Ramaco Resources Inc. is moving toward expansion after launching mining operations in December 2016 and completing its IPO in February.
In a fourth-quarter earnings report released March 28, Ramaco said its IPO included 6 million shares. Its selling stockholders sold 2.2 million shares, while another 3.8 million shares were sold for net proceeds of about $43.7 million for the company.
The offer followed the private issuance of $90 million of series A preferred units to Yorktown Partners LLC and Energy Capital Partners. That financing provided approximately $84 million after expenses and the repayment of two related party notes.
"We have been very fortunate to have private equity investors who believe in the future of the metallurgical coal markets, our investment timing and our ability to execute on our plan," said Randall Atkins, executive chairman of Ramaco. "We have now built on that investment with our successful IPO last month, making us the newest U.S. public coal company, and with the commencement of our mining strategy."
Ramaco reported liquidity of about $65 million as of the end of 2016. The company will use its liquidity to fund a build-out of metallurgical coal mining projects through the end of 2018. Atkins added that the company has $21 million allocated for other acquisitions, operations or other corporate activity.
According to the release, Ramaco invested $24.8 million in its planned mining operations and supporting infrastructure, including $9.5 million invested in the new Elk Creek preparation plant and rail line. Total investment of $32 million is expected by the time the facility is completed in the third quarter. Ramaco also reported that by year-end it had already purchased over 80% of all the equipment needed to open two underground mines at Elk Creek as well as its first surface and highwall miner mines. Production at all Elk Creek mines is scheduled to begin in late 2017 and early 2018.
The company reported a net loss of $1.5 million for the fourth quarter on revenues of $3.8 million. The company reported a net loss of $7.5 million, or 19 cents per share, for the full year.
"Our strategic acquisition of the Knox Creek preparation plant in July 2016 was fortuitous," said Ramaco Resources President and CEO Michael Bauersachs. "In addition to acquiring an operational preparation plant for little cash consideration, Knox Creek also provided approximately 61 million tons of additional metallurgical coal reserves. It gave us the ability to wash the raw coal production from our Berwind property, which we expect to begin producing mid-year, but also to purchase, process and ship coal for our own account into the surging export market during this period. We began third party trading activities in late October and continued into the first quarter of 2017."