Ramaco Resources, Inc. (METC) Q2 2026 Earnings Report, Transcript and Summary

Good day, everyone, and welcome to the Ramaco Resources Second Quarter 2026 Results Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I would like to turn the floor 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 second quarter 2026 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO; Mike Woloschuk, our EVP of Critical Mineral Operations; Oren Atkins, our SVP of Critical Mineral Sales; Chris Blanchard, our EVP for Mine Planning and Development; and Jason Fannin, our Chief Commercial Officer of met coal. 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.

Thanks, Jeremy, and thanks for everyone joining us this morning. We have a lot to discuss. First, turning to our critical mineral front, as you know, we released last week the long-awaited Hatch conceptual study, along with the shareholder letter, both of which are on our website. The overall Brook Mine project is transformative, both for Ramaco and for the country. It also represents the reality of developing, building and financing a major supply chain response to the chokehold on critical minerals that the Chinese have over the West. At Ramaco, we have been at this now for about six years. We believe we are more than halfway there before commercial production. The reality is that it will take several years for the U.S. to balance the playing field with the Chinese, who have been at it for more than three decades. As you know, we changed direction last fall to test the carbochlorination method to apply to our coal-based feedstock. We've now arrived at a method to processing raw ore. This moves us from being just an upstream feedstock provider to also a potential large-scale midstream refiner. The refinery is clearly the most expensive and largest project we have considered, but it also represents a unique long-term potential profit center and at a transformative scale. We are conservative in our fundamental approach to our commodity businesses, be they critical minerals or met coal. We will approach this project in the same way. In brief, now that we know both the "how to process" and also "what oxides," metals and MRECs we can potentially produce, going forward we will work to improve the refining techniques to make them financially stronger. We'll also focus to optimize both the refinery construction cost and the construction timing. On financing, we want to make sure that the subject is properly framed. The major capital disbursements for the refinery are still more than two years away, and we are approaching that runway deliberately to finance the project in as attractive as possible a manner for our shareholders. As we've said before, we have been in discussions with the government. Government financing support has been pending the completion of the independent third-party diligence. Also, procurement offtake counterparties, including relevant federal agencies, were also perfectly reasonably awaiting the Hatch study before advancing. With that Hatch report now in hand, we are positioned to move these discussions forward with both offtake and commercial financing counterparties. Basically, the door opened last week for us to now concretely pursue these discussions to some point of conclusion. I'm not going to repeat all of the metrics which we discussed in last week's letter, other than to highlight just a few of the milestones. We had Hatch look at the Brook project at two different levels of plant feed. One was at 1.8 million, and separately we had it at an elevated 3.5 million tons of feedstock. The higher case was in part motivated by supplying a larger level of feedstock production for domestic government supply chain needs. The project is and always has been very scalable in both directions. Our mine out here was originally permitted at 8 million tons of coal production, which we later scaled back to 2 million tons before it became a rare earth project. As I will touch on, we have generations of available feedstock in our deposit, so we can always increase production. If economics or timing so dictate, we can always also lower the tons mined and oxide produced to get started and then add more production later. So depending upon future demand and financing availability, we could increase or decrease production accordingly. The initial size of the facility will be dictated on Ramaco's efforts to de-risk the project, including offtake agreements and, of course, financing. If there is one hallmark about this company, it is that we call an audible at the line almost every day. Internal modeling for the Brook Mine using the capital and operating cost information from Hatch on the two alternative feedstocks showed a potential NPV of between roughly $3.4 billion to $8 billion and an average adjusted EBITDA of between $600 million to $1.3 billion. Both these figures are up substantially compared to Fluor's 2025 studies. And these figures, I would note, also do not reflect any potential uplift from inclusion of e-waste in the feedstock. As Hatch noted, the timeline and capital costs have been pushed out and increased compared to last year's Fluor report. So has the profitability. We will of course work to tighten and reduce timing and cost as we progress on the testing, optimization and engineering fronts. One pushback from last year's Fluor report was that we were overreliant on scandium production. Both Hatch's and our own analysis now show that roughly 75% of our potential revenue will be tied to key critical minerals whose main demand driver is the semiconductor industry. Our growth trajectory would then also be tied to several key markets, be they from data centers to AI. Indeed, at the projected levels of expected production, the Brook Mine could provide a multiple of all of the nation's demand for the strategic critical element gallium and its related products used in these industries. In terms of independent report milestones, we expect to publish a report on e-waste this fall and its use, followed by a new S-K 1300 compliant technical report summary by the end of the year. This will reflect the Hatch flow sheet and the benchmark scale test work now underway. That year-end filing will be followed by a full pre-feasibility study in the spring of 2027, which marks the next formal step in the de-risking of the project. As we always remind ourselves, fundamentally the Brook Mine project starts as a unique upstream geological opportunity. As we've said before, it's been called the nation's largest unconventional rare earth and critical mineral deposit. Even at the current permit levels, on roughly only one-third of the mine's total acreage, we should be able to operate the mine for generations. We are also working with independent testing labs to identify commercial levels of other critical minerals and rare earth elements within the deposit that we have not disclosed to date. If independent assays and tests confirm commercial size of deposits, we will include that in our future product mix. To date, we have internally discovered more than 50 such minerals and REEs in our deposit. And as Mike Woloschuk will discuss, construction on our pilot plant building remains on schedule for completion later this year, with full-scale operations expected to commence in '27. We will start moving various lab operations into the new facility this fall to accelerate our testing capability and timing. Now, I'd like to turn to our legacy metallurgical business. As you've already heard from some of our other public coal peers, we have continued to see market weakness across most U.S. coal qualities, but especially in the high-vol coals. Too much domestic production is chasing a limited export market at the moment. By contrast, the low-vol coals have shown continued relative strength. Reflecting this market reality, in June our Board approved capital for the $25 million development for the first two underground sections at our Maben complex. Capital will be deployed over the next 12 months, split evenly between this year and 2027. We anticipate by the end of '27 this two-section deep expansion at Maben is going to add about 600,000 tons of production at full capacity. These will be tons which can achieve cash margins roughly double the company's overall second quarter margins. Combined with our existing surface production at Maben, this will also translate into 1 million tons of annualized production by '27. We have the future potential to add two additional deep sections at Maben. This would increase our low-vol capacity by another 600,000 tons for a total of roughly 1.5 million tons of low-vol production from the Maben complex. And to complete our overall low-vol growth plans, we would combine Maben with our previously announced growth at Berwind. This includes adding 300,000 tons in '27 at the Berwind number three section. This would then take the three Berwind sections to 900,000 tons of annual production, with the optionality to add a fourth section for another 300,000 tons. When these four sections are added to Berwind's Laurel Fork mine, this creates another complex with a 1.5 million ton production slate. Berwind would then mirror the same future level of production as Maben. We would have a combined 3 million tons of annual low-vol production from both complexes. When added to the more than 3 million tons at Elk Creek and Knox Creek, this provides a balanced medium-term portfolio of over 6 million tons of total production up from our current level of roughly 4 million tons. Our investor slide shows this strategic objective of increasing low-vol to 50%, up from about 25% today. I would also like to commend our metallurgical operations team. Second quarter mine cost at $99 a ton represented the fourth consecutive quarter of sub-$100 cash costs. This was achieved despite diesel prices increasing quarterly by roughly 33% in the second quarter. Our costs remain in the first quartile of U.S. met coal cost curves. I'm going to finish with a mention of some of our balance sheet metrics. On our shareholder return and capital allocation strategy, we bought back a significant amount of stock for the first time this year. We have now repurchased more than 8% of our Class A shares for about $66 million. This reflects what we regard as a prudent use of liquidity, given what we perceive as a current undervaluation of our stock price. We also ended the quarter with record levels of over $400 million of liquidity after these share buybacks. Because we are so liquid, we additionally have the ability to now be holding about $100 million of stockpiled coal inventory as of June 30 to sell at a better pricing as market conditions improve. In summary, this has been a quarter with a number of positive moving pieces for us as we begin to roll out some transformative growth opportunities, both in our coal and critical mineral platforms. With that, I'd now like to turn the floor back to the rest of our team to discuss finances, operations and markets. And first I'm going to have Mike Woloschuk, who leads our critical mineral efforts, to provide some updates on our progress there.

Thanks, Randy. We had a busy quarter with the main focus working with Hatch to complete the carbochlorination study. The results of this study demonstrate the exceptional potential for the Brook Mine project. I first want to start by outlining why we have adopted a carbochlorination flow sheet for the Brook deposit. Brook Mine hosts rare earths and other high-value critical minerals such as gallium, scandium and germanium. Some of these high-value critical minerals are hosted in carbonaceous kaolinite clays. Extraction of these critical minerals requires alteration of the kaolinite mineral structure. In the carbochlorination process, this alteration also generates additional revenue by converting small amounts of the volatile aluminum and silica chlorides into high purity alumina and high purity silica. The balance of these chlorides is used to regenerate most of the chlorine needed for the process, minimizing makeup chlorine quantities. The flow sheet is designed so that mineralized Brook coal feeds the carbochlorination process as both the source of critical minerals and the reducing agent. In other words, the coal is simultaneously plant feed and reagent. Non-rare earth critical minerals generate about 75% of the revenues from this flow sheet. This is directly related to the unconventional geology of this deposit, and why TREO grades alone are not a relevant measure of asset quality. Furthermore, we can ramp up production of HPA and HPS as the market demands, with only incremental capital to increase conversion of those chlorides to oxides. We do not have to increase the feed to the plant. Carbochlorination has been demonstrated commercially for more than 70 years. This process is not novel. We are adapting proven technology to this feed material because it fits with the geometallurgical response of the Brook Mine. Initial tests generated average extractions of over 90% for all targeted critical minerals and these were verified by third-party independent testing. Subsequent testing achieved even better extractions, but third-party laboratories continue to be a timing bottleneck. To significantly increase test volumes and reduce turnaround times, we have been building out our own analytical and metallurgical testing facility at site. Our analytical lab is now operational and we anticipate internal carbochlorination testing will commence this quarter. The internal test work will aim to optimize separation of the carbochlorination metal chlorides and the results will underpin the next phase of study and the pilot plant design. We have appointed an experienced laboratory manager to build out the team and lead the laboratory operations. As Randy mentioned, we are evaluating additional upside not included in the study results. We have identified trade-off studies focused on capital and operating cost improvements, and integration of e-waste to boost yields of the targeted critical minerals. And this was identified as an opportunity in the Hatch study. The thermodynamic behavior of gallium and germanium chlorides under planned operating conditions is well established. Both species are volatile and report efficiently to the off-gas, where they are captured in equipment already specified in the flow sheet. Co-processing a controlled e-waste fraction therefore requires no new reaction chemistry. Early estimates suggest small amounts of e-waste in the feed blend will significantly boost gallium and germanium production with minimal modification to the process. The Hatch team is now into initial design of the carbochlorination pilot plant, and they will be delivering a package to Zeton for detailed design this quarter. At the pilot plant site, excavation work, pilings and some of the foundations were completed in the quarter. In this quarter, we anticipate finalizing the balance of the deep foundations and the slab-on-grade foundation work. Building steel that will house the pilot and research equipment is anticipated to be completed in Q4. In Q2, we increased the number of drill rigs on site. At the end of the quarter, we've drilled 56 holes this year and have updated our infill drilling program to target a portion of the 4,500-acre permitted area to increase resource confidence level from inferred to indicated to support the pre-feasibility study. We've expanded our in-house geology logging and sampling capabilities and anticipate being able to conduct in-house assays on drill core this quarter. Non-Hatch scope being managed by WSP advanced several key technical activities, including development of the mine footprint, identifying a location for the tailings storage facility and a review of the borehole locations, material properties and geotechnical studies to support TSF site selection. I would now like to hand over the call to Oren Atkins, our SVP of Sales for Critical Minerals.

Thank you, Mike, and good morning. I'll provide a commercial update on our Brook Mine where our critical minerals commercial strategy continues to advance on a number of fronts. Alongside the technical work supporting the just released Hatch conceptual study, we have built out a dedicated internal marketing and sales team for the Brook Mine materials, further supported by an experienced team of industry consultants and lobbyists. With at least 20 different high-value basket materials facing into a myriad of industry supply chains, outreach and visibility has been a high priority. To that end, the team has executed over 30 NDAs related to potential offtake and technical engagement and is in offtake discussions with counterparties for every material to be produced at the Brook facility. With established relationships across the downstream supply chains, we expect commercial advancement to run parallel to our technical development read a Hatch report, with additional MOUs to be announced in the near future. It's also relevant to highlight that the Brook Mine critical mineral deposit was discovered in partnership with the U.S. government. Ramaco continues to build and enhance relationships with various departments of government to support their strategic initiatives to onshore Western critical mineral supply chains. A number of our materials have defense applications which have been subject to export restrictions, so we are in regular communication with the Department of War to align ourselves with their supply chains and needs. As Mike mentioned, the carbochlorination process is projected to extract higher yields of high purity gallium, germanium and silica products. We're excited about the fact that the key demand drivers for our products are in the semiconductor, technology and defense industries. Demand is high for these products, as Brook may be the world's first gallium primary source mine developed at a time where it has been three years since China has exported gallium to North America. We are in active discussions with potential off-takers, ranging from large gallium purification and distribution companies to wafer, power device and RF manufacturers. The carbochlorination process also creates valuable HPA and HPS from what was previously gangue material. While HPA has multiple applications across substrate, semiconductor, ceramics, demand is growing most rapidly for use in batteries. Ramaco is in contact with technology and battery firms, both domestically and abroad, to place offtake of this material. High purity silica similarly faces into semiconductor and battery sectors, providing crossover of multiple value materials to potential off-take customers. In scandium, demand continues to grow for solid oxide fuel cells, and Brook is well positioned to provide domestic feedstocks into this growing industry. We are in discussion with a large firm in this field for both offtake and a circular arrangement of recycling spent fuel cell materials. Scandium also improves the strength-to-weight characteristics of metal alloys, and Brook's stable domestic supply could unlock the development of new alloys for defense, space, aerospace and auto applications. Ramaco has retained an industry consultant with years of experience developing scandium alloys, which has greatly accelerated our integration into these supply chains. And we are currently in discussion with two material developers working to standardize new aluminum and titanium alloys with identified end-use applications. On rare earths, our MREC has a combination of both light and heavy rare earths, making it a unique, valuable product in the marketplace. We are under NDA and in discussion with a number of separation companies, both domestically and abroad in allied nations, and our primary focus is to ensure the technical fit of these facilities to separate each of our rare earth oxides or each of our rare earths into saleable oxides. We announced an MOU with RE Alloys for offtake and separation of MREC and are in discussion with a number of other firms to secure similar separation and offtake agreements. Lastly, I want to highlight that e-waste was identified as an opportunity in the Hatch conceptual study as the carbochlorination facility provides us with flexibility to integrate a number of these mineral-rich materials into our feedstock ore to boost critical mineral yields and production. We are in active discussions with not only e-waste providers to supply materials, but also offtake customers to create a circular arrangement of recycling spent materials or manufacturing waste. Two groups have already sent materials to our Brook facility for testing, so we are actively looking to advance the technical and economic feasibility of incorporating recycled materials into our carbochlorination facility. Now that the technical and economic information from the Hatch report has been made public, we anticipate things to accelerate regarding various supply agreements in the near future. With that, thank you for your time and I will pass along to Chris to speak to our operations.

Thanks, Oren. I'd like to briefly move back to the East and discuss results for the metallurgical coal side of the business. First and foremost, I'm pleased to report and share that operational safety and compliance performance remained strong in the second quarter and much improved from our 2025 results. Quantitatively, we have had 58% fewer incidents in 2026 through the comparable period in 2025, and this is translated into a 54% reduction in our total reportable incident rate year-to-date. Mine turnover of personnel is also reduced substantially during this prolonged market weakness. Fewer vacancies and a more stable workforce has certainly contributed to better results on our safety metrics. On an operations front, we continue to maintain reasonably acceptable cash costs under $100 company-wide. This is despite the headwinds of stubbornly high fuel costs, which are one of our largest single direct costs, plus the added pass-throughs related to transportation and logistics. After entering the year at approximately $2.50 per gallon for diesel fuel, we averaged $4.64 per gallon in the second quarter with a peak at $5.71. Fortunately, we saw a pullback in late June and early July. Unfortunately, however, the restarted tension in the Middle East has now pushed current pricing of diesel to $4.71 at the beginning of this week and actually above the second quarter's average pricing. At our usage and production mix and levels, we see more than a $1 increase in our produced coal costs per dollar of diesel fuel. The impact of diesel fuel alone in the second quarter compared to the start of 2026 levels was approximately $3 per ton produced. Although we are pleased with the cash cost performance, we know it certainly would have been stronger absent some of these external factors. Our Elk Creek complex led to sub-$100 strong cash cost and productivity performance. The main Berwind mine also performed at or slightly better than our forecast during the second quarter on produced tons and cash costs. As Randy mentioned, we have layered in additional low-vol production from our Laurel Fork Pocahontas No. 3 mine, which feeds into the Berwind prep plant. The majority of ramp-up and restart costs are behind us and while the Laurel Fork mine performance has not yet matched the productivities of the Berwind mine, it does continue to improve month-over-month. As a reminder, Laurel Fork production is a bridge for labor and capital equipment until the third section of the Berwind mine is ready to be deployed. It does give us future optionality for additional low-volatile flex production if we wish to continue its operation. Regarding the Berwind mine ramp-up, construction activities for the ventilation projects continued throughout the second quarter. The intake shaft has been completely excavated and the concrete liner is 46% constructed and poured. Once the liner is complete, the new mine fan will be installed and mine ventilation adjusted and optimized for the third section. The shaft excavation ran approximately three weeks behind schedule, but we still anticipate the third section at Berwind being operational very early in the fourth quarter this year. At our Maben operations, we have a significant amount of activity underway now to grow our low-vol portfolio where we see much better supply-side dynamics and perhaps even some shortages of the best quality low-vol coals. We discussed in our last call that the Maben batch-weigh loadout project has moved forward and that work continues. We still maintain a scheduled fourth quarter startup for the rail loadout at Maben. The immediate impact of that will be roughly $20 per clean ton in transportation cost reduction for the Maben produced coal. And on a total company cash cost basis, the Maben loadout savings will lower overall cash costs by almost $2 per ton across the currently producing mines. We are accelerating capital originally planned for 2027 into 2026 to take advantage of the soon-to-be-activated Maben loadout and the superior quality low-vol reserves we hold at this complex. Field work has begun on the surface excavations and the installation for electrical infrastructure for our first mine, which is in the Beckley seam. This low sulfur, low ash, high CSR coal should complement our operating Sewell seam surface mine and highwall miner. All the necessary mining equipment for the first section has been procured or has been transferred from idle operations. We are forecasting first production in early '27 with the potential for some incremental tons late this year. The second underground low-vol section is expected to come online in the second half of '27. By the end of '27 we will have the potential to be producing over 1.1 million tons of incremental low-vol coal on an annualized basis above current levels. This is the combination of the third section at Berwind, two sections at Maben and the potential continuation of the Laurel Fork mine. Offsetting this growth in low-vol, we continue to see challenges on the oversupplied high-vol side. We have proactively idled one of our three Stonecoal sections at Elk Creek. We're using the labor and the idle equipment to enhance our workforce and to lower overall maintenance capital spending throughout the company. We forecast overall high-vol production decline year-on-year, but that the growth in low-vol will offset this, plus favorably rebalance our production portfolio in a positive direction. Over the next few months we should begin to see some clarity with regard to 2027 domestic pricing and may further adjust high-vol production accordingly. I'd like to now turn the call over to our Chief Commercial Officer, Jason Fannin, for discussion of the markets and their dynamics.

Thanks, Chris, and good morning, everyone. Today, I'll discuss our Q2 sales results, provide an update on our 2026 met coal sales position and market outlook, and then spend a few minutes on the commercial strategy behind our low-vol growth plans. Starting with our second quarter results, our realized prices increased $2 per ton versus Q1 on the back of higher volumes of both domestic and PLV-linked shipments. Looking ahead to pricing in the third quarter, PLV-linked tons should represent about 22% of overall volumes versus roughly 15% in both Q1 and Q2. Turning to our overall 2026 sales position, at the start of the third quarter, we had secured commitments for 3.8 million tons, or about 97% of our production at the top end of revised guidance. Our fixed-price book for 2026 stands at 2.5 million tons at a blended price of $121 per ton. We have an additional 1.3 million export tons under index-linked arrangements for delivery in the back half of the year. Moving to our seaborne metallurgical coal market outlook, pricing in both the Pacific and Atlantic basins was roughly flat on average in Q2 versus Q1, although PLV gave back some of its value in July. However, to start Q3, we have seen the U.S. indices largely maintain their pricing levels, increasing in relativity against PLV. On the supply-demand side, global prime hard coking coal supply continues to decline. Australian exports remain well below historical levels amid limited capital investment, high royalty burdens and ongoing production interruptions. The safety-driven mine suspensions in China's Shaanxi province earlier in Q2 also removed meaningful coking coal supply from the Pacific market, much of it in low ash, low sulfur, high CSR qualities that are difficult to substitute. Taken together, we believe supply-side dynamics provide a reasonably firm floor near current PLV levels. This brings me to the commercial dimension of the low-vol strategy and Maben development plans that both Randy and Chris have already outlined. Since early Q2 2025, U.S. low-vol pricing has maintained a persistent and often substantial premium to U.S. high-vol indices. And from a marketing standpoint, Maben volumes have already successfully trialed into the domestic market this year, and we plan to continue to expand our trial volumes into additional North American mills during 2027. Similarly, interest from Asian steel producers in securing premium U.S. low-vol supply is strong. Our first seaborne trial cargo of Maben is scheduled to arrive in India later this week and will undergo industrial consumption later this month and into September. We are also in discussions to supply trial cargo of Maben into Northeast Asia during Q4. To wrap up the met coal side, we are now at the beginning of the domestic negotiating season. While we won't discuss specifics around those today, our focus remains on enhancing the value of our sales portfolio. With that, I'll now turn the call over to our Chief Financial Officer, Jeremy Sussman, for review and discussion of our financial metrics.

Thank you, Jason. I'll start with our balance sheet and echo what Randy said. Since the beginning of this year, our strong liquidity position has allowed us to opportunistically repurchase $66 million worth of shares. This has effectively reduced our outstanding shares by roughly 8% or by almost 5 million shares to now less than 52 million shares outstanding. We still have remaining repurchase authorization. As Randy noted, we will continue to look at opportunistic share repurchases as a prudent use of capital dependent upon circumstances. I would note that we ended Q2 with one of the strongest balance sheets in the public met coal space with over $400 million in liquidity despite the large amount of share repurchases. In addition, as of June 30th, we had roughly 1 million tons of coal sitting in inventory, which will provide us with a meaningful working capital tailwind should markets improve throughout the year as we anticipate. As we look ahead, this strong balance sheet and cash position allows us the optionality to invest in both our coal and rare earth elements business at the same time. In terms of second quarter operational performance, mine cost results were again extremely solid in this challenging market with cash cost per ton sold of $99. This figure is especially impressive considering the impact of higher diesel costs. Second quarter cash margins of $17 per ton fell from $20 per ton in the same period of 2025. This was due to lower realized prices of $116 per ton, which fell 6% compared to $123 per ton in Q2 of 2025. As Jason discussed, U.S. high-vol markets remain weak. Despite Australian benchmark pricing improving more than $50 per ton year-on-year in Q2, U.S. high-vol indices declined roughly $10 per 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 Q2 production levels fell modestly from the same period as last year as we continue to exercise discipline on production of higher-cost operations in the face of challenging market conditions. As an example, we proactively idled one section at our high-vol Stonecoal mine at our Elk Creek complex. In terms of financial results, Q2 adjusted EBITDA was $6 million compared to $9 million in Q2 of 2025. Class A EPS showed a $0.26 loss in Q2 versus a $0.29 loss in the same period of last year. Looking forward, we are providing a number of guidance updates related to our strategic shift to grow low-vol metallurgical coal production to roughly 50% of our overall slate. Based on continued weakness in current market conditions, full-year 2026 production guidance is now 3.6 to 3.9 million tons, down from 3.7 to 4.1 million tons. Full-year 2026 sales guidance is being reduced accordingly to 4.0 to 4.3 million tons, down from 4.1 to 4.5 million tons. Despite lower production, we are maintaining the midpoint of our full-year 2026 cash cost per ton sold guidance at $96 to $99 per ton versus $95 to $100 per ton previously. We now expect full-year 2026 capital expenditures to be $92 to $97 million versus $85 to $90 million previously. The $7 million increase reflects spending this year on the Maben underground low-vol growth project that was recently approved by the Board. We are slightly adjusting other non-operational full-year 2026 guidance, which can be found in our detailed guidance tables. For the third quarter of 2026, we anticipate coal shipments of between 950,000 to 1.1 million tons with the ability to increase this figure depending upon market conditions. We also expect third quarter cash costs to trend towards the higher end of the full-year range on the back of continued elevated diesel costs related to the Iranian conflict. In summary, we are financially well positioned to move forward in multiple directions as we navigate the continued challenging met coal markets and strongly advance our emerging critical minerals business. With that, I would like to now turn the call back to the operator for the question-and-answer session of this call.

[Operator Instructions] And our first question today comes from Brian Lee from Goldman Sachs. Please go ahead with your question.

This is Tyler Bissett on for Brian. Super helpful commentary on the met coal market, and looks like met coal pricing in the U.S. has declined a bit so far in 3Q, but has remained relatively stable. So curious how you're thinking about your realized price in the back half here. Is it fair to assume limited upside to your realized prices until that broader shift towards the low-vol market materializes?

Yes, hi, Tyler. This is Jason. I'd say that's correct. As I mentioned, we've got about 1.3 million tons index-linked across a broad spectrum of indices in the back half, and, of course, the remainder of our committed tons being domestic at a fixed price. But, yes, I think that's a correct statement. They are, given where they're at today, until we see some movement upwards, at least in the U.S. indices, they are relatively flattish.

Tyler, it's Jeremy. One thing I might add, you know, our guidance tables are as of June 30. Since then we've been able to layer in some incremental domestic tonnage, both, as you know, steel capacity utilization is running pretty high right now at multi-year highs, and at the same time we've seen a couple of suppliers fall down. So I do think that will help offset some of the weakness in the indices that we're seeing.

And also appreciate all the color on the offtake discussions. Can you provide any more details on when we can expect to see some more meaningful MOU offtake announcements? Also curious how early customer feedback has been regarding the new timeline and flow sheet. And what needs to happen to turn these MOU agreements to more finalized and binding agreements, especially in relation to making a potential FID at some point. And just lastly, how concerned are customers regarding the upcoming expiration of the China rare earth export control suspension in November?

Oren, you want to start on that, and then I'll add some remarks?

Yes, sure, to chop down some of those questions regarding sort of timing and MOUs. We expect to announce some of these as we progress towards the end of the year. So those would be with this year. As far as, you know, customers' response to our timing, I think everybody, ourselves included, would love to have all of these minerals on the market yesterday. But it is also understood that if you're building a large-scale refinery and working timelines to catch up China's 30 years ahead of us, that these things will take time. So the market is pretty understanding and they want to secure long-term domestic supplies. Regarding your question with the concerns around the Chinese export ban. I think it's pretty well established that, you know, export ban or no, that China has kind of showed their hand on their willingness to use rare earths as a geopolitical weapon. And for anybody that has a manufacturing process that needs stability, that they are not going to be a chosen partner. So outside of even discussions of stability supported by public arrangements, private companies are realizing that they need to step into that kind of stability as well and to look for domestic supplies.

And I think also, I'll chime in on your question about the investment decision. So we are away from, far away from that point, I mean I think the typical engineering, critical path would tell you after the PFS study that would provide most of the engineering and final cost numbers that would put it on the table as to what it would look like from the standpoint of just CaPex, presumably OpEx as well. You know, as Oren touched on, obviously we're going to be lining up a number, hopefully lining up a number of procurement arrangements between now and then. And then I think, you know, depending upon how this thing looks from potential cash flow potential, we'll probably have different options we can consider, be they governmental or private in terms of the financing approach. As I said, with 75% margins at this point, without really, putting in any layering for enhancement from e-waste or other types of opportunities financially, at least on paper, it stands up as a pretty strong project. What you have to do between now and then is actually put some reality behind that, which comes from the standpoint of primarily procurement and optimization of all the engineering and construction costs. So that's -- I'd say if we were talking probably next summer, that would be a point that I think we would have a little bit more intelligent dialogue.

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

I had a kind of a follow-up on the offtake -- kind of the offtake discussions. One of the major changes from the Hatch report was the addition of high purity alumina and silica to the product mix. I was wondering if you anticipate any challenges in securing offtake agreements for HPA or HPS, just given the size of the production, or should it be pretty similar to what you're going through with MREC and the other rare earth elements?

I'll let Oren start, and then Mike can comment.

Yes. In short, I mean, this is a product that has demand across a number of sectors, so it is not dissimilar to the marketing efforts that we're making for our other products. And so, no, we do not expect it to be different in our discussions with offtake counterparties for HPA or HPS.

Mike, you want to touch on anything further?

Yes, look, I think the beauty of this flow sheet for this style of deposit is we have the ability to turn it up or down without changing what goes through the plant. You know, we're only producing about 5% of, as final products, HPA and HPS, and we're regenerating chlorine from the rest of it. So the aluminum chloride, we have the ability to produce more, or we can use it to recycle chlorine. So that gives us quite a bit of flexibility.

Got it. No, that's very helpful. And just to wrap up, I wanted to ask about the upside potential for e-waste. Could you maybe just help me understand the potential benefit there from a financial or operational impact?

So I'll let Mike start on the operations side and maybe Jeremy touch a little bit on the financial side. So go ahead, Mike.

Yes, I would say that e-waste recyclers are typically targeting precious metals and then they're left with a material that, you know, they're less interested in because it's more difficult to process. That's really the material we're targeting. High gallium, high germanium e-waste, we've done some analysis internally. Only small amounts of this material can make a significant difference in terms of the financials. So as Oren said, we're sourcing these materials so we can do some testing, assaying on it, better understand the quantities that are out there, what's the metallurgical response through our flow sheet, and then we hope to include this in future studies.

Jeremy, go ahead.

Yes, very good question. So I mean what I would say is we can't really give specifics at this point until we're a little bit further along the process, but we believe it will be very meaningful in terms of everything from NPV, IRR, payback, cash flows, margins, et cetera, to the point where we plan on certainly having an interim study out with e-waste economics certainly before the end of the year. We wouldn't do that if we didn't think it was material.

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

I had some questions on the updated report that you put out last week, curious about what seems like a pretty significant shift in end markets now, about 75% of projected revenue from the Brook Mine is going to be tied to semiconductors and high-end chip making. Can you talk a little bit about how that came to be? Is that simply the result of the updated chlorinization process and just simply being able to better extract some of those metals like gallium and germanium? Is there a little bit of maybe a strategic shift in aligning with some of those high-end growth verticals that those minerals are going to be serving?

Yes. I think what we learned as the project was developing and we were doing more geological, mineralogical analysis, metallurgical testing was we have a kaolinite clay that could potentially generate revenue in this flow sheet that we weren't capitalizing on the previous flow sheet. So as you alluded to, we're getting better recoveries with this flow sheet and when we're able to produce an expanded suite of products that are meaningful. So, we view this flow sheet as the right fit for this deposit because of its geology and mineralogy. And as mentioned, it's a proven technology in the titanium industry currently, but back in the 70s and 80s, there was pilot testing done on aluminum-type ores, and it was successful technically. But of course, they were targeting a one-commodity product, aluminum, which was lower price. With our basket and the increased materials that we can produce, that's why it makes a difference economically for us.

Our next question comes from Jeff Grampp from Northland Capital Markets.

I was curious with respect to the timing of Brook, I think you guys hit on a couple of different times that you think the initial expectations for I think 2031 could prove a little conservative. I was hoping you guys could maybe elaborate on what some of the kind of early identified levers could be to accelerate some of that timing.

Mike, go ahead.

Yes, sure. I suppose what's changed from last year at this time is, the large power transformers have a long delivery time from two to four years. And we've got independent opinions on that from more than one engineering firm. And the reason for that is these things are highly customized, manufacturing capacity currently limited, and competition with AI data centers, renewable energy products. What that looks like in a year from now, perhaps it gets better, and I think that could be an opportunity. But that's the main driver of what's caused the schedule to push out is supply chain related to large power transformers.

Got it, understood. Thanks for that detail. For my follow-up, you guys have noted being active on the buyback front so far this year, stocks kind of below levels that you guys have executed at. Is that a relatively safe conclusion that we should expect you to continue to be active on the buyback and just in general, how comfortable are you guys leaning into that considering kind of capital spending needs of the existing business and Brook over the next couple of years?

We kind of consider our spend in a pretty holistic fashion. The Board approved a $100 million buyback. We've spent about two-thirds of that. We remain with the optionality in dry powder to do more buybacks should we so choose. And of course, we've also announced that we wanted to layer in a little more of the more low-vol production, given where we saw the market. So that's about a $25 million spend. So I think we'll try to balance them as we go forward to see what works. Obviously, deploying capital for balance sheet purposes gives you one kind of payback, so to speak, and putting funding behind longer-term assets provides a runway for earnings capability out into the future. So we want to kind of try to balance both considerations and obviously not tip our hands beyond what we've said already about production.

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

I was just hoping to follow up on that last question and maybe zoom out. Ramaco's undergone an internal reorganization, but was curious for your latest thoughts on a potential separation of the rare earths business. I mean, when could something like this make sense? And how should investors think about the ultimate equity check that will contribute to the Brook Mine on a fully developed basis?

I think, the way I would look at it, you've really asked two questions. One is the reorg. So, we've already telegraphed that we're kind of aligning ourselves so that we'll have different silos. One's obviously a met silo, one's potentially a critical mineral silo, which frankly might break down into two pieces. One would be refining and one would be mining and marketing, kind of mirroring again what we've got in the East. And the other silo would be sort of our royalty interests, which would include obviously the reserve assets in the East, the Brook Mine reserves out here and infrastructure assets. So that's kind of how we're aligning ourselves in terms of pulling the trigger on any of that, just as a normal capital market transaction sketch, you would probably want to execute on those when you have a little bit more risk mitigation to each silo, and obviously some revenue hopefully behind each one of those particular numbers. So that's kind of a gauzy answer to a question of when, but it's a fairly straightforward one in the sense that you know you don't want to separate things until they're ready to stand on their own. In terms of equity checks, I think it's going to be a question of how we actually break this financing down, which we've got, quite a ways to walk before we decide which direction makes the most sense. There are some opportunities to do things which don't require equity checks. Those are more sort of sovereign-oriented type financings. And there are things which would require equity checks, but how that equity comes in, be it in the form of procurement arrangements, perhaps with advance payments, other types of supplier arrangements, co-ventures, et cetera. We're a little ahead of ourselves on that one right now, at least on the private side.

No, I appreciate all that, Randy. Maybe just one of those items I think you're suggesting is obviously offtake. And so, in terms of definitive offtake agreements, do you think that those will require some sort of sampling from the pilot plant, or could we see something definitive before we kind of get those initial samples?

Yes, I mean, look, I think in terms of offtake, I mean, we're having discussions as we speak. I mean, we will have MOUs out in the near term, and that is well before. And when I say near term, certainly over the coming weeks and months. So obviously that's well before samples from the pilot plant. You've seen many deals in the critical mineral space, based on some process that may or may not be successful multiple years out. And these deals are subject to obviously quality parameters, successful testing, et cetera. So, between now and, the time that the pilot plant is producing samples, we are confident that we'll be able to do significant work, whether it be offtake, financing, et cetera, areas that we can de-risk this. And, of course, it will be subject to quality testing from the pilot plant, but that's just part of the normal course of business.

I understood. Thanks for that, Jeremy. And maybe just one more if I could. Just on your kind of low-vol output more broadly, obviously it's going to be growing here in the coming quarters. Just what's your appetite to reserve some of that low-vol production or incremental low-vol production for the domestic markets versus preserving some for export?

Yes, hey, this is Jason. Good question. As Chris mentioned in his remarks, it's Maben reserve, given both its geography and its geology, is a higher CSR type southern West Virginia low-vol that we've already seen travel extremely successfully into the domestic market here this year. I suspect there'll be strong demand for it for '27 as we get further along in discussions with the customers there. But certainly on the export side, it's got value as well. As I mentioned, we've got a trial that will be starting soon in India. There's a trial quantity that's been requested for Northeast Asia in Q4, and we've seen excellent CSR testing results on the coal as well, but on the export side, it's also an offset against our already existing NS platform on demurrage costs, on blending up qualities, things of that nature. So it's got a lot of positive aspects to it as it comes into our book. But I suspect, in a nutshell, it's going to play in both markets very well. And it just depends on where that final value lands, as we get further into discussions on next year and further along in discussions on additional trial cargoes overseas.

[Operator Instructions] Our next question comes from Nathan Martin from The Benchmark Company.

Just following up on that domestic question, Jeremy, I think you mentioned adding some domestic tonnage for this year since quarter end. Should we expect that to be at similar pricing to the 138 you guys have now for your current commitments? And then how many domestic tons do you expect to ship in the back half of the year versus what you guys ship in the first?

Hey, Nate, this is Jason. Yes, on the pricing side there, it's largely in line with what we already booked there. We're just rolling additional tons on to some existing contracts there with existing customers for this year. Again, as Jeremy mentioned, just to pick up some slack from some of these other operations that have either fallen away or continue to struggle. So in the back-end, it'll be incrementally up, to be a higher proportion, as Jeremy mentioned earlier also, of our sales in the back half, tonnage-wise?

Yes, so on that front, I mean, based on the 1.1 million tons in the guidance tables, it would have been about pro rata, I'll call it about 550,000 domestic tons shipped in the first half of the year, pretty evenly split Q1 and Q2. But as we said, we've been able to layer on some additional tons, so, it'll be up, 100,000 plus, give or take. And obviously we'll update the guidance tables next quarter.

All right. Very helpful, guys. Appreciate that. And then coming to the cost side of the met coal business, Chris, I think you said that diesel expense or higher diesel expense added roughly $3 a ton versus your original expectation, maybe. First, just to confirm that, and then you also mentioned with the rail loadout expected to open at Maben, I think in the fourth quarter, that should reduce overall operations cost per ton by about $2 versus current operations. Again, confirm those are correct. And then just as we think about how that could apply to 2027, again, you guys have done a good job offsetting those diesel costs this year, maintaining full-year cost per ton guidance. Is it reasonable to assume then in '27, cost per ton should come down? Just kind of doing the math maybe to the mid-90s.

Want to address the first part, I'll go through the second part about 2027. Chris?

Yes, yes. So I was trying to figure which part of that question to tackle first, but your math is, your verification on the math is about right. So, so far this year through seven months the increased cost of diesel fuel both as a direct purchase and as the, sort of diesel fuel escalators on trucking and rails has increased our costs by about $3 a clean ton from where we would have been had diesel stayed flat year-on-year. So we're roughly $1, a little over $1 all in per dollar of diesel fuel cost increase or decline. So, as we see the rack price go up or down, you can do the math on what that impact is. And then, you might have to do a little bit of rounding on the Maben loadout, but essentially if you've got a little over 300,000 tons of annual production currently at Maben and you're saving $20 a ton on that in our total 4.1 book of sales, there's a little rounding there but that's how you get to a weighted average reduction of it's a little less than $2 that rounds up to $2 a ton.

Yes, so to tackle '27, it's a good question. I don't think we're ready to give formal guidance at this point but I guess the way I think about it is, if you normalize diesel we're running about in the mid-90s right now. When the rail loadout at Maben comes online, you're right, that basically saves another buck or two a ton company-wide. But obviously we're layering in low-vol tons next year, which I would say cost-wise are slightly above kind of our current costs. But as Randy noted, from a margin perspective, if we were selling spot today from those incremental tons, it'd be about double what we're getting. So, obviously some puts and takes next year, but I mean, I think, at least conceptually you're thinking about the view conceptually, correct?

And with that, ladies and gentlemen, we'll be concluding today's question-and-answer session. I'd like to turn the conference call back over to Chairman and CEO.

Well, again, I appreciate everybody being on the call today, and we will look forward to updating people as we move forward. Thanks very much.

And with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.