Ramaco Files Initial Public Offering with SEC

(SNL, January 3) –  Ramaco Resources LLC has officially marked its intention to open itself to the stock market by filing for an initial public offering.

The Kentucky-based mining operation filed an initial public offering with the U.S. Securities and Exchange Commission on Dec. 29.

The coal company was rumored to go public in 2017 and has been busy buying assets from companies like Alpha Natural Resources Inc. and investing in infrastructure in Appalachia.
Among developing assets are the Elk Creek project in West Virginia that the company says will begin production in early 2017. Ramaco said in the filing that it expects the mine will produce roughly 925,000 clean tons of highly volatile metallurgical coal in 2017 from a pair of underground continuous-miner room-and-pillar operations and one surface contour and highwall mine operation. From 2018 to 2027 Ramaco expects to produce about 2.7 million clean tons yearly at Elk Creek.

At its Berwind property on the border of Virginia and West Virginia, Ramaco estimates production will begin in 2017, when it will produce about 161,000 clean tons and roughly 834,000 clean tons yearly from 2018 to 2027. The coal producer notes that the mine sits close to SunCoke Energy Inc.’s Jewell coke-producing facilities.

In the Knox Creek mine acquired from Alpha, Ramaco intends to evaluate whether it is feasible to access metallurgical coal in a new deep mine seam, but does not intend to restart operations at the currently idled mine. The company is washing coal for a third party at the preparation plant and loading facility at Knox Creek, and will process roughly 95,000 raw tons of coal there per month through February 2017 for a monthly revenue of $440,000. While that contract will not be renewed, Ramaco began processing coal in October it bought from third parties to sell.

The RAM Mine in southwestern Pennsylvania is scheduled for initial prod uction in 2019 and is waiting for permitting expected in 2017. In the first year of production, Ramaco predicts it will produce about 130,000 clean tons and will ramp up to 523,000 clean tons per year for an estimated decade of mining life.

To fund these developments, Ramaco expects to need $133 million, roughly $106.5 million of which will be spent through the end of 2018. Ramaco said it would likely fund capital expenditures mostly through current cash and investments, the net proceeds from the public offering and operational cash flow.

If needed, Ramaco said, it would seek more sources of funding through revolving credit arrangements and other means.

Ramaco’s common stock will be listed on the NASDAQ under the symbol “METC.”

Ramaco did not respond to a request for comment.

SNL, Joshua Learn, 1/3/2017