Ramaco Resources, Inc. Announces Increase and Term Extension of Revolving Credit Facility

Rhea-AI Summary

Ramaco Resources, Inc. announced an increase and term extension of its revolving credit facility to $275 million, led by KeyBank, N.A. The facility now consists of $200 million with an accordion feature for an additional $75 million, and the term has been extended to 2029.

Positive

• The increase in the revolving credit facility from $125 million to $200 million provides Ramaco Resources, Inc. with extra financial capacity for growth opportunities.

• The ability to access an additional $75 million through an accordion feature offers the company more financial flexibility, enabling it to pursue strategic initiatives.

• The extension of the term of the facility to 2029 provides Ramaco Resources, Inc. with stability and time to focus on expanding its metallurgical production profile and rare earth development.

Negative

• None.

Insights

Financial Analyst

Ramaco Resources' strategic expansion of its Revolving Credit Facility suggests a robust fiscal confidence from its banking partners, notably KeyBank. This strengthened credit line from $125 million to $200 million, with potential expansion to $275 million, could bolster the company's liquidity and financial flexibility. Extension of maturity from 2026 to 2029 provides a longer time frame for strategic investments, potentially enhancing its metallurgical production and critical mineral development. However, while increased leverage can drive growth, investors should monitor debt levels versus earnings to ensure long-term sustainability. The credit arrangement reflects positively on Ramaco's market perception and credit culture, yet a deeper dive into future cash flow projections and capital allocation strategies is vital for a comprehensive investment outlook.

Mining Industry Expert

In the context of the mining sector, where capital investments can be substantial, the extension and increase of Ramaco Resources' credit facility is indicative of its commitment to growth, particularly in metallurgical coal production and rare earth development. Metallurgical coal serves a critical role in steel manufacturing, a market witnessing fluctuating demand. Rare earth elements are vital for high-tech industries and represent a significant growth opportunity due to supply constraints and geopolitical factors. Investors should appreciate that the extended credit can support Ramaco's operational and exploratory projects, potentially leading to increased production and diversification. Evaluating the company's cost management and the efficiency of deployed capital will be important in assessing whether the potential upside justifies the increased financial leverage.

LEXINGTON, Ky., May 8, 2024 /PRNewswire/ --

• The Company's principal lender, KeyBank, N.A. ("KeyBank"), has now led a bank syndicate that increased the Company's overall credit facility to $275 million (the "Facility"). This consists of an aggregate revolving commitment of $200 million with an accordion feature for an additional $75 million available upon mutual agreement. The term of the Facility has also been extended to five years expiring in 2029.

Ramaco Resources, Inc. (NASDAQ: METC, METCB) ("Ramaco" or the "Company") announced that its principal bank lender, KeyBank, has amended the Company's existing Revolving Credit Agreement to increase the overall commitments under the Facility to $200 million. The Facility also provides the Company an ability to access an additional $75 million through an accordion feature, subject to its terms and conditions. The commitments under the previous Facility were $125 million with a $50 million accordion feature. In addition, the maturity date was extended from 2026 to 2029.

KeyBank served as Lead Arranger, Sole Book Runner, and administrative agent for the Facility, while Cadence Bank served as Syndication Agent. Associated Bank and City National Bank of West Virginia both served as Co-Documentation Agents. Two other banking partners were also part of the overall syndicated Facility.

"We are very pleased to have deepened our banking relationship with KeyBank and our syndicate partners. We sincerely appreciate their continued support of our Company through the years since 2018. We view this new Facility as a validation of that relationship and testimony to our conservative credit culture and structure," said Randall Atkins, Ramaco's Chairman and Chief Executive Officer. "The increased Facility now provides us not only extra financial capacity by its size but also meaningful financial flexibility by the extension of the term until 2029. As we look to grow on many fronts, we intend to continue our prudent financial and debt discipline as we move ahead. As before, our focus will be on increasing our metallurgical production profile, returning capital to our shareholders and advancing our critical mineral rare earth development."

"KeyBank continues to be impressed with Ramaco management team's ability to execute according to their growth plan," said Chris Trimbach, Senior Vice President of KeyBank for Central Indiana. "We are pleased to upsize our credit facility to further support that growth and look forward to our continued partnership."

About Ramaco Resources, Inc.

Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. The Company currently has three active mining complexes in Central Appalachia and one mine not yet in production near Sheridan, Wyoming. Contiguous to the Wyoming mine it operates a research and pilot facility related to the production of advanced carbon products and materials from coal. In connection with these activities, it holds a body of roughly 50 intellectual property patents, pending applications, exclusive licensing agreements and various trademarks. News and additional information about Ramaco Resources, including filings with the Securities and Exchange Commission, are available at https://www.ramacoresources.com. For more information, contact investor relations at (859) 244-7455.

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SOURCE Ramaco Resources, Inc.

FAQ

What is the increase in Ramaco Resources, Inc.'s revolving credit facility?

Ramaco Resources, Inc.'s revolving credit facility has been increased to $275 million.

Who led the bank syndicate that increased the Company's credit facility?

KeyBank, N.A. led the bank syndicate that increased Ramaco Resources, Inc.'s credit facility.

What is the term extension for Ramaco Resources, Inc.'s revolving credit facility?

The term of the facility has been extended to five years, expiring in 2029.

What is the purpose of the accordion feature in Ramaco Resources, Inc.'s credit facility?

The accordion feature allows the company to access an additional $75 million upon mutual agreement.

Who served as Lead Arranger, Sole Book Runner, and administrative agent for the Facility?

KeyBank served as Lead Arranger, Sole Book Runner, and administrative agent for Ramaco Resources, Inc.'s Facility.

What is the focus of Ramaco Resources, Inc. as mentioned in the press release?

Ramaco Resources, Inc.'s focus is on increasing metallurgical production, returning capital to shareholders, and advancing critical mineral rare earth development.