we, unlike a lot of other companies, have a pretty substantial amount of reserve assets both in the coal as well as in the rare earth space.

I mean, we've got a huge reserve base out in Wyoming. There are, frankly, not very many entities out there that will be able to show sort of an income stream coming from unique assets like the coal and rare earth combined. We think at some point, although we trade now in sort of our B-Stock in similar fashion, we expect at some point to probably be able to sort of drop down many of the infrastructure assets that we've got in both the East and the West into this platform, and it could be a very compelling royalty play. That's kind of the thinking, certainly on that particular aspect of it. The refinery business, very different business, of course, trades at different multiples. It's more of a commoditized business.

Certainly from a CapEx standpoint, that'll be the highest ticket of all of our development efforts. We won't have the numbers nailed down until we publish something independently from Hatch later next month. You can assume that a rare earth processing facility is a high-ticket capital expenditure. Then, of course, you know, the mining and sales aspects that we'll do out West will again be very similar in concept and conduct to what we do out East. I think we'll have an interesting blend of different entities. We don't have any specific plans at this point, you know, other than getting everything sort of set up and put into separate categories and separate entities.

That then provides us the optionality to decide later on what is the most advantaged way to recognize value for our shareholders. I think, you know, we've got a number of different assets that I think could provide some really compelling value to our shareholders as we move forward.

That's great. Thank you very much. I'll pass it on.

The next question comes from Carlos De Alba of Morgan Stanley. Go ahead, please.

Yeah, thank you very much. Good morning, everyone. If you could maybe drill down a little bit more on the rationale to separate in the restructuring that you are doing, you know, to separate the Ramaco Refining Business for the Brook Mine critical mineral feedstocks and the Ramaco Critical Minerals, you know, given that presumably they are fairly integrated operations.

Yeah. Great question, Carlos. I tried to take a stab at that in addressing the last comment. You know, again, the refining aspect of critical minerals, as you well know, is an entirely different breed of cat than the sort of processing aspect that relates to the coal business. I think kind of including and wrapping the refining together with the mining and sales, conceivably, is mixing two different type of operations, which again, could trade at different types of multiples if they were, you know, freestanding operations. I think, you know, providing a platform for rare earth sales and mining is gonna be one platform that I think will be pretty clean to understand.

I think the Refining business sort of segregated into a separate entity provides us some different ways to look at both financing it, but also operating it. I think it gives us some options that we're now seriously pursuing on a number of different fronts, which I can't really get into.

Well, okay. We'll wait for further details, down the road then. Then maybe another one, is relating the thermal coal, mining, within the Brook Mine.

This is a very important byproduct that will help the economics of the project. Can you give us any update?

Yeah

on customer discussions and offtakes or MOUs for that thermal coal volume?

Yes. We are now, and of course, we're happy to have Jason touch on that as well. We are discussing right now with a number of utility groups, potential offtakes. We're even exploring longer term, some possible avenues for being able to make on-site use of the thermal coal in some manners, which I won't get into right now. That could be interesting. I think, you know, as it relates to the actual mining, you know, we don't really wanna engage in full scale mining right now, even though we would be able, presumably to move a thermal product, because, you know, what we don't wanna do is have large stockpiles of, you know, critical mineral feedstock, which we won't be able to effectively process until we have our actually, of course, a commercial facility.

You know, we're setting ourselves up to be able to have the thermal coal moved at sort of in sequence and in sync with our critical mineral processing and mining operations. As you well point out, needless to say, you know, our economics out there are interesting because, you know, what would typically be waste in a critical mineral operation, in our case, the byproduct, of course, is coal, and we're able to sell that at economics even based on current thermal prices, which would, in essence, pretty much pay for all the mining for all the products, inclusive of the critical minerals.

Great. Thank you very much.

Thank you, Carlos.

The next question comes from Nathan Martin of The Benchmark Company. Go ahead, please.

Thanks, operator. Good morning, everyone. Really just a clarification question to start. You guys previously called the expected mid-year report from Hatch a Preliminary Economic Assessment. Now seem to be referring to it as a revised conceptual study. Maybe no difference, but just wanted to make sure if there are any anticipated change in the data we should expect in that report.

The sort of the short and long answer is that you can expect no change in what the data that will be developed in the report. It will have the same sort of commercial and technical feasibility that was developed when the Fluor report was put out last year under the solvent extraction technique. The change in nomenclature is candidly from a compliance standpoint to keep in regulatory formality with the S-K 1300, which the SEC has suggested that, you know, the way that these studies be described should be done as a conceptual study as opposed to the prior nomenclature, which was called a PEA.

Okay. Got it, Randy. Appreciate that. Maybe Jason, a question for you. You gave us a lot of good detail, I think, around, you know, expected sales throughout the rest of the year. I might have missed this, but again, you guys mentioned the lower net back realizations on export sales into Asia in the first quarter caused by the elevated freight rates. What portion of your remaining sales do you expect to be sold on a CFR basis and, you know, could possibly impact freight rates as well if they remain higher?

Yeah, Nate, this is Jason. Thanks. You know, we actually typically sell very little on CFR basis, but where we saw the impact, of course, going into the Pacific was on, you know, recognized freight differentials there versus the Australian shipments. It certainly did. You know, we had several good pricing mechanisms in Q1 set up, you know, in advance of the Iranian conflict. Once we started to see the impacts of that, you know, it was baked into the overall mechanism, and that's where we saw the hit. Certainly, you know, again, given the fact that we had one large shipment slip out of the very end of the quarter there was disappointing, you know, impact to this as well there.

Typically, you know, also Q1 is our, you know, usually our lower, you know, domestic, out sales in terms of total volume out the door. All those things kinda came together there, you know, to end up the impact on that pricing.

Okay. Then you mentioned domestic, Jason. I did see domestic tonnage remained at 1.1 million tons, but I think pricing was down about $4 versus last quarter. Anything specific you could talk about the drove that change? Then do you expect any additional domestic sales thus far with a little bit of open tonnage still out there?

Yes, sir. On your first question here on the pricing change. Nothing's changed there, you know, in terms of the customers, the structures, all that sort of thing. You know, we're marking some certain fees differently than we had before just to get better apples-to-apples pricing comparisons within our book. That's the entirety of that change on that overall price on the domestic side. Yeah, on the, you know, pickup in the domestics, we have seen a couple points of interest, as you can suspect on the high-vol side, just given from operations that have either already shut down or are curtailing or in the process of shutting down. Obviously, we view that as a positive sign.

You know, Elk Creek has an excellent reputation in the domestic market, and we typically get one of the first phone calls when folks need a high-vol, and we're seeing that already. We see that as very positive, certainly for the second half.

All right. Very helpful. I'll pass it on. Appreciate the time, and best of luck.

Thank you.

Our next question comes from Soundarya Iyer of B. Riley Securities. Go ahead, please.

Thanks, operator. This is actually Nick on from B. Riley. First question was just, sorry if I missed this in the prepared remarks, but I wanted to ask if you could just provide a breakdown of CapEx or break out the met coal CapEx between sustaining and growth. Then on the growth side, you know, what's baked in today and what other levers do you have to ultimately increase low-vol exposure and just what that capital intensity looks like? Thanks.

Jeremy, please take this.

Hey, Nick. When we think of our CapEx guidance for the year, you know, it's pretty close to 50/50 in terms of, I'll call it maintenance on the coal front and then growth on both the coal and the rare earth and critical minerals front. You know, I'd use about $10-$11 a ton on the coal side, let's call it about $45 million of maintenance capital and then another $20 million or so for, you know, our low-vol growth this year, which is obviously the third section at Berwind and then the rail load out at Maben with, of course, the remaining for, you know, for rare earths.

You know, on the growth side, I think as you noted, you know, our focus on the coal front is really on the low-vol side. You know, that's ultimately taking the Berwind mine up to four sections. Should we choose, we can go underground at the Maben complex, which would add up to another 1.5 million tons. All of this is market dependent. You know, we are starting to see some positive signs ahead and certainly as, you know, we move throughout the year and start budgeting for 2027, you know, these are obviously things we'll take a hard look at.

Yeah. I think just to sort of add a coda to what Jeremy said, you know, Jason mentioned we've got one of our Maben shipments that's now going seaborne this quarter, which we think is important because to the extent we can establish the Maben brand overseas, that'll be an important market for, you know, volumes on low-vol that are gonna be much higher than we've historically experienced. We view that very positively. You know, we are certainly in a liquidity position, of course, to initiate the Maben deep expansion just as soon as we think we've got a sufficient clarity on market signals that give us comfort that once we put it in, we're gonna have a strong market once we start actual full commercial production.

Got it. Thanks for that, guys. Maybe just one more clarifying one. I think I heard 15% was PLV linked of met shipments this quarter. Where could that go in 2Q? Where should we expect that to settle, when Berwind, you know, kind of ramps-up later this year?

Jason, you wanna take that?

Yeah, sure. Yeah, Nick, this Jason. Q2, right now we're projecting on, you know, basis what's committed, about 25% of exports. You know, basis PLV, I think that's maybe just slightly over 20% of overall volumes. Still with obviously, you know, a few tons out there still to place in Q2, which will look to that market. You know, in the back half, what I can say, you know, a few things. One, we inked a term high-vol deal very late in Q1 that just started against PLV. That'll flow through the entire year, we'll see the impact, you know, more of that in Q2 and then the back half. Both Randy and I both mentioned, you know, the Maben trial here we've got this quarter.

We're, you know, hopeful that that leads to more business on that front. Also we're currently in negotiations, I can say, with one large term customer on PLV linked business to add additional cargoes in the second half. You know, based where we sit here today, I would expect it to increase. It's just hard to put a number on that right now.

Got it. No, that's very helpful, Jason. I appreciate it. Just one more, if I could. Just when we think about the carbochlorination process, as you build IP around this, I mean, is the patent protection ultimately around something chemistry related, or is it the application to coal-hosted material? Just trying to get a sense for, you know, what you would ultimately protect against and just as some of your peers are exploring processing as well. Thanks.

Sure, Nick. Yeah, I'll let Mike go into somewhat more detail, but suffice to say that our IP projections are both designed to be broad and all-encompassing. It would include all of the areas that you would just articulated. Anything that we can regard as trade secrets, you know, we will be protecting because I think, you know, what we're gonna have is a pretty unique process which may ultimately be able to be utilized, certainly not only with respect to our coals, but other coals and other coal-related products. It, if we get it perfected, it's a pretty good mousetrap.

That's why, once again, when I commented that we're gonna have some very interesting things that we think are gonna be Sort of downloaded into our Ramaco Royalty entity, that includes the royalties and potential IP income that would flow from those, which I think over time could be a very impactful bit of income to us.

Guys, appreciate the update and continued best of luck.

Mike, do you wanna go into any more comment there on the IP side as it relates to more of the specifics on the processes themselves?

Yeah. I would just add that you touched on a couple of things. Rare earth elements and critical minerals in coal and carbonaceous clays, definitely we wanna lock this technology up. The IP's also around the extraction and purification around some of those critical minerals. You know, the beauty of this deposit is we aren't purchasing a reagent. We have it there and it's mineralized. You know, if you had to purchase coal as a reagent or carbon for this reaction, we're producing it at a fraction of the cost, and we're generating a significant amount of our critical minerals from the coal itself. That's what the IP is around.

Got it. Thank you for that, Mike. That's more clear. I appreciate it.

This concludes our question-and-answer session. I would like to turn the conference back over to Randall Atkins, Chairman and CEO, for any closing remarks.

Sure. Well, first of all, I of course wanna thank everyone for joining us today. As we commented earlier, we expect probably by the end of next month, certainly maybe just slipping into July, maybe for the Weir report, but we'll certainly receive something from both Hatch and Weir, which we regard as a pretty significant milestone. At that point, we are considering probably coming back into the market to have a separate report, which will be both disclosed in written form and we probably will consider also having somewhat of a separate and unique call, which we'll certainly be able to entertain questions from both analysts and shareholders on. We would expect that to happen sometime probably in July, would be my expectation.

This would be before our Q2 earnings call, which we would expect to probably happen in early August. With that, I thank everybody again for being on the call today, and we'll look forward to our next catch up. Thank you very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Ramaco Resources Fourth Quarter 2025 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Jeremy Sussman, Chief Financial Officer. Please go ahead.

Thank you. On behalf of Ramaco Resources, I'd like to welcome all of you to our fourth quarter 2025 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO, Chris Blanchard, our EVP for Mine Planning and Development, Jason Fannin, our Chief Commercial Officer, and Michael Woloschuk, our EVP of Critical Mineral Operations. 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 website, www.ramacoresources.com. Lastly, I'd encourage everyone on this call to go onto our website and download today's investor presentation. With that said, let me introduce our Chairman and CEO, Randy Atkins.

Thank you, Jeremy Sussman. First, I wanna thank everybody for being with us this morning. We had another extremely busy quarter on our critical mineral front out West, and indeed, the best quarter in years on our met coal operations. Given the great job our coal ops team did in maintaining cost control in 25, I'm gonna start on that front. This quarter, we achieved the lowest cost we've seen since the fourth quarter of 21. At our Elk Creek complex, cost averaged just $80 a ton. Quarterly costs and margins were the strongest of all our Central App tiers. We're also proud that in this difficult market environment, we have not cut wages or benefits for our mineworkers. We believe Ramaco is a best-in-class employer, and we continue to attract the top mining talent in our industry.

Reflecting our strong workforce, productivity in the fourth quarter was also the strongest we've had last year. Quarterly cash margins of $24 a ton were tied with our first quarter margins as the strongest of 2025. This is despite a 17% decline in high-vol met coal indices during that period. We look to where we're headed in 2026, we are initiating our annual met coal guidance, which is published in our release. We are now poised to grow total sales for the sixth year in a row, while lowering overall cash costs for the third year in a row. We cannot control pricing, of course, we are proud to compare our cost against any non-longwall peer in our space. If benchmark prices hold at current levels or even improve, we expect strong overall earnings growth in 2026 versus 2025.

On met coal sales, we've now committed to roughly 80% of our 2026 production at the midpoint of guidance. Jason will go into the specifics on our sales metrics, but we achieved both strong domestic and export pricing. On overall met coal markets, we've begun to see some clarity on what we hope is gonna be a meaningful rebound this year in index pricing. The potential triggers are both supply constraints in Australia and some stronger Indian demand after a slow buildup. Australian premium low-vol indexes have increased to roughly $240 per ton and by more than $40 a ton from the fourth quarter. Average low-vol and high-vol indices are also up almost 10% today compared to the fourth quarter.

As a result of all this market clarity, we are now either accelerating or initiating some of our low-vol growth projects at our Berwind and Maben complexes and moving them from 2027 into 2026, which we had previously deferred. These projects are expected to add about 500,000 tons of production in 2027 and between 100,000-200,000 tons of additional production in 2026. They'll also add about $20 million in growth CapEx this year and have very strong paybacks. On high-vol markets, we are currently seeing a crowded field of new projects from several of our peers. They're all fiercely competing for Asian export business and have created lots of pricing pressure, with current high-vol index prices lagging well below historic relativities.

We, however, have been able to secure recent high-vol sales into Asia at meaningful premiums because of our low-vol, pardon me, low sulfur character of our coals. It's our expectation, given market conditions, that published U.S. index pricing will eventually adjust. Now I'd like to move to our rare earth and critical mineral business. We're excited about the new proprietary technology breakthrough from our internal team, who has developed something called carbochlorination for purposes of separation and extraction from coal. Recall that we recently brought on board two of the most senior members of Fluor's Critical Mineral Team that had spearheaded the work on our original preliminary economic assessment, or PEA. We have referred in our earnings release to some of the details of this novel form of flow sheet. This carbochlorination process provides a fundamental de-risking of a previous complicated and costly separation and extraction process.

In a number of respects, it reduces the overall capital and operating costs. It improves overall product recoveries and yields. It will ultimately increase our cash flow. It creates a higher value product slate. It uses a proven technique, which has already been deployed in the titanium industry. From a marketing perspective, it reduces the project's reliance on scandium as the main product driver, although we still feel scandium is an important future use for our rare earths. We are now working with our independent consultant, Hatch, to validate these estimates and expect to publish a revised PEA with third-party economics by the middle of the year. Despite being a coal company, we have a good deal of technology focus in our DNA.

We've been exploring, as many of you know, new uses of carbon in coal and indeed rare earths for over a decade, both on our own and with the Department of Energy's National Labs. We currently have an impressive basket of intellectual property, which includes over 70 patents, pending applications, exclusive license agreements, and trademarks. We have now already filed robust patent and trade secret protections around this novel flow sheet process and related technologies. We believe this will ensure that Ramaco and our Brook Mine will be the only unconventional source of rare earths and critical minerals that will be able to use this novel proprietary process. As I said, our internal analysis shows that this flow sheet results in increased cash flow and a reduction of both capital investment and operating costs.

These preliminary figures compare very favorably to the already strong original economics that were in both Fluor's original PEA last July, as well as the upsized development case from my last shareholder letter in September. The new flow sheet also shows markedly increased separation recoveries and yields and a higher overall value product slate. Specifically, it changes the proportions of individual production levels of the overall basket of products. We now anticipate that the largest percentage of production will come from the combination of high-purity gallium, high-purity alumina, as well as high-purity quartz. These all target the semiconductor industries and are very high-value products. As mentioned, we also anticipate that this approach will reduce the overall percentage of scandium production. We continue to think that scandium use will prove to be a very important developing market.

However, the current appetite for high-purity gallium and its related alumina and quartz in the semiconductor industry is both proven and rapidly expanding. We hope the Brook Mine will be an important and meaningful resource for this critical industry. Finally, another important benefit to the new product slate is that the flow sheet route will allow us to forgo the costly solvent extraction process. We now expect to sell our rare earth production as a mixed rare earth carbonate, or what's called MREC, to third-party metals and magnet processors at strong pricing. MREC will now be a smaller percentage of our overall production, and this will also now eliminate the significant CapEx expenditure and the ongoing operating reagent expense associated with the former solvent extraction technique. New flow sheet modifications will modestly increase the timeline for completion of our preliminary feasibility study from Hatch.

On a project that could well exceed $1 billion in capital investment, we would prefer to get it right before we build. We are continuing construction of our pilot plant testing facility in Wyoming, which should be complete this summer. We will begin moving our internal chemical and metallurgic testing operations into that building when it opens. We will defer construction of the internal processing infrastructure at the pilot until we finalize the flow sheet testing from Hatch. As we've said, the internal equipment is being designed and optimized at the Zeton Inc. fabrication operations in Ontario. We now expect full pilot operations to start in 2027. On our downstream critical minerals front, the Trump administration recently announced an initiative to establish international price floors for critical minerals.

We remain confident that the U.S. government is committed to ensuring the development of a robust domestic supply chain and will take further steps in this area. We also continue to pursue procurement, funding, and development opportunities with both governmental and strategic stakeholders. We expect the new direction and information we've just announced today with this new flow sheet approach, will inform a good deal of these discussions as we progress. We were also recently gratified to see the administration's discussion about the creation of a domestic rare earth stockpile program called Project Vault. This program dovetails with our previously announced critical mineral stockpile and terminal at the Brook Mine, which we are pursuing with Goldman Sachs. There should be more information on that in the near future.

We are also now exploring some reorganization options for Ramaco's overall corporate structure as we move further into our dual platform operations. We hope to announce more clarity on that in the coming months. We expect to set up separate corporate entities within a holding company structure to better reflect the different forms of assets and operations that we both now have and are developing for the future. We hope this structure will provide more operational and financial flexibility as we develop two different and separate businesses in the met coal and separately in the rare earth critical mineral space. All of this, of course, will be designed to enhance shareholder value. We will provide more color about that as we roll it out. Lastly, I would note that our balance sheet is now in the strongest position it has been in our history.

This is despite some challenging recent years in the met coal markets. As you know, we raised roughly $1 billion in capital in the H2 of 2025. We also ended the fourth quarter with record liquidity above $520 million, up more than 275% year-over-year. We expect this additional funding will allow us to more rapidly move forward with our transition to a dual platform critical minerals company. I would first like Michael Woloschuk, who leads our critical mineral business, to share some further thoughts and details on our rare earth progress. I'll turn the floor back to our team to discuss finances, coal operations, and markets. Mike?

Thank you, Randy. As you highlighted, we have some exciting updates to report on flow sheet development. We completed an expanded suite of testing of Brook Mine composite samples at multiple external metallurgical facilities. These include chemical and mineralogical analysis, ore physical properties, chemical mineral extraction, and purification testing. This expanded test program also included initial testing of the carbochlorination flow sheet. Commercial carbochlorination is a high temperature industrial process using carbon, a carbon source, such as coal and chlorine, to convert metal oxides into volatile metal chlorides and water-soluble chlorides. This is the dominant technology used for nearly all titanium manufacturing today, and from our test work completed to date, including the mineralogical analysis and metallurgical response of the critical minerals, initial testing of carbochlorination indicates the Brook Mine responds favorably to our proprietary process.

In this flow sheet, the valuable volatilized critical minerals from the Brook Mine include gallium, germanium, aluminum, and silica. Initial tests show virtually all of the gallium was volatilized. This is a significant recovery bump from the previous flow sheet. We also achieved high extraction of aluminum chloride, a portion of which can be recovered to produce high purity alumina. Germanium and silica are also volatilized under our intended operating conditions. These volatile vapor phase chlorides will be condensed, separated, and purified from the crude chloride mixture. This flow sheet allows us to produce higher purity gallium, which is sold at a premium. We will also generate additional revenue from the HPA and high purity quartz, both high-value products used for semiconductor, renewable energy, and other advanced applications.

Our carbonaceous clays contain abundant amounts of kaolinite, which is the source for high purity alumina and high purity quartz. Effectively, we are now able to generate revenue from gangue, something no hard rock rare earth project is able to do. Scandium and the suite of the rare earth elements are converted to chlorides in the residue. They remain in the solids after the reaction, and similar to table salt, they will dissolve in water, which is a much better option than leaching in large amounts of caustics and acids. We intend to selectively remove scandium and produce scandium oxide, and simplify the balance of the rare earth portion of the flow sheet to produce mixed rare earth carbonate or the MREC product, as Randy mentioned. Separation of rare earths into oxides is both technically complex and capital intensive.

The production of MREC is a flow sheet simplification that will reduce the capital and operating costs associated with rare earth solvent extraction, separation, and finishing. The two main reagents in carbochlorination are carbon and chlorine, so a coal deposit has all the carbon we need, and it is not a reagent we have to purchase. Most of the chlorine is recycled by decomposition of non-revenue generating mineral chlorides, simplifying the bulk reagent logistics associated with the hydrometallurgical flow sheet option. Our focus going forward is to complete more test work to determine optimum conditions for the carbochlorination reactor and downstream testing on solubilizing the rare earth chloride residues to selectively extract scandium and produce the MREC. We will also conduct separation purification testing on the crude chloride circuits to define the flow sheet necessary to achieve the various gallium purities.

The testing plan for high purity alumina and high purity quartz is analogous to gallium. Ramaco filed provisional patents on the carbochlorination process to recover rare earths and other critical minerals from coal and carbonaceous clay deposits, and we feel this is a significant competitive advantage over other flow sheets being considered for critical mineral-hosted coal deposits. In parallel to the test work program, we have engaged a specialist consultant with experience in alumina carbochlorination to generate a thermodynamic simulation of the carbochlorination circuit and to provide design inputs for the updated preliminary economic analysis. We are engaging Hatch to complete a PEA, and this is anticipated to be completed mid-year, followed by a PFS by year-end. With the flow sheet pivot, we paused the detailed design of the downstream pilot plant modules at Zeton until we generate a new basic engineering package for carbochlorination.

This is anticipated in Q3 2026. We anticipate Zeton's continued involvement since they have experience piloting similar unit operations. We also anticipate conducting on-site testing, both at the existing iCAM Research Center, as well as the new pilot plant building now under construction. We expect the pilot shell to be complete later this summer. Switching to an update on geology. We completed the fall drill program, which included both infill and step out drill holes. We are nearing completion of an initial fence drill program, which will inform drill density necessary to increase geological confidence to support selective mining. We have additional fence programs planned and are increasing the number of drill rigs to complete this program this summer.

We hope to have sufficient geological data from our drill programs to move to reserve status, from inferred up to indicated, rather, by year-end, in line with the completion of the Hatch pre-feasibility study. As mentioned, we are building our internal laboratory to conduct internal assaying and metallurgical testing to mitigate lengthy external lab turnaround times. We have two ICP-MS machines, and we have equipment on-site already that will be used for the carbochlorination reaction. We anticipate hiring technical and analytical staff to ramp up in-house geometallurgical testing. I would now like to turn the call over to our Chief Financial Officer, Jeremy Sussman.

Thank you, Mike. Starting with the balance sheet, I'm pleased to note that we hit record liquidity of $521 million at the end of the year. This is the strongest level of liquidity that we've ever had. Liquidity was up over 275% compared to the same period of 2024, and we ended the quarter with a net debt position of $11 million. I want to touch upon the extraordinary financial transformation to our balance sheet that we achieved in the H2 of 2025. First, in July and August, we raised $65 million in unsecured notes. Second, in August, we raised $200 million in new equity through an underwriting by Morgan Stanley and Goldman Sachs.

Third, in November, working again with Goldman Sachs, Morgan Stanley, and a larger underwriting syndicate, we raised $345 million in sixth-year unsecured convertible notes with a 0% coupon. In December, we increased our revolving credit facility led by KeyBank to $500 million, inclusive of a $150 million accordion feature. In terms of fourth quarter performance, as Randy noted, operational results were again extremely solid, with cash costs per ton sold of $92. This continues to put Ramaco in the first quartile of the U.S. cash cost curve. Q4 also represented the company's strongest quarter in terms of cash costs per ton sold in four years.

Fourth quarter cash margins of $24 per ton equaled those of the first quarter as the strongest of 2025, despite the U.S. high vol metallurgical coal indices having fallen 17% during that time. Our Q4 production fell modestly from Q3 to 892,000 tons, which was the result of the typical Thanksgiving and Christmas miner vacations, as well as our continued focus on value over volume. We'd rather leave production in the ground versus selling it at a loss into the spot market. Thankfully, our strong balance sheet, including our record liquidity position, allows us this flexibility. Should markets continue to improve, 2026 can provide a very meaningful working capital tailwind on the inventory front, especially in the back half of this year. Metallurgical coal price indices declined throughout Q4, they're now up meaningfully from the bottom.

Unfortunately, however, U.S high vol indices fell another 4% in Q4 versus Q3. Despite the continued fall in index pricing, we managed to print Q4 financial results that exceeded Q3 financial results, as cash costs fell $5 per ton sequentially, compared to the realized pricing that fell just $4 per ton sequentially. To get into specifics, Q4 Adjusted EBITDA was $9 million compared to $8 million in Q3. Class A EPS showed a $0.22 loss in Q4 versus a $0.25 loss in Q3. I would note that these fourth quarter results exclude a one-time, non-recurring expense incurred in connection with the structuring of a strategic critical minerals terminal at our Brook Mine. All of our primary peers have either reported Q4 results or pre-announced results.

I'm proud to note that our cash costs of $92 per ton and cash margins of $24 per ton were easily the best in class among our Central App met coal peers in Q4. Looking forward, we're initiating 2026 guidance. Full year 2026 production is now anticipated to come in at 3.7 million-4.1 million tons, an increase at the midpoint versus 3.8 million tons in 2025. Full year 2026 sales are anticipated to come in at 4.1 million-4.5 million tons, an increase versus 3.8 million tons in 2025. Our guidance tables lay out a number of other 2026 expectations, such as CapEx, SG&A, DD&A, interest income, tax rate, and idle costs. While you can find the specifics in our earnings release, I wanna touch on two areas.

First, we anticipate net interest income in 2026 versus net interest expense in 2025 as a result of our large cash balance. Second, we anticipate CapEx of $85 million-$90 million, up from $64 million in 2025. This includes spending on maintenance capital on our metallurgical coal mines of roughly $10-$11 per ton, approximately $20 million of growth capital at the Berwind and Maben complexes, and roughly $20 million for our rare earth elements and critical minerals business. We anticipate first quarter of 2026 shipments to be 800,000-950,000 tons due to normal seasonality with the Great Lakes, which were, of course, closed for most of the first quarter. We expect cash costs towards the high end of the annual range for Q1 on the back of lower ratable shipments.

As I look ahead, I'm incredibly optimistic about 2026. First, we have by far the best balance sheet and liquidity in our history. Second, our cash costs and margins are among the best in Central Appalachia. Third, coal markets appear to be improving, in large part due to pricing having reached unsustainable levels from a cost curve perspective in the second half of 2025. Lastly, we're making meaningful progress on our rare earth elements and critical minerals path towards commercialization. I would now like to turn the call over to Chris Blanchard, our EVP for Mine Planning and Development.

Thanks, Jeremy, and also to everyone who joined us today. It's always preferable to share our operational results when we have been successful in controlling those things like costs and volumes, which are in our control. Across all of Ramaco Resources' operating complexes, I wanna give recognition to all of our miners and support staff who focused on the fundamentals all year to help us drive down costs across the board and to complete the year with our best quarterly performance since 2021. These successes are continuing as we begin 2026. Productivity levels remain high relative to our internal forecasts, particularly at our flagship Elk Creek complex. However, while the mines continue to operate at budgeted levels or above, logistics bottlenecks with both of our railroad partners as a result of the extreme temperatures and snow in late January, did cause delayed shipments in January and so far in February.

These were primarily due to the difficulties in moving and unloading coal to the piers and ports, and the subsequent backlog of loaded trains with insufficient empty cars cycling back to all producers for several weeks. While we built clean inventory due to these events, no production had to be curtailed. However, the impact of the interruption in rail equipment cycling cascaded and continues to be worked through. As Randy mentioned, the high vol markets remain oversupplied and ultra-competitive. Fortunately, our Elk Creek product has some quality advantages over some of the incremental high vol producers, who tend to be of a lower metallurgical rank and have higher sulfur contents. To take further advantage of that, we are transitioning a portion of Elk Creek's production into even lower sulfur areas of our reserve to better meet our customers' needs.

As mentioned earlier, we've also kept our wages and benefit packages for our workforce constant, even in the declining market over the last couple of years, and we are taking opportunities to strengthen our workforce with some of the most talented miners available in Southern West Virginia and Virginia. On the low volatile side of the company, we're seeing meaningful improvement in market dynamics and limited excess supply of high-quality, low volatile coals. Accordingly, our board of directors has approved pulling forward approximately $20 million of planned growth capital from 2027 into 2026 at our Berwind and at our Maben complexes. First, we'll begin to ramp low volatile coal production at Berwind Mine approximately one year ahead of schedule. The timing of the full build-out will be dictated by the completion of two additional air shafts into the coal mine.

Work has been ongoing on these projects since late 2025 and will be completed during this summer. Once the ventilation system is in place, a full section will be added to the mine at an annual expected production rate of 350,000 tons per year. While the Berwind Mine will not be running at this full rate until the third quarter, we will bring on some interim low-vol production during the second quarter at our Laurel Fork Mine, utilizing the same equipment, capital, and workforce. Combined, we project an additional 150,000 approximate clean tons of production during 2026. Secondly, at the Maben Complex, we are now moving forward with the construction of the flood load batch weigh loadout system at our Maben processing plant.

Once operational, this will allow us to ship our premium Maben product to our domestic and international customers without adding approximately $20 per ton of additional logistics trucking costs, which have negatively impacted this operation. We believe that having the fully operational loadout will potentially allow us more opportunities to purchase and ship other high-quality, low-vol coal that would be advantaged by loading at Maben. Work has commenced on the loadout project already, and we are projecting it being operational and loading its first train in the middle of the fourth quarter of 2026. The completion of the loadout will make the development of the underground portion of the Maben property much more advantaged, and we will continue to evaluate the full bowl build-out of the underground mines at Maben at that time, and let the market conditions guide the timing of that investment and expansion.

Finally, to briefly turn to some of the mine and construction updates in Wyoming at the Brook Mine. During the fourth quarter, we expanded the Brook Mine pit to excavate additional thermal coal for an upcoming trial with a regional customer. During this mining, we also segregated several hundred additional tons of rare earth element and critical mineral ore from two different enriched strata zones for continued optimization testing. Construction has also begun on the ore storage facility on the Brook Mine itself, which will function as a staging area for mine products prior to being sent to outside labs and ultimately to our own on-site pilot facility, which Mike mentioned is also starting foundation work and will be under roof later this summer.

Detailed design engineering is also underway for all of the electrical transmission to site and the substation to power our future commercial processing facilities. In closing, with the security and liquidity from all the transformational financial transactions that were consummated during the H2 of 2026, we find ourselves with flexibility to modify our operational portfolio to quickly take advantage of the strengthening low-vol met markets, while also continuing the development of the Brook Mine at full speed as well. To discuss both the coal and the critical minerals markets in detail, I'd like to now turn the call over to our Chief Commercial Officer, Jason Fannin.

Thanks, Chris. Good morning, everyone. Today, I'll share our views on the steel and coking coal markets, provide an update on our 2026 met coal sales position, and then discuss the progression of our marketing strategy at Brook following our recent flow sheet breakthrough. We continue to see global steel markets increasingly shaped by policy rather than supply-demand dynamics. China exported a record amount of steel in 2025, even as domestic crude steel production declined. That divergence between export growth and domestic contraction is unlikely to persist. Export licensing measures and rising political pressure suggest that Chinese steel exports could decline meaningfully this year, which would lend considerable support to global steel prices and in turn, provide uplift to coking coal prices.

European steel production appears to be stabilizing, and prices are already reacting to tighter import controls, rising nearly 20% since early Q4 2025. One of the world's largest steelmakers has predicted a year-over-year increase in European steel production of approximately 6 million-8 million tons, reflecting improved mill margins amid a more constructive policy backdrop. North America, trade enforcement continues to support domestic pricing. U.S. steel prices remain among the highest globally, with spot pricing nearing $1,000 per ton for the first time since mid-2023. India remains the primary coking coal demand growth engine. Blast furnace production increased 17% year-over-year in 2025, and blast furnace steelmaking capacity continues to expand aggressively.

Discussions between U.S. and Indian officials regarding increased U.S. met coal imports could lead to a potential removal of the import tax on U.S. met coal into India, which in turn could increase U.S. imports above 2025's 9.5 million tons. Seaborne metallurgical coal markets began 2026 with an already tight Australian premium coking coal supply, further exacerbated by extreme weather events. With Australian premium low-vol pricing sitting just below $240 per ton today, up nearly 20% from Q4. U.S. East Coast indices are approximately $196 per ton for low-vol, $159 for high-vol A, and $149 for high-vol B. This volatility underscores how thin the spark market truly is. Seaborne hard coking coal supply is roughly 180 million tons annually, with less than 5% of that typically available on spot.

That structural thinness magnifies short-term supply disruptions. That said, the development of significant long-wall, high-vol production capacity in the U.S. has intensified competition in both domestic and export markets. As a result, U.S. high vol pricing continues to stubbornly lag historical relativities to Australian PLV. We therefore continue to focus our growth efforts on our low vol portfolio, where the supply-demand balance remains tighter and pricing durability appears stronger. The new rail load out at Maben, once operational, will materially improve logistics economics and provide access to additional customers for this premium Central App low volatile coal. Turning to our 2026 sales position, we have secured commitments for 3.1 million tons. North American customers account for 1.1 million tons at an average fixed price of $142 per ton. In addition, 2 million export tons are committed at index-linked pricing.

Turning to our Brook Mine progress, our carbochlorination-based flow sheet should substantially strengthen and de-risk our product mix and revenue basket. We are now placing greater weight on high purity gallium, high purity alumina, and high purity quartz, with a modestly reduced emphasis on scandium applications, although scandium does remain an important part of the Brook Mine portfolio. High purity gallium metal, if achieved at scale, positions Ramaco directly within the strategic semiconductor material supply chain. In parallel, we now intend to market our magnetic rare earths, which represent a smaller portion of our overall revenue basket, primarily as a mixed rare earth carbonate or MREC. These flow sheet enhancements, combined with our elevated gallium focus, materially expand our addressable market. We are in active dialogue with several companies and a wide variety of potential customers regarding potential offtake and partnership structures.

We continue coordinating engagement with defense primes and governmental stakeholders. The broader policy backdrop, including potential domestic stockpile initiatives and price support mechanisms, reinforces the strategic relevance of the Brook Mine, as well as the strategic critical minerals terminal, which we announced last year. For the terminal, our location with a dry climate and a site adjacent to both a Class 1 railroad mainline and a major interstate highway, puts Ramaco in a unique position to serve the U.S.'s stockpiling needs. To conclude, these are exciting times for the company. On met coal, we enter 2026 with a strong and largely committed sales book, improving low vol pricing dynamics and a disciplined growth strategy focused squarely on higher return segments.

We believe our cost position, product quality, and logistics flexibility leave us well positioned as markets rebalance. On critical minerals, our flow sheet direction represents a meaningful step forward. It should enhance product quality, lower capital intensity, and sharpen our commercial focus toward high purity gallium and strategic MREC partnerships. With that, I'll turn it back to the operator for the Q&A portion of the call. Operator?

We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Ben Kallo with Baird. Please go ahead.

Hey, good morning, guys. Thanks for taking my question, and thanks for all the detailed information. A lot to go through. Maybe first, so there, the you had a lot of changes, you know, at Brook Mine, and the process and technology. I'm just, I guess my question is, you know, how did you guys, you know, decide to go this route? I know that you guys have been working at this for a long time, and so, from the outside, it looks a little abrupt, but, I'm sure that, you know, this is a thoughtful process. Just if you could explain that.

Then, the second question, just sort of following up on that, is: as you make these changes, I know you've been in, you know, in discussions with, you know, for offtake agreements and with the government, and does that change the timing of any of that? Thank you. Thank you, guys.

Let Mike take the first part of that question.

Yeah, sure. We had anticipated that this might be a flow sheet option, some time ago, but hadn't completed the necessary test work to understand the magnitude. You know, granted, there's some delays in completion of a PFS with this flow sheet change, the expected impacts on the economics are significant. You know, we were, I guess, delighted to see that almost all of the gallium went to gallium chloride, which is, you know, the ability to produce a higher purity gallium product comes at a significant premium. You know, we feel like for a long mine life project, such as the Brook Mine, with potentially a 100-year mine life, that this is a material improvement to the economics.

Yeah, the last flow sheet, you know, no issues with it, but again, the step change in improvements justified the change in our view.

Yeah, I think, Ben, to the second part of your question, you know, we have kept our discussions in relative real time in terms of different procurement and finance options. Honestly, the pivot to probably a more gallium-centric product slate is an improvement and enhances our discussions candidly, because in a number of respects, first of all, we sort of de-risk the process.

The carbochlorination is, of course, a proven technique that's been used with titanium, so it's not as if this is a novel first-time approach given the fact that we've got a novel feedstock to start with. Secondly, of course, you know, as it's been noted before, you know, we think scandium is gonna be a very important part of the whole kaleidoscope of different types of rare earth usage moving forward. It's mainly gonna be used for light weighting and obviously for some electronic storage, but it's a market that, you know, is a bit more in the future that's evolving. The gallium market for semiconductors is not only apparent today, but it's growing rapidly given sort of the electrification of the entire economy and, of course, the AI business.

We are finding, you know, a high level of receptivity, both with strategics as well as with the government, in terms of a pivot toward more gallium, and perhaps a lesser emphasis on scandium. I hope that kind of generally addresses your question.

Thank you.

Our next question comes from Douglas Orman with Discovery Capital. Please go ahead.

Good morning. Thank you. I'm just making sure I caught that in the initial comments. It sounds like the engineering enhancements would lead to materially increased value relative to the September shareholder letter, which had the $5 billion NPV, and not just the floor PEA, when we think about a launching off point for what the new flow sheet will provide. Are we thinking about that correctly? Thanks.

Mike?

Yeah, I think, you know, we're looking at the increased production, obviously, from the new product suite. The potential higher purity and what that translates into in terms of throughput, that's a conversation we're gonna have. The basket price, if you will, is materially increased because of these products. We've been, our internal estimates, we've been, I would say, conservative in terms of what we're looking at for purity, for both high purity alumina and high purity quartz. We've taken, you know, 4N type purities in our projections, but if you look at gallium at 6N, you know, it comes at three times the price of 4N.

Similarly with high purity quartz, you know, if you produce a 5N versus a 4N, it's three times the price. These are the things that we wanna test going forward. The ability to produce those products, understand what the recoveries are, there's a whole lot of upside here, and we already see a significant increase on basket price.

Thanks.

Our next question comes from Carlos de Alba from Morgan Stanley. Please go ahead.

Yeah, thank you. Good morning, everyone. I wanted to maybe get a clarification on the new flow sheet. I think I just heard that this is not a novel approach, it has been used in titanium. If that is the case, then, would you mind please explain, just for our benefit, what is the fundamental technology breakthrough then that you have achieved with this processing? What is the level of confidence on the new approach? Can you maybe talk about the independent laboratories that have done initial testing on this new flow sheet method?

You can share the names and if there is any documentation that you will share with the market.

Sure. I think, you know, it comes back to geology and, you know, because this, the deposit has gallium, germanium, also the mineralogy. You know, we've published that the clays are aluminosilicate clays. This carbochlorination process basically breaks those clays and allows us the ability to produce those products, so high purity quartz, high purity alumina. I think, you know, obviously, the rare earths stay in the residue. You'll find that there's been publications about carbochlorination in rare earths. You know, you'd mentioned the titanium industry. This hasn't been done before in the way that we are viewing the flow sheet. We have some IP around it. We talked about patent pending applications.

Exactly how we're doing it, the operating conditions, the temperatures, the residence times, how we separate these products is proprietary. I would say that it's, you know, we were even surprised by the results. We've been public in our disclosure about the labs that we've been using, Element USA. We've engaged a consultant, Kingston Process Metallurgy, who has carbochlorination experience in the alumina industry, so we're working with them on the simulations. I'm very confident about this. The other benefit is, you know, we've significantly de-risked the bulk reagent requirements for hydromet. You know, we aren't importing large train loads of reagents in this process. The fact that we're a coal deposit, the reagent is right there for us to take.

Chlorine is simply regenerated in this flow sheet, as they do in the titanium industry. Most of the chlorine that we require will be recycled. We'll be, you know, more, I suppose, our operating costs, which were 70% of the processing cost for reagents previously, we'll now be, you know, we'll see electricity consumption go up. That's certainly more favorable, having a, you know, operating costs tied to electricity in a place like Wyoming.

Thank you, Mike. May I just follow up on the gallium aspect of the new flowsheet? I understand that, do you have any information that you can share on the economics and the cost advantage that maybe this new approach will have relative, for example, of extracting gallium from red mud refining operations? You know, our understanding from other companies, more on the aluminum supply chain, is that it's not very profitable for them to extract the gallium. Yeah, I wonder if you have any color that you can share with us.

Yeah, you nailed it. I think that's been one of the challenges of extracting gallium from other sources, red muds, you know, residues from zinc projects. Gallium is volatile as a chloride, that's why this process works. You know, we, as I mentioned, we saw almost all of the gallium go into the off gas, which will then be condensed as a crude product and separated from the other chlorides. You know, what that translates into is a double-digit increase in gallium recovery, and then compounded by the ability to produce higher purity products. This flowsheet is probably the only one that's gonna be a, you know, primary producer of gallium, that can really compete with the purities required for semiconductor industry. You know, we're excited by that.

Thank you.

Our next question comes from Brian Lee with Goldman Sachs. Please go ahead.

Hey, guys. Good morning. Thanks for taking the questions. I guess maybe following up on the prior line of questioning. you know, the RE basket, I think it's the price you're outlining on slide 12, went up to $500 and change from your prior view of $300 and change. I know you maybe it's too premature to give us all the nitty gritty specifics, but can you give us a sense of, you know, what's embedded in there? I think previously you had been talking about scandium, roughly 60% of the value of Brook Mine deposit, assuming $3,750 you know, per kg pricing. You're saying there's a modest decline in that.

Can you kind of give us a sense of what's changing, in terms of mix of scandium on the value of the deposit, and then price, if any, change there, and then where kind of gallium sits in the context of the new flowsheet versus the prior views? Thank you.

Yeah, I'm glad you noticed that. I, that basket value, if you will, had some assumptions that we would be able to capture 5% of the high purity alumina market at a 4N purity, and that didn't include any high purity quartz in that analysis. We think there's even upside with those numbers, when we start putting high purity quartz in the equation and higher purity products. I think truly that number could get better from what we've published. We, you know, we wanna finish the PEA in order to get confirmation on the numbers, and particularly on the costs, which we've mentioned is gonna be mid-year.

To give you an idea of the basket, we anticipate that gallium, depending on, and we're working with our internal marketing team, could challenge scandium in terms of, you know, equivalent production. We anticipate scandium is gonna be somewhere, perhaps less than 40. We did see a double-digit increase in scandium recovery as well, right? So it still maintains, you know, a significant portion of the revenue. You know, gallium is gonna grow probably, in, you know, into the 30s, and the HPA and HPQ is something that's gonna be a significant contributor to this project as well. And the final point on that, of course, HPA and HPQ don't translate into the TREO grades at all.

You know, that's why we wanna be talking about basket price.

Brian, to your point, you know, that the dollar per ton figure is up more than 50% previous to what we had, you know, previously disclosed. Kind of going back to, I think an earlier question, I mean, the bottom line is our internal projections certainly, you know, show material increases in incremental revenue and free cash flow versus what we've previously disclosed, and obviously now that's what we're working with a third party to validate.

Okay. No, that's helpful color. I appreciate that, guys. Then maybe just a question on timing. You know, I appreciate that, the change in the flowsheet pushes out a little bit of the timing in terms of the pilot and the demonstration facilities. Seems like it's about a year delayed. How should we think about that in the context of, you know, how you're budgeting for timing of Brook Mine, you know, ultimately coming online? I think most people had, including ourselves, sort of a 2028 startup timeframe for that deposit coming online. Is that still valid, or should we be thinking it's, you know, a year behind schedule, like the pilot? Thank you.

Yeah, look, I mean, that's obviously, you know, we're projecting a few quarters of delay because of this change. You know, that does push out the overall project schedule similarly. That's kind of what we're anticipating is the overall schedule will push out as well. Yeah.

Thanks, guys. I'll pass it on.

Our next question comes from Alex Fuhrman with Lucid Capital Markets. Please go ahead.

Hey, guys. Thanks very much for taking my question. Congratulations on all of the progress you made last year. Wanted to ask about, you know, the revised flowsheet and the decision to sell rare earths as a mixed product now. Curious kind of where you see that product going. Heavy rare earth separation capacity today is virtually non-existent in North America. Do you anticipate that there will be some separation capacity in the future by the time that you have your MREC product to sell? Actually, are there maybe applications for mixed rare earth products?

Hey, Alex, this is Jason. I'll speak to that. Yeah, I'd say, taking one step back, you know, a lot will depend on what the TREO is on that MREC, and of course, that'll depend somewhat as this flow sheet, you know, further develops, any other separation processes that Mike and his team are working on. Yeah, I mean, as you mentioned in the States, you know, most of the separators are, you know, pilot scale or developing. You know, there are obviously some at, you know, I'd say in allied countries overseas. We're in contact with nearly all these folks now. You know, certainly in the last several weeks, we've seen a big emphasis from the government here in the U.S. on that part of the supply chain.

They recognize, you know, the same as we do and you do, that it's, that it's a, you know, a potential bottleneck today. You know, I think given the timeline that Mike just described and how quickly we see this developing, and as well as the conversations we've had with some of those parties, I think we feel confident that the capacity will be there when we're gonna need it.

That's really helpful. I appreciate that. Thank you.

Sure.

Our next question comes from Matthew Key with Texas Capital. Please go ahead.

Good morning, and thanks for taking my questions. Staying on Brook, I was wondering if you wanted to do the rare earth separation down the road, could you eventually pursue that there? Like, or are the economics just not there to kind of justify the incremental process, you know, versus just doing a mixed rare earth carbonate?

Sure. I think you're onto that. I mean, with the additional revenue generators for this project, the rare earth side of it becomes less. You know, we're looking at 15% of the overall project revenue basket with rare earths. It doesn't make sense to, you know, pursue a complicated, and it's technically challenging, to separate all of these rare earths into products, and build the solvent extraction plant to do so. We're better off selling the product to someone else, and the change in flow sheet is really what's driving that strategy.

We're trying to simplify the back end, where it's a smaller portion of our overall revenue, reducing the CapEx and potentially the schedule and operating costs associated with it, so.

Got it. That's helpful. I guess I'll ask one on the met side, too. You mentioned that the rail loadout could facilitate the eventual development of deep mining at Maben. How soon could a projects come online once you make that go-forward decision? You know, in terms of capital investment of a project like that, could you maybe provide a ballpark, you know, in terms of just getting that across the finish line once you make that go ahead?

The deep mines are largely permitted already at the Maben complex. Once we decide to move forward, it's mostly relatively small construction lead time and acquiring equipment. You know, somewhere between six and eight months lead time from deciding to move forward on the underground to actually having first production. It certainly could be a 2027 event if the market supported that. I think the way I would frame it for you is, you know, each underground section of equipment plus the development is, you know, between, you know, the face ups and facilities and equipment, is probably about $12 million-$15 million. You know, in our long-term, medium-term plans, we project Maben as being about 1.5 million tons per year.

To add an extra 1 million tons is probably in, you know, $60 million-$70 million of total CapEx development to get there.

That's rolled out over a year.

Over a, you know, extended period of the build out. Yeah.

Got it. That's super helpful. Thanks for taking my questions. Best of luck.

Thank you.

Our next question comes from Jeff Grampp with Northland Capital Markets. Please go ahead.

Morning, guys. Was curious with this, with the change in the flow sheet and some of the timing, being pushed back a bit, can you touch on your ability to qualify product for customers in the near term here? Is that something that would really ramp up more significantly, once the pilot plant's online?

Sure. I think the objective of the pilot plant was exactly that, to produce a sufficient quantity for product testing. You know, we are looking at ways to produce sufficient volumes, particularly for HPA and HPQ at bench scale, because, you know, we may be able to do that. That's something that we're anticipating, that we might be able to do some product testing on two of those before even piloting.

Got it. Okay, great. Thank you. For my follow-up on the met coal side, seems like there's potentially some upside to coal sales this year. I know you guys aren't guiding to that yet, but given the positive commentary you guys had on the macro, what might you guys need to see to feel good about pushing some more product out into the market? Thanks.

I'll let Jason provide the granular detail, but the reality is we've got some unpriced index tons out there right now. If we see upward market movement, we're gonna be able to ride that wave. Jason, go ahead and pick up.

Sure.

On the other.

Okay. Yeah, you know, on the low ball side, you know, here in the States, obviously we're seeing that already. That's why we're advancing, you know, bringing these tons forward both at Berwind, you know, bringing the load out forward there at Maben. Obviously, it's still lagging, you know, the PLV, the U.S. low ball is by more than the freight differential. I think you'll see that gap close as the year goes forward here. Obviously, high ball is tough, Q4 was tough, you know. One Southern App producer came up to full production on a new project, and one Northern App producer brought a project back online fully in Q4. A lot of competition we saw in Q4. You know, here in the States, we're already seeing supply side changes.

You know, we've got a neighbor there at Elk Creek, that come April, will fully wind down. Some of that's due to the export market they face, some of that's due to, you know, we've all faced, lower domestic pricing this year versus last year. You know, we've seen some smaller neighbors there in Central App as well, that have either wound down or are winding down now, too. I think you'll see the, you know, those relativities on the high ball start to creep back up closer to historical relativities, which will To Randy's comment, you know, obviously the biggest part of our met portfolio is Elk Creek, is high ball. Those, those moves up, you know, have a big impact on us as we go forward here.

Jeff, I'd just add, you know, we mentioned in the release the ability to sell, you know, almost 5 million tons. Just to be clear, that's without any incremental CapEx. We've built up a fair amount of inventory on the back of our kind of disciplined approach to sales last year. You know, just to be clear, that's, I wanna make sure that everyone is aware that's not with any incremental CapEx.

Got it. That's all really helpful commentary. Thank you guys for your time.

Our next question comes from Nick Giles with B. Riley Securities. Please go ahead.

Hi, team. This is Saundarya on behalf of Nick Giles from B. Riley. I just wanted to check on the, like, with the solvent extraction coming out of the flow sheet, directionally, how CapEx might trend related to that prior $1.1 billion estimate? Even if it's just an order of magnitude, like, how much reduction can we see?

Look, I think we wanna get the numbers from the PEA to look at what the CapEx is. It's hard to compare exactly these two flow sheets. For sure, we pull out some CapEx on the back end. We also shrink, you know, some of the purification, because the crude product separation is a small part of the circuit. Carbochlorination is really where the CapEx is gonna be. I would say that, you know, we still wanna do those numbers and crunch those numbers, and Hatch is gonna give us what that looks like at the completion of the PEA.

Got it. Just one more follow-up. Now that the policy environment around critical minerals is quite favorable, how are you guys thinking about, you know, going behind DPA Title III or DOE loan programs as a part of financing? Has there been any conversation around it?

I think as we've said before, we are in conversation with various government groups. I'm not gonna get into the specifics about which programs that we're pursuing, but, you know, again, the fact that we're now somewhat pivoting to a slate of products, which I think the government is acutely interested in, which is the gallium for semiconductors, I think will provide a little bit of wind in our sail in terms of those conversations.

Thank you, and all the best, guys. I'll turn it back.

Our next question comes from Nathan Martin with The Benchmark Company. Please go ahead.

Thanks, operator. Good morning, guys. I'll be sticking with the coal side now. Gave some 1Q guidance there. Does that incorporate the impacts from the Arctic weather Chris mentioned earlier? How should we think about the cadence of shipments in 2Q through 4Q as the weather warms up and you guys catch up there?

Hey, Nick, this is Jason. I'll take that one. The Q1 numbers that Jeremy gave earlier do in fact take into account the slowdown we saw there in shipments in late January, early February. You know, we've seen that improve, you know, greatly here over the last few weeks, but, you know, we're still working through the backlog there on the shipment side. You know, as far as cadence goes, obviously with the lake starting back up, you know, getting out of the winter season, you know, Q2, we're looking at about 1 million tons, Q3, Q4, about 1.2 each.

Great, Jason. Appreciate that color. Maybe also, while I have you know, talk about the relativities between, you know, between low vol and high vol. Should we expect, I guess, the first quarter coke and coal realization to be pressured, given that wide discount we've seen most of the quarter so far? Maybe any thoughts on what the % versus benchmark could ultimately look like for the year?

Yeah, I'd say on the second one, your second question there, that's a tough one. I've been doing this almost 30 years, and I'm always wrong, so I'd hate to even wager a guess. I do think it will improve from where we're at, you know, Q4. I'm seeing, you know, some supply side discipline in this quarter on spot that's out there. I think we'll see that improve. Again, there are, you know, our neighbor I mentioned earlier, that's 2 million tons a year coming offline. We've seen some other smaller ones come offline around us in Appalachia.

I think the higher cost guys that just can't compete are gonna go away, and I think the lower cost guys that are left, you know, will have that discipline, and it'll start to shrink that relativity. I think it'll take some time for the markets to rebalance around, you know, the incremental high vol that's coming out of the U.S. now.

Okay, got it. That's fair. Maybe just one more, if I could. The domestic tonnage of 1.1 million tons, obviously priced above the public guidance of the peers you guys mentioned. Can we maybe get some color on the quality mix of those tons? You know, a little bit lower, both on an absolute and percentage basis, compared to what you guys have done the last few years. Maybe, a little information around that ship, if there is some.

Yeah. One thing I'd point out around the last couple of years is there were some carryover volumes, I'd say 2023 to 2024 to 2025, that was in that tonnage number. On a deal-to-deal basis, you know, I'd say we're less than 10% down on contracted tons from year-to-year in that number, given that carryover in previous years. You know, on the mix, obviously, as Chris and Randy both mentioned, you know, our lower sulfur side, you know, there's a limited amount of, you know, in the domestic, obviously, foundry business. We support both those plants pretty heavily. With that lower overall number, you know, there's a bit more of an impact from those sales.

Yeah, Nate, mix will be similar. It's, you know, about call it 15 plus % low vol and the rest high vol domestically. One of the reasons we're moving forward with the rail load out at Maben is that, you know, that's a very good domestic potential, but it's logistically challenged right now, so we think that'll play nicely into the mix next year.

Great. Very helpful, guys. Appreciate the time, and best of luck.

Thank you.

This concludes our question and answer session. I would like to turn the call back over to Randall Atkins, Chairman and CEO, for any closing remarks.

Great. Well, I just wanna thank everyone for being on the line today, and we'll look forward to catching up here in the next quarter. Thank you.